On Belausov

First, it's been a long time since I wrote anything in this newsletter. There are many reasons for this. I had a baby, my health collapsed, I lost a job (not going to comment much there), and I started a new one. I didn't have time for all the cool projects I had in mind on the side here. But I have to write up two very strangely related pieces of news, and I am out of the worst of what has been the best and one of the hardest years of my life.

First, Building a Ruin, the book project that gave this newsletter its name is real and will be shipping soon. It's available on the HUP website books. What's even weirder is that my book became somewhat more relevant this very week. I was very nervous about some things I have been writing about, such as Russian economic thought, systemic liberalism, and reformism, and how it is futile without understanding how Russian power is shaped by ideological views of geopolitics and sovereignty. Then, boom, Putin appointed Andrey Belousov as Minister of Defense.

Belousov is not named in my book, but he's a character whose story is right in the narrative and is almost a microcosm of Russian "liberalism" and Soviet reformism. Belousov is not a military man. He is an economist and economic policy hand. He comes from one of the most interesting and important intellectual and literal lineages in Soviet and Russian economics. One can only appreciate the dark irony of his current position if you understand that story.

Belausov's father was Rem Belausov. Rem was short for "world revolution," one of many new names given to children during the heroic and romantic Soviet experiment. Rem himself was educated first at The Moscow State University of International Relations (MGIMO), a university set up to educate the new foreign policy elite of the Soviet Union and became a specialist in the East German economy. Later, after serving in the Soviet embassy in Berlin, he moved to Gosplan's Scientific Research Institute of Economics (NIIE). NIIE was founded in 1955 as Gosplan's internal macro-economic research team and was responsible for understanding the actual structure of the Soviet economy. It became the center for Input Output methodology in the USSR and economic and technological forecasting – often clashing with its parent institution.

Reportedly, Rem was part of the many groups that helped shape the Kosygin Reforms. My work argues that no single group did this, and the reforms themselves were a rolling, contested process. I reviewed some of my own sources, and I cannot find a particular area Rem worked on, but NIIE was certainly part of this process, and I have no doubt that Rem participated in it. In the 1970s, when the reforms began to be rolled back, many of NIIE's staff left for the Central Mathematical Economic Institute (CEMI), where, as Adam Leeds has documented most extensively, they formed a little sub-institute under Alexander Anchishkin. Adam Leeds

Anchishkin's group is important for several reasons. First, it brought a very different kind of modeling to CEMI, based more on a Marxian reproduction theory than the growth theory they previously did. For more on that, read Adam's papers, my book, and my forthcoming work. More importantly, it became the core of a project that forecasted the long-term development of the Soviet economy in the global context of technological change. For more on that, read Adam and a paper I wrotemost. But what this group was influential in was saving but also modifying older criticisms of the Soviet economy into new language that could survive under the more conservative atmosphere of the Brezhnev years.

As Adam points out in his brilliant paper, what is most important is that this critique had multiple levels. It criticized Soviet technology and underinvestment in new sectors. Still, it also contained a social critique that was not obvious to uninitiated readers: that the Soviet economy was unbalanced because of overinvestment into the military-industrial complex and held up by very highly exploited migrant and temporary labor, creating an underclass. The Soviet worker was exploited and did not get the fruits of their labor to the extent of their Western counterparts and were poorer for it.

This critique went in two directions. Adam argues, and I agree, that it went to form some of the initial work of the Gaidar group, who began to think of the USSR as a distorted market economy (ironically the critique of earlier leftist critics of Soviet planning) dominated by an oligarchy that distorted prices. The solution was price liberalization and privatization to break this oligarchy's power and unleash the existing market. On the other hand, most of the Anchishkin group argued for an industrial policy that would first accept that the USSR was in a deep economic crisis and should give up trying to spur high growth rates. Second, it should demilitarize and try to convert much of its heavy industry – especially the military–into consumer-facing goods.

Here is where Andrei Belausov comes in. He and his brother followed his father's footsteps into CEMI and then into the Institute of Economic and Technical-Scientific Forecasting when the old NIIE institute's group at CEMI was spun off into its own institution in 1986. He became the head of (IEPNTP). He became director of the IEPNTP's marco-ec0nomic forecasting lab and later its successor institute. He established himself as a serious and talented macro-economist and econometrician and a major player in post-Soviet economics and policy, serving as Deputy Minister and Minister of Economic Development, Special Presidential Assistant, and various other roles under Putin. He is regarded as a liberal leaning technocrat but not a free marketer and advocated, with not much success alas, for a more active Russian public development and spending policy.

Now, he is the Minister of Defense. His appointment tells us that Russia is preparing for a long war. Belausov is very competent, and if anyone can help clean up the MOD as an economic ministry, he probably can to some extent. More importantly, it means that Russia is moving toward a more permanent war economy, with the MOD taking an even larger economic role.

This is deeply ironic. In the USSR, the military-industrial complex was a power of its own, untouchable by civilian planners. Its power and political position were probably best embodied by Dimity Ustinov, who served as Minister of Defense and Minister of Defense Industry during his long career. He was a conservative in economic politics and probably one of the prime opponents of reformers in CEMI. Now, the man who is the literal son and torchholder of that group of thinkers and advocates will play Ustinov. Russia's economy will probably militarize, its labor force will collapse, growth will stall, blood will be spilled, and two nations will lose their future for boomer fantasies of greatness. All under the guidance of Belausov. What a waste.