Adventures In Two Worlds: Vladislav Inozemtsev Phases In And Out of Reality

Uncle Volodya says, "History will be kind to me, for I intend to write it."

I’ve been thinking back over my lifetime quite a bit lately. Not that flash-before-your-eyes thing that’s supposed to happen when your death is iminent; more like a thoughtful, deliberate inventory. I can’t honestly recall doing anything really, really bad. Well, there was that time in junior high when I stole some ice-cream-on-a-stick treat from the grocery near my school by shoving it down the front of my pants. The clerk at the checkout knew I had it, too, but I grew up in a small town where every adult knew your mother, and those were different times. Rather than embarrass me with confrontation, she simply engaged me in small-talk about my family until it had melted down my legs inside my jeans. It worked, too. I never stole anything frozen again, and I never forgot the lesson.

Well, where was I? Oh, yes. I can’t recall doing anything really bad, but it seems I’m being punished for something disgraceful. I’ve said on numerous occasions how thoroughly I despise economics – but every member of the Russian liberal intelligentsia the west trots out these days to support its theory that Putin will crush Russia in his kung-fu iron grip, or to lecture Russia on the path it must take… turns out to be an economist.

The latest in the conga-line of straitjacket mannequins is Vladislav Inozemtsev, author of a somewhat scolding diatribe for the Washington Post, entitled, “Keeping Russia From Turning Back” (thanks, sinotibetan).

Hey, remember the character of “Reverend Jim” Ignatowski on the TV Sitcom “Taxi” (1978-1983)? Jim was pretty burnt out from systemic drug abuse (you could make fun of people for things like that on TV back then), but every once in awhile he would experience an epiphany when his brain and current events came briefly into alignment. When asked to explain this phenomenon, he replied somewhat dazedly, “I tend to phase in and out of reality”.

So does Vladislav Inozemtsev, apparently. Or at least he lives in alternate realities, where now Russia is kicking ass and taking names, and now it is a smoldering wreck with a gibbering Vladimir Putin at the helm as it spirals ever downward into the fiery heart of hell. How, we must ask ourselves, are we supposed to know when he is being serious?

Well, let’s see how his latest effort stands up to comparison with his previous directives. Because if there’s one thing I’ve learned about economists, they love to see their opinions in print. If there’s another thing I’ve learned about them, it’s that they like to forecast every possible way a situation could turn out, so that no matter how things end up, they can point to one of their theories and say triumphantly, “See? I was right”. They also often forget every contradictory theory they wrote. So let’s help Mr. Inozemtsev out a little.

First, let’s look at Inozemtsev’s contention that “Putin knows that more than half of Russian voters recall the Soviet past with affection”. Fact-checker says… Horseshit. I thought economists were supposed to be good at mathematics. Here’s the report of the scientific survey that informed Inozemtsev’s conclusion. Mendelson/Gerber also attempted to frighten the world with their suggestions that Russians in love with their vision of the Soviet Union would try to recreate it, but the poll results suggest otherwise. To the question, “If Stalin were running for president today, would you vote for him?”, 13% of Russians under 30 surveyed said yes. A block of 46% said definitely not. A further 21% said probably not, although Mendelson/Gerber creatively spin this to indicate likely yes, as if they could read their minds. Even if you add 21 and 13, you still don’t get “more than half”. The over-30’s voted slightly higher in favour of a President Stalin, but nothing like half. Later Mendelson/Gerber bemoan their conclusion that not enough young Russians know who Andrei Sakharov was: Russia needs real heroes, they say, and if the response of a university student who didn’t know who he was is typical country-wide, the country is in very serious trouble.

Let’s put that in perspective, shall we? According to research conducted by Dr. John D. Miller of Northwestern Medical School, 1 in 5 adult Americans thinks the sun revolves around the earth. More recently, a study reported in the Associated Press found that while 22% of Americans could name all 5 characters on the cartoon “The Simpsons“, only 1 in 1000 Americans could name all 5 freedoms guaranteed by the First Amendment. Could the United States be in very serious trouble, do you think? Once again, I’m not picking on America out of dislike for Americans, because I do not dislike them – rather, it’s because the authors of the Mendelson/Gerber report are Americans.

So. There is no evidence whatever to suggest more than half of Russian voters recall the Soviet past with affection – the Mendelson/Gerber study was the most comprehensive of all conducted, and the legwork for it was done by the Levada Centre, which is assessed as pretty credible. The study in fact found that a significant number of respondents were ambivalent, and did not want to commit to an opinion. That was spun by the report’s authors as a reluctance on the part of Russians to acknowledge the horribleness of their past, and to grovel in the dirt and beg western forgiveness for it while embracing role models chosen for them by the west. This is Inozemtsev pulling numbers out of his ass, which is a bad start for a career in economics.

It doesn’t get better, I’m afraid. Inozemtsev appears to low-ball Russian GDP per capita, at $10,360.00. Other sources which purport to be reliable have it significantly higher, at $15,900.00. But whichever is accurate – and I suspect it’s somewhere in between – it as usual does not tell the whole story. Inozemtsev is using the numbers to argue that authoritarian rule in general is bad for GDP. Is it, really? Look at the rate of climb for GDP – remembering that this figure represents Purchasing Power Parity (PPP) – for Russia since 1999, compared with the same period for the USA. Russian per-capita GDP rose nearly 3 times as rapidly, by a factor of 3.7 against 1.3 for the USA. In addition, the unemployment rate in the USA is considerably higher. Authoritarian Russia managed to drive rapid gains in purchasing power for its citizens, while keeping unemployment down around the same level as Germany’s. Germany is the powerhouse economy of the European Union, the one everyone looks to when they think “bailout”.

You can make statistics say just about anything you want, by playing up this while you play down that. Vladislav Inozemtsev wants to make them say things sucked under Putin, and that citizens should prepare for them to suck worse under a reprise of Putin leadership. How credible is Inozemtsev? Let’s see.

Inozemtsev, November 2011: “As [Russia’s] ruling plutocracy seeks to turn back to the Soviet past, the attraction of a European future looms brighter.” Inozemtsev, March 2011, in “The American Interest“: “Many Western experts today portray Russia as a country spiraling down into totalitarianism, slowly (or not so slowly) following the path of the Soviet Union, whose authoritarian regime crumbled under growing pressure from an emerging civil society…Unfortunately, all of these assumptions are wrong. Contemporary Russia is not a candidate to become a Soviet Union 2.0. It is a country in which citizens have unrestricted access to information, own property, leave and return to the country freely, and develop private businesses of all kinds…Clearly, this arrangement—economic freedom coupled with political constraint—does not please everyone. To the standard American mind it suggests that something has got to give. This, too, is wrong. Some Russians do give voice to dissatisfaction with the current regime and the widespread abuse of power by police authorities, local officials and oligarchs closely connected with the ruling bureaucracy. Yet the system seems fundamentally solid and durable.” What a difference a couple of months make; I can’t help observing that in March, Inozemtsev did not know Putin would stand again for election to the Presidency.

Want to do another one? Sure; Inozemtsev, November 2011: “Accordingly, leaders in Brussels should rethink certain myths. Russia is big, but not too big for Europe; as an E.U. member, it would be the second-largest national economy and add one-fourth to the E.U. population…Russia has a kind of a European people but, unfortunately, not a European-type government. Inozemtsev, February 2007, in “Global Affairs“: “Today, Russia and America are very much alike. At the same time, they dramatically differ from Europe, which had an enormous historical impact on them…The first thing that strikes the eye when making a comparison between the United States and Russia is their remarkable similarity as very special people – “chosen” and “messianic.” I see. Russia would be a perfect choice for Europe because its people are like Europeans, except when they’re not. And then, they’re just like Americans, who are not like Europeans even a little bit.

Oh, all right – one more. Inozemtev, November 2011: “In a world orchestrated by three centers of power and wealth — the United States, the European Union and China — Russia can play a significant role only if it strengthens the beleaguered European “pole.” Inozemtsev, again in Global Affairs, March 2006: “ We all are entering a new era in which the Europeans may peacefully live in their united Europe, and the Americans may build their beloved America according to their own projects. But this will be possible only if America and Europe let the rest of the world follow the path of genuine globalization, that is, let each nation and people follow its own course. ”

Clearly, Inozemtsev has experienced an epiphany. Russia, with its large cash reserves and energy-dominated economy, could best serve the cause of global greatness by joining the European Union, many nations of which are groaning under the most severe austerity budgets since the Second World War, and others of which are trembling on the abyss of bankruptcy’s crumbling edge. As I mentioned earlier, when Eurozone members think “bailout”, they think, “help us, Germany”. Enter Russia, with pots of money, a net energy exporter where the EU is a net energy importer, and a guilt complex over its sordid Soviet past that has it just looking for a good deed to do so it will be accepted by its fellow Europeans.

Here’s a helpful explanation of how Russia could be….well, helpful, as a member of the EU and the Eurozone, by way of Alex Mercouris; ” When Mervyn King (the Governor of the Bank of England) and Ben Bernanke (the Chairman of the US Federal Reserve Board) bought British and US government bonds by printing money (“quantitative easing”) they did so in the knowledge that behind them stood the Treasuries of Britain and the US.  This meant that if there were any danger of things going wrong and of quantitative easing undermining the stability of sterling or the dollar the British and US Treasuries would be in a position to step in and bail them out by raising the necessary money through higher taxes.

The European Central Bank is not in that position. No European Treasury stands behind it.  There is no unified European tax system that could raise money if things go wrong. The EU has no independent tax raising powers. It relies entirely on contributions to its budget from member states who negotiate the size of their contributions years in advance. What would have to happen if the European Central Bank were to print euros in order to engage in a bond buying programme and things were to go wrong is that it would have to turn to European governments for help, which in practice as everyone knows would mean the German government. Given the scale of the European sovereign debt crisis Germany could then find itself facing demands for money running into trillions of euros. With a GDP of just $3 trillion Germany could find it impossible to raise such funds in which case there would be a default.”

Economics. Hoo, Boy. Just when you think you understand it. But if you were wondering why economists don’t seem to understand them either, here’s as helpful a guide as I’ve ever read: Thales and I have our fundamental disagreements regarding political philosophy, but I’ve never seen anything as complicated as economics rendered so simple. As he (or she) says, “…acting confident and having conclusive evidence are two different things.”

What was that buzzing noise? Hopefully, it’s Vladislav Inozemtsev, rejoining reality.