If you are new to these essays, welcome! My name is Paul. I am a writer. I wrote the book Raising a Thief about being a parent. You may have seen my writing in The Wall Street Journal. More about me here. For many years I was at Bridgewater Associates, an investment firm. I believe that while the world is complex, it can be understood. Looking at it through a money lens helps, as does hearing personal stories. Feedback: paul@paulpodolsky.com. I read every note and learn from them all.
In the fall of 1991, I landed in St. Petersburg for what would turn out to be a three-year stint living in Russia. As we taxied to the terminal, I looked out the window. A worker was cutting the grass …with a scythe. In Russia, the ancient permeates the day-to-day.
The simplest way of viewing the battle in Ukraine is as a fight between modernity and the archaic, as this week’s podcast guest Dmitry Bykov noted. You can hear the entire conversation here. Bykov may not be familiar to many of you, and he speaks English with a modest accent, but he is celebrity inside Russia.
Bykov has published 85 books including novels, poems, criticism and biography. Putin tried to poison him in 2019. The Kremlin labels him as a foreign agent, which means they don’t like what he says. His observation about Putin’s war with modernity is profound and has explanatory power well beyond Russia.
To be sure, the archaic lives on in all societies, but the degree matters. In the US, later this month we celebrate Halloween. It’s a touch of the pre-modern world, skeletons on lawns anticipate trees barren of leaves. Similarly, in the UK, there is a King. But in both cases the ancient is ceremonial.
In Russia (and places like Iran, Saudi, China, North Korea and others) the ancient is administrative. In each place there is a “Leader” who runs the show and penalties, ranging from the dungeon to death, for dissent. A rules based order brings about changes that are fatal to rigidly traditional societies, like term limits and civil liberties. “Putin doesn’t understand he is surrounded by the future and he says he is surrounded by NATO,” said Bykov.
Russia is a supreme leader, propaganda and land grabs. All three are terrible for growing wealth. Ukraine is striving to join the European Union, a rules based order, and define its borders by international treaty rather than force.
While the archaic feels dated to anyone reared in modernity, shifting from one mode of social cohesion to another is delicate and often dangerous. That’s perhaps why England has only ever so slowly relegated the role of monarch to the gossip pages. A more abrupt change might unleash violence, as it has in China, Cambodia and, further back, France and the US.
Russia’s own transition was extreme but representative. In the mid-19th century, Russia was roughly 1/3 slaves (serfs), was just about (1853) to connect its first international railway and was ruled by a Czar. In many respects, Russia’s administration had not shifted in hundreds of years. The Czars resisted change such that those trying to modernize Russia pursued more and more radical and violent solutions, ultimately culminating in revolution (1917), murdering the Czar and his family and Stalin. The transition is still incomplete.
By the way, I think this clash of the archaic and modern explains Putin’s obsession with transgender people. “Do we really want ... it drilled into children in our schools ... that there are supposedly genders besides women and men, and [children to be] offered the chance to undergo sex change operations?,” he said recently. About 1.4% of the US population identifies as transgender.1 If modernity is about disruptive change, what more convenient symbol of its alleged dangers than the topic of (to many) unfamiliar gender roles?
This tension between modern and ancient is a dominant feature of our world. After the collapse of the Soviet Union, autocrats the world over got the message—if you could not generate wealth, you were doomed. Soviet subjects closer to the West, like Bulgaria, had nicer sneakers and underwear and news of this relative advantage leaked to Soviet interior. That was enough to lead to the collapse. But the modern economy forces modern administrative techniques, the same way the assembly lines forced horse bridle makers to shift their practice.
The current wave of modern is largely about new ways of using information, which is particularly threatening to traditional structures. Thus, China’s informational fire wall and Putin shutting down social networks. But it is leaky. Telegram works great in Russia and offers those who want it an alternative perspective. Bykov predicts that Putinism will collapse, soon, which is, to be sure, way out of consensus.
Russia is fascinating because it is different, out of sync with the West. But those differences can also be lethal, as it has been for so many in Ukraine. This uniqueness may also be what makes the writers so magical. They are both of the Western tradition, but outside enough of its ordered reality that they see things a bit more vibrantly, be it Chekhov or Bykov.
I felt honored to talk to Dmitry and I appreciate so much the opportunity to share our conversation with you. Watching the Russians lose more and more badly, I can’t help wondering how this ends. So I’ll ask you and discuss next week.
Investment Implications
This is NOT investment advice. You get to see what I do as I do it, for you to take or leave.
Big picture: we had a pandemic.
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