Free market capitalism has failed the former Soviet states

Background

The fall of Communism in Eastern Europe was followed by a period in which the successor states of the former USSR and the other members of the old Warsaw Pact struggled to plot a transition from state-controlled economies to economies based on the principles of market capitalism. A radical programme, "shock therapy" or "the Washington consensus", promoted by economists such as Jeffrey Sachs and Anders Aslund, became the main blueprint for action. It had three key components: liberalisation (the lifting of price controls; the removal of barriers to private trade and manufacture, the cutting of subsidies to state farms and industries and the removal of barriers to foreign trade); stabilisation (the control of inflation through tight monetary and fiscal policies), and the privatisation of state owned assets.

However the pace of implementation and the way it was carried out varied from country to country - as did the effects both between nations and between different groups of people within nations.