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Rotten Bananas's avatar

For highly skilled workers working in jobs requiring a lower level of skills, there is labor migration from Eastern Europe, HK, etc. where postgraduates are working in factories, entry-level service, or menial jobs, due to the same mismatch between their skill level and available employment. The wage differential more than compensate the loss of status, tho.

There are also intentional communities (Kibbutz, back-to-the-land) where middle class residents pick up farming or artisanal work as a cultural and social statement.

What is apparently novel about this experiment is that the effects of microeconomic downward mobility will appear on a macroeconomic scale as a regression in the value chain. But still, similar regressions at a lower base also occurred whenever external trade failed, such as the collapse of Western Roman Empire. Both of those are adaptational responses to unfavorable economic conditions, and the economic transition from Late Antiquity to the Early Middle Ages succeeded with the economic reorientation to localized feudal economics.

Moreover, this may also provide a good study to compare with possible applications of degrowth theories, and to debate whether there will be an intentional reduction of economic complexity in Russia.

p.s. It is also very unlikely for the Russian market to be reintegrated into the global one precisely due to the reemergence of economic nationalism and concurrently alternative forms of economic development that will render global economic integration less rewarding, e.g. 4IR, Green transition, degrowth, etc. The Russian economy will be among those developing regions which are left behind on the coming economic consolidation, something that may be partially mitigated by increasing integration with the Chinese technological complex.

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JW Mason's avatar

Not sure I see the distinction between earlier import-substitution efforts, which had the *objective* of modernization, with Russia's deindustrialization, which will have the *effect* of substituting less efficient local production for imports. When Hamilton wrote his Report on Manufactures, US manufacturing was technologically backward compared with British -- that's precisely why industrial policy was needed!

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