Monday, October 09, 2006

Russia's outlook

Russians are a dying population according to this fascinating but grim article.

Russia is rapidly losing population. Its people are succumbing to one of the world's fastest-growing AIDS epidemics, resurgent tuberculosis, rampant cardiovascular disease, alcohol and drug abuse, smoking, suicide and the lethal effects of unchecked industrial pollution.

In addition, abortions outpaced births last year by more than 100,000. An estimated 10 million Russians of reproductive age are sterile because of botched abortions or poor health. The public healthcare system is collapsing. And many parents in more prosperous urban areas say they can't afford homes large enough for the number of children they'd like to have.

6 comments:

belt said...

The free market is certainly doing its thing in Russia, isn't it?

I'm generally a free market proponent, but always question evangelical free market supporters about situations such as these.

It seems "in time" (after writing off many, many lives in the process), the market will "correct" this.

Gerrit said...

Belt,

To make the comparison one would need to know the statistics under the communist regime versus open slather policy in Russia now.

Would also be interesting to see the statistics for the breakaway republics like Estonia or Lithuania to see if it is a "Russia" problem or a free market problem.

I would not be suprised if this has been going on for a long time.

belt said...

The interesting thing about "the market" is that it is expected to start meeting demand. There's always a delay, and sometimes an uncomfortably long one which can be expensive in dollars/roubles as well as human suffering, but eventually the market does seem to to do what it needs to do.

Question remains - how long to wait? Is any intervention more costly than none at all?

amoebe said...

hm, problem with Russia (and the rest of Eastern Europe after the Cold War) is that it went from communism straight to the free market. You cannot do that with people who have never in their life had to make a decision for themselves (like it was in communism). I saw it happen in Eastern Germany - although these people were heavily aided both financially, socially and educationally, it just takes time to turn somebody from a citizen under a communist regime into somebody who can survive in a free market. It doesn't happen overnight. I guess most of Russia's problems lie in the fact that a lot of people don't know how to handle a free market and that the few who do know how to do it exploit them.

Michael said...

The Czech Republic, Slovenia, Croatia, Slovakia will all overtake NZ in terms of GDP per capita in the next decade or so - all went straight to the free market.

The Russian Problem is the same as the African Problem - Corruption.

Veganator said...

With a free-market (assuming no tax and deregulated labor & credit markets), those with capital (and manage it correctly) have their wealth grow exponentially with time. For example, 10% return on investment per annum, with the profit re-invested has the form:
capital_(y+1) = capital_(y)*1.10
Where 'y' is the current year, 'y+1' is the next year. So every year, the combined wealth is 10% more than the previous year. This is grossly simplified and assumes that the economy is growing at about 10% per annum (which it is?), and every capitalist grows his wealth at the same rate. It doesn't really matter if this is not true, since one capitalists loss is anothers gain.

For the labourers under the free-market (no government intervention), their wages are limited to what they can negotiate. There is no incentive to increase the workers wages unless they are in more demand than in the previous year (or inflation has caused a devaluation of the currency).

In a social democracy like Sweden or NZ, a progressive tax-rate causes higher tax-rates with increasing income (until the marginal rate is reached). The goal of this is to redistribute some of the wealth generated by the entrepreneurs to the less wealthy through: free or subsidised healthcare and education; pensions; and social welfare.

The problem with Russia is that the government is only collecting a small portion of the tax its supposed to collect so wealth is not redistributed to the poor. The tax-evaders tend to be the capital owners so their wealth is growing exponentially (Moscow has more billionares than any other city) while the majority are experiencing no growth. Without an increase in the skills of workers, or a shortage in labor, supply and demand for the labor remains roughly constant.

DISCLAIMER: This is a gross oversimplification by someone without any formal economics background. Please don't flame me (unless you want to), point out my mistakes instead :)