Natural Evolutionism of Russian Economic Analysis

Abstract

The article introduces an analysis of economic research method in Russian thought. The analysis made on the basis of a concise historical overview seeks to identify particular features of economic research method in Russia, trace their origin, put them into a wider context of economic theory progress, to assume a possible direction of further development of Russian “indigenous” approaches to economic research. The following conclusions have been drawn. Economic methodology in Russia does have particular traits grounded in its Weltanschauung and a singular path of historical development. This methodology had been developing over decades, in pre-revolutionary Russia and then in USSR till Russia’s transition to market economy, when ideas of mainstream economic theory started to be thoroughly scrutinized and assimilated. It is apparent to some observers, though, that this assimilation in many respects remains the official rhetoric, while the “indigenous” approaches remain to exist and be used somehow implicitly. At the same time these approaches show some similarity with “Western alternative” to economic orthodoxy, the evolutionary economic theory, which has been developing for the last 30 years. Thus, in regard to perspective of Russian economic analysis development it is suggested a comparative study of the evolutionary economic theory methodology and the Russian approaches to economic analysis with its characteristic viewpoint and conceptual apparatus undertaken as part of a more general reassessment of core concepts and methods of mainstream theory.

Author’s note

The article appeared in the progress of a PhD research on Business Model Innovation. The thesis gave me an incentive to look afresh at familiar concepts of the mainstream economic theory: growth, productivity, innovation, and maximization model of firm behaviour. These concepts provide grounds for the modern development model, which in its turn creates tensions with overall social and environmental well-being, since, by the words of Gandhi: “Earth provides enough to satisfy every man’s need, but not for every man’s greed.” If easy assumptions about the compatibility of extensive economic growth and ecological stability prove unfounded, it can be argued, that the way out of the conceptual dead end of the mainstream economic theory can be found in the heterodox economic theory integrated with culturally diverse ideas alternative to dominant Western perception of economic development. The research on the particular features of economic analysis in Russia has been undertaken though not directly for this purpose but with these ends in mind.

Key words: economic analysis in Russia, evolutionary economic theory, economic development

Introduction

The nature of the following work will be best understood by a brief account of how it came to be written. Material for the article has been gathered while writing a thesis on business model innovation. A method of this research by the words of Nikolai Kondratiev (1930-1938/1991) “organically arose and was verified in the very process of investigation” (p. 145). In a thesis chapter dedicated to the research methodology, however, there was necessary to make a grounded justification of the choice of approach to economic analysis. After a due study of history and theory it became apparent, that the employed framework and the approach to the analysis are, on the whole, quite characteristic for the Russian economic thought. A further investigation shown that used methodology, in addition, is very close to the contemporary evolutionary economic theory (both are not in the standard curriculum). As a result of this scrutiny questions have been raised, it would be interesting to answer, on defining traits of economic analysis in Russia, their origin, significance in a wider context of economic theory development, and a possible direction of further development of Russian “indigenous” approaches to economic research.

No doubt there have been undertaken a number of researches on defining traits of economic analysis in Russia. An overall impression gained from their selective examination is that approach to economic analysis in Russia has often been considered by historians and theoreticians as idiosyncratic and out of touch with main trends in the economic theory or even backward. This kind of polemic could be found in pre-Revolutionary Russian economic press and it intensified after Perestroika when chosen approaches were discredited in the eyes of many by collapse of the Soviet Union (Avtonomov, Ananyn, & Makasheva, 2000; Makasheva, 2009). Because of singular and convoluted path of Russian economic analysis development, perspectives of its progress remain an open issue for debate and are perceived by many as unclear (Makasheva, 2009).

However, economists dealing with particular “practical” problems seem unaware of these assumed methodological problems and have been doing their work with employment of original and advanced methods, achieving at times outstanding results. As an example of an incredible outcome of an indigenous approach to economic analysis can be given Russian mathematical economics, a cross disciplinary field started to develop in 1920-s and flourished in 1960-s. As a token of recognition one of its major contributors Leonid Kantorovich received in 1965 the Lenin Prize and the Nobel Prize in 1975 (Kantorovich, 1975a). Some economists for their research purposes closely attend methodological problems to immediately apply and verify their findings “in the very process of investigation.” Take as an example the last treatise of Kondratiev on Main Problems of Economic Statics and Dynamics : A Preliminary Study, written by him in 1930-s while in prison during Stalinist purges and published for the first time in 1991. It is however possible not being acquainted with this treatise to see his approach in earlier works where it had already been employed.

Not sinking into discussion on planned vs market economy paradigms contest, which is not at all a subject of this paper, however it should be pointed out that in purely technical terms the very fact of organising and making function the whole economy of 290 million people on completely new basis of economic relations during 70 years of existence of USSR, is in part the Russian economic methodology achievement. The fact alone makes this particular methodology worth scrutinising. The example itself however is too far gigantic and politically charged to be dealt with in this draft research. Moreover, the focus of the research is not on a Soviet economic analysis but approaches to economic analysis in the Russian thought including pre- and post-Soviet periods. That is why before and henceforth there are given just some selective, most representative or interesting facts or personas to illustrate characteristic traits of methodology in question.

Of particular interest is how developments of economic analysis in Russia relate to western economics theory progress. Historically this issue has been heavily politicized. In this article the political aspect left aside. The starting point of the argument here is that the economic theory as well as politics is secondary to Weltanschauung and preconditioned by it. The research method in the article is examined from this “Weltanschauung point of view.”

In conclusion of the introductory sketch the objectives of the research can be defined as followed. The undertaken analysis seeks to detect characteristic features of economic research methods in Russia, trace their origin, and put them into a wider context of economic theory development. It is maintained that these traits exist not only explicitly but also implicitly and somehow beyond related controversy or lack of interest and in spite of them. The article is structured as follows: in the beginning there is a short historical account on defining traits of economic analysis in Russia. Then, there have been indicated some points of mutuality in recent history in Russian and Western approaches to economic analysis. In conclusion there have been made suggestions on possible coevolution direction of Russian approach and approaches that are developing in the West. This work contains hardly any original facts in regard to peculiar traits of economic analysis in Russia; but as the conclusions at which I arrived, after drawing up a rough draft, appeared to interesting, I thought that they might interest others.

Distinctive Features of Economic Analysis in Russia

Weltanschauung model (a descriptive model of the world)

Schumpeter in his last work, dedicated to economic analysis history, expressed an opinion (1954/2007), that choice of a research method is a question of “temperaments and intellectual bents” (p. 995). He pointed out that there is use for both, himself though being apparently of “a historical temperament.” On the pages of the aforementioned History of Economic Analysis Schumpeter many times emphasized the importance of knowing history for undertaking a valid economic analysis and went even further stating that “the study of history is not only the best but the only method to this purpose [economic analysis]” (the other being statistics, “theory,” and economic sociology) (p. 43).

Starting from the argument that the research method is a function of a researcher “temperament and intellectual bent” we can proceed with an assumption that in their turn these determinants are likely preconditioned by a researcher’s home land culture, which we can define by Schmoller’s words as “a commonality of language, history, customs, ideas” (as cited in Avtonomov et al., 2000, p. 149) or in a wider sense as the world view. If there were not such a relation, how could be explained a difference between national schools of thought and the very fact of naming theories after nations e.g.: the Austrian School, the neo-Austrian School, the German historical School etc.. In textbooks on the history of economic thought there can be found following observations: “In spite of growing unification within mainstream theory, economic analysis in different countries still has some national traits” (p.762). Statements such as this are normally followed by specification of national schools characteristics.

Russian economic thought as well possesses some traits allegedly grounded in the national world view. In this article it is argued that an underlying framework for research methods in Russia is a perception of the world as an open expanding system. Belonging rather to a field of philosophy this idea here takes a form of a statement being explained at length in another paper “Tsiolkovsky Ship and Wittgenstein House: Weltanschauung as a Basis of Creative Methods and Results” (Navalnaya, 2009). It may, however, be necessary to specify that it is not a scientific world view it is meant, but a primeval subconscious world perception started to be formed as far back as a prehistoric period under influence of factors, which are now a subject of research of anthropologists and social psychologists (see G. Hofstede, G. J. Hofstede, & Minkov, 2010, pp. 431-448). In the aforementioned essay there has been undertaken an analysis of creative results and methods of particular scientists in attempt to reveal a structure of basic underlying assumptions on which the whole their reasoning had apparently been made. The drawn conclusions here serve as a basis for a further analysis.

So, having started in the beginning of this chapter with the assumption that Weltanschauung determines researcher method of analysis it would be only consistent to proceed with an assumption that, in addition, it shapes the very questions asked. Problems, which the Russian scientists interested in, are often concern a quest after the underlying structure behind massive empirical data. They strive to arrange this data in a systemic way finding place for available facts and anticipating missing parts. A principle thus found often can be extrapolated on bigger systems. These particular world views together with such problems of interest unavoidably produce methods of analysis that can be characterised as: holistic, universal, systemic, evolutionary, dynamic, inductive, and empirical.

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