Oktay MAMEDOV
Doct. Econ. (DSc), Professor, Southern Federal University, Rostov-on-Don, Russia

TERRA ECONOMICUS, 2017, Vol. 15 (no. 1),

p. 6-15
DOI: 10.23683/2073-6606-2017-15-1-6-15

A century and a half had passed since the first edition of the first volume of «Capital» by Karl Marx published. Significant events had taken place, including the entry into life of new generations of economists. Every year, many intellectual battles occur, in which the defenders and opponents debate and argue on the Marxian methodology of social analysis. The victory tends to go to the one side or to the other. A strange paradox is that the fighters equally make Marx suffer: the defenders – by their poor defense, the opponents – by their miserable attacks. Meanwhile, Marx is still the great, and therefore – incomprehensible; ingenious, and therefore – mysterious; unread, and therefore – lonely. This article is a tribute to the genius, who actually had created modern scientific social science. The author deals with the epistemological principles which introduce readers into the original author’s methodology, including: the art of stating the problem; simplicity and complexity of the finished form of the product; abstraction which exceeds the specifics of the experiment; the natural character of the historical development

Tambovtsev V.L.
Doctor of Economics, Senior Staff Scientist, Faculty of Economics, Lomonosov Moscow State University, Moscow, Russia

TERRA ECONOMICUS, 2017, Vol. 15 (no. 1),

p. 16-28
DOI: 10.23683/2073-6606-2017-15-1-16-28

The paper analyses competition as an economic good. On the basis of the comparative analysis of different approaches to competition’s representations, the process representation is substantiated as the most relevant. Competition is thought of as process composed of firms’ competitive actions intended to redistribute consumers’ purchases in favour of each of the firms’ goods producing. Successful competitive action is conducted as a rule in the framework of the firm’s entrepreneurial orientation, and this action as usual is a creative one. It is shown that competition is a private good with massive externalities, i.e. a merit good. Competition’s positive influence on economic development is an externality of the competitive actions producing by private market actors. In this regard, it is proposed to operationalize the notion of competition threat not as a list of unfair methods of competition but as revealed restraints of opportunities to respond in kind actions of competitors. Empirically it is possible to reveal these restrictions through firms’ appeals in exercise of supervisory power verifying by antitrust authorities.

Buzgalin A.V.
Doct. Econ. (DSc), Professor, Lomonosov Moscow State University, Moscow, Russia, Visiting Professor, Peking University, Beidging, China

Kolganov A.I.
Doct. Econ. (DSc), Professor, Chief of Laboratory of the Faculty of Economics, Lomonosov Moscow State University, Moscow, Russia

TERRA ECONOMICUS, 2017, Vol. 15 (no. 1),

p. 29-43
DOI: 10.23683/2073-6606-2017-15-1-29-43

The authors describe the potential of selective planning in modern market economy and give respond to Prof. Oktay Mamedov’s critique addressed to their publications (see: Oktay Mamedov. 2016. “Trojan horse” of Directive Planning. Terra Economicus, 2016, vol. 14, no. 2, pp. 6–25. DOI: 10.18522/2073-6606-2016-14-2-6-25). In particular, the article shows that planning in modern market economy is qualitatively different from Soviet one, but can use some of its solutions. Planning in the economy of late capitalism can formulate priorities of development and use indirect methods of selective regulation in private sector and direct methods in social sector for realization of priorities and modernization of economy, in particular, Russian. Such planning is, (1) something fundamentally smaller than the Soviet plan, which was addressed to the public enterprises and had mostly mandatory (directive) character. But at the same time it is (2) something essentially more than the planforecast and indicative plan because it includes a well-defined system of “regulatory rules” (means of implementing the plan), which is approved by the society and is mandatory for implementation in the area of the national economy, that is subject to regulation. In addition, it (3) critically synthesizes the disparate practices of the past and uses the achievements of network information society, and in this sense, goes beyond all previous experiences of planning. Authors also show that not only plan economy, but the market one has ‘failures’ as well, including such satellites of the market as deception, fraud, theft. The methods to overcome such ‘failures’ of the state as bureaucracy and corruption are also shown. According to the arguments given by the authors the logic of selective economic planning is as follows. Plans can and should fix the democratically elaborated and accepted goals of socio-economic development and propose a set of measures for their implementation. Its tree goals are based on the dialogue of civil society, expert communities, academic and government institutions. Among the goals of social development are a priority for the progress of human qualities, and economic growth, the more purely quantitative, should be considered only as a means to achieve this goal. Means of implementation of the priorities accepted by the society in the modern economy of late capitalism may include indirect regulators addressed most part of the economy (mass production, trade and commercial services, finance, etc.) and a combination of direct and indirect methods to regulate the very limited public sector (mainly education, health, fundamental science, culture, infrastructure). Direct and indirect methods of regulation are expedient to unite under a single program-plan. The implementation of the selective economic planning assumes that the economy will remain market-capitalist in its basis, because indirect regulators do not cancel the market conjuncture mechanisms, but only correct it.

Tsirel S.V.
Doct. Sci. (Tech.), Leading Staff Researcher, Saint-Petersburg Mining University, Saint-Petersburg, Russia

TERRA ECONOMICUS, 2017, Vol. 15 (no. 1),

p. 44-67
DOI: 10.23683/2073-6606-2017-15-1-44-67

The main object of studying are processes of disintegration of the social state and building of other society with other social and gender structure. Influence of changes in the third world, automation and robotization on growth of unemployment and reorganization of social and economic structure of the Western countries are analyzed. Two forms (Russian and Western) of reactions to decrease in manpower requirement are considered. The social and gender structure of new Western society is considered. In new society automation and robotization take away a set of usual professions from people, and the work involving direct contacts between people (expanded sphere of occupations like care work) becomes the main work arrangement. It is supposed what societies will be divided into several strata, related to the people’s capabilities for highly intellectual work or to contacts between people, including corporal ones. The conclusion is drawn that male introverts will fall into the worst state. At the same time it is noted that not clear contours of future society which only still begin to shape exert considerable impact on political and economic processes. At the same time future society is a transitional stage between common human story and absolutely modern history. In this absolutely modern history, wide use of machine mind for purely human occupations and embedding of electronic devices in a human body (cyborgization) are possible. However, intervention in genetic human nature, almost inevitable after disappearance of natural selection in human society will become the most important factor which is most of all changing the social and economic relations.

Rozmainsky I.V.
Cand. Sci. (Econ.), Associate Professor, National Research University – Higher School of Economics, Faculty of Liberal Arts and Sciences (Smolny College) of Saint Petersburg State University, Saint Petersburg, Russia

TERRA ECONOMICUS, 2017, Vol. 15 (no. 1),

p. 68-78
DOI: 10.23683/2073-6606-2017-15-1-68-78

The paper offers Post Keynesian/Institutionalist critique of the shock therapy policy in Russia by means of analyzing its influence on rationality of the Russian economic agents in the 1990s. The main idea is that the shock therapy policy’s implementation contributed to an institutional hiatus and led to both rising information overload and higher uncertainty. It created barriers to calculated valuations of expected costs and benefits in the process of decision-making. As a result, behaviour of agents became more arational. In the process of decision-making agents of the Post-Soviet Russian economy relied more on emotions, advertising, group pressure and “behaviour of others” rather than individual optimizing techniques. All these aspects were substitutes for real knowledge. The paper considers forms of arational behaviour of agents in the processes of consumption, investment and financial decision-making and its negative consequences. So such arational behaviour contributed to the great economic crash of the Russian transitional economy in the 1990s. Consumers generated adverse tendencies because of conspicuous consumption of the Western goods at the expense of demand for domestic goods. Investors refused to buy fixed capital goods due to higher uncertainty and provoked both investment collapse and technological degradation. Finally, agents that demanded on the financial markets were fooled by numerous financial fraudulent “players”. It steered away funds from financing real investment projects.

Korneychuk B.V.
Doct. Sci. (Econ.), Professor of Department of Economics, National Research University Higher School of Economics (St. Petersburg branch), St. Petersburg, Russia

TERRA ECONOMICUS, 2017, Vol. 15 (no. 1),

p. 79-88
DOI: 10.23683/2073-6606-2017-15-1-79-88

The authors, offering mobilization scenarios for the development of the Russian economy, follow the historical method and propose to nationalize the key industries, restore the Soviet planned economy system and adopt some aspects of the German economy of the 1930s. Critics of this approach, however, highlight the incompatibility between the planned economy system and the private interest which drives investment and generates development. These researchers regard mobilization scenarios as asmokescreen for political agendas and a means of militarizing the economy. The author of the paper assumes that mobilization thinking was formed in the totalitarian society, under social inequality and the state’s aggressive impact on public opinion. Accordingly, three sources of mobilization thinking can be identified: nationalism, social hierarchy, and the social consciousness aberration. Economic nationalism (or protectionism) appears in mobilization scenarios in the form of strict foreign exchange regulations and other isolationist policies. The paper shows that the lack of ethical principles can lead the proponents of nationalism to conclusions which are unacceptable from the conventional morality point of view. The deep-rooted ideas of inequality and superiority served as the second driver of mobilization thinking which rejects democracy and suggests a hierarchical system of social relationships. The social consciousness aberration is a product of the totalitarian society, where propaganda creates disrespect for the truth which invades science. The aberration comes in the shape of conspiracy theories, economic dogmatism and mythologization of history. Mobilization scenarios involve financial system reforms based on the practices of the Soviet and German prewar economies. The essence of the approach is to expand the use of directive methods and restrict financial markets, so that money and interest rate would become technical accounting indicators. The scenarios suggest directive methods of encouraging investment: setting differential lending rates, emitting “investment ruble”, etc. Referring to the macroeconomic model of the “investment trap” and the history of voucher emission in Russia in the 1990s, the author demonstrates the method of creating “special assets” to be invalid.

Rakviashvili A.A.
Cand, Sci. (Econ.), Associate Professor, Economic Faculty, Lomonosov Moscow State University, Moscow, Russia

TERRA ECONOMICUS, 2017, Vol. 15 (no. 1),

p. 89-102
DOI: 10.23683/2073-6606-2017-15-1-89-102

The article describes the features of the compensation contracts, which can accelerate reforming process and reduce resistance to them from losers. Four basic types of compensation, as well as four phase of the compensation transactions are described. The presented typology is illustrated by the examples from South America, Europe and the former socialist countries. Next, the theoretical limits of compensation contracts are described. There are identified seven such restrictions. They are connected with changes in the motivations of special interest groups, as well as the complexity of the calculation of costs and benefits. The article shows that there is no possibility for the Kaldor-Hicks improvement due to the lack of the mechanisms to precise calculation of the economic impact of reforms. But at the same time, there are some specific approaches to reforming, which can partially flatten the complexity of compensation contracts. Finally, we are considering the ethical issues that arise during the compensation, and which are associated with the need to leave unpunished crimes committed in the past. These problems are often ignored in the economic literature, but in fact ethical restrictions are the main barrier for successful reforms. In general, the main finding is that compensatory contracts, in contrast to what is commonly believed, do not accelerate reforms, but on the contrary, hinder their implementation through the political compromises and a partial preservation of the significance of the old advocacy group. That’s why mechanisms for compensations are often used as an element of political bargaining only in the case of small changes, but not during the radical and ambitious reforms.

Shevchenko I.K.
Doct. Econ. (DSc), Senior Researcher, Southern Federal University, Rostov-on-don, Russia

Razvadovskaya Y.V.
Cand. Sci. (Econ.), Leading Staff Researcher, Southern Federal University, Rostov-on-don, Russia

Marchenko A.A.
Junior Researcher, Southern Federal University, Rostov-on-don, Russia

Khanina A.V.
Cand. Sci. (Econ.), Assistant, Southern Federal University, Rostov-on-don, Russia

TERRA ECONOMICUS, 2017, Vol. 15 (no. 1),

p. 103-129
DOI: 10.23683/2073-6606-2017-15-1-103-129

The strategic goal of economic development is the growth of competitiveness of the country through the formation of innovative economy, the operation of which is largely determined by the qualitative characteristics of the innovation system and the strategy of building national innovative capacity. This study attempts to identify the strategy of innovative development of domestic enterprises of industrial sector of economy, including those depending on the technological level of the industry. The main hypothesis of this study is that the current model of economic development of Russia focused on the export of new technologies, which determines the predominance of the strategy of borrowing in the industrial sector at the medium- and low-technology levels. We assume that different sources of innovation financing differently affect the industry, in particular, public investment has greater influence on the industry of high-tech sector of the economy, and foreign investment – on the industries which use the strategy of new technologies borrowing. The study also tests the hypothesis that such factors as the cost of staff training have the greatest impact on economic activities dependent on the labor resources development. The research findings suggest the specifics of the model of economic development in Russia, and show orientation on international experience in the building of the innovative economy. We conclude that the main source of modernization of production and innovative development of industries is the import of new technologies, at the expense of own funds of enterprises. In this regard, the article proposes such a measure as the formation of consolidated groups of classification of fixed capital and the establishment of the regulatory service life of the equipment in branches and types of economic activities which are of the highest importance for the development of the national innovation system.

Nureev R.M.
Doct. Sci. (Econ.), Professor, Head of the Department of Economics, Financial University under the Government of the Russian Federation, Tenured Professor, Higher School of Economics, Head of section of Philosophy and Methodology, Institute of Economics, Russian Academy of Sciences, Moscow, Russia

Simakovsky S.A.
Post-graduate student of the Department of Economics, Financial University under the Government of the Russia Federation, Moscow, Russia

TERRA ECONOMICUS, 2017, Vol. 15 (no. 1),

p. 130-147
DOI: 10.23683/2073-6606-2017-15-1-130-147

The article analyzes the relationship of innovative processes in Russian regions in the XXI century. The interrelation between innovation supply and demand is shown, the mechanisms of their interactions and influence on the development of innovative economy of the region is investigated. Before the upward phase of the wave of a new Kondratiev cycle, Russia’s economy was on the kind of the bifurcation of ways. One of the sources of competitive advantages are innovations, created as a result of scientific and technological activities. Innovation potential of Russian regions should be considered in conjunction with the innovative processes in the region. Of particular interest are innovative competitive advantages. They are formed due to the implementation in the production of R&D results, aim to ensure rapid upgrade the range and the range of products. The paper analyzes the data on the specialization of certain regions in the production of certain kinds of products and export destinations of these products in the various parts of the globe. Under the conditions of inadequate development of the division of labor between regions, such specialization poses a threat to the centrifugal tendencies. The article describes the structure of the objects that make up the region’s innovation infrastructure. The data on the number of innovative infrastructure organizations in the regions of Russia. The article reviewed the rating of innovation development of the Russian Federation. This ranking collectively explored different aspects of innovation development, between which, at first glance, there is no relationship. A comparative analysis of the dynamics of the Russian position in terms of annual international indices «Doing Business», «Global Innovation Index», «Global Competitiveness Index» for the 2008–2016. Despite the positive trend, significant reserves have been identified for their further growth.

Simionescu M.
PhD, Senior Researcher, Institute for Economic Forecasting, Romanian Academy, Bucharest, Romania

Strielkowski W.
PhD in Economics, Research Associate, Cambridge Judge Business School, University of Cambridge, Cambridge, United Kingdom

Kalyugina S.
Doct. Sci. (Econ.), Professor, Institute of Economics and Management, North-Caucasus Federal University, Stavropol, Russia

TERRA ECONOMICUS, 2017, Vol. 15 (no. 1),

p. 148-156
DOI: 10.23683/2073-6606-2017-15-1-148-156

Nowadays, migration to the United Kingdom remains to be one of the most debatable issues as far as the Brexit is concerned. Many speculations have been made regarding the impact of Brexit and its effect on the social and economic status of the UK. Even though the issue has been deeply explored and analyzed, the implications of the nation’s withdrawal from the European Union still remains to be uncertain. The only sure thing is that such a drastic move will have profound repercussions as far as movement and settlement on the UK is concerned. Our paper seeks to examine the impact of Brexit on migration in the United Kingdom using the example of Polish migrants. We examine the recent trends and development and elaborate on the future of EU migrants in the UK and UK citizens residing in the EU (which might be about 3 million people on both sides of the spectrum). Moreover, we discuss possible scenarios of UK migration policies after the country will eventually leave the EU in a few years, and assess the impact of immigration to the UK on the British and European economies.

O’Leary S.
PhD in Science & Management, Principal Lecturer, Faculty of Business & Management, Regent’s University London, London, England

TERRA ECONOMICUS, 2017, Vol. 15 (no. 1),

p. 157-156
DOI: 10.23683/2073-6606-2017-15-1-157-164

Achieving economic development through the development of skills is a policy priority throughout Eastern Europe and Central Asia (International Labour Office, 2016a) and it is with the ILO that the Russian Federation’s tripartite constituency of government, employers’ and workers’ organisations recently signed a new Programme of Cooperation (International Labour Office, 2016b). Continued improvements to general education are essential in the long-term while, for the short-term, higher education has a particularly important role to play as graduates take up managerial roles across the Russian Federation. This research focuses on just one aspect of that much broader initiative with the ILO, by addressing the issue of employability-related support for higher education students. While progress has already been made, with three Russian universities in the global employability rankings list, further international opportunities to collaborate with other universities exist through initiatives such as the Erasmus+ scheme in Europe, the Generation Study Abroad initiative in the USA and via the BRICS consortium of rapidly developing nations. These three options alone accommodate over 80% of the top-ranked universities worldwide for employability and such collaborations could help embed additional seeds of economic growth in Russia.