Dead Man On the Side of the Road

Somebody shot Boris Nemtsov to death late last Friday evening as he was walking along a street in downtown Moscow with his girlfriend. The couple were making their way toward his apartment near the Kremlin when an unknown assailant ran up from behind and emptied a pistol into Nemtsov before fleeing in a car. The girlfriend, Ukrainian model Anna Duritskaya was unhurt.

According to her account, she was waiting for Mr. Nemtsov since 10 pm at the Bosco-café of the GUM shopping mall at the Red Square right across the Kremlin.

The couple had dinner at around 11 pm Moscow time and then left the mall and went for a walk toward Vasilievsky embankment right by the Kremlin walls. Their intended destination was the posh building half a mile away from the Kremlin where the murdered politician had an apartment.

As they were crossing the Bolshoi Moskvoretsky Bridge, an unidentified man ran out of the underpass of the bridge and shot Mr. Nemtsov multiple times. Then he jumped into the passing white car without a license plate.

Mr. Nemtsov died on the scene.

Nemtsov was deputy Prime Minister in the Yeltsin government, an implementer along with Yegor Gaidar and Anatoly Chubais of the Washington Consensus, ‘shock therapy’ and market reforms of the Soviet economy. At the time, the charismatic minister was briefly considered as a potential alternative to Vladimir Putin. He most recently opposed the Russian invasion of Ukraine. Nemtsov killing is the latest in a long line of unsolved politically related murders in Russia that have punctuated the Putin regime.

Part of the mystery is how such a lurid crime could take place in one of the most tightly guarded areas in the World, under constant surveillance with hundreds of security officers nearby. The easy answer is that the officers themselves, acting covertly under orders, were responsible. Nemtsov clearly felt comfortable walking in plain view without escorts or entourage; he expected to be followed closely and under constant scrutiny by agents of the FSB. Nobody knows anything for certain, no group has come forward to claim responsibility.

Because the majority of ordinary Russians support are distracted by both Putin and Russian territorial expansion it is hard to imagine Nemtsov as anything other than an sideshow/irritant. Gunning down celebrity activists risks making martyrs out of them; this is reason for governments to be cautious. Yet, none of the Kremlin’s alleged crimes to date have triggered a backlash: like Nemtsov before his final stroll, the government — if indeed it was directly involved — appears to feel secure in its actions.

Nemtsov’s death is a component of the onrunning collapse of the Soviet Union.

Many of the places that are suffering unrest and war were components of- or client states of the USSR during its heyday: Libya (client), Egypt (a Soviet client before becoming an American client), Somalia (client), Eritrea (client), Afghanistan (client) Yemen (client), Syria (long-term client), Iraq (client); Armenia, Azerbaijan, Chechnya, Georgia, Ukraine, Dagestan, Nagorno-Karabakh (all components of USSR); also Vietnam, Laos, Angola and North Korea (all Soviet clients but wars have ended in these countries) … also Russia itself. Seen from a long-term perspective, the end of the Soviet Union government turns out not to be the bloodless event as was advertised, the rotting empire still has some collapse left in it.

One of the duties of the Economic Undertow is to turn conventional historic narratives on their heads, to where they begin make sense. What Americans have been fed about the demise of the Soviet Union is a self-serving, political/ideological fairy tale: that the United States under the direction of Ronald Reagan’s brilliant conservative leadership outspent the USSR in an arms race that eventually — along with collapsing oil prices caused by new oil on the markets from Prudhoe Bay and the North Sea — bankrupted the Communist government. Once the economic and ideological fault lines were revealed, the various client/satellite states that made up the Soviet empire peaceably went their own way without interference from Moscow. All of this ‘revealing’ and ‘peaceable-ness’ took place over a remarkably short period of time in the early 1990s: here today, gone the next.

The more realistic narrative has Soviet intelligence agencies — perhaps collaborating with those of the West along with Western interests (banks) — gaining control over Russian assets, shifting them to well-connected insiders, with the decrepit- and ossified Communist government powerless to do anything about it. This process began before- or during the Brezhnev period with matters well underway by the time of Gorbachev … Perestroika being a (feeble) attempt on the part of the Communist establishment to regain both credibility and some measure of control. What happened in Russia was not reform and the end of communism was an accident: what actually took place was the greatest crime of the modern era, the theft of an empire by the country’s intelligence services and criminal associates.

This outcome was a natural consequence of the Soviet Union as a regimented national security state with outsized spy agencies … as well as the slow commercial opening with the West beginning during the Khrushchev era. Within the immense ganglia of the Soviet intelligence- and internal security apparatus there was a kind of singularity or dawning self-awareness … the managers grasped in an instant they had access to the levers of control outside the reach of the Party, the Politburo and the Red Army. The rise of the agencies’ power was a consequence of Stalin’s paranoia; the Stalinist Russia was built on a foundation of intrusive spying and control/liquidation of potential internal enemies. Stalin held the agencies in check by way of periodic purges, no group of operatives could become too comfortable or entrenched, they had to constantly look over their own shoulders. Once ‘Uncle Joe’ was gone there were no further checks on spy agency power, they could act with impunity and did: what occurred was a silent coup d’etat with the KGB state first emerging publicly under Yuri Andropov. Once the looting and undermining was well-established in the center it spread out and took hold among the clients with consequences that can be seen clearly today.

At the same time, contact with the West, as tentative as it was, informed the Russian intelligence elite what was possible … that the Western standards for wealth and success were both qualitatively- and qualitatively superior to what was available under egalitarian communism. In 1975, to be wealthy and successful as a Swiss or Londoner far exceeded what was possible in Leningrad or Kiev.

Under this scenario, ‘Nemtsov the reformer’ was either a co-conspirator — or, more likely a tool of intelligence services and/or Western business interests; an operative within the looting scheme along with Gaidar, Chubais and others. Instead of being the heir to Stalin’s strongman legacy, Putin recedes to become the technocratic figurehead who serves to distract public attention as the Russian Mario Monti or Antonis Samaras … meanwhile, the stealing takes place in the background. The context for the Nemtsov hit becomes much murkier with a wider range of potential adversaries, not necessarily Putin but unknown ‘others’ deep within intelligence nebulae … and for possibly more prosaic reasons such as an unpaid debt. It is also likely that the Ukrainian ‘model’ had something to do with Nemtsov’s death as well; perhaps she was bait, leading him by the hand to a carefully mapped kill zone.

No doubt Nemtsov had more to do with running Russia into the ground than Western media lets on, his Yeltsin- era associates have bona-fides that raise questions:

From 1998 to 2008, he (Chubais) headed the state-owned electrical power monopoly RAO UES. A 2004 survey conducted by PricewaterhouseCoopers and the Financial Times named him the world’s 54th most respected business leader. Currently, he is the head of the Russian Nanotechnology Corporation RUSNANO. He has been a member of the Advisory Council for JPMorgan Chase since September 2008 and a member of the global board of advisers at the Council on Foreign Relations since October 2012.

Honore de Balzac famously remarked, “Behind every great fortune is a great crime;” hovering near the crimes is the criminal banker. Readers can come to their own conclusions about Chubais; regarding Gaidar, (Pravda – 2006):

Litvinenko’s death, Gaidar’s poisoning and Politkovskaya’s murder may have the same roots

Doctors in Moscow said yesterday that the former Russian prime minister, Yegor Gaidar, had been poisoned with an unidentified toxic substance on a recent visit to Ireland , adding a new twist to the Alexander Litvinenko affair.

Mr Gaidar, an economist and one of the “young reformers” responsible for privatising Russia in the early 1990s, lost consciousness and was rushed to hospital last Friday during a conference near Dublin. Last night his daughter said she believed it was “a political poisoning”. Doctors saw “no other grounds” for his sudden illness, she told the BBC’s News 24.

Gaidar died in Moscow in 2009 of coronary artery disease. He was 53; while it is not unheard of for a person to die of heart trouble at a relatively young age, the circumstances of his death … like Chubais’ relationship with JP Morgan-Chase … is suggestive.

Regarding public perception of Nemtsov within Russia, (National Interest):

In a 2011 survey of twenty-three Russian political experts, a lack of fresh faces, ideas, or practical programs aimed at helping ordinary citizens were cited as the primary reasons for the perennial failure of Russian liberalism. Along with Anatoly Chubais and Egor Gaidar, Nemtsov was named as one of those most directly responsible for discrediting liberal discourse in Russia, Unlike Chubais and Gaidar, however, Nemtsov was not regarded as being an intellectual driving force for liberalism, but rather a pure politician. For a person of such staunch principles, it must of been particularly galling to be regarded as a mere politician.

Perhaps less galling than being regarded as a spy … a stalking horse for uncertain international business interests.

The new, improved narrative fits into the theory of, ‘Zero Government’, which postulates a transition from a functioning government to technocracy as the means to loot national assets. Technocracy is the last step before default/repudiation of non-payable debts. After technocracy comes the void: ‘zero-government'; the capitulation of the establishment, its dissolution into factions and chaos. This is part of post-petroleum transition, the breakdown of the status quo. The process runs like this:

Government => Technocracy => Zero Government

The process is easy to remember for even simple- minded business tycoons and their agents, also easy enough to set into motion particularly when the thermodynamic headwinds are blowing in the world’s face.

In Russia, the Soviets made up the last, functioning government, what followed was the relatively long technocracy that was born as Perestroika and ‘Shock Therapy’ that continues under Putin. The ordinary citizens’ collective wealth was swindled away- or hyperinflated into worthlessness. Entire industries and resources were stolen- or handed off to well-positioned opportunists. Russia itself is a gigantic country with massive resources, it has taken a lot of time to steal it all, the thefts are ongoing. To fill the vacuum left by the vanished wealth there is bread and circuses: demonstrations of Russian ‘power’ and evanescent ‘personal mobility’. What comes next is economic and political breakdown — already underway — then dissipation when there is nothing left to steal = zero government.

The zero-government dynamic is not necessarily political, rather it is a component of decline in energy throughput. Governments and ideological ‘operating systems’ are nothing more than mechanisms to allocate- and manage the costs associated with energy surpluses; as the costs multiply the ideologies are stranded. Conventional wasting regimes are unable to adapt to straitened conditions where waste cannot be easily financed: zero-government is a manifestation of ‘Conservation by Other Means ™’.

Triangle of Doom 030315

Figure 1: Oil industry has become a dead man on the side of the road: WTI forward continuous contract by TFC Charts (click on for big). As Russian bosses steal everything the citizens are bankrupted => the price of crude declines. At the same time, the ability of the Kremlin to function properly unravels; citizens are murdered a few feet away from Red Square even as war rages in Ukraine next-door. The marginal oil consumer turns out be as likely a Russian as a Japanese. Under the circumstances, with increase of marginal deadbeats worldwide, it is hard to see oil prices ever increasing, certainly not to the level that would allow extraction of expensive unconventional fuels.

We can see what zero-government looks like because some of the ex-Soviet clients have already crossed the River Styx into oblivion: Syria, Iraq, Ukraine and Libya. In these countries effective government is a myth, the countries themselves are ruins. In Syria, hundreds of different militias operate without rhyme or reason, some claim regions within the country such as Rojava Kurds or Islamic State; others control a neighborhood or a few blocks in a city … or they control nothing at all! Syria has descended to bellum omnium contra omnes, Hobbes’ war of all against all. At this point, whether Syria has resources or not is particularly relevant because there are no means or opportunity to extract them.

The militaries of a dozen Western- and allied nations operate with impunity within Syria’s territory without any legal basis, declaration of war, absent any aggression on the part of Syria in complete disregard of the country’s (non-existent) sovereignty. It is the concept of sovereignty itself that is disintegrating right under everyone’s nose; even putative states offer non-state alternatives to conventional nationality. Syria’s armed trespassers include Iran, Jordan, Israel, UAE, Qatar, UK, US, France, Hezbollah/Lebanon; last week, Turkey. Bashar al-Assad is ‘leader’ in name only, and that in only within a relatively small part of the country. Even if he were to somehow magically make the militias vanish overnight he would not be able to govern. Syria has been so reduced by violence and natural disaster that it has become unmanageable. Assad is damaged goods, anyway … credibility he might have at one time possessed has been destroyed along with the cities his air force has flattened with barrel bombs.

The tragedy that has overtaken Syria … that has rendered millions of its citizens into refugees … has many more years to run according to those who are in the best position to know.

There is little difference in Iraq where the south of the country has become a de-facto province of Iran, where the Baghdad government is made up of Iranian spies … all of this taking place with the acquiescence/participation the United States, nominally Iran’s adversary. The tapeworm process that was perfected in the Soviet Union has been applied without mercy to the Iraqis … with dire consequences. One only needs to examine both countries together to see the process play out. Unlike Russia, theft in Iraq has been accompanied with wanton, high-tech devastation. The country has been bombed and rocketed flat, then lavished with artillery with over a million deaths. Roaming across the north-western and central parts of the country is an alphabet soup of militant groups bent on outdoing each other in corruption and barbarity. Like Syria, Iraq has become a free-for-all Western militaries and their regional allies all acting without restraint … except those imposed by their own onrushing bankruptcy.

Ukraine has been looted by a succession of corrupt post-Soviet governments, what remains is to fight over the scraps. The country is fast becoming a Syria on Europe’s doorstep, a theater of operation for countless militant battalions fighting each other for ‘gains’ that evaporate as soon as they are obtained. Ukraine, like the other countries — and Libya too — has resources, but ‘zero-government’ leaves these in the ground … this is what conservation by other means ™ amounts to.

When the wars finally die out due to exhaustion of combatants, these countries will become sparsely inhabited wastelands. Without economic growth/business expansion, without the increased flows of energy, without decrease of energy efficiency that drives all business expansion, there are no means to recover after wars- or other disasters. Managers either understand the implications completely and are too corrupt to care … or they refuse to understand because the implications are too frightening.

The zero-government world that we are now entering into is not at all like the one that the human race has occupied for the past five-hundred and fifty odd years, there is no more growth to it. For Syria or others to rebuild some prosperous countries such as France or Canada — or China — must fall into ruin; for anyone to gain others must lose. If this is not serious business then such a thing does not exist.

Zero-government is literally what it says it is; a one way state of existence whereby a country is rendered into an administrative vacuum that convention cannot occupy. The rot of technocracy leading to zero-government is plainly evident not only in Russia but in the West as well: the American and European governments are riddled with corruption and self-dealing, irrelevance and denial. Ballooning intelligence services and ‘internal security’ agencies gain ascendency/tighten their grip. What saves the West so far is that its property is already mostly owned by the thieves; they can only steal from each other. Issues are disregarded or waved away; there are no more statesmen only advertising managers and shallow demagogues offering blatant lies/crowd-pleasing distractions. Meanwhile, in the background a thermodynamic process that cannot be negotiated with is steadily and relentlessly underway …