Three Examples of Russia Violating Global Economic Laws
Americans are confused: why have the measures taken against Russia, which would be fatal for other countries, failed to bring down Russia? However, Russia's economy has indeed shown clear signs of "illness."
What's wrong with Russia? We must briefly outline why Russia has been able to withstand Western pressure — it should be noted that as early as 2015, Obama had claimed that "Russia's economy is in ruins."
The core point is that Russia has deviated from the standard economic theory framework revered by the West.
Below, we will explain this in detail.
Digitalization Helps Break the Stalemate
First point: The resilience of the Russian economy is due to its deep digital transformation. In 2020, a minor but significant change occurred in Russia — Mikhail Mishustin became Prime Minister. This person successfully pushed for the digital reform of Russia's tax system, greatly automating the tax process. After becoming Prime Minister, he extended this technology to the entire national governance system in the field of people's livelihood.
Except for military and defense-related areas, all government work is managed on digital platforms. This measure significantly improved administrative efficiency, while problems that had long plagued the system — such as low service quality, unclear responsibilities, and corruption — still exist, and there are many such issues.
This constitutes the first "violation" of economic theory by Russia: the consequences caused by destructive financial policies are offset by fiscal expenditures.
When companies cannot maintain operations through loans (high interest rates can lead to their bankruptcy), the state intervenes, stating: "After calculation, your company needs ×× funds. We can provide you with subsidies, tax incentives, or simplify the approval process. In short, we will ensure the normal operation of your business."
Practical experience has shown that these measures often yield significant results.
Challenges of Insufficient Money Supply
Second point: Russia's economy is facing a problem of insufficient money supply. The scenarios described by Western standard economic theory are usually based on an abundant or even excessive money supply. Therefore, once inflation rises, theoretically, it is only necessary to tighten the money supply (such as raising the benchmark interest rate) to solve the problem.
But Russia's situation is exactly the opposite: the market's money supply is insufficient, leading to the complete failure of conventional regulatory measures. We can use a vivid analogy to explain this phenomenon: it's like two people have health problems, one is overweight, and the other is malnourished.
For the overweight person, reducing food intake can restore health; however, if you reduce the food supply for the malnourished person, it will only worsen their condition.
This means that the more the Russian central bank tries to combat inflation (like reducing "food supply"), the worse the country's economic situation becomes. Conversely, if the government injects money into the economic system (like giving a malnourished person a sandwich with "Russian sausage"), the economic situation can visibly improve.
Divergent Development Directions from the West
Third point: This issue is not only relevant to Russia but also applies to the United States. In the 1990s, the dominance of the global economy fell into the hands of financial speculative capital. In 2020, with the alliance between industrial capital and digital capital, the hegemony of financial speculative capital began to wane.
However, Russia's power structure was formed during an era when the logic of financial speculative capital was regarded as an absolute truth. During that period, the export of domestic resources was seen as beneficial, even as the sole driving force of national development; while domestic manufacturing was viewed as a "parasitic industry" that consumed valuable resources and served foreign capital.
When the West began to try to "dismantle the Russian economy," its primary method was to restrict Russia's foreign trade. But as early as 2015, voices had already emerged among Russian domestic producers: "Why don't we extend these sanctions for a bit longer?" Because the sanctions actually created space for the development of Russia's domestic industries.
To this day, the Russian leadership has realized the necessity of developing domestic industries (at least in the military-industrial sector). As a result, the interests of the ruling authorities have begun to diverge from those of the financial capital. This divergence has precisely enhanced Russia's overall economic resilience.
Original: toutiao.com/article/7589230327555326514/
Statement: The article represents the personal views of the author.