Kuznetsovian economics
Kuznetsovian economics (Russian: Кузнецовская экономика Kuznetsovskaja eknomika), named after the Russian economist Aleksandr Ivanovich Kuznetsov, is a school of economic thought rooted in the principles of National republicanism. It emerged in response to the European Economic Crisis (1922-1928) and is characterized by its emphasis on stringent state control on the economy, self-sufficiency, and protectionist trade measures.
Theory
Traditional Kuznetsovian theory (1920s-1950s)
Kuznetsov's theories were formed during the European Economic Crisis. He and other national republicans blamed the recession on the growing interdependence of the European economies, arguing that movements in the market will magnify the more interconnected national economies are. His seminal work, Economic Resilience and National Prosperity, was published in 1926 in the midst of the Russian Civil War and outlined three core principles, which served as a cornerstone for early national republican economic thought.
- State oversight: Kuznetsovian economists argue that the state should have a central role in the economy. Intervention and tight controls are necessary to safeguard the national economy. This includes the nationalization of key industries such as energy, transport, and banking.
- Self-sufficiency: Self-sufficiency of the nation is the ultimate goal of the Kuzetsovian economy. Imports are viewed as a temporary measure until domestic industries can be developed to reduce foreign dependence.
- Protectionism: Kuznetsovian economists advocate for high tariffs, limited foreign investments, and strict capital controls to shield the domestic economy from external fluctuations.
Neo-Kuznetsovian economics (1960s-onwards)
Following the Russian recession of 1958-1959, the newer generation of Kuznetsovian economists, later known as Neo-Kuznetsovian economists, revisited and amended the original principles. Neo-Kuznetsovian economists blamed the overemphasis on self-sufficiency as the cause of the 1958 recession, which resulted in the oversupply of goods and resources in the Russian market. To address this, they advocated for opening up to export excess production to friendly and neutral nations, effectively bolstering the Russian economy.
Neo-Kuznetsovian economists also advocated for the expansion of infrastructure to alleviate unemployment and stimulate economic activity after the recession.
Russia softened its economic policy and adopted Neo-Kuznetsovian economics in the mid-1960s, under the leadership of Chairman Ilya Kiselev.
Currency
While not explicitly outlined by Kuznetsov in his early work, Kuznetsovian economists generally favor a commodity peg, specifically the gold standard. By maintaining large reserves of gold, currency stability is ensured and guard against inflationary pressures.
