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All entries for March 2014

March 24, 2014

Marxism: My Part in Its Downfall

Writing about web page http://warwick.ac.uk/markharrison/comment/economics_of_capitalism_ver_2.pdf

The news has been so grim on many fronts that I begin to long for something a little lighter. To help things along, here is a story I began to write a long time ago, but never finished until now. It tells how it happened that in 1976 I published a 20,000-word pamphlet called The Economics of Capitalism.

Another stimulus to go back to this was that I got drawn into a discussion about Marxian economics. Not everyone with whom I was debating with would give me credit that I knew much about Marxism in the first place. In that context I mentioned that one day I intended to put my pamphlet on line. Now, here it is -- in two versions. One is the original, scanned as images(therefore large: 30Mb). The other is OCR'd and so 99 per cent searchable(much smaller: 4Mb). (Or, if you insist, a few copies are still available in the second-hand market.)

In the searchable version I've taken care to conserve the original illustrations and page layout. The illustrations were by Richard Hill, whom I never met, so I never got around to telling him what I thought of them. Are you out there, Richard, or anyone who knows you? I just loved the illustrations as soon as I saw them, and I still do.

The origins of the pamphlet were like this. I joined the communist party in 1973. This was for reasons I've discussed elsewhere so I won't go into them here. I was soon drawn into various activities as a student and then as a young lecturer. It wasn't long before I met Betty Matthews, who ran the communist party's education department. This meant she was responsible for producing education material for the party members and their branches.

I certainly wasn't the party's only economist. Others, such as Maurice Dobb and Bob Rowthorn (Cambridge), Ron Bellamy (Leeds), and Pat Devine and Dave Purdy (Manchester) were of longer standing and greater eminence. Dobb was a world-famous scholar. I recall that the party had an economic advisory committee to consider its economic policies. I wasn't a member of that, and I've no idea who was on it, but probably some of these. Anyway, unlikely as it might have seemed at the time, somehow or other I was the one Betty persuaded (or maybe I was the one who offered) to write an economics pamphlet for the purposes of party education.

The previous material that was out there for party members was Sam Aaronovitch's Economics for Trade Unionists, published in 1964. In its time this was a solid introduction, and Sam was a good scholar, but Betty felt it needed updating. So I got to work and The Economics of Capitalism was the result. If you read the acknowledgements, you'll see I had some help, with comments and advice from Pat Devine (see above), from Betty Matthews and Bert Ramelson (see below), and also from Keith Cowling and Ben Knight who were sympathetic colleagues at Warwick. I remain grateful to all these people.

I'd like to break the narrative for a moment to say how much I valued getting to know Betty and meeting and talking with her (and her assistant Deanna, whose family name I've forgotten). Betty always seemed like a thoroughly cheerful person and a kind soul. According to Sarah Benton's obituary she was "unique in the communist world in having no enemies." I'm not surprised. Betty spent her childhood in Southern Rhodesia (Zimbabwe). I'd recently read Doris Lessing's account of a similar childhood. Lessing was sent to church, where the message was brotherly love, and then came out and saw the hypocrisy of the colour bar. She decided that the colour bar must be wrong. I asked Betty if her experience was the same. She laughed and said: "Oh, no. I decided that the church must be rubbish!" Anyway, I thought Betty was a good person and that made her hard to refuse.

As for the substance of what I wrote in the pamphlet, I'm not going to review my own work here. Anyone can read it and decide what they think for themselves. I'm just going to comment on a couple of aspects of the writing. One is about the history in it; the other is about the party and its sensitivities.

First, the history. One question I've sometimes asked myself is: Where on earth did I get the history from? There was a lot of freedom in writing without footnotes, and I am not sure I used that freedom wisely. When I re-read what I wrote then, the history now seems pretty slapdash to me. Probably it was a mishmash of stuff I half understood and borrowed from Dobb, Rodney Hilton, E. P. Thompson, and a few others that I've forgotten. They might not appreciate what I did with their work. I'm pretty sure that today I'd follow a different style of writing, with more respect for facts, including the ones that did not fit. Nowadays even my lecture notes have footnotes for everything.

In contrast to my cavalier approach to history, I tried to be careful with the economic facts. I even put in a statistical appendix.

Second, the party. As a young party member, and at the same time a professional scholar, I was always watchful and curious to find out whether at any point the party would start telling me what to write. I didn't know how I would react if that happened. I felt a commitment to the truth. I felt a commitment to the cause. Politics being what it was, I half expected that at some point these two commitments might clash, and I did not know how I would manage it if that came.

As it turned out, the only aspect of the pamphlet that anyone in the party (other than an economist) really cared about was how it would explain inflation and the role of trade unions. This was bitterly controversial in British society in the 1970s, and the issue was contested within the labour movement and even within the communist party.

Since the 1950s, successive British governments had taken the view that the cause of rising inflation was increases in wage costs, which arose from the excessive wage demands lodged by the trade unions. The appropriate remedy to inflation was therefore wage controls, voluntary or statutory. In recognition that wages were not the only cost of production (although the largest proportion in the economy as a whole), this became known as "incomes policy." From the 1950s through the 1970s, successive governments tried and failed to use incomes policy to control inflation.

At the time I was writing, the British economy was experiencing its greatest inflationary crisis. We didn't know it yet, but it would pave the way to Margaret Thatcher's historic 1979 election victory. Trade union power and wage pressure were huge issues. The "official" position of the communist party at the time, as far as I recall, was that inflation hurt the workers, but wage pressure was not the cause of inflation. A class struggle was in progress in which the organized workers were fighting the employers using the weapon to hand: wage demands, backed up by strike action. Price-setting was the weapon in the hands of the capitalist employers, so inflation was the counter-attack of the capitalist class. Anything that weakened wage pressure favoured the enemy.

This line was much debated. I've probably forgotten a lot of nuances that were important to others, so I'll speak for myself. My own view was something like this: There was a distributional struggle in progress. Suppose the initial distribution of the national income between wages and profits was 70 per cent to 30. The workers wanted to increase their share at the expense of the employers, and would try to achieve this by pushing up nominal wages. The capitalists wanted to raise profits at the expense of the workers, and would aim to achieve this by raising prices. As a result, the implicit claims on the national income would exceed 100 per cent. The workers wanted 75 and the employers wanted 35. If you added up 75 and 35 the sum was 110 percent, so the outcome would be 10 per cent inflation -- a self-defeating wage-price spiral.

Put like that, it was a non-monetary theory of inflation. Nowadays absolutely nobody believes you can understand inflation without thinking about money. Even then, the party's economists had surely all read Milton Friedman, who told us that inflation was "always and everywhere a monetary phenomenon." While we didn't buy this completely, we understood that inflation had to have a monetary dimension. For myself, I thought that the inflation process was contingent on some sort of government commitment to full employment. This was the commitment that enabled workers and employers to push up their incomes against market pressure. A later generation would call this the "soft budget constraint," a term that Janos Kornai developed to analyze Soviet-type economies. In capitalist Britain, the soft budget constraint meant was that the government's fiscal and monetary policies were being relaxed continuously to maintain real demand and keep down real interest rates, and this would also be an essential permissive condition of the inflationary process.

In the trade unions, many communists were not particularly keen on this line of argument. It seemed to give away too much to the idea that trade unions caused inflation. They wanted to say that the capitalist class was on the offensive and the wage struggles of the time were basically workers' self-defence. In other words it was capitalism that caused inflation, not the workers. In my view, even at the time, this was somewhat implausible. The share of profits in British GDP had been declining since the 1950s (and the contribution of domestic trading profits had fallen even faster) so wage militancy looked more offensive than defensive. On that basis, it was very hard to maintain that trade union militancy was not at all complicit in the inflation of the time.

In this context, there was a lot of focus on what my pamphlet should and shouldn't say about inflation. Betty Matthews told me I had to meet Bert Ramelson and talk it through with him. Bert ran the communist party's industrial department. He had played a key role in many episodes of the struggle of Britain's organized workers, most famously the seamen's strike of 1966 and the miners' strike of 1972. The last thing he and other communists involved in the trade unions wanted was that a publication by the party's own education department would be quoted in the media saying that striking for higher wages would end up hurting the workers.

My one and only meeting with Bert took place in Coventry railway station where we talked over a cuppa in the cafeteria off platform 1. I was nervous about it. Bert was a legend of the labour movement; I was a nice middle-class boy who had never done anything much outside school and college. I had the academic qualifications, but Bert had the steel that was tempered in the furnace of the class struggle. I could not anticipate how he would respond to me; I did not know what criticisms he might have, and I did not expect he would swallow them easily.

In fact, our conversation was amicable. I had insured myself to some extent by being even-handed: I wrote in the pamphlet that the causes of inflation were controversial, and I outlined various perspectives, and I suggested that they all contained some unspecified measure of truth. I also wrote that wage militancy was not enough to transform society; this was something that no one would have disagreed with, even then, although there would have been a lot of dispute over how and by how much it fell short. There were certainly those party members that behaved as if they believed wage militancy was 99 per cent of the revolutionary struggle -- at least.

Bert turned out to be concerned more with what I would write about the future of trade unionism than trade unions in the present. Tighter restrictions on trade union rights were in the air. The party was opposing them vigorously. In order to give credibility to the party's defence of unfettered trade union rights in the present, it was also party policy to promise that trade unions would continue to be free and independent, with entrenched rights, in the transition to socialism. Bert wanted me to make this clear.

The result was a passage that read:

Our path will encounter many problems. For example, in the process the state must acquire far more power than ever before. But we seek power for all working people, not for bureaucrats and civil servants. And in fact the struggle for democratic rights is an integral part of challenging the state power of monopoly and ultimately replacing it. Thus if the outcome is to mean more democracy, and not just more bureaucracy, the autonomy of the working class, and of its sectional mass organisations the trade unions, and of its allies, must be strengthened and extended. That is why the freedom of collective bargaining today is a guarantee for tomorrow.

For example, in a socialist economy, for the progress of society as a whole, one group of workers or another may sometimes have to be asked - not ordered - to moderate wage demands, or change jobs. But in a socialist state, for the first time, these processes will be open and subject to democratic control.

Today it may read like wishful thinking. It didn't at the time. at least, not to me; there was nothing there that it was hard for me to sign up to. Bert had been persuasive but not heavy handed or confrontational; he treated me very correctly and I did not feel that I had compromised anything in writing those words. Just in case, however, I concluded with a libertarian flourish:


The most important of society’s productive forces is the working class itself. The British working class today has skills, understanding and aspirations available to it as never before. Capitalist relations today hold back its development, and face it with low wages and stultifying labour discipline at work as the only alternative to unemployment. Beyond it lies the vision of a world in which “the free development of each is the condition for the free development of all”.

Anyway, the pamphlet was finished, went to the printer, and came out. I was very proud of it (and delighted by the illustrations, as I've said). What impact did it have? I've absolutely no idea. Looking back, I think it's remarkable (and not in a good way) that I never had any idea of how many were printed or sold or how widely it was used for its intended purpose, that is, for discussion as educational material. I think I did one or two meetings around the Midlands, based on the pamphlet, but that was all. For all I know, the rest of the stock was packed up and warehoused, or sent out to the branches where it was stored in cupboards up and down the country, and finally ended up in a hundred skips when the party branches closed down.

There's a final question that I'll pose: What would have happened to the British economy if that party programme had been implemented? It's not a completely idle question. In 1976 the late Tony Benn, then a government minister, put something pretty similar to the British cabinet as an alternative to the IMF loan that Denis Healey was after. It was rejected -- but what if it had been put into effect? How would the economic effects have worked out? Not well, I now imagine. Most likely the experience of Belarus or Venezuela would give a few hints.

The moment when my pamphlet appeared, as it happens, was just about the peak of popularity of Marxian economics in the English-speaking world. After that, everything went downhill. This should not be a surprise because the world of the 1970s was about to move strongly to the right. In 1979 Margaret Thatcher became British prime minister, and in 1980 Ronald Reagan was elected US president. Everyone moved on, including, eventually, me.

To prove my point, here's the evidence. This chart uses the Google Ngram Viewer to show the changing relative frequency of three terms that no one would ever use except in connection with seriously discussing Marxian economics: "monopoly capitalism," the "rate of surplus value," and the "organic composition of capital." The what? Yes, it's in my pamphlet.

And here is a link to the same chart in its native location, where you can play with it as you like.

As you can see, everything was going up until my pamphlet came out, and afterwards everything went downhill and never recovered.


March 17, 2014

Crimea: Then I'll Fight You For It

Writing about web page http://www.bbc.co.uk/news/world-europe-26606097

In an old English story, a tramp was asleep in the grass by a lane. The landowner woke him roughly:

Get off my land!

The tramp replied:

How come it's your land?

The landowner:

My ancestors fought for it!

The tramp:

Then I'll fight you for it.

This story offers a dubious principle and an excellent moral. The dubious principle is that property is theft: no one's claim on property is more legitimate than anyone else's. The excellent moral is that if we lived by that principle our's would be a world of chronic insecurity and unremitting threats in which no one could sleep peacefully.

In that light, here are some facts about Russia.

  • Russia's territory covers more of the globe than any other country: more than 17 million square kilometres.
  • Russia's land border is the second longest in the world: more than 20,000 kilometres, shared with 16 sovereign neighbours.
  • Between 1870 and 2001, the Correlates of War dataset on Militarized Interstate Disputes counts 3,168 bilateral conflicts involving the show or use of force. Every dispute involves a country pair, and the same dataset also registers the country that originated the dispute. Over thirteen decades Russia (the USSR from 1917 to 1991) originated 219 disputes, more than any other country. Note, by the way, that this is not about capitalism and communism; Russia's pole position is the same both before and after the Revolution. Also-rans include the United States (in second place with 161 conflicts) China (third with 151), the UK (fourth with 119), and Iran (fifth with 112). (My more patriotic readers will want to know where Germany stands: lagging behind at sixth with 102). These results are reported by Harrison and Wolf (2012, p. 1064, footnote 29).

Why has Russia achieved this preeminent position in the history of conflict? Here are three reasons.

  • Russia is large, and small countries have little weight to throw around.
  • Russia has many neighbours, and therefore many opportunities to engage in bilateral disputes.
  • Russia's regime has always been authoritarian, with the exception of the few years either side of the collapse of communism, when Russia's borders were able to change relatively peacefully. It is an established empirical regularity that authoritarianism predisposes a state to engage in conflict (the literature is surveyed and also qualified by Harrison and Wolf).

In most of European history, borders have changed through violence. The Eurasian landmass is for the most part a vast plain, with mountains only on the margins, and without natural frontiers. The absence of natural defences other than a few rivers and wetlands has allowed armies to roam freely back and forth across vast distances, killing as they go. European sovereignty was based on possession, and sovereignty changed hands when rivals fought for it.

The stability of borders is a tremendously important condition for economic development. Unstable borders engender conflict, raiding, and killing. Stable borders can be opened for trade and the movement of merchandise and merchants. The goods, cultural values, skills, and talents that flow across stable borders enrich both sides. Stable borders also allow the development of democracy, as argued by Douglas M. Gibler (2007), whereas territorial disputes prevent it.

Russia has suffered terribly from the territorial disputes of past centuries. When the Soviet Union broke up, Russia's new borders were drawn for the most part peacefully. This was a tremendously hopeful omen for Russia's future. Particularly important were the assurances given to Ukraine in 1994: Ukraine gave up its nuclear weapons and in return the US, UK, and Russia guaranteed Ukraine's territorial integrity. It is all the more shocking that Russia has created an opportunity, which it is now seizing, to revise its border with Ukraine unilaterally and by force.

That some Russian nationalists now regret the 1994 agreement is completely irrelevant: Russia gave its word, and so did we.

In the present crisis the issue that should take precedence over all others is the integrity of European borders and the process of adjusting them lawfully and without violence. That should come before everything else, including rights of self-determination and the political composition of this or that government. No good will come of Russia's violation. We all stand to lose by it. But anyone with knowledge of Russia's history knows that Russia, of all countries, has most to lose by returning Europe to the poisoned era of conflicted borders and perpetual insecurity.

References

Gibler, Douglas M. 2007. Bordering on Peace: Democracy, Territorial Issues, and Conflict. International Studies Quarterly 51:3, pp. 509-532.

Harrison, Mark, and Nikolaus Wolf. 2012. The Frequency of Wars. Economic History Review 65:3, pp. 1055-1076. Repec handle: http://ideas.repec.org/a/bla/ehsrev/v65y2012i3p1055-1076.html.


March 13, 2014

Stay Where You Are: Russia Will Come to You

Writing about web page http://www.forbes.com/sites/paulroderickgregory/2014/03/10/putins-big-lie-on-ukraine-if-it-werent-so-serious-it-would-be-funny/

An old joke has resurfaced in connection with Ukraine's Crimean crisis. I saw it first in a column by my co-author Paul Gregory:

You want to live in France? Go to France. You want to live in Britain? Go to Britain. You want to live in Russia? Stay where you are: Russia will come to you.

It's generally hard to work out when and where such jokes originated, but this one has real-life foundation.

Before the war Menachem Begin, who was later Israel's prime minister, was a Jewish activist in Poland. When Germany and the Soviet Union divided Poland in 1939 he fled to Lithuania, where Soviet troops arrived in 1940. With thousands of others, Begin was arrested. He was accused of being a British agent under Article 58 of the RSFSR (Russian republic) criminal code, which dealt with counter-revolutionary crimes. In a later memoir Begin recalled a prison conversation (Weiner and Rahi-Tamm 2012, p. 14):

When Begin inquired how article 58 of the Soviet Criminal Code (counter revolutionary activity, treason, and diversion) could be applied to activities that were considered legal in then sovereign Poland, his interrogator did not hesitate: “Ah, you are a strange fellow [chudak], Menachem Wolfovich. Article 58 applies to everyone in the world. Do you hear? In the whole world. The only question is when he will get to us or we to him.”

This raises an interesting question: If the jokes are the same, is the system the same? In other words, is Putin's Russia the same as Stalin's Soviet Union? In most aspects of everyday life the answer is: Clearly not. In Russia today there is far more freedom of speech, assocation, and enterprise than there ever was in the Soviet Union. But there is also much less of these things than there should be. And there are disturbing continuities with the Soviet past in Putin's KGB background and loyalty, his nostalgia for the Soviet empire, and the identification of national power with his personal regime.

Directly linked to these things is continuity in Russia's menacing approach to its neighbours. The people of what was once eastern Poland (now western Ukraine and western Belarus), and Lithuania, Latvia, and Estonia, are being reminded today that they live in territories to which "Russia came" in 1939 and 1940. These occupations were followed by unanimous parliamentary votes and rigged referenda, the registration of the population and issuing of "passports" (ID cards), and mass arrests and deportations.

If we are returning to the past, one may hope for a new era of Russian jokes. Unfortunately, it may turn out that the best jokes have already been told.

Reference

Weiner, Amir, and Aigi Rahi-Tamm. 2012. Getting to Know You: The Soviet Surveillance System, 1939-1957. Kritika 3:1, pp. 5-45.


March 05, 2014

Putin: King in Russia or Emperor of all the Russias?

Writing about web page http://www.maxkeiser.com/2014/03/liam-halligan-on-bbc-radio-4-idea-of-sanctioning-russia-pretty-mad/

After recent events in Crimea several commentators have asked for more understanding of Russia's position -- among them, for example, my old friend Liam Halligan. This is particularly important because, if we do not understand Russia, we will be unable to predict the consequences of our own actions. Because this will be a long blog, here's the short version:

  • Does Putin want primarily to be King in Russia or Emperor of All the Russias? We don't know, and it will make a big difference.
  • If Putin wants to be King, the result of his invasion of Ukraine will be to consolidate his rule, at least for a while, but any further implications are limited.
  • If Putin wants to be Emperor, a protracted and dangerous international conflict has already begun; only resolute deterrence will avert tragedy.

We need better to understand Russia, but Russia is not easy to understand. Why? The most important reason is that Russia's politics lack transparency and accountability. Consider the following. The Russian invasion was clearly well planned, yet took the world by surprise. It was undertaken despite a near total absence of popular support; according to a VTsIOM poll published on 24 February[correction: link updated, 8 March 2014], only 15 percent of Russians endorsed military intervention in Ukraine, with 73 percent opposed. Although there was no popular enthusiasm for military intervention, Russia's parliamentarians mandated it unanimously. Although there would appear to be clear blue water between the administration and public opinion, the administration's action has met with little or no popular reaction.

Russia, in short, is free of the public agonizing that signals a vibrant democracy. Nothing could show more clearly that Moscow's decisions are made in a secretive, unaccountable way, so that ordinary people expect to have no voice and remain passive.

Two related factors only add to the difficulty we face in trying to interpret Russia's behaviour. One is that the Kremlin understands the value of surprise. The sudden and unexpected character of the Russian action in Crimea deprived Russia's opponents of the chance to react promptly in a calculated way. The result has been confusion and indecision in Kiev and western capitals. While Ukrainian and Western leaders have pondered their best responses, Moscow has consolidated its gains. The result of this is an analyst's paradox. A capacity for unpredictable action is valuable, but can only be maintained by preventing adversaries from understanding how Russia will decide its next move, and therefore from predicting it. Thus, Russia's leaders must continue to behave unpredictably, avoiding any clear or systematic pattern.

A second related factor stems from the fact that, while Russia's action in Crimea was extremely successful in exploiting surprise to achieve a bloodless coup, the bloodless nature of the intervention could not have been predicted. Any panicky self-defence by Ukrainian troops or (say) Tatar civilians would have led to a bloodbath. One must suppose that Putin and his cabinet anticipated this possibility, but discounted it and went ahead regardless. As things turned out, the risk of bloodshed was not realized, but this was just lucky. In other words, Russia's leaders were prepared to take a very substantial risk. A propensity for risky behaviour is characteristic of rulers that have a great deal at stake but also fear that time is running out: the option of wait-and-see has low value for them, or is seen as also highly risky, so they act now despite the risks.

What is at stake for Russia in Ukraine that is of such value? What is Russia's action designed to achieve? Here I see two possibilities, and the opaque, unaccountable nature of Russia's politics makes it hard to discern which is the dominant factor.

I take it for granted that Russia's action in the Crimea was designed to help bring about a lasting change in the balance of forces. I cannot see that any lesser objective would justify invading a sovereign neighbour whose borders are guaranteed by two other nuclear powers (the US and UK, the third being Russia itself). But which hostile forces was the Russian action designed to counter? Does Putin mean to change the balance of forces within Russia or that in the world beyond Russia? Related to this, is Putin content to be King in Russia more or less as it is today, or does he mean to become the new Emperor of All the Russias?

Explanatory note. "All the Russias" means Great Russia (Russia proper) plus Little Russia (the Ukraine) plus White Russia (Belarus). All the Russias would be a smaller territory than the old Russian Empire (which extended to Poland, Finland, the Baltic, the Caucasus, and Central Asia) and also smaller than the Soviet Union (which lost Poland and Finland), but it would reunite all the Slavic nationalities under one authority.

There is a case for thinking that Putin just wants to be King, and his primary objective is to offset potential domestic opposition. Among Russians, his legitimacy rests on a narrative of Russia, weakened by the collapse of the Soviet Union, plundered by domestic and foreign thieves, and encircled by enemies at her borders. When Putin's position at home is weakened by stories of election-stealing or corruption, he portrays his opponents as fraudsters and agents of foreign powers and he deters many critics by putting a few of the more important out of circulation. His narrative has been sustained by the turmoil of Ukraine's unfinished transition from communism and by worsening relations with the West. On this interpretation, Putin's goal in Ukraine has been to stoke international tension for a while and so change the balance of forces domestically, within Russia. He has used the Ukrainian events to teach Russians that Ukraine's movement is not "anti-corruption" or "pro-democracy" or "pro-Europe" but "anti-Russia." And anyone in Russia who campaigns against corruption or vote-rigging is now vulnerable to proscription as anti-Russian.

If it is Putin's strategy to weaken domestic opponents and so shift the domestic balance of forces in his favour, then it is already largely successful. All that is required is for the West to put up a show of resistance, and Putin will have achieved his objective, which is to confirm that Russia is embattled and he is the Russians' only defender. He does not need a war to prove it. He will take no more risks, and he will stop here. It's hard to say how long the effects will last; they might be relatively short lived. As for Crimea, the outcome can be some messy compromise that will poison Ukrainian politics and store up future conflict, which will also serve Putin's domestic purposes.

Alternatively, and much more seriously, Putin's final objective may be to weaken external adversaries, and so to shift the balance of forces in Europe. To do this permanently would mean to redraw frontiers by creating a new Empire of All the Russias with a cordon sanitaire of neutralized states on its borders. A first step is to expose the powerlessness of the EU, to divide Europe from the US, and so to divide NATO. But in this case he has only just begun. He will continue to work to subordinate Ukraine and Belarus in a Eurasian Union, while isolating and neutralizing all Russia's less compliant neighbours, which include Georgia, Poland and the Baltic states. If that is Putin's grand project, it is probably shared by others around him.

If Putin wants to be Emperor, it is hard to see how confrontation can be avoided at some point. If Europe and NATO signal accommodation, for example, and express only token resistance to the Russian action in Crimea, then Putin will drive on towards his ultimate goal by undertaking other adventures, perhaps by going deeper into Ukraine or by setting out to humiliate other neighbours. On the other hand, to the extent that Europe and NATO show unity and put up resistance, Putin's objective will become more distant and, because time is not on his side, he will be willing to take more risks to achieve it. Only resolute deterrence will prevent violence and tragedy.

As I see it the immediate policy implications are limited. In 1994 Britain guaranteed the security of Ukraine's borders. In return, Ukraine gave up its nuclear weapons. Whatever Russia's motivation for breaking its word, we cannot honourably walk away from our own guarantee. There are many steps that Britain, Europe, and NATO should now take, that fall well short of destabilizing military intervention. Most importantly, we should take them together.

It troubles me, however, that we do not know how Russia will respond. If Putin's objective is to affect the domestic balance of forces, nothing much more will follow, except that his regime will be consolidated for a while. If his objective is to redraw Europe's boundaries, then a game has begun with many unpredictable and dangerous moves in store.


I am a professor in the Department of Economics at the University of Warwick. I am also a research associate of Warwick’s Centre on Competitive Advantage in the Global Economy, and of the Centre for Russian, European, and Eurasian Studies at the University of Birmingham. My research is on Russian and international economic history; I am interested in economic aspects of bureaucracy, dictatorship, defence, and warfare. My most recent book is One Day We Will Live Without Fear: Everyday Lives Under the Soviet Police State (Hoover Institution Press, 2016).



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