Russia – Page 9 – artdiamondblog.com

A Tale of Two Churches: Russia Has an Entrepreneurial Tradition Too

Two old and exotic churches, St. Basil’s in Moscow and Kizhi in the Russian north, survived the Soviet era and are invariably depicted in brochures and books to suggest the distinctiveness of Russian culture. Both feature the tent roofs and onion domes that dominated the skyline of medieval Russia. But each bears mute witness to a very different tradition: one, imperial centralism; the other, entrepreneurial regionalism. Both are embedded in Russia’s history; the conflict between them may well determine Russia’s destiny.

St. Basil’s, looming over Red Square, is an enduring symbol of theatrical autocracy; the Kizhi church, of frontier inventiveness. Authoritarian centralism has been growing recently under President Putin. But he also is fond of Kizhi and brought its new priest with him on his last trip to New York.

. . .

Tolerance was implicit in the northern tradition of dvoeveria: the simultaneous belief in both the old pagan spirits and the new Christian God. Medieval petroglyphs of the Kizhi region freely intermixed symbols of both. Peasants in the region were not enserfed. The northern region lost much of its independent power when Moscow sacked and subdued Novgorod.

. . .

Many more people have seen St. Basil’s on Red Square than Kizhi on an island in Lake Onega — and most see Russian history in terms of autocratic power in Moscow rather than creativity amid adversity in the regions. Kizhi is the supreme monument to this forgotten tradition that continued to unfold as the vast Russian domain spread north to the Arctic Ocean and across the Pacific to Alaska in the 17th and 18th centuries.

No one knows who was the architect of either monument. But Russian popular folklore suggests that the creator of St. Basil’s was forcefully either blinded or drowned to assure that it could never be duplicated. In contrast, the creator of Kizhi is said to have simply thrown his ax into the lake and lived on peacefully as a holy man in the northern forests.

During that time, Moscow autocrats looked out from the closed front porch of St. Basil’s to see the enemies of central power drawn and quartered publicly in Red Square. By contrast, the Kizhi church was wider and open to the sky — and where local people gathered to solve practical problems, facing a vista of lakes and forests.

Much of the renewed vitality in Russia today is coming from young people in the regions. Their hopes for a more participatory and accountable political and economic future depend on the kind of open community that created Kizhi — not the closed circles that cling to St. Basil’s.

For the full commentary, see:

JAMES H. BILLINGTON. "MASTERPIECE; Two Churches, Two Russias; One born of authoritarian centralism, the other of entrepreneurial regionalism." Wall Street Journal (Sat., September 16, 2006): P18.

Russians Try to Steal Rocker’s Vacuum Tube Factory

Mike Matthews holding one of the vacuum tubes produced in the Russian factory he owns. Source of photo: online version of the NYT article cited below.

(p. C1) SARATOV, Russia — Mike Matthews, a sound-effects designer and one-time promoter of Jimi Hendrix, bought an unusual Russian factory making vacuum tubes for guitar amplifiers. Now he has encountered a problem increasingly common here: someone is trying to steal his company.

Sharp-elbowed personalities in Russia’s business world are threatening this factory in a case that features accusations of bribery and dark hints of involvement by the agency that used to be the K.G.B.

Though similar to hundreds of such disputes across Russia, this one is resonating around the world, particularly in circles of musicians and fans of high-end audio equipment.

Russia is one of only three countries still making vacuum tubes for use in reproducing music, an aging technology that nonetheless "warms up" the sound of electronic music in audio equipment.

"It’s rock ‘n’ roll versus the mob," Mr. Matthews, 64, said in a telephone interview from New York, where he manages his business distributing the Russian vacuum tubes. "I will not give in to racketeers."

Yet the hostile takeover under way here is not strictly mob-related. It is a dispute peculiar to a country where property rights — whether for large oil companies, car dealerships or this midsize factory — seem always open to renegotiation. It provides a view of the wobbly understanding of ownership that still prevails.

. . .

(p. C4) If the tube factory dies, so will the future of a rock ‘n’ roll sound dating back half a century, the rich grumble of a guitar tube amplifier — think of Jimi Hendrix’s version of "The Star-Spangled Banner" — that musicians say cannot be replicated with modern technology.

"It’s nice and sweet and just pleasing sounding," Peter Stroud, the guitarist for Sheryl Crow, said in a telephone interview from Atlanta. "It’s a smooth, crunchy distortion that just sounds good. It just feels good to play on a tube amp."

He added: "It would be a catastrophe for the music industry if something happened to that plant."

For the full story, see:

ANDREW E. KRAMER. "From Russia, With Dread; American Faces a Truly Hostile Takeover Attempt at His Factory." The New York Times (Tuesday, May 16, 2006): C1 & C4.

The transistor disrupted the vacuum tube, a case that would usually be described as an episode of creative destruction. One secondary lesson from the story above is that there may be a previously unremarked symmetry to the process of disruption. A disruptive technology typically appeals only to a niche in the market, while the incumbent technology dominates the mainstream. But after the disruptive technology improves sufficiently to capture much of the mainstream market, maybe there often will remain a niche market that still prefers the older disruptive technology?

To use Danny DeVito’s example in "Other People’s Money," the car may have disrupted horse-and-buggies. But for some nostalgic "jobs" the horse-and-buggy may still be the better product, so there will likely remain some demand for buggy whips.

To the extent that this phenomenon is significant, it might serve to ease the labor market transition when one technology leapfrogs another.

A vacuum tube used in guitar amplifiers, that was produced in the factory that Mike Matthews owned. Source of photo: online version of the NYT article cited above.

Doha Tariff Cuts Would Save Global Economy About $100 Billion; France Objects

Source of graphic: online version of the WSJ article cited below.

(p. A1) The so-called Doha round of talks, which began in 2001, were designed to boost developing nations; among other things, they want lower barriers to their agricultural exports. France has vowed to veto any deal that doesn’t protect its farmers. A pivotal missed deadline April 30 has led to predictions the talks could die by summer if countries including France don’t change their stance.

The standoff shows how cultural and emotional factors can combine with politics to stifle free-trade goals that most economists believe would provide a net benefit to the world. The tariff cuts envisioned by Doha would not only help developing countries sell their minerals and food products, but would also lower barriers to the industrialized world’s exports of goods and services. The World Bank calculates that Doha would boost the global economy by around $100 billion.

Overall, France itself likely would be a major economic gainer from a global (p. A10) deal. Though it’s the world’s second-largest agriculture exporter after the U.S., farming accounts for just 2.5% of the French economy. World-class manufacturing and service companies, such as car maker Renault SA and insurer AXA SA, are larger engines of the French economy. France could gain more income than it would lose in opening its agricultural markets to budding farm superpowers like Brazil.

Even in agriculture, France can be a formidable competitor, notably in products such as wine and cheese. Its brand is well-known the world over. And its farms are increasingly home to capital-intensive agribusiness companies, not just small family producers. Most of the $11.5 billion in European Union subsidies that France receives each year goes to the largest, most commercially viable farms.

WTO chief Pascal Lamy, a Frenchman, says he doesn’t understand France’s position. "As an efficient farm producer, the strategy should be to reduce subsidies and prices, because others won’t be able to compete with you," he said in a recent interview.

. . .

The French rural tradition, however, is changing. Between 1993 and 2004, the number of arable farms fell by nearly a third. Wide swaths of neglected land are now home to unsightly scrub, and the farms people see as they drive down France’s immaculate highways are often parts of major business enterprises. Oxfam says as much as 60% of subsidies went to the richest 15% of French farmers in 2004, the latest figures available.

Oxfam believes the EU’s tariffs and farm subsidies, which total over €40 billion annually, are harmful to the world’s poorest countries. High customs duties keep products from poor nations out of the wealthy EU market. At the same time, EU farmers overproduction is dumped cheaply abroad, driving down global prices and harming farmers in the developing world.

For the full story, see:

SCOTT MILLER. "Food Fight; French Resistance To Trade Accord Has Cultural Roots; WTO Talks Promise Benefits But Farmers Retain Hold On the Nation’s Stomach; ‘Politicians Are Frightened’." The Wall Street Journal (Tues., May 16, 2006): A1 & A10.

“Growing Recognition of Economic Costs” of Koyoto Protocol

Commentary on the Kyoto Protocol:

(p. 3) . . . the current stalemate is not just because of the inadequacies of the protocol. It is also a response to the world’s ballooning energy appetite, which, largely because of economic growth in China, has exceeded almost everyone’s expectations. And there are still no viable alternatives to fossil fuels, the main source of greenhouse gases.

Then, too, there is a growing recognition of the economic costs incurred by signing on to the Kyoto Protocol.

As Prime Minister Tony Blair of Britain, a proponent of emissions targets, said in a statement on Nov. 1: ”The blunt truth about the politics of climate change is that no country will want to sacrifice its economy in order to meet this challenge.”

This is as true, in different ways, in developed nations with high unemployment, like Germany and France, as it is in Russia, which said last week that it may have spot energy shortages this winter.
. . .
The only real answer at the moment is still far out on the horizon: nonpolluting energy sources. But the amount of money being devoted to research and develop such technologies, much less install them, is nowhere near the scale of the problem, many experts on energy technology said.

Enormous investments in basic research have to be made promptly, even with the knowledge that most of the research is likely to fail, if there is to be any chance of creating options for the world’s vastly increased energy thirst in a few decades, said Richard G. Richels, an economist at the Electric Power Research Institute, a nonprofit center for energy and environment research.

”The train is not leaving the station, and it needs to leave the station,” Mr. Richels said. ”If we don’t have the technologies available at that time, it’s going to be a mess.”

For the full commentary, see:
ANDREW C. REVKIN. “THE WORLD; On Climate Change, a Change of Thinking.” The New York Times, Section 4 (Sun., December 4, 2005): 3.
(Note: ellipsis added.)

Solzhenitsyn Endures: The Return of “The First Circle”

Source of book image: Amazon.com.

I remember Ben Rogge recommending The First Circle, decades ago when it first appeared in English. It is a powerful, courageous, wise work, bearing many lessons. As you read the book, you keep hoping you can find someone to blame for the evil that is happening. But as Solzhenitsyn works his way up the bureaucracy, each bureaucrat has a plausible motive for his part in evil; one motive, for example, is the protection of the bureaucrat’s family. Only when you reach Stalin, do you find someone who you can really despise. But he seems borderline crazy, so even he is not a totally satisfying villian.

The book can be seen as illustrating a point that Rogge often made: socialism is not bad because it is run by bad people; it is bad because it provides ordinary people incentives to do bad things. (These are not his words, but I believe they capture his point.)

Alexandr Solzhenitsyn. Source of image: online version of the NYT article quoted and cited below.

(p. A1) MOSCOW, Feb. 8 — A grandfatherly figure, his bearded face wrinkled into a smile, peers down from billboards around town.

It is surprise enough that the man is Aleksandr I. Solzhenitsyn, the once-exiled writer, Nobel Prize winner and, of late, octogenarian scold. It is even more so that the billboards advertise his adaptation — broadcast on state television, no less — of one of his fiercely anti-Soviet novels, “The First Circle.”

Solzhenitsyn has been called the conscience of the nation, but his reputation has risen and fallen as tumultuously as Russia itself since the collapse of the Soviet Union. “First Circle” has once again placed him on the national stage, reaching an audience that would have been inconceivable to him four decades ago, when he smuggled the book out of the Soviet Union.

For the full article, see:

STEVEN LEE MYERS “Toast of the TV in Russian Eyes: It’s Solzhenitsyn.” The New York Times (Thurs., February 9, 2006): A1 & A3.

A scene from the Russian mini-series version of The First Circle. Source of image: online version of the NYT article quoted and cited above.

Ayn Rand Admirer Illarionov Pushed Russia Toward Free Market

Image source: WSJ article quoted and cited below.

Since the following interesting article, Andrei Illarionov has resigned. That’s probably a bad sign for Russia, unless you argue that Illarionov can be more effective outside the government than inside it.
The article begins by quoting Al Breach, who is chief strategist at Brunswick UBS:

(p. A13) It’s a one-party state, and if you’re out, you’re out,” Mr. Breach says. “If he can help stop some of the bad things, it’s worthwhile sticking around.”
This year, however, things haven’t gone his way, with state-owned oil and gas companies swallowing up independent oil producers, vastly expanding the state’s presence in the economy. The result, says Mr. Illarionov, has been a fall in private investment in the oil industry and slowing oil-production growth–at a time when world crude prices are soaring. Meanwhile, state outfits have also bought stakes in private engineering companies and taken over the management of Russia’s biggest car maker, AvtoVAZ.
It is all anathema to Mr. Illarionov, a St. Petersberg-trained economist and longtime admirer of Ayn Rand, the American writer who lauded unfettered capitalism. In the early 1990s he was an adviser to Yegor Gaidar, then- prime minister and architect of Russia’s early market reforms. But he quit in 1994, criticizing the government for failing to curb inflation and for putting the brakes on overhaul (sic). He then became one of Russia’s most respected independent analysts: He was the only prominent economist to call for a sharp devaluation of the ruble before the currency crashed in August 1998.
Mr. Putin hired him as an adviser in 2000, and he was a top (sic) force in drafting the liberal, modernizing agenda that the president pushed through in his first term. His ideology — trimming state spending, slashing taxes, cutting red tape and deregulating Russia’s gas, electricity and railway monopolies — became official policy.
Mr. Illarionov was seen as one of the key drivers of crucial overhaul initiatives: a flat income-tax rate of 13%, a rainy-day Stabilization Fund for Russia’s oil windfall, and the decision to dip into the fund to make early repayments on Russia’s foreign debt.
But his reputation suffered in later years from a long, bruising fight over how to restructure the electricity industry, and a quixotic campaign against the Kyoto Protocol, both of which he largely lost. Russia ended up ratifying the climate-change pact last year.

For the full article, see:
GUY CHAZAN. “Putin Insider’s Outsider Game; Adviser Illarionov Preaches Capitalism, but Who Is Listening?” THE WALL STREET JOURNAL (Fri., December 23, 2005): A13.
(Note: There are several differences (e.g., in the title, and in the reference to Ayn Rand) between the online version of this article, and the print version of this article.)

Do-Nothing Leaders Are Not Always Wrong

The source of the above image is:&nbsp http://www.edwardtufte.com/tufte/posters

Edward Tufte says that the graph/map above is the best graphic ever drawn. His criterion is how much information is communicated per unit of ink. (Sort of a signal to noise ratio?)
The tan line that starts thick on the left, and gets thinner toward the right, represents Napoleon’s army as it enters and crosses Russia. The width of the line is scaled to the remaining size of the army. On the right hand side, the tan line ends in Moscow, where the army disastrously wintered. The black line moving left shows the diminishing size of the army as Napoleon retreated.
When I was a student at Wabash College, I was a determined and vocal advocate of Ayn Rand’s Atlas Shrugged. My economics professor Ben Rogge, was not so enthused. He thought there were better Russian novels to read, and on several occasions, suggested:&nbsp ‘Diamond, you should read War and Peace.’
I often did not take Rogge’s advice quickly, but usually I took it eventually.&nbsp After leaving Wabash, I read War and Peace. Parts of it, I found too much like a soap opera for my taste. But I did find a part that resonated.
Part of Tolstoy’s story is about the Russian general facing Napoleon, who would not fight, but who continued to retreat into the heart of Russia. He was widely castigated as a do-nothing leader. But as a result of the Russian general doing nothing, Napoleon ordered his army further and further into Russia.
It is very hard for leaders in government to do nothing. They will be castigated. But sometimes nothing is exactly the right thing for them to do.

Edward Tufte’s wonderful book is:
Tufte, Edward R. &nbsp The Visual Display of Quantitative Information. 2nd ed. &nbsp Cheshire, CT: &nbsp Graphics Press, 2001.

Finland Building Europe’s First New Nuclear Reactor in 15 Years

Petr Beckmann holding a copy of his The Health Hazards of NOT Going Nuclear. Golem Press, 1976. Beckmann died on August 3, 1993. Source of photo and Beckmann date of death: http://www.commentary.net/view/atearchive/s76a1928.htm

Not all those who are right, live to see their ideas vindicated. Thank you Petr Beckmann, for writing the truth, when the truth was not popular.

. . . when Finland, a country with a long memory of the Chernobyl disaster in 1986 and considerable environmental bona fides, chose to move ahead this year with the construction of the world’s largest nuclear reactor, the nuclear industry portrayed it as a victory, one that would force the rest of Western Europe to take note.

But the decision to build the reactor, Olkiluoto 3, Europe’s first in 15 years, was not taken quickly or lightly.
. . .
“There is an expectation that others will follow, both because of the way the decision was made and the boosting of confidence in being able to get through all the oppositional fear-mongering,” said Ian Hore-Lacy, the director of public communications for the World Nuclear Association, an industry lobbying group.
The United States, which has not had a nuclear plant on order since 1978, is experiencing a groundswell of interest. Taking the first step in a long process, Constellation Energy, a Baltimore-based holding company, announced in late October that it would apply to the Nuclear Regulatory Commission for permission to construct and operate a pressurized water reactor like the kind being built in Finland, possibly in upstate New York or Maryland. The Finnish reactor, designed by Areva, the French state-controlled nuclear power group, is being built by Framatome ANP, a joint venture of Areva and Siemens, a Germany company.
In addition, President Bush signed into law an energy bill in August that offers billions of dollars in research and development funds and construction subsidies to companies willing to build new nuclear plants. Several utility companies have applied for early site permits, a preliminary step toward building reactors.
Worldwide, the resurgent interest in nuclear power is even more pronounced. Twenty-three reactors are under construction this year in 10 countries, most of them in Asia, which has aggressively pursued nuclear energy. India is building eight reactors. China and Taiwan are building a total of four reactors and are planning eight more. Russia is building four and South Korea is planning eight.
…
Nuclear energy’s selling points were timely: it does not create emissions, unlike coal, oil and gas, and provides predictable electricity prices, a major bonus for Finnish industries, nuclear proponents said.
“The only viable alternative, if we want to maintain the structure of the economy, maintain our industries and meet our Kyoto targets, is nuclear,” said Juha Rantanen, the chief executive officer of Outokumpu, one of the world’s largest steel producers and one of Finland’s biggest energy users. “We can’t have a declining economy. We face huge challenges and an aging population. Something had to be done.”
Environmentalists, however, argued that nuclear reactors could never be entirely safe. They are always radioactive, and their waste remains toxic for 100,000 years.
But the designers of Areva’s pressurized water reactor, which is costing $3.5 billion to build, helped counter those arguments. In the event of a core meltdown, they said, the nuclear material would flow into a separate enclosure for cooling. They also said that the reactor is being built with enough concrete to withstand the impact of an airliner.
In the end, Finland’s largest trade union supported the project, basically sealing the deal.
. . .

Read the full article at:
LIZETTE ALVAREZ. “Finland Rekindles Interest in Nuclear Power.” The New York Times (Mon., December 12, 2005): A10.
(Note: ellipses added.)