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Influence of Culture on the Modernization of Russia: rep.at XV Apr. Intern. Acad. Conf. on Economic and Social Development, Moscow, April 1–4, 2014

In lieu of an introduction: This work, presented as a report at XV International April Conference of National Research University HSE, was started as a new version of the first chapter of my book published in 2002 “Russian Economy. Sources and Panorama of Market Reforms”.

The more I worked and read literature on the subject, the further I moved from the initial idea. Changes were especially significant after I read the works of E. Huntington and L. Harrison which emphasized the role of culture, which also includes institutions, in the development of the economy and society.

It happened so that I lost hope to rework the text of the mentioned book in the spirit of these ideas. It seemed appropriate to me to present the results of work in the form of this report mainly devoted to one task: understand the historical and institutional sources of the problems now faced by Russia which started its transition to the well-established European market and network economic model back in 1861. Thus, this report is focused on how Russia, unlike Europe, developed its national culture after 12th century, and how it formed the autocracy institution as a core of the political system. And how the traditions of this system influenced the development of the country again and again. It is understood that this subject attracted the attention of many researchers. Here I will mention the names of V.O. Klyuchevsky; A. Akhiezer, I. Klyamkin and I. Yakovenko; Y. Pivovarov and A. Fursov, L.S. Vasiliev, as well as R. Pipes. The key moment I would like to draw your attention to is the collision of totally different structures, though compatible under certain conditions: hierarchy of domination and submission typical of feudalism and bureaucracy, on the one hand, and the network market structure born in the Ancient Greece on the other hand. Then it revived in Europe, first in medieval cities, and then it became the basis for capitalism and democracy development in present- day understanding. This system of institutions generated industrial economy and ensured a high pace of its development. It also contributed to growing importance of science and accelerating the processes of innovations creation and realization. According to E. Machiusson and G. Clark, the scope of the world economy increased ten times in the past 200 years (1800–2003), while there was no substantial growth during the previous 3,000 years.

As I understand, Russia started transition from hierarchy to network in 1861, after the Emancipation reform. Since that time it has 5 been undergoing a painstaking process of transformation, with the Soviet experiment being its stage. It was started by people that believed in the truth of Marxist theory that adopted the collapse of market economy and its replacement by large-scale machine industry. By 1970s it became clear that Marx was mistaken: the market mechanism did not disappear, it confirmed its role in the development and globalization of the world economy. Russia managed to put an end to the Soviet experiment and puts great efforts to overcome the contradictory processes of renewal and development of the present-day market economy, as well as the retarding influence of long-standing traditions of hierarchy and despotism domination. These questions are dealt with in greater detail in the offered report.

Influence of Culture on the Modernization of Russia: rep.at XV Apr. Intern. Acad. Conf. on Economic and Social Development, Moscow, April 1–4, 2014