From the October 2018 issue: A warning from Europe: The worst is yet to come
He says he acquired this real-estate empire legally, but the speed with which he did so has raised eyebrows, though it probably should not have. Obajtek is an oligarch, and in the hybrid democratic-autocratic political systems now emerging around the world, many newly minted oligarchs make their money at an extraordinary pace.
Until very recently, Poland didn’t have oligarchs. Of course the country had some very rich people, including a number who got rich through corruption or deception. But they didn’t have that specific combination of characteristics that we have come to recognize as typical of the very wealthiest Russians, Ukrainians, Kazakhs, or Chinese. In fact, contrary to popular belief, corruption is not necessarily the means by which modern oligarchs acquire wealth and property, if corruption is defined as actually breaking the law. Oligarchs are wealthy because they have friends in high places who arrange for them to be wealthy, and these arrangements can be perfectly legal. Obajtek, for example, is wealthy because the Law and Justice party named him first to run one state company, and then another. (Full disclosure: I am married to a Polish opposition politician who, when previously in office, never earned more than a standard civil-service salary.)
Oligarch and oligarchy are very old words. Aristotle defined oligarchy as what happens “when men of property have the government in their hands.” Nowadays, the word has acquired new connotations, for in a full-blown 21st-century oligarchy, distinguishing men of property from the government isn’t easy, because they have become one and the same. What truly defines the modern oligarch—and what makes him (or, more rarely, her) different from the typical well-connected rich person—is that his relationship with the state is not just close, but symbiotic. His business career exists solely because of his relationship with the autocrat or the ruling party. The regime knows this, and it expects favors in return.
This new kind of oligarch appeared first in post-Soviet Russia. David Hoffman, the author of The Oligarchs: Wealth and Power in the New Russia—one of the first attempts to describe how the original Russian billionaires made their money—explains that their path to riches was different from that of Western tycoons. Even though plenty of wealthy people in America and Europe “feasted off both the government and private capital,” Hoffman writes, Russia’s first tycoons “drew their early sustenance almost entirely from one source: the state.” They never invented anything, never organized anything, never built anything. Instead, they were simply in the right place at the right time when things were being divided up.
Gazprom, for example, now a very large private company run by an oligarch named Alexey Miller, was formerly known as the Soviet Ministry of Gas Industry. Its history is complicated; many in the West were pleased by its privatization in the late 1990s, and some made money out of it. But in 2000, soon after Vladimir Putin became president of Russia, the company revealed its true nature. Using financial pressure—and helped out by the arrival of armed, masked “tax police” at the company headquarters, and the arrest of its CEO—Gazprom acquired Media Most, then the largest independent media company in Russia and owner of NTV, a prominent independent television station. Immediately, Gazprom-Media fired and locked out staff, and closed several publications; the new editor of NTV arrived to take over at 4 a.m., surrounded by his own security detail.