Question

Can Shock Therapy be called the best way to make transition from authoritarian socialist system to liberal capitalist system after the disintegration of Soviet Union? Explain.

Hint:

Shock Therapy can be effective in stabilizing economies quickly, but it often has harsh social impacts.

Answer 1

Shock Therapy refers to the rapid and sudden transition from an authoritarian socialist system to a capitalist system, implemented by a series of quick economic reforms. The idea was to stabilize the economy by quickly privatizing state-owned enterprises and moving toward a market economy. While it was effective in some post-Soviet states, it also resulted in high unemployment, economic inequality, and inflation in others. Therefore, while Shock Therapy had some benefits, it is not always considered the best transition method due to the severe social and economic consequences that followed in many of the affected nations.