What exactly are shock therapy and gradual reform?
Recently, there seems to be a heated debate about which is better, shock therapy or gradual reform. There is an important question to be discussed here: What exactly are shock therapy and gradual reform?
Do they only refer to economic reform or include political reform? When we discuss problems now, we often have a preset premise (including myself): shock therapy is a Russian-style reform, involving political reform; Gradual reform is a Chinese reform. So far, it has basically only involved economic reform. Is this understanding correct? I don't think so.
If these two reforms are as mentioned above, I can almost say that shock therapy is better because it has a bright future. But if we think there is another possibility of gradual reform, that is, gradual reform of political reform at the same time, that is another matter. Then we can divide four reform methods by permutation and combination. I think this division may make everyone's thinking clearer, so as not to find that what everyone says is the end.
1 shock therapy without political reform
Shock therapy for political reform, such as Russian reform.
Gradual reform without political reform, such as China reform.
4. Carry out gradual political reform.
So which of these reform methods is better?
But the question comes again: Is there such a division method? Can it be called "shock therapy" without political reform? Political reform has been carried out. Can it be called gradual reform? Ha ha.
6- 16 14: 54 2005
There were designers in Russia.
"Shock Therapy" in Russian Economic Reform
2001-11-16 International Finance News
"Shock therapy" was originally a treatment method used clinically in medicine. Later, this medical term was used to describe the "sequela" of the economic crisis-inflation. The basic intention of this economic prescription lies in: adopting strict fiscal and monetary policies, supplemented by means of reducing consumption, forcibly bridging the gap between total supply and total demand, and achieving the purpose of curbing inflation in a short time. Due to the strong impact of the above economic measures, the social economy will be greatly impacted, even in a "shock state", so there is a medical metaphor of "shock therapy"
At the end of 1980s and the beginning of 1990s, the political situation in Eastern European countries changed suddenly, and countries urgently needed to get rid of the economic crisis and realize the economic system transition as soon as possible. Jeffrey Sachs, a professor at Harvard University in the United States, was invited to prescribe a "prescription" for the transformation of planned economy countries, that is, a "shock" economic transformation strategy, which specifically includes the following four aspects: First, the government strives to establish a price system determined by market factors, stop price control, reduce or even cancel state subsidies, and liberalize import and export trade. Second, remove restrictions on private activities. Third, through privatization and strict control of existing state-owned enterprises, state-owned enterprises are constrained. Fourth, maintain price stability, implement tight monetary and fiscal policies, reduce deficits and balance budgets. Later, he summarized this strategy as stabilization, privatization and liberalization, and considered it to be the "three pillars" of the transformation of the former Soviet Union and other eastern European countries.
After the formation of the new Russian government, Saks was invited to be the "consultant" of the Russian government. At that time, the economic reform measures of Gaidar government adopted Sachs' thought of "shock therapy", but the difference was that price reform and privatization were hesitant for a time, and finally a decision was made, that is, price reform should come first, and privatization should not be "delayed", otherwise "reform opportunity" would be missed.
Thus, at the beginning of 1992, Russia officially carried out economic reform, the main contents of which were: fully liberalizing prices; Liberalization of commerce and foreign trade; The main measures of large-scale privatization include: liberalizing prices on a large scale, forming a free price system, and creating necessary conditions for economic marketization; Implement strict fiscal and financial policies and tighten monetary policy; Large-scale privatization; Reform the foreign trade system and liberalize foreign economic and trade activities.
However, what will be the consequences of "shock therapy" economic reform?
At that time, the actual situation of Russian economy was: the economy was highly monopolized, there was a huge military industry system in the economic structure, public welfare funds did not match the national budget, and there was a lack of market competition environment and developed production incentive mechanism. All these make enterprises and residents react inappropriately to the government's reform measures. In terms of prices, in the year of 1992, Russian prices seemed to soar like a kite with a broken line. The ratio of social consumer goods price to service cost 199 1 year has increased by 26 times, and the price increase rate is as high as 6700% compared with 1990. In just one year, the prices of many commodities have risen by 100 times, or even more. Russia, once the lowest price in the world, has been rated as "second to none" in Europe for several years. In terms of political rights, due to the serious setback of economic reform and the continuous deterioration of economic form, the struggle for the rights of the upper class has further intensified, and the contradiction between the ruling faction headed by President Yeltsin and the government opposition represented by the Speaker and Vice President has escalated and finally confronted each other. From the perspective of social and economic effects, although Russia has already had the embryonic form of market economy through reform and introduced some important market elements, such as commodity trading system, free price system, foreign exchange management and banking system, the revolutionary reform movement has also caused extremely serious consequences to the society: during the period of 1990- 1995, the Russian economy declined by 38%, exceeding the 30th century. Among them, the machinery manufacturing industry dropped by 65%-85%, the high-tech industry dropped by 90%, the daily consumer goods dropped by 55%, 70% of the grain needed to be imported to meet, and the departments or industries such as agriculture, machinery, instrumentation, electronics and road construction were almost wiped out.
"Shock therapy" was originally a treatment method used in clinical medicine. Later, this medical term was used to describe the "sequela" of the economic crisis-inflation. This economic drug ... [/quote]
There is no political reform at all. But without politics, can reform be considered complete? For example, under the institutional conditions of our country, can the "handling method" be implemented? As stated in this article: "... Second, remove the restrictions on private activities. Third, through privatization and strict control of existing state-owned enterprises, state-owned enterprises are constrained. ..... "If China's reform realizes these two provisions, the rights of vested interests will be dealt a fatal blow. Will they agree to this reform? Because the more corrupt China is today, the more centralized state-owned enterprises or state intervention (such as telecommunications, electricity, medical care, education, real estate, etc.). ).
The financial crisis in Russia triggered a more comprehensive and intense economic, political and social crisis, and also caused Russia to reflect on the rationality of its socio-economic transformation path and model. This paper intends to make a brief analysis of its basic characteristics, main contradictions and their relationship with the financial crisis for readers.
(A) the basic characteristics of Russia's economic transition model
At the beginning of 1992, the new Russian government, presided over by Gaidar, a representative of radical democrats, and with the assistance of its western consultants, put forward a complex and radical economic transition plan, the basic connotation of which can be summarized as follows:
(1) privatization. It is the core and foundation of the whole economic transition, and its basic connotation is the sale and disposal of state-owned enterprises and assets. At that time, the government stipulated that privatization should start with the so-called "small privatization" of small state-owned enterprises, followed by the "big privatization" of large and medium-sized state-owned enterprises. The whole privatization plan will be basically completed by the end of 1995, when about 70% of state-owned enterprises will be privatized. Its goal is to establish the ownership structure with private ownership as the main body, and at the same time form a broad and powerful class of property owners and entrepreneurs as the social and economic foundation of the new regime.
(2) liberalization. Its basic connotation is: fully liberalize prices and strive for one step; Completely abandon the material planning and distribution system, and at the same time completely abolish the national plan and the national plan management institution; Give enterprises full freedom, and at the same time cut off state investment in enterprises and all other subsidies, so that enterprises can stand on their own feet in the market. If the goal of privatization is to completely change the ownership relationship, then the goal of liberalization is to completely change the economic system and management ideas, and strive to eradicate the planned system and form a free market system as soon as possible.
(3) Westernization or total Westernization. This westernization is different from the usual opening to the outside world and has special connotations: first, the decision-makers in transition believe that the free market economic model of western countries, especially the United States, is the most advanced and reasonable social and economic system in the world, and Russia must fully introduce and emulate it; Second, without the aid of western countries, Russia's social and economic transformation is impossible. Russia's social and economic transformation conforms to the strategic interests of western countries, so western countries will be willing to provide assistance; Third, fully open the domestic market to foreign goods and capital, first of all, western countries, sell state-owned enterprises and assets to foreign capital, first of all, western countries at low prices, and strive for investment and loans from western countries as much as possible. In a word, the essence of westernization policy is: relying on the west, relying on the west, imitating the west, and total westernization is firstly Americanization, which is the dominant idea of Russian social and economic transformation model put forward and adhered to by radical Democrats.
(4) Shock therapy. If the above three characteristics reflect the direction and goal of Russian economic transformation, then shock therapy embodies the basic methods and means for radical Democrats to achieve this goal. Its basic connotation is: while fully liberalizing, especially fully liberalizing prices, strictly implementing the monetary tightening policy, taking stabilizing the ruble, controlling inflation and reducing the government budget deficit as the top priority of the government's economic policy, and production development, industrial policy, structural policy and science and technology policy should all give way to or serve the monetary tightening policy and be in a secondary position. In the eyes of the makers and promoters of this method, this is the only effective way for Russia to get rid of the economic crisis and achieve economic stability as soon as possible. On the surface, shock therapy is only a matter of method, and it is a partial monetary policy. In fact, it is an important part of the guiding ideology of radical Democrats in the whole social and economic transformation. Its basic idea is to break the old system and establish the capitalist system they yearn for as soon as possible through the extreme means of "impact". In a word, it embodies the political purpose and intention of radical Democrats' social and economic transformation, and is an integral part of their whole economic transformation model. We have to explain this separately.
Although the above-mentioned economic transformation model of radical Democrats was designed according to the American model with the help of American consultants, it was out of shape in the process of implementation, forming a seriously distorted, extremely deformed and Russian-specific transformation economic form, and its basic characteristics can be summarized as follows.
(1) bureaucracy. Democrats tried to form a broad and powerful bourgeoisie and entrepreneur class through economic transformation, especially privatization. In fact, this class has not been formed. While the residents are generally poor, a bureaucratic monopoly group has emerged. This is manifested in the rapid expansion of the economic and even political power of a few financial oligarchs. It is reported that Russia's nine major financial and industrial groups now control most of the most powerful and potential industrial sectors, most of the commodity import and export business, financial and securities business and nearly 50% of infrastructure investment. Most of the leaders of these groups are party and government officials in the former Soviet Union, but now they have become an important pillar and supporting force of the Democrats. They are inextricably linked with government officials. They are the so-called people who are listed in the "Kremlin phone book" and hold "Kremlin and White House passes". While they made their fortune through privatization and financial speculation, they also transferred huge profits abroad through various channels.
(2) mandatory. Radical democrats call for liberalization and democratization. In fact, this mode of economic transformation is neither the natural result of the development of market economy, nor the wishes and demands of the broad masses of the people. Basically, it is enforced by a few people relying on the power of political power. Facts show that this model is seriously divorced from Russia's national conditions, lacking both economic foundation and mass base. From the beginning, it was strongly opposed and resisted by most political parties, factions, public opinion, business circles and the broad masses of the people. In the whole society, there are very few people who support and agree with this economic policy, principle and model. Moreover, with the exposure and deepening of this model contradiction, opponents are getting stronger and stronger, and supporters are getting less and less.
(3) political. First of all, the radical Democrats formulated and implemented this economic transition policy, which mainly served political purposes, that is, destroying the old planned system and the old ownership relationship as soon as possible to eliminate the social and economic foundation for the revival of the old system; Form a ownership structure with private ownership as the main body and powerful bourgeoisie as soon as possible, and strengthen the social and economic foundation of its rule. As for its economic rationality and feasibility, it is secondary. In addition, the policy and mode of adhering to and opposing this economic transition has become the core and focus of Russian political struggle and confrontation since the beginning of social and economic transition, and it has been carried out from beginning to end and intensified. In a word, not only this model itself has a strong political color, but also the whole social life of Russia has been politicized because of its compulsory implementation.
To sum up, Russia's economic transition model can be said to be an extremely special bureaucratic monopoly economic model instigated by western countries and forced by a few people for political purposes under the banner of liberalization and democratization, using political power and through shock therapy. This model is not in line with Russia's national conditions and the wishes of the broad masses of people, nor with the trend of world economic development, and its failure and extinction are inevitable. The main contradictions and consequences of this model are analyzed as follows.
(B) the main contradictions and consequences of shock therapy
Shock therapy is not only the most important method in Russia's economic transformation, but also the most direct link between fiscal and monetary policies and the financial crisis. So, let's analyze it first. As we all know, this method was not initiated by Russia. Before Russia, some countries in Latin America and Eastern Europe have adopted this model, which has both successful experiences and failed lessons. It should be admitted that at the beginning of economic transition, it is necessary to suddenly open the market and liberalize prices in order to curb inflation. In other words, Russia has an objective need to adopt this method in a certain period and to a certain extent. The problem is that the Russian government has made this austerity policy long-term and politicized, and turned it into a basic national policy as an important symbol of whether to persist in reform. Russia's monetary tightening lasted for seven years, which was extremely absurd and set a world record. Generally speaking, the currency circulation (m2) should be adapted to the scale of gdp, which is generally 80% ~ 100% in western countries. In order to maintain the stability of the ruble during the Soviet period, it was generally controlled at about 70% of the total social output value, which was already very low. However, since Russia's economic transition, under the control of shock therapy, the average currency circulation is less than 20% of gdp, the highest year did not exceed 60%, and now it is less than 15%. In practice, this extreme monetary tightening policy has prolonged Russia's economic shock and brought serious consequences, which is one of the most unpopular economic policies of the government. Its contradictions and disadvantages have caused the following obvious vicious circle.
First, it caused the payment crisis of enterprises and destroyed the normal production and operation conditions. Due to the lack of means of payment, nearly half of the products of various enterprises have to be supplied and sold by barter, and a considerable number of enterprises have to pay wages by products. This is an important reason for the triangular debt and wage arrears between enterprises, and it is also one of the important reasons for the sharp decline in output. Shrinking production has dried up the country's tax revenue sources. In order to meet the necessary expenses of the government, it is necessary to increase taxes and raise tax rates, which makes the tax burden of enterprises extremely heavy, thus further reducing production, drying up tax sources and causing tax crisis. This is the first vicious circle.
Second, it caused the government debt crisis. The exhaustion of tax sources and insufficient tax revenue will inevitably lead to the national budget deficit. In order to make up the budget deficit, there are generally two ways: one is to issue more money and overdraw banks; The second is to borrow and issue treasury bonds. Under the guidance of shock therapy and monetary tightening policy, the Russian government chose the latter. As a result, the government's domestic debt and foreign debt are accumulating. By the middle of 1998, the Russian government's foreign debt was about140 billion US dollars, and its domestic debt was nearly 80 billion US dollars, both of which accounted for more than 50% of gdp. In addition, the government's various arrears account for nearly 100% of gdp, and Russia's economy has become a veritable debt economy. The annual debt service expenditure accounts for about 1/3 of the budget expenditure. At present, the Russian government can only repay the old debts by raising new debts. The more it borrows, the more it spends, and the bigger the budget deficit. The bigger the budget deficit, the more it needs to be made up by borrowing. This is the second vicious circle.
Third, an important reason for the Russian government to implement monetary tightening policy for a long time is to control inflation and achieve economic stability. Practice has proved that this goal has not been achieved. Long-term monetary tightening has caused a decline in production, budget deficit and overweight debt, and at the same time fundamentally destroyed the foundation of economic stability, especially monetary stability, laying a curse for currency depreciation and inflation. The tighter the currency, the lower the production, the more unstable the monetary base, and the greater the possibility of inflation; The greater the inflationary pressure, the tighter it is. This is the third vicious circle. 1998 since the outbreak of the financial crisis, the ruble has depreciated again and the inflation rate has risen sharply again, which is an obvious proof of this vicious circle. 1Since the financial crisis in May 1998, the ruble exchange rate has fallen by nearly two thirds, and the inflation rate has soared to over 200%. The "fruits" of years of austerity vanished in an instant.
People can't help asking, since this kind of shock therapy has brought the above-mentioned evil consequences to the Russian economy, and it has been strongly opposed and criticized by the government opposition and a large number of famous economists in the process of implementation, why should the government adhere to this policy for a long time? The reasons are complicated and varied.
First of all, the reason why Gaidar and others accepted this method in those years was largely influenced by the economic theories of liberalism and monetarism popular in western countries. According to this theory, the government with the least intervention in economic activities is the most efficient government, and monetary policy is the most reasonable and effective means for the government to regulate the economy. This can be said to be the theoretical basis for Russia to implement shock therapy with monetary tightening as the core.
Secondly, the reason why Gaidar and others strongly advocate shock therapy also has profound political purposes. This is manifested in their efforts to eradicate the old system and establish a free market economy as soon as possible through liberalization policies and full liberalization of prices. Therefore, the so-called impact can be said to be the first impact on the old planned economic system. In addition, shock therapy is also to shock some state-owned enterprises, first of all, military enterprises. Before the introduction of shock therapy, its brewers claimed that in the process of opening the market, liberalizing prices and forming competition, it was inevitable that those enterprises with poor management, no market for products and lack of competitiveness would go bankrupt. Their closure is not a bad thing for the healthy development of the national economy, but a good thing. In their view, such enterprises are not only a stumbling block to the transition to a market economy, but also an important economic foundation and maintainer of the old system. In a word, shock therapy is not only a means of economic adjustment, but also has a strong political connotation. For western countries, weakening Russia's huge military-industrial complex through shock therapy is one of its important strategic goals.
Thirdly, the reason why the Russian government has implemented this monetary tightening policy for a long time is also forced by western countries. Different from Gaidar and others, President Yeltsin and former Prime Minister chernomyrdin have clearly pointed out that "this unpopular shock therapy will not be implemented in the future" after Gaidar and others stepped down. But in fact, during chernomyrdin's administration, it was generally believed that "Gaidar policy without Gaidar" was implemented. One of the important reasons is that the Russian economy has been difficult to get rid of the aid of western countries because of the implementation of shock therapy, and it has a strong dependence. The output has been greatly reduced, the tax sources have dried up, and the government's financial difficulties have forced the Russian government to apply for loans from western countries to solve its urgent needs. Western aid to Russia is conditional. That is, Russia's economic policy must meet the requirements and interests of western countries. In addition to the basic requirements of "persisting in reform" and accelerating privatization and liberalization, adhering to the monetary tightening policy is a prerequisite for providing every loan. Therefore, for many years, the Russian government has been consulting and negotiating with the International Monetary Fund before preparing the national budget, in which monetary policy, currency circulation and inflation rate are the important contents of the negotiations. This has formed another vicious circle, that is, the tighter the currency, the more difficult it is for the government to solve its financial difficulties, and the more it needs to rely on western loans to maintain it. To obtain western loans, it is necessary to adhere to the austerity policy. For a long time, the Russian government has been caught in these vicious circles and cannot extricate itself.
The vicious circle of the above four aspects makes the Russian economy, especially the monetary and financial system, extremely fragile and can't stand a little trouble. This is the deep-seated economic policy root of Russia's financial crisis. From a realistic point of view, although the financial crisis has the influence of the financial crisis in East Asian countries, the fall of international oil prices and the change of government, it is fundamentally the result of the accumulation of profound contradictions in Russia's financial system, especially the debt economic collapse caused by shock therapy. First of all, the withdrawal of foreign capital and the selling of the national debt they bought were the direct reasons for the sharp decline of Russian securities, stocks and exchange rates in late May 1998; Secondly, in August, the Kiriyenko government announced that it would postpone the repayment of short-term government bonds, which triggered a more drastic decline in the stock market and foreign exchange market. These are closely related to the overweight of government debt, and shock therapy and monetary tightening policy are one of the important reasons for the formation of debt economy.
(C) the special destructiveness of Russian privatization
Since the economic transition, there are many reasons for the deepening of the social and economic crisis in Russia. In addition to shock therapy, the destructiveness of Russian government's privatization policy is also an important factor. It should be pointed out that before the economic transition, the overall nationalization pattern formed by the Soviet Union for a long time was very unreasonable. It is necessary to properly sell some state-owned assets and state-owned enterprises, reduce the proportion of the state-owned economy, and develop a variety of economic sectors. For this reason, even the opposition of the Russian government has not generally denied the necessity of denationalization or privatization. As early as before the social upheaval, the Soviet Union and the Soviet government had successively formulated plans and decrees for denationalization and privatization. One of the important measures of the "500-day plan" put forward by the Soviet government in that year was to sell state-owned assets to employees and residents of enterprises. According to the planner's idea, the cash in the hands of Soviet residents at that time reached more than 500 billion rubles. If this huge sum of money is used to buy state-owned assets, it can kill two birds with one stone: first, it will greatly reduce market pressure and avoid hyperinflation; The second is to enable enterprises to obtain much-needed new investment, expand production, increase market supply and government tax revenue, and reduce government financial pressure; Third, workers and residents become the new owners of the enterprise, and input new vitality for the enterprise, which is helpful to change the business thinking of the enterprise and improve the business efficiency. Although this method has yet to be tested in practice, it is a way to get rid of the crisis in terms of the conditions at that time.
However, after the disintegration of the Soviet Union, the above-mentioned economic transition policy pursued by Russian radical Democrats completely made this plan to transform state-owned enterprises impossible to implement. This is because under the guidance of shock therapy, the Russian government completely liberalized prices regardless of conditions, which immediately triggered hyperinflation, and the ruble depreciated sharply, making residents' savings for many years become waste paper almost overnight, making most residents fall into the abyss of poverty at once, not to mention buying state-owned assets, even if it is very difficult to fill their stomachs.
In order to realize its privatization plan and accelerate the privatization process, the democratic government can only give away state-owned assets free of charge and sell them cheaply. This is the condition and background of Russian free large-scale privatization. Therefore, Russian privatization is particularly destructive, especially compared with the privatization of state-owned enterprises in western countries.
First, the privatization of state-owned enterprises in western countries is generally a process of mobilizing social investment and increasing the total social capital. This shows that private purchase of state-owned assets will increase the budget revenue of the government and provide the possibility of reinvestment for the government. In this sense, privatization is a process of adjusting and optimizing the stock and structure of state-owned capital. This is manifested in the following aspects: the government sells those enterprises that are not well managed and have lost the necessity of government possession and direct management, and at the same time increases investment in departments or fields that are of great significance to the sustainable development of the whole national economy, such as culture, education and high-tech development; In addition, after the private purchase of state-owned enterprises, most of them have to invest more money to transform the enterprises.
Privatization in Russia, especially large-scale privatization, is different. It has directly become a process of massive loss of state-owned assets. According to Fu Wei, member of the Russian State Duma Privatization Results Analysis Committee? Lichkin revealed that the average selling price of 125000 state-owned enterprises sold in Russia is only 1300 US dollars, which is a world record. For example, Ural Machinery Factory, a large state-owned machinery manufacturing enterprise with more than 34,000 employees, only sold 3.72 million US dollars, Ryabin Sike Iron and Steel Factory with more than 35,000 employees only sold 3.73 million US dollars, Kovrov Military Factory with more than 10500 employees only sold 2.7 million US dollars, and Ryabin Sike Tractor Factory with more than 54,300 employees only sold 2.2 million US dollars, compared with one in European countries. According to the figures provided by Lisichkin quoted by the government finance department, during the period from 1992 to 1996, the privatization income paid to the budget every year only accounts for about 0. 15% of the total budget income, which is only 1996. The losses caused by privatization of state-owned enterprises are more than those caused by Hitler's invasion of the Soviet Union [/kl
Second, in western countries, privatization also means selling state-owned shares to foreign investors, while in Russia, due to the lack of private enterprises in China, the residents are poor and unable to buy enterprises, especially large state-owned enterprises. Therefore, a considerable part of the assets of large state-owned enterprises are sold to foreigners cheaply. More seriously, in western countries, selling state-owned assets to foreign investors is a way to absorb foreign capital, but in Russia it has become a way for a large number of state-owned capital to flow out. This is because a considerable number of foreign buyers are speculators, who buy state-owned assets or stocks at low prices, collude with local speculators, engage in financial securities speculation, and transfer speculative profits and income abroad through various channels. According to Lichtenstein's estimation, since the economic transition, Russian capital has flowed to foreign countries at least 300 billion US dollars, and a considerable part of it has been transformed from state-owned assets. If the loss of state-owned assets flows into domestic hands, and the assets of enterprises still exist and continue to operate, it is still a problem of unfair property distribution, which does not do much harm to the economic development of enterprises and countries, then the loss of state-owned assets flows into the hands of foreign and domestic speculators, who try to transfer the funds obtained abroad. It is not simply the loss of state-owned assets, but the loss and destruction of the country's economic strength and production capacity.
Third, in western countries, the sale of state-owned enterprises from state-owned to private is not the only purpose, or even the main purpose. In these countries, the fundamental purpose of privatization of state-owned enterprises is to change the business philosophy and mode of enterprises, from government-run system to private system or commercial system, and to improve the operating efficiency of enterprises. For this reason, in these countries, apart from privatization in the general sense, there is a difference between privatization of property or property rights and privatization of management or operation. Privatization of property or property rights is only a means to sell state-owned assets, and privatization of management or operation is to change the business thinking and mode of operation of enterprises, and to improve the business efficiency of enterprises is the fundamental purpose.
In Russia, it is different. Privatization has become a simple sale and disposal of state-owned assets and the elimination of state-owned enterprises. As for the management and efficiency of enterprises after privatization, it is the buyer's business, and the policy makers of privatization do not seem to take this to heart. In fact, although most large state-owned enterprises in Russia have changed their property rights through privatization, they have all become new enterprises such as joint-stock companies and established new institutions such as boards of directors, but their management methods have not changed much, and most of them are still managed and operated by the old people. From a practical point of view, the operating efficiency of most privatized large enterprises is not as good as that of the original state-owned period, or even as good as that of the state-owned enterprises still retained.
The opposition of the Russian government and even a considerable number of people in the government system have long criticized the privatization policies of Chubais and others, saying that they "privatize for the sake of privatization" and "completely ignore the economic effects and social consequences". In fact, the radical democrats, regardless of the people's strong opposition and conditions, have a profound political motive and purpose, that is, they try to eradicate the socialist economic foundation as soon as possible and cultivate a new bourgeoisie, so as to strengthen the social and economic foundation of their political power and eliminate the social and economic conditions for the revival of the old system. For the most important political goal they want to achieve, the objective requirements of economic development and economic losses are secondary.
Fourthly, compared with western countries, the process and speed of privatization in Russia are record-breaking. Suffice it to say that Britain, which actively took the lead in privatization, reduced its state-owned economy, which only accounted for about 10% of the national economy, by 5 percentage points, and it took more than 10 years, while Russia reduced its state-owned economy, which accounted for more than 90% of the national economy, in just five years, although there was almost no private capital. This super-speed of Russian privatization is closely related to its purpose and mode, and it is this unique purpose, mode and speed that distinguishes it from the ongoing privatization process in most countries in the world and determines its special destructiveness.