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The gap between the rich and the poor destroys the possibility of economic growth

The curse of Russia is the eternal triumph of primitive groups throughout the foreseeable historical retrospective.

From time to time our country became rich by widening the gap between rich and poor, the structure of society from primitive groups immediately reacted to incentives with a bloody redistribution of property, overthrowing society in the abyss of troubled times.

Blood bath ended in hunger, poverty, they naturally blocked violence. It was only in a quiet time to increase fat, as immediately redistribution through primitive groups again reproduced the inequality between the rich and the poor. This vicious circle is still paralyzing the social life and has its own logic, making it understandable why people in Russia always choose a strategy of mutual loss.

Gini coefficient

Economists determine the degree of inequality by the Gini coefficient. 0 — all have the same amount of ownership, 1 — all the property of one person. If we apply the coefficient to the distribution of land ownership, 0.45 refers to the countries of maximum rapid economic growth — South Korea, Japan and Taiwan.

The countries with the lowest growth — Venezuela, Peru and Argentina have a Gini coefficient of 0.85. They are re-distributed economy.

Polarization in societies is just off scale, the super-rich areas of skyscrapers are surrounded by shacks of poor people.

The concentration of wealth in the hands of a few creates incentives to refuse investment

Societies with strong differences in income between the rich and the poor create crooked incentives for redistribution, they refuse to create. The rich think that it makes no sense to strain and invest in production.

It’s easier in a fierce struggle, using the resources of power, to ruin another and take away his property. A typical example is the case of Bashneft. Sechin could create an effective management of Rosneft, as the MBH in Yukos did, but there is no incentive for Putin’s friend to work. It’s easier to use your power, proximity to the body of the first person and grab a tasty morsel.

It is very advantageous to create preferences (advantages). For example, arrange a public-private partnership to collect a road tax “pay for a ton”, most of the funds should be directed to administration, and a smaller part — to build roads. It is insanely advantageous to get huge money for the construction of an object, taking advantage of the proximity to the body of the first person, to pump unbelievable costs into the estimate, hire for pennies of contractors.

Difference put in your pocket, sharing with the first person. A huge income can be obtained from inflation. Pumping in with budget expenditures leads to its deficit and a conscientious central bank raises the accounting bank rate for withdrawing money from the economy.

The difference between inflation and an increased discount rate avoids creation and pushes investors to financial speculation through the operations of the carrie trade.

The discount rate in Russia was 7% this year, inflation 2%, premium of speculators 5%. The only condition is that they should control the central bank so that it does not reduce the discount rate. In polarized societies, the main incentive for the rich is to redistribute existing wealth.

There are 96 billionaires in Russia, so there is something to do. The rich refuse to invest in technological capital, a creative economy and growth become impossible.

In polarized societies, the poor also kill economic growth

If a society consists of a huge number of poor people who have only a workforce and a small group of rich people, in whose hands all land and capital are concentrated, then the majority of the population has a powerful incentive to take and divide among themselves.

Even worse, if democratic institutions appeared in such a country, representing the interests of the majority. It immediately introduces high taxes on the rich, they flee the country, refuse to invest.

The reduction in production strikes the poor even more, they lose their jobs, this strengthens the stratification of society, the incentives for redistribution increase.

A typical example of such a situation is Venezuela. Hugo Chávez came to power on the democratic wave of left populism and began to redistribute wealth in favor of the poor.

Thanks to the high price of oil, this insanity lasted a long time, almost the whole of Latin America flew in. When the wealth was exhausted, oil prices collapsed, it was time to pay the bills. The king was naked, Latin America abandoned left populism and redistribution in favor of creation.

The same countries where the freebie has burned out a private initiative, found themselves in distress. The only salvation for the Venezuelans was mining. Since our country is following the path of left populism, I recommend that everyone podsuetsya until it’s too late.

Putin and Navalny — two milkheads, sacrificing economic growth

The first group of siloviki and Putin’s friends are engaged in the destruction of economic growth through incentives to redistribute hydrocarbon rent and acquired wealth by Russian oligarchs.

The meaning of investing in technological capital, in science education, health care is completely absent. The budgetary expenses for teachers, doctors and pensioners are raised in Russia only for the period of presidential elections, after which they are eaten up in a swift inflation.

The whole society loses from such a strategy, with the exception of people close to Putin and the first group of siloviki providing their requests.

The Communists in Russia discredited themselves by cooperating with the Kremlin and justifying the crimes of the red executioners. But the stratification of society into the poor and the rich, the washing out of the middle class created a request for left populism.

Alexei Navalny was able to jump on a wave of just people’s anger. His program just contains a mechanism for redistribution of income from the rich to the poor, creative economic growth, it does not provide.

The fact that the Putin regime will be replaced with the democracy of the left populists, which turn Russia into Venezuela — this is a steady trend of Russian policy.

From the swamp of poverty Putin’s yesterday, with heavy nostalgia for the Soviet lines and an idiotic faith in power, our society is sliding into the future quagmire to seize and divide, under the beautiful packaging of the fight against corruption, the progress toward universal prosperity.

The logic of this transit is determined by two factors of Russian life — primitive groups that dominate the society and property inequality.

What was not allowed to do to Yegor Gaidar

To the restructuring of the USSR came up with a rather low Gini coefficient. The difference between an ordinary person and a party boss was insignificantly ridiculous compared to the existing inequality between the Russian citizen and Putin’s oligarch.

Moreover, the middle layer was made up of employees of defense enterprises with very high technological capital in comparison with other underdeveloped countries.

This opened up a window of opportunities for Russia’s transition to sustainable economic growth. But primitive groups dominated society, a high black market premium led to a fierce power struggle, during which the reformers were driven away. They could open borders for goods and services, the banking sector, which would lead to the deployment of factories and factories of European countries in Russia.

But Chernomyrdin first closed the borders, then liquidated the free movement of cross-border payments, adopting a currency control law, which still hinders economic growth, creates a high premium to the black market. Adopted the law on banks, which eliminated the competitive environment, created incentives for financial speculation, turning banks away from business lending.

As a result of all the restrictions, the oligarchs continue to be enriched so far, the middle class of the USSR has fallen into poverty, a new one has appeared, and as a result, Russia has become stuck in conditional private property.

The redistributive economy was successful at high prices for hydrocarbons, the standard of living of people increased 4-fold, but the trouble was that the polarization process was going on in parallel: the rich became richer, the number of the poor was increasing inexorably, pushing the country into the embrace of left-wing populism.

How to come off Putin’s oligarchic capitalism and left populism

All my conscious life, I believed that the main value is human life. Egor Gaidar infected me with the idea of ​​economic growth.

Solving the question of basic human needs as a result of improving well-being gives people free time for creativity. Occupation of art is a real happiness in life.

Therefore, the idea of ​​economic growth was always a fix for me, I was interested in methodology (philosophy), psychological topology and dissipative systems.

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