«Тупой Как Мешок Кирпичей»: Повлияла Ли Абсурдность Современных Экономических Теорий На Деиндустриализацию России[“Dumb As a Sack of Bricks:” Are Absurd Economic Theories to Blame for Deindustrialization of Transition Economies?]

International consultants and institutions such as the International Monetary Fund (IMF), the World Bank, and a group of American advisors from the Harvard Institute for International Development (HIID) actively recommended that Russia implement radical economic reforms in the 1990s, which included, among other things, closing inefficient state-owned enterprises. This paper demonstrates that if the only "efficient" industries are raw material extraction and primary processing using imported equipment, then supporting "inefficient" enterprises is the only way to improve the well-being of the population. This goes so far as to suggest that even 100% subsidy, for example, of the automobile industry and the free distribution of Volga and Lada cars to the population, leads to an increase in the standard of living in the country. Furthermore, in this case, subsidizing "loss-making" enterprises leads to a slowdown, not an acceleration, of inflation. Following these same principles, developed countries have been subsidizing their "loss-making" enterprises, such as Airbus and Nokia, for decades. The model presented is greatly simplified and does not take into account numerous other factors influencing economic development. Therefore, much of the article is devoted to discussing why these seemingly obvious mathematical methods won't work when applied to the Russian economy, and why economic development in Russia is impossible, regardless of any measures of government support or stimuli.