THE DEMOGRAPHIC CRISIS IN RUSSIA AND UKRAINE
Demographers and economists have long known that one indication of the economic and social health of a country or region is whether the population is growing or declining. Russia has been slowly losing population since 1994, but the rate of loss has been accelerating for the last couple of years, in part due to the war in Ukraine. The situation in Ukraine, however, is much worse. It is now estimated that perhaps 10% of Ukraine’s population has left in the last two years alone, on top of steady population loss since 1992.
Many military-age men in both countries have fled in order to avoid being drafted into the war. Ukraine was already at the bottom of the Eastern and Central European income scale, so the war merely provided one more nudge for those who were already considering leaving. Ukraine has been reluctant to mobilize a sufficient number of military-age men who are capable of serving, and the situation will only get worse. NATO members and other countries may well continue to give aid in the form of weapons and other materiel support to Ukraine, but there is virtually no appetite among them to put boots on the ground. Ukraine can continue to play defense with a smaller number of troops than the Russians, but it becomes more unlikely that they can wage a major offensive operation, particularly with the West rationing and delaying weapons delivery and aid, which is encouraging Russia to continue its aggression.
The Russians have increasingly militarized their economy, including switching factories that were producing civilian goods to military production. If a majority of citizens are behind a war, then they will put up with shortages of goods and services for a period of time. But after a couple of years, support usually begins to wane.
The British people got fed up with the cost of trying to suppress the rebellious American colonists and pressured members of Parliament and even the king to cut their losses — which they did after the loss at the Battle of Yorktown. The French got tired of the never-ending war in Indochina in the 1960s and were happy to dump it into the lap of the Americans, who after a decade also got tired of the effort. A generation later, American politicians had to relearn the lesson as the people got tired of the long war in Afghanistan — as the Russians had done earlier. Vladimir Putin would be wise to heed these lessons of history and recognize that although he may wield great power at the moment, the Russian people will demand at some point that he, too, get out of Ukraine.
Mr. Putin is betting that he can outlast Ukrainians and their NATO allies — and he may win the bet since President Biden has made it much easier for him. Russia is an oil exporter, and the higher the price of oil, the more money Mr. Putin has to buy what is necessary to win the war. By waging a “war on fossil fuels,” Mr. Biden has accomplished little in curbing their use, but has driven up the price of oil to the great benefit of Mr. Putin. The losers have been lower-income people and those with fewer options around the world.
It is unlikely that Mr. Biden’s buddy John Kerry, the very rich former secretary of state and professional climate change whiner, has reduced his use of gasoline or jet fuel by even a gallon. The Biden-Kerry energy policy comes down to the fact that an American construction worker who must drive his truck a considerable distance each day is being forced to finance Mr. Putin’s war against the Ukrainian people through higher fuel prices.
Until the Glorious Revolution of 1688, Britain was a relatively poor country, but then it opened itself to the world and established and defended the rule of law. Investors and entrepreneurs of the world took notice and flocked not only to the mother country of England but also to its colonies, where English law, customs, and financial systems took hold. By the mid-1800s, the little island of Britain had become the dominant nation of the world. But within half a century, one of its spinoffs, the United States, had a far larger gross domestic product and per-capita income.
The Glorious Revolution reduced the power of the king and central government by giving more citizens a say through a real Parliament. A couple of decades later, Peter the Great decided to continue turning Russia into a great power through an authoritarian top-down model. This model has been used by communist and communist leaders in the 300 years since Peter the Great and failed in each case.
The American Founders made the people, rather than rulers, supreme by using a decentralized, bottom-up governance model. In 1800, Russia (including much of Ukraine) had a population seven times that of the U.S. Now, the U.S. has a growing population that is almost double that of Russia and Ukraine combined and an average income about five times as high. Russia is no longer a population or economic giant among nations, and each year, its relative importance diminishes.
• Richard W. Rahn is chairman of the Institute for Global Economic Growth and MCon LLC.
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