The Russian economy (catch all)

[Firn]

The Soviet Collapse, an article in 2007 by Yegor Gaidar.

Yegor Gaidar is director of the Institute for Economies in Transition in Moscow. Between 1991 and 1994, he was acting prime minister of Russia, minister of economy, and first deputy prime minister. Between 1993 and 2003, Gaidar was a founder and a co-chairman of the Russia's Choice and the Union of Rightist Forces Parties, and a deputy of the State Duma.

That second part of that quoted text caught my eye immediatly:

There were several factors which pushed me to write this book. The first was the rise in oil prices, which in real terms have started to approach the level of the late Brezhnev period. The second was the disturbing tendency to mythologize the late Soviet period in current Russian society and popular culture. These myths include the belief that, despite its problems, the Soviet Union was a dynamically developing world superpower until usurpers initiated disastrous reforms. At least 80 percent of Russians are convinced of this flawed interpretation of history.

Historically, such myths have a dangerous precedent--namely, Germany between World War I and World War II. Then, the legend went that Germany was never defeated in the war, but "stabbed in the back" by the Jews and the Socialists. To some degree, the responsible party was the democratic German government, as it was unprepared to publish materials about what really happened before and after World War I.

The notion that the high hard income from the oil shock prices set bad incentives far higher public spending, the Afghan adventure and misallocated investment sounds plausible. This imperial overspending made the whole system inreasingly vulnerable to low revenue due to higher production costs and lower market price.

In 1985 the idea that the Soviet Union would begin bargaining for money in exchange for political concessions would have sounded absolutely preposterous to the Soviet leadership. In 1989 it became a reality, and Gorbachev understood the need for at least $100 billion from the West to prop up the oil-dependent Soviet economy. According to chairman of the State Planning Committee Yury Maslyukov:

We understand that the only source of hard currency is, of course, the source of oil. . . . If we do not make all the necessary decisions now, next year may turn out to be beyond our worst nightmares. . . . As for the socialist countries, they may all end up in a most critical situation. All this will lead us to a veritable collapse, and not only us, but our whole system.[7]

History doesn't repeat itself in the same manner but the patterns seem to emerge in a strinkingly similar fashion. So far the commodity prices are still high, and the Europeans are still buying Russian gas.



It seems that the 'Russians' had recently the tendency to invade non-aligned countries right after another all-time high oil prices. 1979, 2008, 2014...