"Dark times"

Why is Putin everything is fine, but the West is bad

Although it was initially assumed that the powerful sanctions of the West will hit the Russian economy and politically weaken Vladimir Putin, today the matter looks so that it is the Western governments that may encounter the political consequences of a sharp deterioration in their economies. However, this impression reflects not so much economic realities as the features of the reaction mechanisms to the signs of the crisis, characteristic of democracies, on the one hand, and autocracies, on the other.

A few days ago, at the St. Petersburg Economic Forum, Vladimir Putin radiated unkind optimism. For ten minutes he listed signs of stabilization in the Russian economy and the upcoming measures to strengthen it, described the future prospects, and then twenty minutes talked about the problems of the economy of the world and especially European and American. And although it was evident that in his almost manic blasting of the West, Putin mixes, as it should be, the real facts and propaganda, and it seems, does not distinguish very much where the first, and where the second, the picture he painted, had many points of intersection with reality.

Indeed, the one who represented three months ago, under the blow of the sanctions adopted in response to the Russian invasion, the Russian economy will be dilapidated and the visible signs of this destruction will undermine Putin’s political capital within the country, should today be dubbed in depression and become ash. Everything looks exactly the opposite.

In the Russian economy, the initial blow of sanctions, which led to sharp changes in macroeconomic indicators - the course, inflation, banking rates, etc., that is, all that is mainly for observers and markets of the market, mostly signs of the crisis - now looks almost completely stopped. At the same time, direct damage to the economy from the departure of Western companies and the rupture of supply chains, on the contrary, so far manifests itself quite moderately and dispersed.

All this feeds not only the official optimism of the Putin bureaucracy, but also the optimism of Russian business. The indicators of the main conjunctural index PMI demonstrate that after the failure of March by the beginning of June, the balance of negative and positive assessments of the economic situation by entrepreneurs practically returned to Ziro, and in the processing industries was even a little higher. Other surveys considered in the review of Re: Russia. The share of entrepreneurs positively evaluating their financial situation, having experienced a sharp compression in March, returned to the indicators of the beginning of the year, writes Nafi's research center. Moreover, the Russian population vigorously shares this mood: the share of those who optimism looks at the prospects of the Russian economy, in regular polls, the Federal Antimonopoly Service is at the historical maximum (!), And crisis expectations that recorded in March the Levada Center surveys have decreased sharply.

And vice versa: the Western seal is full of panic publications about the state of eurozone and America economies. Indeed, the situation looks completely crisis by historical standards. Inflation in Germany, Great Britain and the USA has reached a maximum over 40 years, on average inflation in developed countries (OECR countries) is 8.5%unprecedented. Food is getting more expensive-an average of one and a half times to the level of the mid-2010s, energy (heating, gasoline, electricity) is getting more expensive, as a result they occupy a greater share in the consumption of households, limiting their ability to make other purchases. Demand for other goods falls - companies do not make a profit and experience problems with the repayment of loans. Central Bank struggle with inflation by raising bets, as a result of which the loan is getting more expensive and the problems of firms become even more acute. This is a crisis spiral. While government organizations, such as the World Bank and the OECD, reduce their forecasts regarding growth in the world and in developed countries (by 1-2 p.), Experts not related to corporate care whether the recession in developed economies is inevitable.

All this is reflected in the well -being of the population and political moods. The Gallup economic confidence index (measuring optimism/pessimism of American citizens) dropped to –45 points. This is worse than the peak of covid negativity in 2020, below the index was only from February 2008 to the spring of 2009, when the global financial crisis raged. In Europe, economic problems also begin to close the theme of solidarity with Ukraine, and expert centers predict the likely split of the powerful coalition of its support in public opinion.

In other words, the case looks like the sanctions hit the initiators themselves, the Western economy entered the turbulence zone, which undermines the political capital of the leaders of the anti -Russian coalition and threatens it with a collapse. As the Kremlin strategists promised.

In 1982, the CIA prepared a detailed report on the state and prospects of the Soviet economy for the US Congress. Its main conclusion was that the Soviet economy would have a sharp slowdown and stagnation with a bouquet of related problems, but the structural crisis and something similar to collapse, in any case, in a foreseeable perspective, did not threaten. This forecast will forever remain a classic of faculty of professional examination, but this is not the main thing. The main thing is why the authors of the report did not see the approaching collapse - like the leaders of the Soviet Union, who were generally familiar with its conclusions and, proceeding to the reforms, also proceeded from the idea of ​​the fundamental stability of the Soviet economy?

The reason for this general mistake was that all those indicators who usually say about the imbalance of the economy - the dynamics of the price of goods, the price of assets, the price of money, the price of labor and the price of resources - were either absent in the Soviet economy or were suppressed so that their nominal values ​​did not say anything about the real state of affairs and real imbalances. And when the Soviet leaders, under pressure from circumstances, decided to weaken forced ties in the economy, realizing that they no longer have an effect, they, like American experts, did not realize the scale of the imbalances that began to show themselves and encountered what neither they nor their experts were completely ready.

And if you provide a slight resistance to the energy of the discursive strategies of Russian economic optimism, we will immediately find that Putin drawn by Putin is mainly a fake. What is the point in a stable dollar rate, if citizens cannot buy it or even use the dollars with them, and the firms cannot purchase the goods and components they need for them? And its current stability is more likely to resemble Soviet, when it cost 67 kopecks: this price reflected not the real ratio of two currencies, but only the tear -off of the Soviet economy from the world, its market inferiority. The Central Bank reduces the rate, but enterprises do not take loans. Or inflation. In reality, this is now not about slowing inflation, the Russian economy is dealing with deflation, which is caused by crisis (more than 10%) compression of internal demand. What is issued for the stabilization indicator is actually an indicator of the crisis. The best Russian analytical telegram channel MMI writes , analyzing a sharp reduction in personal income tax paid by citizens: “Perhaps the situation with the incomes of Russians is worse than we expected. Then this largely explains the collapse of consumer demand. ” In general, the Russian economy officially entered into a recession, and even in the most optimistic forecasts the expected fall in the economy should be at least 7%.

Feel the difference: in Russia, everyone is full of optimism despite the fact that the recession has already begun, and in Europe - full of pessimism, discussing its high probability in the future. The model of the reaction of the Russian autocracy to the crisis is increasingly evolving towards Soviet: market indicators are suppressed or stopped working, statistics are closed , unpleasant problems are not discussed (officials and large businessmen seem to be banned from the word “crisis”, only “structural adaptation”). At the same time, the Western model of reaction is built in the exact opposite way: the economic, political and social mechanisms enhance the signs of the crisis as much as possible, sending the most high -profile distress signal to society, politicians, business and experts.

In his book on the “Open Access Procedure”, Douglas North and its co -authors write that all the advantages of such orders (“democracies”, in our simplified sense), upon closer examination, may be questioned. They do not always provide higher growth rates and are unlikely to demonstrate significant successes in the fight against inequality, but they have one unconditional advantage, which determines their strength in the long term - they are better adapted to external shocks. And the mechanisms of this adaptation are arranged in the opposite way than in autocracies (closed access orders).

This explains why autocracies and, in particular, Russian autocracy constantly seems that Europe or even the West as a whole is in a state of decline, disorganization and an impending collapse. From their point of view, the inability of the Western governments by force to stop, block the transmission of crisis phenomena is an obvious sign of weakness and lack ofless. Blocking such a transmission at home, autocrats convince the population that there is no crisis or it is not so terrible. Due to this, they retain their power, but doom society into unusualness and powerlessness before the development and consequences of the crisis. While the “weak” Western governments can be not even swept away by such a significant signs of the future crisis, but society as a whole is much more armed with his face.