GOUSA stands for free market capitalism. But capitalism is not just a driver of economic opportunity. It is an important driver of national opportunity and security too.
At the outset of the Russia-Ukraine conflict one would have thought that Russia would simply roll over Ukraine. The Biden Administration predicted that Kyiv would fall in three days.
That didn’t happen. Why? There are several reasons but one of them is the poor quality of Russian military hardware.
Russia has a huge arsenal of weapons. Russia has the largest fleet of tanks and armored vehicles in the world. Russia’s air force has 3,800 planes, second only to the USAF.
Moreover, a major focus of the Putin regime has been to modernize the Russian military. Russia spends about 5 percent of its GDP on the military compared to about 3 percent in the U.S.
So why isn’t Russia kicking ass in the Ukraine? A major factor is that Russian military hardware sucks.
As explained in the video below the Russian military-industrial complex consists of companies that are state-run or owned by Putin cronies. Such firms have little incentive to innovate and there are few controls on production quality.
For instance, in the West there are at least three American companies that compete to produce fighter jets (Lockheed Martin, Boeing, and Northrop Grumman) plus several in Western Europe. In Russia, there is only one, United Aircraft Group, which is part of RosTec, a state-owned firm. In Russia there is no competition among aircraft manufacturers, little incentive for innovation or quality control, or need to keep costs down.
Corruption is a big factor too. The higher the price of Russia arms, the more cash available to Putin’s cronies. How much of Russia’s defense budget gets diverted into the pockets of Putin’s allies is anyone’s guess.
As a result, Russian troops are supplied with guns that jam, missiles that don’t fire properly, and tanks that break down. That reduces the combat effectiveness and morale of Russian units in the field.
And it’s not just military hardware. Companies that supply food, clothing and other materials for Russian soldiers are also either state owned or controlled Putin’s cronies. That’s one of the reasons for the widespread reports of logistics failures such as the delivery of spoiled food to frontline troops.
This is not to excuse the existence of the revolving door between Washington politicians and bureaucrats and America defense firms. However, the Russians have taken the revolving door to another level.
The failures of the Russian military in the Ukraine war provides the world with a clear example of how capitalism enhances national strength.
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