The scale of Russia’s disillusionment with western-style democracy became apparent yesterday as the country’s two largest pro-western parties were all but wiped out in parliamentary elections.
President Putin’s United Russia came out the clear winner with 37 percent of the vote and a majority in the new State Duma and will most likely end up controlling two thirds of the Duma enabling the president to change the constitution at will. This may not be a revolutionary change from the past as the constitution was rendered feeble and Duma castrated by Yeltsin. Another quarter of the seats will be shared by anti-western reactionaries nostalgic for the days of Soviet superpower status.
The election made clear one thing – that I have argued here on Samizdata.net in the face of indignation by some commenters – Russia is not (and was not) heading the right direction. The reasons for this are more fundamental than Putin’s taste for power or Yeltsin’s penchant for gestures of a ‘Leader of Mother Russia’. Although they both fossilised what was wrong with the political and state institutions in Russia, their attitudes and actions originated from the country’s political and social values and traditions and were often supported by the majority.
Here are some quotes that sum up the political development in Russia:
Yesterday’s election shows what the people actually think: they are stridently nationalist, want wealth redistributed and have little interest in liberal or democratic values.
An analyst at a financial firm, Aton
It is a sad day for liberalism. The liberals in Russia are finished in the short term.
Igor Mintusov a political campaign consultant at Nikkolo M
Our main impression of the overall electoral process was one of regression in the democratisation of this country.
Bruce George of the Organisation for Security and Co-operation in Europe
The first two statements are spot on, the last one confuses democracy with liberal values. The Russian elections were probably democratic alright. It is freedom, liberal constitutionalism, individual and civil rights that have suffered a defeat in Russia. My point is that they were not even taking part.
I agree that Russia is manifestly not heading in the right direction but, given the government crackdown on any oppositional media, and given the fact that the government has made it extremely difficult for any sort of organised political opposition to flourish, and that in many areas voting stations lacked very basic oversight, I think it’s wrong to read the results as genuinely reflecting what people really want for their society.
As federalization continues here in the US I can’t help but see the same process happening here as well. People in the US are all too willing to cede away liberty because they are scared of the realities of life and are willing to listen to anyone who makes promises to them, ‘anyone’ coming in two categories, the self deluded do-gooder or the Machiavellian power monger.
Either way ‘redistribution’ of wealth has been going on here for decades, totaling up to an enormous unpaid debt which can only be satisfied with force. The day will have to come to pay the bill and when that happens I can’t think how much different the US will be than the likes of the Soviet Union II. The federal government now all but controls the money and its supply, they control the interest markets, they are by far hold the biggest chunk of the credit market, they regulate all the top industries, and they all but control the economy in general being by far the largest interested party of the economy.
And this is under the realitively benign borrow and transfer phase of the ponzi scheme. Very soon the bottom tier of suckers isn’t going to come along to keep the thing moving and I shudder to think of the strong arm tactics that will be necessary to keep the thing afloat. Rationed care, high taxation, price controls, re-regulation of the few industries that have prospered, and generally centralized control overall. The States are now (much less how things will be in the future) so reliant on the Feds that they soon won’t exist as an independent economic unit and therefore nothing will effectively stand between an individual and the dictates from DC.
Liberal notions of liberty and self determination are being mortgaged with deferred principal payments. In the next 10-30 years the payments are going to be demanded and the disappearance of liberty will be complete.
I saw an interview last night with the leader of the liberal faction in Russia. Asked about his party’s defeat he smiled sadly and said he that would continue to “fight from the wilderness.” He said his party had done it before, in the Soviet days, so they “knew how to do it.” It was heartbreaking.
An alternative construction can be placed on the Putin consolidation.
Much evidence exists to suggest that economic and social reform has been blocked by a coalition of old-line communists and the beneficiaries of Yeltsin’s giveaway of state industries. Putin now has the power to bulldoze this opposition, and the people, by decisively rejecting the old-time communists (dropped from around 30% to 12% in the voting), have understood the need for such action.
Surely economic growth and modernisation will provide a far better seed-bed for democracy than insistence on a balancing of forces between progressive and reactionary? The road to a mature democracy is long, and must go through economic reform. Putin is still on that road.
Gabriel,
For the reaction from the public, you might also want to look to Russian Dilettante.
I don’t always agree with him on different subjects, but since he is close to action and had lived in this, as you call it, “shit-hole” all his life, his opinion is worth reading.
I am pretty much came to same conclusions.
Tatyana
“The day will have to come to pay the bill and when that happens I can’t think how much different the US will be than the likes of the Soviet Union II”
Give me a break.
Or, rather, same conclusions in regards to the result of the elections, not on opinion of Putin. But his statesments are understandable. He lives in much closer proximity to the KGBitch, than me (now), and – o boy, didn’t we sang the same song just a few yrs ago…
Whenever I hear about Russia’s allergy to liberal democracy, I always think of the theory, expounded by Fareed Zakaria among others, that countries that are rich in resources have anti-democratic tendencies. Since the government does not need to raise much revenue from the populace, it doesn’t feel very accountable to it.
High taxes may be anti-democratic in their own way, but it seems that there *needs* to be some interaction between government and the people in revenue terms, in order to have some sense of accountability.
Or would you Samizdata guys disagree with that?
“Liberal” in Russia is Libertarian in America, just like the Liberal party in Australia, Hong Kong, and much of the English speaking world.
The sell off of State assets, encouraged by Western money men, has failed to do anything for the nascent Russian Republic. Let them seize it all and start over, America re-formed after about a dozen years, also.
“The day will have to come to pay the bill and when that happens I can’t think how much different the US will be than the likes of the Soviet Union II”
Give me a break.
I stand corrected by your incisive response. I’m sure it will all work out. Massive build up of government power rarely comes back to haunt us. I don’t know what I was thinking.
Er, I mean …… you don’t think it’s a major problem? You don’t see darkness on the horizon? You don’t see a day when rationed medicine, higher taxes, and extreme regulation will not be the order of the day for the Feds to make good on all the blinkering that has been going on for 70+ years? How do you feel it’s going to unravel? The Easter Bunny and Santa Clause is going to make it all better? Perhaps we as a country will fall into a nice inheritance and we’ll pay the bills. That’s how it always turns out in those Hallmark movies anyway. Maybe we can put on a show, my uncle has an old barn and I’m sure my mom will sew us some curtains.
Stick your head in the sand all you want and poo poo what I’ve said. But I’ve read a bit of history in my day and realize that domestic bliss beyond reasonable means is paid for two ways, conquer and pillage or putting the screws to the peasants. We’ve bought off doing either by commandeering a huge chunk of the credit market. What do we do when it has to be paid back? I’m all ears how this will be done without ruining the economy by pillaging the rich, putting the screws to the masses or attacking someone. None of these options seems to comport with right libertarian views too very much.
“I’m all ears how this will be done without ruining the economy by pillaging the rich, putting the screws to the masses or attacking someone.”…
All of the above. Some mix of them.
Of course you cannot keep acumulating debt and deficits like a drunken sailor, forever. The day of default will arrive, though it may take a couple of decades yet.
The Kremlin control over television media had the direct impact on the victory of pro-Putin “party” last weekend. National TV networks gave slanted view on the opposition parties, both pro-Western fractions and Communist parties. That, in turn, allowed the Kremlin to control how people would vote.
And also pro-Putin party isn’t even a party. It doesn’t have a platform. It didn’t paticipate in the televised debates. It only has one thing: it support the Russian President.
I think it’s partly a problem of excessive expectacy. On the part of the Russian public who thought the Wall Street lifestyle would be theirs by 1988 when Gorby was spouting perestroika. On the parts of Westerners who think you can transplant the rule of law and property rights without a de-nazification (or de-communisation) process.
I’m optimistic about Russia: in 2050.
Toolkin writes:
“We’ve bought off doing either by commandeering a huge chunk of the credit market. What do we do when it has to be paid back? I’m all ears how this will be done without ruining the economy by pillaging the rich, putting the screws to the masses or attacking someone.”
I’m sympathetic to his view – have been since the mid 1970’s when I ran across Harry Browne, Howard Ruff and their ilk. It all makes perfect sense, except that it still hasn’t happened. The fact that it has been thirty years now makes me wonder if something else isn’t going on. Here’s a hypothesis for the commenters to kick around if they are so inclined:
The hard money crowd always claimed that if we were to back our currency with something of relatively stable value, eg. Gold, then the politicians would be limited in manipulating the economy. Now, from the point of view of Von Mises, prices are fundamentally an information channel which renders an unmanageable and (practically) inaccessable mass of supply and demand measurements down into one convenient number by which a person can make economic decisions. From this perspective, economic manipulation is done by distorting the price signal in order to get people to do economic acts that they would not do otherwise. Putting the screws to the masses doesn’t work very well because our current productivity level is far above what slaves are capable of. Manipulation requires enthusiastic misled people. Hard money makes distorting the price signal very difficult, which is why we will probably never have hard money.
My hypothesis is that something else has developed which has taken the place of hard money as a restriction on economic manipulation: a much faster, cheaper transnational flow of information and money via the internet and other communication channels. For example, consider the difficulties of a currency devaluation these days. Any reasonably enterprising rapacious government needed merely to close down the banks, close the borders and prohibit credit card transactions and voila! You were worth a lot less than you were the day before.
Nowadays, the same process would be a lot more like nailing jelly to a wall. The little guy would still get caught, costing votes, but any larger amounts of money would be gone nearly instantly.
I think the same thing would tend to happen to any manipulation. It would be pretty limiting for a government. Perhaps it has already kept things from getting a lot worse than they already are.
This puts another, more sinister, aspect on attempts to ‘regulate’ the internet. And possibly even on the development of transnational governments like the EU. The only ways the information flow can be countered are to stop it or to make sure there is nowhere else for money to flow away to.
“given the government crackdown on any oppositional media, and given the fact that the government has made it extremely difficult for any sort of organised political opposition to flourish, and that in many areas voting stations lacked very basic oversight, I think it’s wrong to read the results as genuinely reflecting what people really want for their society.”
While I agree that Putin’s control over the media was a factor in this, I’m much more inclined to take a very negative view of Russia ever becoming what we could call a genuinely liberal country, at least in the near to medium future. History and culture cannot be ignored. Authoritarianism has always been the norm in Russia. And culturally Russia is part of the Orthodox world, which is known for its virulent anti-Western paranoia.
Today in Russia, most of the population is hyper nationalist, anti-Western (and especially anti-American), deeply anti-Semitic, and dreams of reviving former “glory” through a strong State and leader. The decline in the communists fortunes should not be seen as rejection of them per-se, but as support for Putin’s version of the same creed.
Russia is not heading in the right direction, and never has been. If Putin falls he will not be replaced by a liberal, but by someone even more authoritarian. Just look at the success of the certifiably insane Vladimir Zhirinovsky, a man who makes Jean-Marie Le Pen look like a moderate.
It will take a major breakdown in Russian society, a cultural/poltical defeat on a massive scale, before Russia may finally start along the path towards real liberalism, and I fear this will only come about through war.
To Shawn:
Following your logic: Muslim nations will never be able to enjoy freedom and democracy to any extent due to the countries’ cultural and historical past. “Once a commie, always a commie,” as they used to say in Russia.
It’s said that Napoleon, on his death bead, complained that they wanted him to be a Washington. Ideology matters a great deal, philosophy, institutions, all the standard western concepts of what makes a state run. But the individual counts too.
So what is in Putin’s soul? He has the clear choice now to become a tyrant or a new Washington. May he choose well.
The question about democracy in Russia will be answered when Putin loses an election.
You might also consider democratic Taiwan which in it’s development phase was very authoritarian. The press was often muzzled.
It is way too early to write off the Russians.
In any case the Russians have always liked the strong man.
Putin WANTS to be the Great, a Napoleonic Washington, Plato’s Republic’s benign dictator; possibly making Russia just a huge Singapore.
The liberal/ libertarian forces had to accept the oligarch neo-mafia types gaining huge power to get privatization. Of course the poor Ruskies are upset, and Putin putting the Yukos guy in jail, after Berenosky (?) got asylum in the UK increases his control power AND his popularity.
Similarly, Russia is stuck with lots of resources, “free wealth” that just has to be controlled & sold & have auto-profits distributed, not really a complex, interrelated set of consumer – is – king tradeoffs. Oil & mining extraction industries do not create much wealth — just redistribute it. (There’s a “land value” case for nationalizing them, leasing them on least cost management principles, using all profits for gov’t and reducing other income taxes on those who DO create wealth.)
The key indexes are housing starts & new business formations, both going up, so there is real hope for a middle class and thus middle class = democracy in the future.
Putin’s next election will likely be more unfair; but perhaps the liberals can more successfully come back with pure criticism of Putin, rather than implicit kleptocratic support for thieves. Lots of folk hate the rich – when it’s really obvious the rich are unpunished thieves, it becomes anger inducing rage. (Which, as Bush’s tax cuts are enriching his Enron like cronies, is a significant issue for Angry Left Bush hate.)
I meant to add that a 15 (14?)% flat rate tax in Russia, now two (3?) years old, was a HUGE, positive step. If Putin DOES use Russia’s oil & gas for gov’t costs, and keeps other taxes low for real businesses, his 10 econ prognosis goes way up. Even if he remains democratically unfair.
“High taxes may be anti-democratic in their own way…”
No, Ann, high taxes are very democratic.
Oil & mining extraction industries do not create much wealth — just redistribute it. (There’s a “land value” case for nationalizing them, leasing them on least cost management principles, using all profits for gov’t and reducing other income taxes on those who DO create wealth.)
WTF? Why doesn’t mining and oil create wealth? Until resources are extracted and put to use, they are not yet “wealth”. They may be potential wealth, but they ain’t wealth yet. Saudi Arabia was floating on oil for millenia, but it was dirt poor before the oil wells were put in. It is the extraction that creates the wealth, as far as I can tell.
I guess I would be interested to hear the “land value” case, but I am a little baffled at the outset by what seems to be its core premise.
Putin’s regime is much more authoritarian than democratic. Correct. So what ?
It’s hardly possible to have a “good” western style democracy where culutural conditions and traditions are undemocratic. The masses don’t want democracy, they want some strong, capable and competent government. You cannot install democracy against their desire – it would be undemocratic. Democracy might evolve over time if people start fighting for it.
Past governments in Russia have been weak and chaotic, they have failed to legislate needed reforms like land privatization. They have failed to curtail simple crime. People were fed up with them.
So the big question is : what will Putin do. What does he beleive in, beside power and order ?
So far it seems he is no murderer, thereby departing from a long Russian tradition – no small feat this. He also does not seem to be too corrupt.
The flat, low tax was also good. He might turn out to be a free market autocrat like in Singapore or Chile. Anyway, a communist he ain’t.
Thing might still turn out ok in Russia, this cooked election is not the end of the world. Of course, failure is also possible, but not certain.
Isn’t Putin an ex-KGB hack? Anyone know what his position was?
If he has access to old KGB data, he doesn’t need to murder anybody; he can probably shut anybody he feels like up just by pointing at some files.
This ends my conspiracy theorizing for this month.
To Alfred:
Putin used to work in the German Democratic Republic as a member of KGB, but, as much as that seemed to be a threat to a Westerner, is not all that negative. He was also a member of the Sobchak team in St. Petergsburg. Sobchak was a highly respected pro-democractice reformist and mayor of St. Peterburg, who was shot several years ago.
So go figure.
Besides, Putin’s KGB past seem to actually help him to gain voter support, since most Russians seemed to believe that the country needs a strong hand until the economical, policitical chaos is resolved.
Aleks:
I thought Sobchak died of a heart attack. And wasn’t his death after he left office as mayor of St. Petersburg?
Ted:
Woops, my bad! You’re right he died of a heart attack. And he was out of office.
Incidentally, there are a couple of follow-ups to the elections, which I am not certain, if the Western media pick up. One way or another I’ve not seen anything yet. The alternative counting of the votes conducted by the Communist Party (now, please, disregard the negative connotation that just appeared in your brain) puts the “pro-Western” blocks above the required minimum of 5 percent. The Communist count gives pro-Putin United Russia 33.1 percent, instead of the offical 37. Communists would only gain 0.03 percent. But Yabloko would get 5.98 percent; SPS would get 5.12 percent. Those two parties are usually refered to as “pro-Western” whatever that means. Ironically, the Communist Party doesn’t intend to appeal the election results in court.
In another follow-up, the Russian-language newspaper Kommersant was following the election results as they appeared in real time on the Election Commission web site. The number of registered voters had been fluctuating between 106 to 109 million registered voters on the day of elections. No election official could give a coherent explanation as to why that went on. “It must have been a glitch in the system,” one was quoted as saying.
“Oil & mining extraction industries do not create much wealth — just redistribute it. ”
I would like to second R. C. Deans WTF comment. There is not only the investment and intellectual effort involved in extracting the resources and making them practically available for use, there is also the intellectual effort in finding them in the first place. One of the reasons the oil and gas industry is singled out for anger and envy is a perception that one needs only to drill a well and then can just cart money to the bank. I could never understand why the people who believe this aren’t out there drilling in their backyards. Not very enterprising, I guess.
Alfred,
Check this.
I think his rank when he left the KGB was captain, but not sure of that.
So Putin was a true spook; the real deal. Neat. And a judo champion to boot. I’ll bet that came in handy.
I think Tom was probably referring to the fact that oil and other extractive mineral wealth is not of the self-sustaining kind, it is a one-off.
Japan is one of the wealthiest nations on the Earth by any measure, but they don’t have jack for natural resources. Conversely, most oil-rich states have very low per capita GDP.
Wealth creating structures and enterprises are much more important than some minerals. Why work at actually creating things when you can just pump dollars out of the ground? Or agitate for your share of them?
I know next to nothing about Russia, but I don’t understand how Russian support for Putin shows that they have no interest in democracy. The important thing is that the economic situation, which was a total disaster, has begun improving under his administration. In supporting him, the Russians have shown good sense. The most important is to get a living. Who cares that the communists did not get equal access to television ? The first attempt at Russian liberalism was not a success. It seems that they lacked the infrastructures to supervise the transformation. Thank God Putin was able to stop that. Now they can try again, as Josh Narins says on this forum. I also agree with Patrick B : economic growth will be good for the development of democracy.
In my own country (french-occupied Brittany), it looks like most people show very little concern for democracy and tend to vote with their wallet (and as a consequence, there is little democracy). So it seems natural that in Russia, where life is much harder, people would be more concerned with making the ends meet than with any lack of democracy. In the end, your personal freedom is more threatened by poverty than by unequal access to the media.
(However the problem of Chechnya is Russian oppression, not economic hardship. I hope Putin will not kill them all).
By the way, I am willing to accept that the UK is a more democratic country than Russia. But the English bipolar system does not seem very democratic to me. They have a kind of monopoly on political life, and it is not like the United States, where the two main parties are open to anyone who wants to participate.
“Following your logic: Muslim nations will never be able to enjoy freedom and democracy to any extent due to the countries’ cultural and historical past. “Once a commie, always a commie,” as they used to say in Russia.”
I never said “never” with regards to Russia, I said that it is extremely unlikely in the near to medium future, and that it would most likely have to be precipitated by a major social/cultural breakdown, such as a comprehensive defeat in a war, in the same way as Germany and Japan were. Also, I don’t think the Russian problem has anything to do with communism, but with an ancient cultural mentality and worldview.
And yes, the same is true of most Arab countries, with one exception, so long as the U.S. stays the course their defeat is hopefully already at hand.
One of the problems with some libertarian’s thinking, as also with the neoconservatives, is a tendency to overestimate a people’s desire for freedom, and to underestimate the power of history and culture/religion.
I’m inclined to agree with Samuel Huntington’s views in ‘The Clash of Civilisations’ that we will see much more conflict and war before we get to any “End of history”
Shawn:
“I never said “never” with regards to Russia, I said that it is extremely unlikely in the near to medium future, and that it would most likely have to be precipitated by a major social/cultural breakdown, such as a comprehensive defeat in a war, in the same way as Germany and Japan were.”
My own country, Latvia, has only — only — 40 years of independence throughout much of its 800-year history. Are Latvians “not likely” to be able to govern themselves, since most of the time in the past, they were serfs to big neighbors? Are they much more likely to serve other nations? I think not. I think a change in one’s mind is possible.
And without help from US.
You said: “And yes, the same is true of most Arab countries, with one exception, so long as the U.S. stays the course their defeat is hopefully already at hand. ”
Isn’t the United States creating the very same problem you mentioned about “some liberitarian’s thinking” and “overestimating a people’s desire for freedom” and ignoring “the power of history and culture/religion”? Since Iraq has seen many occupying nations from Persia to Great Britain, it would be fair to say, according to your logic, that Iraq is very unlikely to adopt democracy and freedom. If it is correct, what does it matter if US stays the course?
“My own country, Latvia, has only — only — 40 years of independence throughout much of its 800-year history. Are Latvians “not likely” to be able to govern themselves, since most of the time in the past, they were serfs to big neighbors? Are they much more likely to serve other nations? I think not. I think a change in one’s mind is possible.”
Certainly, but Latvia is not Russia. The historical and cultural issues are different. Also, I don’t think the issue is whether or not a nation or people have had a history of independence or serfdom. As I said, the issue with Russia has more to do with a deep rooted cultural worldview and a strong popular tradition of authoritarianism. The Latvian people may well have been serfs to big neighbours, but they may also have had a desire for freedom and independence despite their circumstances. This is quite different from the Russians, a majority of whom want and like authoritarian rule, and who deeply distrust the West and its traditions.
“Isn’t the United States creating the very same problem you mentioned about “some liberitarian’s thinking” and “overestimating a people’s desire for freedom” and ignoring “the power of history and culture/religion”?”
I think that some neoconservatives do in fact make this mistake.
” Since Iraq has seen many occupying nations from Persia to Great Britain, it would be fair to say, according to your logic, that Iraq is very unlikely to adopt democracy and freedom.”
Quite possibly. However I do not believe that spreading democracy and freedom should be our goal, in Iraq or elsewhere. Our goal should be to ensure a functional republic in Iraq, thats all. In the wider sense, our goal should be to convince the Arab/Islamic world, through military means, of the futility of terrorism against the United States and its allies. We must punish acts of terrorism with massive overwhelming force. In time, the futility of using terrorism, and the failure of both Islamic fundamentalism and secular Arab fascism, may hopefully inspire a real reformation and the adoption of some form of classical liberalism. But this is not going to happen overnight, which is what I mean by the U.S. (and the entire West for that matter) staying the course.
David Mercer writes:
“Wealth creating structures and enterprises are much more important than some minerals. Why work at actually creating things when you can just pump dollars out of the ground? Or agitate for your share of them?”
I don’t mean to be a bore about this, but I have to say again: One doesn’t just “pump dollars out of the ground”. If you really believe this, why aren’t you doing it? Or if you know where it is possible to just pump dollars out of the ground but you don’t own the ground, why aren’t you selling your knowledge to the oil companies. I can absolutely assure you that if you actually have such knowledge, there are at least a hundred large, well funded, oil and gas companies who will pay you millions, possibly billions for your wisdom.
Wealth creating structures and enterprises are just as essential for the extractive industries as for any other. As far as those backward countries whose leaders marshal bilions of petrodollars while their people live in squalor – they got their wealth the old fashioned way: they extorted it. You don’t need a wealth creating structure for that, you just need a victim with a wealth creating structure.
Doug, not if your nation has large enough oil or mineral deposits, why do you think such a large percentage of the worlds extractive wealth is pumped/mined via things like ‘oilfield development contracts”?
For instance, the nation of Saudi Arabia has none of the required industry to pump its own oil Almost all of the infrastructure (civil and industrial) on the coastal cities was built and is run under contract to Bechtel and the like. One of my uncles, for instance, was once the Director of Sanitation for the City of Jubail (sp?), with all of the responsibilities you would normally expect from such a position in a County govt. in the US; but he was an employee of Bechtel Corp., and had to live in one of the hated closed compounds. Most other workers are similar: Educated Westerners or poor Asians, depending on what needs doing.
So yeah, all that infrastructure has to exist, but mostly not at the point of extraction. I have and do have consulting clients in mining and oil, so I know I’m not talking out my ass here.
The situation you describe is not unlike the one that happens in the US when an oil company takes a lease from a land owner, drills, discovers a field and pays the land owner a royalty. That land owner never invested in the wealth creating structure that resulted in his royalty income, but someone – the oil company, the seismic company that took a chance on shooting specutlative seismic, the drilling company that invested in a rig to rent to the oil company etc, all invested in a wealth creating structure. Often in the face of much more risk than, say, Toyota faces in building a new factory or Wal Mart faces in building a new store.
How is the land owner’s income any different from another land owner who happens to own an ideal street corner for a new retail store? He will also profit from his good fortune, without investing in the warehouses, trucks, distribution networks, advertising etc that produce this income. In fact, a stock investor who choses correctly will also profit with very little investment of his own. You could say that his stock price is his investment, but so is the contribution of the land owner’s corner lot, or for that matter, King Faisal’s sand dune. I can think of analogous historical situations in other ‘industries’. For example the Doges of Venice took advantage of their position for trade. So far as I know they did not risk their money on ships and docks, they just ran the place.
The problem is not that there is no investment in mineral extraction – in the cases you cite, Bechtel has made huge investments – it is all that the land is owned by the State in the form of a dictator who trousers the proceeds himself without benefitting his subjects. That, I agree, is a problem. I am just disagreeing with the idea that extractive industries are different from any others in somehow not requiring investment in wealth creation.
And I’m just pointing out that the industrial wealth created to extract mined and pumped resources does not happen in many developing nations.
Once the oil runs out, Saudi and other gulf states will have nada, and the industrialized nations will just move on to the next patch of ground to extract from.