Thursday, June 13, 2013

Did Putin Just Name an Austrian Economist to Head Russia's Central Bank?

Russian president Vladimir Putin has just named Elvira Sakhipzadovna Nabiullina the head of Russia's central bank, The Central Bank of the Russian Federation.

According to Bloomberg:
Putin [...]surprised all 15 economists in a survey by picking Nabiullina, his 49-year-old economic aide, over Alexei Ulyukayev, who’s been the top deputy of outgoing Bank Rossii Chairman Sergey Ignatiev for nine years. A majority of those economists expected Ulyukayev to get the post. The others pegged former Finance Minister Alexei Kudrin, whom both Nabiullina and Ulyukayev have worked under.[...] 
While Nabiullina, who was economy minister during the worst of the global credit squeeze, is a technocrat who shuns the limelight, according to the four colleagues, Ulyukayev, 57, is a frequent guest on domestic and foreign television programs who serves as the public voice of Russian monetary policy.
There is no indication that she is an Austrian, though I'm not sure you would state so publicly if you were a politically inclined economist in Russia (or for that matter the US) But check this out, again from Bloomberg:
Her chosen course of study also gave her access to western economic texts by authors including Robert Higgs and Joan Robinson that weren’t available to the general population. Nabiullina has described herself as a liberal economist, one with no hint of radicalism, according to a friend who has known her since university. She believes the state’s economic policy should be guided by grassroots efforts and public consensus, not dictated from above, said the friend, asking not to be identified because their relationship is private.
Joan Robinson was, of course, a important Keynesian, but it is simply remarkable that Higgs name is mentioned. Bernanke would not have the courage to do that in the US.

Higgs is a Senior Fellow in Political Economy for The Independent Institute and a frequent contributor to

He is also the author of  unquestioned  anti-interventionist books, though not necessarily on monetary policy: Delusions of Power, Depression, War, and Cold War, Neither Liberty Nor Safety, Politick√° ekonomie strachu (The Political Economy of Fear, in Czech), Resurgence of the Warfare State, Against Leviathan, The Transformation of the American Economy 1865-1914, Competition and Coercion: Blacks in the American Economy, 1985-1914, and Crisis and Leviathan.

Here's what Murray Rothbard wrote about Higgs' Crisis and Leviathan:
Crisis and Leviathan is a blockbuster of a book, one of the most important of the last decade. It is that rare and wondrous combination: scholarly and hard-hitting, lucidly written and libertarian as well. To Professor Higgs, being thorough and erudite does not mean timorously qualifying every statement, or torpidly and "judiciously" picking one's way through the minefields of ideology. Higgs's depth and breadth of learning has only intensified his commitment to truth, liberty, and the identification its enemies.
On some level,  Nabiullina, therefore, may understand the dangers of the interventionist state, if she is mentioning Higgs. But does she just understand the dangers on some "theoretical level," as say Alan Greenspan, who once wrote a pro-gold piece calling gold the only sound money, then became chairman of the Fed and almost ran the country dry of green ink, with his constant money printing? Sadly, this may be the case with Nabiullina , for while throwing the name of Higgs around, Bloomberg tells us:
 Nabiullina said she’s rethinking central bank policy to encourage more corporate lending and cap cash transactions to help curtail corruption.
Encouraging corporate lending sounds like it could be about Bank of Russia money printing, and curtailing cash transactions is all about tracking and stifling the black markets which are, of course, all about  providing a method for markets to breathe.

Perhaps Higgs needs to make a more direct statement to Nabiullina and pen a column, What I Would Do If I was Head of The Central Bank of the Russian Federation.

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