Russia’s Legal Transitions: Marxist Theory, Neoclassical Economics and the Rule of Law

We review the role of economic theory in shaping the process of legal change in Russia during the two transitions it experienced during the course of the twentieth century: the transition to a socialist economy organised along the lines of state ownership of the means of production in the 1920s, and the transition to a market economy which occurred after the fall of the Soviet Union in the 1990s. Despite differences in methodology and in policy implications, Marxist theory, dominant in the 1920s, and neoclassical economics, dominant in the 1990s, offered a similarly reductive account of law as subservient to wider economic forces. In both cases, the subordinate place accorded to law undermined the transition process. Although path dependence and history are frequently invoked to explain the limited development of the rule of law in Russia during the 1990s, policy choices driven by a deterministic conception of law and economics also played a role.This is the author accepted manuscript. The final version is available from Springer via http://dx.doi.org/10.1007/s40803-015-0012-

Recovery Growth and Some Peculiarities of the Contemporary Economic Situation in Russia

This article shows that after the collapse of the USSR the post-socialist countries all followed a similar path: after the transformation fall in social production they are now in the stage of growth. Moreover, this does not depend on particular circumstances connected with, for example, the absence or presence of exportable resources, government by one party or another or the accession of any particular politician to power. This growth, called recovery growth, by its nature inevitably fades, and in Russia its possibilities are practically exhausted. However, the question is not about driving up the pace of growth, which is dangerous. On the contrary, efforts must be concentrated on preparing and carrying out comprehensive, interconnected structural reforms, which will also ensure steady economic growth in the future. The country, the author says, must learn to develop using not so much instruments of state coercion as private incentives and initiative.

The Most Correct Policy Is a Responsible Policy, Not Populism

The situation that developed in 1989-91-when demand exceeded supply, prices were fixed, employment was full, the surplus money supply was consumed in regulated distribution in queues, black market prices differed sharply from official prices, and savings were of a forced nature-was by no means a purely socialist phenomenon. Such phenomena are also characteristic of market economies, but under wartime conditions. The bane of any economy operating under conditions of suppressed inflation is the crisis of its state regulatory mechanism. If the market is cut off from day-to-day regulation and does not help the interrelations of economic agents, there must be a strict authoritative power capable of redistributing resources as it sees fit.