Russian Studies graduates in the United States need less 19th century literature, more 21st century finance.

Making Econ 101 or Finance 101 a minimum prerequisite for all Russian Studies grads might improve the understanding of the Kremlin's motives in determining its domestic and foreign policy. Photo: AP

Today, it’s impossible to understand the nuances of modern Russia without having a top-flight knowledge of economics and finance. Not just classic microeconomics of the sort that you’d get in a university’s Econ 101 class – but knowledge of currency markets, international debt markets, and modern commodity markets. Today’s Russia experts need this to understand all of the factors currently roiling modern Russian currency crises, sharp swings in the price of oil, free trade deals, debt downgrades and equity market reactions to political events – they’re all topics that are helping to determine the arc of both Russian foreign and domestic policy.

During the heyday of the Cold War – and even in the two decades following the collapse of the Berlin Wall – Russian Studies programs in the United States typically required a mix of Russian language proficiency, knowledge of Russia’s historical role in international affairs, a study of Russian culture (mostly 19th century literature, maybe some Alexander Solzhenitsyn or Boris Pasternak thrown in for good measure), and enough knowledge of how the Soviet political system worked to make a few expert observations as a Kremlinologist.

That’s a big problem for today’s modern, interconnected world.

Notice what’s missing – any type of broad-based understanding of global finance and macroeconomics. If you wanted to learn more about business in relation to Russia, it usually required taking MBA-level classes – and even these classes were usually found under the “emerging markets” rubric. There was no strong Russia focus. Even economic topics like “shock therapy” during the 1990s – which should have been studied from a macroeconomic perspective – tended to be approached from a sociological or historical perspective. (And look how “shock therapy” turned out.)

Consider the requirements for an undergraduate Russian Studies degree at Harvard, which has to be considered one of – if not the premier – Russian Studies program in the nation. As Harvard points out on the Davis Center website, “While the field may include the study of language, literature, and culture, the primary emphasis is on the social sciences, including history.” While economics is one of the social sciences mentioned by Harvard, the others are anthropology, government and history. Harvard’s two-year Master’s Degree in Russia, Eastern Europe, and Central Asia (REECA) is no different. It “offers advanced training in the history, politics, culture, society, and languages of this region.” (But no economics or finance.)

If America’s top Russian Studies programs won’t guarantee their grads know as much about derivatives as Fyodor Dostoevsky, you will get a strange bifurcation of “American expert opinion” about Russia. On one hand, you will get the think tank experts and scholars rambling on about the Russian political system, liberally peppering their remarks about the grand sweep of Russian history or their in-depth knowledge of some intricate Cold War policy area, like strategic arms and nuclear disarmament. When it comes to economic solutions, they are still thinking in terms of the “shock therapy” solutions of the post-Soviet era, which they see in sociological and political terms rather than economic terms.

On the other hand, you get the traders and portfolio strategists who appear on CNBC and Bloomberg and in newspapers like the Wall Street Journal. These are the guys and girls who manage multi-million-dollar portfolios for a living, and for whom a drop in sovereign debt credit ratings has very real meaning – not just for average Russians, but also for institutional investors looking for juiced-up returns. These are the people who have an intuitive grasp of how oil prices fluctuate over time, and how the risk-reward premium differs across a variety of asset classes.

That sets up an odd contradiction in the Western capitalist system.

At a time of potentially cataclysmic change in Russia, you have two very different sets of people trying to tell us what to do about Russia. You have the academics and scholars who pull out their Cold War frameworks and their knowledge of Russia’s historical regimes from Peter the Great to Putin the Great. And then you have the Wall Street and London traders who have zero ideological baggage and might pay attention just to the country's economic stability and prosperity that resulted from oil boom in Russia and faded away with the headlong drop of oil prices.

So here’s the possible solution: Make Econ 101 (and preferably, Finance 101) a minimum prerequisite for all Russian Studies grads. Encourage them to take classes in business and finance. The next generation of Russia experts should be able to discuss important topics like de-dollarization without blushing. They shouldn’t flinch when they are asked to talk about commodity derivatives such as futures, options and swaps. They should be able to make some truly informed opinions about deficits, borrowing costs, currency crises, free trade agreements and credit ratings.

The long-term benefits would be extraordinary – you’d be preparing the next generation of Russia experts not just for a career in academia and Think Tank Land (opportunities that really don’t exist any more the way they did during the Cold War), but also to become consultants, traders, entrepreneurs and financiers. If the future of the U.S.-Russian relationship is in more business, more trade, and more economic relationships, this knowledge of macroeconomics and finance are vital not just for the future success of students, but also for the stability of the current world order.

The opinion of the author may not necessarily reflect the position of Russia Direct or its staff.

Want to know which program for Russian Studies is the best in the U.S.? Russia Direct is about to release its first-ever ranking in March 2015. Here’s your chance to nominate your pick as the top Russian Studies program in the nation. Read more here