Probbly not, but there has been some movement in that direction. The New Economic Policy (NEP) was the Socviet system in the 1920s after the War Communism period and before Stalin imposed command central planning as well as full state ownership of the means of production, classsic socialism. The War Communism period was a command economy, but without central planning. Famine appeared as authorities demanded crops from farmers.
The NEP was a partial move back from War Communism to a mixed economy in which most of the "commanding heights" were nationalized, but smaller businesses were privately owned. There was basically a makrket economy with agriculture privare and market oriented.
When the USSR ceased to exist, central planning ended in Russia, and there was widespread privatization, even as some sectors remained state owned. What has happened in recent years has been a mild trend towards renationallizing several large firms in several sectors, or letting a dominant state-owned firm become more dominant compared to privatedly owned ones. This has happened in the oil and gas sectors shere both Rosneft and Gazprom have been renationalized, with only Lukoil privately owned, now the largest privately owned firm in the economy. In banking there were over 1000 privately owned banks at one point, but the vast majority have failed and increasingly the sector is dominated by always state-owned Sberbank, with the Gazprom bank also being renationalized when Gazprom was. The railroads remain state-owned as well as the Telecoms.
It is not clear what proportion of the economy is state owned or state directed, with different sources saying anything between 40 and 70%. However, agriculture and most smaller businesses are privately owned and there is no central planning, even though the state does direct much of what goes on in the economy. The system is not precisely the same as the old NEP, but it is not all that far off and it may have become more like it in recent years. On a just-ended visit to Moscow I heard from someone at the central bank that reported inflation numbers are not precisely accurate as they are set ahead of time by policmakers to fit budget projections, with, in effect, the central bank having to try to make those numbers be true, or at least close enough to get awy with the lie.
Addendum (3/12, 8:15 AM): A way NEP different than now is that was a period of social and cultural liberalism and innovation, with the influence of the church suppressed. One saw modern literary forms, such as the poetry of Mayakovsky, constructivism in architecture, abstract art as with Kandinsky and Malevich, new names for things, and much more, although it was not a political democracy. But now, with at least nominal democracy, the churh is increasingly influential, homophopbia and xenophobia are on the rise, and a nationalist and autoritatian themes are on the rise.
Actually, this part, along with the form of state control of the economy in place, more resembles Italy in the 1920s than Russia.
Barkley Rosser
18 comments:
Minor comment: War Communism was just that - a response to the impacts of the First World War and the Civil War. Famine started in 1916/17, as urban populations ran out of food. The Tsarist and following regimes were unable to deal with this (indeed, Tsarist policies were part of the cause), hence the revolution. It took political victory to restore the conditions in which any other economic policy was possible (and War Communism fed the urban centres and the railways, which ensured Bolshevik victory).
An interesting discussion on War Communism and the NEP:
http://www.inquiriesjournal.com/articles/1670/lenins-new-economic-policy-what-it-was-and-how-it-changed-the-soviet-union
NEP had a technocratic side to it: through trustification, figure out which enterprises were run well and let them gobble up others, and then run the economy by running the commanding heights. Less clear there is any similar technocracy running the show today. More of a dirigisme oriented to profit for Putin and his cronies, and enough control over the economy to use paternalism. In other words, a less ideological and more cynical (or corrupt) dirigisme. The comparison with Italy is more apt. Actually, Latin American economies come to mind, even if the comparison is imperfect.
Fascinating essay.
The article assumes (as much economic discourse tends to do) that Lenin et al were free to make economic policy in a vacuum. In fact, in 1917 there was a war on, harvests were down, 9 million men were in the army and the Germans had occupied a considerable chunk of the country. Then after that, there was a civil war, German and Allied occupation, war with Poland. The key to avoiding total collapse was keeping the railways running and feeding the urban populations. War communism did that - no other policy was possible. That a policy switch was possible in 1921 is not an argument for that policy in 1919.
Peter T.,
Sorry, but you are seriously off on the most basic facts. There is a well known tendency for even strictly market capitalist economies to go into heavy command mode during wartime. The US did so duering WW II, and the model for Lenin was Germany of WW I. The peoblem was what they did in agriculture.
Yes, there weere food shortages in 1917 prior to the Bolshevik assumption of power, indeed, promises of "bread and peace" were made by the Bolsheviks, and they did deliver the Brest-Litovsk treaty that ended the fighting with Germany. But the famine that really underlay the step back to basically private free markets when the civil war (and foreign invasions) ended and the NEP was implemwnted happened in 1921-22. Five million people died. This was not going on in 1917, not remotely. This has been largely forgotten in the West because there has been so much focus on the larger famine in the 30s with collectivization, but in Russia it was the other way around, with the 30s famine long underreported while much was made of the 1921-22 one, which indeed was of the same scale and could at least be partly blamed on the invading foreigners.
The Tsarists did not do much in agriculture until late 1916 (when they raised the price the state would buy grain at). Nor did the Provisional Government. Then came the Revolution, and civil war. The key issue in the civil war was maintaining the railways and feeding the urban populations, so forced requisition - in the absence of any other means (very little production to exchange for grain, currency in chaos, large area occupied by Germans or separatists or anarchists or other factions). The war ended in the central regions in very late 1920 and in the Ukraine went on into 1921 (fight with Makhno), with issues at the centre and in Siberia/Central Asia well into 1922.
My point is that the practical options for any regime trying to hold the state together in 1919/20 were very limited. The alternative was not some better situation but something more like the misery of China through the 20s and 30s. Does not make it good, or justify it morally. Just understandable. The article is recommending rest and a balanced diet to a person in a cage fight to the death.
Barkley said: There is a well known tendency for even strictly market capitalist economies to go into heavy command mode during wartime. The US did so duering WW II
This is a good point and it reminded me of something that it took me a long time to learn over the course of my four decades as an ORSA guy with the Army. When economists talk about efficiency, they usually have in mind some idea of maintaining the same output with fewer inputs, or some similar version of the story. But when military leaders talk about efficiency they mean something quite different. When military types complain that some bureaucracy is inefficient, they don't mean that it takes too many inputs for a given output level; they mean that it is slow to respond to the commands of leadership. In a sense their idea of efficiency is akin to Aristotle's notion of an efficient cause. This explains why a lot of the old Cold War literature sort of praised and envied the efficiency of the Soviet economic system. They didn't mean that the Soviets produced output efficiently, they meant that the Soviet economy could be directed and controlled by the leadership. In Cold War literature the authors oftentimes thought of mastering the productive power of the US economy such that it could be directed towards strategic and military goals. They were not thinking in terms of following some kind of Solow growth model following a balanced growth plan. None of that. They saw the US economy as inefficient because its output potential could not be harnessed to the military leadership's goals.
Very inteeresting comment, thank you 2Slug as well as for the personal addition. I shall not directly reply but note things your remarks trigger in me. So an obscure fact (noted in my comparative econ book with wife Marina) is that at its last stage in the 80s the Soviet economy was by various measures efficient, or at least, cost-effective. There were several papers by deeply knowledgeable scholars on this point, people involved in frontier production function analysis.
As with most things in this dialectical universe, this was deeply tied to its contradiction, its long run stagnation. The command socialist syystem suppressed the Schumpeterian creattive destruction associated technological change. So the stagnation of little tech change helped make the system perfect its given tech, becoming reasonably cost-effective. But in the end the tech stagnation did them in.
Note on Barkley Rosser’s ‘Is Russia Becoming A Neo-Socialist NEP Economy?’
The distinction between Capitalism/Socialism is obsolete. The updated distinction is Capitalism/Gangsterism/Socialism.
What does the Neo-Capitalist economy look like? The answer is not in the supply-demand-equilibrium textbooks but on the Internet: “When we look at western countries, especially the USA, we see what some call ‘crony capitalism’ with absolutely fantastic levels of corruptions, huge mega-corporations in control of entire segments of the economy, exports imposed by sanctions and threat of sanctions rather than competitive advantages, feudal labor laws, a ruthless imperialist/colonial policy of systematically robbing those who dare to live above resources the Empire needs or wants.”#1
Accordingly, the commanding heights of the economy are no longer occupied by capitalists/entrepreneurs but by actors/entertainers like Elon Musk.
Whether there is long-range central planning in Neo-Capitalism is unclear. However, the fact that the crucial qualification of presidents like Reagan or Trump or business leaders like Musk is media-suitability lets one guess that at least the casting is centralized in Hollywood.
Unfortunately, Barkley Rosser is stuck with the NEP in interwar Russia and somehow missed that there has been an NEP in the United States in the 1960s. As a result, the economy does no longer resemble the classical description of free market Capitalism.
Egmont Kakarot-Handtke
#1 The Saker
https://thesaker.is/mr-maga-and-the-end-of-western-civilization/
The US economy is about a third run by government, and this has basically been the case since the 1930s. It has long beeen a mixed economy that is predominantly market capitalist. Except in WW II and in a few specific government departments such as Transportation, there has not been and is not now central planning in the US. Indeed, very few nations now have central planning even of the non-command indicative variety, with Iran and India examples that stiil have the latter. These are mostly of the five year plan variety like China has, not classic month-to-month planning like the old USSR had.
Elen Musk is a capitalist and entrepreneur, whatever he does or does not do on the media. Some other more successful entrpreneur capitalists are less on the media than he is, such as the people running Google. Some are more in the media than others, but that is not a necessary part of being a successful entrepreneur/capitalist.
Barkley Rosser
The economist as scientist cannot say anything about the political system but he can say something about the economic system. The most important insight is that all monetary economies are governed by the same economic laws. For example, the macroeconomic Profit Law, i.e. Q=Yd+(I−S)+(G−T)+(X−M), holds independently of whether an economy is capitalist or socialist. More specifically, this Law holds for the USA, Russia, China, the EU, etcetera.
The Law boils down to Q=(G−T), i.e. the profit of the business sector is equal to the deficit of the public sector.
For the USA, this means (i) the profitability of the so-called free market economy is maintained by the State’s permanent deficit spending, (ii) financial wealth grows in lockstep with public debt, (iii) the positive performance of the stock-market is maintained by the operations of the Central Bank.
In sum, the wealth-creation of the so-called free market economy depends on the joint operations of Treasury/Central Bank. The State produces macroeconomic profit and this money is, in turn, partly used to control the State. The power-infighting between the different factions (military, CIA, FBI, organized crime, media, agriculture/industry/banking, states, churches/religious groups/sects, political parties, domestic/foreign lobbies, wealthy individuals, etcetera) is NOT the subject matter of economics.
It is characteristic of economists from Paul Krugman to Barkley Rosser that they blather a lot about the ongoing political infighting but have no idea how the monetary economy works. With this unqualified personages, it is no wonder that economics is to this day a failed science.
Egmont Kakarot-Handtke
What a pile of crap, Egmont. The US government ran a budget surplus during the last several years of the Clinton presidency, but, guess what? Corporate profits were at a record high. You are just plain wrong. Period.
Barkley Rosser
You say: “The US government ran a budget surplus during the last several years of the Clinton presidency, but, guess what? Corporate profits were at a record high.”
Have you never heard of vector addition?
The macroeconomic Profit Law, i.e. Q=Yd+(I−S)+(G−T)+(X−M), consists of 4 vectors. The government vector reads Qg=(G−T), i.e. the deficit of the public sector adds to the profit of the business sector and the surplus of the public sector adds to the loss of the business sector. The negative gov vector, though, can be overcompensated by the other vectors, such that the vector sum is positive.
Your Clinton example is proof that you cannot even read a simple equation.
You talk about Capitalism/Socialism and do not understand the Profit Law. What about doing some scientific homework first?
Egmont Kakarot-Handtke
Egmont,
Your comment shows that you do not know what a fact is, much less broader empirical data. This has been pointed out here on numerous occasions and is a main reason that your claims about how other economists are "unscientific" while you are happen to be just completely ridiculous. You live in a world of pure theory that has nothing to do with anything in the real world.
Barkley Rosser
You say: “Your comment shows that you do not know what a fact is, much less broader empirical data.”
The macroeconomic Profit Law consists of measurable variables and is testable in the USA, Russia, China, the EU, etcetera with the precision of two decimal places. That makes it scientifically superior to your political blather about interwar Russia.
Egmont Kakarot-Handtke
Yes, the variables are measurable, and they are measured all the time, and your claims about what those measurements should show are blatantly false. Corporate profits were very high in the US in the late 1990s at the same time that the budget was running a surplus. Since you claim that that corporate profits equal budget deficit, you are wrong. Period.
Deal with it, Egmont. I am not going to post on this nonsense further on this thread.
Barkley Rosser
You say: “Yes, the variables are measurable, and they are measured all the time, and your claims about what those measurements should show are blatantly false. Corporate profits were very high in the US in the late 1990s at the same time that the budget was running a surplus. Since you claim that that corporate profits equal budget deficit, you are wrong. Period.”
I said: “… the macroeconomic Profit Law, i.e. Q=Yd+(I−S)+(G−T)+(X−M), holds independently of whether an economy is capitalist or socialist.… The Law boils down to Q=(G−T), i.e. the profit of the business sector is equal to the deficit of the public sector. For the USA, this means (i) the profitability of the so-called free market economy is maintained by the State’s permanent deficit spending, …”
For the record: you are wrong, I am right.
Egmont Kakarot-Handtke
Post a Comment