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Russia’s re-emerging nightmare

It is not often I read the Independent but even that haven of fluorescent idiocy seems to be on the right side of the need to face down Vladimir Putin’s increasingly sinister regime. There is a very interesting open letter by journalist Yelena Tregubova on the importance of not pretending that everything in Russia is just fine and dandy.

Of course over the last few days Putin has made the task of those shouting warning about the dangers posed by Russia a great deal easier, what with him threatening to target nuclear weapons at Europe again and pretty much announcing that he is about to appropriate BP’s investments in Russia.

Clearly Putin needs to be taken down a peg or two because if there are no consequences for his theft of foreign investments in Russia and the murders of opponents to his regime both at home and overseas, all we can look forward to is ever more destabilising antics coming out of the Kremlin.

30 comments to Russia’s re-emerging nightmare

  • There is no way that Russia could appropriate foreign investments without consequences. Were they to appropriate such investments, they would lose their ability to attract foreign investors, thus harming themselves. For the governments of the corporations which were so robbed to intervene, and go to Russia for yet another mission of “nation building”, however, would be insane.

    One of the major competitive advantages of a long-time free nation, like the United States, is that one can invest in the United States without fear of such actions being taken against you (or you could, until the environmental lobby came along). To enforce our laws in other nations would not only be prohibitively expensive in blood and treasure, but would at least to some extent eliminate this competitive advantage.

    I am all for globalization: but to invest overseas carries both risks and rewards. It is the function of individual entrepreneurs to balance those risks and rewards, and to determine the conditions under which they will engage in international trade. Those who act correctly will increase their wealth, and continue to prosper in the marketplace. Those who do not act correctly should not have their assets returned to them, at great cost, so that they can again invest them improperly. This is how the market protects itself against a loss of wealth through repeated foolishness. It does not matter whether the disaster that wipes out an investment is natural or governmental or bloody extraterrestrial in origin. The principal is the same.

    Why should we use military force to restore assets stolen by foreign governments, when we do not use military force against our own government to restore the assets it steals to their rightful owners? Why should we make it safer to invest in Russia or Venezuela than it is to invest in America?

  • Just so nobody announces they want my head sawed off again (the traditional samizdata idiom for “I disagree with you”), I should point out that I am well aware that BP is a British and not an American company. When I prescribe policy, I always do it from an American point of view, since I am an American, and therefore British policy is none of my damn business. The nice thing about having good principals, however, is that they work very nicely for anyone who chooses to abide by them.

  • What on earth are you talking about? Who is talking about attacking Russia? Weird. My views on the risks of investing in places like Russia are hardly a secret.

  • Clearly Putin needs to be taken down a peg or two because if there are no consequences for his theft of foreign investments in Russia and the murders of opponents to his regime both at home and overseas, all we can look forward to is ever more destabilising antics coming out of the Kremlin.

    That is what I’m talking about. I know how the people here love to unleash the military and/or the CIA at the least excuse.

  • Why does ‘consequences’ have to mean the military? That said, I do think having MI6 assassinate a member of the Russian security services every time they murder someone in the UK might not be such a bad idea.

    In general I was thinking of kicking them out of the G8, playing hard ball with them politically and telling them to take their gas and stick it. Actively advising folks not to invest there in the current conditions would also be a good idea though ultimately shareholders should really be doing that if they value their investment.

  • Boondocko

    Cutting off the supply of chicken pussy to Russia should do it.

  • toad

    Economic warfare is a nasty business but it is a bit easier to keep in hand than armed warfare.

    Putin is feeling pretty fiesty because he has the oil/gas weapon andf it is also providing income for the new military toys. Longterm that can change, and short term, a US executive order to start drilling in ANWAR and the Pacific and Atlantic field off the coast would see a very quick drop in spot market price IMHO.

    Even though BP is a British company their are investors in the US that would be quite pissed if Putin confiscated its assets in Russia.

    Also there are numerous trade agreement with other countries that Putin could see evaporate.

  • Russia is facing an election. Once again Putin is finding enemies to surround the state. With enemies on the outside, those on the inside must put aside their differences and band together…. Every political party does this to remain in power…Most are a but more subtle and less abusive…

    The Oil Pipeline gives Russia control over Europe… Until that faucet is turned off, its either dance to the tune or shivver in the dark… On-Off-On-Off is not a war making event… Just enough to remind who are the masters and who the servants… Ask Georgia how cold it can get….

    Russia faces more economic and demographic problems… These will grow larger because the people are not free to respond with ingenuity and enterprise… It is a Kleptocracy where muscle is fed by what is stolen… As log as the price of oil is high the muscle can be controlled. If the price should fall, the whole economy will drop into chaos…

    This will be a good time for Islam to make serious inroads into Russian society… Their wealth, discipline, sobriety will be welcomed…. sorry to repeat myself, but I see the quest for nukes and world domination going through Russia before it makes any advances in the West… The ready built authoritarin state just adds to the atraction…

    Russia is in no shape to fight an Iraq style war. They lack the training and mid-level officer and Non-Commissioned officer corps to support a sustained effort… Car Bombs not set by the state will rack the economy… even if they do little damage…

    Putin is hopng for a Cold War since he can play the cards he has. A hot War would require more talent than he has available… a loss would be humiliating and expensive… The question is whether the West has the will to ignore this pre-election bluster or whether the West will cavil before it or whether the west will fall in behind Bush…. Silly question?

  • Russia is facing an election. Once again Putin is finding enemies to surround the state. With enemies on the outside, those on the inside must put aside their differences and band together…. Every political party does this to remain in power…Most are a but more subtle and less abusive…

    The Oil Pipeline gives Russia control over Europe… Until that faucet is turned off, its either dance to the tune or shivver in the dark… On-Off-On-Off is not a war making event… Just enough to remind who are the masters and who the servants… Ask Georgia how cold it can get….

    Russia faces more economic and demographic problems… These will grow larger because the people are not free to respond with ingenuity and enterprise… It is a Kleptocracy where muscle is fed by what is stolen… As log as the price of oil is high the muscle can be controlled. If the price should fall, the whole economy will drop into chaos…

    This will be a good time for Islam to make serious inroads into Russian society… Their wealth, discipline, sobriety will be welcomed…. sorry to repeat myself, but I see the quest for nukes and world domination going through Russia before it makes any advances in the West… The ready built authoritarin state just adds to the atraction…

    Russia is in no shape to fight an Iraq style war. They lack the training and mid-level officer and Non-Commissioned officer corps to support a sustained effort… Car Bombs not set by the state will rack the economy… even if they do little damage…

    Putin is hopng for a Cold War since he can play the cards he has. A hot War would require more talent than he has available… a loss would be humiliating and expensive… The question is whether the West has the will to ignore this pre-election bluster or whether the West will cavil before it or whether the west will fall in behind Bush…. Silly question?

  • cubanbob

    Time and again nothing parts faster than a fool and his money. However much a swindle Putin is pulling on BP it is small beer compared to what Argentina did to the foreign small bond holders and bank shareholders.
    Moral of the story: it is OK to buy from socialists but only a fool invests in socialists.

  • josh Davenport

    Some reasoned points all around. However, I am currently trending toward Rich Paul’s perspective.

    I think the large trade blocks have performed their higher purpose, which is to bootstrap economies. I think at this point we should move – at a reaonable rate – back to the tried and true bi-lateral trade deals and run tariffs with the others.

    I understand the market arguments against that, but I don’t think that the majority of nation-states are up to the task of maintaining reasonable internal liberty under the current pressures. Perhaps even our own.

    Most of them are too new. Consolidate our democratic gains.

  • nick g.

    Some parts of “Atlas Shrugged” seem appropriate here. Why don’t all big foreign companies, which invest in Russia, or other backward countries, simply put high explosives in their main businesses, and if they really are going to be ‘nationalised’, destroying the stuff that was about to be looted from them? Why leave the assets untouched for the state to enjoy?

  • I suggest that the practice of issue of Letters of Marque and Reprisal should return.

    That way, when a foreign nation seizes property, the offended citizen files suit in US court, and gets a ruling for damages. The holder of Letters of Marque and Reprisal would seize property from citizens of the offending nation, and sell it in a US prize court. The US gets 10 percent, the damaged party gets 45 percent, and 45 percent goes to the holder of the Letters of Marque and Reprisal.

    Of course if the offending nation paid their liability, they could settle the debt at par (dollar for dollar) rather than at expanded (100 dollar cost for 45 dollars damage) rates.

    That would provide a means short of war to resolve conflicts, as well as a means short of war to provide an incentive for citizens to encourage their country to act in a lawful way.

  • I suggest that the practice of issue of Letters of Marque and Reprisal should return.

    That way, when a foreign nation seizes property, the offended citizen files suit in US court, and gets a ruling for damages. The holder of Letters of Marque and Reprisal would seize property from citizens of the offending nation, and sell it in a US prize court. The US gets 10 percent, the damaged party gets 45 percent, and 45 percent goes to the holder of the Letters of Marque and Reprisal.

    Of course if the offending nation paid their liability, they could settle the debt at par (dollar for dollar) rather than at expanded (100 dollar cost for 45 dollars damage) rates.

    That would provide a means short of war to resolve conflicts, as well as a means short of war to provide an incentive for citizens to encourage their country to act in a lawful way.

  • On the fourty year anniversary of the Six Day War- thanks to Vladimir- we can remember what side you should be on.

    The one that doesn’t build fences to keep people in.

    I guess this mess is good for something.

  • john

    For the first two posters, it’s principle!

  • Julian Taylor

    I suggest that the practice of issue of Letters of Marque and Reprisal should return.

    In this day and age that sounds rather akin to Vulture Funds, the mot du jour of the noble modern caring socialist fighting the evils of decadent fascisto-Western capitalism.

  • Chris Harper (Counting Cats)

    I suggest that the practice of issue of Letters of Marque and Reprisal should return.

    Well, the UK can’t without breaking the Treaty of Paris, but my understanding is that the United States is not a signatory and is free to do so.

  • Jacob

    Someone said that the cause of Global Warming is the end of the Cold war.
    Putin is trying to rectify that.

  • Tom Avery

    The British government is a pussy, leading members of the EU are in cahoots with Putin (Berlusconi, Schroeder, ex-prez Chirac), the only governments with a clear grasp of the situation are the Baltic and ex-Sovietised central European states which are politically weak and internally confused. So this will run and run: BP and other British firms will be dispossessed, Gazprom will be allowed to buy up swathes of European energy infrastructure, political assassinations on UK soil will continue, the British and other European ambassadors will continue to be harassed by Kremlin youth thugs. The UK and EU response here is laughable, in a sense, but essentially a dereliction of duty.

  • lucklucky

    “Russia is in no shape to fight an Iraq style war. They lack the training and mid-level officer and Non-Commissioned officer corps to support a sustained effort… Car Bombs not set by the state will rack the economy… even if they do little damage… ”

    Russia doesnt fight Iraq “Style” Wars. They usually just destroy everything in their path. See the photos of Grozny and imagine Baghdad…

  • James

    “Russia doesnt fight Iraq “Style” Wars. They usually just destroy everything in their path. See the photos of Grozny and imagine Baghdad…”

    Exactly…all the international outrage over the humanitarian crisis in Chenya (sp) in the ’95 and ’99 wars did absolutely nothing at all to sway Russia. The only solice was that the Russian army (with a few exceptions) was shown to be a complete and utter disaster, and no better than the Nigerian army.

  • Interesting…and the consequences of Chavez nationalizing foriegn investments in Venezuela’s oil infrastructure was…what?

    It seems there’s some truth to the old saw that Russia’s actual mode of government from its very roots is kleptocracy in many guises, and that communism was abandoned because it was unable to generate wealth worth stealing.

  • joe y

    As geekwith45 alluded, I think we may be begging the question, “Why would Putin do something so damaging to Russia?” by assuming that Putin cares about Russia; he cares about himself and those with him. The effects on Russia of appropriation, belligerence, etc, are of (political) interest to him only as they effect his (financial) interests.

  • The British government is a pussy, leading members of the EU are in cahoots with Putin (Berlusconi, Schroeder, ex-prez Chirac), the only governments with a clear grasp of the situation are the Baltic and ex-Sovietised central European states which are politically weak and internally confused. So this will run and run: BP and other British firms will be dispossessed, Gazprom will be allowed to buy up swathes of European energy infrastructure, political assassinations on UK soil will continue, the British and other European ambassadors will continue to be harassed by Kremlin youth thugs. The UK and EU response here is laughable, in a sense, but essentially a dereliction of duty.

    Posted by Tom Avery at June 6, 2007 11:12 AM

    I heartily concur Tom, and think that it would most diligent of western European states to start looking for alternative trading partners and alternative enrgy sources than having to rely upon the gas man from the east

  • Paul Marks

    Rich Paul.

    The Putin government has already taken lots of assets belonging to Western companies. The normal tactic is to say that the company has violated some regulation or other and then force it to sell the assets at a knock down price. The “consequences” of this have been that Western companies invest a fortune in finding and opening up various resources and then Putin steals them.

    One would like to think that Western companies would stop investing in Russia, but we shall have to see.

    Of course, with Russian companies it is even less difficult. Putin’s people just make up a tax bill or a regulation violation and take over the company for no money at all (and toss the owner into a labour camp if they feel like doing so) – it is then put about that the owner was a Jew (whether he was or was not) in order keep public opinion on side.

    “Unleash the C.I.A. at the least excuse”

    I doubt that the C.I.A. would be of any use for anything. And certainly the military can do nothing about Putin (other than try and protect against him if he goes totally insane and starts fireing missiles).

    However, as for “least excuse”.

    Well there are such things as the ending of the direct elections of Governors (it is now as if George Walker Bush could appoint the Governors of all 50 States), then ending of all opposition T.V. and radio stations (so no A.B.C., C.B.S., N.B.C., or P.B.S.) and almost all opposition newspapers (bar a token one in Moscow whose journalists keep getting killed) – so no big critical newspapers like the New York Times or the L.A. Times or the Boston Globe or (well almost all of them really).

    Just (apart from the little tokan newspaper whose journalists keep getting killed) pro Putin newspapers.

    And then there is the underming of trial by jury – a return to the Soviet practice of the verdict being decided before the trial.

    And so on, and so on.

    Then there is the close military relationship with Iran (both conventional and atomic), and the friendship with Chevez – and so on, and so on.

    No Comrade Putin is not a friend (although George Walker Bush seems to think that he is misguided friend, but then “Bush is a moron” is about the only thing I agree with the left on).

  • Putin is a very shrewd and intelligent man. He knows Russia’s weaknesses. He can piss us off and make things uncomfortable for the EU, but he’s unlikely to do something really stupid like attempt to reoccupy the baltic states.

    Putin’s term ends next year, and he currently cannot stand for re-election. I suspect that what is happening is that Putin is spoiling for a fight with the west, so as to create the conditions within Russia to change the constitution and allow him to run for election again, or even to dispense with the divisive practice of elections altogether; after all when you already have a President who so obviously cares for Mother Russia, what do you need to have an election for?

  • He can piss us off and make things uncomfortable for the EU, but he’s unlikely to do something really stupid like attempt to reoccupy the baltic states.

    No kidding. Automatic war with NATO? He is not that crazy.

  • nick g.

    As with everything, there is an upside. Russia is re-emerging as the enemy of choice! Islam is a bit amorphous, but our future BOND movies can have slavic villains in future! This will make things easy for the movie industry….

  • Paul Marks

    Comrade Putin has indeed been talking about changing the Constitution so that he can stay President (after all this is what his friend Chevez did and the international “liberals” do not seem upset about it).

    The old plan was for Putin to put a puppet in as President. However, it may have occured to him that all his friends are as dishonest, and just plain evil, as he is. So a “puppet” President might turn out not to be puppet (and Putin could end up having an “accident”).

    However, President Bush has said of President Putin “I have looked into his soul and he is a good man” so that is O.K. then – unless one believes that only God has the ability to look into people’s souls (us humans having to judge people by their actions).