Publication in Russian on the Zen blog
https://dzen.ru/a/ZqE0os4mqCL2o3I7
To make the world a better place, we must replace despotism in Russia with democracy so that future generations can better engage in the pursuit of happiness and self-realization to become better versions of themselves. The good news is that Russia is beginning to fall apart due to the economic consequences of the resource curse. In this post, we will look at the reasons why the Russian economy is showing weakness, which may eventually lead it to a new state.
Let's remember the era of wooden ships and iron men, namely the conquistadors from Spain who came to South America in search of gold and resources. A participant in the conquests as part of the expedition of Hernan Cortes, Bernal Diaz del Castillo, the author of the chronicle "The True History of the Conquest of New Spain" said the phrase: "We have come to serve God and to get rich, as all men desire." An excellent motto of the conquerors, explaining their intentions and motives to get rich, which led to the resource curse for the Spaniards. How does this apply to Russia today? The resource curse includes six characteristics: tyranny, corruption, underdevelopment, conflict, an abnormal Gini coefficient, and resource diversification. So Russia has all these ticks, as does Spain. St. Augustine was the capital of New Spain, and in the New World, the Spanish Empire eventually fell apart because of this curse. A nation of shopkeepers, industrialists, innovators and farmers prospered and prospered. Spanish pieces of eight (piasters) were used as a reliable currency, like the American dollar is today. The Spanish Empire began to collapse from within because, due to the resource curse, a lot of people's productive energy, their aspirations, their mental activity were directed towards acquiring an unproductive asset - gold. Oil and gas are also unproductive assets because they are worthless in themselves, unlike what the human mind creates. There is a correlation between countries with more resources and countries with fewer resources. Countries with the least wealth are forced to rely on their intelligence to succeed. I will give an anthropomorphic example from nature. Interestingly, the Spanish brought many pigs to the New World, which they domesticated and raised. Nowadays, there are many of these pigs left, but they have become feral. And these pigs are very smart on the scale of human and animal development. In contrast, domesticated pigs are less intelligent, they don't have to work hard to survive. This doesn't mean that regular domesticated pigs are less intelligent, it's just the culture they're raised in. This metaphor also applies to the resource curse. When you have opportunities in a free market under capitalism, or under free enterprise, then you're willing to innovate, you think outside the box, but if you're in a system that's turned you into a feudal caste, you don't think outside the box because you don't have hope and you don't have opportunities, so let's move on to Russia, which is based on the resource curse. I'll try to explain it in a microeconomic way, and I'll repeat that the metaphor of anthropomorphic pigs has nothing to do with humans, it's really about the environment that these creatures are placed in, it's not about intelligence, it's about survival. The microeconomic basis is that if somebody in your town, in your area, discovers gold or a large amount of natural resources underground, will you personally benefit from it, will you be richer? Probably not. The people around you will still be poor, and in a relative sense, you will still be poor. So the idea that Russia has huge natural resources and it is a rich country, which I often hear, is incorrect economic thinking, because the resource curse only benefits a few, everyone else is worse off. Think about it again, ask yourself again, if somebody in your town finds a pot of gold or wins something through a windfall, will that make you personally rich? So what happened to Spain? Spain fell apart. New Spain fell apart. People were making claims, look how big Spain is, look how many resources Spain has, but look at South America, they are all separate little countries. And the best way to improve Russia is to sever the resource curse. If Russia doesn't have resources to fall back on as a crutch, it will have to use the greatest god-given resource in the universe, the human brain, to innovate and create value. Look at intellectual property in the West, like Google or YouTube, these are incredible innovation platforms and intangible goods and property created by the intellect that drive development and growth. By extracting resources and relying on that as the foundation of the economy, in addition to causing terrible damage to the environment, remember that the resource curse has six things, all of which are green: tyranny, corruption, underdevelopment, conflict, a Gini coefficient that is out of whack, and resource diversification. And if you've studied Russian history, you'll see that there's a lot of bluff coming out of it. The country has always projected an image of strength and power, but in reality, it has all the prerequisites for its downfall. From an accounting point of view, from a monetary theory point of view, from a physical point of view and from a metaphysical point of view, Russia will only be better off if it gets rid of the resource curse. Moscow has about $300 billion in its coffers and it is estimated that it will run out in 2026, it will have to print money and monetize everything, which will eventually bring chaos and lead to collapse. The last time rubles were backed by gold was in 1898 and it ended in 1914, but now it is just paper, they are trying to use it, to exert currency controls and other methods to fictitiously support the value of the ruble, which is constantly falling. And this has a significant impact on the ability to generate income from oil and gas production. The government is resorting to emergency measures to support the ruble, but it is doubtful that it will be able to do this in the future. Let's look at it from a physical point of view, this is the Eastern Pipeline, Siberia - the Pacific Ocean, an artery that currently provides Russia with income from resource sales, in particular, to China. The problem is that if this connection is broken, then, in addition to the huge impact on the environment, it will bring huge problems to the Russian economy. As for the metaphysical point of view, I am not a supporter of the supernatural, but I will draw your attention to the influence of myths and, in particular, the fact that good triumphs over evil, I recommend the scientific psychology "The Power of Myth" by Joseph Campbell, and make a thought experiment, is crime a good path to follow? Is crime a road to success? There are many rich people, altruists and philanthropists who make money through innovation or creativity, but Russia is essentially not a good environment for this. Over the years, a huge negative karma has been created, and I do not believe that the Universe will allow this to continue for long, no matter what, the resource curse will remain a curse for Russia. This will lead to an economic catastrophe, on the ruins of which Russia will have a chance to become better.
Участник завоеваний в составе экспедиции Эрнана Кортеса, Берналь Диас дель Кастильо, автор хроники "Правдивая история завоевания Новой Испании"
Научная психология "Сила мифа" от Джозефа Кэмпбелла. Автор раскрывает таайну влияния мифов на современную жизнь. После прочтения этой книги вы по-другому будете видеть некоторые вещи.
Марк Галеотти - политолог, посвятивший изучению России 30 лет, специалист по российским спецслужбам, эксперт по международным отношениям.
Adding to the numbers and formulas, to these verifiable foundations, a metaphysical aspect, not as ignorance, but in an attempt to explain the functioning of the world, where what happens is a consequence of certain actions. For example, forest fires, floods, and so on. Think of the mayor of a flooded city, where the causes of what happens are corruption and neglect. People with apartments in Dubai did not and will not do anything to build a dam, because the whole system is so corrupt. Such people talk about the decadence of the West, how bad everything is there, but their children get an education and live in London or Paris. Monumental hypocrisy.
Before Russia (then the Soviet Union) discovered oil in the 1970s, they carried out economic reforms, because it became clear that the planned economy did not work. And then the economy improved. But then oil was discovered in Russia and they started selling oil to the West (Europe), so the reforms were stopped, Russia became a "dig and sell" country.
One of the wonderful things that works in Europe and the US is the entrepreneurial spirit. A society built on the innovation of a free market economy, which is not the case in countries like Russia. The resources are great, but over time they are depleted, leaving big holes in the earth and their economy.
The world is transitioning from a resource-based economy to a knowledge-based economy. This is especially true of fossil fuels, but it is also true of other resources. When this war is over, Russia will try to sell its resources again, but there will be no markets. In essence, the country has committed suicide. In humorous terms: our karma has surpassed your dogma.
Natural resources without capital and know-how are just decorations. Russia has cut itself off from global capital markets and failed to invest adequately in the education of its citizens.
One could also add that China is silently colonizing Russia economically and geopolitically, without having to shoot or occupy territory. Russia's increasing dependence on China is doing all the work. In a few years, Russia will cease to be a global player, since colonial status is incompatible with a significant role in world affairs. Meanwhile, Western markets continue to be the oxygen for China's export economy, so optimistic predictions are likely that the West will find a non-violent way to coexist with the Chinese.
Russia is exhausting itself militarily, leaving its largely unpopulated and resource-rich eastern territories open to assimilation by other population-rich, resource-poor countries like China. This would eliminate or at least reduce Russia's own resource curse, but restore the demographic balance of East Asia.
Economist Richard Auty coined the term "resource curse" in 1993, but the idea has been around since at least the 1700s. Noted Russia expert Mark Galeotti has noted that the Soviet economy finally began to grow, diversify, and provide some opportunity for its citizens in the 1970s when the discovery and exploitation of vast oil reserves began to pour in vast amounts of foreign currency. This led to a halt in most change and development as the oligarchs in power began to siphon off the vast majority of that wealth for their own benefit. This marked a return to central planning and absolute state control. Who needs economic diversification and development when billions of dollars in hard currency are pouring in?
The Russian system currently exists to allow a tiny minority of those in power to appropriate vast wealth while controlling and oppressing the masses. Government and military officials are engaged in theft and embezzlement, not in providing services or caring for the health and well-being of their constituents.
Imagine how rich and developed Russia could be if the government and oligarchs invested at least 10-20% of the stolen billions into consumer loans, industrialization, and economic development? China is the world's largest economy. But it is also one of the poorest in terms of natural resources. Russia is the complete opposite. Russia has the economy of just one state, like New York, and vast reserves of oil and minerals worth trillions of dollars.
There are many examples of the resource curse. For example, Venezuela, an island with bird droppings, and many other countries rich in oil. Finland was resource poor and made a conscious decision to invest heavily in education. The only exception is probably Norway. Perhaps because they discovered oil AFTER they had already established a stable society and democratic government.
Think about if resources were used not for sale but to service their own industry. Instead of a few people getting rich, every Russian would benefit. Happiness would increase. Russia could become the richest country in the world. Instead, the oligarchs are like the mafia, taking over the country's power and resources.
Russia would collapse suddenly, like in 1991. Until citizens eradicate kleptocracy, this country will decline in accordance with the resource curse.
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Publication in Russian on the Zen blog
https://dzen.ru/a/ZqE0os4mqCL2o3I7
