Annals of the Class War in Putin’s Russia
There were some interesting tidbits of information in a recent Moscow Times op-ed by on Vardan Dastoyan, identified as the CEO of Rolf Retail, a Moscow-based chain of car dealerships. Granted, the things he says are undoubtedly motivated by personal pecuniary bias, maybe a little Russian nationalism thrown in there for good measure, and hence not too reliable (for instance, he says sales of new cars are up 43% this year, but doesn’t give the base or the dollar value of the sales for perspective). Still, though, they’re fascinating to consider.
According to Dastoyan — get this now — most Russian buyers of imported automobiles pay cash (hence they couldn’t care less what happens to interest rates) and they are comprised of the roughly 3 percent of the country rich enough to invest in the Russian stock market. And these folks are not just rich, but super-rich. They’re so rich, in fact, that they couldn’t care less what happens in the stock market, because they only invest there with “one pocket,” keeping the other free for spending.
Three percent of the Russian population works out to 4.2 million people. Suppose each one bought two cars, and bought new ones every two years (after all, Russia’s wretched roads take a mighty toll on automobiles). Paying cash on the barrelhead, no worries about defaults on financing and plenty of liquidity for skimming. That’s a demand for over 2 million new foreign cars every year.
Dastoyan points out, too, that declining economic conditions abroad would only be good for these car buyers, since they would create a glut of supply abroad and reduce prices. Maybe each of these super-rich Russians might then afford third and fourth luxury automobiles. The sky’s the limit!
But what, you may ask, about the other 97% of the Russian population? You know, all those folks who work for Russia’s national average wage of $4/hour and who can barely afford bus fare, much less a new car. What about Russa’s domestic industry, starved by the lack of investment capital and the lack of consumer financing to fuel demand?
That’s a silly question, really. Did the Tsar’s court worry about questions like that? Did the Politburo? Of course not!
What we see happening today in Russia is the same sort of gargantuan class divide that existed in Tsarist times and gave rise to the Bolshevik revolution. And the Bolsheviks learned nothing from it, but instead continued it in another guise. That system too collapsed of its own fetid weight, only to be replaced by yet a third attempt to perpetuate naked class warfare.
At tiny elite oligarchy has once again taken power in Russia, and is literally drinking the blood of the mass population, which langhishes in miserable poverty. The oligarchy, just as in times past, uses the selfsame mechanisms of draconian blunt trauma to impose its will on the public, and simultaneously to menace foreign nations so as to discourage them from doing anything to upset the golden apple cart.
And so it goes in Russia.