Economics of extortion: where will the money of the Russian government

It is impossible, however, to deny that there is something scandalous in the spectacle that is such a large number of people involved in the refinement of the analysis of economic situations for which they have no reason to believe that they will ever take place in reality… This is an unsatisfactory state of Affairs in which there is even something that’s so dishonest!.

Excerpt from the book by V. Leontiev.


photo: Alex geldings

In March last year in the Russian economic statistics have an important but unnoticed society event. Rosstat for the first time in twenty years published the data of interbranch balance which shows the balance between consumption and production. This method of mathematical analysis of linkages between sectors of the economy have developed, and described in 1925, scientist Vasily Leontiev. Soviet statisticians have tested it in practice in 1959, the first in the world considering the balance in the natural (products) and value terms. It was neatly made every five years (1966, 1972, 1977, 1982, 1987 gg) for the entire period of the Soviet Union. The method Used in other countries — where he is called input-output analysis and the results are posted on the websites of statistical services: Statistisches Bundesamt Germany to Norway Statistisk Sentralbyrå, not to mention such countries as the USA and Japan. Based on these calculations, the state is developing a support system for various industries, predicts employment of the population, predicts and mitigates the crises — a sort of planned economy of capitalism.

By the way, Wassily Leontief, examining the structure of imports and exports of the United States, have shown that they export high-tech products with high added value, by importing from underdeveloped countries cheap raw materials. The “Leontief paradox” — something almost based modern economic and political world system.

After the collapse of the country and the economy of the Russian experts tried to capture the linkages between industries in 1997. And safely forgot about this method — really, why analyze what is not?

Economic news of recent months are diverse — authorities are intensifying their extortion. Going to raise a single tax on imputed income (UTII), to cancel the VAT exemption for scrap, collect the property tax in advance. Sometimes generously offer small businesses a choice: tax on movable property or sales tax. Not impossible to climb directly to the wallets of people using tax — not a problem, it is possible to increase indirect levies, the same recycling fee on cars. The fiscal policy of the state looks like randomly taken and randomly attempts to profit at the expense of their citizens. We have no money, but you hold on — we’ll take them from you. Petrodollars is over, now people is the new oil.

In the previous column in the “MK” I wrote that in a system where any functionary of the flies from his job after his boss, it is useless to try to artificially develop effective managers. Our first task of a statesman is to sit in his place and if you leave, painlessly and with money. Time to catch from flowing past the budget of rivers as much as possible, holding on official rocking chair as long as possible. That’s what the problem is before any Russian official who has no time to think about growing new elites, nor the creation of an effective economic system, nor about the long-term (and even short term) planning.

This behavioural model is not accidental. All the current oligarchic economic elite emerged in the ‘ 90s, when the original accumulation of capital meant the butchering of the giant dead body of the Titan of the Soviet economy. While studying at University, I was surprised my Professor asked: where in our country all these cars of the periodic table, trains leaving abroad? He explained to me that this so — called strategic reserves. In the Soviet Union factories operated in such a way that even in case of a nuclear winter descended from the conveyor military equipment. These “bins Motherland”, and looted to the last.

What can we say about the second popular method of “making state” — the famous auctions. Let me remind you how it happened: the government was opening in major private Bank accounts, which were transferred budget funds, then taking in these banks loans, giving under pledge of shares of state-owned enterprises. As stated in the report of the accounting chamber “Analysis of processes of privatization of state property in the Russian Federation for the period 1993-2003”: “Transactions of crediting of the Russian Federation on the security of shares of state-owned enterprises can be regarded as sham, because the banks actually “lent” the state of public money. The Finance Ministry had previously placed on accounts of banks — participants of the consortium funds in the amount almost equal to the loan and then the money transferred to the Government of the Russian Federation as a loan secured by shares of the most attractive enterprises. As a result, banks “lend” the state could directly or through affiliated entities become the owners are in the pledge of stakes in state-owned enterprises.” Outright theft and fraud — that’s the distinguished founders of the modern economic system. But they knew what they were doing, and their current successors is already the norm in which there is a “new reality,” “negative growth economy” and other “failure of state egoism.” It is not surprising that for twenty years they do not occur to see what happens with intersectoral links. The fact that someone woke up and decided in 2017 to make the balance for 2014 (which reflects not all industries), nothing, of course, will not change.

What will change?

Recently, our fellow party member Andrey Berezhnoy launched an initiative to oblige the officials after the service to live in the same place in which they had charge. The heads of cities with a population of more than a hundred thousand people will stay in these cities for ten years, municipalities — five years. Sounds like a measure of restraint in the criminal offense, but is the fact that these people sometimes do this to entrusted to them by the regions, is not a crime?

Of course, such a proposal is controversial and should be widely discussed, but the idea is conveyed accurately — it is necessary to make officials accountable for their actions. Then and economic strategy they shall build, based on the actual status of industries; and manage government efficiently and effectively for the citizens with whom they have to live side by side after retirement.

official channels

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