Innovations, Information Society and Long-Term Development Strategy of Russia
Valentina M. Bondarenko

Fordism as an economic system for organization of mass-stream production appeared in the United States in the 1^st quarter of the 20^th century. This system of labor- and production organization was based on assembly line, as well as on type design of production, standardization and commonality of parts, their interchangeability, etc.

Ford was a pioneer of technologies that provided for inexpensive mass production and mass consumption. Mass consumption became a norm in the years, when salaries were rather high and prices of commodities were reducing. As production and consumption took place within national boundaries – that is, within one state, a relative balance was attained and sustained between the two for some time. As long as proportions between the time for production and circulation of commodities were not disrupted, the higher labor productivity was conducive to price reduction.

The years of 1945-1973 is qualified as the period of balance between mass production and mass consumption. The same period can also be called as the time of interest conciliation between manufacturers and consumers, while post-Fordists qualify it Fordist-Keinsian. Those years were featured by continuous economic growth and almost full employment of population. Advertising and TV encouraged mass consumption that served the basis for stable mass production, and some balance was sustained between the first and the latter. Growing incomes and full employment provided for sustainable economy.

National state was the venue of economic activities and national corporations used to dominate in the respective national territory. Two or three companies prevailed in each sector. In that period, national manufacturers supplied the domestic markets in developed states.

Later on, gradually, the Fordist regime was becoming less stable. With the trend for overproduction of mass commodities, the time for their circulation was becoming longer than the time for their production, prices and inflation were growing, and the regime of capital accumulation became unstable.

In the second half of 1970s Europe was hit by the economic crisis caused by overproduction of some goods and unsatisfied demand for other goods. It became clear that the Fordist and Fordist-Keinsian models were failing. Exactly at that time, the post-Fordist approach appeared to explain the crisis in systemic terms and to assign the main role to information. The approach was voiced by a group of French intellectuals, less known in Russia, who initially were influenced by Marx’s economic ideas and studied reproduction of societal relations – namely, Michel Aglietta² , David Ferbach³ and Alain Lihietz. They were concerned with the two key questions: How does capital accumulation take place? How does society control instability? In the search of answers they came to the conclusion that since the mid-1970s new regimes of capital accumulation started to emerge in Europe, while the Fordist regime, which prevailed in Europe from 1945 through to mid-1970s, became unstable to give way to what they qualified as post-Fordist regime.

Even at that time, the authors of post-Fordism argued that mass production of standardized commodities, manufactured in big volumes under the common technology, was disappearing as consumption was overfed by such products. Hence, mass production and mass consumption would be defunct. While in the Forst period standardization was the main point, in the post-Fordist period the forefront was taken over by flexibility – that is, the production system, which, owing to modern electronic systems, was turned on to operate only if and when the order was made.

The consumption, too, became somewhat flexible – that is, enterprises, applying electronic technologies, could produce the more diverse assortment of commodities than before as well to manufacture efficiently smaller parties of goods. The structure of production was changing and moving from mass production to flexible specialization and distributed systems that could be reset on the real-time regime in conformity with the ordered type of products. The basis for such production was formed by information technologies and intellectual labor. Consensus would take place between production and consumption, and conciliation of interests was taking place between manufacturers and consumers. Unfortunately, these trends were not noticed and their architects were not heard. The world chose to proceed along a different road. Today, information technologies become an end in itself for development and a means to build global markets.

In such circumstances, the role of nation states was getting less significant. With such purposes as to find markets for sale of mass standardized products and to increase capitalization, national borders were opened for movement of commodities and money, the more fierce international competition was undermining national sovereignty of different states, and transnational corporations stepped in as new players. Trade as a link between production and consumption surpassed the borders of individual states and was internationalized, and the processes of globalization unleashed rapidly.

Globalization of markets, finances and production became possible owing to emergence of global information infrastructure with such features as:

• globalization of information services – in particular, modern financial, insurance, banking and advertising services. If not for such services, TNC would be unable to function. Production and dissemination of information on markets, consumers, regions, risks, partners, taxation systems, etc. – is the essence of this business, which generates profits through analysis and timely supply of information;
• rapid growth of innovation in the sphere of ICT in the last several years. Globalization propels development of computer technologies providing for cooperation among major international organizations;
• growing speed and volumes of information flows generated by appearance of global infrastructure.

The speed of all these processes was growing continuously. Scholars explained such changes in different terms. For instance, Daniel Bell qualified that period as “transition from industrial to post-industrial society” and associated the process with the shift from commodity production to service production. Russian scholars shared these or similar ideas. Production of information, information and communication technologies and services, together with production of money for money become an end in itself. Capitals are flowing exactly into the given boiler. Corporations receive fantastic profits. It is not incidental that until recently Bill Gates, the founder of Microsoft was identified as the richest man in the world. Today, with the fortune of 58 billion US Dollars, he stepped down to the third place. Until now, in the top lines of ratings of the richest people we do not only see owners of computer companies, but also owners of internet portals, supermarkets, mass media and gambling establishments, as well as, especially, owners of financial structures, engaged in purchase and sale of virtual capitals with the help of information technologies. That is why Warren Buffet, a US financier, was the number one name in the Forbs magazine’s rating of the world richest. Buffet’s fortune is valued at the level of 62 billion US Dollars. In 2008, his wealth grew by 10 billion USD owing to 25% growth in price of shares of “Berkshire Hathaway”, his investment company. The second line is given to Carlos Slim from Mexico – this telecommunication tycoon and the richest man in Latin America, after his capital grew by 11 billion USD, now owns 60 billion US Dollars. However, none of those invests their billions in production oriented to needs of specific people, although such investment could secure their own capitals and save the global economy from the financial and economic crisis and wars.

Globalization of ties in the world economy has become an omnipresent factor of economic growth in every country and in the world at large. In none of national economies domestic decisions can be taken without regard of the outer environment.

In view of Elwin Toffler, the author of “Third Wave” bestseller, globalization is not something necessary, as it results in the change of space and time relations as well as in full de-synchronization of human relations on the planet. In my articles of 2001, I have shown already that globalization in the currently observed form is an episode in the history of human society development, and that just having emerged, it would start negating itself. That is what happened in reality. For example, the ever less time is left for the global business to take the ever bigger decisions. In the financial sphere, correct decisions must be made and taken within milliseconds, while in government structures decision-making might take years. In Toffler’s view, mass production, mass advertising and mass culture have become outdated. Time is coming for computer-based individualized production for each specific individual (inter alia, in my view, this should have taken place even yesterday). By Toffler, we are departing from mass society and will be personalizing everything. However, despite the million-copy circulations of his books (for example, in China), explaining the meaning of the “third wave”, Toffler suggests that his studies failed to produce an integral picture and integral understanding of the current developments.

T. Freedman, an American researcher, defined globalization as an untamable integration of markets, nation states and technologies, enabling individuals, corporations and nation states to reach any place in the world more rapidly, farer, more deeply and more cheaply than ever before. Under such conditions, the ties between production and consumption have become immeasurably longer in time and space, with the entire misalignment of manufacturers’ and end consumers’ interests. Instead of conciliation of interests, we see their mounting polarization and uncontrollable growth of prices. Hence, to realize the objective of human community development was not considered possible.

Many authors, who studied the given problem beginning from the 16^th – 18^th centuries and through to today (from mercantilism to M. Porter’s theories and I. Wallerstein’s “world systemic” approach), arrived to rather tough conclusions, such as:

• growth of globalization in the world is accompanied by the stronger social stratification within each country and in the world at large. For 25 years of active march of globalization in the late 20^th and early 21^st century, over 80% of the world wealth happened to be appropriated by less than 20% of the world population;
• today three billion people of Earth earn less than two dollars per day. One billion people do not have a permanent access to drinking water. Another billion humans are homeless. At the same time, however, the average daily income of Swiss citizens is equal to average yearly income of Ethiopians;
• owing to globalization, transnational corporations became the major actors in the world economic relations. The aggregate product of 500 largest TNC accounts for over 60% of gross global product. Many TNC are economically stronger than small and even some big states;
• for a long time, the currently developed countries have been developing more rapidly and productively than the rest of the world as they availed the unlimited monetary and resource base involved in production and consumption in the rather limited space, and thus they plunged the whole planet into the global financial and economic crisis.

These conclusions need no additional comments. It is not incidental that the prospects of the mankind’s future development have been in the focus of growing attention. As a result, we see an impressive number of long-term forecasts on the expected trends of global and regional development. The forecasters emphasize their concerns connected with the fact that economic growth in dynamic countries and in the world at large generates the growing consumption of natural (in particular, energy) resources, and that the rates of consumption exceed all ecologically admissible norms. In view of those analysts and forecasters, the modern economy should either be restructured radically (and such restructuring would cause big shocks and at least temporary decline), or reach the climax of its development and then get in the period of crisis and disruption of global economic ties. Realization of the latter scenario is fully evident these days.

So, as shown by analysis of global trends in formation of the desired model of human relations, in which manufacturers’ and consumers’ interests would be conciliated, the world rapidly has driven back in the opposite direction. These trends are the even more typical of Russia.

In the currently existing concept for construction of information society, a specific human individual is only present in the data register, in which he / she has his / her identification code, as a controllable subject for the needs of governance at all levels. In this concept, a specific human individual is missing as producer and consumer of all goods, and this concept does not offer a possibility to conciliate producers’ and consumers’ interests in the real time and space and thus to reduce the existing disproportions between the time for production and turnover of commodities and money. In the nearest future, internet will fully satisfy the human demand for information by offering to people efficient instruments to obtain as well as to search, produce and transmission of information. Together with mobile communication progress, internet fully satisfies the human need in communication and in being able to coordinate one’s own interests with those of others. Let me refer to an ample case in point. Probably, the biggest merit of the digital century should be seen in the fact that today the possibility of creative self-realization is available for actually every talented person, including those people who just 20 years ago for whatever the reasons did not have any chance to express themselves as representative of some or another creative profession.

Professions of “the letters” – journalists, writers, and poets – provide the best illustration of “informatization of creativity”. They no longer need to live in big cities and have extensive contacts in the literary environment in order to be able to publish their works. For them, it will suffice to write literally, interestingly and with talent. To deliver the manuscript, to undergo editorial alteration, to sign the contract and to receive the royalty – today all this can be done without leaving home, even if the publishing house is located at the other end of the world.

Therefore the next strategic task is to form, in the real time, a mechanism for conciliation of all links (actors) in the chain of reproduction through to specific end consumers. The shortest, in time and space, interconnection between the production links manufacturing the end consumer products, and the people, can be realized at the local (municipal) level of government; any other connection will be longer in space and hence in time. Such level would make it possible to integrate all spheres of material and non-material production in any regional complex being an organization component of the entire economic complex of Russia. The effect of direct times will be reached, as an absolutely independent and free associated producer must be faced with an associated consumer. The very fact of collision of interests between the counteragents from the two camps of economy, production and consumption, will bring the main sought effect – that is, synchronized movement of commodities and goods, plus reduction of the currently huge disproportion between the times of their production and circulation. Thus we would obtain the only possible instrument to remove all systemic reasons of the current global financial and economic crisis. Therefore, to abandon conciliation of interests through the higher center must be a mandatory condition in formation of an efficient mechanism of interconnection between production and consumption (or mechanism for conciliation of interests to be the basis for satisfaction of human needs), while at each local level it is necessary to build a most modern infrastructure for interconnection with each specific person that would provide for conciliation of producers’ and consumers’ interests in real time. The actors that could perform such role include information system of interconnection with specific people – that is, associations of smaller high-tech manufacturer companies, high-tech structures of commerce, education, healthcare, housing and communal complex, etc., as well as banking structures, financial institutions, civil society structures and other institutions.

An impressive number of similar segmental systems have been created already in Russia and other countries for development of education, medicine, trade, etc. One of the most ample case in point is found in the Moscow high-tech chain of “Utkonos” shops “at walking distance” (www.utkonos.ru).

Today internet shops trading with many groups of commodities, distant education, internet medicine and many other things (actually covering the whole range of needs) are available; the only thing to be done is to link all those in the shared information space at each local level. Another case in point – integrated information systems to provide and account targeted social services for population on the base of standardized individual social card. Such systems have been built already in the Samara, Tver’, Nizhniy Novgorod, and Penza Oblasts,in the Krasnodar Territory and in other regions. Therefore, at each local level, it is necessary, applying ICT, to build an advanced infrastructure for intercommunication of producers of commodities and services with specific consumers. Such system will make it possible to conciliate their interests in the real time.

In this context, information resources become a most powerful productive force. ICT, being a super-modern means of instantaneous communication among people, will make it possible to pool their minds for perception, buildup and use of knowledge relevant to the purpose of societal development. For the whole bulk of this knowledge to be used in the interest of each specific human individual, the human individual must be present in the system of communications socio-economically, organizationally, as well as in the sense of science-tech, law, etc.

Human individual must be present in the system of human relations, not as an object for some people to govern (manipulate) others, but rather as an equal-righted subject of relations with all his / her needs up to the need to enhance maximally his / her level of consciousness in relations with other people, to develop his / her spiritual and intellectual potential and to reach physical perfection.

Only in such conditions the Knowledge would really become a true productive force, as the use of unified mind of all people (through the means of communication, and eventually – at the level of thoughts) would generate new knowledge in the interest of each human individual. Knowledge rests in human heads rather than in engineered means.

The knowledge gained in the past is stored in different information means, while new knowledge is formed by nobody else but people. Therefore, it is necessary, first, to form a new development model, in which specific human individual will be present equally, together with his / her needs and capabilities at any moment of time to generate and receive new knowledge from the future. It is at this point that ICT, being a means of human communication, must play its historic role.

As we see, the new reality does not proceed from the past experience; rather, it is taking shape here and now from knowledge of the future. In the information society, acceleration of all processes somehow isolates or even rules out a chance to return back to the experience of passed days.

Therefore, introduction, by applying ICT, of specific human individual into the system of relations as a producer and consumer of all goods, and conciliation of his / her interests in the real time, through these communication means, with interests of other people – this is the innovation, which, according to Shumpeter, will change the mode of material production irreversibly in history. This is the only way to turn the world irreversibly towards people, to overcome their troubles and to provide for their spiritual awakening.

Only in the given form of human relations the public and private property shall become at the same time societal property, as the given property shall be formed by a direct way of communication with specific human individual. The energy of the regulating impact by the state must play a creative role in shaping of exactly such form of relations. If sorting out of different models for development of human relations is procrastinated (and such danger is now present in the minds of leaders of 20 countries), and if some elements of the system do not reach mutual relevance before all vital resources are exhausted, the catastrophe will be inevitable both in Russia and in the whole planet.

As for the need and the possibility to form such model, today Russia has unique advantages over other countries.

The need is predetermined by the fact that Russia is on the brink of financial default and social explosion.

The possibilities include the actually available:

• clear and scientifically based idea of the further development roads;
• possibility not to reconstruct, modernize, destroy and eliminate the old production, but, as the latter is almost entirely absent, to build anew and in the required form the high-tech consumer commodity production, resettable in the real time and oriented to orders from specific individuals;
• unique possibility – in the context of saturation of government and private-business structures by information-and-communication technologies as well as realization of “Electronic Russia”, “Computer for Each Home” and other programs – to build as swiftly as possible the infrastructure of direct real-time human communication in real time and basing on that, to create the unified information space of Russia;
• undisputable willingness and possibility to accomplish the reform of local government bodies and to provide vista for formation of civil society within the framework of the new development model;
• possibility to expand the list of national projects through to the rage of all human needs and to realize as efficiently and effectively as possible;
• possibility to step over the development stage, at which consumer society would be formed and people would become the simulacra with low-level consciousness and sinister instincts, and to proceed right to the stage of new quality of life, in which people would develop comprehensively their spiritual and intellectual potential, improve physical health and continuously elevate their level of consciousness.

So far, huge financial resources are available in the country for realization of all above-listed tasks. To realize them, nothing else is needed but the political will of the state and its top leaders. Thanks God, all signs that this, too, will be available, are evident already!

Otherwise, there will be no prospect for development of Russia as well as of the entire world!

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Footnotes:

¹ This article was written with support from Russian Humanities Foundation (Grant No. 06-02-00165а). The first part of the article is published in the “Informatsionnoe obschestvo” [Information Society] journal, No. 5-6, 2008.

² Michel Aglietta, born in 1938, is a former student of the École Polytechnique (Promotion X1959) and of the ENSAE. Current Professor of Economic Science at the University of Paris X: Nanterre, he is a scientific counsellor at CEPII, a member of the University Institute of France, and a consultant to Groupama-AM. He is also a member of the Circle of economists^[1]. From 1997 à 2003, he was a member of the Council of economic analysis for the Prime Minister. He is a teacher at HEC Paris. In October 1974, Michel Aglietta published his thesis, entitled Régulation du mode de production capitaliste dans la longue période. Exemple des États-Unis (1870-1970), for his doctorate thesis at the University of Paris I: Panthéon-Sorbonne. He is also aggregate professor for the universities in Amiens, after he was administrator of the INSEE. The jury who marked his thesis consisted of Professors Raymond Barre, H. Brochier, Carlo Benetti, J.Weiller and Edmond Malinvaud. Michel Aglietta was one of the founders in 1976, with Robert Boyer, of the regulation school. He is a specialist in international monetary economy, known for his work on the functions of financial markets.

³ Michel Aglietta, David Ferbach A Theory of Capitalist Regulation: The US Experience, Aglietta's path-breaking book is the first attempt at a rigorous historical theory of the whole development of US capitalism, from the Civil War to the Carter Presidency. A major document of the 'Regulation School' of Marxist economists, it was received on publication as the boldest work in its field since the classic studies of Baran, Sweezy and Braverman. This new edition includes a substantial new postface by Aglietta which brings regulation theory face to face with capitalism at the end of this century and beyond.

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Dr. Valentina M. Bondarenko - Leading Researcher, RAS Institute of Economics; Director, International N. D. Kondratieff Foundation.

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