© all rights reserved 2011
HISTORY OF THE ECONOMY, MONEY, AND
FINANCE
It is impossible today to accurately determine Russia’s economic
activity, the value of its resources and what is exactly owned by what/who.
What matters is the strength of individuals and/or groups in a constant
battle of secretive fortress mentalities. It’s been pretty much the same
throughout history, with only the political systems changing. The concept
of law only became viable in the 1800’s but has never taken root in Russia,
though constitutions were written between 1905-1911, 1935, and 1992. In
all cases, the laws were only enforced/are today only enforced for the
ruling elite’s selective accomplishing of desired goals. Prior to 1800 as
well, the value of monarchal earning/spending in relation to that of the
REOC and the landed nobility/aristocracy was not considerably different---
they were mostly entwined and in sync. So let’s begin this history section
in the 1800’s and the Monarchy’s first big non-military expenditure ever:
The Moscow-St. Petersberg railroad during the 1830’s-40’s. This proved
to be way too expensive because the engineers made it laser-straight,
regardless of topography and natural obstacles. This was because the
Tsar made a straight line between the 2 cities on a map with a pencil and
everyone was too afraid to question this (note: history repeated itself in the
late 1940’s with Stalin and a northwestern railroad he desired between 2
major rivers above the arctic circle, in permafrost. It was impossible to
build but people built anyway. Stalin died and work was stopped). During
this railroad’s construction, the concept of complex military scenario
modeling was beginning in earnest throughout Europe; all countries
integrated railroads into their future military strategies, along with ever-
improving naval technologies. Russia was realistically not expected to
manufacture railroad or military products in the foreseeable future and
would have to pay hard currency to keep up with the other land-dynasties.
The stark realization of this came to fruition during the Crimean War of
1854-55, during which Russia was shown to be woefully provisioned and
ill-prepared. At this critical time, when more government spending was
projected in amounts greatly exceeding that in the REOC and private
sectors, its purse was relatively empty. The freeing of the serfs and
buying land for them to live on were the budget-busting end of the old
loose economic system of monarchal subsidizing the growth of a small
wealthy class via land grants, entitlements, etc.. More people had to get
into the system and stimulate growth from below. The Industrial
Revolution was really beginning. The initial solution for the monarchy was
selling Alaska to the U.S.A. in 1868 and then borrowing money from
Germany, mostly from Jewish banks, during the 1870’s. This money built
railroads between the major cities in European Russia and gave these
cities some modern infrastructure, with the ripple effect facilitating
industrial development. This site has never been able to determine if the
German loans were ever repaid and, if they were, how this was
accomplished. The 1880’s slowed down the pace due to the Tsar’s
assassination and the new Tsar’s relatively repressed/repressive mind-set.
This Tsar died a bit more than a decade later, ironically, from the long term
ill-effects of his speeding railroad car upending on him several years
earlier.
The 1890’s issued in a new lending take on an old theme: borrowing
much, much more money but this time from the French, British, and
Americans. This money financed the Trans-Siberian Railroad, major
infrastructure upgrades in Moscow and St. Petersberg and, no doubt,
many more things than the borrowers indicated---involving the military,
especially. The key to the success of this was Sergei Witte, the Minister
of Finance, because he often forcefully used “great Russia” (see the
culture section) to change the terms and conditions of Russia’s debt to
serve national purposes. By 1900, Russia was humming and the debt kept
growing. Russia lost the Russo-Japanese War of 1904-5 largely because
of a single transport issue: the Trans-Siberian was only one-track with
inadequate sidings and with only a ferry link across the huge Lake Baikal.
Imagine this hell: The winter of 1905-05 was the coldest in 100 years.
activity, the value of its resources and what is exactly owned by what/who.
What matters is the strength of individuals and/or groups in a constant
battle of secretive fortress mentalities. It’s been pretty much the same
throughout history, with only the political systems changing. The concept
of law only became viable in the 1800’s but has never taken root in Russia,
though constitutions were written between 1905-1911, 1935, and 1992. In
all cases, the laws were only enforced/are today only enforced for the
ruling elite’s selective accomplishing of desired goals. Prior to 1800 as
well, the value of monarchal earning/spending in relation to that of the
REOC and the landed nobility/aristocracy was not considerably different---
they were mostly entwined and in sync. So let’s begin this history section
in the 1800’s and the Monarchy’s first big non-military expenditure ever:
The Moscow-St. Petersberg railroad during the 1830’s-40’s. This proved
to be way too expensive because the engineers made it laser-straight,
regardless of topography and natural obstacles. This was because the
Tsar made a straight line between the 2 cities on a map with a pencil and
everyone was too afraid to question this (note: history repeated itself in the
late 1940’s with Stalin and a northwestern railroad he desired between 2
major rivers above the arctic circle, in permafrost. It was impossible to
build but people built anyway. Stalin died and work was stopped). During
this railroad’s construction, the concept of complex military scenario
modeling was beginning in earnest throughout Europe; all countries
integrated railroads into their future military strategies, along with ever-
improving naval technologies. Russia was realistically not expected to
manufacture railroad or military products in the foreseeable future and
would have to pay hard currency to keep up with the other land-dynasties.
The stark realization of this came to fruition during the Crimean War of
1854-55, during which Russia was shown to be woefully provisioned and
ill-prepared. At this critical time, when more government spending was
projected in amounts greatly exceeding that in the REOC and private
sectors, its purse was relatively empty. The freeing of the serfs and
buying land for them to live on were the budget-busting end of the old
loose economic system of monarchal subsidizing the growth of a small
wealthy class via land grants, entitlements, etc.. More people had to get
into the system and stimulate growth from below. The Industrial
Revolution was really beginning. The initial solution for the monarchy was
selling Alaska to the U.S.A. in 1868 and then borrowing money from
Germany, mostly from Jewish banks, during the 1870’s. This money built
railroads between the major cities in European Russia and gave these
cities some modern infrastructure, with the ripple effect facilitating
industrial development. This site has never been able to determine if the
German loans were ever repaid and, if they were, how this was
accomplished. The 1880’s slowed down the pace due to the Tsar’s
assassination and the new Tsar’s relatively repressed/repressive mind-set.
This Tsar died a bit more than a decade later, ironically, from the long term
ill-effects of his speeding railroad car upending on him several years
earlier.
The 1890’s issued in a new lending take on an old theme: borrowing
much, much more money but this time from the French, British, and
Americans. This money financed the Trans-Siberian Railroad, major
infrastructure upgrades in Moscow and St. Petersberg and, no doubt,
many more things than the borrowers indicated---involving the military,
especially. The key to the success of this was Sergei Witte, the Minister
of Finance, because he often forcefully used “great Russia” (see the
culture section) to change the terms and conditions of Russia’s debt to
serve national purposes. By 1900, Russia was humming and the debt kept
growing. Russia lost the Russo-Japanese War of 1904-5 largely because
of a single transport issue: the Trans-Siberian was only one-track with
inadequate sidings and with only a ferry link across the huge Lake Baikal.
Imagine this hell: The winter of 1905-05 was the coldest in 100 years.
The British made and locally-assembled ice-breaker AND the Titanic-sized (4-stack,
shorter but wider, to carry trains) ferry were locked in 2-meter thick ice. At first,
tracks were laid with the belief that the ice would support a train: it sank. So the
locomotives were rotated at the banks and cars had to be pulled individually by
horses. A massive blockage. Obviously, more debt was needed to two-track this
and other major railroads and to re-ballast/re-bridge practically everything to
facilitate greater speeds between 1904-1916. And, the link between the Chita
region and Khabarovsk in the Far East needed to be completed so to be free of
dependence on the through-China link. Remarkably, no major steps were taken to
export anything until 1906, when the peasant-farming sector was given incentives
to produce more, mostly with financing at the expense of the landed elites and the
offering of free land in Siberia. This did little, however, to improve the deficit
balance of payments situation, and WW-1 only made the financial situation worse.
The new USSR abrogated all previous debt and for its first decade there was
no economic activity to speak of. With absolutely no money, Stalin realized the
only solution was a command economy. This was feasible because labor and raw
materials were abundant. So Stalin commanded away between 1929 and his death
in 1953 to achieve various objectives, without using money, and his people
complied meekly. The greatest cost in those 24 years was in human capital, with
estimates ranging from 25-40 million lives lost (not counting WW-2). The labor
camp system didn’t die out until the early 1970’s, mainly because by that time there
wasn’t any expendable human capital left. By that time, all significant industrial
activity was managed by criminals, the descendent legacy of their earlier war-
orphan-parent-established and managed camp system that developed these
industries. The baby-boomers were then called into action on such multi-billion
dollar domestic projects like the BAM railway and the building of 35+ nuclear power
stations, etc. After WW-2, Stalin incorporated Eastern Europe into his no-money,
conscript economy to initially provide extra labor for repairing
infrastructure/replacing population lost during the war. Later, these countries
provided much of the USSR’s manufacturing base. Thus began what would later
become a massive weapons exporting program into those countries and much of
the 3rd world. When trade with the outside world was required, it was usually
accomplished with barter involving the supply raw materials as payment. With no
interest in building any facilities that would improve the citizenry’s living standards,
the strategy was to explain that the present generations were sacrificing for the
future ones, which would bury capitalism at some undermined time in the future.
This command system of cheap labor (working very inefficiently) using easily
accessible and abundant raw materials (harvested very inefficiently) to facilitate the
promotion of world socialism via western currency/weapons export (distributed
very inefficiently) finally collapsed in 1991 for lack of all the above resources plus a
total loss of inertia and momentum. It is very interesting that Vladimir Putin,
Russia’s leader for the foreseeable future, calls this the greatest GEO-POLITICAL
disaster of the 20th century…it seems that he just wants to keep lining his own
pockets at the poor’s expense.
The last 2 decades have seen a consistent movement of loaned capital back
out of Russia despite western intentions that it remain inside. Most wealth has
been realized by very few from short-term capital markets and the consolidating of
private ownership in major infrastructure and raw materials but two major currency
devaluations/corrections (from the vastly over-valued pre-1991 USSR ruble
exchange rate of 1 ruble to 1-1/2 U.S. dollars) have greatly reduced the poverty-
stricken population’s buying power. Of course, the USSR’s criminal
control/management structure of industry had to be redefined, and that was
accomplished with HUGE infusions of western capital, the voucher system and
GREATLY expanded bribery. Except for real estate and a few food products, the
cost of goods and services in Russia are the same as for the rest of the world while
Russia’s average salary hovers around $500 U.S. dollars/month. The price of
gasoline is cheaper than in Europe but more expensive than in the U.S. This
ensures that fully extended middle-class car owners will never be able to fill their
tanks more than 25%. These types of things guarantee that Russia’s middle class
will never grow above 10% in the foreseeable future and that 90% will always live in
poverty. The re-securing of all financial wealth back in Moscow has been
accomplished in the last 5 years. As has been the case throughout history, the
ruble is not a viable international currency and is only used for domestic
convenience. The major component of Russia’s economic movement is bribery,
with the delivery vehicles being corruption and criminality, and the trading place
the black market.
shorter but wider, to carry trains) ferry were locked in 2-meter thick ice. At first,
tracks were laid with the belief that the ice would support a train: it sank. So the
locomotives were rotated at the banks and cars had to be pulled individually by
horses. A massive blockage. Obviously, more debt was needed to two-track this
and other major railroads and to re-ballast/re-bridge practically everything to
facilitate greater speeds between 1904-1916. And, the link between the Chita
region and Khabarovsk in the Far East needed to be completed so to be free of
dependence on the through-China link. Remarkably, no major steps were taken to
export anything until 1906, when the peasant-farming sector was given incentives
to produce more, mostly with financing at the expense of the landed elites and the
offering of free land in Siberia. This did little, however, to improve the deficit
balance of payments situation, and WW-1 only made the financial situation worse.
The new USSR abrogated all previous debt and for its first decade there was
no economic activity to speak of. With absolutely no money, Stalin realized the
only solution was a command economy. This was feasible because labor and raw
materials were abundant. So Stalin commanded away between 1929 and his death
in 1953 to achieve various objectives, without using money, and his people
complied meekly. The greatest cost in those 24 years was in human capital, with
estimates ranging from 25-40 million lives lost (not counting WW-2). The labor
camp system didn’t die out until the early 1970’s, mainly because by that time there
wasn’t any expendable human capital left. By that time, all significant industrial
activity was managed by criminals, the descendent legacy of their earlier war-
orphan-parent-established and managed camp system that developed these
industries. The baby-boomers were then called into action on such multi-billion
dollar domestic projects like the BAM railway and the building of 35+ nuclear power
stations, etc. After WW-2, Stalin incorporated Eastern Europe into his no-money,
conscript economy to initially provide extra labor for repairing
infrastructure/replacing population lost during the war. Later, these countries
provided much of the USSR’s manufacturing base. Thus began what would later
become a massive weapons exporting program into those countries and much of
the 3rd world. When trade with the outside world was required, it was usually
accomplished with barter involving the supply raw materials as payment. With no
interest in building any facilities that would improve the citizenry’s living standards,
the strategy was to explain that the present generations were sacrificing for the
future ones, which would bury capitalism at some undermined time in the future.
This command system of cheap labor (working very inefficiently) using easily
accessible and abundant raw materials (harvested very inefficiently) to facilitate the
promotion of world socialism via western currency/weapons export (distributed
very inefficiently) finally collapsed in 1991 for lack of all the above resources plus a
total loss of inertia and momentum. It is very interesting that Vladimir Putin,
Russia’s leader for the foreseeable future, calls this the greatest GEO-POLITICAL
disaster of the 20th century…it seems that he just wants to keep lining his own
pockets at the poor’s expense.
The last 2 decades have seen a consistent movement of loaned capital back
out of Russia despite western intentions that it remain inside. Most wealth has
been realized by very few from short-term capital markets and the consolidating of
private ownership in major infrastructure and raw materials but two major currency
devaluations/corrections (from the vastly over-valued pre-1991 USSR ruble
exchange rate of 1 ruble to 1-1/2 U.S. dollars) have greatly reduced the poverty-
stricken population’s buying power. Of course, the USSR’s criminal
control/management structure of industry had to be redefined, and that was
accomplished with HUGE infusions of western capital, the voucher system and
GREATLY expanded bribery. Except for real estate and a few food products, the
cost of goods and services in Russia are the same as for the rest of the world while
Russia’s average salary hovers around $500 U.S. dollars/month. The price of
gasoline is cheaper than in Europe but more expensive than in the U.S. This
ensures that fully extended middle-class car owners will never be able to fill their
tanks more than 25%. These types of things guarantee that Russia’s middle class
will never grow above 10% in the foreseeable future and that 90% will always live in
poverty. The re-securing of all financial wealth back in Moscow has been
accomplished in the last 5 years. As has been the case throughout history, the
ruble is not a viable international currency and is only used for domestic
convenience. The major component of Russia’s economic movement is bribery,
with the delivery vehicles being corruption and criminality, and the trading place
the black market.
