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GlossaryRussia’s Social Contract, Taxes, $TSM
November 28, 2023“Bang is the act. Bang is the IED explosion, the sniper taking a shot, or the beginning of an ambush .. being left of bang means that a person has observed one of the pre-event indicators, one of the warning signs.”
Left of Bang, How the Marine Corps’ Combat Hunter Program Can Save Your Life, by Van Horne and Riley, 2014
“We will survive, we will get through it all.”
Russian Musician Monetochka, 2024
“I knew one ‘champion’ of freedom’ who told me himself that, when he was deprived of tobacco in prison, he was so wretched at the privation that he almost went and betrayed his cause for the sake of getting tobacco again!”
The Brothers Karamazov, Dostoyevsky, 1880
Today I want to talk about Russia’s social contract, taxes, and Taiwan Semiconductor, the company that makes the chips modernity relies upon. These topics may seem disparate but actually inter-relate.
THIS IS NOT INVESTMENT OR TAX ADVICE. DO YOUR OWN RESEARCH. I MAY HOLD POSITIONS IN THE SECURITIES DESCRIBED.
Russia
It’s too dangerous to travel to Russia now, so last week, still punchy with Taiwan jet lag, I made time for two Russian opposition figures who were in New York City. Musician “Monetochka,” or “small change” (real name Elizaveta Gyrdymova), is a twenty-five-year-old from Russia’s hinterlands and sort of a cross between Billy Eilish and Bob Dylan. Imprisoned anti-corruption activist Alexei Navalny’s chief of staff Leonid Volkov is a former politician and current civil rights activist. Monetochka was performing at the Melrose Ballroom and Volkov raising funds on West 46th Street, with a phalanx of security given the Kremlin’s habit of icing people like him.
Monetochka in action, November 26 in NYC
My insight–any country that repels or arrests its talent and frees murderers is doomed because doing so violates a fundamental social contract. That is what’s going on in Russia. The Kremlin is breeding a chaos that I fear will come back to reverberate in ways even bigger than Ukraine.
When I first read about a “social contract” between state and citizen, the notion seemed abstract. When things work well, they do seem abstract. It’s when they break that you see how it actually works. Russia has created such a twisted social contract that I now understand Rousseau (1712-1778) was spot on. There are indeed fundamental forces that regulate citizen and state and if you punish the noble and reward the wicked catastrophe will follow.
Both Monetochka and Volkov fled to the Baltics (Estonia, Latvia, Lithuania), a region both teeming with Russians the Kremlin has labeled “foreign agents” for their opposition to Putin and safely inside the NATO umbrella. In New York, both halls for Monetochka and Volkov were packed with the young lights of Russia–programmers, journalists, entrepreneurs, and others who could be boosting Russia’s future but instead have fled to Queens and Brooklyn. Despite polls suggesting 70%+ support for Putin, Volkov claims his research shows support is closer to 40% but that the roughly 100,000 Russian war dead are not dragging it lower. Why? Because most of the people killed are desperately poor and from distant provinces and, according to Volkov, are hardly missed.
When Monetechka yelled “no to war” the crowd chanted with her. She herself is an example of a meritocracy Russia should celebrate, not punish. She shot to fame by uploading her ballads to YouTube from her home 1800 kilometers east of Moscow. Talk about grit. Her words might not move you because they are in Russian but they moved me and everyone listening to her.
A visitor to Russia risks arrest or, more accurately, being taken hostage. The word “arrest” suggests there is at least some possibility of guilt. The arrested are guilty only of independent thought. Russia is now a criminal state and takes you hostage if you post anything anywhere about what is really going on.
The WSJ reporter Evan Gershkovich has been in prison since March. Last month, Alsu Kurmasheva, working for Radio Free Europe-Radio Liberty was arrested with no evidence. Tiny forms of protest are viciously punished. Russian artist Alexandra Skochilenko was given seven years after she was caught replacing grocery store price tags with small slips of paper detailing the number of dead Ukrainians.