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There's something else here, too. For thousands of years, national wealth and power were largely based in natural resources such as agricultural land and gold m

There's something else here, too. For thousands of years, national wealth and power were largely based in natural resources such as agricultural land and gold mines. In the industrial revolution, new natural resources, especially fossil fuels, were added, but wealth and power shifted mainly to manufactured goods. That is why you can have great industrial powers like Japan, China, and South Korea that are relatively poor in natural sources. And it is why Russia, even though it has natural resources far beyond any other nation, is about 10th in the size of its economy. The problem with Putin is his mind is still partly back in the pre-industrial era, and so he only half gets this. He knows Russia has to industrialize, but he still sees natural resources as being much more important than they really are, and so he is simply on the wrong economic track. A key case here is petroleum. It accounts for half the Russian government's tax revenues, and it is central to Putin's plans and investments. But thanks to the renewable energy revolution, based on manufactured technologies like PV cells and giant wind turbines, in half a century petroleum will be largely replaced, and so worth very little. But Putin doesn't get this, which is why so little effort is being put into renewables.

ivan_gammel 10y ago
First of all, Russia is already post-industrial state and it experienced multiple industrialization waves in its history - from colonization of Urals (there were the biggest manufactures in the world in XVIII century and there's a special term for that amazing period of history of Urals region - Mountain Manufacturing Civilization introduced by Russian writer and historian Alexey Ivanov), to industrialization in late XIX century (with such projects as Trans-Siberian railway and production shifting to European part of Russia), to industrialization by Stalin in 1930s and finally industrial expansion of 1950-1980s. It's all in the past now, not least because Russia lost most of its industry in competition with China and hi-tech manufacturing to the West. Indeed, Russia is a petrostate now, but it still has large industrial capacity, to name some in which there's some good progress - aerospace (how many nations are capable of creating new civil and military aircraft designs?), arms, automotive (very hot sector with big investments and non-stop race on building new plants). It's not feasible and already too late to compete with China or emerging economies like Vietnam in light industries or consumer electronics, but some targeted efforts to join global manufacturing chains are already paying (e.g. did you know that sapphire glass for Apple products is made in Russia?) Putin's mistake is not that it applies XVI century resource extraction approach to finally get industrial economy (which is not true because of above), but that it applies command-administrative methods of XX century to build post-industrial economy. He is more interested in playing war games, than writing economic strategies - this job is left to his advisers, and there's ongoing competition to fill that position between liberals like A.Kudrin and communists like S.Glazyev. These bureaucratic battles did not produce any document that could be fully implemented, so significant progress could be visible in only some technical fields, which are far from politics (hence very smart Central Bank, Federal Tax Service or Ministry of Informatization and Communications).
- woodandsteel 10y ago
  I generally agree with your analysis. I would just add that Putin applies a command-economy approach because he is an authoritarian, and authoritarianism goes with agrarian society, whereas industrial societies do best, over the long term, if they are democratic. And this is true of Russian society as a whole. It looks at the world through the war-orientation of agrarian societies, rather than the more international peace and mutual economic-benefits that fits with liberalism and modern technology.
- PerfectDlite 10y ago
  > Russia is already post-industrial state > Russia lost most of its industry in competition with China and hi-tech manufacturing to the West. Congratulaions, you've managed to contradict yourself in one paragraph.
  - dragonwriter 10y ago
    A post-industrial state is one which was dominantly industrial, and has moved on to some other primary basis for its economy, usually because it is engaged in international trade and its comparative advantage is no longer in manufacturing but some other area. Usually, this shift in comparative advantage is reflected in industrial work moving overseas to competitors whose comparative advantage is in that kind of work. So, the two sentences you quote as a supposed contradiction actually support each other, rather than contradicting each other.
    - PerfectDlite 10y ago
      > A post-industrial state is one which was dominantly industrial, and has moved on to some other primary basis for its economy, usually because it is engaged in international trade and its comparative advantage is no longer in manufacturing but some other area. In case of Russia it wasn't so, they still struggle to get back to Soviet level of industrialization after USSR fell apart.
      - dragonwriter 10y ago

ivan_gammel 10y ago

First of all, Russia is already post-industrial state and it experienced multiple industrialization waves in its history - from colonization of Urals (there were the biggest manufactures in the world in XVIII century and there's a special term for that amazing period of history of Urals region - Mountain Manufacturing Civilization introduced by Russian writer and historian Alexey Ivanov), to industrialization in late XIX century (with such projects as Trans-Siberian railway and production shifting to European part of Russia), to industrialization by Stalin in 1930s and finally industrial expansion of 1950-1980s. It's all in the past now, not least because Russia lost most of its industry in competition with China and hi-tech manufacturing to the West. Indeed, Russia is a petrostate now, but it still has large industrial capacity, to name some in which there's some good progress - aerospace (how many nations are capable of creating new civil and military aircraft designs?), arms, automotive (very hot sector with big investments and non-stop race on building new plants). It's not feasible and already too late to compete with China or emerging economies like Vietnam in light industries or consumer electronics, but some targeted efforts to join global manufacturing chains are already paying (e.g. did you know that sapphire glass for Apple products is made in Russia?) Putin's mistake is not that it applies XVI century resource extraction approach to finally get industrial economy (which is not true because of above), but that it applies command-administrative methods of XX century to build post-industrial economy. He is more interested in playing war games, than writing economic strategies - this job is left to his advisers, and there's ongoing competition to fill that position between liberals like A.Kudrin and communists like S.Glazyev. These bureaucratic battles did not produce any document that could be fully implemented, so significant progress could be visible in only some technical fields, which are far from politics (hence very smart Central Bank, Federal Tax Service or Ministry of Informatization and Communications).

woodandsteel 10y ago
I generally agree with your analysis. I would just add that Putin applies a command-economy approach because he is an authoritarian, and authoritarianism goes with agrarian society, whereas industrial societies do best, over the long term, if they are democratic. And this is true of Russian society as a whole. It looks at the world through the war-orientation of agrarian societies, rather than the more international peace and mutual economic-benefits that fits with liberalism and modern technology.
PerfectDlite 10y ago
> Russia is already post-industrial state > Russia lost most of its industry in competition with China and hi-tech manufacturing to the West. Congratulaions, you've managed to contradict yourself in one paragraph.
- dragonwriter 10y ago
  A post-industrial state is one which was dominantly industrial, and has moved on to some other primary basis for its economy, usually because it is engaged in international trade and its comparative advantage is no longer in manufacturing but some other area. Usually, this shift in comparative advantage is reflected in industrial work moving overseas to competitors whose comparative advantage is in that kind of work. So, the two sentences you quote as a supposed contradiction actually support each other, rather than contradicting each other.
  - PerfectDlite 10y ago
    > A post-industrial state is one which was dominantly industrial, and has moved on to some other primary basis for its economy, usually because it is engaged in international trade and its comparative advantage is no longer in manufacturing but some other area. In case of Russia it wasn't so, they still struggle to get back to Soviet level of industrialization after USSR fell apart.
    - dragonwriter 10y ago