In the interest of being completely fair to Dyson, I'm not sure anyone could have fully predicted just how bad of a regime Putin's would be. That said it seems like a long shot just the same.
Exactly... the political and economic institutions of Russia have not progressed and have likely regressed in the last 10 years. Who led Russia in 2002? Putin. Who is leading Russia in 2011/12? Still Putin and United Russia. The Litvinenko killing and Khodorkovsky imprisonment are chilling indictments of this regression. Also the run up of energy and commodity prices has only increased the allure and hold of the Dutch disease in Russia.
True, but the article the other day on Norway said that they squandered the oil up until the 1970s? when they brought in a foreigner to advise them on how to set up their current successful system. The law and order helped them recover from their mistakes, yes, but it didn't stop them from making them and if the oil had run out before they recovered...?
So ... finance definitely has a rent-seeking component, having reviewed some of the literature.
But it also has the effect of starving other fields of talent and technical expertise, of bidding up their costs, and related effects which are more similar to Dutch Disease / Resource Curse. The number of physics, maths, and engineering grads working at banks / financial institutions rather than at science / product R&D firms, for example, is pretty staggering.
Still mulling, but thanks for the food for thought.
> Particularly if those financial services are extractive in nature?
Could you elaborate on that sentence? What do you mean by "extractive"? In the context of natural resources, I take that word to imply that the resource is depleted (e.g. non-renewable). Do you have a difference sense in mind?
"Rent seeking" would be a good description of what I had in mind, take a look at the Wikipedia article I mentioned.
Some financial activities -- traditional financing of productive economic activity with real returns -- actually generates productive financial and economic activity. Other forms of finance -- essentially create liquidity based on existing assets, but don't actually turn that liquidity into something productive. Say, roughly, a HELOC. Or they simply squeeze payments out of population that's poorly equipped to refuse them: fees, fines, and penalties added to many financial and services contracts.
I'd argue that both of the latter are "extractive" in that rather than promoting economic activity, they serve to convert some illiquid asset class (or population) into a currency pump for the benefit of the financier.
I don't know if computerized trading falls into this model but I'm inclined to think it does, and would very much favor a transactions tax to put limits on this sort of activity. I suspect the bigger problem is that these systems are poorly understood and have very large downside potential through inadvertent (or deliberate) feedback loops. Think Flash Crash.
I wondered what he meant by "extractive" financial services, too.
>In the context of natural resources, I take that word to imply that the resource is depleted (e.g. non-renewable).
Is incorrect. Lumbering and agriculture are extractive industries but not "non-renewable". All primary production of resources are "extractive" industries.
Political change must go hand in hand with cultural change. It is easy to blame a democratically elected leader, yet quite difficult to identify the underlying problems of those who elected that leader to power.
Russia is decades ahead of other countries, but they have a long path ahead of them. A good start would be teaching English in elementary school.
I have not met any Russians who were proficient in English, that learned it locally in school. I have met Russians who were fairly good with English that learned it after living in the US for a while.
Compare that to, for example, someone from the Philippines who will be proficient enough in English that you think they are an American.
Not arguin against you, but I think your example was a pretty poor one: The Philippines was basically owned and ran by the US for a hundred years. So when discussing English skills, it is not a good example of a "regular other country".
I never said the Philippines was a "regular other country", thus why is this in quotes?
In my own personal business, I estimate without native English proficiency my employees would be worth 1/5th or less of what they are to me now. I would have to hire an bilingual manager to run projects, and that person would have to be paid a lot. My turnover would be higher and the accuracy of instructions would be diminished, thus resulting in slower project execution times.
Irregardless of the non-ideal situations of the past, current citizens with English proficiency benefit enormously -- in the form of money.
Being proficient in English is a really big deal. As an American child I was told over and over again that it was important to learn a foreign language to increase my ability to get a job. As an adult, I found the opposite, that English above all other languages was critical in running a successful international business.
You used the Philippines as a counter-example to Russians not having very good skills in English. I think the example was badly chosen: Like if you choose to compare them to Canada or United Kingdom. Of course there are countries where people have better skills in English than in Russia. But I think comparison with one of these extreme examples misses the point -- you should compare Russia to other countries that are competing for being "the world leader in software development".
I do think however that we are discussing about a bit different things though, as I didn't understand how your reply had anything to do with my message -- except for the double quote part.