Thomas Piketty on the Russian kleptocracy
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Thomas Piketty on the Russian kleptocracy
Thomas Piketty on the Russian kleptocracy

Russia is widely thought of as an oligarchy run by President Vladimir Putin and a handful of billionaire cronies whose main accomplishment is looking out for their own financial interests. In a new paper, three economists say forensic evidence bears that out.

Economists Thomas Piketty, Filip Novokmet, and Gabriel Zucman found that income inequality is as great in Russia as the United States, with the top 1% of earners garnering upwards of 25% of national income, well above China and other former communist countries like the Czech Republic.

An offshore treasure trove: Piketty and Zucman have studied rising income and wealth inequality all over the world, and what makes Russia unique is how much cash is held offshore. They estimate that nearly $1 trillion in Russian assets is held outside the country, likely by a handful of oligarchs, most of which doesn't show up in official statistics.

The exploited masses: The Russian experience is in stark contrast to economic development in China, where income inequality has also exploded, but where the typical citizen's wealth and income has risen significantly as well. This research shows that the average private citizen's share of the national wealth has not increased whatsoever since the fall of the Soviet Union, despite the huge transfer of assets from the public sector to the private. The authors write:

What is particularly striking is the very low level of recorded financial assets owned by Russian households. ... In effect, it is as if the privatization of Russian companies did not lead to any significant long-run rise in the value of household financial assets, in spite of the fact that it is now possible to own financial shares in Russian firms, which seems especially paradoxical. In our view, the main explanation for this paradox is the fact that a small subset of Russian households own very substantial [sum of] unrecorded financial assets in offshore centers.

In other words, the uber wealthy in Russia have as much or more assets stashed overseas than the rest of the population combined holds in the country itself.

Why it matters: The Russian system rests on the extraction of natural resources, primarily oil and natural gas, which is sold abroad by oligarchs. They use the proceeds to invest in foreign real estate and other assets, rather than in productive ventures at home that would create jobs and allow the median Russian to share in that prosperity. (...)

http://gabriel-zucman.eu/files/NPZ2017.pdf




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2017 Nov 15 21:43
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RE: Thomas Piketty on the Russian kleptocracy
... and unfortunately the very little "trickle down" that there is tends to get spent by twenty- and thirty-somethings on extravagant holidays to Thailand and the like. The majority of the little people across the country aren't amassing capital at all, hardly. Then again, this oligarch class are surrounded by a class of managers and service providers who are keeping some wealth circulating in the system. If you get into the big city and happen to make the right friends, things can go very well for you, but that does mean massive swathes of the country are barely getting by. But sometimes it's hard to make your own anecdotal impressions fit the big picture, when you know middle-aged history professors who own flats in Switzerland, or sociologists that you do occasional editing work for mention that they're thinking of buying a winter residence in Spain! Just yesterday I met two Russians here in Granada, looking for premises to rent for their online business, too. There are several layers of life in Russia, which often don't intersect.

I find it hard to picture a Russia that isn't held under firm central control precisely by means of this neo-feudal relationship between state and money, though. Things seem stuck in their own iron logic, perpetuating the system. Blink for a second in this nasty geopolitical game and you lose entire provinces, or your head.

"And now if a whole nation fell into that? In such a case, I answer, infallibly they will return out of it. For life is no cunningly-devised deception or self deception, it is a great truth that thou art alive, that thou hast desires, necessities: neither can these subsist and satisfy themselves on delusions, but on fact. To fact, depend on it, we shall come back: to such fact, blessed or cursed, as we have wisdom for."
Thomas Carlyle
2017 Nov 16 09:51
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RE: Thomas Piketty on the Russian kleptocracy
The Russian history is a perpetual showcase of deep betrayals of the state against its citizens. Truly a game how much the sovereigns and their cronies might exercise power and not incite a revolt. We all know how that ended.

To this day the Russian national spirit is deeply wounded. On the other hand they are proud of their heritage and nation, but they cannot really trust the government. Is it any wonder if anyone with money wishes to invest it abroad away from the clutches of central authority who might some day decide that your possessions are legally confiscatable, and that you in fact deserve a prison sentence for ever thinking otherwise?
2017 Nov 16 11:52
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RE: Thomas Piketty on the Russian kleptocracy
(2017 Nov 16 09:51)Osweo Wrote:  ... and unfortunately the very little "trickle down" that there is tends to get spent by twenty- and thirty-somethings on extravagant holidays to Thailand and the like. The majority of the little people across the country aren't amassing capital at all, hardly.

Which just shows the bad saving habits and poor economic education of said little people. The big wealth disparity is not only there due to a big Jewish scheme (which is part of that), but also because after decades of communism too many people just don't know how to tap into the wealth that is circulating in a free market. Only a tiny percentage of Russians invest in stocks or have a retirement account and many lose a lot of their saved value to inflation. Thus the disparity. Clever people can actually make it big in Russia, much more so than in many Western countries (... and part of being clever is keeping some money abroad and to store savings in foreign currencies or a basket of commodities).

(2017 Nov 16 09:51)Osweo Wrote:  I find it hard to picture a Russia that isn't held under firm central control precisely by means of this neo-feudal relationship between state and money, though. Things seem stuck in their own iron logic, perpetuating the system. Blink for a second in this nasty geopolitical game and you lose entire provinces, or your head.

(2017 Nov 16 11:52)Artturi Wrote:  The Russian history is a perpetual showcase of deep betrayals of the state against its citizens. Truly a game how much the sovereigns and their cronies might exercise power and not incite a revolt. We all know how that ended.

That's a relatively recent phenomenon. In pre-revolutionary Russia, there was much more local self-rule and certainly a stronger sense of property rights. The Russian Ruble also had the greatest gold backing of all European currencies before the kikes sent our gold reserves to Sweden and then to New York.

"Whoever says that he "belongs to his time" is only saying that he agrees with the largest number of fools at that moment." - Nicolás Gómez Dávila

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2017 Nov 16 14:11
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RE: Thomas Piketty on the Russian kleptocracy
I would need more experience of the possibility of social advancement in the provinces to really speak on the issue. Along the Volga is hardly the most remote place, either. I'm thinking of people out in Komi or Arkhangelsk, Magadan or Bryansk. There is something of a legacy of Soviet education even out in the most distant corners, but making the psychological leap from that kind of surroundings to being an entrepreneur or finance wizard seems hard for me to envisage even many naturally talented people managing it.

Contemporary stuff aside though: God, the gold! (Though it seems joining the City of London's war already compromised the Tsarist regime, even before fullkikery.exe had been launched):
http://www.renegadetribune.com/tsars-gold/
Same fucking thing happened here in Spain in the '30s when the Reds were getting scared. This gold went INTO Russia, though! Big Grin

"And now if a whole nation fell into that? In such a case, I answer, infallibly they will return out of it. For life is no cunningly-devised deception or self deception, it is a great truth that thou art alive, that thou hast desires, necessities: neither can these subsist and satisfy themselves on delusions, but on fact. To fact, depend on it, we shall come back: to such fact, blessed or cursed, as we have wisdom for."
Thomas Carlyle
2017 Nov 16 15:01
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RE: Thomas Piketty on the Russian kleptocracy
(2017 Nov 16 14:11)Temnozor Wrote:  That's a relatively recent phenomenon. In pre-revolutionary Russia, there was much more local self-rule and certainly a stronger sense of property rights.

It is well known that Peter the Great turned Russia into a police state and the show has been going on ever since. Taxing even beards for goodness' sake! Excuse me for quoting wikipedia, but I do not have the time to seek proper sources right now.

That is hardly recent history. If you have good sources indicating otherwise, please present them.
2017 Nov 16 16:03
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RE: Thomas Piketty on the Russian kleptocracy
(2017 Nov 16 16:03)Artturi Wrote:  Peter the Great
Always with such national mass mobilisations, you get a hectic period followed by one of relaxing back to the natural state. The reality never quite matches the word of the law anyway, and Peter's bones were barely cold before things were getting back to normal, and Catherine the Great finished the process of "demobilisation", letting the nobility off the hook when it came to compulsory national service. You get a similar phenomenon with Bolshevism and Iranian Islamic theocracy - things have a natural tendency to want to slump back into lazy normality.

But with Tsarism, you have to appreciate the difference between autocracy (viewed as a GOOD thing by Russian political theorists of the day!) and totalitarianism. Order and prosperity was to be achieved in society by everyone knowing their place and not intruding on the competencies of other social layers, not by detailed micro-management. In any case, the more ambitious tsars had to contend with the communications realities of the era: plenty of local governors took one look at centrally composed ukazes and edicts, shook their heads at the contents, and shoved them away in a box, never dreaming of acting on anything therein. You can get away with plenty in a big country.

"And now if a whole nation fell into that? In such a case, I answer, infallibly they will return out of it. For life is no cunningly-devised deception or self deception, it is a great truth that thou art alive, that thou hast desires, necessities: neither can these subsist and satisfy themselves on delusions, but on fact. To fact, depend on it, we shall come back: to such fact, blessed or cursed, as we have wisdom for."
Thomas Carlyle
2017 Nov 16 17:29
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RE: Thomas Piketty on the Russian kleptocracy
(2017 Nov 16 16:03)Artturi Wrote:  It is well known that Peter the Great turned Russia into a police state and the show has been going on ever since. Taxing even beards for goodness' sake! Excuse me for quoting wikipedia, but I do not have the time to seek proper sources right now.

The beard thing was related to Peter's abolishment of Boyardom as a class (a huge beard was a status symbol). It's on wiki as well.

Quote:In 1698,[3] Emperor Peter I of Russia instituted a beard tax to bring Russian society in line with Western European models. To enforce the ban on beards, the tsar empowered police to forcibly and publicly shave those who refused to pay the tax.[4] Resistance to going clean shaven was widespread with many believing that it was a religious requirement for a man to wear a beard.

(> tfw Orthodox Jihadis aren't a thing because of Peter I.)

I'll need my dear time to give you a sourced response with hard data (just found this interesting read I am going to go through later), but the Russian Empire for example never had an income tax and it was pretty hard to tax anything else as well. It was a big country where transport was slow and record keeping fairly hard, so there was plenty of freedom the farther away from St. Petersburg you were willing to live. The vast landmasses to the East and South of historical Russia were largely conquered the same way the British gained sovereignty over India (via a private trading organisation), only that instead of the East India Company, Russia had plenty of free Cossacks who ventured out and established settlements and trading outposts. These were under the nominal sovereignty of the Emperor, but for a very long time essentially outside of his influence. There's always been a saying that "Russia is large and the Tsar is far away", referring to the fact that central authority is quite easily avoided.

"Whoever says that he "belongs to his time" is only saying that he agrees with the largest number of fools at that moment." - Nicolás Gómez Dávila

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2017 Nov 16 17:47
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RE: Thomas Piketty on the Russian kleptocracy
(2017 Nov 16 17:29)Osweo Wrote:  But with Tsarism, you have to appreciate the difference between autocracy (viewed as a GOOD thing by Russian political theorists of the day!) and totalitarianism.

It's funny that our Slavophiles who were the philosophical opponents of the Europhiles back in the 19th century (the latter advocated for Russia to adopt political reforms that would make it more "Western"), argued for autocracy because they believed that it offered more freedom than a republican or constitutional system. They were in fact almost libertarian minarchists who saw the crown as a giant burden for the Emperor, and the Emperor himself as a "necessary evil". The Slavophiles felt quite rightly that a monarch would intrude less on the "natural life of the people" than absolute rule of law (i.e. rule of the legal system and dead letters on paper over a living organism such as the nation).

"Whoever says that he "belongs to his time" is only saying that he agrees with the largest number of fools at that moment." - Nicolás Gómez Dávila

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2017 Nov 16 18:21
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RE: Thomas Piketty on the Russian kleptocracy
(2017 Nov 16 18:21)Temnozor Wrote:  our Slavophiles who were the philosophical opponents of the Europhiles
[Image: 2cxxaf5.jpg]

(As an anglichanin, these are the things I'm jealous of - just to have even a dim memory of such an intellectual tradition, ekh!)

"And now if a whole nation fell into that? In such a case, I answer, infallibly they will return out of it. For life is no cunningly-devised deception or self deception, it is a great truth that thou art alive, that thou hast desires, necessities: neither can these subsist and satisfy themselves on delusions, but on fact. To fact, depend on it, we shall come back: to such fact, blessed or cursed, as we have wisdom for."
Thomas Carlyle
2017 Nov 16 19:23
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