RUSSIA Russian economists propose to return to Stalin’s five-year plans

The possibility of returning to the state the assets that were privatized after the fall of the USSR is being studied. The country is going through a crisis stemming from the war in Ukraine and Western sanctions. Kaysin Khubiev and Ivan Tenjakov: Returning to centralized control is the only way to promote the war economy wanted by Putin.

Moscow () – The head of the Union of Entrepreneurs and Producers of Russia, Aleksandr Šokhin (view photo), responded to the arguments of economists who have criticized in recent days the economic model derived from post-Soviet privatization. Critics consider this to be a fatal mistake that led to Russia’s international marginalization and humiliation. Indeed, in the last 20 years, Russia’s economic growth has been much slower than that of China and the United States, and other more developed countries.

The diagnosis of a systemic illness of the Russian economy is spreading more and more among commentators, becoming mainstream among non-aligned economists. Allegedly, the state promoted savage privatizations, without adequate control: a phase of war between the oligarchs subsequently ensued, culminating in Putin’s authoritarian turn. To remedy the situation, today the professors of the University of MGU propose a recipe that looks like a return to the planned economy of Soviet socialism.

The idea would be to “give more to the State”, against the background of the serious problems of industrial production and its military reconversion, to provide soldiers with weapons and equipment that are lacking today. This new orientation should be accompanied by a profound judicial reform, and replace the ownership of strategic companies with their nationalization. This would be implemented through a special body, an Economic Coordination Council.

The reference model is none other than the State Defense Committee of the Stalinist era: starting in the 1930s, the USSR carried out the greatest industrialization and transformation of agriculture, science and the whole of Soviet society. A process that came after the liberal decade of the “New Economic Policy” (NEP), promoted by Lenin to reactivate Russia and the entire Union after the First World War. According to Professors Kaysin Khubiev and Ivan Tenjakov, in their article on “Issues of Political Economy”, the low growth of GDP in the last 30 years -no more than 20-25%- would justify this new “dekulakizatsija“, imitating the eradication of the kulaksthe peasants became rich, during the time of Stalin.

Analyzing the strategic objectives of technological development, proposed by President Putin in June this year, the two academics conclude that they can only be achieved through forceful action by the state. That is, through five-year plans with budgets imposed from the top of the government. These plans would also become mandatory for private industry and stop the flight of capital abroad, which would translate into investments in the country’s economy.

The nationalization would thus occur not directly as an expropriation, but as a redefinition of property through contests, with investments that meet the needs of the state economy. The new masters, including the State itself or the workers’ groups, would compensate the dispossessed owners with the resources resulting from the new productive approach.

Šokhin reports the opposition of businessmen to the economists’ plan, which he describes as the “effect of the post-Covid syndrome”, and calls for a credible way out of the economic crisis, increasingly overwhelmed by uncertainty about the future, after the war and sanctions. The transition to a “war economy”, according to Šokhin, does not mean a return to the Soviet type, although he admits a much more decisive role for the state.

The mobilization is changing the labor market, giving business ownership a much more institutional role, as the rector of Rankh Presidential University, Vladimir Mau, explains: “We have no problem with the market economy, and there are no analogies with the collapse of the Soviet economy in the 1980s: we made mistakes, but today we just have to resist the sanctions, and start over with new markets and new production.