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Aug 15, 2022
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S.F. Sharapov on economy without a head

This is not the first time I have written about a Russian economist and public figure Sergei Fedorovich Sharapov (1855-1911). His thoughts on the proper organization of economic life in Russia sound no less relevant today than at the end. XIX – beginning XX centuries The most serious brake on the economic development of pre-revolutionary Russia was the bureaucracy that had settled in the state apparatus. Sergei Sharapov sharply criticized her for her sluggishness, unprofessionalism, lack of patriotism, isolation from the people, corruption …

How does all this look like the bureaucracy of democratic Russia!

Sharapov boldly attacks the bureaucracy, demanding that it be replaced by people’s self-government and zemstvos:The bureaucracy has outlived its time, disgraced and ruined Russia, and aroused such hatred for itself that we cannot cope with. You have to take a different path. There can be no supreme power in Russia other than the Tsarist and Autocratic. But under it you need to bring a completely different foundation. This foundation is broad self-government, which should completely replace the bureaucracy. The whole future of Russia is in the zemstvo, set as the fundamental basis of the state building“.

Many Russian patriots spoke about the need to restore order in the state administration of the national economy of Russia during the time of S. Sharapov. Yes, general. HELL. Nechvolodov in his work From Ruin to Prosperity (1906), he draws attention to the lack of self-government in industry and agriculture, the dependence of the local commodity producer on two forces hostile to him – the metropolitan bureaucracy and usurious bankers. The reorganization of state administration and the transition to cheap paper money (from expensive gold money) will lead, according to the general, to the revival of local economic life: “Thus, only with the help of paper money, we can revive all types of our national economy in harmonious interaction and replace the policy of economic centralization, which led the country to so many disasters, with a policy of the widest possible creation of small economic centers. This, at the same time, will resolve in the most expedient way … the question of the conditions for industrial self-government.

In S. Sharapov’s novel “Dictator» General Ivanov (the main character, whom the tsar instructed to perform the functions of a dictator), in the course of a conversation about the reorganization of the country’s monetary and financial economy, asks his Minister of Finance Sokolov (through whom Sergei Fedorovich expresses his own thoughts) about what is the role of zemstvos in managing this economy. Sokolov replies:Very simple. The regions send their special representatives to the respective councils. Thus, the Council of the State Bank, the Council of State Enterprises, and the Financial Council are formed. This is for management. And for economic legislation, make up an elected People’s Economic Council from representatives of the regions, parallel to the State Council according to your scheme. It is only necessary to strictly observe the rule so that people with the appropriate official qualifications, and not “orators” and not sworn attorneys, get into these councils.“.

Even at the beginning of his journalistic activity, Sharapov drew attention to the fact that, despite the abundance of various ministries, offices and departments in the capital city of St. Petersburg, there was no agreement between them. And there is a complete mess that even experienced bureaucrats cannot figure out. Not to mention the “provincials” (manufacturers, farmers and merchants), who naively turned to the city authorities for help. As a result, the national economy turned out to be “a child without an eye with seven nannies”. In work “What is needed first of all for our economic revival?» (1885) Sharapov writes:

The state mechanism of Russia lacks a small thing: there is no body whose direct task would be to take care of the national economy, guide people’s labor, and protect national economic interests! To run the national economy, to have a clear plan for Russian industrial activity, to raise a voice for the Russian national interest – it simply turns out to be no one, even with the exorbitant abundance of departments and authorities that Russia truly suffers from.»

To restore order in public administration and overcome economic disruption in Russia, personnel changes and updates were periodically carried out. According to Sharapov, this is a necessary but not sufficient condition for a radical increase in the efficiency of state management of the national economy: “Even if people with a living knowledge of Russia and Russian economic conditions are called to government activity, these people will become entangled in the inevitable contradictions, will be absorbed by the abundance of clerical work, will naturally become the same bureaucrats as their most talented predecessors.“. The first and obvious thing that, according to Sharapov, needs to be done is to create an agency that would be entirely responsible for the national economy: “Therefore, it is necessary to establish a special ministry, which would concentrate in its hands all branches of the national economy, would be in charge of all affairs for the development of the agricultural, manufacturing and commercial industries of the country.“.

Unfortunately, the idea of ​​creating a special department that would concentrate in its hands the management of the entire national economy (a kind of super-ministry) was never realized before the revolution. This is also one of the reasons (perhaps not the most important) of what happened to Russia a few years after Sharapov’s death. However, he warned about this back in 1885 (32 years before the events of 1917): “In the absence of a special body in charge of all branches of the national economy, the living life of the people and people’s labor will forever and invariably remain neglected, in the policy and activities of the state there will be nothing but accidents, struggles and contradictions, and those troubles that the Russian agricultural and manufacturing industry is now experiencing. , from the form of a crisis will easily go into the form of an economic catastrophe“.

At the end of life in the report “Financial revival of Russia» (1908) Sharapov again returns to the theme of centralized and coordinated management of the national economy. According to Sharapov, at least the following set of ministries and departments is required: 1. Ministry of Finance. 2. Ministry of Trade and Industry. 3. Ministry of State Enterprises (or State Economy). 4. Ministry of People’s Credit (State Bank). 5. Ministry of Agriculture. At the time when Sharapov wrote the report “The Financial Revival of Russia”, there were only four departments, and there was no Ministry of State Enterprises. Sharapov notes:The group of these five departments obviously needs a closer unity than is represented by our highest state apparatus in the form of the Senate, the Council of Ministers, the State Duma and the State Council. The vital interests of the country, guided by a network of economic institutions, are too important and too idiosyncratic to be content with general supervision and guidance from above, not to mention legislation through the random composition of the Duma. The slightest inconsistency in the parts of the state’s unified economic policy, and the entire economic life of the country will go awry. On the other hand, this area is only indirectly in contact with the rest of the state legislation and administration, the police, the courts, education, etc.”

And Sergei Fedorovich proposes to create a special supreme coordinating institution that would conduct all state institutions that somehow manage the national economy: “The best, administratively unifying link would be the Economic Council, parallel to the current Council of Ministers, chaired by an outstanding economist, consisting of heads and representatives belonging to a group of departments, officials of the State Control and persons specially appointed by the Supreme Power from among well-known Russian economists and financiers. The task of this institution is to coordinate and check unremittingly the activities of departments, eliminate all differences and give competent guidance on every issue that arises.“. The economy is a single organism, it must have one owner, who performs the functions of a nanny, a doctor, and a strict parent.

Let’s give the Bolsheviks their due: after coming to power, they quickly realized that without a single economic department, economic chaos would begin in the country, and they would not retain power. And in December 1917, such a department was established: it was Supreme Council of the National Economy (VSNKh). Please note: the name is similar to the one proposed by Sharapov (Economic Council). The main function of the VSNKh is the organization and management of the entire national economy and finances, and the management of sectoral departments.

Another central economic agency was Gosplan of the USSR. It was created in 1923. Its full original name is the USSR State Planning Commission under the Council of Labor and Defense. At first, Gosplan was the highest expert and scientific coordinating center in the field of economics. Later (after the abolition of the Supreme Council of National Economy in 1932), it acquired the status of the main department for managing and planning the national economy, coordinated the activities of all ministries and departments of the financial and economic bloc. The State Planning Committee of the USSR had its branches in all the union republics, where they coordinated the activities of the republican ministries and departments. The State Planning Committee of the USSR lasted until the end of the Soviet period of our history.

Today in the Russian Federation the economy is again headless. There is no coordination between the ministries and departments of the financial and economic bloc, each department is a specific principality, and an atmosphere of “economic liberalism” reigns in the country’s leadership (as in Sharapov’s time). And Sharapov warned in 1885: “The troubles that the Russian agricultural and manufacturing industry is now experiencing will easily pass from the form of a crisis into the form of an economic catastrophe.“.

And another interesting thought of Sharapov on improving the management of the national economy: the need a special approach to the development of legislation in the field of economics and finance.

In The Financial Revival of Russia, Sharapov notes:For legislation in the economic and financial fields, the current legislative institutions, the State Council and the State Duma, are both insufficient and hardly adequate. Economic legislation requires, first of all, absolute non-partisanship and a very large amount of specialized knowledge … it is precisely here that parliamentary-type institutions are especially unsuitable. If serious economic legislation and serious control over the activities of departments are desired, there is no other way than the formation of special institutions from elected zemstvos as representatives of the agricultural element and cities, and commercial and industrial institutions as representatives of the commercial element on the basis of a serious official qualification that determines the efficiency of members of the future colleges. In this case, there can be no place for any accidents. And if accidents of a bureaucratic nature, such as the sovereign 11-year management of a completely ignorant and unprincipled person, led Russia to a terrible modern situation (Sharapov is referring to the activities of S.Yu. Witte as Minister of Finance. – VC.)then parliamentary accidents in the form of legislation by the so-called best people expelled by the political street can lead our Motherland to the most serious disasters“.

Sharapov believes that the Economic Council proposed by him should be not only an executive, but partly a legislative power, participating in the preparation of bills of an economic and financial nature: “Here (in the Economic Council. – VC.) all bills previously introduced by law must be pre-discussed and agreed upon“.

Today, the State Duma develops and adopts a bunch of different laws on economics and finance. These laws bear the imprint of party predilections, cunning, selfish interests of deputies lobbying the interests of certain oligarchs, reflect low professionalism, and sometimes outright ignorance of “people’s representatives”. Deputies are accustomed to political activities, election and advertising campaigns, lobbying; they do not delve into the content of most economic laws, sometimes they do not even understand what they are talking about.

How all this is similar to the activities of the Duma of the times of Sergei Sharapov!

Collage: Finobzor

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