Here it is worth recalling the notable book Growth Crystal
, published back in 2021. Its main author is Alexander Galushka, previously president of Business Russia and Far East development minister and now the deputy secretary of Russia’s Public Chamber. The main idea of the book is simple: from 1929 to 1955, the USSR set records for economic growth that have yet to be surpassed by any other country. According to the book, to drive such economic development we simply need to use this invaluable historical experience.
A convincing critique of the arguments regarding the effectiveness of the Soviet “mobilization economy” is given in a comprehensive review
of Galushka’s book, “What the History of the Stalinist Economy Teaches,” by Professor Girsh Khanin, coauthor of the famous article “Lukavaya Tsifra
” (“Deceiving Statistics”), which caused a sensation back in perestroika times. The objections of doubters like Khanin, however, did not in the least hinder the campaign to promote the book in the public space as a “fundamental scientific monograph” showing how to effect a “Russian economic miracle.”
How the campaign was carried out led to the impression that very influential people were behind it, using the ideas of the book’s authors to justify the transition to a mobilization model for the economy. For example, in May 2023, during a speech at the St Petersburg International Legal Forum, Investigative Committee Chair Alexander Bastrykin explicitly stated
that the main sectors of the economy should be nationalized to ensure “economic security in times of war.” Recall that before his appointment to the post of prosecutor general, Krasnov had worked for 13 years under Bastrykin.
If we proceed from this interpretation, then the claims of the Prosecutor General could be considered a trial balloon. Since the cases caused a nervous reaction from big business and gave rise to a series of public statements, the initiative was slowed down – so as not to create unnecessary tension, especially since the presidential election is coming up in March 2024. However, after the election, given the huge increase in spending on the army and other security forces penciled in to the budget, as well as Putin’s statements that the special operation will go on until victory is achieved
, we should expect a new escalation in the war with Ukraine. And this, in turn, could become grounds for a full-fledged pivot to a mobilization economy.
The problem is that in the mobilization model that the authors of Growth Crystal
put forward, there is simply no room for big private business. All the “strategic heights” in such an economy are controlled by the state. Anyone who disagrees with this approach will “fall out of windows” (as has already happened with a number of top managers from major Russian companies in the last year and a half – here
), while the remaining businesspeople are destined to become at best new “red directors,” appointed and removed by Kremlin fiat
. Meanwhile, the declared relocation of the parent holdings of the biggest companies to Russian jurisdiction
will certainly make their business more controlled by the authorities.A more general view
A preliminary discussion for this commentary with a number of experts (including those still in Moscow) does not suggest that any one of the three abovementioned motives is clearly the main one – neither the seizing of property by private players close to the Kremlin, nor general pressure on big business with the aim of having headquarters moved to Russian jurisdiction, nor moving toward a mobilization model for the economy. One of the experts said that it is impossible to deny the trend; the only question is where (at what level) it will end. Still, there is no fatal predetermination yet that everything will be sucked up by the state – after all, in the end it was private business that showed a very high degree of flexibility and pulled the economy back from the brink in the spring of 2022.
Another expert believes that the system still operates on a model in which the key factor is not certain ideas or interests but physical access to Putin. The state apparatus (including security services) will implement all decisions that have a green light from Putin – no matter how contradictory they may be. In addition, these decisions could well be implemented alongside the realization of certain private or corporate interests.
And yet it seems to me that