Russia: A 100-Year Economic Inferiority Complex on Stilts
Russia: A 100-Year Economic Inferiority Complex on Stilts
8
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Russia: A 100-Year Economic Inferiority Complex on Stilts

Or, Why Russia Choses Confrontation Over Competition

tl;dr:
(Russia’s clash with the West isn’t geographic — it’s economic. Strip out oil and gas, and Russia is a mid-tier economy like Mexico, Brazil, or Turkey. After the USSR collapsed, it could’ve followed the path of Poland or South Korea — using its talent to build real industries and compete on innovation. Instead, it doubled down on energy rents and elite control.)

After 1991, Russia faced the same basic choice as the rest of Eastern Europe — adapt to Western capitalism or resist it. Most of the former Eastern Bloc chose “if you can’t beat them, join them,” and, though painful, integration into Western markets brought long-term growth, stability, and rising living standards. Russia, by contrast, liberalized just enough to let a small elite capture the state and its resources while keeping political power centralized. That locked it into a rentier, extractive model based on oil and gas rather than innovation or diversified industry.

Because that system can’t compete economically with the West, the Kremlin leans on other forms of power — military force, energy leverage, nationalism — to protect its influence and status. What often gets described as “security” or “identity” politics is, in effect, a way to compensate for economic weakness. Even Putin’s drive to restore “greatness” is best seen as an attempt to preserve a system that can’t deliver prosperity by Western standards.

If you remove energy exports, Russia’s economy looks surprisingly ordinary — large in size but middle-income in structure and productivity. Without oil and gas rents, it’s basically a mid-tier industrial economy with strong human capital but weak institutions and almost no competitive manufacturing or tech base.

In the 1990s and 2000s, Russia *could* have used its scientific and engineering talent to build competitive industries — cars, machinery, software, electronics — just like South Korea or even Eastern Europe did. It had the brainpower, a big internal market, and the legacy of Soviet industrial capacity. But that required integration into global supply chains, rule of law, and foreign investment — things incompatible with the crony-political economy that emerged.

Energy exports became the easy substitute. Oil and gas revenues funded consumption, bought political loyalty, and masked the lack of industrial progress. The ruble’s strength during boom years even hurt manufacturing by making exports less competitive. So instead of becoming the “Asian Germany” it could have been, Russia became a commodity superstore — rich enough to buy stability, poor enough to resent those who surpassed it.

That’s why the economic angle explains so much: once a country locks itself into a rentier model, it has to project power in other ways to maintain relevance. If Russia had diversified — say, building world-class automakers, robotics, or software firms — it wouldn’t need to intimidate neighbors or posture militarily to assert itself. Its weakness in those sectors drives the need for confrontation as a substitute for genuine competitiveness.

After the Soviet collapse, it could have followed the path of Poland or South Korea — leveraging education and technical know-how to build globally competitive manufacturing and tech industries. Instead, it became more like Brazil with nukes: heavy on commodities, light on complex exports, and run by elites who profit from raw-resource rents rather than productive investment.

The difference comes down to political economy. Countries that climbed the ladder — Poland, Korea, Taiwan — built rule-based systems that attracted capital and disciplined corruption. Russia’s leadership did the opposite: they privatized power before property. That created a class of oligarchs and siloviki whose wealth depended on state access, not competitiveness.

So when we talk about Russia’s confrontation with the West, it’s not just a clash of values — it’s the frustration of a country stuck in the middle-income trap. Lacking the economic engine to compete on quality, it leans on energy exports and military spectacle to command attention. Had it built cars, chips, or robots instead of pipelines and missiles, the 21st century might look very different.

Had Russia truly “joined the West” — adopting rule-based institutions, accepting foreign investment, and tolerating Western oversight — it likely would have sacrificed elite control but gained sustainable growth and stability. The refusal to do that was ultimately an economic choice by those who benefited from the old order. In that sense, the post-Soviet confrontation between Russia and the West isn’t about ideology or geography — it’s about the consequences of one economy refusing to modernize on Western terms.

And the war in Ukraine is just the same inferiority complex playing out again. Russia can’t compete with the West economically — and now it can’t compete militarily either, at least not by conventional means. Like a nuclear suicide bomber, it threatens destruction not to win, but to make sure no one else can.

All that said, this is Russia. Countries don’t survive as long as it has unless *not* pulling the pin is woven into their cultural DNA. With that said: Revolution coming. That's in their DNA, too.

13 October 2025 at 03:27 PM
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38 Replies

8
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thank you


by QtangPendek m

thank you

Well actually that started out as a response to your post....

by QtangPendek m

That’s my point too. This is not an invasion on Ukraine, it’s a crawling devouring of what’s in their reach. They switched from economy of economy to war. It will be persistent and endless

But yeah, all that stuff you were posting got me thinking maybe it’s time we start communicating more directly with the Russian people. Give them a mulligan: no sanctions, full reset, open door to the West. They can keep their country and their nukes.

Everyone knows what we did with Japan after WWÌI when we needed a blocker against China: helped rebuild their auto industry, electronics, infrastructure, education, etc. Within a generation they went from ruins to a global powerhouse. That’s what partnership with the West can do.

And the Russians already had a taste of the good life. They’d be the heroes of the world if they got rid of Putin. Proud, intelligent, educated, they want to be part of the world, not ostracized from it.

We can hope.


by John21 m

maybe it’s time we start communicating more directly with the Russian people Give them a mulligan: no sanctions, full reset, open door to the West. They can keep their country and their nukes.

Russian citizens - граждане - want to be lied to, and Rublovka guys, who co-benefit from Putin’s ruling, want to keep lying. They are better off being kings among rats, than rats among kings. They only know how to steal budget money via Gazprom and similar companies. That’s it. It’s a part of their class mindset. Your proposal is reasonable but as impossible as democratizing Afghanistan - they simply don’t want it. You can force people to surrender, but not to proactively cooperate. Lack of will


by QtangPendek m

Russian citizens - граждане - want to be lied to, and Rublovka guys, who co-benefit from Putin’s ruling, want to keep lying. They are better off being kings among rats, than rats among kings. They only know how to steal budget money via Gazprom and similar companies. That’s it. It’s a part of their class mindset. Your proposal is

How many Pollocks does it take to screw in a light bulb?

Took our Melting Pot about 50 years or so after the early 20th century EE immigration waves to get past your kind of ethnic bigotry.


by John21 m

How many Pollocks does it take to screw in a light bulb?

Took our Melting Pot about 50 years or so after the early 20th century EE immigration waves to get past your kind of ethnic bigotry.

I didn’t intend to offend you by criticizing your proposal, I just wanted to point out one major underlying condition that is not met. As per your analogy - poles and Russians are insanely similar as people, yet completely different as citizens. Putin has 70/80% polls towards his actions. You should watch street interview from Russia. This country is like one big MAGA. It’s not about bigotry of mine, but about their (lack of) culture. They are hypnotized by Россия1 tv channel, with daily rants about invading Poland and bombing UK. Look up Solovoyov on YT. He’s Russian most important “journalist”. Spend 2-3 minutes watching him.


This is daily political debate on Россия1. You’re welcome: https://m.youtube.com/watch?v=Pbm1Nucw-q...


Russians still praise господарство approach, which can be loosely translated into commonwealth, but means dependency on the state, subventions, pensions etc. Mother Россия is great, powerful and unconquerable. 20-30% people who understand are not in power, if fact any power has been taken from them for good, or are likely to soon be imprisoned or dead like Navalny or Politkowska. Addressing Russians will not help. Bribing Putin’s inner circle could


by QtangPendek m

This is daily political debate on Россия1. You’re welcome: https://m.youtube.com/watch?v=Pbm1Nucw-q...

Yeah "Let's firebomb Britian because the Americans won't do anything,"

Right. I guarantee you if the news broke right then that Putin is going to blow the UK off the map, he would've crapped his pants on live TV along with the rest of the Russian population.

Anyway I'd appreciate it if you keep all the propaganda in your own thread.


You misunderstood me cause I’m just describing facts, which I’m pretty surprised by. Anyways, I’m leaving this thread. Maybe some Russian player will settle. I’m off


by John21 m

[I]

Had Russia truly “joined the West” — [B]adopting rule-based institutions
, accepting foreign investment, and tolerating Western oversight — it likely would have sacrificed elite control but gained sustainable growth and stability. .

And now we see the USA abandoning rule based institutions.


by Nut Nut m

And now we see the USA abandoning rule based institutions.

GTFO with your false equivalencies, comrade.


by campfirewest m

GTFO with your false equivalencies, comrade.

Which rule based institutions do you see the Trump Administration subordinating itself to ?


by Nut Nut m

And now we see the USA abandoning rule based institutions.

by Nut Nut m

Which rule based institutions do you see the Trump Administration subordinating itself to ?

The only one that really matters when it comes to economics and the protection of capital is the rule of law.

You can have political chaos, scandals, even populist waves, but as long as contracts hold, courts function, and property rights are secure, capital stays put.

That’s what separates the U.S. and the West from Russia, China or any other country that might go socialist and seize the means.

I mean if you had billions to invest or were looking to build a chip manufacturing plant worth tens of billions, where are you putting it, the U.S. or Russia?


by John21 m

The only one that really matters when it comes to economics and the protection of capital is the rule of law.

You're opening up multiple routes of argument.

One is the Trump Administration's respect for the rule of law .... which is a dubious representation.

The second is even more troubling .... that the rule of law is the only thing that matters when it comes to economics and protection of capital ..... unless of course you're referring to natural law as explained by math and science.


As I have said many times on this forum, Russia is the geographical and cultural legacy of a colonial empire that never disbanded.

Sure, under the Russian revolution, regions and colonized parts of the Russian empire were on paper given the opportunity to go independent, as long as it didn't "hinder the socialist revolution" (paraphrased). In practice, those who attempted independence were brutally subjugated to remain. Which puts Lenin squarely into the camp of Russian "reformers" ever since Alexander II who makes a lot of promises about freedom, but after a period of initial delivery, they quickly reverse course and become brutal oppressors in their own right.

I don't think an economic analysis of Russian geopolitics is unwarranted, and I think it can be interesting. However, there are both geographic, cultural, and political reasons for Russia's continued problematic relationship with the west. Liberalism has always been met with scepticism in Russian politics, and is often seen as just "westernism" in disguise. This is often misunderstood in the west, because the part of Russia we regularly interact with is the "west-facing" Russia, which we then mistakenly believe accurately represent the entirety of Russia. Similarly, in the west, we have both historically and currently held cultural and political reservations about Russia.

The imperialistic ambition is also very much alive in Russia today, which is hardly a secret. Neo-imperialist ambition is openly touted by the Russian regime. The term "Novorossiya" (New Russia), the name of the Russian Empire's administrative area in Europe is still being used today as pretext for re-conquering old imperial holdings, even by Putin himself in public speeches.

Russian kleptocracy and autocracy also make the current Russian economy difficult to gauge. So much is kept below deck in order to make it easier to steal or to hide the truth from their own populace, that it is difficult for an observer to accurately assess the reality of the Russian economy. It also doesn't help that western countries have for the two decades been more than happy to accept enormous amounts of Russian blood money. Regardless, we must at least surmise that the Russian economy's only role is to ensure the kleptocracy remains in power and can continue to steal from its people.

These two factors (imperialism and kleptocracy) fairly adequately explain Russia's economic failings. Imperialism isn't the best economic model, cooperation and relatively free trade is. A Russia that had built trading blocs instead of invading its neighbours every 10 years would have done a lot better for itself and might even have regained its status as a superpower by now. As for kleptocrats, they don't serve their nation's economic interest; they serve their own. It of course doesn't help that Russia hasn't really been a democracy for a long time, so it isn't exactly easy for its people to find a new government.


by Nut Nut m

You're opening up multiple routes of argument. One is the Trump Administration's respect for the rule of law .... which is a dubious representation. The second is even more troubling .... that the rule of law is the only thing that matters when it comes to economics and protection of capital ..... unless of course you're referring to natural law as explained by math and science

Well, it’s not really an argument, at least not from me. Of course taxes, regulations, strategic interests, and geopolitics all play a part. Western capital goes wherever the opportunity looks good enough, even into places like Russia, China, or unstable regimes when the returns justify the risk.

But that’s not really relevant to my point in the post. I’m talking about the kind of long-term, large-scale investment that builds industries, not quick capital chasing returns. That only takes root where the rule of law is dependable, where investors trust that tomorrow will look enough like today for their money to stay put and grow.


I literally promised myself not to come here but since tame_deuces kind of confirmed my view, I feel like I'm allowed to. I just want to develop one issue - the people:

”...the part of Russia we regularly interact with is the "west-facing" Russia, which we then mistakenly believe accurately represent the entirety of Russia. Similarly, in the west, we have both historically and currently held cultural and political reservations about Russia”.

We know: Putin, Pieskov, Lawrow, Zakharova and Nebenzya (lol at this bald dIck), maybe some oligarchs like Abramovitch etc.

We knew: Navalny, Nemtsow, Politkowska - all are dead. Only kasparov is still alive, at least as I'm writing it

Excluding these two groups and some highly educated ppl working for multinantional corporations in moscow (there's almost no so called "middle class" in russia) we are left with something as passive as a domestic animal - it's called H0M0 SOVIETICUS and it makes up for 70-80% of russian population.

These people know only one thing - how to be obedient towards the state and hostile to their fellow citizens - cause it's the state who feeds them, and neightbours who can take their chunk if you're not aggresive enough.


by tame_deuces m

Russian kleptocracy and autocracy also make the current Russian economy difficult to gauge. So much is kept below deck in order to make it easier to steal or to hide the truth from their own populace, that it is difficult for an observer to accurately assess the reality of the Russian economy. It also doesn't help that western countries have for the two decades been more t

These last two paragraphs sound a whole lot like what is going on in the USA.

Anyone who thinks the USA is a genuine democracy with the gerrymandering, two parties with similar right-wing economic philosophy and a Federalist Society controlled SCOTUS that produces rulings like Citizens United ....

It's not as bad as Russia .... if it were, I wouldn't still be posting online.


by tame_deuces m

As I have said many times on this forum, Russia is the geographical and cultural legacy of a colonial empire that never disbanded.....

Goood points I don’t disagree with most of what you wrote. The imperial and kleptocratic patterns you describe are real and they go way, way back. But I don’t think they’re immutable. Systems like that can change when the incentives change.

Years ago, I was talking to a Mexican business owner about corruption. I kind of joked that when we send semi-tankers down there with new tires, it’d be nice if they didn’t come back with old ones. He just said basically, you Americans have always known justice and the rule of law. We never have. That stuck. It’s the same lens I look at Russia through: people don’t change because someone tells them to, they change when the system gives them a reason to.

That’s basically what Nixon and Kissinger understood with China. You don’t convert a system like that by lecturing it about democracy. Instead you give it TVs, trade, access to Western goods, and the sense that life gets better by playing ball instead of burning the table down. Once people start building wealth and expectations, the political culture starts to follow.

Russia never got that. The West saw it more as a security problem than an economic one. Instead of helping it build real industries or integrate its human capital, we left it orbiting between Western banks and oligarch cartels. The elites doubled down on control because they couldn’t compete on productivity, and the people never got the sustained exposure to the benefits of integration that might’ve reshaped their expectations.

So I don’t really see imperialism and kleptocracy as the cause of Russia’s dysfunction; rather more like the symptoms of that deeper economic insecurity. Give people stability, prosperity and a stake in the future and the empire mindset fades on its own. Take that away, and it’s the only identity left.


by Nut Nut m

Anyone who thinks the USA is a genuine democracy with the gerrymandering, two parties with similar right-wing economic philosophy and a Federalist Society controlled SCOTUS that produces rulings like Citizens United ....

We're not a democracy. Never have been. That's a different constitutional structure.
But we are a genuine two party system: Capital and Labor.


by Nut Nut m

These last two paragraphs sound a whole lot like what is going on in the USA.

Anyone who thinks the USA is a genuine democracy with the gerrymandering, two parties with similar right-wing economic philosophy and a Federalist Society controlled SCOTUS that produces rulings like Citizens United ....

It's not as bad as Russia .... if it were, I wouldn't still be posting online.

Similarities will exist certainly. I think key differences is that Russia has never been at the level you were at your best in terms of human rights, and that it is currently progressed far further towards a totalitarian regime. However, I'd say indicators are pointing towards a trajectory similar to what we saw / see in Hungary, especially since Project2025 could pretty much just be renamed "Let's do what Orbán did".

I'd say if your government succeeds in making more and more people afraid to speak up, then the slope you are on will get very slippery.

by John21 m

We're not a democracy. Never have been. That's a different constitutional structure.
But we are a genuine two party system: Capital and Labor.

The US isn't a democracy in the sense of how the term was often understood by political thinkers in the late 1700s / early 1800s, when it often was taken to mean a direct democracy. However, today the term democracy is pretty much universally understood to be broad enough to include both the US' model of a representative republic or a country like Switzerland which has underpinnings of direct democracy.


by John21 m

Give people stability, prosperity and a stake in the future and the empire mindset fades on its own. Take that away, and it’s the only identity left.

Americans got all of that, they even invented it, and look what they did right now AND you want to liberate Russia by western values. Russia is like USA after trump being president for 20 years. It’s rotten to the core, not only elites but people too, although elites did this. What happened in Poland, South Korea etc is just impossible there. Majority is needed to change the course and majority doesn’t want it and will never want it cause russia is an “up to down” entity, there’s no community among people, there are subjugated to the state, atomized, no parallel bounds, only vertical to the начальство - the leadership, the stronger one the better and that’s the only thing I agree with Russians in the current status quo. This country has all the spectrum of mafia, from the gov one to the street man. Take out Putin and in 2-4 weeks you’ll have an uprising, but led by regional mob cartels. Russia can either be conquered by the west, like japan, or left alone and Russians want the latter


by tame_deuces m

The US isn't a democracy in the sense of how the term was often understood by political thinkers in the late 1700s / early 1800s, when it often was taken to mean a direct democracy. However, today the term democracy is pretty much universally understood to be broad enough to include both the US' model of a representative republic or a country like Switzerland which has under

Yeah, Western democracy is the most common. But when "were a democracy” gets coupled with the people united,” I interpret that to mean the people can make the government do what they want.

All Western countries are firewalled from tyranny at the top and tyranny of the masses below. The people can be as united as they want, but they still have to elect people to do their bidding, and those representatives can do whatever they want as legislators.


by QtangPendek m

Americans got all of that, they even invented it, and look what they did right now AND you want to liberate Russia by western values. Russia is like USA after trump being president for 20 years. It’s rotten to the core, not only elites but people too, although elites did this. What happened in Poland, South Korea etc is just impossible there. Majority is needed to change

I’m actually way less worried about a world or nuclear war with Russia today than I would’ve been in the 1960s. largely for the reasons you mention, plus the absence of any real ideological element.

Back then, it was communism versus capitalism, two competing world visions. Now it’s just power and insecurity driving things, not belief. That makes Russia dangerous, but also predictable and ultimately, containable.

But at the end of the day, I don’t judge the powerful - whether individuals, groups, or institutions - by the same moral standards as individuals, in terms of how good or bad they are or aren’t. Individuals are basically impotent.

I judge the powerful instead by how bad they could have been.... but weren’t.

In that regard, I think the U.S. is easily the best in modern history. Before America’s rise, France probably held that spot. The respect America has isn't from our power; its what we don"t do with it. Thats also why Russians are far more afraid of China than the US.

And with the U.S., we’ve mostly been cleaning up Britain’s mess: the partitioning of Eastern Europe, the carving up of the Middle East, the India–Pakistan divide, the chaos in Africa, Hong Kong and China, even the seeds of the modern Russian problem. Virtually every major geopolitical fault line today has British fingerprints on it.

And another thing about America is we let our enemies get back up, even help them sometimes to our later regret. And as an American, like I said, I think the Russians get a mulligan, and I dont know of one American who cares one with about what Poland thinks.

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