Wednesday, October 29, 2014

On Putin, and Words, and Externalities

So Putin's former economic advisor spoke at W&L  about the Russian- Ukrainian situation this Monday and a few things he said resounded with some themes of class so far. If you are interested you can watch a recording of the talk here.

Word Choice Has Consequences:

In the last couple of class periods we have been trying to navigate language around the IMF. Word Choice becomes very important in situations where perception is key and statements are often really loaded. We have picked our way through "third rate economists" "subsidies" "lender of last resort" "austerity" and other charged words.  The speaker pointed out the importance of words too. Specifically in 2 instances:

1. Most American and Western coverage of the situation in the Ukraine has used the word Crisis and has almost exclusively referred to the Ukraine. The west as a whole has not referred to the situation as a Russian-Ukrainian War. It has studiously avoided both references to Russia in the title of the situation and the term War. The speaker chalked this up to a success for Putin's PR department but I'm not sure thats the whole reason. Words have consequences. Like in the Rwandan Genocide in international politics certain words necessitate actions. An invasion of a sovereign nation by another sovereign nation and the resulting conflict-WAR triggers certain obligations in the international community in the age of the UN. So the US responsibility differs in a Ukrainian Crisis and a Russian-Ukrainian War.

2. The speaker pointed out that in July in a particular speech Putin shifted his preposition use in regards to the Ukraine. Before he used the preposition in Russian that means in- so "in the Ukraine" which is what is used in Russian for all independent countries. However in Russian you use "on" for territories/regions and for the first time publicly, in that speech Putin used the Russian "on the Ukraine" thus denying recognition to Ukrainian sovereignty.

Externalities Like Human Rights

We've discussed that there are non-economic factors that play into people's decisions. The labor market  in particular is shaped by this. Businesses and workers may choose to live in places with higher taxes or some other economic nuisance because they appreciate the society or other non-fiscal factors (ex. Scandinavia) Tommy Joe in particular once made the observation that economics recognizes that people have preferences and that one of those preferences may be human rights.

The speaker pointe out that this particular principle can be seen in the Crimea. Many ethnic Russians speak Russian and are culturally Russian have still chosen to live in the Ukrainian Crimea instead of Russia. This is despite the fact that Russia would probably be more culturally comfortable and that Russia has higher real wages. He attributed these decisions to a preference for democratic government, tolerant society, and rights of speech which are more available in the Ukraine.

Preferences like these make a difference in the lives of real people in the Crimea.

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