Streetwise Professor

Russia’s most recent energy contretemps, this time with hapless Belarus, raises some interesting issues and questions.

The first relates to the European response to Russian energy muscling tactics. I have read that this is “a wake up call for Europe.” It sure should be, but Europe responds to these alarms in much the same way as does my college daughter while on break—by hitting the snooze button and pulling the covers overhead. The EU now offers its citizens the worst combination of government characteristics; it is united, intrusive, pushy, nosy, aggressive, and dirigiste when dealing with the most routine domestic matters, or with enforcing politically correct speech and behavior, while at the same time it is pusillanimous and divided when confronted with a determined and aggressive opponent with contrary interests (cf. not just the responses to Russia, but to Muslim extremists as well.)

The second matter of interest is the speed with which Putin acts, and his apparent unconcern for external criticism, especially European criticism. This can in part be explained by a well-merited disdain for Europe’s ability to match words with deeds (see above), but there is something more to it. Putin is clearly a man in a very big hurry with very little concern for the reputational impact of his actions. Why?

Like many things, this one is likely over-determined; many factors plausibly impel such determined haste.

Part of it is personal makeup. In his “Russia: Experiment with a People,” Robert Service portrays Putin as a “man of action” of “relentless menace” who was always wanting to advance quickly. For instance, Service notes his attempt to join the KGB at age 15.

But I think there are other fundamental, non-personality related factors at work too. Here are a few:

• Energy prices are high, which gives the Kremlin leverage over divided and somewhat panicky consumer nations. Moreover, despite the Kremlin’s confident rhetoric, the current dip in prices shows that this may not last forever. Hence, the urge to strike while the iron is hot and grab as much as possible as quickly as possible before the energy “correlation of forces” (in the old Soviet military argot) becomes less favorable, or altogether unfavorable.
• The unsettled succession situation and the behind the scenes battle for position in the succession struggle (which may account for some of the growing body count) truncates time horizons. Planning beyond 2008 is a dangerous thing to do. Again, better to get while the getting is good. Even though current strong-arming will undermine Russia’s reputation as a reliable supplier and place to invest, that bill will only come due in the years ahead, and who knows who will be in power to pay it? The future is now.
• As I have written before, Russia’s long term prospects are dim. It is living a demographic and public health nightmare. Such an environment is not conducive to long time horizons. When you perceive that you have no future, you obviously discount future costs heavily, and emphasize short run benefits.

It is difficult to identify factors that might offset these considerations. The unsettled political environment, the brutal means of settling scores, and the bleak long term prospects all tend to focus the mind on the here and now. Let the future take care of itself, and the devil take the hindmost.

I think that most Europeans, and those few Americans who seem to pay much attention to these issues, are nonplussed by Putin’s audacity in large part because they are projecting their attitudes onto him. They cannot envision why someone would engage in such seemingly short sighted actions. As a recent Newsweek story puts it, they wonder why Putin is risking severe “blowback.” However, their attitudes have evolved and developed in a completely different institutional, economic, and political environment than Russia’s. The Euro-American environment is much more conducive to taking the longer view that the unsettled (and unsettling) environment that characterizes Russia today. So, the Europeans—and Americans—should be ready for more “surprises” from Putin—which shouldn’t be surprises at all.