While the West tries to downplay and ignore the idea that a new Cold War has begun between Russia and the West, Russia has embraced the idea. In fact, if Russia's President Medvedev has anything to say in the matter, Russia is eager for it. Russia's once fledgling democracy has now fully evolved into a elitist capitalist dictatorship controlled by a few militant oligarchs. “We are not afraid of
anything, including the prospect of a Cold War," he boasted today. Russia troops continue to occupy tiny Georgia, including the port city of Poti, nearly two weeks after Russian leaders agreed to pull out of Russia. In fact, Medvedev said today that Russian forces are continuing to
build, not withdraw.
This is important because as I continue to take the pulse of business leaders throughout the United States, we are only now beginning to price into the market the consequences and costs of this new Cold War (using Medvedev's terminology). Finally, we are beginning to wake up, sit up, and take notice that the past is still prologue in our relationship with Russia.
There is one significant difference this time, however. This time, Russia has a wealthy, capitalist economy awash with petrodollars and the confidence and willingness to pick a fight. They have no intention of backing down with the West.
Interestingly, the Founding Fathers of the United States, in their studies of human history, said that democracies have a tendency to do precisely that, evolving into tyrannical dictatorships controlled by a few wealthy elitists. They feared that such would also eventually be the fate of the United States, resulting in tyranny. That's why, when a woman asked what kind of government has been chosen following the Constitutional Convention, Ben Franklin replied, "a republic,
if you can keep it". He knew that historically, democracies tend to degrade and destroy themselves, partly because where a majority rules, minorities rights are destroyed. Perhaps this is why Jesse Jackson pines for a day of "democracy of capital", in which the majority will take the property of a wealthy minority by force, if necessary.
On the other hand, a republic operates on the concept of the "rule of law", protecting minority rights and holding the tyranny of the majority at bay. This was also one of the reasons why they provided for United States Senators to be chosen by the states rather than by vote. This was changed, and the United States took a giant step toward democracy (and away from the republic they had given us), with passage of the Seventeenth Amendment. This amendment fundamentally changed the form of government in the United States away from that envisioned by the Founding Fathers.
We are now seeing this devolution of democracy occur in Russia, but also in the United States to a lesser degree. Lest anyone bristle at the suggestion that the United States is descending toward the tyranny of democracy, I would suggest that class warfare is one example of this. The idea that the majority can take the property of a wealthy minority by voting it away, is a form of tyranny that the Founders dreaded. A small, unpopular minority of wealthy people are preyed upon by the majority. Here is a link to a good explanation of the difference between a republic and a democracy:
'A republic, if you can keep it' ...or remember what it means
Here is a great write-up sent out by John Mauldin in his weekly newsletter. Mauldin was ranked as the second best investment adviser (only Warren Buffet was higher). He forwards an article written by Stratfor, the world's private intelligence company. Stratfor is an adviser to most multinational corporations around the world regarding security and terrorism.
