Even when oil prices were that low, some companies continued to invest in the development of fields because “sometimes, the correct strategy is not to react to the crisis but to act according to the plan one has set.”  Not all companies are in a position to do that, and in reality in Russia, those among major firms that could are “extremely few.”

When oil prices were high, many of them got used to acting as if they would always be that way, and the government assumed that its best strategy was to monopolize them and expand abroad rather than to develop the branch and the economy at home as a whole. Now it is paying the price for that miscalculation.

If oil prices continue to fall, Lyats says, there are some obvious steps that the Russian government and Russian firms must take. First of all, they must cut costs. The government must cut fees or even eliminate them altogether so that corruption will be reduced; and firms must become more competitive and efficient.

That will involve cutting salaries and wages in the oil and gas sector, something that will have a snowball effect both in other sectors and on government incomes. But once the shocks have been absorbed – and they can be, the Moscow analyst says – the country will be better off for the future.

This all can be achieved, he suggests, by “a broad, decisive and well-organized deflation” and by reducing the role of the state in the economy so that bureaucrats and officials won’t be able to act as parasites on the economic activities of others via licenses, fees, and corrupt activities, he continues.

Indeed, Russia should be ready for a new round of even more serious privatization, something that could be promoted by “decriminalizing economic crimes” and the selling off of many state companies whose managements have been anything but competent, having grown fat and lazy in the times of high oil prices.

Another step Moscow should take is one that the US took 40 years ago: it should prohibit the export of oil, a step that would not only drive prices up, a trend Russian firms with oil interests abroad could exploit, but also have the effect of forcing the petroleum sector in Russia to investing more money in oil processing firms, whose products are in every case more valuable and profitable than oil itself, especially when the latter is so cheap.

Some ideas now being floated won’t work, Lyats says. The defense industry won’t be a driver of growth, he says. “The Soviet Union clearly showed that.” Instead, the growth of defense firms will simply become yet another way for officials and their allies in business to raid the treasury.

“There must be a privatization of [Russia’s] military-industry complex” just as there must be one in the civilian sector. Any further monopolization will only promote “the degradation of thought and production. Not everything in this regard is now visible, but in the medium term, our backwardness will become ever more obvious.”

One sector the government should be promoting, the Moscow analyst continues, is nuclear energy, but even more important, it should be investing in transportation and logistics both for the domestic market and for Russia’s role as an emerging transportation hub between Europe and Asia.

Summing up, Lyats says that “the prospects of the fall of oil to below $10 a barrel are not a threat but the last chance to change things for the better, to stop fattening snobs and bureaucrats and to get involved in real production within the country, to change its approaches to spending and in general to become more tight-fisted, economic and effective.”

By making that reference, the Regnum editors intentionally or not have raised a question that many have preferred to forget: the USSR might have expanded in exactly that way if Lenin had lived because Lenin believed that the borders of the USSR should expand to include all countries that had had a socialist revolution in them.

But in fact, it expanded to the borders that it had at its end because Stalin believed that non-Russians who had not lived under the Russian Empire would not tolerate being part of a Russian-dominated state for long. And consequently, he did not move to include within the USSR countries that had gone socialist in Eastern Europe, Asia or Latin America.

Stalin violated his own view only when he occupied Western Ukraine, Western Belarus, and parts of what is now Moldova and when after a gap of 25 years re-imposed Russian rule in the Baltic countries, and it was these violations that almost certainly contributed to the demise of the Soviet Union in 1991.

Had Stalin moved the USSR’s borders further outward, the Soviet Union likely would have exploded even earlier; but if it had survived in the form Lenin wanted, it would not be a Russian-dominated system but rather one in which the majority of its population would be speaking Chinese, certainly something that would give even the most pro-Soviet Russians pause.

The fight between Lenin and Stalin took place largely out of public view. In his draft theses on the national colonial question for the second congress of the Komintern in 1920, Lenin outlined his view that as the revolution spread, so too should the borders of the Soviet state, an idea that the Red Army’s invasion of Poland may have made appear plausible.

Stalin registered his objections in two code cables, one of which was published in Soviet times only once and by someone who did not die in his sleep, as a result as a footnote in the third edition of Lenin’s collected works and one of which remained unpublished until after the demise of the USSR.

In both, Stalin made clear that national identities would remain powerful even after a socialist revolution and that trying to impose Moscow’s control on those who had never experienced Russian rule before would be a mistake. He said that the Poles would never accept Soviet RUSSIAN rule and that the same would be true elsewhere.

In the event, Lenin was incapacitated and died not long after the USSR was formed, and Stalin was able to put his ideas into practice, ideas that gave birth to a world socialist system in which there were many states not one with the kind of diversity that he had no intention of allowing within the Soviet Union.