Putin's 5 Star Hotel in Gelendzhik

ANATOLY KARLIN

Good taste, not overly tacky (e.g. too much gold like with Trump). I’d probably build something like that as a strongman.

There’s nothing cardinally new about Navalny’s video.

The construction of a palace at Gelendzhik in Krasnodar Krai linked to friends of Putin was “leaked” to the world more than a decade by Sergey Kolesnikov, a businessman involved in the project. Incidentally, the first photographs of the palace appeared at the Russian language version of Wikileaks website, a detail that seems to have been written out of contemporary accounts now that Assange has long become unhandshakeworthy while the election of Biden has given the West the impetus to start intensively building up Navalny as the figurehead of the Russian Maidan.https://platform.twitter.com/embed/index.html?dnt=true&embedId=twitter-widget-2&frame=false&hideCard=false&hideThread=false&id=1314587438568833025&lang=en&origin=https%3A%2F%2Fwww.unz.com%2Fakarlin%2Fputins-5-star-hotel-in-gelendzhik%2F&theme=light&widgetsVersion=ed20a2b%3A1601588405575&width=500px

Why does Putin need a palace? Well, as I noted back in 2019, it seems to be a relatively cheap way to maintain elite discipline while pursuing a sovereign course.

In traditional societies, it is mainly the aristocracy’s sense of solidarity, noblesse oblige, feudal bonds, the Mannerbund institute. Though I don’t mean to idealize it. It proved completely maladaptive come the industrial age.

In totalitarian regimes, chiliastic ideology and repression/terror plays a major role.

Modern, largely non-ideological populist regimes at odds with GloboHomo – that’s Putin, Orban, etc. – distribute resources or economic “demesnes” to their cronies, creating networks of personal loyalty unbeholden to the global elites – a sort of “counter-elite,” or Dugin’s so-called “patriotic corruption“. One additional “benefit” of such systems is that damning kompromat is available on “defectors” by default. Though obviously this is not the only mechanism. Putinism also has elements of a Mannerbund, as well as more severe punishments.

China has elements of all the above, but with greater load on legitimizing ideology (it is still a Marxist-Leninist state) and on repression.

Political elites under free markets are always poorer than economic elites. They resent that. There’s a constant incentive to defect, unless there are countervailing incentives (e.g. material gains) and disincentives (e.g. punishment for “treason”).

Unofficial wealth is one of the big incentives and is seen from Orban’s Hungary to China (Politburo members are not poor) and Sultan Erdogan – who has constructed a nifty palace for himself too. Remember this?

There doesn’t seem to be any way out of it. At a high enough level most everyone seems to have assets entirely incommensurate with their very modest official salaries – even people such as PM Mishustin, who made his name combating tax evasion as head of the Russian tax service.

A major convenience of this system is that the “shadow” nature of this wealth also constitutes ready-made “kompromat” and a built-in “corruption case” against elite defectors.

But since Putin is the head guy, why would he need a palace? Well, it would be pretty bizarre if senior bureaucrats such as Defense Minister Shoigu had pads like these:

… while the Tsar himself made do in a commie block.

Clearly “Putin’s palace” needs to be the biggest and grandest one, with its cost of $1.2B about equaling all of PM Medvedev’s known assets (as per a 2017 Navalny investigation).

He doesn’t even appear to use it much (or at all?). It’s clearly primarily there as a signal of his apex position in the dominance hierarchy to the rest of the elites.

Is this a large sum? It might appear to be so to simple people. But in reality, one billion USD is just the equivalent of a large five star hotel. Modern societies are vastly richer than the Sun King’s France, in which the construction of the Palace of Versailles ate up 60% of the budget. This is just 0.5% of the annual Russian federal budget – less still if lower spending is included – and even that is to exaggerate the impact, because it was not built on budget money but through the reciprocal generosity of people whom Putin allowed to get rich in exchange for their implied loyalty, not just personal but geopolitical.

To illustrate that point, if Putin would have been unable to get the Gelendzhik Palace constructed…

… There wouldn’t – couldn’t – have been a Crimean Bridge either:

No genuinely “private” company would agree to embark on such a project given the US sanctions that would have inevitably been brought against its directors and shareholders.

It’s also not even the case that had Putin not enriched the cronies who built him his palace, the proceeds would have gone to “ordinary” Russians. All market economies concentrate wealth. Those proceeds would have ended up with other people in the construction industry, many of whom would have just used it to build smaller palaces for themselves and send their children to Hogwarts. While the Crimean Bridge would not exist, and indeed the issue would be entirely moot, since Crimea would not be Russian, given Navalny’s reaction to the return of Russian territories was to call for sanctions from his Western friends:

Then, on Feb. 28, Russia sent troops to Ukraine in precisely such a “little war.” I admit that I underestimated Mr. Putin’s talent for finding enemies, as well as his dedication to ruling as “president for life,” with powers on par with the czars’.

As a citizen and patriot, I cannot support actions against Russia that would worsen conditions for our people. Still, I recommend two options that, if successfully implemented, I believe would be welcomed by most Russians. …

Such sanctions should primarily target Mr. Putin’s inner circle, the Kremlin mafia who pillage the nation’s wealth, including Gennady N. Timchenko, head of the Volga Group; Arkady and Boris Rotenberg, influential businessmen and former judo sparring partners of Mr. Putin; Yuri V. Kovalchuk, a financier believed to be Mr. Putin’s banker; Vladimir I. Yakunin, president of Russian Railways; the oligarchs Roman A. Abramovich and Alisher B. Usmanov; and Igor I. Sechin and Aleksei B. Miller, the heads of Rosneft and Gazprom, respectively.

The sanctions must also hit the oligarchs whose media outlets parrot the regime lines, and target Mr. Putin’s entire “war cabinet”: the TV spin doctors, compliant Duma members and apparatchiks of Mr. Putin’s United Russia Party.

Now in fairness it is logical for Western elites to support a quiescent Russian regime whose economic functionaries are clean and not at all corrupt and completely intertwined with the Western world-economy in which the rules of the game are set by the US Treasury and who own the politicians making impossible any deviation from the party line set by the State Department for its vassals. But it would be pretty stupid for Russians to once again step on the same rake that they did in 1917 and 1991 just on account of spite over Putin’s 5 star hotel.

I do not think there will be a Maidan or anything even close for reasons I will detail in the next post. In fact I expect the protests tomorrow and henceforth to be a damp squib. But on the off chance I am wrong, Russians will only prove themselves morons.

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