Nationalization, Deripaska and missiles

Can the job of a Russian billionaire in Ukraine, who produces raw materials for Russian weapons, stay away from the war?

Parliament's decision to nationalize Russian property in Ukraine has been criticized as an alleged anti-liberal and anti-market move. However, the producer of raw materials for Russian warships, missiles and bombers is not out of politics. So, sanctions against him are not a question of freedom of entrepreneurship, but a question of national security.

At its session on April 1, the Verkhovna Rada of Ukraine adopted Law no. 7169, which defines the procedure for nationalizing the property of Russian citizens and Ukrainians who publicly deny the Russian-Ukrainian war. Despite eight years of war, there are many such companies.

Confiscation of property due to denial of the war with Russia

Some liberal observers have criticized the term "nationalization." The counter-arguments are well-known: the state is supposedly a bad owner, business is out of politics

In principle, based on liberal (or rather libertarian) positions, the thesis "war on one side, business on the other" had a right to exist - in the 18th century, when liberalism was invented.

Indeed, back then, war was more a matter of professionals. Many more soldiers than civilians took part in the wars and died.

But, unfortunately, in the 20th century, with the advancement of armaments, everything changed. For more than a hundred years, the losses of civilians in wars have been many times greater than the losses of the army itself.

In addition, production chains have become much more complex. Defeating a civilian building with an Iskander projectile is not an individual decision of Lieutenant Ivanov, who actually pressed the button. Unlike when a single sword strike in the days of Adam Smith.

The rocket shot is the result of the work of millions (without exaggeration) of people. In addition to the designers themselves, there are chemists, machine builders, and workers in non-ferrous metallurgy, space engineers and workers, oil producers and refineries, workers of the Russian Railways, carriers and operators of port cranes in Novorossiysk and Sevastopol - and many others who worked there. .

In particular, Mr. Deripaska, an ordinary apolitical businessman. RusAl is the leading aluminum producer in Russia.

Its property - Mykolayiv Alumina Plant - is one of the largest companies in Europe for the extraction of raw materials (alumina) for aluminum production. This factory is part of the RusAl group.

In 2021, the company exported products worth 6.5-7 billion Ukrainian hryvnia UAH. Revenue was seven billion UAH, assets were estimated at 7.4 billion UAH.

Aluminum is of strategic importance for the military industry.

The most popular areas of use are:

- Aircraft construction: fuselage, pumps, engines, housings and other elements,

- Rocket construction: hulls, engines, flammable component for rocket fuel;

- Shipbuilding: hulls and deck superstructures;

- Electronics: wires, cables, rectifiers;

- Defense production: machine guns, tanks, planes, various installations;

- Railways: tanks for petroleum products, parts;

- Cars: radiators, bumpers.

Together, the products of an apolitical businessman respected by a reputable Ukrainian business publication have been used in every murder of both Ukrainian soldiers and civilians.

By the way, realizing the importance of RusAl for the military-industrial complex, the Russian authorities actively helped the corporation. In particular, there were

huge loans from VTB and Sberbank. And recently, the corporation spoke again about the support during the sanctions.

So the protests against sanctions against Deripaska, I hope, are simply caused by a misunderstanding of how the economy of the 21st century differs from the 18th century.

And the fight against the elements and supply chains of the Russian military industry is a reasonable and timely step.