How the Russian Colony Fails, Episode 0

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The current blog post is inspired by the Oliver Stone Putin Interviews. The failure of Russia is probably an everlasting topic that will probably be discussed till the Russian Empire collapses like the Roman Empire collapsed. As of 2017_07 I believe that one of the best explanations of the failure of the Russian Empire is given by the Loren R. Graham (archival copy). I summarize the Lore R. Graham explanation by using a statement that the reason, why Russia as a colony of people will materialistically always lag behind the West, is that the Russian culture does not respect the private property rights of the brightest members of the Russian community. The core statement of my current blog post is that a fast lane from a cultural ditch to a culture that allows smart people like the Kasparov to stay in Russia is to have a SMART and strong dictatorship that protects the private property of business owners, is free of corruption at its upper echelons and works hard to educate the ethanol loving masses to live smartly at an environment, where there is no censorship. Of course, one of the obstacles will be that the Putin has to stop pretending to be a president of a "democracy" and publicly declare that he is actually running a dictatorship, where only the smaller, lower level, decisions are decided semi-democratically, usually by the appointed officials at closed meetings. Everybody in the west knows already that the 2017 Russia is a de facto dictatorship and that the U.S. is cooperating very closely with the Saudi Arabian dictatorship, which does not even pretend to be anything other than a dictatorship. The Russia and the U.S. are adversaries anyway, so the Putin does not need to please the U.S. or the Europe, not to mention the the fact that the France cooperated with the former dictatorship of the Libya despite the well known fact that the Libya was a nasty dictatorship.

The Issues and the Blunders

The first issue is that the hierarchy of any dictatorship must follow the orders of the dictator. That's a task that Russian dictators have been really bad at achieving, because smart people can't be coerced to do anything, except making them give an appearance that they do what the coercer wants them to do, but dumber people are too dumb to carry out complex tasks. At some point even the Russian dictators gave up and assumed that part of the income of the Russian state officials is meant to come from bribes and "abuse" of their position at the state hierarchy. That is to say, the only way to get the hierarchy of the dictatorship to run smoothly is to stop abusing its officials and hire only very smart people. But smart people want their property to be protected and that's the first point, where it's game over for the Kremlin, regardless of who the dictator is, including the Putin case. The Putin could change his situation by declaring openly that all officials can work remotely and live in Western countries and keep all of their financial assets at Western banks, but that's propaganda wise too extreme for Putin, despite the fact that he could sell that kind of a work arrangement as an effort to modernize Russia, an effort to adopt e-government practices. Russia already manufactures its own computers and smart card chips. Cyber-security wise there are no problems, specially if the Russian space program creates spare communication channels for officials that work abroad. The Russian space program could keep the remote workers online at the Russian internet network even after Russian submarines have cut the internet cables of the western world.

This opportunity is lost probably because the Putin is a single person, who, like all dictators, runs into the problem that no single person is able to know everything and as he tries to play it safe by not depending on technology and solutions that he can not fully, thoroughly, understand, he dismisses the modern IT as a dependable strategic tool. The Putin administration probably sees the IT as a modern propaganda channel, not as something that can be strategically relied upon. Given the Павел Валерьевич Дуров story, people with IT background will not be rushing to help the Putin. The crackers and alike, who work at the Russian cyber-warfare side, are a kind of shady crowd that tends to break the rules of any community, including the orders of the dictator, who hires them. As a KGB officer the Putin probably knows it very well that he can not trust those people, except in roles, where the untrustworthy people are sent to some area to create havoc.

The Putin is incapable of hiring anybody decent at the IT side to really run the project that makes remote work for the Russian officials reliably possible. For example, one part of the modernization work that should probably be done for the Russian military anyway is to make Russian satellites' radio receivers DoS-hardened. Unfortunately the Russian culture at the Russian military circles has "security-through-obscurity" as one of its corner stones. The culture of "security-through-obscurity" alone is a serious obstacle to the dual-use space data link project and it might even eliminate the dual-use project totally, leaving both, the military and the Russian civilian sector, without the upgraded satellite data links. (DoS-proofing of the radio receivers would probably be impossible.) Putin as a dictator might just tell his generals to shut up and do as he tells them to do, but he also relies on those very same generals for his own security and a military plays a very important role in all classical dictatorships. If the Putin as someone, who is a KGB officer, not an IT person, does not see the value in the satellite data link project, then the cost/benefit ratio does not appear sufficiently appealing to him. There's a gridlock: there's a need for smart people for bootstrapping Russian culture reform, but the development of the technology for cooperating with the smart people requires a Russian culture reform or a substantial risk in part of a dictator that does not understand Information Technology (IT). Given how ambitious that kind of an IT project would be, the requirements to use Russian designed and manufactured microchips everywhere, etc., I would not dare to take such a project from any Russian dictator even if I were a Russian by nationality. (In a simplistic way I can say that I'm biologically 25% Russian, because one of my grandfathers was a Russian, but I'm incapable of speaking Russian and I'm culturally 100% Estonian.)

If the Kremlin, in this case, the Putin, is incapable of hiring the people, who can do the job, then the only hope is that the colony of Russians, the Russian Community, solves the problems without the help from the Kremlin. That is to say, the Russian culture reform rests at the shoulders of the "nonprofit" organizations that operate in Russia. The dark irony here is that the KGB officer, the Putin, does not trust his younger and/or former colleagues to do a good job at keeping an eye on Western spies that use "nonprofit" organizations as a cover, so he banned all western financed "Non-Government Organizations" (NGO-s). The Putin understands the issues of the Russian Community very well and unlike the Donald Trump, the Putin is capable of calm thinking and thorough planning. But, the Putin has played himself to a corner, including the way he handled the Ukraine case, where he probably might have been successful by using some European Union model in stead of the military intervention, but in stead of "saving face" and giving his tacit approval to the various NGO-s to help him out of the shoddy situation, he set additional obstacles to the financing of NGO-s. As I said, the NGO-s that act as a cover to adversarial intelligence agencies could be handled by the KGB/FSB, if the KGB/FSB did its job properly. In defense of the Putin it is probably true that the work ethic of the German KGB subsidiary, where the Putin worked, was probably superior to the work ethic of any Russian KGB subsidiary, so the Putin might be wary that the Russian subsidiaries that form the modern FSB might not be thorough enough to handle all possible NGO-s that cover the western intelligence agencies, but, if the Putin as a very talented top level insider of the KGB can't get even the modern KGB/FSB to do a proper job of keeping a trail on adversarial agents operating in Russia, then what does that tell about the general order in the Kremlin?

Putin's Public Relations Blunders

Putin is actually remarkably smart and interesting to listen. I sincerely admire his wit, even when it's pure propaganda, but there is one case, that is an absolute mistake on his part and that's the clip with the Angela Merkel (archival copy). That was just plain stupid of him in multiple ways and I suspect that there is a good chance that he retroactively might consider it to be a serious mistake on his part even when in his private thoughts does not regret it at all. On the other hand, one view of the failed joke, the truth that probably even the most passionate lovers will eventually end up divorcing, is well said and nicely direct and honest in its own right, despite the various sexual and English language related connotations of the failed joke. Another really smart move on the part of the Putin was the elegant public divorce from his own wife, which he might have done out of pure and sincere love towards his wife. A dictator, who sincerely loves his queen, does not want the queen to be around, when the regime of the dictator falls and distancing oneself from the ones, whom one wants to protect, years before the regime falls is a novel move, even, if it entails making the loved ones sincerely dislike the dictator.

How the Putin Might save his Empire

The Donald Trump as an authoritarian has at least the husband of one of his daughters as a "trusted set of brains", but Putin's daughters' husbands seem to be sportsmen, not intellectuals. As with all dictators, the brains that a dictator can hire directly, may have a loyalty problem. Since the Putin was stupid enough to limit the activities of the "nonprofit" organizations, NGO-s, and due to the political reasons, he can not really finance those types of NGO-s from the Kremlin budget even, if he has the money, his only chance might be to give some fake identities to his trusted family members and ask them to hire freelancers from the open market. The payments would be done from the fake identities and the investment strategy must be "spray-and-pray". That is to say, there must be many, parallel, independent, projects and many of them will fail. The project client side requirements must hide the client's real identity really well. For example, in stead of developing the satellite link technology "for Russia", the technology is developed under open source development protocol as part of a western project and "by accident" the Russian authorities "adopt" it just like they have adopted Linux and the western internet and western web browsers. The Lathern Satellite Receiver project might be an example of a "western project". Of course, if the project proposal is stupid or superficial, then really good developers will reject it regardless of who the client candidate is, but supposedly at least one of the Putin's daughters, the one that, according to "internet sources", is related to the Moscow University, is pretty smart, so if she is not acting like a typical Master-of-Business-Administration, then there's a good chance that she is able to write a proper project proposal, set of project requirements that does not get rejected by smart freelancers.

Another option, which the Putin totally blew, was the Skolkovo project. The shutdown of the Skolkovo project (archival copy) was a huge mistake by the Putin. Shutting down the Skolkovo is for the Putin like the shooting of oneself to a foot might be to a really skillful and capable cowboy: an absolutely STUPID THING TO DO even for a drunk cowboy. The Putin, who happens to pride himself for caring for the Russian military, knows it really well that the War Ministry, Pentagon or however the security branch of the supermafia is called, is NOT capable of coming up with anything truly new. He also knows that the Russian military industrial complex investments are decided by his appointed oligarchs and therefore the Russian military industrial complex is incapable of coming up with anything brand new and CHEAP-TO-PRODUCE. Putin also knows that the majority of Russia's funds come from oil and gas and that both, the China and the western world, try to decrease the use of fossil fuels. That leaves the Russia to a state similar to that of the whale oil producers, who operated at an era, when whale oil was gradually replaced with mineral oil. The more people adopt electric cars and energy saving devices and renewable energy sources, the less fossil fuels are needed and at some point the lower price of fossil fuels might not be able to cover the costs of extracting the fossil fuels from the Arctic reservoirs. In that case the income revenues of the Kremlin are in firm decline and projects like the Skolkovo are the Kremlin's only economic hope. Yet, the Putin closed the Skolkovo project. The hope that the Russian Empire can be kept afloat by enslaving people from Europe does not seem to be justified, because the economy of the Soviet Union started to seriously decline way before the Михаил Сергеевич Горбачёв came to power. The 2017 economy requires smart people, not brainwashed, drunk laborers. One of the Putin's options to save the Russian Empire from a total collapse is to revive the Skolkovo project, but he has to do it relatively quickly, because development projects take time and by the time the oil prices have fallen to an intolerably low levels it is already too late to start any development work, specially given the fact that not only do the products need to be developed, but every product needs a production line, which can be virtual, distributed between different subcontractors.

My 2017_07 Prediction

As of 2017_07 I predict that the Putin Regime will not revive the projects like the Skolkovo in time, if the projects get revived at all. The fossil fuel industry in Russia will die off or it will be overtaken by the Chinese, who can operate without the full cooperation of the Kremlin, because the old oil fields will get depleted, new oil fields need new mining infrastructure and no sane person from the west or Russia is going to make a huge investment to a region, where private property is robbed by the Kremlin at will. The Russian Empire will collapse when both, the Europeans and the Chinese, have moved most of their transportation systems and heating systems to renewable energy sources, because the move to renewable energy sources decreases the demand for the fossil fuels and that in turn decreases the prices of the fossil fuels to levels that will not sustain the Kremlin.

After the collapse of the Russian Empire the eastern side of the Russian land mass will be officially charted to be part of China and the western Russia, the Moscow area, Petersburg, Murmansk, etc. will live off of the money that comes from the Russian owned western companies that are headquartered in the West and have their employees in Russia. A typical example of such a company is the JetBrains, which operates from Санкт-Петербург, but the various subsidiaries of various other western companies like the Intel Corporation, etc. will also pay a very important role on keeping the economy going. Since banking requires the cooperation, approval, of the Kremlin, salaries will probably be paid in those companies in crypto-currencies, which will be exchanged for euros and dollars by "illegal" currency exchanges. The smarter bunch of Russians will likely use western banks, probably the banks at the Baltic states and Sweden, for their daily operations and for safekeeping their savings. Tallinn and Санкт-Петербург are a relatively short bus ride or a joy voyage apart from each other and the Russian Russians can use the Estonian e-residency services just like the rest of the world can use them. Opening a bank account in Estonia is relatively easy. All in all, the Russian Russians will survive the crash of the Russian Empire thanks to the western companies that are owned by the Russians and that hire the Russian Russians. The new de facto capital will probably be the Санкт-Петербург, because it's closer to the European Union and is more prosperous in the new situation than the economically relatively isolated and Kremlin associated Moscow region is.

The Putin is not going to resign. Most likely the Putin will be the tzar till he becomes too old to rule, like the Леонид Ильич Брежнев did, or till the financial situation of the Kremlin does not allow the Putin regime to properly pay to the Kremlin top officials that are not oligarchs. Given that as of 2017 the Putin is still relatively young and given the possibilities of the modern medicine, the Putin will probably loose his throne due to the falling fossil fuel prices, not old age related complications. The fall of the fossil fuel prices might be predicted by studying the adoption rates of renewable energy sources, electric transportation vehicles, "zero-energy" housing.

Thank You for reading this text :-)

Update on 2017_07_30.

If I could ask the Putin a question at some "Economic Forum", where he is one of the panelists, then I guess my question would be: Could You please describe Your understanding of the reasons, why the economy of the Soviet Union was so bad during the last 5 years of its existence?

In my opinion the Soviet Union collapsed due to economic reasons, which according to my personal opinion were due to the fact that the Soviet regime did not allow the people, who have self-initiative, to accumulate wealth by running a public business, but it would be really interesting to know, how the KGB-officer, the Putin, who considered the collapse of the Soviet Union to be a huge geopolitical catastrophe, sees the reasons for the ECONOMIC FAILURE of the Soviet Union. As of 2017_07 I believe that politically the Putin probably thinks that the Soviet Union failed due to the relaxation of the oppression, but his views about the economic failure of the Soviet Union would be a really interesting thing to know.