Why are some countries rich while others remain poor despite their best efforts? What factors determine economic growth? In answering these questions, the author comes to an unexpected conclusion: the wave of economic growth of the last two-plus centuries is based on a unique set of circumstances in the global economic system of the 18th century. However, the initial growth impulse has long been exhausted. Are we able to take control of economic development or will we have to accept a slow decline that threatens to turn into disaster at any moment? There is no answer to this question today, but the understanding of the real mechanisms of economic development presented in the book can serve as the basis for developing the necessary solutions.

The book will be of interest to specialists, as well as to a wide range of readers interested in economics. Oleg Grigoriev graduated from the Faculty of Economics of Moscow State University and was a researcher at the Center for Economics and Mathematics of the USSR Academy of Sciences. Worked in the Supreme Council, State Duma, and in the Economic Directorate of the President of the Russian Federation. State Councilor First Class.
Over the past 10 years, I have repeatedly set out to write a book that would embody the results of my reasoning about the fundamentally important role of the division of labor in the economy, but each time I was faced with insurmountable obstacles. Each advance in analysis required a revision, sometimes radical, of what had previously been written. Something needed to be clarified, something needed to be reworked. And with each new step the procedure had to be repeated. From a certain point on, I realized that the only way to work on presenting a new theory was to consistently read courses of lectures on a wide range of economic problems.

With this iterative approach, it became possible to consistently clarify the content of the new economic theory, its system of concepts and internal relationships. Based on the results of the lecture courses, it became possible to look at all the accumulated material in its entirety, critically evaluate its state, separate the important from the unimportant, highlight areas that require further elaboration and outline ways for further research.
The first large course of lectures was organized by order of the EFKO Group of Companies for its corporate university. This still very “raw” course of lectures allowed me to fully appreciate the significance of the new approach to economic theory, its fundamental difference from traditional approaches, and also to determine the main directions of development of the theory.
Further development of the theory took place within the framework of more limited courses of lectures, as well as the work of a theoretical seminar organized by me. In 2012, on the initiative of P. Shchedrovitsky, another large course of lectures was organized at the Moscow Higher School of Social and Economic Sciences (Shaninka). During this course, it was possible to develop a holistic concept of a new approach to economic theory, to create, so to speak, its skeleton.

The next large course of lectures was given within the framework of the Neoconomics Research Center. During its course and during numerous seminars, some important topics that had previously remained outside the scope of the study were explored, and a system of internal relationships of the theory was formed. This book is based on materials from the second and third courses of lectures. The main material is based on the course of lectures given in Shaninka, but it has been significantly supplemented and clarified in accordance with later research, which is reflected in the next course. This circumstance explains some of the stylistic heterogeneity of the book, but it had to be sacrificed for the sake of the substantive unity of the material.

Since the emergence of Homo sapiens on this sinful planet, this man has lived in the same economic reality. And this reality was called - Increased division of labor. Which led to the emergence of more and more new professions. A constant and continuous increase in the division of labor, the emergence of new professions, has accompanied man throughout his history. It seemed like it would be like this forever. At least until all of humanity is involved in the global division of labor. But then the semiconductor transistor appeared and this (happily) came to an end.

The mistake is that, according to Oleg Grigoriev's Neoconomics, this process of deepening the division of labor has reached its limit. It has embraced all of humanity and has nowhere to expand further. There are no more people on the planet who are not involved in the global division of labor. However, it is not. Moreover, around 1990 the reverse process began. Since the end of the last century, humanity has entered a new economic reality. And this new reality is called - Reduced division of labor.

We are talking exclusively about labor involved in Material production. Material production includes everything that can be weighed. In the literal sense of the word. The product of Material Labor has a weight that can be measured in kilograms. Everything that cannot be weighed belongs to the Service Sphere. The work of a hairdresser, designer, actor, psychologist, doctor, teacher, etc. Impossible to weigh. And all this work belongs to the Service Sphere. Material production includes agriculture, extraction of raw materials and industrial production, everything that can be weighed, everything that has Weight. This is the most important point necessary to separate the Service Sphere and Material Production. We will discuss further only and exclusively about Material production.

Although it is here that an interesting debate arises about what type of production software should be classified as, which is becoming increasingly important in the overall volume of Gross Domestic Product. The work of a programmer is Material Production or the Service Sphere. The dispute inevitably comes down to the level of Quantum Mechanics and the Theory of Relativity. Software, at the time of its transfer from one place to another, still has this weight. But precisely at the moment of transmission, not storage. Photons and electrons involved in software transmission have this weight. In any case, the same Photons have energy and this energy can be converted into kilograms, not to mention electrons. But at the time of its storage, this software has no weight. A hard magnetic disk or laser disk has the same weight, regardless of whether a program is recorded on it or not. A person buying such a disc with software in a store is actually buying only the weight of the media itself. The purchased program in its storage location after downloading from the network also has no weight. The program itself, located on the media, cannot be weighed in kilograms. And if at the time of purchasing a product or storing a product, this product (program) has no weight, then it belongs to the Service Sphere. In general, all the work of a programmer can be completely attributed to the economy of the Service Sector.

The increase in the division of labor in material production went through three stages. The first stage is the level. Division of labor based on natural advantages. We grow grapes and olives, you have sheep and goats. Let's exchange wine and olives for wool, butter and cheese. The second level of division of labor is based on industrial and raw material exchange. We give you industrial products (iPhones and gadgets), you give us raw materials and food (oil, gas, hemp and grain). The third level is based on Outsourcing. We assemble and develop the final product, the product itself, and you supply us with components and parts for it.

According to the logic of development of the Increased Division of Labor, the entire post-Soviet space should be included in the global division of labor at a higher level of the third stage or third phase of its development, at the level of Outsourcing. For example, China and Latin American countries are included. However, the entire post-Soviet space is stuck at the second level of development. Raw materials and food in exchange for industrial goods. And this is not just about bad colonial administration, bad Putin or Yanukovych. With a good Poroshenko, the second level of division of labor is even more consolidated. It's all about a global process that began around 1990 of the last century. Humanity has entered a new economic reality - a reduction in the level of division of labor. To understand why the reverse process began and what the transistor has to do with it, you need to start from afar and trace all the stages of development of the Increasing division of labor.

At the very beginning of history, there was only one subsistence economy. Then began a gradual process of exchange - trade, based on natural advantages. At this stage, settled settlements began to appear. Then the second stage of development began, raw materials and food in exchange for industrial (handicraft) products. At this stage, cities and towns of artisans began to appear. The third stage, Outsourcing, is the removal of the production of parts and components to places with lower income levels. At this stage, Trans national or Trans city companies began to appear. Settlements and cities at the top of technological chains began to stand out.

In the beginning there was a stick. And besides the stick, the man produced nothing. Then, there was an increase in the variety of stick products. A stick for knocking down fruits on a tree, a stick for dripping roots, a stick for hitting the head. The process of increasing the number of products produced by man has begun. Man gradually learned to produce clothes, shoes, and dishes from ceramics. To build housing is a hut. The variety of products produced by man has constantly increased. As the variety of products increased, an equally interesting process began in their production. In some products, the number of parts from which these products consisted began to increase. And this is the second important point in production.

An increase in the variety of products leads to the emergence of new professions and, as a consequence; Increases the level of division of labor. An increase in the number of parts in one product leads to the emergence of new professions that produce different parts for the product and, as a consequence; Increases the level of division of labor. The sailing ships in 1492 on which Columbus and company crossed the Ocean contained at least a thousand individual parts, knocked together and assembled into one product called a caracca. Three carracks, Pinta, Niña and Santa Maria, as a result of this action, went down in history as the ships of Columbus. Subsequently, every hundred years the number of parts in one product, called a sailing ship, doubled. Galleons of the early 17th century contained two to two and a half thousand parts. The three-masted Galleons of the 18th century, with several rows of sails on one mast, could contain up to four to five thousand parts.

It is difficult to model when the increase in the number of parts in ships began, but we can say exactly where it all began. It all started with two details. A dugout boat, one part and an oar made of a single piece of wood, the second part. It is easy to see that with an increase in the number of parts in ships, it became possible to move the production of individual parts to places where income and wages were lower. There is not so much an urgent need to move part of the production to another city, as an opportunity to reduce the cost and increase production - the assembly of ships. Including an increasing number of people in the division of labor in the production of one final product. A city or village with a shipyard, with such a division of labor, found itself at the top of the technological chain, controlling the development and final assembly of the product, receiving maximum profit, and the owners of the shipyard found themselves at the head of the Trans City Company, which had suppliers of manufacturers in other cities and towns.

The first Ford cars contained 1.5 thousand parts. Now, the simplest car of the same company contains about 20-30 thousand parts and hundreds of suppliers of these parts, often in other countries. Boeing 747 contains more than half a million parts. The Boeing 787 contains about a million parts and thousands of suppliers around the world. It seems that the number of different products and the number of parts in a product is growing steadily, and along with it the increase in the division of labor is also growing with the transition to the third level, Outsourcing. However, it is not.

The increase in the number of products and parts in them is gradually growing, but much more slowly than before and, apparently, will very soon reach its limit, after which the reverse process will begin. But the number of parts in electronics products has already begun to decline. The first VCRs contained more detail than DVD players. The laser disc itself is one piece. A tape recorder cassette contained up to forty parts. Now the players themselves are disappearing. Even in televisions, the number of parts is decreasing, and every television in the near future will be both a computer and a game console, consisting of two parts. A wire with a plug and a monocrystalline computer with transistors. These same transistors, before the eyes of one generation, practically destroyed the entire film industry. Cinema and Photo film, magnetic film for tape recorders and all the equipment that uses them. It is difficult to imagine how many people were involved in these productions and what was the scale of outsourcing, the removal of production of parts and components by transnational companies. And the first computers, occupying entire floors of buildings, were powered by vacuum tubes and punched cards. And the vacuum tubes themselves. But that's not all.

The computers themselves with the software fired entire institutes of the factory engaged in drawing drawings by hand on paper. A computer connected to a machine and becoming a numerically controlled machine, dramatically increasing labor productivity, sent an entire army of machine operators into oblivion. Peter Martin and Harald Schumann wrote a book - The Trap of Globalization. Where they described the threat to the world order from the transition to society 20 = 80%. Where only twenty percent of the population will be employed in material production. And in agriculture, and in the extraction of raw materials and in industrial production, due to the increase in labor productivity associated with the massive introduction of computers in all areas of production. Already now in countries such as Brazil, Argentina, Chile, Mexico, which have yet to develop and develop to the level of developed countries, the percentage is close to 20-80%. Already, in these countries, 60% of the population is employed in the Service Sector, not to mention in developed countries, and this percentage is steadily growing. It is the reduction in the population employed in material production that is a consequence of the process that has begun - the reduction in the division of labor.

With this trend, the number of countries where high-tech industries will be preserved will also decrease. The world of Elysium and the rest of the Cyberpunk world, where there will be endless Hunger Games that have already begun in the Middle East and the former Ukraine, is the bright future of humanity. This is due to the fact that as labor productivity increases and the population employed in industrial production decreases, there is a great desire to transfer this production to one’s home, to the developed world, leaving neighbors with only the extraction of raw materials and agriculture. This process began at the end of the last century and will inevitably reach its logical end. The shocks and social cataclysms that will accompany all this action will not be at all inferior to the shocks that humanity experienced during the change of previous economic formations.

Previous wars were caused by the desire of individual countries to climb to the top of technological chains. Today's wars will be caused by the desire to remain on these heights. The dispute between the US and Europe over who will remain has already begun.

And before that, central Europe, without any war, destroyed the technological industry of its eastern competitors - its neighbors. After 1990, the high-tech industry disappeared in the countries of the former socialist camp, Poland, Hungary, Yugoslavia, Bulgaria, and the USSR. It is believed that jobs from here have moved to China. But this is not true, by and large they have not moved anywhere. It’s just that labor productivity has increased in central Europe and enterprises in the east working for European Outsourcing, supplying parts and components to final assembly sites, are no longer needed, just as direct competitors are no longer needed. The total number of people who have lost their jobs in the technology industries of these countries far exceeds the number of people employed in China's export industries. In China itself, for the rest of the world, only 20 - 40 million people work.

This is in pseudo liberal myths, all of China works for the rest of the World for a cup of rice. Half of China's population works in agriculture and does not export rice or wheat. The service sector employs 30% of the population. Manufacturing itself employs the remaining thirty percent, or two hundred million people. Of these, only ten to twenty percent work in export production areas. The grown-up guys who run the Western world themselves didn’t understand what they did to China, pumping it up with technology in pursuit of cheapness. In order to have forty million Chinese work for them for low wages, they essentially raised a technological monster and a competitor for their Western head, for a place in Elysium. To destroy industry in the post-Soviet space, preventing it from becoming an analogue of Latin America, technologically dependent on developed countries, for the sake of the exploitation of forty million Chinese, and in fact for the sake of the Chinese, one must be able to do this.

The reader has the opportunity - Age of growth Grigoriev download page by page or read online .

I have sought official permission to publish Grigoriev's books, so the reader will find here TABLE OF CONTENTS in the form of a LIST OF LINKS to individual chapters books by Oleg Grigoriev, which were posted in the public domain on the page OLEG GRIGORIEV “THE AGE OF GROWTH” on the WorldCrisis.RU website

• Source Chapter 1. "On the division of labor"

  Division of labor as a fundamental factor. Understanding the division of labor in Neoconomics and its differences from the “classical” understanding. Natural and technological division of labor. History and mechanisms of development of the division of labor system. The phenomenon of clusters.

• Source Chapter 2. Interaction between developed and developing countries. monocultural interaction

  How and why the “raw materials curse” and comprador elites arise.

• Source Chapter 3. Interaction between developed and developing countries. Investment interaction

  On the transfer of production to developing countries, export of inflation and the “Washington Consensus”

• Source Chapter 4. Reproductive circuit

  About the concept of the reproduction circuit, production functions, and the concept of capital. How does the closed system of division of labor work and what are its limitations? The most theoretical chapter of the book...

• Source Chapter 5: Interaction of Reproductive Circuits: MONEY

  Where does the money come from and how does it work? The role of money in the economy, and why money is fundamentally important. The interaction of reproductive circuits is possible only through money - and in this case the circuits are destroyed and markets are formed.

• Source Chapter 6. Interaction of reproductive circuits: RENT

  Rent from the point of view of neoconomics. Natural resources and their role. Monetization as a way to increase the efficiency of resource (land) use. The nature of the "raw materials curse".

• Source Chapter 7. Technological division of labor. FIRM

  How and why division of labor occurs. Division of labor and the market. The essence of the company as an economic phenomenon.

• Source Chapter 8. Scientific and technological progress

  There is a general consensus that economic growth is largely a consequence of scientific and technological progress. This chapter examines the subtle mechanisms of scientific and technical progress, and shows that in general, everything is the other way around - scientific and technological progress is a consequence of economic growth (although it creates a positive feedback under certain conditions). The experience of the USSR in organizing scientific and technical progress, which is in many ways different from the classical model, is also considered.

• Source Chapter 9. Formation of a modern economic system

  How and why the modern world economic system was formed. How capitalism arose, why the industrial revolution occurred and it was Europe (and then the USA) that became the center of the world.

• Source Chapter 10. Economic crises

  The final one is also the key chapter of the book. The concept of financial and consumer money is introduced and a model of interaction between the financial and consumer sectors and the state is described. This model analyzes the causes of economic crises, and shows that what we call a “crisis” is in fact the natural state of the economy, and it is not crises that need explanation, but precisely periods of growth.

Notes from Vladimir Tochilin

Capital of new times

1.1. Book Age of Growth is the crystallization of ideas and views on history of the world economy, which contained his first lectures on economics. Therefore, let the reader not be surprised that the book is compiled as a collection lectures about the Age of Growth. Today, the framework of purely economic theory has already outgrown, and even the material in this book already belongs to the economic section of neoconomics, which was given the name -. 1.2. Actually, the whole NEOCONOMICS of Grigoriev began with the search for an explanation of the reasons for the rapid growth of the world economy in the last 250 years, since its tasks were: - search for reasons, why economic growth stopped at the beginning of the 21st century- And, - is it possible way out of the global economic crisis? Therefore, the science is concrete, but Grigoriev’s positioning of it only as a hypothesis makes Grigoriev’s NEOCONOMICS.

Oleg Grigoriev graduated from economic...

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Why are some countries rich while others remain poor despite their best efforts? What factors determine economic growth? In answering these questions, the author comes to an unexpected conclusion: the wave of economic growth of the last two-plus centuries is based on a unique set of circumstances in the global economic system of the 18th century. However, the initial growth impulse has long been exhausted.
Are we able to take control of economic development or will we have to accept a slow decline that threatens to turn into disaster at any moment? There is no answer to this question today, but the understanding of the real mechanisms of economic development presented in the book can serve as the basis for developing the necessary solutions.
Oleg Grigoriev relies on the original concept of the decisive role of the division of labor.
The book will be of interest to specialists, as well as to a wide range of readers interested in economics.
Oleg Grigoriev graduated from the Faculty of Economics of Moscow State University and was a researcher at the Center for Economics and Mathematics of the USSR Academy of Sciences. Worked in the Supreme Council, State Duma, and in the Economic Directorate of the President of the Russian Federation. State Councilor First Class. Since 2012 - founder and scientific director of the Oleg Grigoriev Research Center "Neoconomics".

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