B (2:41)

Yes, I think that is indeed somewhat counterintuitive and kind of may sound as a sort of heresy to most people. But I think it is pretty obvious because if we look at the countries where some sort of like great fundamental revolutions happened that really shook the political order from the upside down. That could be Russia in 1917 or it could be France in 1789, or some could even say it's England in 1642. We would see the pattern. And the pattern is in these countries we have a capital which is clearly a capital and very pronounced. It's the largest city in the country and basically everyone hides under Bay Street. So basically one and that is the first pattern we see is that revolutions really happen only in monocentric countries. So usually what we see in countries like the US in 19th century there has to be.

A (3:40)

There has to be a London, a Moscow or a Paris where there's like a clear capital. Okay.

B (3:45)

And in the US in eight in 1860s there was nothing like that. I would even say that in China in the early 20th century. One reason why Russian revolution, it basically happened in a blink of an eye. And in China there was long and bloody civil war for decades is that China just did not have this pronounced capital in a sense that St. Petersburg.

A (4:05)

Well, it was preceded by the warlord era. Right. So that almost was by definition like the Chinese civil war was preceded by the warlord era. And so that was almost like definitionally decentralized. Right?

B (4:16)

Well, one could say that originally when they overthrew monarchy like Xinhai revolution, that that was the beginning of it by basically that is what's interesting what happens. So in China they overthrow monarchy and the power just breaks down and you immediately have lots of regimes and statelets. So it's not like someone else can see this power. And my understanding is that revolution is something very different. That is what happened in France or in Russia. It's where they pre built omnipotence. It falls into other hands. But for that you need to have it in the first place.

A (4:48)

Yeah, so I mean a better term then for revolution is really putting perhaps from the corporate world, hostile takeover.

B (4:56)

I think that is a not bad. I think that is not bad framing. I am really enjoying because.

A (5:02)

Hassan, go ahead. You can use that if you want, if you find that good.

B (5:06)

Yeah, no, I think it's really a great comparison. I'm now really enjoying Reading Taqueville. So he's primarily known in the Anglophone world as the author of Democracy in America.

A (5:16)

Democracy in America.

B (5:17)

Basically the one who wrote on American political institutions.

A (5:19)

Right. But what else has he done? Actually, I don't know, five years he.

B (5:23)

Wrote on his home country, on French Revolution. It's pretty interesting because he originally did not intend to. He wanted to write on Napoleon, but as it often happens, so he tried to. When you are writing about Napoleon and his career, you kind of have to dive into the revolution. When you are diving into the revolution, you become like interested in how it happened in the first place. So it's interesting because he never really finished his book on Napoleon, but he finished a great and interesting volume one of his future intended multi volume history that was basically mostly on Louis xiv, on the Sun Kings and his administrative reforms. So basically the great point of Tecqueville, what he was writing about is that really it was the kings of France who did all the preparatory groundwork for the revolution.

A (6:13)

Sort of like arguably for.

B (6:16)

Yeah, so.

A (6:16)

So why, in what sense did they do the preparatory groundwork in the classical sense of oh my God, they impoverish everybody or in some other sense?

B (6:24)

I think it's more interesting than that. So basically, what is one of original Taquela's ideas? So basically, usually when we talk about revolution, we kind of put it into a position to the old regime. So there was this ancient regime, kind of monarchist regime, then kaboom, and then republic takes its place.

A (6:45)

Right.

B (6:46)

The quill is suggesting something more interesting. So if before the republic there was ancient regime, then the old regime, then what was before the old regime? Because we don't really think that in the entire monarchic period, that's like from Middle Ages, from something like 1800s to the almost Adolf's team, that France was governed in exactly the same way. It's just impressive. So he's saying that when we say old regime, ancient regime, we usually mean absolute monarchy. I'm the king, I decide everything. But it's not how it used to be in the Middle Ages. So before the absolute monarchy, before the extreme centralization of power that really happened only very, very late in history, there used to be a very different medieval order. So absolute monarchy, it built itself upon the medieval order and its ruins. So how did it look like? So how was France governed? And like many Western European countries, governed in fact before the absolute monarchy, in Tocqueville's mind, he defines it as aristocracy with elements of democracy. So this may sound somewhat like bizarre and weird. And logically contradictory.

A (8:01)

But.

B (8:01)

But that is primarily because the medieval order was indeed contradictory. So first of all, over most of country, of course, the ultimate power belongs to nobles. So kind of noble landowners, aristocrats of high pedigree who control the land, who control peasants, and who basically execute all the power on the ground. Police, judicial, administration, politics, military, it all really belongs to the nobles. So even theory, France is governed by the king in practice, in far off provinces and like far away from the royal power, you will not be real to do. You will not be ready to do anything against the will of the local aristocrats who really hold all the power on the ground. So they are like small gods in their provinces. And that is one the most characteristic element of medieval order that basically all of us kind of know. And we call it feudalism. But it was not all limited to feudalism. It was pretty interesting. So a part of countryside where mostly the ultimate power belonged to nobles, we had cities, we had towns. Some of these towns had overlords, like maybe bishops or dukes, but many of them, and maybe actually most of them republics. That is the. That is quite interesting. And again, maybe, maybe it sounds kind of unusual and unexpected for in reference.

A (9:35)

To republics, in what sense of the term like this did you mean? In a specific sense?

B (9:39)

I think the best, not the modern sense, the best way to frame it is comparative with their police, with the city states of the antiquity. Because when we think of city states, we usually think of Sparta, of Corinthus, I don't know of ancient Rome, of Carthage. But in reality, in Middle Ages, cities and towns in Western Europe, they functioned very often in somewhat similarish manner. So while the power of the king exists in terms of everyday governance, it is more theoretical and in practice, in practice, cities and towns, they had great degree of internal autonomy. How they're governed, well, that's a different question. So some of them are more oligarchic. So in some, basically, local government is controlled by rich merchants. In others, it's more democratic, with much greater saying of like working classes or urban classes. But basically everywhere it's some sort of electoral democracy, but not quite in Middlesex, in modern sense, when the vote and when the opinion of different classes and different Gus. Different corporations, it weighs differently.

A (10:48)

And so, you know, this is actually similar in some ways. You know, the Chinese concept of the mountains are high and the emperor's far away, that the king would have formal authority, but the technology of the time limited the extent to which he could monitor all of these villages and towns. And so. And so Forth So sort of an obligate sense in which power was decentralized because he couldn't monitor everything, he couldn't enforce everywhere. He didn't have cameras everywhere or, or communication, you know, telephones or whatever, everywhere. So many of these things sort of had to develop their own governance and maybe the king could overrule it with his knights or what have you. But in practice, a lot of decisions had to be made and were made locally. Is that roughly correct?

B (11:32)

I think, I think to a greater degree I agree with you. So basically, indeed. And that is one difference. For example, the power of baron, it was usually much, much more real. So if a city is governed by account, it is really governed by account. But if it is governed by a king, it usually means it is not really governed by anyone. He's far away.

A (11:53)

Right.

B (11:53)

But it's not only.

A (11:54)

That's interesting. So a federal, it's kind of like, you know, the concept of a union territory. In India, for example, there's some territories that are directly governed by the federal government and others that have state governments and local governments. And so interestingly, the one that's, quote, directly governed by the king is, is, in your view, the one that's not governed because the king doesn't have time to govern it. But the other ones governed by a counter, a baron, are actually governed because the baron or count has nothing else to do. Right. So it's roughly like almost the number of people that fold in to the person.

B (12:27)

This is one way to put it. But it's not only about the lack of capacity and capacity of enforcement.

A (12:33)

Okay, what else is it?

B (12:33)

It's also about constitution, about legal mechanisms. So basically all of these towns, they have their local laws, they have their own charters. So there is this bizarre legal world which is not really uniform yet. So basically some territories, they are governed more, especially in the south of France, they are governed more according to Roman law, according to the written law, especially in the north. It's more like some kind of like customary, more like Germanic systems of legislation. So basically, territories and townships and villages that are located miles away, they could have completely different systems of governance and of law and of constitution that are not even like brought to some kind of uniform standard yet that will happen like many centuries later. So, and third, interesting institution and which is especially important in the context of France, it is of that of Western European countries. France, it had an unusually important and unusually bloated significance of legal profession. So at some point, at some point judiciary, and it is called local parliaments because in England Parliament, it was kind of legislative, it was like kind of congress. And in France it referred to judicial bodies. They usurped a great degree not only of judicial but also of legislative authority. So how it was, and I'll just give you an example because it shows it well illustrates, I think, the bizarreness and weirdness of the old medieval order. So for a royal decree to become a law, it must be registered in parliament of Paris in its like judicial body of Paris. So king is sending order. And it often happens it's completely normal that a parliament doesn't want to register it and gives its objections. We send another order, bless you, and the parliament sends its objections. And this kind of fight can go on and on and on and on with many objections by parliament. But finally, yeah, a king can put a stopper to it if he comes personally to parliament, he can just order them to register it and then it's the end of it. But paradoxically enough, they can still give their remonstrances and they can still protest. It's not. They can do anything. No, it will be registered, the royal will become the law, but they can still protest and say how it's like bad and illegal and everything and unjust. So while they could not in practice.

A (15:10)

What does that mean? Gives him hesitation because he knows that they're complying, but they're doing so against their will. And so therefore their compliance will be, you know, letter of the law rather than spirit of the law. Right, because he's not going to get, he, he, you know, whatever he's ordering. He may get what he orders, but not beyond that. And it may be subtly sabotaged. Is that kind of the thinking as to why he'd want there full consent without the remonstrance?

B (15:41)

I think this is one framing and there's a lot of truth in that. And another part is that all of the judicial bodies, part of their power was that they were simply becoming folka of more general descent, sometimes by township populaces, just by urban people and sometimes aristocracy. Because basically it was giving like other oppositional groups and fractions, some sort of kind centered group around. So from the perspective of French monarchy, I would say these three were three primarily challenges to their power. So three primary internal security threats. And starting from somewhere like 16th century, but especially under the Sun King under the Louis xiv, the monarchy basically break the back of all three institutions, submitting them to its power. But it is an interesting and again, somewhat bizarre process. So what could the king do? So I have great nobles, I have independent towns, that are governed by their own elected governments and that may have their own opinion on politics. And three is judicial bodies, like theoretically. Theoretically speaking, I could have abolished them, but it would be suboptimal. So basically, as Machiavelli put it, there is nothing more dangerous than replacing the old order and the old habits with the new. It's just probably not going to pass. So they, and by they, I mean primarily the Sun King, Louis XIV did something more interesting than that. So you have this traditional medieval constitution and traditional medieval institutions of France that govern the country till then, and you don't abolish them. They keep their power, they keep their prestige, they keep their glory. But you are building a parallel set of institutions, a parallel government that is not rooted in any tradition, that is not rooted in any customer law, and depends upon your will only exclusively, you build a peril government near the old one. So let me give you an example. How were the French provinces governed before? So here's the province it is governed by. Well, it's governor. Governor is always a great noble. He's some kind of duke or count or baron. He is usually governed the same province where he grew up in, where he hold his estates. He's connected by many familial and other links with the local nobility. And he, just by the virtue of his birth and with his family, he commands great respect and loyalty among the local population. And on top of that, he gets an official right to command by the name of the king. And realistically speaking, it just becomes. It is too much. It is too much because you're uncontrollable. So imagine you are duke, you have like a small private army of yourself already, and now you become a governor. How to control you? So imagine there is some kind of conflict between the king and the governor. Whom will the populace support? Truth is that very, very often they'll support the governor because he's already there for the Liege.

A (19:12)

It'S the locality of it.

B (19:13)

Yes. And he's kind of rooted in all this noble world, and he probably can like drag many of the nobles onto his side. If he is alone, that is not a big problem. King is more powerful than any governor. But imagine if he is not. Imagine if there is a group of governors now, like, theoretically, they can replace king. Like, in theory, they can replace monarchy. And that is indeed what could have happened in the early years of Louis xiv, because when young Louis XIV faced a coalition of nobles and it looked like they could have potentially toppled him. So basically he was a prisoner for a brief period of time. So when he became adult and decided to do something with it, he did not relieve them of their office, he did not display them. So basically all this office continued, all these offices continued, and usually it was still great nobles who were ruling them. But in parallel to that he built a separate hierarchy. So basically he was sending their other guys. And these guys were called intendants. So who are these intendants? You have a royal council in Paris. This royal council, it is never composed of nobles. Never. It's always ignoble people of common origin, usually who have some roots in bureaucracy, in administrative profession, but they are never very rich, they never have any noble connections, and they compose the center of royal administration. So.

A (20:50)

Oh, okay. So let me. First of all, this is very helpful. Let me, let me ask you a few questions. So based on some of their just. This is actually very good color. So the relevance of your post the other day, Just coming back to that post, the one on like revolutions are actually more like my paraphrase, hostile takeovers. That actually a revolution which can be conceptualized as a hostile takeover that installs a new harsh order is actually the better outcome relative to the multipolarity, which is really just anarchy, right? Like when no faction actually has the power to impose a revolution, you get warlord era, you get multipolarity, you get anarchy. That's actually even worse than a revolution.

B (21:35)

That is one interesting way to put it. You see this kind, I think you.

A (21:40)

Said something like that. I've come to a similar conclusion. Go ahead.

B (21:43)

That is an interesting idea. And I think there is like lots of truth in that, you know, and that is indeed what our intuition kind of tells us. So basically, is there some big boss, maybe good or bad boss? It's kind of better than then when there is like hundred bosses and they're fighting each other. So and that kind of matches our intuition. So there is for example, some kind of great empire, let's say Roman Empire, it breaks down into warlordism. And then in theory some other empire can be rebuilt again from this warlordism. I think it is partially true because indeed probably experiences of most humans, they are worse at the times of breakdown of empires, at the times when their order breaks down completely, then where just another warlord and he kind of assumes power. But you could look at a different way. You could look not from individual human perspective, but for example, from the perspective of kind of long term trends of history. And then one could see that often it is the periods of breakdown and often complete collapse, not only of political, but also of economic, logistical, and cultural structures. It is often the times of complete breakdown that become, I would say, highly notive and kind of give a sort of reset, a sort of recharge just to the general flow of civilization. Great example, European Middle Ages. So although in fact the collapse of Roman Empire probably worsened conditions of, I think almost everyone who lived there, I think that's quite likely true. At the same time, I think that many of the innovations in agriculture, in cavalry again, then probably sometime later in navigation, that I think the old and sort of stable order was kind of withholding, kind of freezing them on this level. I think they could just blow up, kind of have their chance when the power and the existing like economic and logistical structures break down. Maybe, maybe, probably the people of Bronze Age would kill me for that. But I would even argue that the Bronze Age collapse, it played a similar role. There is this weird theory about the history of iron mining and kind of iron book that basically why people in the ancient Mediterranean switched to iron. It's not because it was superior, actually probably for quite a long time iron, it was inferior to the bronze, but because the logistical structure, they broke down so kind it all worked based on their very long and very vulnerable supply chains. So you bring this teen somewhere from England, from corn oil, and when nothing works anymore, then you have to work with whatever resources there and people just switch to iron. I find this thought very provocative. So very often these element. So very often these times of breakdown, they also become times of innovation. You can kind of deviate from old patterns to the good or to the bad.

A (25:16)

Right, Exactly. Because the old order goes away and everything that was restricting upward and downward deviation goes away. And you do get a lot of things that are worse off, but you also get the upward deviation which is being constrained by the old system. You know, on that point, by the way, I thought you had another very insightful post recently. It was like the art of not noticing things. And you know, on the topic of sort of who's in power versus not, you said the Reds or the Republicans will notice that if somebody says the word censorship, they're probably a Republican or Republican sympathetic, but Blues won't use that word. And why is that? And the answer is because Blues had been in power so long that they didn't call things by their name. And Reds were out of power and used to having power used against them, so they call things by their name. This is even before Trump. And in some ways, you know, is Trump in power now? Kind of, you know, you know, arguably much more so than he Was certainly in the first term, but even still habits die hard. And I thought that was a very good insight, a very good way of phrasing it, that the ones in power basically are like, oh, this is just the way things are. And the ones out of power assign. They put a sharper label on things. Anyway, I wanted to just note that. I thought that was a very good post. Maybe you have some thoughts on that.

B (26:43)

I think, yeah, that is a sort of general pattern. And actually I think that the art of not noticing things and not admitting that you have power, it's actually very good for those in power. So when, for example, like French kings, they in mid 18th century say something like the state is me and all the laws come from me, in me alone. All the power and all the authority lays. That is not very smart. Like, even if it's really true, you shouldn't say that. And I'll give you an opposite example. When I was reading on Octavian Augustus, so kind as a person who is considered to be the first emperor, he didn't really. He didn't really show off. He didn't really show. He didn't really demonstrate how much power he has. So he walked among. He walked around Rome in very simple clothes, all sewn by his own like wife and daughters with very simple sticks, in very simple shoes. When in a theater, just some kind, some author, he deviated from the play, from the script, and just addressed Octavian, calling him a king. Octavian rose and showed his furies and just in indignation left the theater. So you should not. He did not allow even a thought that he aims to hold menerchical power, even though in reality it was probably true.

A (28:16)

I think it's interesting because basically this is something. I think that perhaps the center right is smarter on this than the quote, far right, because the far right is actually enamored with vibes and you know, explicit displays of power and all of that kind of stuff, right? And you know, once in a while, maybe you do need an explicit display of power, perhaps for a regime to stay in. In power. But you definitely don't want to be doing it all the time because if you do have to do it all the time, then you're maybe not in power, you know, and because you have to keep saying how powerful you are, blah, blah, blah, blah, number one and number two is you give a target to put on your back. And number three, so there's a. There's a sense also, you know, encrypted. There's constant decentralization and enlightened self interest is in part splitting power so that there isn't one person to target. You know, of course, if you do that too much, then nobody can make a decision. There's a balance between the two. But. But there is a balance. And it's not simply that the optimal strategy is always, you know, if there's only one person who can make all decisions, well, there's no robustness. You've got single point of failure, you know, and you've mentioned this in the context of succession and so on and so forth. Maybe you have some thoughts on that.

B (29:40)

I agree with you, basically. And yes, it is pretty often that, for example, even regimes that we now retrospectively see as tyrannical or despotic, they very often had to either work out some sort of internal constitution, some sort of objective rules, so we kind of rule by law, or at least pretend they have it. One remark, I have not written about it yet, but I wanted some future point. Stalin was never really accepting or showing within the Soviet elite that it's all his personal wimok caprice. He was kind of avoiding this. So when he wanted to give a decision, he wouldn't say, oh, it's my decision because I'm a boss, you my baby. No, no, no, no, he would never do that. He would approach a bookshelf, take a volume of Lenin, find a quote and say, let's look what Vladimir Lenin told us about that. And kind of that was the decision for the pretense was, so we have a constitution. It is something like 50 volumes of Lenin's works, and we obey them and we live by these rules. And Stalin, who is Stalin? He's not a God. He's more like a priest. He's interpreter. He's kind of appealing to the God and getting his opinion. Of course there was some sort of trickery and all of that, because every Soviet student knew that Lenin contradicted himself and contradicted all the time. So you could like justify whatever decisions based on Lenin's quotes. But you have to pretend there is some kind of formal procedure and you have to pretend there is some sort of solid constitution or it doesn't work.

A (31:19)

Interesting. Yes. And I think, you know what's interesting about this, by the way, is one thing that was. It's always surprising for people who've studied the Soviets or what have you, is even when they're shooting and liquidating this and that person, even deporting whole ethnicities and so on and so forth, they're really focused on the optics and the paperwork, even when they're doing all this stuff, you know, they really want to have some like, veneer of formalism around this. And, you know, eventually I sort of realized that it's like a camouflage to a snake. You know, they just have to have it. It's just part of how they operate. Because, you know, if they're shooting somebody in a room, but they write it up as if, oh, you know, he resisted, so on and so forth, nobody knows any different. And then nobody can align against them on that. Right? So like the. There's only a few people in the room who actually saw that shooting. But the official report says, you know, this guy resisted and, you know, he, he, he committed offense against state security or, or something like that. Same with the show trials, for example. Now the issue is they can only lie to so many people at once. And, you know, eventually the whole thing breaks down. But just at a very fundamental level, they're very invested in camouflage, of which one dimension is the dimension that we just discussed, which is sort of camouflaging, like who's making decisions and so on.

B (32:50)

You see, I remember I was reading interesting memoirs. It's a French aristocrat who visited Russia in 18th century and kind of visited Russian army, saw how it works. And in the 18th century, one of his greatest surprises was the degree of bureaucracy. Like, incredible. Absolutely mind blowing. He said that no army in the world and no state in the world is so much buried under the paperwork as Russian. So that like Russian general, he will be spending his day reading and signing papers on like matters in Germany, no one would even put them on paper. They'd just be done early. So I think paradoxically, much of what we see as Soviet tradition, for example, is formalism. It's not so much even communist thing as just Russian thing of doing everything formally and putting everything on paper very meticulously. Because much of what was happening, yes, of course there were show trials, there were, but much of what was Stalin doing, it was completely illegal, including by Soviet laws. It was, of course, completely secret. Nothing of that was published. And I think that a great deal of it has not been published yet and will not be published in the foreseeable future. But it was still very formalized. So, for example, if we compare with Nazi Germany, they were just documenting stuff less. I think in many cases they could have just not used any paper at all, just do it orally. And in Soviet Union, you would have protocol, you would have kind of decisions, you would have signatures, much more papers as a result, including when it's illegal and including when it's secret, I think that is to some degree just the natural way of doing things.

A (34:37)

Interesting. Okay, so now one other thing that relatively few people understand but that you understand deeply is that the Soviet Union and actually also Russia is actually much more multi ethnic than Americans think Americans think it's just Russians to first order. Right. And even when I was a kid they used to call the Soviets Russians. But it's, it was actually the Soviet Union had Eastern Europeans and it had Baltics and it had Turkish people and had all different kinds of Central Asian people. And for lack of a better term, it celebrated its diversity. And actually towards the end of the Soviet Union it got down to actually 51% Russian, I think in the 89 census, if you remember that. And nationalism of both the Russian and the non Russian variety was as big in ending the Soviet Union as the economic collapse. And really those things kind of work together where the crazy economics combined with the internal ethnic clashing such that the whole thing broke apart and everybody got their own state and or there was a lot of shooting over who was going to get a state. And maybe you have a view on that given that you, you know, obviously have studied this whole thing and being a kind of ethnic minority yourself within the former Soviet Union, I mean you're not old enough to have lived through that, but you know what I'm saying.

B (36:01)

Well, I think that the region I'm coming from, it's not really in the spotlight. So when I was in D.C. i was doing a fellowship at Wilson center and kinda I suggested them that maybe I'll write something on North Caucasus. They said me, oh no, no, no, thank you, there's no need because there is so much written on North Caucasus. We have that already. Maybe better you write something on your own region on Volga rules, because actually everyone knows about Chechnya and Dagestan, but much more numerous like ethnicities of Volguru. There's not much written on that at all. So it was kind of. So some kind of unexplored land for the Western discourse. So yes, I think there's a significant element of truth in that regarding the collapse of Soviet Union. I think that one of under discussed factors was of course population explosion in Central Asia. So basically fertility in Slavic lands in what is now rush, Ukraine, Belarus, etc. Crushed much earlier and in Central Asia remained pretty high. So I.

A (37:21)

And in fact they wanted to remain at the end with the, in the 1991 All Union referendum, which I think was like the first real vote in the Soviet Union in a long time. The Central Asian countries wanted to remain in the Soviet Union, but Estonia and the Baltics boycotted it. And that was actually them breaking away led to the failure of the Soviet Union in a sense. The Estonians felt the deal was not good for them, but the centralizations felt the deal was good for them.

B (37:47)

Yeah, I think it is true and I think that indeed there were countries in which there are pretty strong separatist movements. Most importantly, it's the Baltics, but also Georgia, also Ukraine. But Central Asia, it was not one of them. Azerbaijan was not one of them. And I think it was the other way around in a sense that it was mostly Russians, including Russian nomenclature, including Russian bureaucracy that wanted to cut off Central Asia partially because they saw it as a sort of like economic kind of, that they would have to support it financially. And another thing that we're just afraid there will be too many such relations.

A (38:34)

Yes, and, and the thing of it, you know, one thing that I think is a very important period for Americans to understand is Russia in the 90s, because, you know, a friend of mine, or you know, Joe Max Skabinsky, he's a Russian, you know, immigrant who post on X, maybe you knew him from X. But he mentioned that the 2024 election in the aftermath, it felt to him a lot like the moment in Russia when the Soviet Union ended. And I actually thought that was a very good analogy because essentially a far left ideology was no longer hegemonic. You could openly criticize it, there were people who still believed in it, but it was no longer like the roof over your head that you just had to obey. Right. It was something that had less than 50% support and it knew that it had less than 50 students support, which led to a negative feedback loop. But what happened, as you know, is after that afterglow of yay, the Soviet Union's over, a lot of the Russians thought that they were going to have capitalism and everything's going to be fine and so and so forth. Then Jaeger Guider then basically just flipped the economy to capitalism overnight. And, and there's many other reasons as to why it didn't work. You know, there was, or there were 70 years of communism, people didn't know how to do capitalism and the ruble hyperinflated. There are all kinds of crazy wars, from the Tajikistani civil war to the Chechnya thing to, to many other conflicts. And you know, people were massively impoverished. A lot of the smart people left territory that they had won in blood, was lost in, you know, days and on and on and on. And basically a superpower. What you know, Yeltsin was drunk and the. There was like this whole thing with them shelling the White House and on and on and on. Basically it really sucked to be Russian in the 90s. And then it was the aftermath of that that led to Putin being like sort of a. I think, you know the term, if I'm mispronouncing it the Silovicki figures. Right, the security state thing which you've written about. So they came to. He came to power in 99 and he was a total cipher and people didn't know what to make of him. But he was Yeltsin's guy for I think running Moscow and then got elevated and then he consolidated power, went after the businessmen, the so called oligarchs, basically knocked them out one by one. Reconsolidated power in Russia, made nice with the west while doing so, kept in the G8 and then only really started getting aggressive by the late 2000s with the invasion of Georgia and then it was finally with the invasion of Crimea in 2014 that then you know, the, the US started to, they kicked him out of the G8 and then started to arm Ukraine. And then over the last 10 years Russia's economy has been flat ish, but it's actually seemingly done surprisingly well in this war which you know, is totally unnecessary. But they've been backed in part by China and it looks like they're kind of fighting to a standstill now. So that is at least how I understand the last 20, 30 years of Russia since the end of the Soviet Union. I'm not sure if you'd agree or disagree with that or give your kind of take on what I'm getting wrong.

B (41:57)

Because obviously you disappointment by 1990s not only, but I think most of people in former Soviet Union would agree with that because that is indeed what happened to a significant degree. So kind of in the late USR there was a lot of like positive hope and positive dreams and many kind of harbored ideas that now will kind of throw away a full partner. So west will kind of throw away communism and will go to capitalism and it's going to be all right. And yes indeed for almost everyone it was a bitter disappointment, except very few. That is indeed true. Why was this the case? That's an interesting question. You see, I wouldn't really formulate it in terms of like communism and capitalism dichotomy, although many of like Russian or Ukrainian or whatever. Like people were really disappointed by capitalism. That is true, because let's look at China. So basically another splendid economy with very similar ideology, with similar institutions that roughly at the same period also went through market reforms, but with very different results. And I think that may be a sort of an illusion, like a foreigner like me could harbor, that China went through them smoothly. Oh no, not at all. Because China of course like pretty much every post communist country, it had its own painful transition, it had its own socio economic chaos. So just a small example. So like in China, when Mao Zedong died, they had their plans of economic reforms, they had plans of industrializations, or we'll build so much industry, all based upon assumption that we have very much oil. So we are planning to discover new oil deposits of which we are sure there are many, and become an oil superpower. And by like 1985 we are going to export more than Saudi Arabia. That was the plan. So in 1979, I don't remember, they mined something like. And 8 million meters, they drilled like some 8 million meters of holes and found exactly zero new oil deposit. Next year they closed more than half of their steel plants. So what I mean that there had been a lot of like economic pain, economic disillusionment, disappointment, a lot of, a lot of state owned enterprises in China, plenty of them, they suffered or just were wiped out. So generally speaking you have some of the processes you are witnessing in the USSR with the blows on the state owned industry, on the government sponsored organizations and a huge pain it inflicts on the population. So for example, imagine that you worked all your life on some kind of stilo state owned plant and then it closes and the entire sector basically wipes, getting wiped out. And you are maybe, I don't know, at the age of 40, you don't have any skills for the private market and you are basically like it's really, really bad. So entire generations of Chinese people, they ended with very bad like final results of their life just due to the economic transition. In this regard it's very similar to what was happening in the post usr. The question is what was different? And I think part of the answer is the logic of the leadership was very, very different in the ussr. Part of difference between like Rush or Ukraine, for example from China is that in the USSR socialist economy and planned economy it worked just better. So Soviet planned economy was better than Chinese planned economy. It was bad, it was richer, it was more functional. In the ussr, by the end of USSR you had plenty of enterprises that functioned well that were equipped, well, that were equipped with modern machines and that could make expert products for years and for decades and actually earn some cash for their owners. So basically you can just seize some plant, you can take control over it and, and you can milk it for decades, investing nothing. And in China nothing like that really existed. Very, very little. Partially because Chinese planned economy was just so much more dysfunctional.

A (46:28)

Yeah. So they actually had to add value whereas the Russians had to a greater extent working minds to co opt. So let me slightly push back on that because my view is it's actually hard to do anything at a profit. And in partial defense. Okay, so let me get, let me give something which. Let's call it a thought experiment. Okay. Let's say you're a foreign businessman and it's 1992, okay. And someone is telling you, hey, do you want to buy this coal mine in Siberia? It hasn't made a profit in 70 years. It doesn't really have great infrastructure. And by the way, this is in the former Soviet Union. You don't know if communism is going to come back which abolishes all private property. And even if it doesn't come back, you don't really have as much of a functional state. You've got this mafia government which will cut you if you try to move anything out. And also contracts. Who's going to enforce the contracts? Workers. 2, 3, 4 generations haven't even understood what capitalism is. It's basically pre1917 before the member stock markets contracts even the fact that they can be fired and on and on, on. There's all these operational difficulties associated with it. And as a consequence you say, okay, if we're going to do that, I'm going to need to get this for cents on the dollar. Right. That would be the argument of that foreign businessman. For them to make that kind of investment, given how uncertain it would be and how difficult it would be to operate that business profitably if you just put yourself in the shoes of someone who's doing something like that, they say, okay, we need to get this for cents on the dollar because someone could get killed. Like we'd have to figure out, you know, how to make this thing make a profit. We're gonna have to buy crazy new equipment. Since the Soviet equipment is often terrible or it breaks or it's made to low standards and so on and so forth. A lot of that will have to be imported and it'll have to be gotten through and God knows what, you know, the customs are going to charge and so on and so forth, all kinds of uncertain costs which are, which rise because you have to provide your own security and so on. So I think that's maybe somewhat, at least without seeing numbers, my intuition would be it's not that easy to. One other thing by the way, is something like coal or oil. It is a commodity product, right? The whole point is it can be pulled out of the ground at a lot of different places around the world and there's sort of a global market for it. And if you're producing the commodity product, you're not in control of your price. So that's just different from, let's say you're producing something like an Apple iPhone. You set your price. If you're producing coal or oil, your price is set by the market. I mean there's various, you know, different subtypes of coal and oil and you know, light, sweet, crude or whatever the terminology is for different kinds of, you know, like, like, like refinements and so on. But, but you're not in control of your price. So I would somewhat push back maybe on the other that it was just a gold mine waiting to be exploited. Let me know your thoughts on that.

B (49:34)

Go ahead. Now let's look at it another way. So basically I think you're right that for example, imagine there's some kind of mine on a factory and a foreign investor comes and he is indeed probably likely to pay for it considerably less than if like exactly the same plant was located like in France, I don't know, or in Germany. That is true. So he would probably buy it relatively cheap if he could. But that is a foreign investor who comes with money. Unlike foreign investors, there are basically no people with money in the USR by that point. So when we do privatization and we limit it to kind of local nationals, that means practically speaking that is what happened that we do not sell anything because there are no people with money. We in reality distributing it for free. Maybe it will be kind of disguised by all some like tricky financial schemes. But in practice we can only distribute it. And that means first of all that we are not getting any money. If the government wanted to get any money for their mines and factories, it should have sell them for foreigners because they were the only people with money. And that is one thing. Foreigners could have brought money that could pay for example for social expenses and generally like alleviate the general crisis, like the life conditions could be better. Second, foreign companies could have brought expertise because if you look in China, that is exactly what happened. Almost all of complicated technologies, almost all of Complicated knowledge. It was originally brought by foreigners, by the Taiwanese, by the Japanese, by the Koreans, by all sorts of Westerners. Like one story I read recently, it's pretty funny. So how Chinese microchip industry began, as I read it, began with Dutch Phillips Co. That opened its factory in Shenzhen. And it's interesting because they're not really planning to do Shenzhen originally. It was not part of the plan. They're planning to do it in Pakistan. It's just that Pakistan basically kicked them away. They just were making new and new conditions, like new and new, like burdens and eventually they just changed location. So my point is that for China, foreign companies and foreign investors, they served not only as a major source of cash, but also as a major source of expertise, of knowledge. And what makes a major difference between Russian, let's say privatization and Chinese, that in China foreign investors were lulled. They're often like invited and in Russia they're absolutely excluded. It was more like zero sum thinking and a little bit, you know, like drag dragon smoke thinking. So that is my kind hoard of gold and I'll not allow like any filthy hobbits to take a bit of it. So it was much more of defensive thinking. It's not that we will create something new and interesting as it was in China, as that we will not allow anyone to take a bit of our treasure. Better like in practice, in practice it's not that we'll do anything with this factory, but better let this factory rot than to give it to someone else. So. And one thing I'm indeed noticing in modern America that yeah, I think there's a little bit of post Soviet vibe here. A little bit of like zero sum and very defensive kind of thinking. Not so much about like creating anything cool, interesting, I don't know, profitable as about like guarding our like pile of wealth against all kinds of like hungry thieves all around.

A (53:23)

Interesting. Okay, cool. All right, so I am. If there's one other things I want to wrap and now and we'll. Let's see if we can edit this down into some crisp stuff. If there's any essays that you want to put on screen, if you've got some good subse. I actually I thought the revolution was very good. I thought the conservatives noticing things was a good one. Meaning the. I thought the one where conservatives or those who are out of power can call something by its name in a way those in power will ignore, like Stalin would ignore the power. But those outside, that was an interesting one. And then I thought you had a third one a thread on the silicis, which is good. Anything else that people should go and read?

B (54:11)

I think let's do one let's do on the art of not noticing things, among other like good. Among let's have a good quality. It is relatively short.

A (54:20)

Good.

B (54:20)

So thank you.

A (54:21)

Well, thank you. Thank you, sir. And this is interesting. And so send me any books that you think we should put on and I'll put them on screen, for example, all those book because you're talking about the structure of Europe and so on and so forth. But a specific book or two, maybe there's three books. Do you recommend any three books that people read that maybe people don't know?

B (54:44)

Thank you. I'll send by the evening.

A (54:46)

Okay, good. All right. Thanks, sir.

B (54:47)

Thank you. Have a good day.