1. Shock therapy in Russia refers to decisions made by the government to make widespread changes to the control of production and various other economic controls. Specifically, it refers to the sudden dissolution of existing price controls, the ending of state subsidies, and bringing about the liberalization of systems of trade. In Soviet Russia, the means of production were largely controlled by the government, but shock therapy saw them privatized in a hurry.
Shock therapy operates under the assumption that making a broad change in a national economy is not going to be easy, regardless of the chosen method of transition. In theory, though, shock therapy will produce winners and losers almost instantly, as people positioned to take advantage of the changes will do so, while people not positioned in such a way will suffer.
This is largely what took place in Russia as shock therapy was instituted, with the one exception that the entire economy nearly sank because of rising inflation. One part of shock therapy is that there is bound to be hyper-inflation. When the Russian government began to print more money in order to pay for its existing debt in the face of changes, this made things worse, shrinking the number of winners and widening the number of losers.
3. Russia has undergone many changes under Vladamir Putin, but there have been plenty of positives worth mentioning. Perhaps the biggest changes under Putin have been in the economic realm. Prior to his election, Russia was a country in economic upheaval, mostly because the bulk of wealth was controlled by a very small number of effective oligarchs. While wealth is still concentrated at the top, there is more balance, and the economy is much better overall. Inflation is down for the first time in a long time. Perhaps more importantly for the average person, pension amounts are up, providing some Russians with hope that they did not have before.
Some would argue that Russia’s position in the world has improved and it is seen as being a “strong” nation once again. He has refused to kowtow to the West, especially on matters having to do with the Middle East. The country has also been restored to world power status, putting down revolts and generally restoring a sense of national pride. While this has its plusses and minuses, there is little question that Russians feel better about their country under Putin.
On the other hand, Russia has turned into a place that largely does not care about human rights. Corruption is prevalent in the government. Putin has also established a new norm where journalists and other political dissenters are in real physical danger.
4. Anna Politkovskaya’s book Putin’s Russia: Life in a Failing Democracy is all about the mafia state that she believed exists under Putin. She writes of widespread corruption and strong-arming. Chillingly, she gives plenty of examples of the things that she is complaining about. Namely, there is a torture in the military ranks, judges are often abused because they refuse to follow orders, and extra-judicial killings are not at all a rare occurrence. She discusses Putin the context of humanitarian violations, noting his poor record on protecting civil liberties and even stepping on those liberties when necessary.
The book’s primary strengths are its honest and its willingness to go against the machine. The author was eventually murdered, a testament to just how controversial this book is. She provides actual context to some of the suspicions about how Russia really operates.
In terms of weaknesses, the book seems, at times, to be sensationalist. It is clear that she is trying to draw attention to the dire situation, but she sometimes goes a bit overboard in trying to do so.
5. Russia has gone through significant challenges over the last few decades, but the country is moving forward. Most important is the fact that the economy seems to be at least settled. Before a country can start marching toward growth, it has to stabilize a little bit. Putin has been able to do that, giving the country an opportunity make progress in the coming years.
Still, there is a tremendous amount of reason to be skeptical of the country’s future prospects. This is mostly because the country still has widespread corruption at the top. As long as corruption infects the public officials, one can hardly have confidence that those officials are going to make the right and proper decisions for the country in the years ahead.
One of the most encouraging things is that the people of Russia seem to want something better for themselves. Hundreds of thousands of people protested the re-election of Putin, a statement that the country is tired of corruption. With this kind of populist movement, there exists a chance that Russia will pull itself up and make some legitimate changes in governance.
7. Perhaps the most significant change or development since the fall of the USSR has been the development of capitalism as a legitimate means of economy in Russia. The country has at least toyed with capitalism – with varying levels of success – over the last two decades. There seems to be momentum for the continued tweaking of a capitalist system. This was brought on by the shock therapy treatment that left the economy to its own devices. Unfortunately, capitalism in the USSR is infected by the same cronyism that holds back capitalism in many parts of the world.
Modernization and personal wealth have increased for the middle class. The USSR created much poverty and collective self-loathing. Russia, however, has developed a robust class of young people who are engaging with the world around them. Many were born too late to remember the USSR, and they have no knowledge of some of the atrocities of communism. These people tend to display a quixotic longing for the old days, but they are moving forward. Continued globalism should continue to include Russia in the coming years. As the world shrinks and technology grows, people will be more inter-connected, even in Russia.
