Paul Goble
Staunton, Mar. 5 – To avoid the negative popular reaction that any mass mobilization for his war in Ukraine, Putin has offered enormous bonuses and high pay to those individuals who sign up, something that “shifted the war from being a shared national burden to a private matter affecting only a small segment of society, Vladislav Inozemtsev says.
That has benefitted the Putin regime enormously, the Russian economist says, because this approach “allowed Putin to sustain the conflict without encountering serious domestic pushback and to do so without “launching another wave of full-scale mobilization” that likely would have provoked that (ridl.io/ru/smertonomika-2-0-pochemu-sistema-nachinaet-buksovat/).
But now this system, which Inozemtsev earlier defined as “deathonomics,” because the lure of money if one was prepared to serve even at the risk of death as “the single most economically efficient use of a human life,” is no longer working as well as before and likely will have to be dropped in favor of mobilization or an end to the conflict.
“The key strength” of this system has been “in its deeply market-driven nature,” the economist says. “The federal and regional authorities have been offering huge payments – lump-sum signing bonuses of from one to three million rubles (15,000 to 30,000 US dollars) plus monthly combat pay of 200,000 rubles (2750 US dollars) or more to attract those” who aren’t succeeding in the civilian economy.”
Initially, this system worked well, but it rapidly began to suffer from “a critical weakness – its entanglement with the irrational bureaucratic machinery of Putin’s ‘state.’” The costs of using this method rose dramatically but the Russian military did not use those so recruited more rationally and efficiently, a violation of economic principles.
Of course, Inozemtsev continues, “the system was never designed to deliver an outright military victory in the conventional sense: that would have required far better equipment, commanders and the ability to rapidly scale up the size of forces.” Instead, “its primary objective was always to sustain the capacity to wage war without generating significant domestic protest.”
Up to now, he says, this approach has succeeded as far as that metric is concerned, but “the Kremlin now confronts a multi-faceted economic and socio-political crisis. The willingness to enlist for what is almost certain death is declining, even as losses on the battlefield continue to mount.”
There are obvious reasons for this slowdown in recruitment. The original pool of 2023-2024 volunteers – “those with lower economic integration and few prospects – has been largely exhausted.” Household incomes have gone up even faster than bonuses for enlistment, service and in cases of death which are adjusted only on the basis of understated official inflation figures.
And ever more Russians recognize that “the war could drag on indefinitely, with no genuine short-term contracts on offer” and see that the military command isn’t interested in improving operational efficiency because “when the supply of manpower appears virtually unlimited, there is little incentive to refine tactics or strategy.”
Absent a sudden conclusion of a peace or radical shifts in the way the Russian military operates, neither of which is likely, Inozemtsev says, “the shrinking flow of contract soldiers can be addressed in only two ways: a drastic increase in money for those who might sign up or a new mobilization. There is little money for the former and no political stomach for the latter.
As a result, and because death tolls on the frontline continue to rise without the prospect for victory, deathonomics is unlikely to continue to work as well in the future, Inozemtsev says.
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