A contemporary civilized and efficient economics is a market-type economics, which is based on neoliberal values: private property, various manifestations of democratic freedoms, individualism approach, and market self-regulation of economics, which admits the government intervention only in the view of systematic inability of the market to solve one or another problem in the organization of economic development. Such stereotyped images on the broad principles of the organization of a contemporary civilized and efficient economics, are applied in relation to the ideology and practice of regulation of Russian economic system.


However, the initiated global financial and economic crisis has acquired a systemic character. It is not only because it has covered almost all world economy, but also because it has detected a systemic erosion of traditional liberal (and neoliberal) values. Within these values a quite limited socialization of separately managing, acting and following own personal goals of an individual was based on the protection and preservation of various rights to property of all other market participants. Without such defense, capitalist economy passes into a struggle of all against all, hidden under the external legislation, and into a competition in skills and practice of withdrawing of constantly increasing income from the systematic infringement of property rights of other less smart market participants. But practically there is such a constantly increasing destruction within the private property institution and its values of free enterprise, initiative and conscientious work, responsible and motivated management. During long years and decades, preceding the crisis first in the USA and then in the EU and other developed countries of the world, there have been formed mechanisms, which have completely changed some traditional relationships between the owners and top managers of large corporations, banks and other financial institutions, as well as between the owners and managers on the one hand, and salaried employees on the other.

The example is the expansion of practical usage of stock options for the remunerative incentives of top managers of large corporations, banks, insurance companies and other financial institutions.

 Besides, still in 1990-th there was a practice when the options were acquired by the top management of the mentioned organizations at preferential prices at a discount and actually without the reflection of this transaction in the accounting reports, which is without taking the expenditures on the transaction of stock companies as expenses. Actually this meant that other shareholders, who bought supplement shares, had to pay extra charges, connected with the rights offering to top managers, without knowing the actual sizes of overpayment for their shares[1].

The practice of efficient management, which is directed for the long-term increase of company market price, gradually evolved into the practice of “soap bubbles” blowing, based on which the top managers of large companies, banks, financial structures systematically received the excessive profit. The means for receiving such a profit are a fraudulent misrepresentation of minority shareholders and the suppliers of the borrowed capital, the usage of insider information with the aim of personal enrichment of top managers, creation of various schemes for the evasion of the taxes and for avoidance for the avoidance of responsibility for the illegal use of another person’s income, capitals or other property.

The means for systemic enrichment of representatives from the corporate giants, banks, other financial structures, corrupted bureaucracy and representatives of elective authority are also the creation of financial and economic mechanism of unequal exchange between the developed and developing countries.

Market financial and economic mechanisms instead of being the means of effective distribution of resources, the organization of the efficient activity of all economic agents, based on the provision of marginal efficiency of their activity and their received marginal income, are gradually turning into the means of redistribution of the earned income from the poor and the less protected by the authority to the rich and well protected by the authority, from more poor and “less democratic countries” to richer countries, which function on the basis of formal standards of western democracy.

Markets also quit being the means of efficient and equal distribution of economic data. Consequently, the resources and incomes are divided more and more inefficiently and unfair; the proprietary rights of the majority of the market relations participants are permanently violated. Vast incomes and accumulated wealth are not used for the organization of spiritual-cultural constituents of reproduction increase in the human capital assets production and the increase of the cumulative public welfare, but for the purposes of irrational and constantly increasing personal enrichment of the relatively small layer of super-rich people, who concentrate the control levers on the material resources, information and political power in their hands.

It is necessary to use the other means besides the formal rules of democracy and the development of personal freedom in order to direct the process of usage of the material, economic, financial, legal, informational, political and cultural resources, accumulated in the society, in order to pursue the goals of the formation and perfection of human capital assets, many-sided and full usage of human abilities in order to increase the overall welfare of the community.

Also the concentration of the whole political, economic, informational and other power in the state hands is not good for the provision of public welfare in the conditions of extreme maldistribution of material, financial, political, informational, and other resource categories in society, as the sad experience of socialistic countries has showed. At the same time the practice has shown how important are various adjustment procedures for the solution of tasks, concerning the preservation of rational order and the orientation of the process of development on the human wellbeing for the society, and the mechanisms, which are aimed at the proper solution of these tasks.

In conditions of maldistribution of resources and power in the society and the divergence of interests of the resource and power owners, these tasks cannot be solved spontaneously, taking into account the interests of population. Social organization is necessary for their solution. But any traditional social organization, which passes the settlement of these problems to other people, strengthens the irregularity degree of distribution of resources and power in society, increases the degree of differences of interests, and, therefore, leads to the fact that the authority is delegated not to those people, who can implement them efficiently.

It is necessary to form new mechanisms of the realization of power and democracy in society for more efficient settlement of the indicated general tasks, than it takes place now and the negotiation of contradiction, which is connected with the reinforcement of interest differences at the handover of power authorization to the regulative structure. Traditional government and democracy institutions in western countries, which have succeeded in the provision of growth of public welfare and the development of human capital, are based on the principles of individualism and formal economic and political freedom, independence of the individual from the collective and society. Market mechanisms, which tie up the interests of politicians, public figures and population implicitly, start to fail more and more with the complication of power mechanisms, complication of the matrix of the authority instructions distribution, and the usage of more and more various resource categories in society, and appearance of more various opportunities of information manipulation for the convenience of structures in authority.

A free and independent society individual loses the leverage over the authority structures and society within the described processes and more complicated structures of the realization of more various mechanisms of power. All this leads to the erosion of the basis of democracy and private property, which are responsible for the organization of the market-based economy in western countries.

In order to preserve the bases of the efficient organization of the market-based economy, it is possible only to transform them. In this case the democracy should turn from the individualized to the collective one. The character of decisions, which are taken by the authorized institutions, depend upon the rules, set by the society for the decision-making processes. When the rules are formed by other authorized institutions, the process of decision making and its results may finally be strange for the population and contradict with their interests. Therefore, general rules for the decision making of the authoritative state institutions should be formed by the institutions of primary direct democracy of population.

The collective discussion and elaboration of opinions, regarding the general assessment of the priorities and the effectiveness of the government body activity, the order of taking decisions by the specialized authoritative institutions, can rest upon the collective mind and the corporate liability of primary groups, like labor, common, associations according to their interests etc. The elaborated opinions and evaluations in the collectives can be more deliberate and exact, and meet the common needs of the groups of people.

However, in order the collective decisions, opinions and evaluations become the basis for the perfection of the activity of dedicated and authorized human institutions, the collective discussions and decisions making should become normal in everyday life, and overgrow the rudiments of the collective labour and common democracy.

The rudiments of the collective labour and common democracy are connected with the cultural and historical peculiarities of the Russian society. Their development was violently interrupted after the Russian revolution of the year 1917. The revival of traditions of the collective democracy in the sphere of production, organizational management, in cultural and general life can and should significantly change the mechanisms of the exercising of power in the Russian society. The top public authorities should discuss and adopt a number of key orienting points for the adjustment of their activity and the development of changes in the basis of civil, financial, tax, and administrative legislation with the very representatives of the direct primary democracy, representatives of all social classes.

Various problems in the sphere of legislation can be settled based on the common universal discussion of the state on the most important problems of the society life with the very representatives of this society, as well as the most apparent errors in the mechanism of the state power and in the sphere of control action for decision making, and the very mechanism of interaction between the authority and the population. In consequence, the mechanism of private property can provide not only a more accurate consolidation and protection of the separated proprietary rights of all participants of the economic processes, but also give a stimulus to the progressive integration of interests within the separate business units, in the sphere of their developing a forward integration, and promote the formation of more civilized principles in the sphere of economic cooperation of the market participants.

The key to the solution of the specified problems is in the sphere of development of primary collective democracy institutions, which corresponds to the traditions of the Russian civilization.

[1] See, for example, Stiglitz J. The Roaring nineties Seeds of Distruction / Translated from English — М.: Современная экономика и право, 2005. – С. 163-182.