Sunday, March 4, 2012

A modern Russia?

Putin wins again. Rivals cry foul. Vladislav Inozemtsev at Eurozine writes about the future and modernization of the Russian state:
I prefer to talk about modernisation as, essentially, an economic process that leads to a modern, self-regulating economy capable of stable self-development. At the same time, the building up of an economy requires a serious, consolidated effort from both society and the state, directed at dismantling previous economic structures, opening up the country to the outside world and re-orientating social consciousness from traditional values and ideals drawn from the past, towards the future. In this particular context, I would say that the criterion for the success of modernisation is the absence of any need for new modernisations....
On the one hand, it is said that Russia is already a country with a relatively high standard of living and high incomes, which is why it would be inappropriate to apply the classical method of industrialisation based, in most cases, on the use of cheap labour. Supporters of this view generally support those who advocate a "great leap forward" from a raw material economy into a post-industrial economy.
Others, on the other hand, draw attention to the fact that, in the 1930s, the Soviet Union had already built up a powerful industrial base and that, in the 1950s and 1960s, it became a leading force in world technology. The period of industrial development has therefore passed, they say: the right thing now would be to focus on resolving more long-term issues. This position strengthens and consolidates support for the development of a "knowledge economy".
I would consider the basic counter-argument to be that industrialisation and the development of scientific and technical progress in the Soviet Union took place without any adjustments in market legislation and without taking account of notions of competitiveness. The USSR remained a very closed economy (even in the years directly preceding its collapse, export represented no more than 4 per cent of GDP, 58 per cent of which was directed at socialist countries where there was no visible competition to Soviet goods). Its industrial production was characterised first by extremely poor quality and high energy intensity, and second by almost total lack of development (except in cases when this development was absolutely necessary, as in the military sphere). Yes, the Soviet Union was an industrial power, and its economy was the second in the world; but if one compares the presence of Chinese goods on the global market in the early 2000s with the presence there of Soviet goods at the beginning of the 1980s, the "price" of Soviet industrialisation becomes instantly clear. The specific feature of the time was that the Soviet Union existed as an industrial power, but was not globally recognised as such.

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