Life under sanctions: But can we take over the experience of Nazi Germany?
One can and should learn from an enemy, and one must learn seriously from a serious enemy. Especially when it comes to the most impressive economic miracle in the history of all countries, regardless of where it took place.
The topic is urgently relevant for today's Russia, since we are talking about a breakthrough, not just under sanctions, but in conditions of total economic blockades. This refers to the economic breakthrough made in Germany in the mid-30s.
We abstract for a while from policy and ideology and do it purely technical analysis of the components of economic success.
In 1933, at the World Jewish Economic Congress, Germany declared an economic war - a total boycott. The boycott was extremely effective; not a single product with the “Made in Germany” stamp was delivered to any country in the world.
In response, the German authorities took a number of measures that over four years lifted the country from the completely miserable existence of the Weimar Republic to third (after the United States and Great Britain) places in the world in terms of industrial production.
What was done?
For comparison, let's see how things are with our respective economic policies. Almost everything is exactly the opposite, except for the last paragraph.
For the forthcoming six-year period of the President, the actual May economic development plan is the new May Decree.
The economic meaning of the Decree is to increase funding for certain, albeit undeniably important, areas within the framework of the existing liberal economic paradigm. The “strategic objectives” outlined in the Decree are tied to inflation targeting of 4%. Within the framework of the current budget rule, achievement of the set goals is possible only in conditions of three-digit oil prices.
The ruble is pegged to the dollar. The ruble is issued against incoming foreign exchange reserves. In 2017, the Prime Minister, speaking to the Federal Assembly, emotionally stated that the Government had no money. It is clear that he had in mind the currency, because the Government is able to solve the issue of the issue of the ruble. Recall, in this regard, the words of the former Head of the Central Bank Gerashchenko:
The ruble is not an investment currency - the umbilical cord tying it to the dollar interferes. More precisely, those whom this cord feeds interfere. A ruble loan is too expensive to be an investment currency.
There is no ban or cross-border control over the export of capital. Significant amounts still flow abroad, instead of investing in the Russian economy. Beneficiaries - foreign states, non-residents, incl. offshore and stock market speculators.
There is no control over the dividends and incomes of owners and top managers. According to official figures, the heads of large corporations with state control earn several million rubles a day. It is clear that the state takes this money from children and the elderly. And this is many times more than their counterparts in the West. The situation needs to be changed, since striking disparity in income is fraught with growth of social tension.
We have an increase in government orders, although it is more targeted than systemic in nature.
The application of the five measures indicated above, in itself, can provide breakthrough economic growth. In reality, the list of measures can be expanded. In the context of economic sanctions, we need a systematic plan for accelerated development, and not just an increase in funding for certain areas. It is necessary for a breakthrough, but not enough.
The topic is urgently relevant for today's Russia, since we are talking about a breakthrough, not just under sanctions, but in conditions of total economic blockades. This refers to the economic breakthrough made in Germany in the mid-30s.
We abstract for a while from policy and ideology and do it purely technical analysis of the components of economic success.
In 1933, at the World Jewish Economic Congress, Germany declared an economic war - a total boycott. The boycott was extremely effective; not a single product with the “Made in Germany” stamp was delivered to any country in the world.
In response, the German authorities took a number of measures that over four years lifted the country from the completely miserable existence of the Weimar Republic to third (after the United States and Great Britain) places in the world in terms of industrial production.
What was done?
- A state economic plan for the development of industry has been introduced.
- New money was put into circulation - a Reichsmark not related to the dollar. It was the new national currency that was the investment one.
- A ban on the export of capital abroad.
- Control over the profit of industrialists was introduced, no more than 6% was allocated for dividends, forcing them to thus reinvest in the development of production for the benefit of Germany.
- The scale of government orders aimed primarily at the development of the military-industrial complex and high-tech industries has been increased.
For comparison, let's see how things are with our respective economic policies. Almost everything is exactly the opposite, except for the last paragraph.
For the forthcoming six-year period of the President, the actual May economic development plan is the new May Decree.
The economic meaning of the Decree is to increase funding for certain, albeit undeniably important, areas within the framework of the existing liberal economic paradigm. The “strategic objectives” outlined in the Decree are tied to inflation targeting of 4%. Within the framework of the current budget rule, achievement of the set goals is possible only in conditions of three-digit oil prices.
The ruble is pegged to the dollar. The ruble is issued against incoming foreign exchange reserves. In 2017, the Prime Minister, speaking to the Federal Assembly, emotionally stated that the Government had no money. It is clear that he had in mind the currency, because the Government is able to solve the issue of the issue of the ruble. Recall, in this regard, the words of the former Head of the Central Bank Gerashchenko:
If a statesman says that he does not have money, he must be driven, because he does not know that the state makes money.
The ruble is not an investment currency - the umbilical cord tying it to the dollar interferes. More precisely, those whom this cord feeds interfere. A ruble loan is too expensive to be an investment currency.
There is no ban or cross-border control over the export of capital. Significant amounts still flow abroad, instead of investing in the Russian economy. Beneficiaries - foreign states, non-residents, incl. offshore and stock market speculators.
There is no control over the dividends and incomes of owners and top managers. According to official figures, the heads of large corporations with state control earn several million rubles a day. It is clear that the state takes this money from children and the elderly. And this is many times more than their counterparts in the West. The situation needs to be changed, since striking disparity in income is fraught with growth of social tension.
We have an increase in government orders, although it is more targeted than systemic in nature.
The application of the five measures indicated above, in itself, can provide breakthrough economic growth. In reality, the list of measures can be expanded. In the context of economic sanctions, we need a systematic plan for accelerated development, and not just an increase in funding for certain areas. It is necessary for a breakthrough, but not enough.
Information