So why is Russian miltech performing so badly in Ukraine? In addition to some of the reasons we’ve already covered, this video provides additional answers (skip to 1:35 in to avoid the sponsor blather).
Russia has 2.5 to 3 million people in arms manufacturing, “20% of the country’s industrial jobs.”
“We all thought Russia had the military muscle to be able to take over Ukraine in a matter of days. However, the real way to test a country’s military power is not in a parade but a war. And with the invasion of Ukraine we are seeing something that has become the norm in the Russian economy. Something like an Expectation vs Reality meme.”
60% failure rate for some Russian missiles?
“After a month of the Ukraine invasion, we can say it clearly: Russian armament falls far behind the expectations and hype they had created.”
Modernization of the armed forces was supposedly a priority for Putin, with up to 5% of GDP spent on defense.
Russia should theoretically have military equipment better than anyone but the U.S.
One reason they don’t: Attempted capitalism without privately owned arms companies.
“The Soviet military industry was full of unprofitable State enterprises, obsolete factories and, above all, a great deal of corruption.”
The U.S. bids out contracts. The Soviets depended on state monopolies.
“Russia has never embraced free market capitalism.”
According to Vladimir Putin, the problem with communism was not the centralized economy but an economy based on ideological principles. In other words, if you want to improve the efficiency of the system, it is enough to change the managers and put technocrats in charge. Technocrats who have been forged in the bosom of the KGB and who have a pragmatic mentality, totally free of the romanticism of communism or any other ideology. This type of person has a name: “SILOVIKI”. And so, just what was Putin’s formula for bringing his military industry into the 21st century? Very simple: To put Silovikis in all managerial positions. This is how Rostec was conceived in 2007, a conglomerate of companies designed to be the great umbrella of Russian defense. Under this umbrella are more than 700 armaments companies: all of them State-owned. By grouping companies together, a lot of duplication can be eliminated. All following purely technocratic criteria. And who is the CEO of Rostec? None other than Sergey Chemezov, who was a colleague of Vladimir Putin himself when they were both in the KGB offices in East Germany. In other words, a textbook SILOVIKI.
Yes, in this, as in many other areas, Putin is a complete dumbass.
“By acquiring more and more companies, Rostec has ended up consolidating even more monopolies. For example: fighter jets. The United States works with four major manufacturers: Boeing, Lockheed Martin, Raytheon and Airbus (Yes, Airbus is European but it also has contracts with Washington). In the case of Russia, practically all fighter jets are manufactured by the same company: UAC which, of course, is under the umbrella of Rostec.”
“Another major Russian defense company is Almaz-Antey. This company does not depend on Rostec but is directly owned by the Russian Ministry of Finance. The CEO of this company is another textbook Siloviki. In this case we are talking about Viktor Ivanov, another former KGB agent. Almaz-Antey is the giant where NPO Novator, the manufacturer of almost all Russian precision missiles, is located. Yes, those very missiles that are proving to be so flawed in the invasion of Ukraine.” Try to contain your shock.
“In 2017, NPO Novator could only produce 60 Kalibr missiles in six months. As you can imagine, these figures are ridiculous if we take into account that, in just one month of war, Russia has launched more than 1,200 missiles.”
I know you’ll also be shocked to learn that Yevgeny Prigoshin, another friend of Putin’s, was in charged of the company responsible for providing expired food to Russian troops. “As Alexei Navalny reported, Prigozhin dodged all public tender systems to become the army’s caterer. Today, Navalny is in jail and Russian soldiers are receiving expired cans of food.”
Russia hasn’t achieved air supremacy because Russia doesn’t have enough precision munitions for its planes to use, which is why they do stupid things like hit hospitals with dumb bombs and fly low enough to be shot down. “Russia’s best planes are dropping like flies because they don’t have adequate ammunition.”
“Are you really saying that the Russians are stupid and have gone to war without ammunition? Well, no: the problem is not that the Russians are stupid. The problem is that a political system with bad incentives generates nothing but failure.”
In closing, he wonders just how well-maintained those nuclear weapons and ICBMs are.
All this accords with what we have observed in Russia’s operation failures, and with what we know about the basic incompetence and economic misallocation of command economies.
(Sorry about the delay in getting this up. BlueHost was down earlier today.)