When the Soviet Union imploded Russia was left with two huge resources that it could build its future on. One was the exceptionally high level of education of its citizens, which was a huge advantage at a time when the knowledge economy was on the rise. The other was that it had a lot of physical resources at its disposal. Oil, gas, gold, and the biggest forests in the world.
Under Putin, the extraction of resources has dominated, creating a deeply authoritarian and unequal society. In a knowledge economy the people who obtain a lot of money are mostly those with knowledge, skill and foresight. In an extractive one power goes to those who control resources.
Russia under Putin
It doesn’t take much talent and skill to make money if you control a gold mine or a gas pipeline. What is needed is the ability to seize and control the asset and allies who will let you carry on benefitting from the easy money. Putin rose to power and stayed there by ensuring that a very rich cabal could take Russia’s natural resources out of the ground provided that they were prepared to let him run the country. Anyone who showed a little too much independence lost their assets and ended up in jail or worse.
This state of affairs was sold to the Russian people with heavy doses of national pride and a few crumbs from the tables of the very rich. Corruption ran rife but an end was put to the chaos that had been created by US economists persuading naïve Russian politicians to inflict free market shock therapy that dramatically reduced incomes, life expectancy and personal security.
Russia under Putin embraced the dark side of its history as with every passing year freedom of speech was replaced by state propaganda, and relatively free elections were replaced by selection of compliant delegates. Shiny new office blocks and elite shopping malls went up in the centre whilst miserable housing estates on the periphery crumbled and drug abuse rates soared.
Devastating impact on the environment, global politics, economics and security
The consequences for the environment have been horrendous and are still rising. Casual burning of fossil fuels is increasing the temperature across Siberia and melting permafrost so rapidly that giant bubbles of methane are being released. Licences to cut down forests are being issued to loyal friends who are devastating the boreal woodlands that suck moisture across a continent and store huge amounts of carbon dioxide. Pollution from clumsy but profitable mineral extraction works is running into rivers and damaging rare and wonderful natural environments like Lake Baikal.
The consequences for global politics, global economics and global security have been every bit as bad. Putin developed an ideology to justify what was happening and worked hard to export it and to implant that ideology in as many places as possible. He became the main champion for the belief that what is needed is a strong nation and a strong leader. He also became the main stumbling block for any efforts to limit the damage of the fossil fuel industry.
Putin has systematically weakened global environmental protections
For decades now Putin’s Russia has actively weakened any international treaties designed to protect the world from some of the consequences of global warming and global pollution. He has used the enormous resources at his disposal to finance wars for control of more territory from which to extract resources for his allies or for himself. Hence what happened in Syria. In Chechnya. And now in the Ukraine.
He has also used those resources to fund political forces in the West that shared his ideology. The rise to power of Donald Trump owed a great deal to Putin. The two men shared a set of beliefs about the strong man, a set of attitudes to women as trophies, and a set of messages about making their nation great again. Russian agents used the internet to foster support for Trump and channelled money to friends and associates of Trump’s campaign. In return Trump openly acknowledges his respect for Putin. After the invasion of the Ukraine, Trump’s first inclination was to say how clever Putin was.
Similar shady support can be traced to far-right nationalists across Europe. No one will ever properly trace the extent of the Russian funding that was channelled into the Brexit campaign or uncover all the techniques that were used to persuade the British people that it was in their interests. His agents are far too skilled in the use of offshore bank accounts and disguised internet sources to have left an easy trail and the British government is deliberately choosing not to investigate. Nevertheless, it has been clear for a very long time that Putin hated the strength of the EU, was determined to do anything he could to undermine it and saw Britain’s relatively open society as an opportunity.
The political drift towards authoritarianism in recent times owes much to the funding of it by its main beneficiaries in Putin’s Russia. His extractive economy has destroyed not just the freedom and future prosperity of the Russian nation. It has also put at risk the freedom, security and prosperity of the entire world.
How much damage can Russian money do in the UK?
All of which leads on to one other really worrying question. If this much harm can be inflicted by an extractive economy, then how much harm can be inflicted on a nation by processing the funds from that extraction?
The City of London has seen a huge boom in property purchases from Russian oligarchs. It has seen walls of Russian money being laundered through its financial markets. And it has seen Russian money being channelled into the Conservative Party with every expectation that it will buy influence in exactly the same way that it does under Putin.
Boris Johnson has made some very fine statements recently about standing up to Putin. Unfortunately, most of Britain has learned the hard way how utterly unreliable Johnson’s word is. He has a nasty tendency to say and do what he thinks is in his own best interest this minute and then forget what he said the second his personal interests change.
Until Boris Johnson acts to clean up the City of London financial markets and comes clean about the reliance of his party on millions of pounds of funding extracted originally from Russia, then one very important question needs to be asked. If an extractive economy in Russia can cause so very much damage, then how much more damage can be caused by a dodgy finance economy in Britain?
In other news Johnson is planning to reduce financial regulations in the City of London so that it can benefit from Brexit.