Globalisation in Russia

5922 Words Mar 13th, 2007 24 Pages
Globalisation in Russia : the challenge of the transition to the world economy

Fifteen years ago, the Soviet Union was a socialist authoritative country, tightly isolated from capitalist countries. Nowadays, its direct heir, Russia, is one of the most quickly growing markets of the world, strongly open on the global economy.
During the 1990s, Russia underwent an extraordinary transformation from a communist dictatorship to a multi-party democracy, from a centrally planned system to a market economy, and from a belligerent enemy of the West to a cooperative partner. This change was as unexpected as exceptional: two decades ago, only an idealist would have imagined the "evil empire" to transform so quickly and peacefully into a democratic
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The term of "transition" reveals by itself the prevailing frame of mind at the beginning of the 1990 decade. The concept of transition intends the passing from a situation –a singular balance– to another. It is an intermediate situation, a transitory state. There would be thus "one" market economy, only one model which it would be possible to reach quickly.
The Russian experiment of the 90ies shows that while wanting to go from a point A (Soviet economy) to a point B (an idealized market economy), Russia reached another balance, a point C (a degraded market economy). For all these reasons it is preferable to speak about a process of transformation rather than about transition.

It seems important, at this stage, to take an interest in the concept of market economy. The market is a central concept in economy, but its definition is seldom explicit. It is at the same time a physical place where are carried out the exchanges, a whole of outlets related to a product and the abstract place of the meeting between supply and demand. For certain authors like Ludwig von Meises, the market economy corresponds to capitalism and can be thus defined as the exact opposite of socialist economies.
Actually, the economies of the Soviet block had, to differing degrees, market components. As a result, it seems more judicious to define the market economy as "an economy whose activity is organized

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