Gloomy prospects for the Russian economy

Abstract

ONCE AGAIN I find myself against the (post)sovietological mainstream-at least in the USA-which habitually has believed in legends.' A recent American conference concluded that Russia was 'doomed to stability'. A remarkable assessment.2 In fairness though, there are dissidents nowadays, most notably Peter Reddaway.3 I also deviate from the mainstream of economics, largely because of my disagreement with the view that economic theories are universal and hence applicable to any (type of) economy. Looking back, I understand now that my disagreements with the sovietologists followed from (in addition to other reasons) my perception of the Soviet-type economy as an economy of a special kind, based on non-private property. In my immodest opinion, the attempt to formulate a 'scientifically correct' course for the economies in transition was doomed from the start precisely because the course prescribed certain 'universal recipes' for all of them. In my view the fundamental mistake was the notion that finance, money and market are more basic than property rights. Many authors now prefer the term 'market' to 'capitalist' economy. This is not just semantics: there was a socialist market economy in Yugoslavia, and the main reason why Western economic theories are not quite applicable to Soviet-type economies is that the latter operated almost or entirely without private property. The dismal state of Russian statistics also continues to be overlooked. The old