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Sunday, April 16, 2006

Purchasing Power Paucity: The Powdered Sugar Paradigm

The Russia Blog has an article today about how to bake a Russian Easter cake. It shows a picture of such a cake topped with powdered sugar.

Interesting picture. In my experience in Russia, powdered sugar is almost unheard of and virtually impossible to buy in stores. When you can find it, powdered sugar made from beet sugar turns out to be highly inferior to the cane variant. Eaten raw, it has an unpleasant rough texture, something like powdered glass.In my experience, these Russian cakes are generally topped with some type of fondant rather than powdered sugar as in the photograph when sold in Russia.

Which brings up what is, in my mind, on of the single most important issues about Russia today: the issue of "purchasing power parity." This idea assumes that a person who buys a pound of powdered sugar in Russia gets the same thing as one who purchases it in the USA, and makes similar assumptions about all other products, including such things as medical care.

Yet, with a few rare exeptions (subways in big cities being the most important), nothing in Russia is of remotely comparable quality to that in the West.

For example, the fats and dairy products used to make Easter cakes are quite likely to be laden with pollution or even atomic radiation, especially if they come, as they often do, from Belarus. This is one of the key reasons why the Russian life span is so much shorter than that in the West, and anyone who has ever visited Russia and got sick knows full well about the relative difference in the standard of medical care Russia can deliver.

Yet, purchasing-power parity ("PPP") calculations take no consideration of this fact. PPP means that since Russians pay less for a pound of powdered sugar than Americans do, we should artificially raise their incomes to reflect this. In other words, a Russian doesn't need to earn as much as an American in order to live as well. Neo-Soviet propaganda relies on PPP to keep itself afloat, because the raw figures on income show that Russia is doomed. The raw income earned by a Russian is $300 per month, and average means that at least half the population earns less than that. In Russia, as anyone who has been there knows, far more than half the population is below average, because there are a good number of super-rich billionaires at the top.

When you think about powdered sugar, you realize that PPP is greatly overstated, part of the fraud that keeps the Putin neo-Soviet dictatorship in power and helps it to avoid the Orange Revolution. So far, anyway.

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