Путин не понимает экономику 21 века | Почему войну нельзя выиграть (English subtitles) @Max_Katz
If you have trouble loading the YouTube videos, find our updated guidelines in the description. I’ve repeatedly claimed that Putin’s war is mindless, pointless, and matchlessly dumb. Above all, I mean a catastrophic loss of life, razed cities, broken families, and crippled livelihoods. But an occasional rebuttal goes like this. It’s a harsh reality, it’s, about the survival of the fittest, and as a liberal, I’m too soft to comprehend an image of a reward at the end of this long, dark, and twisted tunnel.
Like, Russia’s victory would justify, if not dwarf, its wartime losses. We’ll seize new lands and have more people. We’ll regain respect on the global arena. We’ll change the world order, and our life will improve dramatically. Putin, after all, emphasized that we’d gained new territory, and that’s the whole point of this war. As for the longer-term outcomes of the special operation, it may take a while, but then you've mentioned those new provinces. It's a very important gain for Russia.
Let's be honest, the Azov Sea got landlocked by Russia. Back in the day, Peter the Great was striving to get access to the Azov Sea. Mentioning Peter the Great was a stretch, of course. A popular misconception is that the higher-ups have a clear-cut idea of what they’re doing and why they’re doing it in the grand scheme of things.
But there’s the rub. These higher-ups clearly struggle to understand the way the world works in the 21st century. Their educational background, at best, harks back to the late 1970s. Their syllabus revolved around a planned economy. But on top of ushering in a market economy, the 21st century has spawned the concept of a knowledge economy these older hardliners seem to have a hard time wrapping their heads around. In this video, we’ll try and figure out the workings of today’s world.
Who succeeds? What really matters and what doesn’t? What’s the recipe of a success and what path leads to failure? !A Whole Different World! One theory is that a drastic global decline in crime rates is largely due to the fact that some traditionally rampant crimes no longer make sense. Like mugging a person on a dim-lit side-street where the victim gets cornered, roughed up, and robbed at knifepoint. It doesn’t take a rocket scientist to see why it’s no longer worth it. The number of possessions a modern person carries around is vanishingly low. A typical wallet stores the holder’s work I.D., driver’s license, a couple of bank cards, and a bunch of pocket change at best. In earlier decades, once an offender spotted a dapper gentleman walking by, he knew the guy might be carrying a fat wallet in his pocket.
These days, our material assets predominantly fit inside our phones. Those tiny devices may offer access to a net worth of millions of bucks, but there’s no way of physically heisting these fortunes. These aren’t the diamonds you’ve stashed inside your phone. They can’t be physically removed.
They only exist inside an array of apps only the owner has access to. Once a thief swipes your phone, it quickly turns into a useless doodad that can no longer be accessed. In previous epochs, a victim could be robbed of its physical assets that included cash, jewelry, and fancy clothes. These days, a millionaire only carries around an iPhone and an Apple Watch. Even if you strip him of a pair of his worn high-end sneakers, there’s hardly any way you can cash in on those. The same is true of home invasions.
Chances are, you aren’t going to break into a residence where an old-school owner stores stacks of cash in a safe vault. Whatever peanuts you may eventually discover there won’t exceed that you’d find in a tiny condo of an elementary school teacher. Modern wealth isn’t about owning treasure chests, bearer cheques, expensive antiquities, or jewelry that could be pawned so that the crime quickly pays off. Modern wealthy is largely an abstraction. It’s about the database digits stored in a faraway server that turns bitcoins into dollars, dollars into stock, and stock into the investment property the owner won’t ever see.
As material assets have escaped the physical realm, robberies have mostly given way to all sorts of scams and hoaxes. The only way you get hold of the assets that can’t be carried in a bag is by having the owner voluntarily hand them over to you. That’s the nature of the modern world. Seizing things by force is fast becoming next to impossible. In times of yore, a war was a commercial enterprise, and the mechanism was rather straightforward. !Rationale vs. War! The physical assets of the past included arable lands peasants used to produce food.
Some of that food was then paid to the government under a taxation scheme. Or think forests chock-full of rare timber and fur-bearing animals. Rivers bristling with fish and being part of a major trade route. Gold mines, amber deposits, salt, and other minerals. The pre-industrial assets were easy to comprehend, picture, seize, and convert. They didn’t require an infrastructure or a healthcare system for you to be able to hold on to. The conquerors couldn’t care less about the income or educational opportunities of the vanquished.
Rather, they followed a smash-and-grab routine. First, the conquistadors arrived in America. Then they unleashed a genocide. Finally, the fleet sailed back to Spain, carrying a ton of gold. A chunk of that gold was used to pay the African tribe leaders for human trafficking. Those people were then enslaved and pushed onboard a ship and taken to America. There the poor folks would working the sugar, coffee, and tobacco plantations. The produce would then be shipped to Europe and sold at a lucrative rate. A slave was an asset.
You wouldn’t be preoccupied with running a maternity capital scheme, covering the maternity ward expenses, paying for their college, writing paychecks, reimbursing a sick leave, ensuring occupational safety, or caring about their opinions or non-existent rights. You wouldn’t need to invest in their education and training. After all, by definition, the only thing slaves were designed for was slaving away. Their fundamental illiteracy was no big deal. A slave didn’t need to be taught basic arithmetic, hence no need for schools, teachers, personnel, departments of education, and hordes of bureaucrats. The investments were limited to the meager food rations that helped them survive and scrape by along with a shed to sleep in.
The ensuing multiple fatalities didn’t take a toll on such business ventures. At a price of human capital that low, it was easier to purchase a new workforce than properly sustain the existing laborers. For all the brutality and ruthlessness, that was the nature of a pre-industrial-age economy. You needed more land and more people to toil away there to produce stuff.
It’d be wise of you to make sure they were sweating it out in the most unbearable conditions. That way, you wouldn’t need to invest a ton of your resources. Using brute force was your best bet. You sent an army to carry out the land grab and then followed it up with a gang of enforcers to make sure your slaves were indeed working their guts out for your profit. That’s the way people lived for most of human history. But Vladimir Putin and his cronies believe that's the way things still are.
The strong conquered the weak, forced them to work for their gains, and thus got even stronger. At the height of that world order, roughly the turn of the 19th century, the global power was wielded by the three super-empires that had most of the world population under their control. Now fast-forward to the 21st century. But first, as a small reminder, here’s my book you can easily get a copy of.
It’s a history of modern Russia, spanning a period between the Perestroika and the 2010s protest rallies. So, fast-forward to the 21st century. The world is dominated by the two global empires: China and the U.S. Even though some of you may feel offended, Russia isn’t part of the club.
Russia’s total GDP roughly equals that of China’s Guangdong Province or the state of New York, I’m sorry, but the scale is incomparable. Both China’s and America’s macroeconomic stats are way out of the Russian economy’s league. It’s clear that China and the U.S. are capable of capturing any country outside of a few dozen large and nuclear-weapon states militarily. The U.S. has the overwhelming tech wizardry, whereas China can easily mobilize a couple dozen million men that are going to overpower anyone. Sure, had we been living in an 18th-century world, it would’ve been divided into the U.S. and Chinese colonies and mandates. Africa and most of Asia and South America would’ve been conquered and then run by the puppet colonial governments installed by Beijing and D.C.
The global political scene would’ve been constantly shaped and reshaped by the two superpowers’ military confrontation. In this context, the Russo–Ukrainian war would’ve been treated as a minor inter-Zulu skirmish. International politics would’ve centered around the Chinese gnawing away at the American clout or vice cersa. Being the two global empires, they wouldn’t have been embroiled in a direct hot war. Rather, they would’ve been busy vying for new colonies and more people. But we don’t see this happening.
Neither army can be seen landing in the poorest countries of Africa that could’ve never mounted any resistance to them. Neither China nor the U.S. is seizing diamond mines or rare-earth metal deposits, which, by the way, are essential to the modern high-tech industry. Instead, both governments can be seen diligently paying fortunes to the Middle Eastern petrocracies. But historically, Arabia could’ve now veen carved up by teh two empires. These princes and sheikhs would be now acting as puppets under the U.S.- or Chinese-run administrations.
In previous centuries, you just couldn’t picture anyone straddling a gold field without being encroached on by a powerful empire. You could only feel fairly safe if you were a force to be reckoned with, capable of conquering anyone. Alternatively, you needed protection from a force to be reckoned with. Or you could be small and feeble, but your cold and barren mountainous terrain could only offer rocks and snow fields. A conquest would’ve never paid off. And yet, there’s no global conquest going on.
Far from it, the Americans and the Chinese are bulk-purchasing the resources all over the world at a set price. They’re investing in foreign assets and acquiring production facilities. In some places, they may be using their economic power to exert political pressure.
Some smaller nations are heavily dependent on the Chinese or U.S. money to the point where they can be called quasi-colonies. But there are no invasions or plundering campaigns. And that’s not because two centuries ago, the world was dominated by some ugly brutes that were hell-bent on invading and enslaving their neighbors as opposed to the reasonable and empathic rulers of today. The real reason is that we now have access to economically much more efficient strategies to have people work for us without having to whip them into compliance at an increasingly sadistic pace. !Conquering the World! Now, what are some of the ways they use to make others work for them? They’re producing the universal values that are sought-after globally. The movie industry would be one example.
The mass culture products that include movies, drama series, and music are built in a way that the end user only pays chump change to get access to it. A movie-goer isn’t purchasing any physical asset. They’re paying to get into a movie hall, which doesn’t carry any extra costs. Half of the ticket’s price goes to the movie theater that invests in arranging, heating up, powering, and maintaining its movie halls.
The remaining 50% of the price is paid to the right-holder, a motion picture studio that authorized the movie theater to screen its flicks. Most of the currently available movies are U.S.-produced. Hollywood is grossing more than the movie industries of the other countries combined.
As you sure know, money is the equivalent of labor. Our work creates something of value. Somebody pays for it. They give us the money we then go on to exchange for our right to slump into a cinema seat. Typically, the ticket prices start at $10. 50% of it goes to the rights-holder. Now, $10 is a typical hourly wage of a low-skilled worker in eastern Europe. It means a Polish worker has to spend 30 minutes unloading the unwieldy cargo to pay $5 so that a U.S.-based movie studio allows him to watch the flick it’s produced. There’s no need to coerce anyone into hard work or mow down anyone. There are no political risks.
A Polish laborer spent half an hour working for the U.S. economy just because the U.S. government created favorable conditions for the industry that bats out the movies everyone wants to watch. What if this Polish guy goes to the movies with his family of four once a month? A year of their movie-going experience totals 48 tickets.
It means that guy spends 24 hours a year grinding away for his family’s opportunity to watch the U.S.-made movies. The American studio has paid nothing to cover their trips to the movie theater while earning the equivalent of his three work shifts. Chances are, this Polish worker has a Netflix subscription.
In Poland, a standard monthly plan costs $8, which works out as $96 per year. After taxes and deductions, most of that money is pocketed by the American company. Now, how much money does Netflix spend for the Polish guy to be able to stream its content? Now, you can challenge yourself to adding up the server and traffic costs, but it’s close to zero.
Even after taxes and deductions, the U.S.-based business spends nothing to gross the equivalent of the Polish worker’s eight-hour wage. This guy works one full day a year to benefit the American company. Spotify, YouTube, Amazon, and Android purchases— to afford all this, a Polish Joe dedicates hours, days, or even weeks of his hard labor to benefiting the U.S. companies for free. He’s doing it to be able to spend quality time with his loved ones or have things to do after his work hours. This money travles stateside.
True, a U.S. corporation will spend part of it creating a new movie, paying the actors, or fine-tuning their apps for Polish users. A fat chunk of that money will be taxed by the U.S. government. But simply put, a Polish laborer is voluntarily working for the Americans. And he’s not alone, we’re talking half of the world. Is the U.S. capable of capturing Poland? It is. The U.S. is Poland’s major ally. If this ally with a population 10 times that of Poland and an economy 30 times as large wants to invade and occupy Poland, Poland will have a hard time resisting it or drumming up external support. This bloodshed will cost the occupiers an arm and a leg, but this laborer may end up being enslaved by the U.S. and forced to work for the invaders.
Except why would they do it? The U.S. is already benefiting from this laborer’s work. They don’t need to teach him, provide him with medical care, police his safety, or set up a public transit system. He’s not rioting against them. They have no political issues with the guy. He’s just a worker who’s paying a portion of his earnings to the U.S. Worse still, if the U.S. invades Poland and wastes a ton of resources to wreak havoc on Poles and finally coerce him into compliance,
he won’t be watching Netflix or buying tickets to watch a U.S.-made movie anymore. Instead, he’ll join the Polish army to fight back the invaders. He’ll then be either killed—and thus won’t ever get a new ticket—or captured. Instead of benefiting from his family’s movie-going routine, they’ll have to be keeping him well-fed and healthy. Alternatively, the worker will survive, but go on to hate all things America. He won’t just be shunning the U.S.-made movies. He’ll try to unlearn the English language.
He’ll make sure his kids and grandkids stay the heck away from the Americans, the ones who ruined his life. Any interaction with them should be reduced to sabotage. Meanwhile, the Americans will need to be paying for their military presence and puppet administration and keeping the local life going amid the people’s universal disdain for them.
So, instead of profiteering off someone who’s eagerly working for the U.S. economy, the invasion will turn these people into a highly motivated adversary that needs to be taken care of and paid for. This is the way the 21st-century economy works. But both Putin and his cronies are oblivious to it. In the 21st century, you can’t achieve anything through sheer force. But one thing you can is hurt your own cause. This U.S.-related example is fairly obvious. But there are other remarkable stories where half the world, including its leading economies like the U.S.,
is benefiting a smaller country whose military capabilites would be eclipsed by a single U.S. army unit. In previos centuries, the ones Vladimir Putin seemingly lives in, this country would’ve been instantly subjugated. But now’s different. I’m talking Denmark. !Global Hit! You must’ve heard the brand name Ozempic. Designed as an anti-diabetic drug, the Danish-made pill is now being used for long-term weight management.
The drug was an instant hit with Hollywood. But as people noticed the quite visible effects of the magic pill, with movie stars and showbiz celebs shedding extra pounds, the medication became a global hit. The sales have now hit astronomical figures. In 2023 alone, it amounted to $11.5B, with 60% of those purchases ($7B) made in the U.S. By 2029, the figure is projected to rise to $18.5B.
Compared to Apple’s revenues, $11.5B may not look like a tidy packet. Importantly, though, the beneficiary of these sales is a Danish-based manufacturer. Denmark, a country of 6 million, has a total GDP of $400B. Even in the early stages of the drug’s explosive sales, the total amount of money made stands for 3% of Denmark’s GDP figures. A pill with paltry production costs is benefiting a small country on a macroeconomic level.
Remarkably, the Danes are sure to enjoy a steady inflow of money for decades to come just because of the Ozempic treatment plans. To keep its effects going, it should be taken throughout the course of the patient’s life. The huge country of America will be paying even more billions of dollars to the small country of Denmark. The Americans who want to look great will be working for the Danes.
Now, let’s crunch the numbers. Let’s divide $7.5B by a median hourly wage in the U.S. That’s $35. We’ll get 214 million work hours, or 26 million eight-hour workdays. Since there are 260 workdays a year, we’re getting roughly 103,000 years of work.
It means 103,000 Americans and counting will be working for Denmark. Such sales are tantamount to Denmark, which most Americans will be hard-pressed to show on a map, having a colonial city in the U.S., home to 100,000 working-age adults that are all benefiting Denmark’s economy. Why is that the case? A short answer would be the following. Denmark has a great educational system. It has a large number of high-skilled professionals capable of designing and selling a pill that’ll be sought-after globally.
Denmark has an advanced political system and an independent judiciary. It’s a well-reputed country with a predictable future that can such a business. It can spend decades investment in the research and clinical trials of a drug that may eventually help them rake in billions of dollars. To be able to invest fortunes in a biotech company under a multi-year investment scheme so that the rest of the world then starts working for this company, an investor should be equally trustful of the country of origin. They should be certain that their money won’t be pilfered by the local law enforcement agencies and his business won’t be outlawed. They should be certain that the government will never go on a deranged crusade like starting a war with its neighboring country and ending up isolated and cut off from the international high-tech market.
!Reputation Above All! To sum it all up, the single biggest asset that helps a modern state conquer the world isn’t its army. It’s the state’s reputation as a country that can be dealt with long term. Movies, music, technology, medications, and services—all of those are something people will be shelling out their money for over the course of decades. It all becomes part of their inescapable daily routines. Unlike a pizza place, it can’t be launched within a month. Unlike a car repair shop, it won’t pay off within a year.
It requires having a long-term relationship with the government. The single biggest investment a modern government should be making is propelling its own reputation. The conquistadors of today are the ones you can reliably strike a deal with. Nothing else matters, not even your short-term economic growth spurt.
Your economy may be booming, but if there’s a chance you may start a war, nobody is going to risk investing dozens of millions of dollars in your economy that could transmogrify into billions two decades from now. Some will be investing in your economy. Except their goal won’t be to milk the dividends in the future and help you turn into someone reaping the benefits worldwide in the process. Their goal will be a momentary gain where they can grab the money and transfer it to a more reliable jurisdiction. Like Denmark.
Under this quick-buck splash-and-dash model, your country will never partake in a global pie. That pie used to be carved up through brute force. Today, though, the only access to it is through selling the indispensable products, services, and technology.
Это экономика XXI века. This concept isn’t necessarily an easy one to grasp. Those who tend to rationalize somebody else’s actions will object to it. Indeed, Putin’s war can’t be that pointless and detrimental. There’s no way it’s being fought for the sake of it. There must be some rationale, however sinister. A land grab that’ll bring new factories and arable soil. But there’s none. Up until 2014, the Yandex engine accounted for almost 50% of online searches in Ukraine. VK was the country’s biggest social media platform. That was a rational policy to pursue.
The Ukrainians were voluntarily investing their work hours in the Russian economy. It went beyond Yandex and VK. Russian drama series, movies, books, and blogs were all being consumed by residents of the former Soviet republics. Those products were relatable and sought-after. But now what our country is left with are the razed lands abandoned by lots of people.
Those who’ve stayed clearly won’t pledge their loyalties to the invaders. So far, this war has generated tremendous losses. Worse, it offers no promise. There won’t come a point where it suddenly becomes a lucrative business. Regardless of its timeline and outcome, this war won’t do any good. There’s no winning strategy in a 21st-century war. It’s always a losing battle. The belligerent on the other side of the fence may, too, eventually lose. But even if its losses turn out to be greater than yours, it doesn’t mean you’ve won.
Even if the Ukrainian defenses eventually collapse and Putin occupies the four provinces he’s included in the Russian Constitution, it won’t be a victory. Russia won’t gain anything. The only thing it’ll get hold of will be a pile of rubble that’ll take fortunes to rebuild and older retirees hating the government for the deadly mess it’s created. The best-case economic scenario Putin may have pursued is this. Seizing a patch of land that’ll never be recognized internationally and its population that hates him. But he hasn’t enslaved them or made them work for his economy. Instead, he’s paying them their pensions and welfare benefits.
But there’ll be no reputation and no investments in either Russian businesses or human capital. Instead of getting college degrees, developing Ozempic, or shooting binge-worthy dramas, our human capital is being wasted on the destructive and senseless war effort. Residents of those razed towns could be buying subscription plans for a Russian streaming service, except they won’t. At best, they’re living as refugees in Poland and nursing a visceral grudge against us.
True, countries keep fighting for a better chunk of the global pie and more clout. But the elderly Russian leadership will never grasp the idea that war is no longer an option. It’s not because people are now more empathic and avoid a good fight. The reason is the same one theft is no longer a lucrative business. There’s no point in swiping an iPhone from a millionaire. Land grabs are equally pointless.
Both the phone and the land are only useful as long as they’re held by their rightful owners. These guys who’ve dragged our country into this unfixable mess can often be heard waxing lyrical about them saving Russia, restoring national pride and sovereignty, and making others respect it. But the single biggest thing required to save Russia is electing a rational 21st-century president. This person must understand the way the world works so that they can succeed running the country. But in case they’re clueless, they, at least, shouldn’t stand in the way. After all, our country is fully capable of doing the right thing. We’ve been unlucky to have this guy as our president.
On top of being clueless about the present-day world, he knows a thing or two about usurping and retaining power. He retains a skillful chokehold on our country. Now he’s dragging 145 million people into a crazy abyss of incompetence. But this period will be over.
The more people realize the way our world operates and can tell a successful government from a failure, the higher the odds of us avoiding the same trap again. See you tomorrow!
2025-01-08 02:19
