This book starts with the experience of Russia since the end of central planning. It covers the great contraction of 1992-98 and the subsequent recovery in 1999-2006. It offers and empirically supports a uniform explanation of both the contraction and the recovery. It views Russia’s economy as a new economic system that evolved from central planning after liberalization and privatization in 1992 and adapted to the policy shift in late 1998. Russia inherited the entire array of enterprises from central planning where they formed a unified assembly line, a veritable nation-enterprise. With few newfangled enterprises, unlike China, these inherited enterprises evolved by default into a ubiquitous network, akin to a vertically integrated super-cartel. The inherited enterprise network was able to extract massive subsidies from the government and the public and redistribute national income. We call this new economic system Enterprise Network Socialism.

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This publication is copyright © 2006 by the Board of Trustees of Leland Stanford Junior University. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without written permission of the publisher.

Copyright 2006.

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