EUH1000 Chapter Notes - Chapter 31: Eastern Bloc, World Trade Organization, Josip Broz Tito
Document Summary
Following the example of poland and other eastern european nations, russia underwent economic shock therapy and privatized the market and industry. The result wasn"t prosperity, but rather extreme inflation and slowing production. Russian industry was meant for military goods, so privatization led to private monopolies that cut production and raised prices in order to maximize profit. Corporate managers demanded large subsidies to reinforce the positions of big firms and avoid bankruptcies. Corporate leaders (which included criminals) converted most of the state power into their own private property, defeating the purpose of capitalism. The owners of the new monopolies (particularly those involved with oil and natural resources) got super rich while everyone else became super poor. 5% of russia"s people controlled 80% of russia"s capital resources. Most people saw their savings and pensions turn to dust. The market consisted of people selling their personal goods to survive. A proper democratic government couldn"t form with the abundant corruption.
