Streetwise Professor

November 16, 2011

Big Wheel Keep On Turnin’

Filed under: Economics,History,Politics,Russia — The Professor @ 2:58 pm

No, not Proud Mary: the hamster wheel from hell that is Putin’s purgatory.

His imminent return as president has sparked a series of stories that highlight the dreary prospects for the Glorious Motherland.

Like this one, from the Telegraph, detailing how as many as 30,000 business people (which, in Russia, really means businessmen) have fled, often without their money, which has been seized by the “law enforcement” authorities:

Russians who have been forced to live overseas also estimate that tens of billions of pounds worth of assets have been illegally seized by the Russian government as Mr Putin has strengthened his powerbase.

According to Andrey Borodin, the former head of the Bank of Moscow, the talent drain will only increase when Mr Putin, currently prime minister, runs for re-election as president in March – a poll he is almost certain to win.

“We call ourselves Putin’s exiles,” he said in an interview with the Daily Telegraph, his first since fleeing Russia last year.

He said Mr Putin and President Dmitry Medvedev, who is set to swap jobs with his mentor, were “using the law to act as gangsters”.

“But unlike gangsters in the West they have one big advantage: they have the police, the prosecutors and the judges on their side,” he said.

Now, you might reply, that these businessmen are just criminals and their fortunes ill-gotten.  First, that’s no doubt true of some of them.  Second, it would hardly be a ringing endorsement of the Russian system, or Russian commercial ethics, would it, if tens of thousands of businessmen in a country notorious for its low rate of business formation were crooks?   Just why couldn’t honest people survive in such a system?  Two possible answers: (a) there aren’t many, and (b) the absence of a rule of law and property rights, and the predation of the  state, mean that honesty isn’t a survival strategy.  Not a great choice, is it?

Indeed, Russia provides the best illustration of Balzac’s statement that “the secret of great fortunes without apparent cause is a crime forgotten, for it was properly done.”  (Sometimes bowdlerized to “behind every fortune there is a great crime.”)  For those of you who doubt that, explain the Abramovich-Berezovsky trial, dissected brilliantly here by my colleague Paul Gregory (an excellent economist and a historian of Stalinist Russia–and the son of an emigre from Chita).

“AHA”, defenders of Putin are likely to say: “That’s all about the ’90s.  That’s exactly what our hero has eliminated.”

But as Paul trenchantly notes, Abramovich did exactly the same as what Khodorkovsky–a current resident of Chita–is alleged to have done: selling oil at below market prices to offshore shadow companies that then sold it at the market price, and then siphoning the profits into foreign bank accounts without paying tax.  Note: Abramovich admits under oath to having done this.  But he is a free man, and Putin has not raised a finger against him.  Indeed, he is in good standing with Putin.

No.  The main difference between the ’90s and now is that corruption and economic crime on a vast scale has been nationalized, and benefits those in the state apparatus and those who pay obeisance to it.

What’s more, it is not just the wealthy or businessmen who are leaving to protect their ill-gotten gains and their precious hides.  It is also the educated, and members of the supposedly burgeoning middle class that differentiates the new Russia from the old (h/t R) who are leaving, or giving the idea serious thought.  There’s even a name for it now: “The Putin Decade Exodus.”  Decade!  What optimists!

There are some murmurs of discontent from those who intend to remain, and some suggest that this could pose political problems for Putin and Putinism.  But the Russian polity is so de-institutionalized, and the populace so atomized, that this is unlikely.  As a Russian participant at the most recent Valdai charade said:

“Because of the Soviet legacy and the 1990s, ordinary Russians don’t trust one another,” adds James Sherr of the Royal Institute of International Affairs. “They don’t combine in collective political activity. They solve their problems independently, with their families and friends. They opt out.”

Add to that the pervasive state control of most Russians’ primary sources of “information” (of which the refusal to permit foreign news broadcasting outlets in Russia that I mentioned earlier today is just one example), and the prospects for change via conventional political means look dim indeed.

In Russia, the lyric “meet the new boss, same as the old boss” is literally true.  The purgatory will persist.  The hamster wheel will keep on spinning.

And the devotees of the personality cult will swoon all the same.  Some of them I can understand. Those who passeth all understanding are the Paulians who channel RT and furiously defend what is really a libertarian dystopia and its overlord.

That is something I really would like to understand.  I would really like to see a non-spittle flecked explanation of the affinity of some Paulians for Putin.  Any takers?

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  1. He might be a slightly better writer, be he isn’t a tenth as cool as Mark Ames though.

    Comment by Sublime Oblivion — November 19, 2011 @ 2:26 pm

  2. Ron Paul is not the only American who adores Vladimir Putin, Pat Buchanan also loves him.

    Both Paul and Buchanan have been utterly repudiated at the polls, including by the conservative movement, which scoffs at both of them. They are a pair of dangerous wackos and it is not surprising that they would therefore find Putin, another dangerous wacko, attractive.

    The fact that, in many ways, the Obama administration is aping their attitude towards Putin only goes to show how utterly corrupt and devoid of morality the Obama regime truly is.

    Comment by La Russophobe — November 20, 2011 @ 6:49 am

  3. Now, Russia is attacking America’s water supply.

    It is directly supporting Iran against the West, helping Iran to continue developing nuclear weapons.

    Meanwhile, the likes of Paul and Buchanan and Obama only want Putin to grow stronger.

    Comment by La Russophobe — November 20, 2011 @ 6:54 am

  4. Fluoridated water is a Russian plot to poison our bodily fluids.

    Comment by Sublime Oblivion — November 20, 2011 @ 12:16 pm

  5. Putin’s behavior is so noxious that even the Russophiles are now rising to attack him.

    But we disagree! We defend Putin’s right to treat the people of Russia like sheep if that is how they choose to behave. He is just being rational lining his pockets and planning his getaway, like all other Russian leaders have always done.

    Comment by La Russophobe — November 20, 2011 @ 12:27 pm


    Do you talk about fluoridated water because you can’t deny the facts, that this attack on an American water plant originated in Russia?

    Do you not talk about Iran at all because you know that a Russian scientist has been documented to have been helping Iran build a nuclear weapon, meanwhile the Kremlin aggressively helps shield Iran from Western sanctions, helping it win time to complete its project?

    Do you really think nobody will notice such utterly ridiculous tactics?

    Comment by La Russophobe — November 20, 2011 @ 12:29 pm

  7. Ah Phobie, Phobie, do you get a bonus to your Jamestown cat food-eating in Manhattan salary for trolling against Ron Paul?

    “Both Paul and Buchanan have been utterly repudiated at the polls, including by the conservative movement, which scoffs at both of them.” Which is why Ron Paul is in a dead heat to win Iowa!

    Comment by Mr. X — November 20, 2011 @ 12:43 pm

  8. No La Russophobe, I’m making not so subtle references to the great film Dr. Strangelove for the purposes of ridiculing you! 😉

    Comment by Sublime Oblivion — November 20, 2011 @ 12:53 pm

  9. MR. X: Why do you talk about what you think Paul is going to do in the next election, rather than what he actually did the last time he ran for office? Is it because you are a lying, ignorant troll?

    SUBLIME MENTAL PATIENT: The only way ridicule would be proper would be if you could prove the attack on America’s water supply did NOT originate in Russia, or that the Kremlin was actively seeking to crush this attack. Can you prove that? If not, shut up silly little boy, and go back to playing with your own feces.

    Comment by La Russophobe — November 20, 2011 @ 3:37 pm

  10. John Samford-Couldn’t agree more. Can you imagine how central anti Americanism is to Putin that he would so actively support Iran in the current circumstances?

    Comment by pahoben — November 20, 2011 @ 7:46 pm

  11. Listen for yourself to the glorious sound of Vladimir Putin being booed off a stage.!

    Comment by La Russophobe — November 21, 2011 @ 12:25 am

  12. While state TV channels later edited the catcalls out and made no mention of the incident, Russian and foreign media said it was the first time Putin had been publicly booed. Alexei Navalny, one of Russia’s most prominent bloggers, called it “the end of an era.” He also suggested the incident had symbolic significance as it was now known to “everyone in the country, from young to old.”

    “The people showed great courage [in booing Putin],” blogger Alexander Morozov wrote. “Maybe they mistook him for [President] Medvedev?” quipped Oleg Kozyrev.

    Putin supporters had other explanations fo the boos. Kristina Potupchik, a spokesperson for the pro-Kremlin youth group Nashi, said in her LiveJournal blog the crowd was “anxious” to get to the toilets.

    Comment by La Russophobe — November 21, 2011 @ 6:31 am

  13. Now Putin’s lying sycophants can’t make up their mind if the crowd suddenly started booing when Putin stepped onstage, and state-owned TV edited out the booing, because they needed the bathroom or because they hated the American that the Russian fighter defeated.

    This is neo-Soviet comedy of the first order. The foundations of Russia, once again, are crumbling.

    Comment by La Russophobe — November 21, 2011 @ 7:29 am

  14. While state TV channels later edited the catcalls out and made no mention of the incident

    Well actually, no, they didn’t. In fact this one highlighted it.

    Why do the liberals like to lie so much?

    Comment by Sublime Oblivion — November 21, 2011 @ 11:49 am

  15. Your link is to a clip from the live broadcast. What part of “later” do you not understand?

    Comment by peter — November 21, 2011 @ 12:45 pm

  16. Sublime Oblivion is not really too smart, or honest, or blessed with morals Peter……

    Comment by Andrew — November 25, 2011 @ 3:59 am

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