This post expands on a comment I made a week ago at Isegoria's, about the Russian system as reconstructed by Putin. I said that Putin has consolidated his control of Russia to such an extent that he need not bother anymore about political opponents. Last year, he permitted Navalny to run for mayor in Moscow because there was no danger of his winning. He can tolerate the existence of journalists such as Latynina, because their audience is very narrow and unimportant in the Russian scheme of things. No real opposition is permitted on air TV, and now cable TV operators got the idea and took the last opposition channel off their distribution lists. Putin didn't even have to order it, it could have just happened because the cable operators don't want any trouble.
All nice and dandy, so where's the catch? Some NRs prefer to think there is no catch, that Putin is the best leader Russia had for a century, and that under his gentle rod Russia has been rising off its knees on a cushion of hydrocarbons. However, I think this is an illusion, and Sochi games provide a very nice illustration to this. Consider first that the Sochi Olympics were nothing if not a huge prestige project for Russia and (more importantly) for Putin personally. He wanted to show off the new, risen Russia, prosperous and respected by foreign nations, both to those foreign nations and to his own people. Obama's and Merkel's decision not to attend the opening ceremony must have hurt plenty. Anyway, there is no way Putin would have wanted to look bad in the eyes of the foreign media (his own media, of course, being no problem). Otherwise what would have been the point of rounding up stray dogs, hiring volunteers etc. Naturally, he could not yield on the gay question, because that would have been seen as weak, but he could count on the West swallowing this with minimal protest, like the ridiculous rainbow Google doodle. But my point is that he would have avoided any potential problems if he could.
And problems there were. Even ignoring the Olympic ring malfunction (which was covered up on Russian 'live' TV by splicing in a rehearsal video), what can any reasonable person make of the Sochi toilets? Of the not-quite-completed media and sports hotels? Of construction garbage hidden by untidy fences and fresh pavement already crumbling due to the patented post-Soviet technology of putting asphalt on raw ground? I ask, is this the Olympic Games of an effective ruler?I mean, who and how can install a fucking squat toilet upside down?
Obviously, this is a big bucket of fail. Putin could not manage his cronies and contractors enough to ensure that Olympic roads and hotels are constructed on schedule and up to snuff. Putin has consolidated his control of Russia, but he did it by constructing (or rather reconstructing) a system of governance which is useless for anything except extraction of revenue. If it does anything productive or generally useful, it is to keep up appearances or by oversight. It turns all projects and initiatives into villas in UAE, Lamborghinis and Swiss bank accounts like a pig turns everything into turds.
This example shows that, contra Moldbug, mere financial incentives are not enough for effective governance. Putin and his people have financial incentives all right, they use them plenty; capital outflow is measured in tens of billions of dollars per year. Would the revenues be bigger if the country was well-governed? You bet they would. But he doesn't do it. Something stands in the way. And that something is himself and his people, and in a more diffuse way, many of the Russians themselves — Putin and his people aren't foreign or alien. In econo-speak, since the marginal utility of wealth slopes downward, at a certain point other considerations take over. And these considerations are, I think, fairly simple: the bummers know they cannot rule a well-governed Russia.