Economics of imperialism: Putin’s empire will fail

Every totalitarian power dreams of greatness. But viewed soberly, everything speaks against imperial empires. Despite its economic and political madness and bloody failure, imperialism cannot be killed. To the detriment of humanity.

Greed for size can be fatal. – «The envoys of Yermak Timofeevich bring Ivan the Terrible the news of the conquest of Siberia». Painting by Stanislav Rostvorowski, 1884.

In 1915, the second year of the First World War, the German politician Friedrich Naumann (1860 to 1919) published his pamphlet «Central Europe». In it, the co-founder of the German Democratic Party (DDP) developed his concept of “liberal imperialism”: “As long as the sun is still shining on us, we must consider joining the ranks of the first-class world economic powers. This includes the incorporation of the other Central European states and nations.»

In addition to general demands for overseas sales markets, global resource gains and increased trade volume, Naumann’s writings reveal an almost classic transfer of Darwinist concepts of power to the then popular habitat theory, says the historian Ulrike Jureit. “Central Europe” was the most widely read war target in Germany. Naumann writes that the German people are driven to expand their influence over the globe.

Illusionary grandeur

Many liberal politicians in the 19th century were national-imperial. Imperial rule is concerned with securing and expanding its sphere of influence. In his Central European vision, Naumann dreamed of creating a state structure directed against England and Russia. Namely under German supremacy and in fusion with Austria-Hungary as well as including so-called “intermediate peoples” (Poles, Czechs, Lithuanians). Their language diversity is tolerable, but Central Europe should be thought of as “essentially German”. In the medium term, everything should be included between the Rhine and a line drawn from the Baltic States via the Ukraine to Romania, including the Balkans.

Imperialism always goes hand in hand with protectionism and is in this respect the opposite of globalism, which relies on gains in prosperity through trade with open borders.

Even then, in 1915, the imperialist concept was anachronistic and the expression of an illusionary grandiose fantasy. After the defeat, only a shrunken German empire remained in the Versailles treaties. Another attempt by Hitler and the National Socialists to push through the Darwinian theory of habitat led straight to the barbaric crimes of the Second World War. And ended with the destruction of all of Europe.

But imperialism did not end there. The ideas survived the longest in the Soviet Union. Stalin had broken away from the internationalism of the early Soviet Union and transformed himself into an imperialist nationalist. The guiding principle of the Soviet economy was the idea of ​​controlling a large empire autonomously in the national interest using planned economic means. Any movement of production factors across national borders – whether of capital, goods or people – was considered harmful and should be stopped. Imperialism always goes hand in hand with protectionism and is in this respect the opposite of globalism, which relies on gains in prosperity through trade with open borders.

Immense integration costs

What is the economic logic of imperialism? Economies of scale speak in favor of larger political units: the provision of public goods becomes cheaper. A public administration, if it works efficiently, need not expand a given number of civil servants, whether it collects taxes from five or fifteen million citizens. The per capita cost of a public good decreases as the size of the state increases. A larger state can upgrade more cheaply, produce a larger army, thicker tanks, more solid border protection, also at lower prices.

If there were only economies of scale, all governments would have to develop the urge to become global empires. But the advantages of size are offset by the costs of integration. Most recently, Soviet imperialism has also collapsed. on what? The immense economic and political integration costs that have overwhelmed every great empire since the ancient emperors from Genghis Khan and Tamerlane to Brezhnev.

The larger a state, the more its inner diversity and heterogeneity increases: language, race, tradition and income remain extremely different and unequally distributed, resulting in an ever greater risk for the inner unity of a country and its emperor. Such unbearable tensions far exceed the hoped-for economies of scale of a large empire and will one day bring about its collapse.

No wonder the number of nations has almost tripled since the end of World War II – from 74 in 1946 to 193 independent states today. Responsible for this duplication is on the one hand decolonization – legacy of European imperialism – and on the other hand the collapse of the Soviet empire with its consequences (the peaceful division of Czechoslovakia and the warlike breakup of Yugoslavia). The Ukraine has also been an independent state since December 1, 1991 – and has become more and more an open society.

Blessed duplication

This multiplication of states became a blessing to mankind – and brought peace and prosperity. The widespread notion that smaller states have it harder than larger ones is completely wrong. The opposite is true: among the richest countries with the happiest people there are a striking number of small countries (Switzerland, Singapore, Estonia, Latvia). National sovereignty and economic or political alliances (EU, NATO) need not be mutually exclusive.

Vladimir Putin has always been an enemy of open society. He always dreamed of restoring the Tsarist and Soviet empires. According to Putin in 2014, the collapse of the Soviet empire meant that millions of Russians in the former Soviet republics went to sleep in their common state and woke up in the morning as an ethnic minority. The Russians, Putin continued, have since become the largest ethnic group in the world separated by borders.

He turns this trauma into the narrative of his campaigns of conquest in Georgia, in the Ukraine and who knows where. The diaspora of “organic Russians”, the result of Stalin’s deportation and resettlement policy, must be used to legitimize Putin’s new revisionist imperialism.

Rationally and with sober consideration, everything speaks against imperial empires. But imperialism, despite its economic and political madness and bloody failure, cannot be killed. This has terrible consequences for people. They lose their wealth, their freedom and often their lives.

Rainer Hank until the summer of 2018 he headed the business and finance department of the “Frankfurter Allgemeine Sonntagszeitung”. He lives as a publicist in Frankfurt am Main.

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