Avocado Economy: Why Russia can't produce anything

March 9, 2022 thread

Let's discuss Russian economy. Many underestimate its dependency upon technological import. Russia's so deeply integrated into Western technological chains that severing these ties will lead to its collapse. Sanctions are already effective and can be made more efficient🧵

Some argue "Russia doesn't produce anything". Not quite. Although industrial goods plas little role in its export, it produces a lot for internal market. This is a 1ГПКС mining machine produced by a Копейский машзавод - monopolist on mining machines for potassium and coal mines

Owner of this factory isn't a mafia boss. He's an engineer who worked for 20 years designing mining machines, has 41 patents, etc. BUT. What equipment do they use to produce these machines? An industrial machine MORI SEIKI VL-553 II - made by a German branch of a Japanese company

This shows how deeply Russia is integrated into the Western technological chains. What Russia produces is produced on Western industrial machines, with Western technologies, Western software and with Western details. That ofc includes military industry which uses this all, too

Of course, authorities are pressuring the manufacturers to align with the “import substitution” policy. However, the import-substitution (импортзамещение) is 95% PR. Producers and mid-ranked officials pretend to do "import-substitution" because Putin tells so. For this fake work they get real awards

Consider Svetlana Orlova, governor of Vladimir. In 2017 she presented new tractor designed and produced by a local factory under her wise leadership. A CEO wouldn't shut up about how much she inspired them all and guided to this great accomplishment in import substitution

"Our governor can guide, can inspire, can command. Several of our main branches of production are organised by her direct orders. One of her last commands is to make our own tractor. It is a huge work of scientists, engineers technicians for the last two years" said CEO Lebedev

President Putin ordered to launch import-substitution. Governor Orlova obeyed and commanded a local factory to create a Russian tractor. CEO obeyed and engineers designed a new amazing machine АНТ 4135F. That's how Russian vertical of power works

And yet, Russian tractor АНТ 4135F isn't Russian. It's a Czech tractor Zetor Forterra 135. I wanna clarify, it is not a copy of a Czech tractor. It literally *is* a Czech tractor. Russian plant buys tractor kits in Czech Republic, assembles them and pretends they're home produced

Here you see governor Orlova in Brno, Czech Republic. What is she doing there? Well, she's buying kits for her home-produced tractors. In 2017 she bough 100 kits from Zetor Tractor company, in 2018 - 450. That's how she's import-substituting. Putin must be proud

Of course, it was all investigated. Of course, dishonest CEO of Russian factory was arrested. Fortunately, they found out that the governor was innocent & didn't know about CEO's shady schemes. So she continued her hard work developing a new home-produced tractor - Vladimirets

Fortunately her patriotism and hard work were well-noticed by Putin and he promoted her. Now she's an Auditor of the Accounts Chamber of the Russian Federation. She'll be checking the transparency of other branches of government and make sure they use government funds efficiently

That's how social mobility works in Russia. Bullshiters are actively promoted. Just pretend to work on import substitution, share stolen cash with influential people, and go up. Now *you* check financial transparency and prevent corruption. Your henchmen go to jail but who cares

Now you can ask. Russians are good in sciences and very good in math. Russian engineers were doing great in Soviet era & are successful abroad. How come Russia can't produce anything competitive on the world market? Apparently it's not a technical skill that is a limiting factor

Let's return to avocados, they give an answer to this question. Have you ever heard of blood avocados? They're called "blood" because almost all avocado production in Mexico is controlled by cartels. Thus when buying Mexican avocados you are directly funding the organised crime

Many misunderstand what "cartels" look like. They imagine ragged hobos with machetes. Nope. Cartels look like this. These are fighters of Jalisco cartel who are cheering the name of their gang boss - El Mencho. They look like an army. Because they are

Mancur Olson conceptualised state as a gang. On its early stages it's a roving bandit: criminal group that kills, burns and pillages not caring of negative externalias. But when it settles down, it becomes a less destructive stationary bandit. That paves a way for civilisation

Many consider Olson's theory as merely an analytical tool. I disagree. It seems that many empires, like Romans or Ottomans in their very beginnings were quite literally bandit gangs. That's why we have so few records from their beginnings. They didn't care about records back them

Well, in this context it seems that a cartel like Jalisco is a protostate. In fact, it has many state attributes and might not be so different from medieval "states" which we retrospectively glorify. That's understandable. But why avocados? Why not chairs, not smartphone apps?