Russia’s shock privatization under Yeltsin impoverished half the population in seven years

Evidence

Much as it did with Mussolini’s dictatorship in the 1920s, the Economist had no qualms in justifying Yeltsin’s strongman actions as the only path that could guarantee capital order: “Mr. Yeltsin had to choose between smashing his rival with force or seeing himself, his government and any prospect of reform destroyed… . Mr. Yeltsin’s opposition was a bizarre coalition of extremists of every kind, more than a few of whom, to western eyes, seem downright crazy… . Th e threat, in the end, was extreme— and so, necessarily, was the response.” Th e article concluded, “Th ese gains— the restoration of Mr. Yeltsin’s power to govern and renewed progress in economic reform— are great indeed.” In the months that followed, as the Economist doted on the rapid privatization of Russian industries, data from the World Bank showed that unemployment had reached double digits. If, in 1987– 1988, 2 percent of the Russian people lived in poverty (i.e., survived on less than $4 a day), by 1993– 1995 the number reached 50 percent: in just seven years half the Russian population became destitute. In the same period, nonwage income rose from 5 percent to 23 percent of GDP. — Clara E. Mattei, The Capital Order, 1594

Categorization

• XREF: Connects to Mattei’s earlier chapters on 1920s Italy/Britain — the Economist defending Mussolini in the 1920s and Yeltsin in the 1990s are the same justification pattern. — connects to: Liberal elites endorsed Yeltsin’s tank assault on parliament to protect economic reform — Clara E. Mattei, Escape from Capitalism, 358; Russian shock therapy shifted half the population into poverty while capital income soared — Clara E. Mattei, Escape from Capitalism: An Intervention, 359
• SEED: The Economist’s rhetorical justification of strongman violence as the only path to reform — an article comparing their 1920s defense of Mussolini with their 1990s defense of Yeltsin would trace the ideological continuity of the liberal press.

Broader Connections

• Russian shock therapy shifted half the population into poverty while capital income soared #corroborates (0.95) — Clara E. Mattei, Escape from Capitalism, 359