Finding friends in quest to rebuild Ukrainian nation

Throughout human history, and the history of economics in particular, the countries that saw change coming and were ready to gamble everything to win in the high risk game of political and economic competition were the ones that had thriving economies.

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Opportunities to play the game are there for every nation if the nation has the will and the vision to achieve the goals.

In 1958 DARPA [a federal agency for scientific research and development] was founded in the United States as a response to the challenge (formed largely due to the scientific and technical potential of Ukraine) posed by the Soviet space industry (Russia and Ukraine were the center of the industry). It was at DARPA that the major scientific and technological discoveries of the twentieth century, including the Internet, were made.

 

In the cult movie “Space Odyssey 2001” the visionary Stanley Kubrick portrayed American and Soviet astronauts manning an international space station.

 

When we look at history we see that the countries that had lost their way and had rejected the fundamental value inherent in social development had problems similar to ours; those who did not make regular efforts throughout their whole life (I stress whole life) to know reality and to assimilate that knowledge into their lives. By the end of the 1980s modern economists proved that success in economic development is reached by countries that creatively restructure not just the accomplishments in the economic sector but the accomplishments in sociology and other life sciences, too, in order to build a proper model for the national economy. No wonder they say, “Where the German feels fine a Slav feels suffocated.” And the other way around. We Slavs are not as scrupulous nor as focused solely on economic gains as the western Europeans are. Therefore, western libertarian capitalism does not suit us.

 

But we have our own distinct advantages which are often missing among the western countries: we are good at conceiving and devising, and even though we do not have the infrastructure the West has, we are capable of moving forward in building a long-range future.

 

We demonstrated that in the 1940s-1950s when we built what at that time was the most modern space industry in the world. Nobel laureate Edmund Phelps wrote that the Soviet socialist economy was less effective than the economy in the west, but it worked well when it came to creating modern technological artifacts. At that time, according to economic historians, that was the only way for us to make such a breakthrough in technology. The alternative could only have been a protracted, organic development, and owning modern technologies would have been just a dream. Following the example of the USSR similar technological success was achieved by Taiwan, South Korea, and China.

 

After World War II as part of the USSR Ukraine was one of the most dynamic places in the world in the sphere of technological development. And this was before the above-mentioned countries of southeast Asia began their advancement.

 

Some industries (the defense industry, the space industry) matched the highest international standards. The rocket engine RD-180 designed by Valentyn Hlushko from Odesa, has until recently been the engine used in the rocket launches carried out by NASA. Few people know that the sophisticated electronic equipment of the docking navigation system for the International Space Station is still made by ON “Elmiz” in Kyiv (in a former radio factory). Yes, in general, our engineering products were inferior in quality when measured by western standards, but at least they were produced. Today production in engineering is almost nonexistent.

 

By mindlessly adopting the libertarian neoclassical model of economic management instead of adapting the former Soviet economic model based on technology to a market economy back in 1991, the latter was simply destroyed. Meanwhile South Korea has successfully modernized its economy after going through seven five-year plans. After 1996 they made a smooth transition to a market economy while reserving the state’s right to intervene in the economy in emergency situations.

 

Why is it important to preserve and to continue developing technological advancement? Technological superiority always improves macroeconomic indicators. In other words, technology seeps through to the rest of the economy and leads to higher rates of growth, including the per capita GDP. So it has been everywhere in the world for the past 200 years. Growth in wages and an improvement in the level of well-being for the public is impossible without a developed base in technology.

 

It behooves us to understand that since in the western countries innovation, which is the essence of all technological development, is endogenous, which is to say, generated and initiated by the native entrepreneurs, in our culture and in the cultures of southeast Asia innovation is and has been (at least for the past 150 years) exogenous, that is, introduced from other countries. In our culture at first technological innovation had been installed by foreign specialists at the initiative of government agencies which created the conditions favorable for such innovation. Independent development began only after that. There is no reason to think that now will be any different. Especially considering how much damage our own government has caused our technology sector in the past 25 years.

 

Therefore the choices we make in foreign partners will affect many things if not everything. After Russia excluded Ukraine as a friend there can be no discussion about what choice our country should make. The choice is obvious. Our friends in trading technology can only be western countries who will gladly share their knowhow in innovation.

 

Cooperation with western countries ought to be conducted on an equal footing. Considering our past, that is exactly how it should be (after all, since the 1950s we’ve had endogenous technological development) if we have preserved any common sense. And the West will cooperate with Ukraine if not gladly, then with interest. Prior to developing its own technology industry, the United States had simply assimilated the best achievements of the world. And Ukraine was far from being the last country the US had learned from. Think of Ihor Sikorskyi and the aviation industry, think of Hollywood and who founded it – half of it was founded by Jewish immigrants from Ukraine – and even recently Ukraine has played a part in the technological developments in the USA – Jan Kum is an example, with his WhatsApp. The USA will be interested in anything and everything that will sustain their growth in the field of technology, and Ukrainians have always been the world’s top-notch engineers and technologists. Cooperating with Ukraine in the field of technology would make sense for the future of the USA and all the western countries.

 

The idea that modern technologies of the third industrial revolution could appear in Ukraine within the framework of the endogenous process, which might arise as a result of deregulation and de-monopolization of the economy is irrational and therefore extremely harmful. It is not based on the modern theoretical work of the leading world economists or economic historians and does not correspond with the actual way world economies have developed. If we take that path Ukraine will be plunged deeper into the past. Our development will be slowed down for a long time. This time it could be forever.

 

Ukraine cannot have an economic policy based on self-sufficiency; accordingly political parties that publicize such policies are distracting. Parties that aim to revitalize Ukraine and its economy should first work to facilitate the transfer of modern technologies to our country by creating conditions for that on the basis of existing effective theory and practice. Eventually we will move to producing endogenous innovations as had been the case in our history.

 

Nothing has been lost yet, and China has demonstrated that. After more than 150 years of humiliation the Chinese have accomplished the seemingly impossible and are in second place in the world with their GDP. I think they will soon top the list and in the future they will be first as the most technologically advanced country. We’ve only lost 30-35 years of development. And we can accomplish what China has accomplished. But we must radically change our mentality. We must make adjustments in our move forward. We must understand and recognize that we have never been a nation of losers, we are a nation of winners. And if we succeed in drastically changing our mentality, if we succeed in changing ourselves the future will simply be a question of how and where we should direct technology. We had done it once and we can do it again.

 

We should ignore those who whine and do not believe that the people of Ukraine are capable people. No matter who the whiners are, no matter how well-respected and accomplished they may be, they should be censured and ostracized. At stake is the survival of the people of Ukraine.

 

The true elite of the country must step in to lead – the wise and experienced economists of the past, engineers and technologists, and the young geniuses in technology of whom we have so many in our country, who will cut through the darkness of doubt and decadence to take our country to a new and astonishing future.

 

I call on all the good, far-sighted individuals in the field of technology, the sensible and patriotic politicians, the economists, and every single Ukrainian who cannot imagine that Ukraine is finished as a superpower in technology to stand up and fight for the great future of the new Ukrainian nation with a re-energized technology sector that will contribute to the Third Industrial Revolution!

Bohdan Danylyshyn, member of The Ukrainian National Academy of Sciences 

EMPR, O. R. contributed to this publication

Original article in Russian is available on lb.ua

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