Monday, May 2, 2011

Arbatov: New Russia

Russian economist Georgi Arbatov describes the tragedy of perestroika: it created too little incentive for the transition to a free market system, yet cut social services too much for the government to serve the Russian people.

Obvious that the old system is not functioning

Yegor Gaidar proposes a “Chicago school” program (so named after the influential group of U. Chicago economists who advocated laissez-faire)

Results: disastrous.

Some problems: inflation, loss of social benefits, lower quality of life

Losing pensions

Tremendous increase in medicinal prices

No social services: Education falling precipitously

Less access to culture: books, movies, etc.

Widespread corruption throughout the system

"The way of ordinary Russians has deteriorated remarkably."


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