T herapy The shock therapy administered in the 1990s did not lead the people into the promised utopia of mass consumption. Generally, it brought ruin to the economies and disaster upon the people of the entire region. In Russia, the large state-controlled industrial complex almost collapsed, as about per cent of its industries were put up for sale to private individuals and companies. Since the restructuring was carried out through market forces and not by government- directed industrial policies, it led to the virtual disappearance of entire industries.
This was called ‘the largest garage sale in history’, as valuable industries were undervalued and sold at throwaway prices. Though all citizens were given vouchers to participate in the sales, most citizens sold their vouchers in the black market because they needed the money. The value of the ruble, the Russian currency, declined dramatically. The rate of inflation was so high that people lost all their savings.
The collective farm system disintegrated leaving people without food security, and Russia started to import food. The real GDP of Russia in was below what it was in . The old trading structure broke down with no alternative in its place. The old system of social welfare was systematically destroyed.
The withdrawal of government subsidies pushed large sections of the people into poverty. The middle classes were pushed to the periphery of society, and the academic and intellectual manpower disintegrated or migrated. A mafia emerged in most of these countries and started controlling many economic activities. Privatisation led to new disparities.
Post-Soviet states, especially Russia, were divided I can see the shock. But where is the therapy? Why do we talk in such euphemisms?