Introducing Russia’s ‘Noonomics’ Concept

A transition of traditional economics to noonomics could be taking place to better adapt to technological advances as the geopolitical world order shifts

The emergence of a new political and financial trend away from ‘economics’ to ‘noonomics’ is being discussed at some length in Russia as opinions make themselves known concerning the management of a potential ‘new world order’.

As part of Russia’s readjustment, investments in education, healthcare, science, culture, and technology are becoming a key factor in Russia’s transition to a new development model and are all rising. Now, this has taken on additional meaning, because Russian scientists are now talking about a new development model. Increasingly, discussions about the transition from economics to noonomics – a fundamentally different way of life are appearing. The concept involves the formation of a society for which the satisfaction of spiritual rather than material needs is more important. And although from the outside it may seem utopian, the idea is capturing the minds of an increasing number of researchers, and not only in Russia.

This era of change that has now begun – both globally and in Russia – involves not only the reorientation of commodity and cash flows, the transformation of markets, the revision of rules, but also shifts on a larger scale. Russian scientists are increasingly raising the question of the transition to noonomics. There are already several definitions of what it is: a non-economic way of organising the economy to meet needs; an economic system developing from an economy to a system where people enter into relationships in a sphere that lies beyond material production itself.

Despite the fact that it is still quite difficult to get a feel for what noonomics is, since the concept itself is still young, scientists are beginning not only to dedicate their work to it, but also to apply the basic principles of noonomics to today’s Russian economic situation. What is now on the agenda is a change in the economic paradigm, and the formation of a new type of economy.

Alexander Shirov, a director of the Institute of National Economic Forecasting (INEF) of the Russian Academy of Sciences, in his recent presentation on the genesis of noonomics said that Russia must go through the stage of economic complexity. The list of requirements for the new economic model as presented by Shirov includes, an increase in the importance of the human capital and social policy sectors, and an increase in R&D costs.

The concept of noonomics is also being developed by Sergei Glazyev, a Academician at the Russian Academy of Sciences.

The main figure with whom this theory is associated is Sergei Bodrunov, the President of the Free Economic Society, and a corresponding member of the Russian Academy of Sciences. As one can judge from the works and speeches of the scientist, noonomics is not even a new economic model, but something that, gradually and with the combined efforts of the state, business and society, should replace the economy as such. If we consider the economy as a way of satisfying people’s needs.

The transition to noonomics as a new way of life is a gradual process. It includes reindustrialisation, technological renewal based on knowledge-intensive technologies, when knowledge becomes the main resource. But it is important to focus specifically on social parameters, on the unconditional satisfaction of people’s vital needs (for food, housing, safety, decent living conditions), as well as the needs of personal development.

“The economy as a sphere of economic relations between people regarding the production and exchange of products will shrink until it completely disappears,” Bodrunov explained in one of his lectures. A new stage of development will be a non-economic way of organising the economy to satisfy needs, and the needs themselves will become different primarily spiritual, and not material.

Making profit will cease to be an end in itself. Consumption of goods and services will become more rational, taking into account, among other things, the consequences for the environment. This consumption itself will be based on what a person really needs, and not on desires imposed from the outside.

Education, science, culture, healthcare everything related to the development of human capital will play a significant role. As can be judged from individual remarks by Bodrunov, the cultivation of spiritual needs is a consequence not only of educating society, but also of achieving a certain level and quality of life of the population.

From the West, such a concept may appear utopian. Although the concept is already integrated into statements by the Russian leadership about the development of a state-civilisation based on spiritual and moral values. It fits with constitutional amendments that prescribe the need to ensure economic, political and social solidarity in the country.

The simplest example is the promotion of volunteering as a special, noble impulse of young people, which Bodrunov briefly mentions in one of his articles.

Noonomics is conquering minds. As Bodrunov said earlier, there are already hundreds of publications about it, and among the authors there are researchers from other countries, including China, Israel, Mexico, and Austria.

That said some still find it difficult to understand the concept. Valery Mironov, deputy director of the Development Centre of the Higher School of Economics, tries to shed some light: “The term noonomics, if by this we mean some stage of economic development, is not yet clearly defined although it is used. The term noosphere is known, in particular Vernadsky’s noosphere, but this is a futuristic term for the distant future, reminiscent of either the communism of Karl Marx or the end of history according to Fukuyama, which are distinguished by diametrically opposed forms of ownership of the means of production: public and private. And both look like some kind of ideal or even utopia. The first due to lack of incentives, the second due to a failure to take into account cultural differences.”

Vernadsky defined the noosphere as the new state of the biosphere and described as the planetary “sphere of reason”.

Marxism is a broad philosophy developed by Karl Marx in the second half of the 19th century that unifies social, political, and economic theory. It is mainly concerned with the battle between the working class and the ownership class and favors socialism over capitalism.

Fukuyama argued that with the ascendancy of Western liberal democracy – which occurred after the Cold War and the dissolution of the Soviet Union – humanity had reached the end-point of mankind’s ideological evolution and the universalization of Western liberal democracy as the final form of human government.

Mironiv continues: “Perhaps noonomics refers to a post-industrial economy, a period of development in which the relative importance of industrial production declines and services, information and research increase. And if we talk about the older term post-industrial economy, this suggests that a transition to a knowledge economy is now taking place.”

Associate Professor of the Russian Economic University. G.V. Plekhanov Mary Valishvili also tries to pin the concept down stating “Noonomics is characterised by an increase in the share of intellectual costs for production, when knowledge becomes the main resource for the future development of society.”

However, Valishvili also states that there is a significant risk associated with uneven spatial development, when all benefits will be concentrated at the centre of the world economy, while the periphery will be deprived of knowledge. And this is precisely the key problem for determining the future of the Russian economy and society; its solution requires significant structural restructuring in the near future, Valishvili believes. But even the knowledge economy, as some scientists apparently believe, is not the highest level, but only an intermediate one. Because the next stage, judging by some studies, is no longer economics in the usual sense.

Nevertheless, according to Shirov, in the process of forming noonomics, digital technologies play an important role precisely because of their influence on current purely economic processes. For example, the key area of influence of new information technologies on the economy is the reduction of transport and trade margins. This is seen as a reason to look for other mechanisms for financing infrastructure.

Igor Mandik, CEO of PRO32, says that “Digitalisation is the automation of processes, which means increasing the transparency and controllability of the economy. Through digitalisation, companies and the state as a whole will be able to reduce costs and make decisions based on accurate data. Thanks to the use of digital technologies, the processes of logistics, distribution and sale of goods and services become more efficient.”

Nikita Andriyanov, a Professor at the Russian State Financial University, notes that “Reducing transportation costs and optimising supply processes can reduce costs for manufacturers, which in theory could affect the final price of the product. Although, in reality, external actions such as changes in taxation, production costs, and so on cannot be excluded. Noonomics is a rethought approach to economic processes taking into account modern information technologies.”

Chris Devonshire-Ellis of Dezan Shira & Associates states “Russia has a long and distinguished history of political, financial and society organisational academia, although my views concerning noonomics align with that of Andriyanov. I currently see the term really refers to a rethink of previous opinions, being a meld of Marx, IT and potentially AI. The concept will be ridiculed in the West. Perhaps the most interesting part of the noonomics concept – which is still evolving – is that it does imply an inherent recognition that we are now moving into a period beyond Fukuyama’s ‘End of Days’ and that the Western-oriented ‘liberal society’ is now moving into obsolescence, perhaps ultimately undone by attempts towards the breaking down of the obvious physical limitations of the human body. Liberalism has descended into levels of absurdity and is now being rejected. How the nononomcs theory evolves and whether or not it establishes itself as a bona-fide concept will be interesting to watch – as will the push-back against it by the more profit-driven motivations of the West.”

Source: Anastasia Bashkatova for Nezavisimaya Gazeta 

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