Jan Macháček has more in common with Andrej Babiš than you thought.


Misunderstood

Jan Machacek, the well-worn economic commentator, is perhaps the most misunderstood man in Prague today. Not since his former colleague at Respekt, Vladimir Mlynar, went into politics and then into PPF, has a Czech journalist been so reviled by his peers.

Machacek’s sin is to have abandoned Economia, owned by Zdenek Bakala, for Lidove noviny, a newspaper with a fine tradition but which has now become an outsourced PR department of Andrej Babis’ Agrofert conglomerate.

Machacek’s peers feel betrayed. Not this peer mind you. Ever since Andrej Babis declared his intention never to lead a political movement called ANO 2011, and when he became its leader, never to go into the government, I have been reading with dismay Machacek's Apologetics for the finance minister. He has now come out into the open, presumably because he had no choice -they say Bakala could no longer afford him.

Machacek is not servile like those other Babis employees. The role he has played in Babis’ popular ascendancy is more subtle. In numerous soothing commentaries, with catchy titles like ‘Babišistán ještě není Orwellistán’ or ‘Lepší babišizace nežli zemanizace’, Machacek has encouraged us to hope that Babis is acting in good faith. At the very least, argues Machacek, he is a welcome disinfectant poured over the fetid political life of this country, a scrubbingly efficient charwoman who will flush out the dirty bathwater of Czech party politics with his managerial bucket and mop (see here).

But Machacek overlooks the baby being flushed out with those mucky ODS dregs, the country's very own parliamentary system of government which Babis is bent on destroying.

Overlooks or undervalues? In my opinion, Machacek and Babis are much closer in their thinking about power than either would care to admit. Both believe in the power of the state above all else, over and above the accountability that a parliamentary system of government provides, however imperfectly. In my opinion, Machacek is no more a free thinker than Babis is an entrepreneur: one is a state capitalist, the other an apologist for state capitalism.

For example, these two great leaders, one of people, the other of opinion, are both enthusiastic champions of the so-called ‘super’ dividend to be handed over to the finance minister by market hybrids such as CEZ. Only an enthusiastic believer in the power of the state could favour such an idea.

With tedious regularity, public debate on CEZ’s profitability returns to the idea of a massive dividend payment from the firm’s retained earnings. The fact that it is Andrej Babis rather than ‘some corrupt politician’ who has come up with the idea most recently makes it no less flawed. And Jan Machacek is always there, pen at the ready, to promote the idea, and this regardless of who holds the government’s finance portfolio at the time. Machaceck supports the idea not because he believes in Babis as such, but because he believes in the power of the state.

Forcing CEZ to dividend 100% of its profits is tantamount to saying that the firm’s management is useless. Perhaps it is, but if this is the finance minister’s opinion, he should sack Daniel Benes. A ‘super’ dividend is intellectually incoherent in other ways too. For example, CEZ cannot afford to dividend 100% of its profits to the state and finance its current liabilities out of its heavily burdened cash flow and meet the other objectives set for it by its majority shareholder, such as building more nuclear power stations.

Above all, the ‘super’ dividend is incoherent because it would reinforce the chronic failure of supervision that has blighted CEZ since April Fools’ Day 2004, encouraging still more the incestuous relations between politicians and the public authorities. If Jan Machacek believed less in the power of the state, he would dismiss the idea on the grounds that it would make CEZ less accountable and the politicians that control it less willing to demand and to publish information, for instance on whether CEZ abuses its market dominance and overpays its suppliers.

Enough. All I am trying to point out, dear reader, is that you have no right to feel aggrieved at Jan Machacek for joining Andrej Babis: they belong together –one a long time state capitalist dressed up as a self-made businessman; the other a long time intellectual champion of state capitalism dressed up as a free thinker.