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However, the
political opposition and the broad mass of citizens, whose standards
of living plummeted, appraised the results of the reform very
differently. The “shock therapy” strategy put intolerable strains on
the economy and society. It resulted in a rapid impoverishment of
the majority of the population. People were subjected to dubious
privatization schemes, their lifelong savings made worthless by
inflation, and millions suffered from the nonpayment of wages and
pensions.
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The radical
monetarist approach advocated by Gaidar failed to achieve its
express aim of preventing inflation and showed a complete
indifference to the plight of average citizens. Shops almost
overnight became stocked with imported goods, which most people were
unable to afford. All this abundance only irritated and generated
social tensions.
Russia’s
industrial output halved between 1989 and 1994, a sharper
contraction than the United States suffered during the Great
Depression of the 1930s. A drastic fall in the standard of living
for the majority of people was accompanied by the emergence of the
super-rich “new Russians,” creating an abyss between the very rich
and the very poor. The vast majority of the population was
impoverished and deprived of a stake in privatized property.
“Shock
therapy” was more like a surgical operation on Russia’s peculiar
economic and social organism. It inflicted great pain but gave
little cure. It was a Bolshevik-style attempt to destroy the old
economic system to its foundations in the hope that the phoenix of
the market would rise from its ashes.
This, however,
did not happen. The reformist strategy of the government was a
utopian attempt to achieve a “great leap” into capitalism. In real
life it led to the appearance of such unattractive characteristics
of Russian capitalism as the concentration of former state assets in
the hands of a small group of financial and industrial magnates and
the economy’s nontransparent and semicriminalized nature.
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