And So It Begins

January 31, 2009

Here’s an article about protests happening throughout Russia over the sinking economy.

These protests, though small and widely scattered, are very significant, because Russia has never had a history of public protests — only repression and revolution.  We can safely assume that the price of oil will remain fairly modest for the next few years.  Russia, like Venezeula and most of the other oil powers, are monoproduct economies — oil was so profitable, developing other industries seemed like a waste of time.  So these countries have little to fall back on, little to export or provide any growth to the economy.

Instead of investing in agraculture or other products, the Russians spent it (not unlike the US) in lavish displays of wealth and foreign intervention (maybe two sides of the same coin).  Now (not unlike the US), they are deep in the whole.

However, very much unlike the US, the loyalty the public feels towards the political class is provisional, the country has no standing among foreign nations, the country has weak institutions without much of a civil society,  and as mentioned above, they have an economy with only one main product.

As this depression builds steam, expect more unrest in Russia and the other oil powers.  Even if the depression starts to rebound in 2010, by the time the recovery starts to hit the oil powers, it could already be too late for many of their leaders, their governments, even their class structures.

We have, quite simply, moved from a few centuries of revolution to perhaps a century or two of devolution, and no international structure has risen to replace colonialism to manage these failed states.

Russia, like other oil powers, finds itself with a drastic decrease in its income.