Transition to a modern management system as a condition for the survival of Russia

Today, when the outline of the new centennial accumulation cycle and the structure of the new technological paradigm have become clear, it is time to think about learning lessons from the strategic blunders of the past. During the last century, Russia could twice have made a breakthrough and seize global leadership. At the beginning of the century, from the UK, becoming instead of the U.S. the center for the formation of a new centennial accumulation cycle and the leader of the new technological paradigm. At the end of the century, from the U.S., becoming instead of China the center for the formation of a new cycle of accumulation and a new system of production relations based on the convergence of socialist and capitalist institutions. If it were not for the dogmatism and primitiveness of the " new thinking" of the Soviet leadership, the USSR could half a century ago have embarked on the formation of such socio-economic system, and become the leader of both the next long wave that was being established at the time and the global core of the new centennial accumulation cycle. The scientific concepts necessary for this had already been elaborated by the theory of convergence[244]. However, they were rejected by the dogmatically thinking ruling elite. In 1987, even a Plenum of the Central Committee of the CPSU took place, condemning these studies as revisionist.

The reforms were aimed not at creating the new production relations, but at loosening up the old ones. Scholastic-minded leading party officials failed to notice that the development of the productive forces of the global socialist system came into conflict with the production relations that kept them in check. Like their current successors in power, they considered the existing system to be the most progressive and not subject to drastic changes. The challenge of the technological paradigm change that took place at that time was answered only by calls for the acceleration of scientific-technical progress. Thereafter, when the Integrated Program of Scientific-Technical Progress developed for this purpose stalled due to a lack of implementation mechanisms, they began to hastily imitate their creation, not changing anything in essence. This resulted in an increase of chaos in the economy and tensions in the system of its administration, culminating in the self-destruction of the system of socio-economic relations and the collapse of the entire global socialist system.

Of course, one could regret the opportunities missed in the 80s of the last century. If the Soviet leadership, which had control over one third of the global economic potential, had listened then to the recommendations of the scientists of the Economics Department of the Academy of Sciences (D. Lvov, N. Petrakov, O. Bogomolov, L. Abalkin, Y. Yaremenko, A. Angishkin), today the USSR would have been in good faith the global leader.

One can also recall another opportunity missed in the course of the previous change of long waves and the centennial accumulation cycles. At that time, Nicholas II could also lead Russia to global leadership, relying on the continuation of Stolypin's policy of modernization and peaceful cooperation with European countries. However, failing to bring themselves to urgent changes and being tempted by simple decisions, the leaders of the country fell victim to external provocations that dragged the ruling elite into catastrophic ventures.

The first catastrophe cost our country a third of its economic potential, including emigration of a significant part of engineers and many millions of lost human lives. Mitigation of its consequences took two decades, during which a new system of institutions was built that ensured restoration and industrialization of the national economy. It took many more sacrifices to protect the country from external aggression and to bring this system to a global scale.

The second catastrophe, even without an overt civil war, was no less destructive in terms of losses in the productive, human and natural-resource potential. The new system of institutions was being built under the external control of Washington's international organizations, with market fundamentalism as its basis. As was shown above, the drastic reforms based on it and conducted in the spirit of the Washington Consensus doctrine, subordinated the disheveled post-Soviet economy to the interests of American-European capital.

Russia and other republics of the disintegrated Soviet Union were pulled down to the level of the raw materials periphery of the American accumulation cycle. The latter, having absorbed not less than $ 3 trillion, millions of intellects, hundreds of critical technologies that had been accumulated, established and created within the global socialist system, gained a " runner's high" and successfully passed another long wave of economic growth. By now, this rise has been completed, since the dominant technological paradigm has exhausted the possibilities for further growth. The possibilities for expanded reproduction of the institutional system of the American accumulation cycle have also been exhausted.

The current status of Russia is incomparably worse compared to the previous two structural crises. At the beginning of the last century, the Russian Empire was developing ahead of schedule, attracting capitals and intellects from developed countries to the advanced economy sectors. The Bolsheviks got the richest country in the world which, despite the monstrous losses, managed to industrialize on the basis of a new technological paradigm for that time. The USSR objectively became the second economy of the world in terms of economic, human, scientific and technical potential. Yeltsin's regime got most of it to control. However, the possibilities of its development by activating the entrepreneurial initiative of millions of citizens (as it was done in China) were not used. The oligarchy, which established itself on the basis of state property privatization, basically squandered this potential and transferred it to foreign jurisdictions. The reforms were carried out according to the prescriptions issued by the Washington international financial organizations. The system of economic regulation created in accordance with them was built into the reproductive system of the world economic structure of the American accumulation cycle, which resulted in its degradation and transformation into the raw materials periphery of the core of this system.

It follows from what has been said above that remaining within the existing governance system, Russia is doomed to be a victim of U.S. aggression undertaken by American geopoliticians in order to retain global leadership in their competition with China. If this aggression succeeds, Russia will become a piece of fiddler's money in the haggle between the U.S. and China, with a possible concession of a significant part of its territory. It is possible to avoid such a course of events only through a drastic change in the system of economic management by creating institutions that are characteristic of the new integral world economic paradigm. This is not so difficult to be done, given the country's experience in planning and managing the scientific-technological progress, creatively used by China and other core countries of the emerging new world economic order of the Asian cycle of accumulation.

First and foremost, urgent measures are needed to drastically change the monetary and credit policy in the direction of creating domestic long-term credit sources. To ensure expanded reproduction, the Russian economy needs a substantial increase in the monetization level, with expansion of credit and the capacity of the banking system. Unlike economies of the countries issuing reserve currencies, the main problems in the Russian economy are caused not by the excess of money supply and associated financial bubbles, but by the chronic under-monetization of the economy, which for a long time has been overtaxing itself due to an acute shortage of loans and investments.

It is necessary to abandon the dogmatic approach imposed in the 1990s by the IMF with the aim of colonizing the post-Soviet space with American-European capital. Over two decades the Russian monetary authorities have been guided by superficial misconceptions about the linear relationship between money stock growth and inflation, ignoring both scientific knowledge on the dynamics of economic processes, and global and domestic practical experience.

At present, monetary authorities make errors in the planning of monetary and credit policy that are naï ve and extremely harmful in their consequences. In particular, they proceed from the wrong hypothesis about exhaustion of the available sources of economic growth, while the observed recession occurs against the backdrop of 30-40% underperformance of production capacities, 15% excessive employment in industry and services sectors, and extremely inefficient use of natural resources and human potential.

As the world experience reveals, in order to realize the opening opportunities to raise on a new wave of growth of the new technological paradigm, a powerful initial impulse of renewing the fixed capital is required. However, the level of investment and innovation activity required for this exceeds twofold the current Russian financial and investment system capacities. To achieve this, it is necessary to implement the following set of measures to create the macroeconomic environment and the system of institutions that are required for outstripping growth of the new technological paradigm. They are directed toward the country's reaching the path of sustainable economic growth at a rate of up to 8% in the annual GDP growth, 15% in investment growth, 20% increase in R& D spending.

 

 

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