CHAPTER 5
WHO LOST RUSSIA?
WITH THE FAll of the Berlin Wall in late 1989, one of the most important economic transitions of all time began. It was the second bold economic and social experiment of the century.I The first was Russia's transition to communism seven decades earlier. Over the years, the failures of this first experiment became apparent. As a consequence of the 1917 Revolution and the Soviet hegemony over a large part of Europe after World War II, some 8 percent of the world's population that lived under the Soviet Communist system forfeited both political freedom and economic prosperity. The second transition in Russia as well as in Eastern and Southeastern Europe is far from over, but this much is clear: in Russia it has fallen far short of what the advocates of the market economy had promised, or hoped for. For the majority of those living
in the former Soviet Union, economic life under capitalism has been even worse than the old Communist leaders had said it would be. Prospects for the future are bleak. The middle class has been devastated, a system of crony and mafia cdpitalism has been creacted. and
the one achievement, the creation of a democracy with meaningful freedoms, including a free press, appears fragilc at best, particularly as formerly independent TV statiom are shut down onc by one. While those in Russia must bear much of the blame for what has happened. The Western advisers, especially from the United States and the IMF,who marched in so quickly to preach the gospel of the market economy, must also take some blame. At the very least, they provided support to those who led Russia and many of the other economies dowlI the paths they followed, arguing for a new religion-market fundamentalism-as a substitute for the old one-Marxism-which had proved so deficient.
CHAPTER 5
WHO LOST RUSSIA?
WITH THE FAll of the Berlin Wall in late 1989, one of the most important economic transitions of all time began. It was the second bold economic and social experiment of the century.I The first was Russia's transition to communism seven decades earlier. Over the years, the failures of this first experiment became apparent. As a consequence of the 1917 Revolution and the Soviet hegemony over a large part of Europe after World War II, some 8 percent of the world's population that lived under the Soviet Communist system forfeited both political freedom and economic prosperity. The second transition in Russia as well as in Eastern and Southeastern Europe is far from over, but this much is clear: in Russia it has fallen far short of what the advocates of the market economy had promised, or hoped for. For the majority of those living
in the former Soviet Union, economic life under capitalism has been even worse than the old Communist leaders had said it would be. Prospects for the future are bleak. The middle class has been devastated, a system of crony and mafia cdpitalism has been creacted. and
the one achievement, the creation of a democracy with meaningful freedoms, including a free press, appears fragilc at best, particularly as formerly independent TV statiom are shut down onc by one. While those in Russia must bear much of the blame for what has happened. The Western advisers, especially from the United States and the IMF,who marched in so quickly to preach the gospel of the market economy, must also take some blame. At the very least, they provided support to those who led Russia and many of the other economies dowlI the paths they followed, arguing for a new religion-market fundamentalism-as a substitute for the old one-Marxism-which had proved so deficient.
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