Streetwise Professor

May 4, 2007

The “Russian” Soldier

Filed under: Politics,Russia — The Professor @ 7:09 am

All bow before Russia, scourge of the Georgians, smiter of the Estonians. Tremble before Vlad, Tsar of all the Russians, and (apparently) would be Emperor of a lot of people who have been there, done that, and don’t want to repeat the experience, thank you.

Russian revanchism has reached a new low (though probably only a temporary one) with the contretemps over the war memorial in Tallinn, Estonia which has spurred riots in the Estonian capital and thuggish intimidation of Estonian diplomats in the Russian one. Edward Lucas’s j’accuse casts a pox on both houses, blaming the Estonians for needlessly baiting the Russian bear, and the Russian bear for snapping up the bait. He also excoriates the pusillanimous European response.

Lucas, as usual, makes excellent points, especially in his blog post on the subject. Personally, the Jacksonian in me is more sympathetic with the Estonians. Pragmatically speaking, Lucas is right that it is not wise to give Putin and his clique the opportunity to whip up nationalist sentiment in the lead up to the Russian “election.” But: (a) Estonia is a sovereign nation, (b) the Soviet occupation was a terrible and unlawful thing that deprived Estonia of its sovereignty, and many Estonians of their lives and many more of their liberty, (c) the monument has been a lingering reminder of that occupation, and (d) the Russians need more than a little reminding of (a)-(c) above. Moving the monument is a declaration of independence/sovereignty, and coming at a time when Russia is aggressively attempting to undermine the sovereignty and independence of its little neighbors, it is a bracing example of a small but determined nation standing up to a malign and bullying one. Passivity in the face of Russian bluster–and worse–will only encourage more.

Lucas objects that since no other country thinks that this is a good idea, the Estonians should have demurred. I think that the main problem is with the other countries that shy away from standing up to Putin. The collective cowardice of many is a poor reason to be a coward oneself. Indeed, in a better world Estonia’s action–and the Russian response–would shame the cowardly into a more manly posture (can you say that anymore? Harvey Mansfield, call your office.) Estonia is also providing a valuable positive externality, by taking an action that has goaded Putin into showing his true colors.

Hence, my main objection is to the aforementioned pusillanimous Euros. (No surprise that they are pusillanimous; no surprise that I am bagging on them yet again. La plus ca change.) They should be standing up for Estonia–an EU member and a member of NATO. But–MIA. Again.

An interesting sociological aspect of this is the identification of the statue of a Soviet soldier as a Russian one by a large slice of the Russian populace (and the Russian citizens of Estonia). The USSR largely tried to downplay–and indeed suppress–Great Russian nationalism. Russia was clearly the first among not-so-equals in the USSR, but for a variety of reasons (ideological and pragmatic) the Soviet regime did not encourage the development of a Russian national identity. (Robert Service’s book on Russia in the 1990s discusses this in some detail, and argues that it had consequences for Russian politics in the post-Soviet years.) The Great Patriotic War was fought not just by Russians, but by Ukrainians, Georgians, Azeris, and yes Estonians. Men (and women) from many nations under Soviet rule wore the uniform of the soldier depicted in the statue. Perhaps there are non-Russians buried under it; certainly millions of non-Russians died under Soviet banners in the conflict the statue commemorates. (If only Russians are buried underneath, I would be curious to know whether that was a trick of fate, or a deliberate choice.)

But outside of Russia, and the Russian populations of former Soviet republics, few–very few–want to claim the legacy of service in the arms of the USSR during the period 1941-1945. The Estonian episode is a graphic reminder that although hardly anybody else misses the USSR, many Russians do. I am currently reading Moby Dick (what a book!), and the Estonian riots evoke in me an analogy between Ahab’s fury at his lost limb and the Nashi-ites fury at their lost empire. There is an unreasoning anger at the loss–anger that is directed at any reminder of it. So Russian revanchism is not just driven by material goals and a thirst for power. It draws its energy from primal, emotional, psychological sources, and hence will be difficult to manage with reason, compromise, and diplomacy. One may with reason chide the Estonians for unleashing these dark emotions, but perhaps we owe them thanks for providing the world with an important object lesson. The first step in dealing with Russia in a constructive way is understanding it, warts and all, and plucky (and perhaps foolhardy) Estonia has provided anyone paying attention with valuable (if frightening) insights that we should all heed.

May 1, 2007

Putin=Deng? Not!

Filed under: Politics,Russia — The Professor @ 2:03 am

The usually (very) sensible Charles Krauthammer compares Putin to China’s Deng Xiaoping. This comparison is way wide of the mark. The main similarity is that Deng and Putin took a non-idealogical approach to economic issues. Perhaps both view (or viewed) a strong economy as the foundation of a muscular state able to project power and restore their respective nations to Great Power status. These similarities in objectives do not extend to means.

Although China post-Deng has hardly respected the property rights of ordinary Chinese, it has not run roughshod over the property rights of investors, especially foreign investors, in the way that has become routine in Russia. China has not engaged in widespread expropriation. It has not dismantled leading corporations on false pretexts. Moreover, even though state owned enterprises are still prominent in China, that nation has been weaning (albeit slowly) inefficient nationalized companies from state support. In contrast, Russia is engaged in an aggressive effort to restore leading firms in every sector deemed “strategic” to state ownership and/or control.

In brief, while Putin may admire Chinese success in achieving strong economic growth while retaining state control over virtually all political activity, his means on the economic side are far different than those the Chinese have employed.

Nor has Russia achieved the same economic results as the Chinese. While Putin struts and crows about 6 percent economic growth over a handful of years, China has been growing at 8 percent for far longer. And Chinese growth has not been steroid (I mean to say energy price) enhanced. Russia’s growth is largely, though not completely, attributable to high energy prices. In contrast, high energy prices (driven to no small degree by robust Chinese demand) have constrained Chinese growth. Moreover, much recent Russian growth is catch-up from the economic collapses post-USSR and post-1998. Considering the windfall arising from strong energy prices, and that much of Russian growth reflects a return to more complete utilization of its economic capacity, rather than a growth in that capacity, and Russian growth looks much less impressive. Indeed, as Andrei Illironov has written, in the past two years Russian growth has lagged behind 12 of the 14 other post-USSR countries, most notably the Baltic states, but also other nations without the same human capital and natural resource endowments as the Russian Federation.

In brief, the Chinese transformation–and the Chinese model–are much different than the Russian. I am no Sinophile, and dislike that nation’s political system and much of its economic system, but viewed objectively it has done better than Putin’s Russia hands down. There are shaky supports to the Chinese economy–most notably its banking system–but it is on a far firmer footing than Russia’s. And Putin’s Commanding Heights-state driven-siloviki managed model will not encourage future economic growth. It is probably the best model if you are a former (or current) member of the state security apparatus looking to siphon rents, but it is far inferior to the Chinese model–and miles behind that dreaded Anglo-Saxon model–when it comes to providing broad-based economic growth that redounds to the benefit of the larger population.

Insofar as redounding to the benefit of the larger population is concerned, a couple of closing comments. First, there is no doubt that most Russians have seen a marked improvement in their standard of living. In this respect, Putin is reaping the benefits of very low expectations and the horrific experiences of the 1990s, as well as the aforementioned windfall from higher energy prices.

Second, as North et al emphasize in their analysis of the “natural state” (discussed here), there is a tension between an economy built on rent seeking and rent extraction that primarily benefits the connected elite but benefits the unconnected masses far less. Economic development that benefits a wide swath of the population that is largely deprived of political voice and representation is eventually what Avner Greif describes as “self-undermining.” Thus, natural states–of which Russia is an exemplar–are threatened by broad-based economic development that encourages the growth of a middle class.

And I think this is where Putin admires the Chinese most. They have heretofore succeeded navigating this tricky transition, and if Putin is looking east for inspiration, it is in this sphere where he is looking hardest. The ruthless campaign against any political opposition, no matter how puny, and the relentless drive to extend state control over great swaths of the economy in spite of the clearly adverse implications of this for economic growth, are manifestations of his strategy to maintain the natural state that benefits him and his fellow siloviki.

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