Alexander Etkind’s Russia’s “Oily Grip of Power” and the Hyper-Extractive State

On Wednesday, May 7th Alexander Etkind, Professor of History at European University Institute- Florence, joined the Jordan Center for a lecture and panel discussion of his new critical theory, which explains the nature of Russia’s political and economic system as well as its external relations as symptoms of the “hyper-extractive state.”

Host of the panel was Bruce Grant, Professor of Anthropology at NYU who specializes in the former Soviet Union. Grant introduced the discussants, who concentrate in a diverse set of academic fields– Sara Brinegar focuses on the oil industry and government policy, with a particular emphasis on Azerbaijan, at the University of Wisconsin; Stephen Gross of NYU is an historian of 19th and 20th-century Germany; Andrew Needham, also hailing from NYU, is an historian of American history with a particular focus on the environment; and finally, panel member Anne O’Donnell, who is completing her PhD in History at Princeton and working on her post-doc at Harvard. O’Donnell will be joining the faculty at NYU in 2015.

Etkind began by discussing the key concepts of his critical theory. He argued that in the post-Cold War era, it’s important to consider the impact of an increasingly globalized economy on all varieties of governance. Even authoritarian leaders are subject to serious economic constraints. However, Etkind argued: “dictators really operate within an opportunistic structure which preceded them.” Etkind’s theory proposes a model of this structure, which takes into account labor, capital, as well as natural resources. According to these three criteria, Etkind argued that Russia can be categorized as a “hyper-extractive state. “

“Such a state gets its power directly from nature, with minimal participation from the people,” Etkind said. In this context the state has no incentive to develop a functioning system of tax collection, or even to establish rule of law, because the state does not have to realize either of these developmental achievements to continue profiting from resource extraction. Etkind explained that in this type of system there are only two economic actors: those who extract, and those who trade.

This type of system is not without precedent in Russia. “A different kind of resource dependency [than oil and natural gas] developed in Russia a century ago,” he said. Etkind pointed to 18th and early 19th century Russia, when its fur trapping and trading industry was the largest in the world. Etkind explained this was an apt analogy to Russia’s current economy. “In pursuit of this fur [the Russians] pushed eastward toward the Pacific coast– now these areas are the sources of Russian oil and gas,” he said.

Etkind also divided states into three categories– resource bound, labor bound, and simply land countries– based on their natural resources, economies, and polities. Whereas labor bound states promote competition, develop public goods, and become increasingly socially inclusive, resource bound states have almost the opposite orientation. “They are greedy, insatiable, and they keep their population oppressed,” Etkind explained. He counted Russian as a resource bound state, and the United States and England as examples of labor bound states.

The resource and labor bound states interact in several ways. While the labor bound state is dependent upon the resource bound state for energy and other natural resources, the resource bound state deposits its capital in labor bound states. Elites take advantage of the desirable trappings found in a labor bound state, for example by sending their children to high quality universities in the United States. Etkind said that as long as peace and steady trade are maintained between the two states, “one could expect an equilibrium.”

“What then can shake, disturb, or destroy this balanced coalition?” Etkind asked. As natural resources are depleted, prices rise. Labor bound countries will react by carrying out policies of import substitution to alleviate the burden of rising import costs. He explained that the resulting tempered growth in the resource bound state will lead to internal discontent. Eventually the resource bound state will carry out an “act of aggression” against the labor bound state and destroy their relationship.

This is the moment when what Etkind called the “two-state game” expands to include the third state, the land country– exemplified as Ukraine. Both the resource bound state and labor bound state are acting in self-interest by oppressing the land country. Whereas the former may profit from appropriation of “this wilderness,” as Etkind referred to it, the latter is motivated by its desire to suppress the labor force which poses a threat to its own labor force as a cheap alternative.

After Etkind’s summary, the discussion moved to comments and questions by panel members. Sara Brinegar of Wisconsin said that, from an historian’s perspective, “critical theories and models don’t always tell the whole story.” She pressed Etkind for a better articulation of the relationship between Putinism and the hyper-extractive state. “Is Putinism inevitable in the hyper-extractive state? If it is, then why? […] Is Russia a hyper-extractive state, or is there a spectrum?”

Brinegar also pointed out that perhaps Etkind’s model did not take into account Russia’s significant investment in public health, education, and other public goods. She also challenged Etkind’s assertion that oil is an industry that does not rely on a huge domestic labor force for extraction. She argued that, in looking at the massive global infrastructure devoted to the extraction, refining, and transporting of oil and natural gas, it seems as if the opposite would be true.

Although Stephen Gross of NYU said that Etkind’s theory was helpful for understanding how different states treat their people differently, he also posed some questions. “Where does Russia’s business elite fit into your model?” he wondered. Gross argued that multinational corporations are so influential now that they could be counted as a fourth actor.

NYU’s Andrew Needham prefaced his comments by saying that although he was not a Russian expert, he saw Etkind’s theory as an interesting way for thinking about the place of nature in the global economy. Needham pointed out that he’s noticed a rise in the number of media references to the inevitability of global warming and climate change since the Ukraine crisis. He argued this could be the result of what he said were, “very dramatic changes related to the prevalence and power of the carbon economy.”

However, Needham admitted: “I found your description of the United States to be not the most helpful way to think about this.” Needham suggested a model which reflected what he called the “hyper-consumptive state,” which he argued might be a more apt way to think about the United States’ relationships with hyper-extractive states.

Needham said the hyper-consumptive state might be characterized by the widespread willingness amongst its population to deny the sources of their energy. As an environmental thinker, Needham reminded Etkind of the importance of unintended consequences of resource extraction. “The commodity produces a product, but also a byproduct,” he said. “Maybe you should bring byproducts into the story.”

Anne O’Donnell of Harvard University provided the panel’s closing commentary for Etkind’s paper. She praised his paper for its focus on the relationship between demodernization and deindustrialization. However, she challenged Etkind’s characterization of the state’s relationship to its own natural resources. She pointed to an account by a Imperial bureaucrat of Russian nobility whose land had the potential for extremely profitable platinum mining. The Bureaucrat was stunned when a noble expressed his reluctance to extract the precious metal. “Why mine it? Let it sit under the land.”

O’Donnell explained this puzzling reaction spoke to how she understood the contemporary Russian state’s relationship to its resources– which is one geared toward securing power over profit. “This has been Russia’s goal for centuries,” she said.

“But the hyper-extractive state is a departure from this,” she argued. “So how did it becomce so divorced from the historical Russian state?” She also criticized Etkind’s model for its lack of focus on politics, which is essential for understanding Russia’s behavior. “Russia today is using its resources for politics and purpose,” she said.

Etkind thanked the panel for their comments. He first explained the necessity of his model in defining an explanation that is distinct from the Dutch Disease, which he argued does not apply to Russia. The main difference being the Netherlands’ superior institutions and rule of law. “So we should be thinking about  the Russian Disease,” he said.

Etkind also pointed out the contextual aims of his model are Russian historians who use critical theory. In the Soviet period, critical theory was dramatically underdeveloped compared to the West. “It was a kind of lacunae,” he said.

Jordan Center Writer in Residence Peter Holquist pressed Etkind to outline how politics fit into his model. He said this is particularly important when looking at the situation in Ukraine, a symptom of which he described as a “triangular process,” of mass media and propaganda on all sides of the crisis. Holquist also challenged the economic basis of Etkind’s explanation for the events in Ukraine. “I also believe this is based on a deep resentment,” he said. “This might not solely be propelled by economic driven politics.”

As the host, Bruce Grant issued closing remarks. Firstly, he commended Etkind for his bravery. “We don’t see a lot of people who work with models anymore,” he said. “They’re easy to pick apart.” He reminded the panel of the proper approach to model based theories. “We have to work differently with models.”

However Grant also had some suggestions for Etkind’s theory. “I’d like to parse out the word ‘state’ here,” he said, pointing out that Etkind uses the term in several different ways. He pointed to Philip Abrams’ argument. “When 99 percent of people use the word ‘the state,’ they fall into a kind of trance,” Grant explained. “It lacks specificity […] and takes on this god-like quality.”

“I feel that Putin would be please about this diagnosis of the hyper-extractive state,” Grant explained. “Many people might be proud of this.” He argued that Putin would interpret this description as one that reflects his rebuilding of the Russian state to its prior glory. Rather, Grant suggested that Etkind examine the “aura of the state,” rather than as a thing in and of itself. He joked that the added benefit of this perspective is its implicit criticism of Putinism.

Grant thanked Etkind for his sharing his paper with the group and for the panel member’s contributing discussion.