Diatribes of Jay

This is a blog of essays on public policy. It shuns ideology and applies facts, logic and math to economic, social and political problems. It has a subject-matter index, a list of recent posts, and permalinks at the ends of posts. Comments are moderated and may take time to appear. Note: Profile updated 4/7/12

19 September 2007

Putin, Zubkov, and Their Lessons for Us

We still view Russia and Vladimir Putin through a Cold-War lens of fear and paranoia. Putin may not be what we would call a “small-d” democrat. As he has come to understand the depth of Russia’s social and economic problems, he has become more authoritarian.

I don’t think Putin yearns to become another tsar. But he is getting frustrated at the slow pace of change in Russia. He wants to accomplish more in the short time that he (or any leader) has to set the direction of a huge and complex society. The result may seem at times like a return to Russia’s dismal past. It is not.

Yet however you view Putin’s authoritarian turn, one thing is clear. He is an extremely smart man. With the possible exception of the two Chinese leaders (Hu Jintao and Wen Jaibao) and Germany’s Angela Merkel, Putin has more raw brainpower than any national leader on the world stage today.

To give just one example of his many accomplishments, in late 2001, after September 11, Putin gave a path-breaking speech, in fluent German, before the German Bundestag. In it, he put a decisive end to the Cold War. He repudiated any idea of Russia backsliding into authoritarianism and promised constructive partnership with Germany. He said that “we are all to blame for what happened” on 9/11 and pleged cooperation on security with Europe and the United States. So far he has kept that promise. And despite the recent tiff over natural gas prices in Europe, Germany is now Russia’s biggest trading partner.

Putin was then a visionary. I believe he still is—just one whose views are tempered, and perhaps jaundiced, by repeated contact with intractable reality in his own country.

So when Putin does something so unexpected as to appoint a virtual unknown as Russia’s prime minister, we should pay attention. More is going on than just anointing a figurehead so Putin can rule from the sidelines after he leaves office. Putin is sending a message, at least to Russia and perhaps to the rest of the world. When a man with his brains and vision sends a message, we should all read it carefully.

We in the West know little about Viktor Zubkov, Putin’s appointee. But we do know three things about him. He has cooperated closely with the West in fighting terrorism. He has spent a lot of time fighting money laundering and other forms of corruption. And Putin has claimed repeatedly—with no ground for refutation that we can discern—that Zubkov is an honest man.

Could it be that Putin is identifying qualities essential to Russia’s future? Could he be suggesting that the usual suspects for his successor, Sergei Ivanov and Dmitry Medvedev, may not possess them? If so, Putin is implicitly identifying terrorism and corruption as the chief threats to a bright future for Russia, and perhaps for any diverse modern nation.

Iran’s Ahmadinejad and our own George W. Bush may dream of bilateral Armageddon, Texas style. But Putin is smart enough to know that the twentieth century is over. Its continent-wide wars with their rivers of blood are things of the past. He implied as much in his 2001 speech.

Even rogue states like North Korea and Iran cannot bring the twentieth century’s horrors back. One reason: a single nuclear submarine could obliterate either of them in fifteen minutes, if it came to that.

That’s not likely to happen. North Korea is in the process of backing down or being bought off, depending on how you look at it. Iran may be in the process of coming to its senses, as the moderate and pragmatic Rafsanjani outmaneuvers Ahmadinejad to become Speaker of the Assembly of Experts, which will pick Iran’s next Supreme Leader when Ayatollah Ali Khamenei dies. As for George W. Bush, he’ll be gone in about sixteen months, and the United States may have intelligent leadership once again.

So twentieth-century-style warfare is largely obsolete. Putin understands that. He also has the imagination to understand the existential threat that terrorism poses to Russia and to every civilized part of the world.

If you think that Putin’s Russia and Hu’s China are authoritarian, or that our own country is becoming more so, wait until a terrorist nuke explodes in one of their cities. The reaction and clampdown will bring George Orwell’s dark vision to life. Putin is smart enough to understand that and to devote a substantial portion of his country’s still-limited resources to fighting terrorism. If someone as smart as Putin were our own leader, you could bet that Al Qaeda Central would no longer be in operation, in Pakistan or wherever else it might be hiding.

Our own country hasn’t done much yet to exterminate our chief terrorist threat. But we all understand, at least in the abstract, the menace that terrorism poses for civilization. So Putin’s implicit warning about corruption warrants more attention.

Corruption is a much more subtle threat than terrorism. Today it can drain a society far more quickly than in the past. In Tom Friedman’s flat world, capital and talent flow out of corrupt societies into stable, honest ones. That can happen with the speed of international commerce and migration. In a flat world, the less corrupt society wins—and wins rapidly. Smart people and smart money move wherever conditions are fairer, more rational and more conducive to innovation and business.

That’s precisely what Putin is worried about. Now that they are free to move, capital and talented people are flowing out of Russia and into the West and Asia at an alarming rate. The reasons are the remnants Soviet-style bossism and cronyism, combined with so-called “oligarchs” and organized crime. These negative elements control and dominate business in Russia. They ultimately force bright people with good ideas to emigrate. In choosing an honest man whose personal history promises a valiant fight against corruption, Putin may be tackling the single greatest challenge to his country and its people.

China can avoid this problem for the time being only because it’s so big, and because its money and people are not yet entirely free to move. Yet even now China suffers a severe “brain drain.” Many Chinese come here to study, taste freedom and a level playing field for business, and never return. Whether China can continue, let alone expand, the “reverse brain drain” of talent attracted back by its rapid growth depends upon how quickly and effectively China can get its corruption problem under control. China’s leaders seem to be aware of the problem.

So Putin’s appointment of Zubkov sends a message of warning, not just to Russia, but to all the world. Terrorism and corruption threaten the well-being and prosperity of every modern industrial society. They are the twenty-first century’s universal problems.

Putin also sends a message of exhortation and hope: honesty in a leader may be the most important quality of all. Putin himself showed this quality several years ago. Responding to a foreign reporter’s question, he unashamedly named poverty in Russia as the country’s greatest problem and his greatest embarrassment. After nearly seven years of Bush and Cheney, plus Alberto Gonzales’ brief but comically Orwellian regime at Justice, we Americans would welcome that sort of honesty in our leaders.

But what about Putin’s warnings? In a previous post, I have outlined how lax we have been about facing our worst enemy, and how seriously we need to take Al Qaeda Central—and exterminate it as soon as possible. I won’t repeat the analysis here. Suffice it to say that Putin’s warning is something we, too, should take to heart.

As for corruption, we are by no means immune to this universal human failing. Our society is more advanced, legally and politically, than Russia’s and China’s, so our corruption takes different forms. We don’t have as much outright bribery, direct use of “muscle,” or outright racketeering. But we do have some bald bribery. We also have plenty of corruption that takes a more subtle form but is equally corrosive. We try to control it by regulating and exposing it, but often we succeed only in legitimizing it or driving it into still more subtle expression. It is a perennial battle and one that we have been gradually losing over the last fifty years.

How are we Americans corrupt? Let me count the ways. Campaign financing as practiced today is institutionalized corruption, even without aberrations like the Norman Hsu scandal. Earmarks are a form of corruption that is undermining our legislature, our checks and balances, and our democracy. Lobbying as practiced today is a form of corruption, especially when it undermines the public interest and prevents voices representing the public even from being heard. Our rich pharmaceutical companies corrupt public policy with huge donations and massive lobbying. They corrupt the practice of medicine through massive marketing and subtle “gifts” to physicians, including free samples of drugs and slanted promotional material masquerading as helpful research. Our insurance companies corrupt the political process so they can continue to exploit the lucrative field of health insurance while decrying “socialized” medicine and incurring administrative expenses several times higher than comparable government programs incur.

Our most corrosive forms of corruption occur in the area of our greatest pre-eminence: business. Our antitrust laws no longer work. For two decades they’ve allowed a single company to dominate and control one of our most innovative and important industries—computer software. Microsoft has its hands on or in almost every advance in personal-computer technology, being challenged only recently—and only indirectly—by Google's rise and the popularity of open-source software.

Multiple corrupting forces threaten our innovation and industry. For the first time in our history, we who built our national pre-eminence on science and technology have allowed religious zeal to restrict scientific research. Our patent laws allow firms to suppress innovation and whole industries with junk patents that owe more to patent lawyers’ skill than to innovative science and engineering. Our chief executives collude to jack up each others’ salaries to a level which no one but they can justify, leading to national and international embarrassment. And over all lies the pall of Enron-style fraud and malfeasance, which is becoming increasingly common, with over 2,000 firms restating their financial results.

Our energy industry is massively corrupt. The fossil fuel industries have a stranglehold on politics at the federal level and in many states. As their reserves run out and their sources of raw materials become increasingly controlled by forces inimical to our national security, they use political leverage to maintain gargantuan state subsidies. At the same time they manage to preclude both subsidies and fair entry to sources of energy that pollute less and offer greater national security. The extent to which the coal industry—the greatest polluter of all—controls some state governments is, or should be, a national scandal.

Taken separately, none of these phenomena may seem particularly alarming. None of them seems as acute, for example, as China’s regulator taking bribes to let industrial chemicals poison food and drugs. But taken together, they represent a distinct downward trend in national innovation, flexibility, resilience, and our ability to attract talent and nimble capital.

Already some brains with ethnic or family connections to Asia and Europe have started to drain. If we don’t want to see this trickle of “reverse brain drain” become a flood, we need to attend to our knitting.

The danger is particularly acute in biotechnology. Great minds that can solve the mysteries of our own origin, genetics and molecular functioning are simply not going to put up with third-rate minds spouting scripture and telling them what they can do. Today they don’t have to. A growing number of civilized nations with fine standards of living welcome them with open doors, open minds, and open pocketbooks.

Our country is still the best place in the world to do business and scientific research. But its lead over others is narrowing, and our trendline is down.

So as we assess Putin’s appointment of Zubkov, let us learn the lessons we must. Terrorism is a threat we all must face, directly, forcefully and effectively. If we do not, nothing else may matter. A single terrorist nuke in New York or Washington would change our self-image, our culture, our laws, our society and our future forever.

As for corruption, it is not just a foreign problem. It lurks here at home, often in ways so subtle that we barely recognize them.

Like it or not, the world’s nations are in a race to provide an environment most conducive to scientific research and innovative business. Corruption is a large part of that environment, and the society that has the least of it will win. In the perennial human struggle with corruption, and in the race to suppress it, we need to stop finding fault in others and start getting our own house in order. Like the bell that tolls, Putin’s sage warnings to his own people are also for us.

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