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Fun fact, China has greater gdp per capita than Russia(nominal, Russia is still ahead in in ppp). Russia gdp per capita for 2020 was $10,127 China gdp per capi

by mnau 5y ago

Fun fact, China has greater gdp per capita than Russia(nominal, Russia is still ahead in in ppp). Russia gdp per capita for 2020 was $10,127 China gdp per capita for 2020 was $10,500 Their descend into mineral rich vassal state of china seems inevitable. I wonder how much effect the economic transformation/collapse in the 90s had. They lost the status, economy, respect/fear, rule of law. Military and resources is about the only thing left. And military doesn’t look too great. Anyway, lesson for the future: don’t rely on “invisible hand” and optimism to transform economy. China did it correctly, Russia didn’t.

beebmam 5y ago
There are a near-infinite number of reasons to explain differences in economic outcomes between these two countries. How confident are you that the conclusion you've come to here is the truth?
rich_sasha 5y ago
Invisible hand might work in a liberal capitalist law-abiding society. Russia in 90s lacked most of these.
- mnau 5y ago
  Trust me, most of former eastern block hasn’t been much better. Mine country certainly lacked it. There were no laws against most of the stuff that happened. You took a loan and had no collateral? Perfectly fine. 90s was the second biggest theft of last century(after commie nationalization/theft). All wealth concentrated in hands of few who then use the economic power as a leverage over politics. I am pretty sure we got saved by EU, otherwise whole eastern block would be similar to Ukraine/Russia/Moldavia. EU forced a lot of laws and reforms that really helped and were needed.
travelingteach 5y ago
I've lived in both and the difference between them is even starker in person. So much of Russias wealth is concentrated in so few hands. The median Chinese is doing so immeasurably better and that gap will only grow. Russias a nuclear power which counts for a lot on the world stage but economically the country is in terrible shape even before the sanctions.
- dogma1138 5y ago
  Russias economy is about the size of Spain tho that doesn’t account for the shadow economy run by the oligarchs but even that is probably negligible compared to the scale of national economies. Russia is piss poor and it’s probably the best example of how much the wealth of a nation is dependent on its government and its civic institutions. Russia isn’t just rich in a single resource and it has a highly educated and culturally rich society. It has all the ingredients to be the most prosperous nation on the planet and yet nearly ever since it’s inception as a state (and I mean every iteration of it) it has had its head so high up its ass that it’s a world power nearly solely due to its remarkable ability to fail upwards.
cyrksoft 5y ago
You are comparing nominal GDPs, not really useful. If you compare PPP, Russia is almost 50% higher than China... This estimates are for 2021, would like to see what they are now. They probably change the picture a bit.
mytailorisrich 5y ago
China has about 10x Russia's population and from what you're saying about 10x the economy (and the economic gap is bound to increase)... So it's clear that any alliance and close relationship between Russia and China will turn out like the US and its allies, i.e. with the larger side firmly in charge. I think at the moment China's objective has to be to maintain 'stability' in Russia. Indeed, it's clear that the West's play in the war in Ukraine is to attempt to destabilise Russia to the point that Putin is toppled, with the obvious objective to replace him him with a weak, Western-friendly (and not China-friendly) leader. Clearly China will not want that to happen.
zeruch 5y ago
Russia didn't do "“invisible hand” and optimism", they did laissez faire "no rules" capitalism and rapacious (eventually oligarchic) cronyism at scale. The hand was an administrative machine that changed the appearance but none of the core substance of how the nation ran; Putin's very existence as a scion of that very machine bears that out. I still suspect that should he fall from power before he wishes to, it will be because a bunch of unknown "Putins" in a bureaucratic machine that do the actual heavy lifting will decide he's a become a liability, much as he did when rising to power in the first place.
- r00fus 5y ago
  > Russia didn't do "“invisible hand” and optimism", they did laissez faire "no rules" capitalism and rapacious (eventually oligarchic) cronyism at scale. Can you tell me what the difference is?
  - zeruch 5y ago
    the former can take any number of forms, the latter is a very specific set of political arrangements that leverage the former, but aren't bound by it either (hence why so many Russian oligarchs were putting their money in various other jurisdictions, in any number of legal, if altogether off-putting ways...like buying UK football teams, swathes of residential and commercial properties, etc.
  - spacebanana7 5y ago
    Most Invisible Hand models sketch that if each consumer is allowed to choose freely what to buy and each producer is allowed to choose freely what to sell and how to produce it, the market will settle on a product distribution and prices that are beneficial to all the individual members of a community, and hence to the community as a whole. In Russian-style cronyism, the freedom of producers in particular was corrupted by the need to pay heed to everyone with political muscle. No sensible producer who valued personal safety would compete with the mining company of an oligarch in a development, for example.
hungrygs 5y ago
It's baffled me for years that Russia is making such an obvious geopolitical mistake by not becoming an EU style country aligned in that direction. Culturally, Russia and China are dramatically different and Russia is going to end up as a glorified North Korea under its current leadership. Putin and his cronies just want to loot all that they can while they can.
- morpheos137 5y ago
  There is nothing to be baffled about. There was a time when Russia would have gladly joined the EU and or NATO but they were rebuffed. Why? The real reason is Russia united with Europe would enable a true Eurasian competitor to the USA to arise. The subjugation of Europe by the United States seven decades after the 2nd world war is rather pathetic. After the fall of communism there was a time when western Eurasia could have united. But some people deliberately stoked nationalism (in Yugoslavia, the Baltics, etc) so it was not to be. The war in Ukraine is a late repercussion of this path taken. The idea that Putin is in it for the money is stupid. When you control a nation state for life money doesn't matter much. Money is a proxy for power for those lacking real power.
  - dmytrish 5y ago
    "The real reason is Russia united with Europe would enable a true Eurasian competitor to the USA to arise." -- this is plainly ridiculous. Russia was not able to join the EU at the time due to its oligarchy and systemic corruption, very weak democratic institutions, lack of understanding and enforcement of some basic human rights. It was clearly incompatible with the EU values and has actually severely degraded in that regard since then. Geopolitics is the last refuge of a scoundrel.
    - morpheos137 5y ago
      "Russia was not able to join the EU at the time due to its oligarchy and systemic corruption, very weak democratic institutions, lack of understanding and enforcement of some basic human rights. It was clearly incompatible with the EU values and has actually severely degraded in that regard since then." All these apply to an even greater extent in Ukraine. Propaganda is the succor of dull minds.
gruez 5y ago
> Fun fact, China has greater gdp per capita than Russia(nominal, Russia is still ahead in in ppp). >Russia gdp per capita for 2020 was $10,127 China gdp per capita for 2020 was $10,500 Why is there such a huge discrepancy between the PPP adjusted numbers? My impression is that lower GDP countries tend to have their PPP adjusted up because the price of goods in those countries are also cheaper. However, china and russia have similar nominal GDPs. Are goods just super expensive in China for some reason?
- lostmsu 5y ago
  I would expect food to be much cheaper in Russia due to the abundance of farmland. Same for energy.
  - user432678 5y ago
    I would not say there’s an abundance of farmland. Yes, it’s quite big, but most of the Russian territory actually has quite extreme climate conditions, not suitable for farming. And even good farmland is actually abandoned, which always surprised me. I was travelling by car from Saint Petersburg to Sochi every summer till 2016. Huge areas filled with nothing but weeds, or even worse — toxic and hard to eradicate hogweed. So food there usually a little bit cheaper (not much) just because it’s a lot lower quality.
lostmsu 5y ago
The quite visible hand of state mafia in Russia is probably the reason.

by mnau 5y ago

beebmam 5y ago

There are a near-infinite number of reasons to explain differences in economic outcomes between these two countries. How confident are you that the conclusion you've come to here is the truth?

rich_sasha 5y ago

Invisible hand might work in a liberal capitalist law-abiding society. Russia in 90s lacked most of these.

mnau 5y ago
Trust me, most of former eastern block hasn’t been much better. Mine country certainly lacked it. There were no laws against most of the stuff that happened. You took a loan and had no collateral? Perfectly fine. 90s was the second biggest theft of last century(after commie nationalization/theft). All wealth concentrated in hands of few who then use the economic power as a leverage over politics. I am pretty sure we got saved by EU, otherwise whole eastern block would be similar to Ukraine/Russia/Moldavia. EU forced a lot of laws and reforms that really helped and were needed.

travelingteach 5y ago

I've lived in both and the difference between them is even starker in person. So much of Russias wealth is concentrated in so few hands. The median Chinese is doing so immeasurably better and that gap will only grow. Russias a nuclear power which counts for a lot on the world stage but economically the country is in terrible shape even before the sanctions.

dogma1138 5y ago
Russias economy is about the size of Spain tho that doesn’t account for the shadow economy run by the oligarchs but even that is probably negligible compared to the scale of national economies. Russia is piss poor and it’s probably the best example of how much the wealth of a nation is dependent on its government and its civic institutions. Russia isn’t just rich in a single resource and it has a highly educated and culturally rich society. It has all the ingredients to be the most prosperous nation on the planet and yet nearly ever since it’s inception as a state (and I mean every iteration of it) it has had its head so high up its ass that it’s a world power nearly solely due to its remarkable ability to fail upwards.

cyrksoft 5y ago

You are comparing nominal GDPs, not really useful. If you compare PPP, Russia is almost 50% higher than China... This estimates are for 2021, would like to see what they are now. They probably change the picture a bit.

mytailorisrich 5y ago

China has about 10x Russia's population and from what you're saying about 10x the economy (and the economic gap is bound to increase)... So it's clear that any alliance and close relationship between Russia and China will turn out like the US and its allies, i.e. with the larger side firmly in charge. I think at the moment China's objective has to be to maintain 'stability' in Russia. Indeed, it's clear that the West's play in the war in Ukraine is to attempt to destabilise Russia to the point that Putin is toppled, with the obvious objective to replace him him with a weak, Western-friendly (and not China-friendly) leader. Clearly China will not want that to happen.

zeruch 5y ago

Russia didn't do "“invisible hand” and optimism", they did laissez faire "no rules" capitalism and rapacious (eventually oligarchic) cronyism at scale. The hand was an administrative machine that changed the appearance but none of the core substance of how the nation ran; Putin's very existence as a scion of that very machine bears that out. I still suspect that should he fall from power before he wishes to, it will be because a bunch of unknown "Putins" in a bureaucratic machine that do the actual heavy lifting will decide he's a become a liability, much as he did when rising to power in the first place.

r00fus 5y ago
> Russia didn't do "“invisible hand” and optimism", they did laissez faire "no rules" capitalism and rapacious (eventually oligarchic) cronyism at scale. Can you tell me what the difference is?
- zeruch 5y ago
  the former can take any number of forms, the latter is a very specific set of political arrangements that leverage the former, but aren't bound by it either (hence why so many Russian oligarchs were putting their money in various other jurisdictions, in any number of legal, if altogether off-putting ways...like buying UK football teams, swathes of residential and commercial properties, etc.
- spacebanana7 5y ago
  Most Invisible Hand models sketch that if each consumer is allowed to choose freely what to buy and each producer is allowed to choose freely what to sell and how to produce it, the market will settle on a product distribution and prices that are beneficial to all the individual members of a community, and hence to the community as a whole. In Russian-style cronyism, the freedom of producers in particular was corrupted by the need to pay heed to everyone with political muscle. No sensible producer who valued personal safety would compete with the mining company of an oligarch in a development, for example.

hungrygs 5y ago

It's baffled me for years that Russia is making such an obvious geopolitical mistake by not becoming an EU style country aligned in that direction. Culturally, Russia and China are dramatically different and Russia is going to end up as a glorified North Korea under its current leadership. Putin and his cronies just want to loot all that they can while they can.

morpheos137 5y ago
There is nothing to be baffled about. There was a time when Russia would have gladly joined the EU and or NATO but they were rebuffed. Why? The real reason is Russia united with Europe would enable a true Eurasian competitor to the USA to arise. The subjugation of Europe by the United States seven decades after the 2nd world war is rather pathetic. After the fall of communism there was a time when western Eurasia could have united. But some people deliberately stoked nationalism (in Yugoslavia, the Baltics, etc) so it was not to be. The war in Ukraine is a late repercussion of this path taken. The idea that Putin is in it for the money is stupid. When you control a nation state for life money doesn't matter much. Money is a proxy for power for those lacking real power.
- dmytrish 5y ago
  "The real reason is Russia united with Europe would enable a true Eurasian competitor to the USA to arise." -- this is plainly ridiculous. Russia was not able to join the EU at the time due to its oligarchy and systemic corruption, very weak democratic institutions, lack of understanding and enforcement of some basic human rights. It was clearly incompatible with the EU values and has actually severely degraded in that regard since then. Geopolitics is the last refuge of a scoundrel.
  - morpheos137 5y ago
    "Russia was not able to join the EU at the time due to its oligarchy and systemic corruption, very weak democratic institutions, lack of understanding and enforcement of some basic human rights. It was clearly incompatible with the EU values and has actually severely degraded in that regard since then." All these apply to an even greater extent in Ukraine. Propaganda is the succor of dull minds.

gruez 5y ago

> Fun fact, China has greater gdp per capita than Russia(nominal, Russia is still ahead in in ppp). >Russia gdp per capita for 2020 was $10,127 China gdp per capita for 2020 was $10,500 Why is there such a huge discrepancy between the PPP adjusted numbers? My impression is that lower GDP countries tend to have their PPP adjusted up because the price of goods in those countries are also cheaper. However, china and russia have similar nominal GDPs. Are goods just super expensive in China for some reason?

lostmsu 5y ago
I would expect food to be much cheaper in Russia due to the abundance of farmland. Same for energy.
- user432678 5y ago
  I would not say there’s an abundance of farmland. Yes, it’s quite big, but most of the Russian territory actually has quite extreme climate conditions, not suitable for farming. And even good farmland is actually abandoned, which always surprised me. I was travelling by car from Saint Petersburg to Sochi every summer till 2016. Huge areas filled with nothing but weeds, or even worse — toxic and hard to eradicate hogweed. So food there usually a little bit cheaper (not much) just because it’s a lot lower quality.

lostmsu 5y ago

The quite visible hand of state mafia in Russia is probably the reason.