The Crisis in Ukraine: Authoritarianism’s Threat to the Next Economy

Markets aside, the events of the past week have been devastating. Russia’s war on Ukraine is ending lives and placing millions more in harm’s way, while also putting democracy under attack. As we’ve all watched this unjustifiable war of aggression unfolding, a few things have become clear.

First, authoritarians, especially isolated authoritarians, can make and implement horrifically bad decisions. But of course that’s the case: social science, neuroscience, and market evidence have shown over and again that it takes multiple and diverse viewpoints to arrive at the best decisions. The more isolated an individual, the fewer the inputs that go into a decision, the less opportunity there is to be informed and formulate a first principles-based, working way forward.

As an isolated paranoid with near absolute power, Vladimir Putin may be incapable of good decisions at all. Putin’s war of aggression is good for no one, not for him, the people of Russia, the people of the world, and least of all for the citizens of Ukraine. If we needed more evidence of the importance of diversity in decision making, here it is.

Second, it is even more clear now that Petrostate dictators, and those with an overdependence on fossil fuels for revenues, are dangerous for global stability. Their propensity to create economic shocks and their unwavering commitment to the burning of fossil fuels despite the existential risk of the climate crisis, combined with their low probability of making good long-term decisions, may make dictators in those economies the worst kind of authoritarians. The possible exception to this statement is a petrol authoritarian with a massive nuclear arsenal.

These Petrostate dictators (and their investors everywhere) are thwarting the world’s ability to make the existentially critical transition to the Next EconomyTM. They are attempting to stop rule by popular vote and to end collective decision making in general. On a human level, they stand against social justice, and they stand for rule by the rich alone.