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On the Unscientific Claim That the Public Sector Accounts for 70 Percent of the Russian GDP and the Social Subtext of This Myth

ABSTRACT Economic experts have repeatedly reacted to the suggestion that Russia is currently undergoing a large-scale nationalization of its economy. One widely influential economist, Abel Aganbegyan, has argued that some 70 percent of Russia’s gross domestic product (GDP) belongs to the public sector. This article analyzes Aganbegyan’s argument and concludes that it is entirely unfounded. The 70 percent figure is based not on the analysis of statistical data, but on poorly constructed rhetorical argumentation. It is argued that the subtext of the antiscientific 70 percent public sector myth serves the interests of the oligarchic-comprador ownership; that it is a destructive social force promoted by comprador ideology to instigate a return to the economic model of the 1990s; that this model would deprive the government budget of the resources to support domestic demand; and that this would lead to the collapse of the federal structure of Russia. The article concludes that while the retro-liberals insist on an oligarchic-comprador path of development, and the Kremlin chooses a conservative, inertial path, the best way forward is to create conditions that facilitate interindustry organization and the vertical integration of the national economy.