This is a guest author post by Den Kalmyk – PhD, expert in economics. He was a Senior Lecturer at Yale University and Oxford University.
Economics bring an element of practicality to all political systems. To paraphrase Tolstoy, successful systems are alike while each unsuccessful system is unsuccessful in its own way. Let us dwell on the economic basis of political systems encouraged by Vladimir Putin and Donald Trump. In the field of public administration, the economic principles of a former intelligence officer and a successful entrepreneur seem identical. So what is the similarity between Trumponomics and the economic model of Putinism?
Make [Insert Country Here] Great Again
First of all, both leaders understand that a strong economy is the foundation of independence and success in the political sphere. Putin, who is positioned as a ruler that stopped the flywheel of Russia’s collapse in the late 90s, is very well aware that a developed economic system is the key to ensuring his country’s sovereignty and national interests. After the end of the Cold War, Russia lost one-fifth of its territory, a significant share of its economic potential. On the world political arena, it was surrounded by states that significantly surpassed it in various economic parameters. Proceeding from this, President Putin’s domestic and foreign policy lines were mainly aimed at returning to Russia the status of great power and preventing it from rolling back into the lower echelons of the states. In fact, such a course is tacitly embodied in the axiom “Russia is above all,” which is the conceptual stronghold of Putin’s economic model.
This is consonant with Trump’s declared principle of shaping U.S. domestic and foreign policy – “America is above all.” In modern history, the U.S. has not faced an existential crisis where the very fact of the state’s existence would be at stake. On the contrary, for a long period of time after the USSR’s collapse, America was unconditionally recognized as a formal and informal leader in international politics. Nevertheless, President Trump is building his activities in accordance with the concept of returning America to its former glory. And naturally, there appears a parallel between Russia that “rises from its knees” under Putin and America that becomes great again under Trump.
Anyway, both formulas require appropriate financial and economic justification. It is quite difficult for ordinary citizens to feel their countries’ power if they do not observe the attributes of economic success in everyday life: high economic growth rates, real wage growth, financial well-being of the population, rapid growth rates of labor productivity, new technologies, competitive industries, and so on.
Given all the myriad problems, including the Russian economy’s dependence on energy prices, it is necessary to admit that for all its centuries-old history, the population of Russia has not lived better than during the rule of Putin. Stable wellbeing of Russian citizens is one of the main goals of Putinism. The population’s real incomes growth has been provided with varying intensity throughout his stay in power. The most dynamic real incomes increased from 2000 to 2008 and from 2012 to 2014. Russia’s GDP growth in 2018 was 2%. The country’s total external debt is one of the lowest in the world. Thus, experts talk about a stable economic situation while Putin gains political points, comparing Russia’s economy before and during his rule.
Meantime, the U.S. economy under Donald Trump shows significant growth. Implementing tax reform now makes it possible to stimulate business development and help increase job numbers. Last May, the unemployment rate fell to a record level (3.8%) in the last 18 years. In the second quarter of 2018, GDP growth accelerated to 4.2% in annual terms. Besides that, the U.S. stock markets are getting stronger. Therefore, it is possible to announce the unprecedented growth of economic indicators during Trump’s presidency if compared with previous figures.
Russia and America: Not So Different After All
In fact, Putin and Trump agree on many aspects of conceptual justification of economic policy. They are also similar in something bigger. Both of them are subjected to harsh criticism, in their countries and beyond. Both comprehend that politics is not a charity shop but a battlefield of fierce competition of multidirectional interests. Both are doing everything to ensure the independent foreign policy of their states.
Such similarity should ideally open a wide corridor of opportunities for interstate relations. However, for effective cooperation between Russia and America, it is necessary to stop perceiving their interaction from the zero-sum game angle. It is important to accept that Putin’s “Russia is above all” model and Trump’s “America First” model are not mutually excluding patterns. On the contrary, it is the protectionist approaches of these leaders that are significant tools in saving national economies, which were terribly damaged during the global liberal experiment of the last thirty years. From the standpoint of economic approaches to world politics, Trumpism and Putinism speak with one voice, even if this is not said openly.
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