RUSSIAN WORLD Russia’s war economy without a future

Against all odds, Russia’s GDP is growing at a rapid pace. There is no need to set anything aside for the “dark times”, because the dark times have already arrived. Everything is for immediate consumption, and obviously, most of the money goes to the military industry, around which various groups of an endless supply chain grow.

With debates in the Moscow Duma on changes to the tax reform, which seeks to introduce ever higher taxes and say goodbye definitively to the welfare system of recent decades, Russia is preparing to definitively redefine itself in the economy. of war, destined to shape the country for many years to come, even after Tsar Putin’s eternal reign ends. The latest brilliant idea has been to increase the divorce tax, which makes it possible to kill two birds with one stone: it affirms the validity of “traditional values” by defending the family and the principle of indissolubility of marriage, and at the same time ensures abundant income , since Russia, beyond the proclamations, is very little consistent with these values ​​and has a divorce rate much higher than most countries in the world (last year alone there were more than 700,000). In compensation, it was also proposed to eliminate the marriage tax, always for the same reasons.

The effect of these measures on the lives of Russians is truly paradoxical, since instead of causing impoverishment, they seem to be ushering in an era of well-being and enrichment. The head of the Central Bank of Russia, Elvira Nabiullina, revealed that loans to individuals and businesses are growing significantly, because “the population is getting richer.” Against all odds, Russia is breaking all records for its GDP growth rate, which was 3.6% in 2023, instead of the 1.8% that had been projected, and in the first four months of this year it rose to an indecent 5.4%, generating popular enthusiasm for the “mobilization economy.”

One of the most prominent Russian economists, Professor Igor Lipsits, who now lives in Lithuania after being expelled from academia and declared a “foreign agent,” explained on Radio Svoboda that “Russia previously left a part of export earnings as reserves abroad”, but “now it leaves nothing and everything is reinvested within the country”. There is no need to reserve anything for the “dark times”, because the dark times have already arrived and there is no future ahead. Everything is destined for immediate consumption and, obviously, most of the money goes to the war industry, around which the various groups of a supply chain that has no end grow. Soldiers not only need weapons, but also food, clothing, medicine and many other things, and the entire population lives in a state of mobilization, even those who do not have to go to the front, at least for the moment.

Rather than a “war” economy, it could be defined as an “end of times” economy, a sense of apocalyptic reality. The religious dimension increasingly applied to politics and society creates the illusion that Russia is already in the kingdom of heaven, that it is above the earthly turmoil of peoples in the grip of the Western antichrist and that the soldiers going to Ukraine are angels who have come down to defend the purity of the saints. To confirm this feeling, President Vladimir Putin made a pilgrimage to the Trinity Lavra of St. Sergius, where he venerated, together with Patriarch Kirill, Rublev’s icon of the Holy Trinity, now a symbol of the heavenly reunification of the Slavic peoples, and kissed the sarcophagus containing the remains of St. Sergius of Radonezh, patron of militant Russia.

The gross domestic product is growing, but it does not produce anything for the future of Russia, which has already reached its eternal status. As Lipsits says, “Russian GDP has been buried under the black earth of Ukraine, along with the fallen and the weapons on which so much money is spent.” The “gross product” does not refer so much to what is produced, but to what is added in value, while huge investments in the war do not contribute anything, it is a huge waste of money, a “dance of death”, just as daily life seems to be in Moscow with the arrival of summer, a continuous succession of parties and revelry in every corner and place in the capital.

In theory, the government’s new measures should inspire a great spirit of sacrifice and support for the needs of the moment: we are surrounded by enemies, we must tighten our belts and give up luxuries. Instead, the opposite attitude occurs: if everyone is against us, then let’s enjoy it as much as we can, because we no longer have anything to lose. It is difficult for this illusion to last long, but the current generation of Russians has lost the dimension of “duration”: three years of war after three years of pandemic are equivalent to a geological era in people’s minds. The apocalyptic exaltation will inevitably be followed by a long “Putinian stagnation”, given that at this point all the parameters of Russian social life refer to the mechanisms of the Soviet system, which are those of the “horizontal economy”, always equal to itself.

Economists warn of the danger of the “elastic” effect of GDP, which expands and then turns in the opposite direction, the money you have wasted turning against you, until you are left with nothing. 40% of the entire Russian budget is allocated to defense spending, but also in the rest of the “civilian economy” huge investments are calculated for the reconstruction of Mariupol and other destroyed cities in Ukraine, a very un”civilian” chapter of the budget. Many other points in the official text of that budget are secret, and there is much talk of a “closed economy”, indecipherable and dark, precisely as occurred in Soviet times.

When Mikhail Gorbachev inaugurated perestroika, the most important step that he was unable to take was precisely that of the “civilian economy”, because the entire system was geared towards Cold War objectives that had to be sustained indefinitely. In the budget items, these were classified as “mobilization potential”, to such an extent that in every factory that produced “civilian” goods there was a war conversion procedure that had to be activated at the slightest sign of a new conflict. In the 1990s, these “potentials” were taken over by companies, without any support from the State, and ended up causing continuous bankruptcies. They could not be disposed of because they were a “sacred treasure” much more important than the development of civil society, and that was precisely one of the main reasons for the economic collapse of the USSR: it was not able to renounce war in order to build peace.

Gorbachev was accused of having depressed the economy with the anti-liquor laws, and many attribute the end of the Soviet system to the losses from the war in Afghanistan, but in reality these were only stones compared to the rocks of the war economy as a whole, which drained all the resources of the communist empire. Today, those levels have not yet been reached, but Ukraine could become a new Afghanistan for Putin’s Russia – not that of the Taliban, who now go hand in hand with Russian politicians, but that of the country that resists each new attack, with the support, however hesitant, of the whole of the West. But for now the Russians want the war to continue in order to continue making money; in a relatively peripheral city like Ivanovo, 300 kilometers east of Moscow, the business of making military uniforms has generated a real boom in income, and the local inhabitants only expect new mobilizations.

Surprising paradoxes are created, such as the collapse of the real estate market in the face of the enormous growth of the construction market: everything possible is done to sell properties that are no longer useful to anyone in order to dedicate themselves to building new houses in the devastated areas, not only in Ukraine but also in the Belgorod region and other affected territories. Investors rush to buy real estate for a few rubles, hoping that it will be a deal who knows when. Domestic tourism has increased dramatically, since not everyone can travel to the pleasant Asian or Cuban beaches and, consequently, domestic flights are increasingly active, although the planes are becoming less and less reliable due to lack of maintenance. and spare parts. In Crimea, most fear attacks by Ukrainian drones, but the state offers increasingly attractive incentives, including almost free hotels that would otherwise not be filled, not to mention the perverse charm of spending holidays in a war zone, which stimulates the feeling of omnipotence of those who want to feel like a winner at all costs and capable of disdaining any danger.

It is not only the war euphoria and apocalyptic joy that keep the Russian population in a state of hypnosis regarding the economic development and the future of the country. For years, Putin’s only political line was “social stability”, after the turbulent nineties that had destroyed all certainties. People do not want to know how things really are, they take advantage of new and unexpected possibilities and exploit the wave of certainties very different from those of the communist sharing of goods or the paternalistic protection of the oligarchs. Russia has chosen to isolate itself in its own world, an increasingly unreal and incomprehensible Russian world, above and beyond geographical, historical, cultural and religious coordinates. As happened with the Soviet Union in the last century, in the third millennium Russia is attempting an unprecedented experiment: to reverse the course of history, to enjoy the present in order to return to the past, erasing the future forever.

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