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Putin, Schumpeter, and the Terrible Potential of Bureaucracy

An enjoyable piece from Paul Goble today, drawing on the analysis of Konstantin Remchukov published in NG.

Drawing on the works of Joseph Schumpeter, Remchukov points out both that entrepreneurs play a key role in societal transformations and that the economic and social progress which they promote tends to spread “as a result of the diffusion of two types of innovation”: organizational and informational technology.

In Russia, the Moscow analyst argues, the former is especially important given the size and role of the state in the economy, and change becomes an increasingly obvious necessity as daily reports about “tragedies, catastrophes, accidents, explosions and fires shows the inability of the [Russian] bureaucracy to effectively fulfill its functions.”

But this situation also shows, Remchukovsuggests, that “the corrupt bureaucracy is being transformed into anindependent economic and even political player, pitilessly defendingits own material interests,” which in many cases are tied up withownership of land, “the most natural manifestation of the deficitnature of an economy of our type.”

All that makes the bureaucracyextraordinarily dangerous to the future of the country, Remchukov says,noting that Albert Speer had told Hitler that the German bureaucracywas behaving in such a way that it was becoming “the main cause of thedefeat of Germany” in World War II.

Even if one finds thathyperbolic, Remchukov suggests, “at a minimum it forces us to thinkagain about the terrible potential of the destructive power of thebureaucracy,” a destructive power that is manifested in very differentways at the political level than many people now appear to think.