[lbo-talk] Russia (was kvetching...)

andie nachgeborenen andie_nachgeborenen at yahoo.com
Wed May 9 09:07:39 PDT 2007

I take no pleasure from the destruction of Russia. And if if I did, it would be irrelevant to the validity of what I said.

I think that people on the list should avoid psychologizing and stick to arguments. I haves peculations about the psychodynamics behinds various people's ratiocinations on this list, and I try to keep them to myself. They are, like others' about mine, almost certain wrong and normally will provoke anger if voiced, since virtually the only reason to offer such pop psychology is to suggest (a) that what your interlocutor says is so stupid that it is not worth serious consideration and (b) requires an explanation based on an ulterior, preferably an embarrassing motive or mental defect.

James's reading of the decline in percentage of capital formation in Russian GDP is defective. If Russia were developing industrially, that figure would be rising. Is has been in China, Malaysia, Indonesia, India, right Doug? Absolutely, there is more capital investment in Russia than in '98; that follows from the figure remaining constant while GDP had risen. That's the "nowhere to go but up" effect, though, I suspect.

Russia's development has not flattened off due to diminishing marginal returns on investment -- the curve is inverted. In developing countries you get a big increase in capital investment as a percentage of GDP, them it falls off as the returns on each unit expended becomes less. In Russia's case, you got a big fall that has now leveled off. That's better than free fall, but it's not economic development. Russia's situation looks like a classic raw materials export driven boom.

If it is necessary to say so, I wish it were not so. I love Russia and wish the Russian people the best and their leaders long prison terms.

--- James Heartfield <Heartfield at blueyonder.co.uk> wrote:

> I think Andie has misread the statistics on Russia's
> investment levels and
> oil revenues.
> First, as an aside, I guess that Andie takes
> pleasure from the idea that
> Russia has been converted from an industrial power
> to a platform for raw
> material exports because it vindicates an argument
> he was making, not
> because he wants to see the Russian people
> prostrated before the developed
> west.
> In any event I do not believe that is what the
> figures show. I think the
> series of Gross Fixed Capital Formation as a
> percentage of GDP flattens off
> because GDP has grown, not because investment has
> fallen. I guess that if it
> were expressed in fixed dollars then it would show
> quite an increase. Also,
> a lot of the investment in the Yeltsin era was junk,
> so not really
> comparable.
> I think the strong desire that commentators like
> Perry Anderson have to
> rubbish Russia's growth is what needs explaining. I
> remember that not so
> long ago a lot of people wanted to prove that
> China's growth was peripheral.
> (The otherwise very perceptive Michel Chossudovsky
> wrote analyses of the
> Special Economic Zones as a return to the
> concessionary zones.) Is this what
> was meant by "kvetching"?
> In another post I gave the figures on oil and gas as
> a share of Russia's
> GDP, which is large, but by no means the only
> explanation of her success.
> Russia is not Saudi Arabia.
> "Interesting. This supports Perry Anderson's thesis
> in
> a recent London Review of Books survey that I liked
> and Chris Doss hated, that Russia's current relative
> prosperity is relative, basically a matter of having
> come from a place where it had nowhere to go but up,
> and that Russia has become converted from an
> industrial power in a platform for raw material
> exports. In terms of capital development, Russia has
> been flat for a decade, with _no_ improvement over
> the
> depths of '98, although of course living standards
> are
> much improved. "
> ___________________________________

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