Учебный год 22-23 / William_Simons_Private_and_Civil_Law_in_the_R

of privatization as theft of state property implies that one starts from the definition of state property as the “property of the whole people”, which was indeed ideologically correct; however, not legally. Seen from a legal point of view, state property was the strange absolute and exclusive property ownership of the state as the sole legal subject being able to appropriate this kind of property. One can argue that the whole privatization process—with legal figures such as the leasing of state property, sale by auction and loans for shares—was set up to counter this reproach of robbery or theft, and to make the new private property legal; however, not legitimate.

In our view, the main challenge for the future of property ownership in Russia will be to re-design a balance between, on the one hand, the individual function of property ownership and other rights in rem (as the foundation and guarantee for personal freedom, creativity and entrepreneurship) and, on the other hand, the social function of property (as the basis for economic development, social justice, social peace, and public interest). This tension between the individual and the social function of private property ownership has increased in the course of privatization.

Probably, such a development will ask in the near future for more differ- entiation in property rights and other rights in rem than that which the

1994 Russian Civil Code offers at this moment.

As a problem of transition and change in post-communist paradigms, the comparative property rights discussion is especially interesting from the point of view of legal reception. In the framework of post-communist transition, new concepts change labels on the old structures but are unable to put aside those old structures. This imposes a threat of semantic distortion of the new concepts, when the gap between legal appearance and reality becomes too broad. One concept, in casu private property—with an established connotation in the West—seems to relate to several levels of meaning, to several phenomena. Legal concepts, indeed, as “faux amis”. 4

Within the framework of this chapter, we will limit ourselves to the following question:

How to define the social function of property ownership when we can now observe that the political elite in Russia in general is “playing” with the legal concept of private property and that private ownership has even become the legitimation for a situation that clearly disbalances the public and the private?

In today’s Russia, the elite has become so private-property based that its members risk to control the political process and the democratic

4A. Nussberger, “Die Frage nach dem Tertium Comparationis. Zu den Schwierigkeiten einer rechtsvergleichendenAnalyse des russischen Rechts”, Recht in Ost undWest 1998 No.3, 84.

procedures while—at the same time—an enormous problem of social justice arises among the population.

ATheory of Property

Since the nineteenth century, nearly all discussions on property relations havebeendominatedbythecritiqueofsocialistsandMarxistsonthesys- tem of generalized private property, which forms the basis of the Western market model of industrial society. As a counter-pole against the principle of private property, the pre-liberal tradition was placed on the foreground: the idea—which is common to all theories—of property that, in a golden age of humanity, a primitive or ideal communism existed.5

The liberal concept of property is expressed in the Déclaration des droits de l’homme et du citoyen of 1789 and in other documents of the bourgeois revolutions which put an end to feudality structures and royal absolutism. Property was considered in that framework as a “natural and inalienable right, one of the fundamental rights of man, which has to be guaranteed by governmental power without distinction” (Art.2, Déclaration). The same idea is repeated in the 1948 Universal Declaration of Human Rights (Art.17).

The right to property as a subjective right was, thus, presented as the naturalconsequenceofrecognizingthebasicprinciplethatahumanbeing is the bearer of inalienable rights. The reasoning of John Locke—who is generally recognized as the founder of a liberal theory on ownership—can, indeed, be criticized from its ethically disputable grounds. The outgoing idea, formulated by Locke in his Second Treatise of Government, was that a human being is the absolute owner of her person and body and, consequently, also of the fruits of her labor. In this way, Locke was the first to make a case for property of unlimited amount as a natural right of the individual prior to governments and overriding them.6 This “labor theory of property”—being the justification of all property—became the basis and framework for liberal capitalist property relations. From this philosophy, we come to the general legal formulation of property ownership in civil law countries: that private property ownership is the most absolute right of possession, use, and disposal and that state interference is not allowed—except in cases of expropriation for public use and with

5F. Engels, Der Ursprung der Familie, des Privateigentums und des Staats, in: Marx-Engels, Augewählte Schriften, Vol. II, Berlin 1977, 155-301; J.J. Rousseau, Du contrat social, ed. Guillemin, Paris 1963, 292 (Discours sur l’inégalité parmi les hommes, second part).

6C.B. Macpherson, Property. Mainstream and Critical Positions, Toronto, Buffalo 1978,

14.

due compensation to the owner. In other words, the state had as its most importantdutytolegallyprotectpropertyasitwasrightlyacquired.This implies that existing property ownership is protected by law, while the sources and the social function of that property ownership are not further questioned by law.

Post-communisttransitionandprivatizationequallyrelyonthisliberal theory, aiming at the legitimation of private property as, if not the sole, then in any case the most genuine form of property.The formula of private property ownership as an absolute right—that only can be taken for public use and with due compensation to the private owner—is typical for the new constitutions and civil law regulations in post-communist countries. However, in post-communist countries, this liberal theory of property ownership (and its legal expression in the so-called absoluteness of private property ownership) is introduced subsequently to (and imposed upon) a fundamentally different communist logic of property ownership.

Thedifferentiationbetweenindividualpropertyandcollective,social property (i.e., property with a social function and relevance for the collectivity) was remarkably underdeveloped by Soviet law and practice because law eliminated autonomous subjects of property where it concerned the most important wealth in society. This was, essentially, what was meant by a “single fund” and the “indivisible ownership” of state property. In this way, the individual function of property—as the basis for freedom (of the individual and of entrepreneurship)—was missing during “real socialism”.

The indivisibility of state property hampered differentiation and made it difficult to consider individual private property as a foundation for personal development and entrepreneurial initiative, even to speak about rights in rem—although the right of operative management or governance (pravo operativnogo upravleniia)—conferred upon state enterprises was, in essence, a strong real right to state property. Personal property was introduced by the 1936 USSR Constitution as fundamentally different from private property; this kind of property was highly functionalized by its aim (personal consumption and use only) and by its source (labor income only). Unfortunately, this reasonably consistent system of Soviet property law, based on the idea that production was the responsibility of the state, simultaneously supplied one of the principal components of Soviet totalitarianism.7

We should also bear in mind that, in Western Europe, this liberal theory of property ownership has been criticized from its very beginning. A liberal approach to property was seen by some philosophers and legal theorists as leading to a property ownership structure in society that fun-

7F.J.M. Feldbrugge, Russian Law: The End of the Soviet System and the Role of Law, Dordrecht 1993, 229.

damentally contradicts social justice and is set against a well understood “labor theory of property”. How to reconcile a liberal property right with the right of all individuals to use and develop their capacities? Liberal democracy faces this ethical dilemma to this very day. This brings us to Proudhon, as one of the most convinced protagonists of a re-thinking of the social function of property ownership.

Proudhon’s Criticism of a Liberal Theory of

Property Ownership

“La Propriété, c’est le vol” (“Property is Theft”) is the provocative formula of Pierre-Joseph Proudhon (1809-1865) who—in opposition to Marx— developed a socialist, anti-authoritarian political philosophy. Through

Mikhail Bakunin, Proudhon’s ideas passed into the historic anarchist movement. Proudhon situates himself within a range of publications, questioning property ownership in the second half of the eighteenth century,ofwhichJean-JacquesRousseauwithhisDiscours sur l’origine et les fondements de l’inégalité parmi les hommes is another well known protagonist. In 1840, Proudhon wrote Qu’est-ce que la propriété. Recherches sur le principe du droit et du gouvernement and, in doing so, created a scandal because he affirmed that property is theft: “La propriété, c’est le vol.”8

Proudhon denounced private property in its social “deviation” (détournement) but, at the same time, opposed collective property,—advanced by communism—as he was persuaded that only a society without government is able to establish social harmony. The First International was, indeed, destroyed in the great fight between those who supported a libertarian socialism of the kind Proudhon had advocated and those who followed the authoritarian pattern, devised by Karl Marx. Kropotkin and Herzen were all his confessed disciples. Even Tolstoy sought him and borrowed the title and much of the theoretical background of his masterpiece

War and Peace, from Proudhon’s book, La guerre et la paix.9

8“Sij’avaisàrépondrelaquestionsuivante:Qu’est-cequel’esclavage?Etd’unseulmot je répondisse: C’est l’assassinat, ma pensée serait d’abord comprise. Je n’aurais pas besoin d’un long discours pour montrer que le pouvoir d’ôter à l’homme la pensée, la volonté, la personnalité, est un pouvoir de vie et de mort, et que faire un homme esclave,c’estl’assassinat.Pourquoidoncàcetteautredemande:qu’est-cequelapro- priété?Nepuis-jerépondredemême:C’estlevol,sansavoirlacertitudeden’êtrepas entendu, bien que cette autre proposition ne soit que la première transformée ?”

P.-J. Proudhon, Théorie de la propriété, suivi d’un projet d’exposition perpétuelle, Paris 1890, 11.

9P.-J. Proudhon, What is Property? An Inquiry into the Principle of Right and Government, with a New Introduction by George Woodcock, New York 1970, xiv.

Leo Tolstoi (1828-1910), indeed, in that same period raised his voice against private property: “Allowing property is allowing violence and murder.” He condemned the exclusive private property rights of land owners (of which he was one) and even legitimated the act of theft of the fruits from the land:

“He knows very well that not he is the thief, but the one who has stolen his land, and that all restitution he obtains from the one who has stolen from him, is a duty to his family.”10

Tolstoi—as the father of Christian anarchism—was very close to the mir, the peasant community which intellectuals saw as a protection of Russian peasants against the harshness of upcoming capitalism.11

One can place Proudhon among the great socialist thinkers of the nineteenth century. Contrary to freedom and equality, the right to prop- erty is—according to Proudhon—not a natural right. Saint-Simon in that same thought speaks of “the most unjust of all privileges”. Proudhon’s intellectual heritage is claimed at the same time by anarchists, part of the socialists, extreme right and the (social) liberals. In his view, individual freedom has to be socialized. Proudhon differed from some of his suc- cessors in believing that the abuses of property could be brought to an end without the traumatic convulsions of a bloody revolution. Being an anarchist, Proudhon was convinced that social evolution would progressively lead to the deconstruction of the state.

Proudhoncriticizescapitalistpropertywhichneglectsthespecificities of property owned by collective persons. He also opposed communism, which negates the autonomy of individuals and collectivities and only considers a global community. In this sense, Proudhon was taking into account the far reaching implications of a legal concept of private property, much more than did Karl Marx. For Marx, property relations were no more than an expression of existing production relations. But Proudhon—during his whole troubled life—did not stop to rethink the problem of property ownership, which he saw as the key for a future world. In his Théorie de la Propriété, he constantly asked himself how to also escape from both wild capitalism, creating inequalities and exploitation and from communism,

10L. Tolstoi, Sobranie sochinenii v 22 tomakh, Vol. 22, Moscow 1985, 14.

11“In our time property is the root of all evil and the suffering of men who possess it, or are without it, and of all the remorse of conscience of those who misuse it, and of the danger of collision between those who have (it) and those who have it not. Property is the root of all evil: and, at the same time, property is that toward (which) all the activity of our modern world is directed, and that which directs the activity of the world.”

L. Tolstoi, ibidem, 16.

creating oppression and misery.12 How to struggle against a vulture state that threatens the freedoms of citizens?

Ironically, Proudhon did not literally mean what he meant when he launched“whatisproperty?”withagrandéclatbyansweringthequestion in the title with the phrase: “property is theft”. His boldness of expression was intended for emphasis, and by “property” he wished to be understood as meaning “the sum of its abuses”. Proudhon had no hostility towards property as “individual possession”, the right of man to control her/his dwelling and the land and tools he needs to live. Indeed, he regarded it as the cornerstone of liberty; his main criticism of the communists was that they wished to destroy that liberty.

Proudhon believed in an immanent justice which man had perverted by creating the wrong institutions. Private property was incompatible with that justice, because it excluded the worker not only from enjoying the fruits of her/his toil but, also, from those social advantages which are the product of centuries of common effort. Justice, therefore, demanded a societyinwhichequalityandorderexisttogether.13 According to Proudhon, it is the state that organizes the wrong absolutism in favor of the owner and, thus, its abuse. The state in this way organizes usurpation.

It is clear from a reading of What is Property? that Proudhon is talking, mainly, about property in land and that his solution is almost wholly an agrarian one (the kind of solution that would have saved his father from bankruptcy). He seems to ignore manufacturing more complex than that carried out in small individual workshops. In this sense, Proudhon’s ap- proach to our highly sophisticated postmodern world seems to be obsolete and no longer applicable.

Nevertheless, that which could be observed during the past decade andahalfinthefieldofprivatizationintheCentralandEasternEuropean region seems to reflect this perversion of a liberating concept of private property by creating the wrong institutions. And, this time, it is not limited to land but, also, concerns other basic means of production, the major wealth of the country in energy resources and raw materials. What can be seen in most privatization cases is a form of collusion between the ruling elites and the state, organizing a shift from political and bureaucratic power to private property ownership for a small elite and excluding the majority of citizens from this redistribution of property ownership. All this is based on that absolute concept of private property ownership, which can be considered to be abusive—at least if we are prepared to turn to the meta-juridical social function of property ownership.

12P.-J. Proudhon, Théorie de la propriété, op.cit. note 8, 11.

13Ibidem, xiv.

The Social Function of Property

Private ownership can become a dangerous concept when it starts to cover a reality of “misappropriation”. We should look at it in a careful way when we study privatization in Central and East European countries. What is exactly the role of this key concept? Comparative law is—to a great degree—inspired by the need for avoiding the pitfalls of homonyms. The false déjà vu is one of the greatest sources of error in comparative law.14 In order to avoid this, we have to place ourselves outside the network of legal arguments and come back with a detached point from which the law appears in perspective, as a product shaped by society, the needs of which it is destined to serve.

If we are prepared to do so, we can follow the tradition of the legal philosopher Rudolf von Jhering and the sociologist Max Weber—the founders of what we would call a “social theory of law”.15 Weber relied on tools from legal science—in order to distance himself from social theory initsconventionalform—andonmeta-juridicalideas(suchastheideaof law as a scheme of clarified ideal-typical definitions that self-consciously diverge from reality). Indeed, private property ownership of holdings such as Yukos—emanating from the public ownership sector—is not the same as private ownership of, for example, a car. But law works with such ideal- typical definitions as private property ownership and it self-consciously diverges from reality.

Usurpation, however, is not allowed. In the classical definition of private property—which goes back to late Roman law—ownership is considered as an absolute power (dominium). Dominium est ius utendi et abutendi re sua, quatenius juris ratio patitur (Property ownership is the right to use and to abuse one’s property as far as legal reason allows). Where the limits of ownership as absolute power were defined in Roman law as

“being in agreement with the legal ratio” the Code Napoléon (and other liberal codes of law in the nineteenth and twentieth centuries) defined ownershipasarighttoenjoyone’spropertyinthemostabsolutewayand to dispose of it, as long as the use of that property does not contravene laws and regulations. Afterwards, the social function of ownership was refined and elaborated in many theories basing themselves on the socio- logical reality of property rights.16

14“Comparative Law as an Academic Subject”, in O. Kahn-Freund, Selected Writings, London 1978, 285.

15S.P. Turner and R. A. Factor, Max Weber, The Lawyer as a Social Thinker, London, New York 1994, 45.

16See, for example, A. Belden Fields, Rethinking Human Rights for the New Millennium, New York 2003.

The Soviet system of property ownership introduced a fundamentally differentlogicintopropertylaw.Ideologically,propertywasthekeyconcept of Marxism-Leninism as expressed in the Communist Manifesto: “In diesem sinne können die kommunisten ihre theorie in dem einen Ausdruck ‘Aufhebung des Privateigentums’ zusammenfassen”.17 The Soviet regime however, did experience the problem of setting up a new property structure. After a period of radical collectivization—which denied not only private property but, also, individual property rights in the absurd—the Soviet regime made some important concessions to the property of individual persons and, in this way, recognized the ineradicable urge to individual property as a price that had to be paid for a minimum of political loyalty.18 This concession— which never received full recognition by law—was harmful for the purity of the communist system because it admitted the natural egoism of aver- age people and (which was even worse) the cynical selfishness of political leaders. State property de facto led to an extremely privileged position for those who governed the political system, as the party elite obtained an almost unlimited power over national wealth without attribution of a legally defined ownership to this wealth.

In West-European liberal democracies, the object of this absolute power of the owner remained undefined. Only one important limitation was introduced: slavery and feudality were abolished. The revolutionary French Constitution of 1793 declared that a person could not sell himself or be sold, as it was not to be considered as an alienable property.

The functional approach—that was so typical in the socialist doctrine of property rights—tothecontrarylookedfordifferentiationofproperty and claimed a victory over the monistic concept of property in the liberal tradition. Capital—as the concentration and circulation of production means—is the product of collective labor and serves as an instrument for collective labor. By its nature, it has a public structure and de jure belongs to society, as represented by the state. It was Pashukanis who finally at- tacked the foundational idea of individual rights. In his General Theory of Law and Marxism, he repudiated the idea of individual rights as a leftover of capitalism.19

17K. Marx, F. Engels, Ausgewählte Schriften in zwei Bänden, II, Berlin 1960, 418.

18J. Hazard, I. Shapiro and P. Maggs, The Soviet Legal System, New York 1969, 385.

19E. Pashukanis, “The General Theory of Law and Marxism”, in B. Beirne and R. Sharlet, (eds.), Pashukanis: Selected Writings on Marxism and Law, Armonk, NY 1980.

Property Ownership in the New Russian Civil Code as a

“Stretched Concept”

ForWestern observers, when reading the general section on property law of the new 1994 Russian Civil Code (Art.209), the (false) impression of “back to basics” is evoked: this is the well known private property concept of the

Code Napoléon, which proved its flexibility by remaining unchanged for so many decennia in West European societies. But, at the same time, this recognition of private property ownership in the Civil Code involves—for those who lived under real socialism—a radical (and controversial) example of legal change. Old communist truths are rejected and new ones advanced in their place. This change in civil law clearly represents a revolution in which paradigms shift and a new web of interpretations is constructed on the remains of the old.20 The problem of discontinuous legal change is especially acute for legislation which may not be subject to the same standards of coherence and precedence as judicial decisions.21

Our question is whether the concept of private property ownership, as defined by the new RF Civil Code, has not become the victim of “con- ceptual stretching”. According to Sartori, the phenomenon of conceptual stretching occurs in social research when a clear concept is applied to all possible “applications” in a way in which the comparative test of the hypothesis becomes impossible. Now that the concept of private property ownership is introduced in Russian civil law—after a period of rigid hierarchical division of property rights—we can ask ourselves whether or not the concept of private property has been stretched to unacceptable extensions. This conceptual stretching does not imply that the new Civil

Codedoesnotcontainanydifferentiationinpropertyrightsastosubjects, objects, and allocation of wealth. Our point, however, is that the radical change of paradigms in this field has created opportunities to legitimize the misappropriation of public wealth and natural resources.

Ownership and private property rights in post-Soviet Russia have become “omnibus data containers” that hopelessly lack discrimination and sharpness.After a process of getting away from “real socialist” classifica- tions, Russian civil law (judicial practice) will be forced to look for a new typology of property rights, answering the desired future developments.

20T. Kuhn, TheStructureofScientificRevolutions(1962),quotedbyW.Oehler,“Working with a Code. Is there a Difference between Civil-Law and Common-Law People?”,

University of Illinois Law Review 1997 No.3, 711.

21For an illustration, see Postanovlenie No.2/1 Plenuma Verkhovnogo Suda Rossiiskoi Federatsii i Plenuma Vysshego Arbitrazhnogo Suda Rossiiskoi Federatsii ot 28.02.1995 “O nekotorykh voprosakh, sviazannykh s vvedeniem v deistvie chasti pervoi grazhdanskogo kodeksa Rossiiskoi Federatsii”, Biulleten’ Verkhovnogo Suda Rossiiskoi Federatsii 1995 No.5, 1-2.

Rights in rem attributed to a non-owner could present an important op- portunity for this much needed differentiation.

This is not just a theoretical game of comparative legal scientists. Taxonomic negligence can lead to dismal practical results. The point in the reasoning of Sartori is that the poorer the discrimination in our own concepts, the more facts are misgathered and, therefore, the greater is the misinformation that results.22 An issue of typology is, indeed, an issue about the structures of the reality concerned. For the lawyer, taxonomic negligence can have even more important consequences: it can lead to abuse and distortions, so that law is no longer able to play its role in find- ing a balance between commutative and distributive justice.23

Normative regulations, elaborating the legal institute of ownership in a particular society, can be divided in two categories: institutional and technical norms. Institutional regulations represent the “hard core” of ownership. They answer to the question: which goods can be attributed to various subjects of ownership? To this hard core of ownership regula- tion belongs a second category, which can be defined as the content of ownership. What can a citizen or legal person do with this property? In which circumstances is the subject of ownership abusing the property? Technical norms, in their turn, presuppose the existence of these institu- tionalchoices.Theyfunctionasaspecifictechnicalelaborationofproperty relations, as conditioned by institutional regulations. Technical norms regulate common property ownership, protection, acquisition, transfer, and termination of property rights. It was commonly accepted during Soviet times that, for comparative purposes, precisely the institutional differences in attribution and content of ownership made the difference between socialist and western property rights.

In particular, the institution of private property owes its specific legal regulation to its association with personal freedom. It is commonly accepted that this kind of ownership needs to be approached on several legal levels:

22G. Sartori, The Theory of Democracy Revisited, Vol. 1, London 1987, 297.

23These two categories of justice go back to the writings of Aristotle. Distributive justice was enclosed in the communist principle: “From each according to his capacities, to each according to his needs.” Commutative justice is the one on which the concerned parties agree: it is honest, but not necessarily just.This kind of justice was translated in the socialist formula: “From each according to his capacities, to each according to his contribution.” Post-communist transformation implies a change in commutative justice. The new institution of private property gives an answer to the claim for commutative justice, but the claims for distributive justice increase. See, also, R. Dworkin, Taking Rights Seriously, London 1977, 227 (on the difference between the right to equal treatment and the right to treatment as an equal).