Former Soviet Union
When the Soviet Union finally collapsed, citizens expected the freedom and
prosperity that had been promised.
Instead, more than 40% of their national income was lost during 1990s - worse
than our Great Depression. An IREX report extimates that 500,000 women have
entered the Western sex industry.
This is because Russia went from control by communist extremists to
capitalist extremists -"macro-economists whose faith in the market was
absolute. These economists had no knowledge of history or of the details of the
Russian economy nor did they believe that they needed any" according to the
former Vice President of the World Bank, Joseph Stiglitz. (He was kicked out of
the World Bank for this.)
The neos believed that "shock therapy works for all countries on their way
to the market economy; the stronger the dose (and the more painful the
reaction), the more quickly the change is effected."
(Boris Yelsin, in his autobiography wrote that "I would use shock therapy
on myself, and not just one time." Actually, Yelsins office (complete with
ballroom chandeliers) were even more expensive than the old communist party
headquarters. Of course, these "shocks" are not needed for the rich and neos
themselves, for some reason.)
Joseph Stiglitz continies: "The rapid privatisation imposed on Moscow by
the IMF and the US Treasury had allowed a small group of oligarchs to take
control of the country's assets." This fraud has been estimated at 130
billion dollars (tax-free) since 1993. Meanwhile the external debt has risen
from 60 to 155 billion dollars between 1990 and 1999. "When the government
began to run short of money for paying pensions, the oligarchs diverted
important national resources to Swiss or Cypriot bank accounts. The United
states were implicated in these obnoxious transactions. In mid-1998 Larry
Summers replaced Robert Rubin in the post of US Finance Secretary, He appeared
by the side of Anatoly Chubais, the chief architect of the Russian
privatisations. In acting thus the United States appeared to be allying
themselves with the forces responsible for the impoverishment of Russia. The US
Treasury and the IMF continued to insist that the problem did not result from
too much therapy but from too few shocks. But during the course of the '90s, the
Russian economy continued to collapse. Whereas only 2% of the population were
living in poverty at the end of the Soviet period, the 'reforms' saw the rate of
poverty climb as far as 50%, with more than half of Russian children living
beneath the poverty threshold. Today Russia is eaten away by enormous
inequalities and the majority of Russians have lost faith in the market
economy." Neos who bragged about putting communism in the "dustbin of
history" were actually living the Marxist prediction about the "contradictions
of capitalism". In short, the neos have done more damage to capitalism in ten
years than the communists could do in 80.
Reaction
The effect of neoism on Russia was so devestating that Stalinism and Fascism
gained popularity. In October 1993 a coup attempt killed about 150 and nearly
plunged Russia straight back into civil war and authoritarianism. The hatred of
Yelstin was only countered by the fear of takeover by fascists.
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What is transition?
Russia and Eastern Europe are economic disasters. Neos say this is because
suffering is inevitable when changing from communism to capitalism. (Of course,
propaganda like "Voice Of America" never predicted this, or if they did, they chose not to tell anyone.) More likely it
is because this transition is run by neos instead of moderates. The real
question to ask neos is:
How long will "transition" last?
Or perhaps: will "transition" ever end?
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