VITORIA-GASTEIZ – Russian President Vladimir Putin has long regarded the collapse of the Soviet Union as a “geopolitical catastrophe.” The invasion of Ukraine, now approaching its one-year anniversary, could be seen as the culmination of his years-long quest to restore the Soviet empire. While this effort will almost certainly fail, Putin may succeed in reviving one of the USSR’s worst features: its centralized, sclerotic economic system.
With Russia’s economy straining under Western sanctions, some of the country’s leading economists and mathematicians are advocating a return to the days of five-year plans and quantitative production targets. In an interview marking the centenary of the Soviet Union’s founding, economist Ruslan Grinberg called for the reinstatement of the planned economy – an opinion that could be easily dismissed were Grinberg not the head of the influential Institute of Economics at the Russian Academy of Sciences.
What Grinberg proposed is not a war economy in which production is geared toward the needs of the military. A planned economy, in his view, should be “not directional, but indicative.” Government, he explained, must formulate economic priorities but not tell companies what to produce and when. Instead, the state should “stimulate production via subsidies, as well as fiscal and customs policies.”
But while Grinberg attempts to strike a balance between plan and market, others have gone further. Albert Bakhtizin, the director of the Russian Academy of Sciences’ Central Mathematics Institute, supports not only “indicative planning” but also a return to the economic five-year plan (pyatiletka), which he defines as “strategic planning with a clear definition of goals and a system of socially significant indicators.” In his view, the state should “calculate what should be produced and when, and what is needed.”
These proposals could be seen as signs of desperation in the face of crippling international boycotts and economic sanctions. But Russia’s exclusion from the global economy (and other domains of international influence such as science, sports, and culture) is only part of the story. The rollback of the post-Soviet economic reforms initiated by Mikhail Gorbachev and Boris Yeltsin marks the latest stage in Russia’s ideological, social, and political regression.
Russia’s newfound infatuation with Soviet-style economics is ironic, given that the USSR’s bureaucratic, inefficient, and ultimately unworkable economy was one of the main causes of its collapse. But there is another, deeper reason why Russians are increasingly turning away from the market economy.
Putin’s invasion of Ukraine represents what I call the implosion of history. Improbable as it may seem, several different timelines converged in this disastrous war: the Soviet collapse, the Chernobyl disaster, and the two world wars, as well as Stalin’s engineered famine in Ukraine and repression of the 1930s. When historical developments are concentrated and condensed in a single event, they scramble the order of historical time.
The implosion is analogous to the looking glass through which Alice enters an alternative reality in Lewis Carroll’s novel. The distortion of reality is reflected in language. Thus, the war in Ukraine is not a war but a “special military operation” (even though Putin has himself tripped over the w-word). Or, as Russians now joke, their army does not retreat; it engages in “negative counteroffensives.”
But the effects of this alternative reality are not limited to language. Putin’s 23 years in power (as president and prime minister) have distorted Russia’s public consciousness and altered its political regime. In contrast to the somewhat pro-Western stance of Putin’s first two terms in office, later-stage Putinism acquired the features of the Soviet era of stagnation that began when Leonid Brezhnev replaced Nikita Khrushchev in 1964. The invasions of Georgia in 2008 and Ukraine in 2014 were the means by which Putin sought to shake off Russia’s malaise and reinvigorate its body politic.
That brings us to the current exhumation of central planning. Having passed through the looking glass of the war in Ukraine, Russia is not repeating Soviet history so much as replaying it at an accelerated pace. The first pyatiletkas represented the transition from Lenin’s New Economic Policy (which allowed for some independent initiative and freedom for farmers and small-business owners) to the horrors of Stalinist repression.
The logical endpoint of a planned economy today is the same as it was then: mass expropriation. Stalin’s collectivization of Soviet agriculture in the late 1920s and early 1930s led to millions of deaths, and the post-communist “shock therapy” of privatization resulted in the proliferation of “raiders” and the creation of a new class of oligarchs. Now, enthralled by imperial nostalgia, Russia may be about to embark on a new violent wave of expropriation and redistribution.
For now, the violence is primarily directed at Ukraine’s energy facilities and civilian infrastructure. The Russian Duma has also recently passed a law granting impunity for crimes committed by Russian soldiers in the occupied territories of Ukraine, effectively legalizing the seizure of Ukrainian goods and private property. But given Russia’s fast backward trajectory, a domestic expropriation drive that pushes the country to the brink of civil war should not be ruled out. A segment of Russia’s intellectual elite already seems to be on board.
Copyright: Project Syndicate, 2023.
