Paul Tolmachev Author Rss

Why Russia's Authoritarian Regime Maintains Popular Support

Paul Tolmachev — Thu, 02 Jun 2022 15:43:00 +0000

One of my main interests in institutional economics is the social conduct of people under various political regimes, which Thomas Schelling referred to as micromotives and macrobehavior. Of course, this topic is intimately related to numerous disciplines, ranging from behavioral economics and political theory to decision-making neurobiology and biological market theory.

The issue begs the question, "What are the grounds for the current tightening Russian authoritarianism and its recent political decisions, notably the aggressive invasion of Ukraine, which are denounced by the majority of the world community?" In a nutshell, the answer can be found in the following logic:

The internal logic of the policy of any tightening autocracy consists primarily in the need to expand control over the subordinate and serve society's major interests.
This control can actually be achieved in two ways: by stiffening repression or by manipulative technologies.
The chosen method, or rather the degree of superiority of one over the other, depends on the rigidity of autocracy, or rather, on its position on the scale between two poles: a soft informational autocracy with democratic institutions that partly work and a totalitarian repressive dictatorship.

Public opinion and legitimacy have a part in the domain and the beneficiary elites' holding of power as long as autocracy is in the process of changing toward the most repressive and closed form feasible. Of course, to lower the expenses of obtaining control over and controlling public opinion, the government employs a rational and logical strategy: suppressing the growth or decline of human capital.

What is the source of the shortage of human capital? Individual education is inadequate, there is a rudimentary social mentality, there is a lack of civic awareness and individual initiative, and there is a general unwillingness and inability to investigate causally and critically. The essential method for sustaining low human capital quality is to maintain a low level of education, both in school and in higher education, and to repress the growth of civic consciousness and initiative. What causes this in Russia?

First, the systemic underfunding of Russian education and the actual isolation from modern scientific and other knowledge and educational methods ensures the low level of education. This applies to all educational institutions, from kindergartens to institutions of higher education.
Second, the underdevelopment of civic consciousness and initiative is the result of a combination of several factors. These are the hypertrophied state sector versus private business, a balanced macroeconomic policy that does not allow for high inflation while simultaneously allowing for significant income growth, a corrupt and noncorrupt institutional economic framework, the same low quality of education, and, of course, the all-encompassing and multidirectional state propaganda.

All-encompassing propaganda is diverse information manipulation via the regime's monopolized mass information media. Broad propaganda while removing alternative information sources for the mass consumer and forcing these sources underground is a crucial aspect of any autocratic regime's domestic policy.

The systematic state monopoly on mass information inevitably results in propaganda and informational distortions with clear objectives. Planting archaic ethical-ideological values beneficial to the regime, justifying expanding discrete repression against "dissenters," cultivating the "leader's" persona, instilling a conflicting foreign policy agenda, and, most importantly, instilling a sense of national-ideological superiority are among them.

All of these "phantoms" are well adapted to the very human capital that enables the regime to provide genuine social support, build a so-called bad equilibrium, and extend its life cycle.

As previously stated, the expanding government sector is one of the key societal bases of support for the dictatorship. The public sector, which includes the security forces, the bureaucracy, other state employees, and workers in state firms, is the dominant socioeconomic cluster in authoritarianism. Social advancement and financial growth in autocracies are governed by affiliation with state structures and access to administrative and bureaucratic resources. Real knowledge, abilities, and human initiative all have a single point of application for success—the state and everything linked with it. Because the public sector is the social chord of aggressive authoritarianism, the populace engaged in it always benefits from vertical distribution of benefits—both in times of stability and in times of turmoil.

The so-called middle class is another crucial social resource for the regime's legitimacy. This class includes both the aforementioned state company employees and the population in the state budget and private business; in general, it includes persons with higher education and a more or less high level of consumption.

Under modern Russian dictatorship, the conventional middle class has developed two key defining characteristics: conformism and double standards, which have become an ethical consensus and a fundamental existential preference. This type of environmental adaptation is essentially the following: support for the regime in its mild form of authoritarianism while simultaneously seeking "Western" lifestyles and everything that goes with it.

In general, the regime's method of developing a degree of social consciousness that suited it has not been successful in bypassing the middle class. The primitization of sociopolitical behavior, the reduction of critical consciousness, and the atrophy of individual positioning abilities have determined the shape of the social contract with the authorities: security and stability in personal income growth in exchange for political loyalty and civic passivity.

The populace in the lowest socioeconomic strata, which represent the majority of the country's social mass, has an obviously insufficient degree of development—ethical, educational, and material—for critical causal thinking. This lower socioeconomic stratum is a target for the regime, and it is conditioned by the same objective of limiting human capital and economic progress. This enables the dictatorship to successfully control public opinion in lower social groupings and accomplish the "conditioned behavior" demanded of these people.

As a result, the dictatorship receives complete public support for nearly any unusual measure. In times of extreme geopolitical judgments, which obviously have the biggest socioeconomic costs, the regime, with proven technology, a functional political infrastructure, and, most significantly, a prepared social consciousness, shifts to special means of modeling social support.

The syndrome of mass psycho-emotional arousal is generated and promoted, enhancing the effect of pleasure and satisfaction derived from commonality and belonging to the majority. Cohesion forms around the regime's "leader," which stabilizes his political position in the short run. The feeling of a constant and expanding threat is heightened, prompting the development of an aggressive attitude toward all potential—internal and external—enemies.

As a result, there is a social self-deception effect, a willful disregarding of genuine facts that do not correspond to the regime's ideological principles and the prevailing social attitude. In general, this is a natural "protective" style of social individual behavior in the presence of a ready or proposed neutralization of threats under conditions of psycho-emotional and cognitive stress.

Signs of such a social state are especially common in expressions of mass religious fanaticism and the intellectual social hysteria of totalitarian dictatorships in their early stages.

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It's Not Just the United States: Global Economic Instability

Paul Tolmachev — Tue, 24 May 2022 09:37:00 +0000

The acts of governments in industrialized nations, which are largely a continuation of the Keynesian economic policy rhetoric, have tarnished the economies. In the face of predicted destitution due to COVID, lockdowns, and other global challenges, these initiatives include massive stimulus and nearly unfunded government indexation of voter income.

To keep electoral support, the administration is making money cheaper. This causes demand to disperse and a profusion of zombie enterprises, confuses the incentives for healthy competition, decreases corporate efficiency, and kills the economic growth factor of innovation. Most crucially, it produces leverage, or the domination of requirements over opportunities, demand over supply, resulting in significant market instability.

Such imbalances were bought with fresh leverage before COVID times, and the imbalances went away for a while, only to be replaced by new imbalances in the future. The Austrian cycles are ideal for describing this process, its beginnings, and its outcomes. In truth, this leftist social agenda for purchasing electoral allegiance is a new political ideology predicated on simplicity and, above all, the elimination of any concern for the future.

However, in COVID times, everything has changed. Another massive influx of cash happened against a backdrop of blocked demand, rather than declining owing to economic slowdown. As a result, all agents' savings rose unnaturally, individuals stopped wishing to work, and investment into the stock market and financial assets increased, causing hyperinflation and causing them to depreciate in value.

Because supply has the capacity to fulfill demand, the idea was that once the limits were eliminated, the heightened and unmet purchase intentions would dramatically accelerate the economy, because supply has the capacity to satisfy demand, synergistically driving the economy. However, structural alterations as a result of excessive lockdowns have occurred, including holes in supply chains, lower labor force participation, and general labor shortages, hypertrophied commodities market expansion, and geopolitical tensions that strengthen all of the aforementioned issues. As a result of the cheap money, supply is failing to satisfy demand, and inflation is once again ravaging the economy.

Simultaneously, rather of limiting its clumsy involvement, the government expands social programs and government investment in the form of infrastructure projects. As a result, it depresses business by increasing the tax burden, which further adds to supply compression, less efficiency, decreased motivation to invest, and, in general, lowering business expectations while extending the mandate and number of bureaucratic institutions.

Against this context, the government is pressing a green agenda at the worst possible moment by maintaining its conciliatory policy with resource autocracies, underfunding both conventional and alternative energy, which cannot meet the present demand for conventional energy capacity. A quick perusal of Klaus Schwab's The Great Reboot demonstrates the insufficiency of such a utopian notion, which, as we can see, has anti-utopian effects when followed.

As a result of divergent interests, desires, and expectations among global actors, geopolitical tensions emerged: Russia, as a resource dictatorship, perceived a window of opportunity and the Collective West's economic fragility - and played the tactical card. The assessment was true in the near term: post-conservative externalities and leftist populist policies of Western power elites undermined developed economies, caused stagflation, and raised the risk of recession. The armed war in Eastern Europe and its aftermath struck the Western world at just the right time for the resource autocracy, which required a new push for self-preservation and population validation of the regime's legitimacy.

What do we end up with? When all of the post-Soviet difficulties accumulate, we end up with structural upheavals. Today, stagflation is a truth; tomorrow, recession is unavoidable. Social unrest, which will inevitably occur and is already occurring in various parts of the Western world, will force governments to focus on today without considering tomorrow - and to continue populist and leftist expansive discourse policies, which will inevitably lead to even more leverage and exacerbate economic and social imbalances.

Commodity inflation will take time to subside since major raw material exporters are at odds, and alternate pathways for resource imports have yet to emerge. When old energy imports from the resource autocracy are restricted, new energy is plainly insufficient. This necessitates recanalization of traditional energy supplies, which will certainly result in higher costs and faster inflation. Increasing expenses are putting pressure on supply, including logistical bottlenecks, commodity inflation, and labor shortages. A new source of stress is on the horizon, or rather, already present: increasing lending prices and a possible reduction in demand.

At the same time, China gains in the near term as the personification of an alternative sociopolitical pole. Against the backdrop of global volatility and socioeconomic inequity, the capacity to centrally boost the market during the early phases of the capitalist drive can be quite a success story. There are no acute reliance on state injections, no significant supply and demand imbalances, and no ideological limits on imported raw materials at this time.

With its own issues of expanding state capitalism in the form of hypertrophied infrastructure expenditures and an authoritarian political framework that leads to long-term market and innovation inefficiencies, China now has a distinct edge. It is seen in the ability to implement directed economic management and linear monetary and fiscal incentives. This is an edge that Western governments no longer have, and that China will soon lose as well, because "big government" games do not last very long. They all lead to the same thing: social and economic collapse in diverse forms and consequences.

As a result, Western economies confront a conundrum unlike any other: whether to continue state growth and addiction therapy with a fresh dose, or whether to begin bringing the economy back into balance. Naturally, this is linked to difficult and unpopular political decisions, which are all the more painful in a time of global tension. But it is precisely in this scenario that politicians demonstrate their genuine abilities, notably the capacity to persuade voters to give up something today in exchange for a better tomorrow. There will be no tomorrow if this does not happen.

Only one thing has been confirmed to us thus far: we are living in one day and there is no tomorrow. In other words, we're all going to perish in the end, just like Keynes said. We've probably gone through this previously.

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