The main cause of the economic crisis in Russia is revealed

2024 Author: Seth Attwood | [email protected]. Last modified: 2023-12-16 15:55

Of the many reasons for the chronic economic crisis of our system, there is one, but the most important one.

Human consciousness is able to simultaneously keep in focus no more than three components. The most trained people can hold five. Brilliant and super-capable - or highly trained - seven. Anything beyond the three points of control falls out of the sphere of awareness. Either it is not taken into account at all, or goes to the level of motor skills, called reflex control.

When the economic picture is painted to us, our attention is scattered between the number of parameters far exceeding the optimal number. That is why the picture always falls apart, and this allows all sorts of cheats, disguised as economists and economic specialists, to powder the brains of the population with various theories, whose task is to draw up a false picture of life by scattering attention.

Someone presses on some criteria, someone on others. Their combinations are always not just arbitrary, but ideologically set in advance. Economists are the only tribe on earth that in science makes conclusions fit a hypothesis, rather than form a hypothesis from conclusions. Which gives the full right to expel economists in disgrace from science and place them on the part of propaganda as the most sophisticated category of fraudsters and manipulators.

What do we know about the nature of our economic problems? Very different. Some say that the monetary theory of money is to blame. Others are lack of adherence to the rules of this theory. Still others - that non-sovereign emission is to blame, and that if we printed money ourselves according to our needs, we would be happy. Others shout that if this is done, then there will be hyperinflation. Fifths put the budget in the center of the problem and say that it is possible to develop by allowing the deficit to grow. The sixth shout that this is madness, and one must first give a budget balanced in terms of revenues and expenditures, and then think about growth, emissions and inflation.

Here manufacturers appear and ask to remember their existence in general. The entire community angrily turns to them and shouts: "Go away, not up to you, we have not yet solved the most important problem!" Raw materials specialists grin and say: "Whatever you decide, it will be as we say." The bankers view these disputes as a bunch of madmen and quietly do something that has nothing to do with any of the disputants. The rulers watch which group is winning at the moment, and this is what they articulate as the main administrative priority.

The people first try to keep track of this kaleidoscope, then they spit and leave, without understanding anything about what is happening, but firmly convinced that all around are cheats and swindlers and there is no one to believe at all. Here different saviors of the people appear and bring their own simple versions of complex solutions, for which the people are happy to vote. Or he wants to vote, when he is not allowed to.

But no one really understands what is the cause of all our difficulties and why they do not disappear. In these attempts to understand reality, people often grab the right end that allows them to unravel the whole tangle, but along with the correct threads, fake ones always come across in their hands, and the whole picture is distorted, despite the presence of correct statements in it. We will try to give another interpretation, in which it will be possible to understand where all the difficulties of modern Russia begin. But we will not offer a solution to the problem, because any hypothesis will require lengthy experimental testing.

There is a Soviet myth that capitalism is to blame for everything, and if you return to the USSR, then all problems will disappear. There is an anti-Soviet myth asserting that problems arose already in the socialist USSR, and therefore it is madness to return there.

Supporters of the capitalist myth cite Kosygin's reform as an example, showing it as an attempt to solve the economic problems that have accumulated in socialism. In this case, the whole trouble, in their opinion, is a stop halfway. And there is truth in this statement. Failure to complete and curtail those reforms and is declared the cause of socialist problems. Only not folding, but leaving new elements along with the old ones. “New” in this context does not mean the best, and “old” is the worst. New are just new, that's all.

Alexey Kosygin and Lyndon Johnson. 1967

Supporters of the socialist myth give a real example of how Soviet economists, after Stalin's death, asked Khrushchev not to destroy money circulation in the country with the so-called "cost accounting", but Khrushchev did not listen to them. The monetary reform, carried out in the interests of the then emerging oil exporters, created the problems that ultimately destroyed socialism. One of the attempts to save which was Kosygin's reforms, but since they did not change the foundations of the order created by Khrushchev, it is clear that the alien body led to a crisis and rejection.

Nikita Khrushchev

Thus, it is wrong to say that a return to socialism solves the problems. It is also necessary to clarify what version of socialism we are talking about, because there are at least four of them - Stalin's, Khrushchev's, Brezhnev's and Gorbachev's. All these are socialisms, and socialisms are different, with different economic mechanisms. Without specifying what we are talking about, the conversation will be empty and will be reduced to unfair manipulation.

The eternal and constant - as they say in science, "permanent" - the crisis of our Russian economy crawls out of the way the ruble is issued. And the point here is not about the sovereignty or lack of sovereignty of anything, but about the fact that, in principle, the Russian emission model is assembled for commodity exporters.

The Central Bank is the core, the engine of this mechanism, commercial banks - steering rods and transmissions, stock exchanges - chassis, corruption - gasoline. The driver is the ruling class, the passengers are everything, from manufacturers to pensioners and state employees. Security officers - conductors and controllers. Liberals - the accounting department of the enterprise, the president is the general director. Not a single director has either the authority or the ability to re-establish the enterprise. He can only manage what was given and resolve labor disputes. And then up to certain limits.

This is the main "stove" from which to dance. Let us remember this moment and "anchor" it in consciousness, as the coaches say. The way of letting the ruble mass into the economy is designed so that exporters have a benefit. To the detriment of all other industries, because their benefit is the damage of raw materials producers.

Exporters are our everything. Since the days of Khrushchev's monetary reform, they have increasingly formed the main part of the budget and provided the main flow of freely convertible currency, which the world has been chasing since the Bretton Woods conference. As soon as the main task in the USSR was not to develop domestic production, but to earn currency and profit - that's it. The plan became impracticable due to the internal inconsistency of its targets. When they try to fulfill the plan both in value and in kind, a conflict of interest is inevitable. Something should be the main thing.

Raw materials workers became the main ones, and the officials and apparatchiks twisting around them became the fifth column. The reason - through the export of raw materials, the Soviet country entered globalization. The clans responsible for this became dominant in politics. Over time, socialism began to interfere with them, and they carried out privatization. That is, in principle, the whole theory of economics of any "ism".

The economic mechanism of the post-Khrushchev model had elements restraining inflation, although it had already lost the mechanisms for the development of production. The currency entering the country did not go to the stock exchange and was not the basis of the ruble issue. Rubles were divided into non-cash and cash, and their number in the economy was determined not by the exchange situation, but by five-year plans, for which the cash plan of the State Bank was formed. Here, the contradictions of the system were laid, where the export industries lived according to the standards of the domestic processing industries, but these contradictions were resolved at the expense of exporters in favor of processors.

The victorious class of privatizers seized the raw material enterprises and was no longer going to allow the state to rob itself. Having seized, first of all, oil and gas facilities, they have built a system where the currency enters the exchange and weakens the ruble. This reduces the cost of domestic expenses for exporters, creating a ruble profit in relation to foreign currency. Currency is flooding the stock exchange like a river, and the Central Bank is forced to buy it out itself in order to remove excess from the market and not completely collapse the rate. But deletion is not a withdrawal, but a throw-in of cheap rubles. This pump works fully without stopping, and the only way to utilize this river of rubles is incessant inflation.

There is a myth that there was no inflation in the Brezhnev USSR. Although prices were rising. But in a transformed economy, where they are trying to combine the incompatible and stick in the plan for the gross and for profit as equivalent indicators, the washing out of the cheap assortment for the sake of the profit plan is inevitable. This is how the deficit arose. They tried not to produce cheap ones as unprofitable. Expensive made. It is the deficit in a socialist economy that is a converted, modified form of inflation. Only instead of changing price tags, cheap goods disappear from circulation.

You cannot scold the manufacturer for this. The fact is that they have a dual nature, which was not studied either then or now. As a part of the macroeconomic whole, the enterprise is interested in lowering prices, because it, like every employee, is a buyer. But as a separate element of microeconomics, each employee and the enterprise as a whole are interested in the maximum price for their products and in the maximum profit - from this, wages and bonuses are formed. The administration also carries this conflict of interest between part and whole. To circumvent competitive constraints, cartels and monopoly mergers arise.

When the state withdraws from the arbitration of this conflict, giving it to the market, then the decision is made not by the market, but by large owners and banks associated with them. This reality tramples on any market theory. And when the main parameters of the economy are created for commodity exporters, a certain political economic model emerges. It is impossible to break it, because it is firmly inscribed in global politics, and its collapse means the collapse of the state. And this is evil, far beyond all the flaws of the system put together. The vices of the system are the disease of the organism, and the collapse of the state is its death. Therefore, the current raw material model has strong supports, despite all its flaws.

Such a model cuts any manufacturer without a knife and will always do it. Not looking at the form of ownership. Because the alternative is to slaughter exporters, which is impossible both for budgetary and corruption-elite reasons, that is, in total, for political reasons.

The problem of corruption is the number one problem, a threat to the national security of the country. This cannot be cured by changing the system, since the roots of current corruption are in the socialist Soviet system. That is why a systemic fight against corruption in any state is impossible due to the threat of a systemic crisis and paralysis of the management system.

In a socialist economy, the flows of currency and rubles were separated, and this created the basis for growth opportunities for producers. These possibilities were cut through the contradictions of the planned system. Note - it is not bad in itself, but only in the confusion of forms and principles. Rubles were led not through the stock exchange, but according to the plan. Enterprises received fixed assets from ministries, and from there they were assigned working capital. But the plans required incompatible - both shaft and profit.

USSR Post XXVI Congress of the CPSU

The authorities who expelled Stalin along with his economy sat on two chairs. Khrushchev's drifts were removed, but not completely, the duality remained. And germinated like metastases. The producers turned on immunity and adapted. They were shaking from the injections of cost accounting, as they broke the logic of the planned system, where the cost, prices, profits and production volumes were set from above, but coordinating mechanisms arose - adjusting plans retroactively.

This saved the system from collapse and failure. Structural imbalances, when sugar or laundry soap lay in abundance in warehouses, because they were assigned to enterprises that had already chosen planned rates this quarter and were waiting for the next, and for this reason these goods were not available in retail, could be ignored. Theft began as the main basis for the adaptation of the people to the system. The topic of "attorneys", "commercial thieves" and "production thugs" did not leave the pages of the press and television and film screens.

This is how socialist legalized systemic corruption arose. Pusher-suppliers for bribes in the form of a deficit solved issues with adjusting plans at the level of ministries and central administrations. The system has floated from erosion. It all ended with its privatization - that is, the legalization of the already established coordination and management mechanisms. All approvals were given to the so-called "market".

Ivan Shilov © IA REGNUM Privatization

That is, the point is that the model of market expanded reproduction that developed in the USSR after Stalin and up to the present time inevitably reproduces inflation, corruption and economic downturn. Only in the USSR was corruption, inflation and recession generated by the combination of the incompatible in the form of a plan and cost accounting, while in today's Russia inflation and recession are generated by the emission of rubles through the currency exchange in favor of exporters. A fall in the ruble exchange rate and inflation are inevitable, which suffocates producers in the bud. The consumer market is also dying from this.

There is a self-replicating inflation mechanism within the current emission model. This is that our entire non-food consumer basket is based on imports. Due to inflation and high cost of credit, import substitution outside the military-industrial complex with its separate management system is impossible. And the price of imports is again the ruble exchange rate that appears on the currency exchange, where exporters exchange dollars for rubles.

Volatility is dispersed by currency speculators, who cannot be driven out for foreign policy reasons - they represent the interests of the masters of globalization, from where currency comes to the country. Importers finish off the ruble that exporters kill. Everyone, except exporters, suffers from this, but they cannot do anything. A self-replicating mechanism emerged. To disassemble it - to break the budget, not to disassemble it - to let the budget break itself over time with the economy and politics. The choice, to be honest, is very bad.

The task of any government in such conditions will, of course, be balancing and avoiding frontal actions that accelerate the crisis. Trump is doing the same with the Fed, and all US presidents did the same before Trump. The Soviet political model also failed to save the system from the Khrushchev-Kosygin experiments, the consequences of which were never fully neutralized.

Ivan Shilov © IA REGNUM Donald Trump

That is, the salvation of the system is not the work of the ruling politicians, and even less the work of economists. This is the sum of systemic and non-systemic manifestations that falls out randomly in a certain combination. Economists in this situation are not analysts, but the servants of the government, explaining the required attitudes in hindsight and developing special methods of distorting reality in the right direction. Like Goskomstat in the USSR or Rosstat and the Ministry of Economy in Russia. Or ideologically blinded conceptuals, adjusting all their conclusions to the concept that owns them.

The truth is that seeing all the vices of a particular system, science cannot yet offer a single comprehensive concept. All hypotheses in the field of economics run the risk of being ideologically biased and thus unusable. Unsuitable, because ideological bias forces us to close our eyes to refuting and questioning considerations. Where an ideological dispute begins, science dies.

Therefore, any real dissertation is always a way out to a problem that does not yet have a solution. That is how the dissertation differs from the proclamation, where all the solutions have long been known and simple. Take and share. Or print money and give it away. And then what? And then shoot the one who asks such questions. For he is the enemy, and if the enemy does not surrender, he is destroyed. So the discussion turns into a firefight. And when the guns speak, the muses are silent. First of all, the muses of critical science, for all science begins with criticism.

True, recently it has so happened that science ends with criticism. For the world still does not have global interpretations and answers to the main questions of our time. We do not know how to get out of this situation so that the state would survive in the process of leaving, and the economy would strengthen, and a world war would not arise. Nobody knows that. And if he says he knows, then he is lying.

But we know that today it is definitely not allowing us to develop. This is a model for issuing the ruble through the currency speculation market. And the forms of monetary regulation arising from this rule. All recipes require careful study for the consequences due to the huge number of unpredictable side effects. The question of the optimal way out of this system is still open.