Trajectories of Economic Transformations. Lessons from 2004 for 2024 and Beyond. Valery Kushlin

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СКАЧАТЬ But this does not mean that there was no alternative to the specific paths of reform chosen.

      Today, from the standpoint of the experience gained on the path of contradictory market transformations, it is becoming more and more obvious that ideological approaches are an extremely unreliable background for the choice of state decisions. The old communist ideology was a brake on effective entrepreneurial behavior in the economy, and, therefore, a brake on ensuring the country’s highly competitive position. But then a new ideology rose to the Olympus – the primacy of market individualism, and it proved to be intolerant of other approaches and aggressive. With unusual peremptoriness, decisions and proposals that did not correspond to the new ideology were labeled as “non-progressive”, “non-market”, and “conservative”, which was enough to remove them from consideration without delving into the content from the point of view of economic performance.

      Was it then possible to carry out effective transformations without completely rejecting the signs of socialism, but, on the contrary, deriving certain advantages from them? It is hardly possible to answer this question today. Reasoning in the style of the subjunctive mood is always insidious. But it would also be a mistake to abandon any analysis of possible variants of socio-economic systems with components of relations of the socialist type.

      Socialist and communist principles, which have been greatly discredited by the practice of the USSR, cannot simply be destroyed by some other ideology as fundamental values that attract many people. There is no reason to believe that they will not be in demand again and again by humanity in some respects in the future. Nikolai Berdyaev, one of the first and most profound critics of the model of socialism that developed in Russia after the October Revolution, remarked that “the movement towards socialism, understood in a broad, non-doctrinaire sense, is a world phenomenon” and that “it is not for the defenders of capitalism to denounce the falsehood of communism.”23 It is no coincidence that many ideas and principles of communism coincide with the universally recognized principles of decent human behavior, which are enshrined in the dogmas of the world’s major religions.

      The recent deterioration of relations between the countries of the world in claims to limited natural resources and the inevitable disillusionment with the models of absolute individualism on which Western prosperity was nurtured, has brought many thinkers back to the values of collectivism. An additional argument is the steady dynamism of economic development in China, a country where socialist principles continue to color the entire system of social relations while at the same time actively spreading creative market mechanisms.

      Unambiguous answers to the question of which model of economic and political system will be acceptable to the entire world community can hardly be found now. But the fact that this model will not be purely capitalist in the Western version in the foreseeable future is already recognized as true by objectively thinking researchers. The search for answers in terms of combining the motivations of market individualism and socialist collectivism will inevitably continue.

      Chapter 4. Radical Reforms: Concepts, Consequences, Challenges

      The idea of radical reforms, which set the tone for the transformation of the economic system in Russia, was the result of a collective awareness of the need to give our economy and society a new dynamism. It seemed that these transformations would create a scope for economic progress that would provide benefits for all. It is this national economic interest that became the driving force and justification for the initiation of radical economic and political reforms. And it was in anticipation of improvements for all that society embraced the ideas of transforming the country.

      The reforms were aimed at rapid systemic transformations that were supposed to change the entire structure of motivations, increasing the interest of enterprises, savers, banks, and managers in entrepreneurial strategies leading to high efficiency and income growth for all. But, if we recognize this as the starting point of the public choice made, then the assessment of the results of the reform plans should be carried out with the expectation of adequate socio-economic criteria.

      A Bold Start: The Early Phases of Reform

      It is believed that market economic reforms in Russia began to unfold at the end of 1991, when a team of young, educated, and radically transformative ministers was assembled in the government under the patronage of President Boris Yeltsin. As early as January 1992, bold measures were taken on the so-called shock therapy method. Control over prices was lifted, channels for the implementation of foreign economic relations on an entrepreneurial basis were wide open, a policy of all-round denationalization of the economy and privatization of state-owned objects was announced, etc. Almost at the same time, the existing money overhang in the retail market was removed, shortages of goods and queues in stores were eliminated, and the shelves were filled with imported goods that were previously unavailable for free sale.

      At the same time, it was found that the prices of goods and services rose abruptly, at a rate that was many times higher than the rate of increase in production. Wholesale prices for cement, for example, in January 1992 increased by 6 times compared to December 1991, and by 8.4 times by January. Daily output was 99% by December and only 89% by January 1991. The shortage of goods was eliminated by a sharp decrease in the effective demand of the general population and enterprises.

      The reversal of the events of the reforms of 1992 and subsequent years has been sufficiently described in the literature. The courage of the young reformers at that time was based on the desire to get rid of the shackles of the stagnant past as soon as possible and was fueled by the conviction that it was the radical version of economic liberalization that would lead to the rapid emergence of a workable market economy with automatic advantages over the Soviet economy. The realities, as we know, turned out to be much more complex than desires and hopes.

      Measuring Success: Two Dimensions of Reform

      The results of the reform efforts can be assessed in two main ways. The first is the final economic and social results recorded by statistics and felt by the population. These results are determined by the scale and rate of growth of the social product and shifts in the standard of living of the people. The second section is the institutional changes that mark the formation of a new economic system.

      It is the second aspect that has been brought to the forefront of public attention during the first very long stage of reforms. The denationalization of the economy, privatization, and the expansion of all kinds of entrepreneurial principles were conceived as the most important directions for the formation of a new structure of institutions and a new economic climate. And quite soon in this respect it was possible to note many remarkable processes in the economy that strongly influenced the structure of economic interests:

      1. Shifts in the structure of ownership, the multiplicity of interacting economic structures.

      The multi-structuring of the economy has become a reality. It is known that the economic structure is a certain type of production relations that encompass a significant part of the economy and is capable of relatively independent reproduction. At the heart of every economic structure is first a certain type of property. After 1995, more than 70% of Russia’s GDP began to be created in the non-state sector. In 1994 this share was 62% and in 1993 – 52%. Especially characteristic were the changes in the structure of retail trade turnover by form of ownership. In 1991, 33% of Russia’s total retail trade turnover was sold through non-state forms, while in 1992 it was 59%, in 1993 it was 77%, in 1994 it was 85%, in 1995 it was 87% and in 1996 it was 91%.

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