FreshBooks banner ad

Roman Avdeev about Social Stratification, Zuckerberg and Luxury

Russia is a leading country in terms of social stratification, second only to some countries of the “third world”. How to overcome social segregation in the country? Is it possible to make business in Russia as Zuckerberg did in the USA? Why do we have a penchant for luxury? Why did the project that focused on billionaires reading lectures in schools fail? Pravmir will discuss these and other topics with Roman Avdeev, the owner of the Credit Bank of Moscow and the father of 23 children.

Roman Avdeev

photo credit: Pravmir.ru

Russia is effectively the world leader in terms of social stratification. Do you see any ways to overcome this problem?

This is a huge problem for both sides of our society, indeed. When I walk down the street or ride the subway, and I see an elderly woman begging with an outstretched hand, I just can’t help but feel uncomfortable to live in this country. Stratification paralyzes the vital forces of people.

Surely, the problem of social stratification can be solved by fiat, or, simply put, by repressions the rich. However, history teaches that such methods can not improve the lives of poor people. This is why we have only one real way to solve the situation on a global scale: the improvement of the education system in the broadest sense. Russia must form its middle class, and the middle class must have a desire to live and work in Russia. However, at the present time, when a person reaches the middle class, they immediately migrate to another country. We must significantly improve the quality of life in many areas at the same time, including medical care, education and the ability to move around the country in general.

For example, traffic jams in Moscow have been a huge and actively discussed issue for a very long time. It seems like everyone sees and understands the obvious problems. However, the issue of traffic jams is still not solved. I used to drive out to work at 6 AM and spend about 20 minutes on the road. Today, if I leave at 6 AM, the road takes at least 1 hour 15 minutes. That is why many people I know have decided to go abroad. Alternatively, they live in the country houses and manage their business remotely – they no longer have to be in Moscow to do that. People who went abroad conduct business in the same way.

That is why we have to modernize the education system and human relations in our society, which will be of benefit to everyone, and especially to rich people.

The society must have clear and well-articulated demands to the authorities. However, our society stays quiet on many important issues and takes everything for granted, including a quality of education, roads and medical care.

Have a look at the results of the latest polls. What worries people? Prices for housing and communal services are at the top of the list. Whereas education, ecology and safety are at the very bottom. So what can be done with such priorities in life?

Why housing and communal services prices shouldn’t worry people? For instance, monthly payment for housing and communal services is 3000 rubles, whereas the average monthly income is 7,000!

I realize that this is a very important issue. However, if the society has no demands to the authorities, the government can’t make changes for the better. The only thing that can be done is the education of the masses. The society must demand improvement in education, the education system can’t be reformed from the top-down.

What kind of improvement?

You know, my 10 years old daughter once said: “We are taught how to pass the Unified State Exams, whereas in other countries people learn to apply their knowledge in practice”. Some time ago she went to Germany to study. Her German was very poor, and she had a hard time studying. However, after a month she told me that it was interesting and that she wanted to study there. An interesting learning process – this is the way formal education should be!

Roman Avdeev family

photo credit: Pravmir.ru

How can this be done?

I remember one Soviet joke. The collective farm chairman says: we have two ways of solving the problem – realistic and unrealistic. Where do we start? The realistic way means that aliens come down from the sky and do everything for us. The unrealistic way means that we do everything ourselves.

Most people are unhappy with our civil servants, policemen, teachers, authorities. They have every right to complain! However, take a look at entrance halls in apartment buildings in our country. Nobody cleans the hallways and doesn’t keep them in some semblance of order!

This is what I mean by education in the broadest sense.

Perhaps, you mean “culture”?

Basically, culture is a part of education.

Nevertheless, the education system in our country is quite decent. It is in-demand in Western countries, and many Russian graduates work in foreign companies.

I believe that the demand for our graduates in Western countries is a myth. To be precise, only graduates of Moscow State University and 5-6 other universities are sought-after. Doesn’t seem like a high demand to me. Moreover, doesn’t Russia have a demand for good specialists too?

Most doctors in Russia work for a salary of 15,000 rubles or even less – is it a “demand” or not? Come work to us, heal people, have your 15,000 rubles and live large?

I agree, it’s horrible.

However, socially rejected Spinoza was a genius author and philosopher, yet he earned his living by grinding lenses. Einstein once said, that if he earned his living not by science (physics), but by something else instead, he’d make much more inventions. In this case, science for him would be not work, but a hobby. I believe that the invention of something new first of all requires innovative ideas and the desire to bring them to life, whereas money is secondary.

Geniuses are one thing, but the established system is something completely different. There is no such system where a doctor can’t provide for his family, neither in the West nor in the East! For instance, let’s take a look at Germany…

Yes, we lag behind Germany all across the board. I can’t even recall a single historical period when we were ahead of Germany. However, a brain drain is a natural process. Capital flows to places where it’s more effective, and scientists move to places, where it’s better to live.

Maybe, you could recall a period, when we were ahead of Finland? And what’s going on right now?

We were ahead of Finland when we annexed it. Let us recall the fact that Finnish women were given a right to vote only when Finland became a part of the Russian Empire.

It’s sad to give up ground, but, I repeat again, we will not get anywhere without a proper demand to the authorities.

For instance, let’s take patriotic upbringing. Pretty cliche, but still. It is implemented from the top-down: schools are obligated to provide a certain number of hours of patriotic upbringing, because the government said so. However, patriotism can’t be forced. This is something that has to be taken willingly. Society must create the idea of patriotism on its own. Traditionally, we had two ideas on which patriotism was built: historically, it was the czarist autocracy, then the communism took over. What idea do we follow today? What kind of society are we building? What will our children and grandchildren inherit?

Even the introduction of the simplest ideas, such as the idea that everyone should be a good person and work well, is a matter of education in the broadest sense.

When these ideas collapsed, the society was left without demands. Speaking not even of the national idea, but rather of a simple agenda, the government should stimulate the society or individual social groups to form it. They shouldn’t be spelled out in the Kremlin, but vice versa. However, instead of a constructive dialogue between society and the state, we have an endless stream of mutual accusations.

In the USA national and sociopolitical values are taught to children from a young age – is it implemented from top-down too?

In the United States, there has always been a social demand – a hymn, a flag, etc. Therefore, the government acted under the pressure from voters. One of the direct responsibilities of the state is the unification of people living in the same territory. A reference to the USA may be annoying for some, still, this system works for them. Every citizen of the United States is proud to be American. Perhaps, except for the Chinese and the Japanese, who care about their national identity.

So, how it is possible for our society to build a middle class?

For this to happen, the society must have working social elevators. They worked in the 90’s – regardless of our attitude to that decade. Nowadays social elevators work way worse. The 90’s were a good time to make business. The society was ready for it, and everyone had a chance to make their way in life.

Many people became impoverished in the 90’s too…

Of course, when social elevators work, someone goes up and someone goes down. Nevertheless, they allow the society to move forward.

Not so long ago Mark Zuckerberg visited Russia, hence the question: theoretically, can startups like Google or Facebook appear in Russia? After all, the situation in small business is getting worse with every year…

The situation in small business and startups is not getting worse. However, it’s not getting better either. For a startup to be successful you need a new, striking idea. You have to know exactly who will buy your product, and if there is a demand for your product. If you understand the demand, you will make a successful business.

However, I must say that startups like Google or Facebook could never appear in Russia. Everything comes down to the social demand, legislation and access to the labor force. There is a shortage of qualified specialists in all sectors, not to mention a demographic hole.

Many of our programmers work in the USA, where the shortage of staff is prominent too…

As far as I know, Asian Indians fill the personnel gap in the IT sector, and American companies use that resource to their benefit.

Give a tip to someone, who wants to start a business from scratch?

If you are in doubt – act!

By the way, do you continue to give lectures to students?

No, we couldn’t find a suitable format for meetings. The thing is that I have some experience and knowledge that I’d like to share, but the students see me as a kind of superhero. However, I’m just a successful person that wants to share his knowledge with others. Such communication should not be one-sided, like, you know «THE MAN HIMSELF came down to you, listen to his wise words». Only two-way communication yields benefit.

I’d like to touch another sensitive topic. Last year, there was much controversy about the role of the church in society. For the most part, the media were negatively predisposed. What do you think about the current situation?

The society and the church have different agendas. The church creates its own agenda, which, in turn, affects the social agenda. Such a dialogue should be backed up by actions. Nowadays, we hear a lot of news about the division of the diocese, high-level meetings and so on. Instead, the church could initiate important discussions, say, of civil ethics. Social stratification is another example of a good topic. The church must bring up important subjects and shape public opinion, especially since it has the power to do so. Important to note, that the church agenda must differ from the public agenda.

If you read the Acts of the Apostles, the Apostles did simple and accessible things. The modern church should act in the same way.

Talking of the church agenda, should the business be socially accountable?

Certainly, there is a meeting place for companies and society. If the corporation promotes itself through good deeds, say, sponsors a football club – it’s the soft power of the company. It’s effective. Of course, it’s not charity, but a good deed is still a good deed.

Why not?

Charity is always a personal act. It’s not about the money. Charity changes the society and the people involved. If it becomes a social norm, it changes both the person and the society. That said, corporations do good things only for advertising. For example, when we celebrated the 20th anniversary of our bank and organized a festival in the Gorky Park, we obviously wanted to put everyone in a good mood. However, we did this for advertising purposes too – after the festival, the company’s capitalization increased. So, good deeds like that are effective, but they have nothing to do with charity.

Should there be such a thing as the Orthodox entrepreneur code

The Orthodox entrepreneur code? How about Orthodox swimming? Or, say, Orthodox walking? I think that all possible codes come down to the conscience of a person. If a person listens to their conscience, then they know what’s the right thing to do. Never say that you don’t know what to do – just stay true to your conscience! In the past, I did not always follow my heart, and I’m not proud of that. But there was never a situation when I in all earnestness didn’t know what to do.

In your opinion, why people have a penchant for luxury?

It comes from low self-esteem. Our society and the business-community both have some traditions. For example, one friend of mine once said: “You need to buy a new watch”.

“What for? – I asked. – Mine can tell the time too”.

“Nobody wears watches to tell the time!”

Nobody argues with the fact that money gives freedom. However, sometimes instead of giving freedom money enslaves people. They make a person think that they need to meet certain requirements and wear status symbols, such as expensive watches. By the way, that contributes to social stratification too.

Imagine that you gave an expensive car to a priest, but he sells the car and buys a cheaper one. Would you be offended by that?

I can hardly imagine the situation where I’d give a car to a priest. However, I would have reacted to this with admiration. I think that every person who would do so would make a wonderful gesture.

What personality trait do you appreciate the most?

Frankness. In the broadest sense of the word. It’s very difficult to remain open to the world and other people. I’m trying my best to train this quality in me. Mistrust and intolerance of other opinions are very common to find.

But if a person is open to the world, it means they overcame their pride. Which is not an easy task to do.

About author

Newsroom
Newsroom 177 posts

Noobpreneur.com Newsroom features the latest business news and insights that matter to business owners and entrepreneurs.

Funding Note

You might also like

News

The Tipping Point: eBay Got Tipped

I love The Tipping Point, written by Malcom Gladwell. Consider this: “The best way to understand the dramatic transformation of unknown books into bestsellers, or the rise of teenage smoking,

News

Buying a Franchise – If You Think Owning a Franchise Unit is Easy, Think Again!

I owned several local franchise units. To tell you the truth, the first time I buy a franchise unit is my effort to cut my way into entrepreneurship. I thought

News

Is This the end of Social Media?

Looking into the development in social media lately, I see a tendency of over use of social media. In my opinion, social media today are heavily abused, either for personal