Russia: The System Matters

They began just shy of a year apart.

Two Stanford University students, Larry Page and Sergei Brin, started a company they named “Google” on the 4th day of September 1998 in Menlo Park, California.

Eleven months later, on the 9th day of August 1999, Russian president Boris Yeltsin named a former KGB Colonel, Vladimir Vladimirovich Putin, as Acting Prime Minister and named Putin as his eventual successor. Yeltsin stepped down early, and Putin assumed the presidency on the 31st day of December 1999. Putin’s first official act, signed on the same day, was an Executive Order barring the prosecution of Yeltsin and any of his family from ever facing charges of corruption.

Mr. Putin has been credited as reviving the Russian economy and building Russia into an energy superpower. Enjoying high public approval ratings, Putin is widely acclaimed by Russians for bringing stability to the country.

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Russians say that Vladimir Putin has accomplished a miracle. At the end of December 2014, the value of the entire Russian stock market, the Micex exchange, was $325 Billion.

Google has not been credited with reviving any nations, but they have not done too badly themselves. As Justin Worland of Time wrote recently, by the end of December 2014, Google, a single company started just eleven months before Mr. Putin took power, was worth $340 Billion, more than the entire Russian stock market.

Ah, but then so is Apple. As is ExxonMobil, also an energy superpower. Another American stock, Microsoft, is also worth more than the entire Russian stock market.

Detractors will rush to say that Putin took power at a time when Russia was on her knees and therefore somehow the comparison is invalid. They will argue that the environment in which Google started was much more favourable than the one in which Mr. Putin had to navigate, and that Russia was just emerging from the shadow of the Soviet Union.

Exactly. That is the point.

During that same period, Americans have changed presidents several times, and both houses of Congress have changed hands. Via peaceful means and open elections, whoever the “opposition” party was at the time found the way to win, and yet you don’t hear Americans complaining about the lack of stability. It is the United States Constitution that provides stability, not an individual.

In the midst of change, two college students founded their little company, without the need to appease any Oligarchs or national leaders, and their Google idea has grown to be worth more than the entire Russian stock market.

The worth of Russia’s giants: Rosneft, Gazprom, Lukoil, Yandex, Norilsk Nickel, Sberbank, etal, are still not worth the value of one American company started by college kids.

It is not about one group of people being better than others. It is the system. The system matters.

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