Thursday, September 07, 2017

The Russian Oligarchs

Economists Thomas Piketty, Filip Novokmet, and Gabriel Zucman found that income inequality is as great in Russia as the United States, with the top 1% of earners garnering upwards of 25% of national income.

Piketty and Zucman have studied rising income and wealth inequality all over the world, and what makes Russia unique is how much cash is held offshore. They estimate that nearly $1 trillion in Russian assets is held outside the country, likely by a handful of oligarchs, most of which doesn't show up in official statistics. 

This research shows that the average private citizen's share of the national wealth has not increased whatsoever since the fall of the Soviet Union, despite the huge transfer of assets from the public sector to the private. 

 The Russian system rests on the extraction of natural resources, primarily oil and natural gas, which is sold abroad by oligarchs. They use the proceeds to invest in foreign real estate and other assets, rather than at home.

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