How does the value system of the Belarusians affect the economy?

Justice matters more than money

On December 18, the Press Club and the website of the expert community of Belarus “Our Opinion” held a regular meeting of the Expert and Analytical Club on the topic “How does the value system of the Belarusians affect the economy?”.

The discussion was attended by economic and foreign policy experts, journalists, diplomats, and government officials. This time the speakers were: Piotr Rudkouski, the director of the Belarusian Institute for Strategic Studies (BISS), Pavel Daneiko the administrative director of the Belarusian Economic Research and Outreach Centre (BEROC), and Anatoly Pankovsky, the head of the expert project “Our Opinion”.

The experts noted there was no universally accepted definition of values, but the question of whether it is possible to equate “values” and “institutions” remains debatable.

Values are ethical beliefs and ideals, moral codes. On the other hand, values are the subjective characteristics of the objects that have a certain importance to us. Finally, values are the objects with a certain consumer value or just useful objects and phenomena able to satisfy some human needs. Institutions are interrelated with values, but not identical with them. In perceiving the external world, people process information and they do it by means of pre-existing mental constructions, in which values are somehow embedded. These constructions enable people to understand their environment and solve emerging problems. Institutions are a necessary continuation of inherent human methods of information processing.

In a functional aspect, however, institutions can be conceived of assystems of values determining social behaviour through analternation of awards and penalties. Institutions are “the rules of a game” (Douglass North) or “factories of the reproduction of social relations” (Emil Durkheim), which reduce uncertainty in virtue of a relatively clear distribution of functions, rights and obligations as well as roles and statuses of the participants of an interaction, etc.

For discussants, the main research taskis how to explore value attitudes and establish the function that they perform within an institutional environment.

In one of the speeches, it was emphasized that the phenomenon of values can be identified by analysing trivial things. Every day we make decisions, every decision is accompanied by information processing, and every act of information processing is energy-consuming. A person is inclined to minimize costs, especially when decisions are not typical. Values are just what helps a person to process information and make decisions without too much effort.

According to Daniel Kanneman, there are two systems responsible for making decisions: the fast-thinking system, a source of automatic information-processing, and the slow-thinking system, a source of the conscious digestion of information. It is to the first that values belong to: values are a kind of ready-made guidelines for quick decision-making without energy costs.

Any serious economic, political, or educational reform depends to some extent on a system of values. In processing information,decision-makers depend on their value systems. Values do not exist in isolation and tend to be hierarchicallyarranged into systems and subsystems. If we analyse values in isolation, the picture will not complete and we will not know what role they play. It is advisable to study how values translate into a specific behaviour. Such an approach would allow us better to understand how values affect decision making and how they change the economic and political system.

The audience was inclined to accede to the thesis that people`s attitudes doaffect their behaviour. In other words, values are behavioral guidelines. In a sense, a “value system” can be considered the basic institution that determines the political and economic success of reforms. This system is difficult to change. Ultimately, the question is how to carry out the reforms that are perceived by the population as reasonable and fair.

Investigating values only by means of surveys is unlikely to be successful. But there are some methods, such as comparisons, associations,which, coupled with surveys, can be quite productive.

The conversation about values and their relation to economic behaviourturned into adebateonthe economic reforms that are currently underway in Belarus. Participants also debated about the results of reforms and privatization in someother countries of Eastern Europe. Electoral processes in Poland and other East European countries show that not allhave been able to take advantage of economic transformations. For example, in Hungary, the entrepreneurial activity of the population is now suppressed, and there is a growingdissatisfactionamong citizens. At the same time, according to some researchers, the slow progress of reforms in Belarus without social upheavals has its advantages. In particular, Branko Milanovic, the former chief economist of the World Bank, claimed Belarus was among the five champions of capitalist development among the ex-Soviet countries. These five countries are characterized by gradual development of the private sector, and the formation of a national business.

In Belarus, reforms towardsincreasing the private sector have been underway since 2006. According to the IPM research presented during the Kastrycnicki Ekanamicny Forum, the Belarusians are positively disposed towards the development of the private sector. The Belarusians respect business, because the system itself teaches to pay taxes and keep records. In terms of self-employment Belarus is comparable to Great Britain, the labour market in Belarus is dynamic, and unemployment remains low. Finally, the Belarusians are not inclined to think that the rich are “thieves”, rather, they believe the richhave earned their money honestly.

According to one of the speakers, there are no oligarchs in Belarus today, despite some earlier attempts atbringing business under control. Authoritarianism can be of two kinds: “Me and the people”, “Me and the elite”. Oligarchs appear within the latter system, while in Belarus the former system exists.

The audience, however, did not agree with the latter arguments. Moreover, the public was skeptical about the results of the research cited; somenoted that the investments of banks flowed to “failed countries”.

There was also an opinion that the reforms that Central Europe implemented were just imitative, they were not developed on their own. And the dangers of imitative liberalism are visible today: the victory of the right wing in Hungary and of the Law and Justice Party (PiS) in Poland. Belarus is characterized by a more steady development: a long way forward has been traversed – these steps have beenmadewith a struggle, a tough dialogue, which is being imprintedontothe national mindset.

But can the reforms in Central and Eastern Europe be called failed? The public was inclined to think that there might be some disappointment with the reforms, but thisdid not mean their collapse. Even if Belarus is among the “winners” in the capitalist competition of countries, one can also notice a certain disappointment  in the “special way” policy. Today it is difficult to find those who would fully support the current government policy.

One of the theses that was generally supported by the audience was that the population mostly welcomes an open society (while our society is stillclosed).The state, the only institution common to both an open and closed society, is the “legitimate monopoliston violence.” The difference between the two is the following: in an open society, contracts are made between organizations, while in a closed one, they are between heads of organizations. It is organizations that maintain the functioning of value systems. It is believed that 50 years are necessary for a state to transit from one system to another. Central and Eastern Europe has not yet passed this path of transformation.

Can democracy be classified as a value? One of the arguments has it that democracy is a complex value system built out of checks and balances. Democracypresupposesthe developed skills of dialoguing. For example, Brexit illustrates a situation where people accept many things that are against their linking. They do it out of respect for the principles of democracy.

There are quite a few advocates of structural reforms in Belarus, even among state officials, but there is a gap between those who carry out reforms and those who they are targeted. Therefore, it is still needed to find a balance between the two realms, given that the value system of one realm in some way jarswiththat of the other.