Discussion of Russian economics (split from TSW)

[Surlethe]

Factor 1: Labour. China and Russia were not, in fact, similar. Let's put it as a theorem - with all other conditions being similar, the nation with cheaper labour will win against the nation with more expensive labour. Chinese was objectively cheap - climate, uneducated rural population which was just urbanizing, extremely bad living conditions compared to Russia. Russian labour was in the late 1980s, is and will remain objectively expensive - climate is cold, and Russia was an industrialized, urbanized nation by the late 1980s. Ergo, the conditions are not similar.

So, Stas, your contention is that Russia's entire economic deal is a sticky wage problem? Here's how I'm interpreting your description. Upon exposure to international competition, Russian industry was not competitive. Wages did not adjust downward and quality upward quickly enough to become competitive, so it went out of business. Capital went from industry to resource extraction because resource extraction was profitable, while wages continued to not adjust, leading to obscenely high unemployment, malnutrition, and the rest. (This does not take into account political and demographic complications.)

Is that correct?

If so, the Chinese method could still work. Here's a proposal. Let wages fall until you're competitive with third world labor and then open your borders to investment the way China did. You still have infrastructure and political stability, so you're still better off that way; you're also helped by proximity to Europe and China, so you don't have to ship your cheap goods across a fucking desert and ocean to get to the markets that demand them the way Africa does. Then industrialize, on Western dime (big current account surplus, just like the US in the 1800s and China in the late 1900s, zenmayang?) and make sure your people survive with your resource export money.

[K. A. Pital]

Let wages fall until you're competitive with third world labor

You are joking, right? The workforce is (1) living in a cold climate, (2) fully urbanized, (3) fully literate and educated. It cannot survive on Third World wages. Russia does not have Third World prices. Doing this will condemn millions of people to malnourishment and thousands if not hundreds of thousands to death. It was already attempted.

Moreover, since Russia heavily relies on imported food and consumer goods (it is no longer food-independent, neither has independent tech chains for consumer goods), their prices would NOT fall when wages of the populace fall. You are proposing a new round of pauperization. Are you really serious? The Chinese worker could survive living in a carboard hut, the Indian worker can live in a fucking fridge box (temperatures never fall below 10-15C anyways). They surive on a bowl of rice made in China or in India, they are self-sufficient in foods. Russian people buy tons of food abroad since agriculture is decimated.

The Chinese model could work if Russians could be pauperized to the same degree as rightless Chinese village laborers living in temporary housing right on the building site all year round, and if the prices in Russia would collapse together with the wages. The exact opposite happened, wages collapsed but prices rose up. It is completely untenable because Russia cannot supply it's own population with goods and prices will NOT go down no matter how brutally you treat the workers, even up to making them go malnourished, kill union leaders, imprison them, put them on hunger strikes after 2 years of not paying a dime. It was tried. It failed.

Name me a cold nation from the Northern hemisphere which would have Third World wages or had such in the past, and not have massive malnourishment and possibly even death occuring at the same time. There are no cold nations with cheap labour, at least, to my best knowledge.

To make things clear, the minimum wage is 5000 roubles per month. To simply feed a human no less than 2000 roubles ($80) are required (that is the RAN figure). Food is often 40% imported, so even a double wage collapse wouldn't give more than a 25% decline in food prices - ergo, wages will collapse more than the prices, check. That is feeding with the worst quality products on the market. Housing costs will likewise not fall with the wages - in fact, most people in communal services have a minimum wage (~$140 per month), however, the housing costs around 2000 roubles per month for water, heating, electricity - absolute necessities to survive in Russia - their prices are decided by the price of gas, oil and energy, not by the price of labour, which is a very small component thereof.

Therefore, the minimum wage of 5000 roubles is objective - it's the very bare minimum on which a person can feed himself living in his own home. Driving it lower is impossible. Unless, of course, you don't shy from killing or starving people as a measure of economic development.

[Guardsman Bass]

Factor 2: Goods. The above makes it simply so that only natural monopolies will survive in competition with foreign goods. Consumer items were created for the internal market and thus were sub-par (and even if they weren't, they were utterly destroyed by the sweeping economic collapse regardless if they even were competitive or had a potential). This makes it rational for the capitalist to only invest in selling rawest natural resource (oil, gas, timber). It is the fastest path to enrichment.

That's part of it. The other reason was that oil, gas, and natural resources were also seen as the most secure investments in the long-term. As you mentioned, the consumer goods producers were disappearing in the economic collapse - a potential investor could put money into it one day and stand a good risk of having that money just vanish overnight.

Whereas the oil industry wasn't going anywhere, and same for the natural gas industry.

Liquidating a factory in the manufacturing sector, moving all assets abroad and your entire family abroad is also perfectly rational. First, the Russian capitalist enriches himself in a maximally fast way. Then he removes funds from an unstable nation whose government has just collapsed. Finally, he removes his family from Russia. Regardless of the misery he could force on entire towns, his economic goals are fully rational, and fully accomplished, I may add.

It's perfectly market-rational if you think you'll just lose any investment that you might make for the long term in the companies in question. It wasn't that the market was fundamentally going to fuck Russia no matter what happened because of market principles and certain unchangeable market factors. Rather, you had a situation of a severely botched privatization and market-creation that created a gray area for the oligarchs to operate, where the incentives were all to grab as much as possible in the short term and get it stashed away.

You are joking, right? The workforce is (1) living in a cold climate, (2) fully urbanized, (3) fully literate and educated.

The first part is a problem, but not necessarily the other two. Using China is probably a bad example, but Japan, for example, managed to use Export-Led Industrialization in the latter half of the twentieth century to get rich.

That's more or less the general idea of what Stuart is calling for. Focus on developing certain sectors for the export market, and go from there.

[K. A. Pital]

That's part of it. The other reason was that oil, gas, and natural resources were also seen as the most secure investments in the long-term. As you mentioned, the consumer goods producers were disappearing in the economic collapse - a potential investor could put money into it one day and stand a good risk of having that money just vanish overnight. Whereas the oil industry wasn't going anywhere, and same for the natural gas industry.

Exactly. Absolute, refined, pure capitalist rationality.

Rather, you had a situation of a severely botched privatization and market-creation that created a gray area for the oligarchs to operate, where the incentives were all to grab as much as possible in the short term and get it stashed away.

Actually, it wasn't a "grey area". The free market legally allows to move capitals into any nation you want. To sell productive equipment. It's fully legal. It's also fully rational for an unstable nation. While China crushed it's Tiananmen protest brutally, making it clear it will retain power. So yes, no matter what happened post-collapse, the Market fucked Russia over. It couldn't have happened otherwise due to the collapse itself and the maintaiment of the free market afterwards.

Japan, for example, managed to use Export-Led Industrialization in the latter half of the twentieth century to get rich.

Post-war Japan had dirt-cheap labour and a Cold War ally ready to pour money into a military force in SEA to counterbalance the Reds.

[Guardsman Bass]

That's part of it. The other reason was that oil, gas, and natural resources were also seen as the most secure investments in the long-term. As you mentioned, the consumer goods producers were disappearing in the economic collapse - a potential investor could put money into it one day and stand a good risk of having that money just vanish overnight. Whereas the oil industry wasn't going anywhere, and same for the natural gas industry.

Exactly. Absolute, refined, pure capitalist rationality.

A kind of capitalist rationality, one that arises when the incentives for any type of long-term investment are next to non-existent and more productive alternatives exist. It wasn't the inevitable end-result.

Rather, you had a situation of a severely botched privatization and market-creation that created a gray area for the oligarchs to operate, where the incentives were all to grab as much as possible in the short term and get it stashed away.

Actually, it wasn't a "grey area". The free market legally allows to move capitals into any nation you want. To sell productive equipment. It's fully legal. It's also fully rational for an unstable nation. While China crushed it's Tiananmen protest brutally, making it clear it will retain power.

I was talking about the chaos of privatization of state businesses with regards to who owned exactly what in terms of assets. The oligarchs had the incentive to engage in asset-stripping because of the shady ways that they had acquired them - they had no guarantee that they'd be able to hold on to them in the long run if/when the Russian government finally cracked down, or that they'd even be worth anything in the long run due to the economic collapse from the way that the privatization was carried out.

Like I said, though, that wasn't inevitable. It was a result of the particular way that privatization was carried out in Russia, and you yourself brought up the example of Belarus taking a different path towards it.

[K. A. Pital]

Like I said, though, that wasn't inevitable. It was a result of the particular way that privatization was carried out in Russia, and you yourself brought up the example of Belarus taking a different path towards it.

Um... "Particular way"? Belarus simply grinded privatization to almost a full halt after a small, 2-year vacchanalia of legalized looting - and even now it's enterprises are 75% state-owned. Of course, taking the position of special economic zones, controlled "market zones" like elsewhere and in general creating a small private market alongside a massive state sector which would not be looted, or creating a 100%-nationalized banking system to control all cash inflows and outflows is a "different approach". But it's an approach which dispenses with the free market and market mechanisms themselves to a large extent.

A kind of capitalist rationality, one that arises when the incentives for any type of long-term investment are next to non-existent and more productive alternatives exist. It wasn't the inevitable end-result.

Sorry, man, but it was inevitable. You said it yourself - no incentives for long-term investment. This situation is a result of a combination of historic and climatic factors, all of which are objective and not subject to change. Then why produce anything in a cold climate like Russia, with sub-par industries (historically objective factor), but expensive labour, and thus very low profit margins? The only argument for maintaining such inefficient production is, quite simply, a humanitarian one. But no economic reasons to do so, none whatsoever. And humanitarian reasons are NOT economic.

You said "one that arises", which is true. It arose due to objective reasons, not subjective ones, and the result is thus not subject to change. You can't suddenly remove oil (thus making it necessary to invest in something else for the oligarchs) or ban the flight of capital from Russia, because doing the former is wishful thinking and the latter is an obvious violation of free-market mechanisms.

[Surlethe]

Let wages fall until you're competitive with third world labor

You are joking, right? The workforce is (1) living in a cold climate, (2) fully urbanized, (3) fully literate and educated. It cannot survive on Third World wages. Russia does not have Third World prices. Doing this will condemn millions of people to malnourishment and thousands if not hundreds of thousands to death. It was already attempted.

Yes, I'm joking. But I'm also making a point. For Russia to become sustainably competitive in the world economy and end its economic malaise, it must develop a reliable source of international trade. (As you yourself pointed out, it is simply not a country that is able to sustain itself.) In order to trade, either you need a reliable export industry or you need to adjust wages downward to be competitive (i.e., foster either a competitive advantage in some industry or foster a competitive advantage in labor). The China model is to spur the first by being good at the second, freeing markets, and inviting international investment. Another model is for a mass exodus of Russians until wages rise again. In fact, I suspect such will occur anyway; you're but one example of this. Whether developing the first option is possible without the second, I don't know. My gut feeling is no, and during the time it takes wages will fall anyway.

Anyway, until the people of Russia make something that other people value, they are living time borrowed from resource deposits. You recognized this, which is why you got out, dui bu dui?

Name me a cold nation from the Northern hemisphere which would have Third World wages or had such in the past, and not have massive malnourishment and possibly even death occuring at the same time. There are no cold nations with cheap labour, at least, to my best knowledge.

Well, for one, Inuit populations had zero wages while they were hunter-gatherers. How many people starved or froze to death annually in Russia or Scandinavia during the Middle Ages?

Therefore, the minimum wage of 5000 roubles is objective - it's the very bare minimum on which a person can feed himself living in his own home. Driving it lower is impossible. Unless, of course, you don't shy from killing or starving people as a measure of economic development.

I do shy, but it might be an interesting Coliseum debate. After I get my rounds with Alyrium done, of course.

Edit:

Sorry, man, but it was inevitable. You said it yourself - no incentives for long-term investment. This situation is a result of a combination of historic and climatic factors, all of which are objective and not subject to change. Then why produce anything in a cold climate like Russia, with sub-par industries (historically objective factor), but expensive labour, and thus very low profit margins? The only argument for maintaining such inefficient production is, quite simply, a humanitarian one. But no economic reasons to do so, none whatsoever. And humanitarian reasons are NOT economic.

I wonder --- Russia, c. 1500, was one of two states with a feudal system and no middle class to speak of. The other was Spain. Could that lack of a middle class and no significant economy have put Russia on its current trajectory?

[Samuel]

Well, for one, Inuit populations had zero wages while they were hunter-gatherers. How many people starved or froze to death annually in Russia or Scandinavia during the Middle Ages?

Famines occured repeatedly throughout the middle ages and I don't see any reason why Russia would be different. The population would fluctuate around the carrying capacity and you'd have people starve to death whenever a sudden shift in the climate made the multiple crop failures in a row occur. Unless climate is more variable in Russia the deaths should be proportionally the same- if the land is bad for crops you are going to have less people living there to begin with.

As for freezing to death... aren't all the cities in Siberia (where the temperature gets even colder) new? I know most of the population lives in the European section, but before the Russian Empire pushed west wasn't the native populations of the areas they claimed hunter gatherers?

[Kane Starkiller]

It is interesting to visualize 10 largest Russian cities and their latitude if they were located in North America:

Excluding Rostov on Don the 9 largest cities alone have a population of 23 million people. Canada's northernmost major city, Edmonton, is located roughly at the same place as my placemark for Samara, itself relatively southern city by Russian standards.
Canada's main population core is located between Lake Superior and Maine well below Russian main population centers.
With this in mind the question arises: capitalism vs communism aside is Russia simply an overpopulated country? Or rather does anyone see Canada having 30 million people living in those areas?

[Zixinus]

A question regarding Russian economics, as this looks like an appropriate thread to ask:

1. I have heard that the Russian economy is in worse shape than it was towards the end of the Soviet Union. Is there any truth to this?

2. One of the main exports of Russia is weapons. How true is this and is there any chance for Russia to be the weapon-maker of the world (ie, fill in that niché in the world market)? How dominant is the military-industrial complex when compared to nations like the USA or some European nations?

Well, for one, Inuit populations had zero wages while they were hunter-gatherers. How many people starved or froze to death annually in Russia or Scandinavia during the Middle Ages?

A lot? I mean, it was par on course for that sort of thing to happen during those times. Farmers that didn't prepare for the hard winter well enough had to beg from those that did or die.

Is this a joke reply? I mean, it looks serious but I recall that you are much more intelligent than to suggest something like reverting back to pre-industry levels (for one, I doubt that the urbanized Russian city folk have the skills or the land to even hope of surviving without outside trade).

[Sidewinder]

2. One of the main exports of Russia is weapons. How true is this and is there any chance for Russia to be the weapon-maker of the world (ie, fill in that niché in the world market)? How dominant is the military-industrial complex when compared to nations like the USA or some European nations?

Due to its poor economy, Russian arms manufacturers often find themselves at a disadvantage to US, European, and even Chinese competitors, whose governments continue to spend money for research on radar, electronic warfare, stealth, and other things a military MUST HAVE if its leader doesn't want to share Saddam Hussein's fate.

Another disadvantage is maintenance, support, and spare parts. One reason F-16s are so popular on the export market, is because in addition to supporting sales of the fighter, the USAF also offers training for foreign users' maintenance crews, without which a high-tech weapon system will become a paperweight REALLY FAST. The aircraft's widespread use in the USAF also encourages Lockheed Martin and other contractors to continue producing spare parts, develop upgrades, and offer manufacturer support, which benefits EVERYONE who uses the F-16.

Political conflicts add another dimension to this. Would Russia sell high-tech weapons to Georgia, against whom it recently fought a war? Would Russia sell weapons to Israel, and risk alienating Syria and other allies- as well as future sales to those nations? Would the US be willing to buy Russian weapons, and risk this dependence become a leash with which Moscow can force Washington to concede on sensitive issues- something the US REPEATEDLY DID to nations that bought American?

[K. A. Pital]

My gut feeling is no, and during the time it takes wages will fall anyway.

If there is a continous depression of the Russian life standard, Russia will suffer a massive revolt. Many former Soviet republics suffered mass revolts or civil wars upon getting pauperized and people put on the brink (Ukraine, Kyrgizia, Georgia, etc.). Russia's situation is more complicated, but everything has it's limits. And such a revolt is not guaranteed to change anything for the better, because it might just rotate one group of large capitalists into a position of power, removing the old ones (Ukraine, Georgia and Kyrgizia are all good examples of this, one set of corrupt oligarchic elites was replaced with another set of the same).

As for me getting out, yes, I did - but I am not sure it's for "all time". The recent crisis has created a situation of extreme uncertainty in Russia. If there is a situation of collapse, ethnic strife, etc. it's best to look at it from a certain distance. But I'm not sure I've left for good. Me and my wife are considering moving to Moscow and starting to participate more actively in the political struggle in Russia, because we're definetely not content with what is happening there (and Belarus being an option where one could flee from European Russia, if things go real bad for us due to our political action).

How many people starved or froze to death annually in Russia or Scandinavia during the Middle Ages?

Actually, they had very small populations on substience levels (not an option today with millions of people living in the nation thanks to modern industry) and atrocious infant mortality levels. But I'm sure you know all that. Comparing the Middle Ages, where populations stayed small enough for substience farming or hunter-gatherer life to modernity

Russia, c. 1500, was one of two states with a feudal system and no middle class to speak of. The other was Spain. Could that lack of a middle class and no significant economy have put Russia on its current trajectory?

I wouldn't look that far. Most economies industrialized in the later years and what matters is the industrialization. Pre-industrial economies are irrelevant. China may have been the largest pre-industrial economy, but that meant nothing when the age of industry came.

With this in mind the question arises: capitalism vs communism aside is Russia simply an overpopulated country?

Overpopulated for it's climate? Perhaps. But industry can solve that. If there was a stimulus to do so.

I have heard that the Russian economy is in worse shape than it was towards the end of the Soviet Union. Is there any truth to this?

Yes, there is.

[Surlethe]

My gut feeling is no, and during the time it takes wages will fall anyway.

If there is a continous depression of the Russian life standard, Russia will suffer a massive revolt. Many former Soviet republics suffered mass revolts or civil wars upon getting pauperized and people put on the brink (Ukraine, Kyrgizia, Georgia, etc.). Russia's situation is more complicated, but everything has it's limits. And such a revolt is not guaranteed to change anything for the better, because it might just rotate one group of large capitalists into a position of power, removing the old ones (Ukraine, Georgia and Kyrgizia are all good examples of this, one set of corrupt oligarchic elites was replaced with another set of the same).

It would also disrupt exports, imports, and investments. A revolt would just dig the hole deeper.

As for me getting out, yes, I did - but I am not sure it's for "all time". The recent crisis has created a situation of extreme uncertainty in Russia. If there is a situation of collapse, ethnic strife, etc. it's best to look at it from a certain distance. But I'm not sure I've left for good. Me and my wife are considering moving to Moscow and starting to participate more actively in the political struggle in Russia, because we're definetely not content with what is happening there (and Belarus being an option where one could flee from European Russia, if things go real bad for us due to our political action).

If you do, good luck. I understand that politics is pretty corrupt --- you could face significant threats?

How many people starved or froze to death annually in Russia or Scandinavia during the Middle Ages?

Actually, they had very small populations on substience levels (not an option today with millions of people living in the nation thanks to modern industry) and atrocious infant mortality levels. But I'm sure you know all that. Comparing the Middle Ages, where populations stayed small enough for substience farming or hunter-gatherer life to modernity

Hah, yes. Not saying that Russia should devolve to subsistence peasantry. On the other hand, something similar could happen anyway if nothing is done about the economic pressures on the nation.

Russia, c. 1500, was one of two states with a feudal system and no middle class to speak of. The other was Spain. Could that lack of a middle class and no significant economy have put Russia on its current trajectory?

I wouldn't look that far. Most economies industrialized in the later years and what matters is the industrialization. Pre-industrial economies are irrelevant. China may have been the largest pre-industrial economy, but that meant nothing when the age of industry came.

Industrialization, though, is certainly tied to social and political institutions. If Russian social and political institutions were set up in such a way that they did not permit the formation of a middle class in the 1500s, when the merchant nations of W. Europe were developing them, then perhaps the descendants of those institutions contributed to late (and possibly inefficient?) industrialization and turmoil when the USSR collapsed. (I'm really not sure how much truth there is to this hypothesis; I'm just kicking it around.)

[K. A. Pital]

It would also disrupt exports, imports, and investments

Foreign investment had been scant for the last 20 years anyway, failing to create anything really sizeable and long-term in Russia. Capital flight, for the greater part of these 20 years, exceeded foreign investment (and much more so long-term investment). Russia should not count on foreign powers to 'save' it. They have no real reasons to do it. A disruption of exports is certainly bad; but it depends on how long it lasts (not long I bet, before the new elite starts exporting oil after consolidating power). Russia's exports are for the most part raw resource anyway. Raw resource and domestic investment (even when buying foreign technology, it's always introduced en masse through domestic investment) - they have always been keys to development here. Foreign investment is a drop in the bucket, and the main question is that the bucket is being wasted on luxury consumption of people who deserve, to be frank, jail at best.

I understand that politics is pretty corrupt --- you could face significant threats?

We're used to it. Even living in Russia makes one face a lot of threats, mostly from crime. Being a communist in Russia - heh, interesting life. I could tell some stories, someday later perhaps.

If Russian social and political institutions were set up in such a way that they did not permit the formation of a middle class in the 1500s, when the merchant nations of W. Europe were developing them, then perhaps the descendants of those institutions contributed to late (and possibly inefficient?) industrialization and turmoil when the USSR collapsed

Hmm... if you put it that way. Perhaps. The lateness and rush of Soviet industrialization compared to the relatively slow and rather early industrialization in top-tier powers could certainly be tied up with the issues prior to the XIX-XX century. But, say, the Japanese Empire had no "middle class" too, if I'm not mistaken. In fact, the middle class itself in my view has not existed before the rise of industrial capitalism and industrial revolution itself. I'm not sure there was a class in the XV century that could be called "middle class" in modern terms.

[al103]

Indeed, Khruschev. He knew the system wasn't working and tried to put it right. Unfortunately he trod on so many toes, the old guard booted him out. It's interesting to speculate on an alternative history where Khruschev remained in power.

Bwuh, what? It was Khruschev who destroyed last parts of non-government small business that were left by Stalin (and Stalin didn't even planned to touch them - because they were considered needed as machine oil between working parts of big government enterprises). Then Khruschev reorganized economy so, that pretending became much more safe for position than actually doing. And then moved to even more stupid projects - now that made him booted out. So it was Khruschev that killed all possibility to go that way.

[SilverHawk]

Foreign investment had been scant for the last 20 years anyway, failing to create anything really sizeable and long-term in Russia. Capital flight, for the greater part of these 20 years, exceeded foreign investment (and much more so long-term investment). Russia should not count on foreign powers to 'save' it. They have no real reasons to do it. A disruption of exports is certainly bad; but it depends on how long it lasts (not long I bet, before the new elite starts exporting oil after consolidating power). Russia's exports are for the most part raw resource anyway. Raw resource and domestic investment (even when buying foreign technology, it's always introduced en masse through domestic investment) - they have always been keys to development here. Foreign investment is a drop in the bucket, and the main question is that the bucket is being wasted on luxury consumption of people who deserve, to be frank, jail at best.

So the question comes down to removing the corrupted class whole-sale and finding something that can be produced locally and exported. I was actually thinking of the ruskies kicking more money into their space program. You've already proven your mettle with MIR, I think the issue comes down to nobody really feeling the need to heft really large loads into orbit, so Space Programs tend to say "Local" for rockets and launch facilities.

How about the manufacture of Superconductors? Turn the fridged wastes of Sibera to your advantage, cut out a lot of the cooling overhead.

We're used to it. Even living in Russia makes one face a lot of threats, mostly from crime. Being a communist in Russia - heh, interesting life. I could tell some stories, someday later perhaps.

The Russian People sure get the short end of the stick with those in power, I can't recall any period in Russian history where the government wasen't just working every poor sod over that didn't have the right connections.

Hmm... if you put it that way. Perhaps. The lateness and rush of Soviet industrialization compared to the relatively slow and rather early industrialization in top-tier powers could certainly be tied up with the issues prior to the XIX-XX century. But, say, the Japanese Empire had no "middle class" too, if I'm not mistaken. In fact, the middle class itself in my view has not existed before the rise of industrial capitalism and industrial revolution itself. I'm not sure there was a class in the XV century that could be called "middle class" in modern terms.

Perhaps the answer then is quite simple? Allow the gestation and growth of a middle class in Russia to contribute to a better government?

[Simon_Jester]

So the question comes down to removing the corrupted class whole-sale and finding something that can be produced locally and exported. I was actually thinking of the ruskies kicking more money into their space program. You've already proven your mettle with MIR, I think the issue comes down to nobody really feeling the need to heft really large loads into orbit, so Space Programs tend to say "Local" for rockets and launch facilities.

How about the manufacture of Superconductors? Turn the fridged wastes of Sibera to your advantage, cut out a lot of the cooling overhead.

...This makes no sense.

Let's examine your suggestions. Rocketry requires a massive industrial base of precision manufacturing and sophisticated metallurgy- things Russia does not have except for whatever is left of the Soviet-era legacy systems. That means that the Russians cannot easily upgrade to take advantage of new rocket technology. Moreover, except for commercial satellite launches any space program is a money sink and will remain so for the foreseeable future.

Russia lacks the capacity to expand its space launch infrastructure to make up for the huge hole in its economy, and even if it could do so there aren't enough people who will pay them to use that infrastructure.

Superconductor manufacture is even worse. Again, it requires high-end precision manufacturing. Low temperature, which you cite as a big advantage for manufacturing superconductors, has... nothing to do with it. I mean, sit down and do the math. The temperature difference between a Siberian winter and the Sahara desert is one third the temperature difference between the Siberian winter and the temperature at which "high temperature" superconductors can operate at. Your idea is as absurd as saying that Saudi Arabia should become the world's leading steel producer because they can use the heat of the desert to make it easier to melt iron.

Actually, it's worse than that, because low temperatures are not required to manufacture superconductors! What you need them for is running superconductors, so even if Siberia was cold enough to be useful for this purpose (in winter; in summer it gets quite hot), and even if the Russian manufacturing sector were vast and diversified enough to support superconductor manufacture (it isn't), and even if there were plenty of demand for superconductors (there isn't), you'd still be wrong. Because the fact that the superconductors were fabricated in a cold place doesn't make them work any better when I move them somewhere else and try to use them.

As for the rest... I'll leave that to the economists and historians to tackle.

[Samuel]

Perhaps the answer then is quite simple? Allow the gestation and growth of a middle class in Russia to contribute to a better government?

You need decent wage jobs to get a middle class. Russia lacks that so... no middle class. They don't magically spring up.

[SilverHawk]

So the question comes down to removing the corrupted class whole-sale and finding something that can be produced locally and exported. I was actually thinking of the ruskies kicking more money into their space program. You've already proven your mettle with MIR, I think the issue comes down to nobody really feeling the need to heft really large loads into orbit, so Space Programs tend to say "Local" for rockets and launch facilities.

How about the manufacture of Superconductors? Turn the fridged wastes of Sibera to your advantage, cut out a lot of the cooling overhead.

...This makes no sense.

Let's examine your suggestions. Rocketry requires a massive industrial base of precision manufacturing and sophisticated metallurgy- things Russia does not have except for whatever is left of the Soviet-era legacy systems. That means that the Russians cannot easily upgrade to take advantage of new rocket technology. Moreover, except for commercial satellite launches any space program is a money sink and will remain so for the foreseeable future.

Russia lacks the capacity to expand its space launch infrastructure to make up for the huge hole in its economy, and even if it could do so there aren't enough people who will pay them to use that infrastructure.

Superconductor manufacture is even worse. Again, it requires high-end precision manufacturing. Low temperature, which you cite as a big advantage for manufacturing superconductors, has... nothing to do with it. I mean, sit down and do the math. The temperature difference between a Siberian winter and the Sahara desert is one third the temperature difference between the Siberian winter and the temperature at which "high temperature" superconductors can operate at. Your idea is as absurd as saying that Saudi Arabia should become the world's leading steel producer because they can use the heat of the desert to make it easier to melt iron.

Actually, it's worse than that, because low temperatures are not required to manufacture superconductors! What you need them for is running superconductors, so even if Siberia was cold enough to be useful for this purpose (in winter; in summer it gets quite hot), and even if the Russian manufacturing sector were vast and diversified enough to support superconductor manufacture (it isn't), and even if there were plenty of demand for superconductors (there isn't), you'd still be wrong. Because the fact that the superconductors were fabricated in a cold place doesn't make them work any better when I move them somewhere else and try to use them.

As for the rest... I'll leave that to the economists and historians to tackle.

I know this, I'm not suggesting that it happens "Bam!" and everything is ready to go. But if anything, the ruskies have proven they know their way around heavy lift rockets and it would seem the perfect niche to fall into once they get industry developed. My suggestions specifically avoided the requisite development of supporting industry because that's just common sense that it would need to exist.

I focused more on something that Russia could "export" without it being raw resources. Because we both know what happens when said resources dry up and the country that used to have them didn't develop anything to take it's place.

As for the Superconductors, I got the Kelvin requirements mixed up for what function. (98K to operate instead of to manufacture was my gaffe)

You need decent wage jobs to get a middle class. Russia lacks that so... no middle class. They don't magically spring up.

I didn't suggest they did, I suggested the growth of the middle class as a way to stabilize the political situation that is ever on-going in Russia. How to reach it was not something I touched upon.

[ray245]

I didn't suggest they did, I suggested the growth of the middle class as a way to stabilize the political situation that is ever on-going in Russia. How to reach it was not something I touched upon.

Do you think that Russian economist don't understand the benefits of having a much larger middle class?

[SilverHawk]

I didn't suggest they did, I suggested the growth of the middle class as a way to stabilize the political situation that is ever on-going in Russia. How to reach it was not something I touched upon.

Do you think that Russian economist don't understand the benefits of having a much larger middle class?

I don't recall saying they didn't.

[Simon_Jester]

I know this, I'm not suggesting that it happens "Bam!" and everything is ready to go. But if anything, the ruskies have proven they know their way around heavy lift rockets and it would seem the perfect niche to fall into once they get industry developed. My suggestions specifically avoided the requisite development of supporting industry because that's just common sense that it would need to exist.

Then if the supporting industry does not exist, isn't that a common sense problem with the idea you suggested? Your proposal looks like:

1. Status quo in Russia
2. ???
3. Massive advanced industrial base appears!
4. Export rockets/launch satellites for others.

It's step 2 that's the problem, along with the lack of an actual market to sustain step 4. And to me, that seems like a fairly obvious flaw in the whole concept of making rocketry the linchpin of the future Russian economy.

There is no way that I can imagine for your step 2 to occur before the resources run out. They can't go from where they are now to a massive* rocket industry without first coming up with other exports to fund the growth of that rocket industry.

*As in, large enough to feed the country off the exports.

As for the Superconductors, I got the Kelvin requirements mixed up for what function. (98K to operate instead of to manufacture was my gaffe)

That's a very important and fundamental mistake, but it was far from your only one. Your other mistakes were:
-Ignoring that being in Siberia gives little to no advantage over being anywhere else when it comes to working at temperatures of 70 to 100 Kelvin.
-Ignoring that even if it did, and even if you were right about low temperatures being needed to make (not use) superconductors, it would (again!) require a large supporting industrial base in Russia to feed the superconductor industry, and that this base does not exist...
-And ignoring that there is no market for this hypothetical Russian superconductor industry even if it did exist.

So both your rocket and superconductor proposals make no sense. You're looking at a case of "my country has no industrial base" and proposing as a remedy that they start exporting stuff that it takes an industrial base to make.

[SilverHawk]

So Mag-Lev Trains, MRI Scanners, Atom Smashers, among other things is "No Market"?

http://en.wikipedia.org/wiki/Supercondu ... plications

As for the mystical step #2, it's simple really. Build and improve basic industries that will support the underlying infrastructure of advanced material production. (Steel, concrete, refined petrol, agriculture, etc.)

[Simon_Jester]

So Mag-Lev Trains, MRI Scanners, Atom Smashers, among other things is "No Market"?
http://en.wikipedia.org/wiki/Supercondu ... plications

No market on the necessary scale. Scale is important, as with rocketry. An industry that only brings your nation a few billion dollars a year in GDP is not enough to sustain an economy the size of Russia. The superconductor industry simply isn't big business, and won't be for the foreseeable future.

As for the mystical step #2, it's simple really. Build and improve basic industries that will support the underlying infrastructure of advanced material production. (Steel, concrete, refined petrol, agriculture, etc.)

If they could do that they wouldn't need to export superconductors in the first place, because they'd have already solved (or mostly solved) their economic crisis without it.

Moreover, if so, why is it even relevant what they export after completing step 2? They could equally well make semiconductors, or machine tools, or any other product of a modern industrial base. Any idiot can dream up things for Russia to sell after Step 2 is complete. The challenge that is not being met, and the one that takes real effort, is actually carrying out Step 2, especially if we stay within the capitalist model.

[Zixinus]

Orbital rocketry, as I understand it know, is simply not mature enough yet to become an economically competitive business. Come back in a decade or so.

The mass-production of superconductors is still off. Superconductors are difficult to make and maintain.
And correct me if I am wrong, how do you intend to bring all the stuff necessary to make Superconductors in Sibera? Build the roads, hire the people, build the building, etc... in other words, stuff that you need money for and wouldn't that money be better spent in other stuff? You know, like renovating existing factories to make better goods or renewing roads and traintracks.

And aside all the (very good) reasons Simon has mentioned, there is the fact that most countries prefer their own rocket programs. There is a reason why several would-be (and perhaps is) rocketplane companies are sprouting in the USA: there is a market there, there is infrastructure, there is expertise, etc. High-tech and precision technology is available in the USA (Burt Rutan, IIRC, company also makes a bunch of other experiment planes and other model planes, often out of carbon composites). A very small, but provenly available, market is there of people wanting to go to orbit.
In short, everything is there what you want and need. Why on Earth would you want to go another, colder, poorer country with older technology (whom you have to bring all the stuff you want them to put up) and deficient or even lacking in many of the above? Why?

Please, this has been an enjoyable and informative discussion so far, don't ruin it by inserting a lot of wishful thining.