Why Russia is Not a Rich Country

Introduction

• Natural Resources: Russia has vast natural resources including farmland, oil, gas, iron, aluminum, and a labor force.
• Question: Why isn't Russia rich despite its resources?

Chapter 1: Early Russia

Serfdom and the Commune

• Historical Background: Unified land by Mongols; Russia gained independence in 1547.
• Serfdom: Implemented to keep peasants from migrating; serfs worked land for life with no personal benefits.
  • Lack of motivation for serfs to innovate in agriculture.
• Communes: Land managed by community; frequent land redistribution discouraged innovation.

Chapter 2: Imperial Russia

Bad Geography

• Geography Challenges: Rivers not suitable for trade; relied on expensive land transport, limiting trade.
• Industrial Limitations: Lack of industrial growth due to lack of access to foreign markets.
• Population and Urbanization: Low urbanization compared to Western Europe; poor productivity.

Chapter 3: Laissez-faire Russia

Failing to Reform

• Emancipation Reform of 1861: Freed 23 million serfs; ineffective due to mortgage burdens and lack of viable land.
• Industrial Challenges: Continued lack of domestic and foreign competition; reliance on military industry.

Chapter 4: Industrial Russia

The Failure of the Aristocracy

• Economic Shift: Government-led industrialization; creation of monopolies limiting competition.
• Infrastructure Development: Railways connected major regions; however, innovation was stymied by lack of competition.
• Education Issues: Low literacy rate; knowledge not widely accessible.

Chapter 5: Communist Russia

The Communist Revolution

• Command Economy: Nationalization of industry; inefficiency and corruption issues.
• Five-Year Plans: Central planning improved trade barriers but at economic cost; Russia lagged in productivity.

Chapter 6: Stalin's Russia

A Command Economy

• Forced Urbanization: Shift from farming to factories; education efforts increased skilled labor.
• Corruption and Punishment: Denunciation system promoted fear; gulags for dissenters.

Chapter 7: Cold War Russia

The Slow Slowdown

• Post-War Growth: USSR became a superpower; reduced Stalinist policies.
• Corruption: Attempts to introduce competition were blocked; corruption increased.
• Economic Stagnation: Inefficient resource distribution; reliance on foreign imports.

Chapter 8: Declining Russia

The Breakup of the USSR

• Economic Reforms: Attempted liberalization under Gorbachev; economic crisis worsened.
• Collapse: Soviet Union dissolved, leading to economic decline and inequality.

Chapter 9: Capitalist Russia

The Oligarchy

• Post-Soviet Transition: Businesses privatized; control fell to oligarchs.
• Economic Model: Industrial feudalism; lack of competition and innovation.

Chapter 10: Putin's Russia

Industrial Feudalism

• Oligarch Control: Economy divided among oligarchs; little competition or innovation.
• Innovation Barriers: Government control over industries; foreign investment discouraged.
• Economic Isolation: Dependence on outdated technology and limited foreign trade.

Conclusion

• Systemic Issues: Lack of competition and innovation; oligarchic control of economy.
• Impact of War: Recent conflicts further isolate Russia economically.
• Future Outlook: Without systemic change, Russia unlikely to become a rich country.