Mobilization economy versus structural transformation: who wins?

Mobilization economy versus structural transformation: who wins?

31 May, 19:37
Дмитрий Михайличенко
Three months after the start of events in Ukraine is clearly not enough time to comprehend how the Russian society, economy and public administration will change, but we have already managed to see the contours of the changes.

Dmitry Mikhailichenko, political analyst

According to the principle of “intelligence sign”, which is now widely used in the conditions of a special operation: everything that will happen next is already there, it is only important to see it at the initial stage of genesis.

For the past three months, the expert community and the media have been talking a lot about import substitution and the mobilization economy. This approach is opposed by another one, which assumes a structural transformation of the economy, but at the same time maintaining a focus on the previous state.

Strictly speaking, proactive modernization is impossible for Russia under these conditions, the prospects (more precisely, the risks) of de-modernization and sliding into a simplified sociality, the economy of which will lose its diversity, are quite clear. Under these conditions, the task of the state is to provide at least some catch-up modernization and prevent technological lagging behind the countries, if not the first, then at least the second world (Turkey, Argentina, Brazil, etc.).

The principle of structural transformation of the economy, voiced by the head of the Central Bank Elvira Nabiullina, allows preserving some principles and elements of a market economy, and this factor, among other things, will work for harmonization (however, very relative and vague) in relations with the West.

The scenario of a mobilization economy, on the contrary, assumes the suppression of the remnants of a market economy, an overconcentration of resources from the state for, as stated, the sovereign development of the country. However, strictly speaking, this adaptation mechanism, sooner or later, will lead to a new wave of confrontation and the locking of Russia in its own bosom. Adherents of import substitution do not bother with examples of modern states that have effectively replaced imports (about North Korea and the level of purchasing power of the population of which, as a rule, they prefer to remain silent).

The high level of concentration of capital in the state makes the ruling class not only indifferent to the economic situation, the interests of small and medium-sized businesses and market mechanisms in general, but also to public opinion in general. With all the ensuing consequences.

The logic of resource concentration is beneficial to the oligarchs and managers of state corporations, but it leads the country to a state of deliberately limited economic growth. In fact, this type of mobilization economy will lead to hyper-statism, and this will invariably work to further strengthen control over society, suppress the institutions of social criticism, and will contribute to the simplification of social and economic diversity.

Now it is clear that part of the ruling class is trying to avoid this scenario, seeing its dead end. However, it is quite possible that supporters of mobilization turbo-patriotism will get new opportunities to actualize anti-Western resentment in case of failure of negotiations with the West (by the way, there are quite a few intelligence signs of such a scenario). And then we can expect even tougher attempts to impose the principles of a mobilization economy.

The main consequence of this will be a sharply increased and multi-level potential for confrontation with the West, as well as fundamental changes in the structure of Russian society in the conditions of its impoverishment. Therefore, it is hardly worth it now to be ironic over the scenario of "structural transformation" of the economy, which was voiced by Nabiullina. Its successful implementation will allow in the future to hope that a sharp and open confrontation with the West will be avoided: moreover, to the benefit of the absolute majority. True, I would not overestimate the likelihood of this scenario.

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