Principles of russian (war) economy.
a thread about russionomics.🧵
Recently there is rising discussion about #russia's ability to sustain the #Ukraine war. The great #Perun on YT comes to mind. Yet many observers overlook the specific russian economic model, russionomics. 1/n
1/ Material goods.
- A material good is something you or your mates can steal.
- It needs a means of production or storage to steal from.
- If a good is in short supply steal the rest.
- The function of the army is to provide lots of material goods to steal easily. 2/n
2/ Intangible assets
- An intangible asset can be stolen remotely.
- Nobody cares if it is stolen until some burly gopniks ring at your door
- Favours are immaterial goods obtainable by means of a bribe
- Justice, public sector and army operate as system of favours and bribes 3/n
3/ Immobile assets
- Immobile assets can be bought but are commonly obtained via bribe.
- Get immobile assets as they are harder to steal.
- The size of your immobile asset shows how much you steal and creates status.
- Yachts are mobile immobile assets.
- Never outdo Prez. 4/n
4/ Surplus value
- When you steal it it has value
- When you can bribe with it, it has value
- Selling is an attempt to steal as much money from the customer (gopnik) as possible.
- Stealing from the army creates private value.
- Sale of stolen goods maximizes surplus value 5/n
5/ Public Sector
- State steals from everyone inc other countries & people
- Everyone steals from the state
- You may also use bribes to steal from the state
- The more you steal the more important you become
- Your superior assigns you fiefdom to extort
- Prez gets 50% share 6/n
6/ Armed forces
- Army is a public sector entity with loads of material goods and heaps of mates to bribe
- The army hence educates in stealing and bribery
- Generals steal everything
- Senior ranks steal from conscripts/stocks
- Conscripts may bribe to get stolen stuff back 7/n
7/ Defense industry
- Provides army with stuff to steal
- Ideally produces fake goods or deliveries to ease stealing for senior officers and maximise surplus value
- Procurement▶️Bribing▶️Stealing
- Industries are fiefdoms to extort
- Converts material assets into immobile 8/n
8/ Storage
- Storage are things intended to be stolen
- Deliveries to and inventory of storage may be faked to ease stealing by officials
- Army has many warehouses to steal from
- Storage employees may be bribed
- Stealing minimizes storage costs increasing efficiency 9/n
9/ Currency
- Money is either Dollar or Euro
- Ruble means the state steals from you
- In cities you can buy things that other people stole, the state often forces you to use rubles for that.
- Money helps paying bribes, only poor people bribe in rubles.
- Store Money in EU 10/n
10/ Hydrocarbons
- Gas and oil have strategic importance and are lifeblood of russian economic cycle
- Hence the technology used is >90% from the evil west
- Only rich people can steal oil/gas to convert it into yachts and London flats.
- Bribe the Prez to steal oil/gas 11/n
11/ Inflation
- There is no inflation
- Inflation is a way the state steals from you
- It only affects poor people without money, convert your Rubles
- the ruble exchange rate is stable, poor people subsidize the rate for the rich
- Ferrari 3% - LADA 300% price increase p.a. 12/n
12/ State Budget
- State Budget is the money the state has stolen
- Includes charitable donations from oligarchs, aka taxes
- Avoid taxes using bribes
- Budget finances oligarchs & siloviki without natural commodity fiefdom
- pays pesky gopnik pensions
- pays OMON/SOBR 13/n
13/ Human resources
- A person is a commodity the army can steal/mobilize
- Production lacks, so the state steals from neighbour countries
- You may bribe yourself out of being stolen by army
- Jobs are provided via bribes
- If you steal enough you may live in the evil west 14/n
14/ Services
- A service is obtained by bribe aka fee
- serving state is "compensated" in rubles
- public servants are really payed via bribes, preferably in Money ($/€)
- You may also avoid state services via bribe
- Services degrade radially from Moscow
- All serve Putin 15/n
15/ Legal system
- Justice is a public service, use bribes
- Russia is humane, no death penalty
- Instead use accidents, mobilization and GULAG
- The police arrests criminals
- Criminals are convicted
- Arrest leads to conviction
- You may pay for de-arrest using bribes 16/n
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Some people advocating for talks with russia argue that RF has the escalation dominance.
This view is not based in reality but the implicit fear that the russian junta becomes totally irrational and unpredictable. 1/x
Just because they think different from us, with different priorities and values, does not mean that they are not rational within their own framework. Like in Afghanistan we tend to cast everything as irrational that does not follow our own rationale. 2/x
What can we, what can Ukraine do?
Ukraine has identified that russia is fixed on doubling down and escalation. They counter this by dominance of attrition. Ukraine bleeds russia out slowly. It is evident seeing the elastic defense doctrine on the battlefield. 3/x