Saturday, February 20, 2021

Price Control Fiasco Highlights Spread of Moronization from Population to Bureaucracy, Inozemtsev Says

Paul Goble

            Staunton, February 19 – The Kremlin benefits when it reduces the population to the status of morons incapable of assessing the situation adequately because that makes it easier for the rulers to manipulate the population and maintain themselves in power, Vladislav Inozemtsev says.

            But when that “moronization” spreads to the bureaucracy as it inevitably does, that undermines the rulers because they thereby lose the ability to degrade the society while maintaining their control and thus ultimately lose the foundations on which the regime rests, the economist says (

            The past week’s fiasco in which the government tried and failed to reverse price rises on basic commodities suggests, he continues, that the moronization of the bureaucracy has gone far further than most had assumed and that officials are likely to prove increasingly incapable of responding effectively to new problems.

            Russian officials high and low seem to think that because world prices are rising, they must rise in Russia as well; but in fact, Moscow like other governments has a large toolbox it can deploy to ensure that the population is insulated against international prices. But because of the moronization of the elites, it isn’t using them – and so is failing to achieve its announced goals.

            As European countries have demonstrated recently, it is possible to take part of export earnings from other things, such as oil and gas and then use them to subsidize prices on foodstuffs. “One needn’t have great intelligence to repeat these European practices,” Inozemtsev says.

            But instead, Russian officials have adopted an approach which makes the attainment of their nominal goals even more difficult. They are talking about collecting new duties on oil and gas exports. That will lead both to rising gas prices within Russia and also rising food prices because the agrarian sector will see such export duties as a tax on themselves and compensate.

            No one is depriving Russia of the opportunity to subsidize prices on its internal market, and with oil prices where they are now, Moscow could cut the price of grain inside the country for the year by using what it is earning from the export of oil in the course of just three days, the economist says.

            “Alas,” Inozemtsev says, “no one is even thinking about this” in the Russian bureaucracy; and this is “understandable” given the backgrounds of key officials. The agricultural minster was born into and lived his whole life in a bureaucrat’s family, and the prime minister knows only how to collect taxes rather than how to manage spending.

            Such people are increasingly common in the Russian bureaucracy and the Russian leadership, the economist says, and because they are, prices will continue to rise and “by the end of the year, the National Welfare Fund will once again expand, but the welfare of the nation will continue to decline.”

            Only in Russia, a place which “cannot be understood by the mind or measured by the usual yardstick,” is such a prospect really possible.

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