On The Necessity Of Subjecting Kremlinologists (And Social Scientists) To Market Discipline

I have gone on record with the following odds on Russia’s next President: Medvedev – 70%, Putin – 25%, Other – 5%. The first betting site to offer odds on the Russian Presidential election has other ideas. As of June 2011, the British online gambling site Stan James is offering the following odds: Putin 4/7, Medvedev 11/8, Zyuganov 66/1, Zhirinovsky 80/1, Bogdanov 100/1*.

Converted into non-gambler terminology, this means that they view VVP as the clear favorite. Whereas a $100 investment into Putin will yield just $56, betting right on a second Medvedev Presidency will net you $138. All the other candidates are (rightly) considered to be insignificant fry – e.g., correctly betting $1 on a Zyuganov win will get you $66 (with the additional EV-lowering risk that it may be promptly confiscated as a product of speculation if you’re in Russia))). Or from the viewpoint of implied odds, you need to have >63.64% confidence that Putin will win OR >42.11% confidence that Medvedev will win to profitably bet on the respective candidates**. So if I had the opportunity I’d totally bet on DAM, but unfortunately that site is closed to US-based political gamblers.

Bookies structure their odds in such a way that they win most of the time; note that the total implied odds add up to nearly 110%. But you can still win despite the handicap, by having special insight or knowledge of the topic. Needless to say, most “Russia watchers” will no doubt claim they have those, at least implicitly (otherwise, what right do they have to their editorials, salaries, etc?). I have previously exposed the self-appointed Kremlinogist priesthood for being full of cranks hiding their fundamental ignorance behind credentials, citations, post hoc narratives, etc. Here is their chance to prove me wrong, all ye Leon Arons and Ariel Cohens and Loco Lucases of the world! And get fabulously rich into the bargain!!!

All social (so-called) scientists should be subjected to this “trial by casino.” As the price of holding publicly funded positions, economists should be forced into investing their money into their own predictions of GDP growth or unemployment; political scientists should use their unique insights to bet on political candidates, parties, and revolutions; etc. Think of this as an idea for an institutional safeguard against fraud, an antidote to the snake oil and two-bit experts polluting economic, social, and political discussions. Because when these “experts” fail, they experience no accountability – largely, by conjuring explanations for why they were wrong, or sweeping their old claims under the carpet altogether – while the common folks who pay for their sated and comfortable upkeep suffer the repercussions of their failed predictions. By subjecting the “experts” to the market discipline of the casino, the quacks will be exposed and bankrupted in a Darwinian struggle for (reputational, pecuniary, etc) survival, and thus cleaning up social sciences and benefiting productive society.

But for now I’ll limit this challenge to Kremlinologists, an especially odious, malign and mendacious strain even by social “science” standards. Come on, bet some of that money you leech off your readers and/or taxpayers. If you don’t, like the pathetic quackacademic you probably are, then consider yourself lower than the meanest bookie on the planet. He at least puts his money where his mouth is.

UPDATE 6/11: Two further things I want to mention. Patrick Armstrong kindly pointed me to this site, which is based on punters’ estimates (as opposed to bookies). There, as of today, the traded odds are that there is a 75% chance that Vladimir Putin will “announce he intends to run for Pres. of Russia before midnight ET 31 Aug 2011.” So betting here – i.e. selling shares – is even more profitable. Not only does it cut out the bookie and get one even better odds that from Stan James above, but that prediction also flies against the Kremlin tradition of announcing their candidate within a half-year of the elections (Yeltsin announced Putin as his preferred successor on Jan 1st, 2000; Putin did the same for Medvedev on Dec 10th, 2008).

Why on Earth could the odds be so tilted? First, this trade isn’t enjoying a lot of volume so lots of potential for skew. Second, the Western media coverage, which focuses on how DAM is a puppet of VVP and on how the master wants his old job back to reassert dictatorship or some such. As with the Russian stock market in the past decade, it offers an excellent opportunity, paraphrasing Eric Kraus, to profit off the difference between the media’s perceptions of Russia and reality.

PS. Speaking of prior elections… I noted that Sean Guillory posted about the Presidential odds in August 2007. Back then, the bookie consensus was that Sergey Ivanov – presumably because of his silovik background – was the favored successor with odds of 2.2/1 (45%), as opposed to DAM with 3.75/1 (27%).

PPS. Track the intrade.com odds below:


* I’d also be willing to take odds of c. 200/1 on figures like Igor Shuvalov or Sergey Naryshkin. They’re very unlikely, of course, but they are dark horse candidates and the payoff, in the event that they are nominated by the Kremlin – after which the chances of theirs winning will skyrocket to near 100% – would be huge.

** That is the reason I took 7/4 odds to bet on a Republican Presidency in 2012. The implied odds for that are 36.36%. My own assessment is that it’s basically a coin flip, because everything hinges on where the economy goes, which in turn depends on whether oil prices spike again between now and summer 2012. I view the odds of that as being significant, about break-even actually. Hence my bet.

EDIT: I was wrong.


  1. Yalensis says:

    I believe the next Russian prez will be Putin, but I am not willing to bet any $$$, because I am cheap.

  2. … they win no matter what

    Incorrect. Maybe you should try Betting 101.

    • OK, well spotted; that isn’t quite right. They win most of the time, but sometimes they get it wrong and lose because they assessed the real probabilities too wrong or experienced unanticipated betting patterns. But with their structural advantage, in the long-term they should be making money “no matter what” assuming they’re competent at their job.

  3. I believe, like Yalensis, that Putin will run again, but that’s based on the number of times Medvedev has stepped on his dick over the last few months. If he were to straighten up and fly right, start looking like a statesman instead of a second-guessing, self-doubting John Kerry flip-flopper, things could certainly change.

    Perhaps I’m a naive fool, but I believed Putin when he said he was the richest man in Europe (figuratively speaking) because the people of Russia has twice entrusted him with the leadership of the country. I believe the continuing advancement of Russia as a nation and as a united federation is the driving force that makes Putin get up every morning. It would be totally at odds with that philosophy for him to stand idly by and watch somebody take over who is likely to fall victim to political infighting that will distract him from his reform efforts and ultimately result in their negation, or deliver the country into the hands of western manipulators. If Dmitry Medvedev still isn’t looking like that guy by the beginning of autumn, I believe Putin will brush him aside and declare his own candidacy. If he did so, he would win. Not because the polls are rigged, not because Russia is a one-party nation in spite of a crying need for competition, but because poll after poll has established that the Russian people want the kind of leader who can keep his attention on moving the country forward. Nobody else, to date, has demonstrated that they have identified that priority and have a workable plan to make it happen. If they do, I’ll happily agree they’d be a choice worth considering.

    • That’s a possibility, though I’d note that the gap between DAM’s and VVP’s approval ratings have been converging if anything in the past few months.

      What I really don’t think have any basis in reality are hysterical articles like this one by Ariel Cohen which expounds that old, lame, and refuted canard that Putin’s goal is to return Russia “to Soviet era.”

      I think a major part of the reason why the odds given by bookies on VVP’s return is that a significant portion of Russia watchers subscribe to such analyses by great “experts” such as Ariel Cohen and Mark Franchetti (who, BTW, predicted in Oct 2007 that VVP would return to the Presidency in 2009 after a short stint as PM). You can’t really go too wrong betting against idiots like this.

      PS. Perhaps I’m a naive fool, but I believed Putin when he said he was the richest man in Europe (figuratively speaking) because the people of Russia has twice entrusted him with the leadership of the country. At that time, he also said “I collect emotions.” We know that some US politicians have expressed doubt as to whether Putin has a soul. And Medvedev enjoys Harry Potter (perhaps Defense Against the Black Arts in particular?). What could this all possibly mean??? OMG! Putin is a Dementor!!!

      • Yalensis says:

        Kremlinologists of the Ariel Cohen breed are not logically consistent. They claim that Mr. Putin’s “Popular Front” conception is a “retreat from democracy”. But prior to this, they claimed Russia was not a democracy anyhow, rather an “authoritarian”, possibly even “fascist” state. So, they need to make their minds up. By the way, the “popular front” gig is the main reason why I deduce that Putin has decided to run for prez. Why else would he bother with this?

        • Logic is flexible for liars and propagandists. Bending the truth often leads to inconsistencies. Also, there are certain emotional hot buttons that have to be pressed all the time. So pressing the Russia is a Stalinist totalitarian regime button once is not enough. You have to keep on painting it as such over and over in true Goebbels style.

          Remember all the endless references to the opinion polls about Americans believing that Saddam was responsible for 911? They were never cited to discredit Bush, but rather to bolster his policies as reflecting the will of the people (as brainwashed by Bush and Fox News). Then consider how opinion polls are *never* cited when covering Russian politics and foreign affairs. The so-called free western media is denying Russians a voice. It does not matter whether they want Putin as president and support the smackdown of tie-eater Sakhashvili’s brutal attack on South Ossetia. It only matters that Limonov and Khodorkovsky are denied the right to rule over Russians.

          My impression is that the same BS was active before the Russian revolution. Trotsky was the Limonov of the day and made a tour of the US to gather some cash for the revolution. He was detained in Halifax, Canada, but was mysteriously released. He also got a US passport to travel back to Russia (how did he pull that off, he wasn’t even American). It looks like the same countries are trying to play the same game again today. I hope Russians don’t fall for these tricks the second time around.

          • Yalensis says:

            During his “Halifax” period Trotsky was technically still a member of Menshevik faction; he had not yet merged his faction with Bolsheviks. Both factions still belonged to Socialist International, which had split up into many factions as a result of war that broke out in 1914. However, German Socialist Party still remained dominant force in Third International. Socialists had truly mass following in USA, especially among German and Russian/Jewish immigrants. Socialists even had secret supporters among American elite, which may explain how Trotsky was able to pull some strings and get his phony American passport. Dubious he got any assistance from U.S. government, which had nothing to gain from revolution in Russia. As opposed to German government, which had everything to gain, and it is documented fact that both Bolsheviks and Mensheviks received financial and other assistance from German government. German motivation was obvious: Russian revolutionaries were fiercely anti-war and had pledged to pull Russia out of war if they came to power. This would benefit Germany, but would NOT benefit England-France-America. Also, Russian revolutionaries, as Marxists, were philosophically and culturally pro-German; Bolsheviks in particular hoped eventually to forge strategic continental alliance between Russia and Germany. Which would have happened too, had Hitler not come to power in Germany. A sadly missed opportunity.
            I believe incorrect to compare Trotsky with Limonov: Limonov is a talker, Trotsky was a do-er. Actually organized an actual revolution, as opposed to lame street protests attracting 30 people. Also, Trotsky (like Lenin) never pretended to be a democrat: their stated goal was dictatorship of proletariat, and they did what they said they would do.

  4. I’ve used Intrade on and off for a few years. I don’t follow Russian politics nearly as closely as you do, so having read the above, I quickly sold a share of the Putin contract. And yeah, since the volume on that particular contract is so low, there’s no way to make more than a few bucks on it.

    In the real world I’m rooting for Putin, and it will sadden me greatly if your prediction comes true. But I’m sure you know your stuff here.

    I placed an Intrade bet on a Republican win in the 2012 presidential election a long time ago. The economy will either stay crappy or get even worse. Also, the media’s enthusiasm for Obama can’t be as effective this time around, after the voters have had a chance to observe the man closely, as it was in 2008, when he was new to the voters.

    • You’ve singlehandedly reduced Putin’s chances from 75% to 35.1%, you rascal! 🙂 I basically agree with you. I didn’t bother betting on it because I can only expect to win a few dollars (due to the low volume), and didn’t want to bother joining InTrade which I read has $5 monthly fees.

      The main reasons why I think Medvedev will most likely continue in his role is, first, the historical precedent – all Russian Presidents to date have served both terms, second, what reason do either have to change the arrangement?, and third, I have the impression that Putin grew tired of the rituals associated with the Presidency and enjoys his role as PM more. But I’d also be happy to be proven wrong when they meet up and decide on the Kremlin nominee in December 2011.

      I’ve been skeptical about an Obama win for a long time too. I placed a bet (with a bookie) on a Republican win in 2012 on 7/4 odds a few days after the OBL assassination and everyone talking about how it now meant that Obama’s win is assured. LOL.

  5. It is sad that climate scientists are subjected to smear (USA, Canada) and death threats (in Australia) but professional liars called kremlinologists don’t even get so much as ignored when they screw up but are recycled endlessly as a source of wisdom. The bottom line is that while one group steps on the feet of moneyed interests, the other are nothing more than paid shills of said interests. The Russia analysts are never going to be subjected to merit screening of any sort since that is not their job. They are there to spread a cacophony of anti-Russian hate propaganda and are a part of the larger media machine that functions to shape public opinion by supposedly delivering all the truth all the time for free to the media consumer.

    Regarding the whole Putin running for another term hysteria is too much to take when it comes from British or Canadian sources. There are not term limits in the British parliamentary system. How legitimate the 1993 Russian constitution is when it was imposed by Yeltsin with tank shelling of the Duma is up to Russians to decide. Putin has found a legal way around this piece of paper and if Russians want him to be their president then that is their choice alone. It is not the prerogative of the west and its spasms of hate aimed at Russia.

  6. It depends on whether Putin chooses to run if he does then his meat puppet won’t.

    If he does the odds are

    Putin 100%.

    If he doesn’t then the odds are

    Meat Puppet Medvedev 100%.

    Either way Putin remains Emperor and Autocrat of all the Russias .