Russia's Economic Collapse: The Hidden Role of Time Preference - Econ Lessons

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My name is Mark Biernat, and I am an economist. Here, I explore the economic trajectory of Russia through the lens of Austrian economics, focusing particularly on Eugen von Böhm-Bawerk’s theory of time preference. According to Böhm-Bawerk’s foundational 1884 framework, individuals prefer present goods over future goods for three main reasons: (1) a more urgent satisfaction of wants, (2) uncertainty regarding the future, and (3) the greater productivity of roundabout (capital-intensive) production methods.

Today’s Russian economy exhibits an exceptionally high intertemporal subjective time preference among citizens and, more catastrophically, within state policy. As the Kremlin diverts national savings into immediate war expenditures, it sacrifices capital accumulation, future production, and long-term investment. This bifurcation of time preferences between the Russian people and the state has created a destructive feedback loop: forced savings and high nominal interest rates coexist with declining real capital deepening.

Drawing upon insights from Hayek, Rothbard, and Mises, this video argues that Russia’s economic system is undergoing terminal maladjustment. Metaphorically, it is consuming the seeds meant for future harvests — a clear sign of economic decivilization and eventual collapse. With expanding credit card debt and shrinking investment horizons, this disjointed time preference structure may lead to what Austrian theory calls a catastrophic disequilibrium.

This is not simply a downturn—it is a warning of economic extinction, comparable to evolutionary dead-ends like the prehistoric bear dog: an apex predator unable to adapt. I use metaphors to make a point about how economics affects real life.