In the 90s of the last century, the overlord of northern Siberia, the ice field hairy bear fell under the hunting rifle of Western countries, and the Soviet Union, which existed for 69 years, quickly fell apart in just 4 months, turning into Russia, the three Baltic countries and 12 CIS countries, all this happened too quickly, not only that, but this downed beast was endlessly deceived and humiliated by Western countries.
On December 26, 1991, the Soviet Union officially collapsed, and Russia inherited most of the Soviet Union's political legacy.
All problems are economic problems, and there are many reasons for the fall of the Soviet Union, including the huge consumption of the Afghan war, the financial collapse caused by the fall in international energy prices, plus the fact that the Soviet Union raised a lot of younger brothers had to spend money to maintain, and the imbalance of light and heavy industries in the country (these have the opportunity to write a separate article).
For the Americans, this opponent, who has been competing with themselves for decades for global hegemony, just fell, the whole country fell into a carnival, and was ready to step on 10,000 feet on the hairy bear, so that he could never turn over, and the United States, worried that the Soviet Union was not yet dead, sent a poison: "shock therapy".
First, the "kindness" of Americans
For the poison sent by the Americans, the unsuspecting bear drank it very happily, resulting in lying on the ground and wailing for nearly a decade. What exactly is "shock therapy"? Medically speaking, it is to shock the patient's head by electricity, causing the whole body to convulsions wildly, to achieve the purpose of treating the disease, this crazy theory of fighting poison was cited by the American Jeffrey Sachs into the economic field, used in some extreme cases, short pain for long pain, economic "shock therapy" theory is divided into three steps:
The first step is to liberalize prices and allow the market to trade freely.
The second step is to "double tighten" fiscal and monetary policies, covering the government's money bags.
The third step is to bring into play the free market mechanism, regulate the economy through the market means of free trade, and promote privatization.
This theory was a great success in Bolivia in 1986, when the economic crisis broke out in Bolivia, inflation was as high as 40,000%, when Jeffrey Sachs as an officially invited economic adviser to implement the theory, unexpectedly less than a week to quickly control the currency Peng Zheng, less than two years the country's economy began to recover in an orderly manner, this economic miracle made Jeffrey Sachs famous, now looking back, I deeply suspect that it was a big chess game laid by the Americans, In order to convince the Soviets and implement this economic plan. You look at the one next door who is eating my medicine, you can rest assured to eat silly child.
At the beginning of 1992, a reform based on shock therapy was fully rolled out in Russia, and let's take a look at the implementation of this three-step theory in Russia.
The first step is to liberalize prices. Russia ordered the state to liberalize 90% of consumer goods prices and 80% of the prices of means of production, the market quickly got out of control after a short recovery, in less than 3 months, the price of major consumer goods in the market soared 65 times, traders and state store employees were complicit, constantly changing hands to sell scarce materials, the price of industrial products rose more than 14 times, the market environment deteriorated rapidly, and the first step of shock therapy was broken.
The second step is tightening monetary and fiscal policy. The government needs to cover its purse, cut money to increase revenue, eliminate all tax incentives and raise tax rates, while cutting government spending and drastically reducing public investment and military spending. Because after the market was liberalized, many enterprises did not share the dividends brought by free trading, and more people who profited and fattened through price difference reselling were a very small number of power departments and key positions, coupled with the rapid deterioration of corporate cash liquidity due to tight monetary policy, resulting in a large number of enterprises falling into operational difficulties and quickly closing down, and the second step of shock therapy was also broken
The third step, quickly privatize state-owned assets, this step is the most vicious, they believe that state-owned enterprises are inefficient and rigid spokespersons, only by turning enterprises into private can they play a market role, a large number of high-quality state-owned assets are rapidly lost, they skillfully privatize state-owned assets through the method of national shareholding, at that time through valuation believes that The state-owned assets of the entire country were worth about 1.5 trillion rubles, and the country's population at that time was 150 million people, just enough to share 10,000 rubles per person, so each citizen was issued a certificate of shareholding, trying to make everyone share the Soviet state-owned assets equally, but when the citizens got the bonds, they quickly released fake news to suppress the market price, and the bonds in the hands of the citizens depreciated rapidly and were purchased in large quantities, flowing into the hands of individual government officials who held real power, and they quickly formed a huge oligopolistic capital, forming a Russian consortium capable of resisting the central power.
In less than a year, Russia's GDP has been halved, less than one-tenth of the United States, and inflation has looted the wealth of its people. Not only that, at that time, Russia actually listened to the Americans, relaxed currency controls, and the ruble began to be freely convertible with the dollar, and as a result, the ruble plummeted from 1:1.5 to 100:1 against the dollar, and the country's wealth quickly depreciated to one percent of the previous one, and finally collapsed itself.
According to statistics, enterprises, minerals, and materials of the entire country flowed into the pockets of the oligarchs at a price of less than 3%, and the oligarchs rushed up together with Western countries to pounce on the fallen hairy bears. In 1992, the G7 countries decided to aid Russia $24 billion, and a year later felt that this matter had pitted Russia too hard, and the amount of aid rose to $32 billion, but in the end it was not given a dime, and the hairy bear was really pitted.
You may ask, couldn't the whole country find a person who understood this problem at that time? I can only say that at that time, there really was none, people were poor and short-sighted, rich and talented, and when people had no money, they often had huge doubts and unconfidence in themselves. The country is the same, when the Soviet Union just collapsed, the poor clanged, the country is full of voices that beautify the Western line and question the original system, thinking that as long as we follow the Western countries and move their set of things, we will immediately resurrect in place and run to the well-off, in this environment, the "mainstream" economists have long knelt down, which is a pity, and in the end all this is to be paid by the people at the bottom.
Second, the huge arms trade
After the collapse of the Soviet Union, the huge inventory of weapons accumulated in the Cold War has now become a material that Russia can use to continue its life.
Between January and August 1992, there were 621 cases of major weapons loss in the country, and by 1994, there were more than 3,000 arms dealers in Russia with more than 200,000 pieces of various weapons, and some people were even preparing to smuggle uranium-235, the raw material for nuclear bombs, out of the country, not only private trafficking, but also the power departments also sold it, from aircraft and artillery to submarine tanks, everything that can be sold can be sold, what cannot be sold is secretly sold, and those who cannot be sold are taken back to the furnace to sell scrap iron. At that time, the brand-new submarines were sold at a price of $2,000 per ton of scrap iron, including advanced models such as T72\T80, which were sold directly at the price of tractors, and it was estimated that 10,000 tanks flowed to the market in Russia that year. Nicolas Cage's movie "King of War" is a reflection of the story of this period, the movie is very exciting, recommended to see.
In sharp contrast, the soldiers who contributed their lives to the country, when the compensation after the demobilization of soldiers was only 5,000 rubles, less than 1 US dollar according to the market at that time, and sure enough, every time there was social turmoil, the worst was the people at the bottom.
Not only that, Westerners deceived Russia and said that as long as you disintegrate, our NATO will no longer exist, we no longer have to maintain a huge army, the Russians believe it (later NATO expanded eastward many times, constantly humiliating Russia, and finally breaking out war), countless important strategic weapons and equipment were destroyed by themselves or interrupted the research and development process, the T160 strategic bomber known as the White Swan was discontinued in this context, which is a pity.
And Jeffrey Sachs, who implemented shock therapy, became famous because of his great "success", and his reputation overwhelmed Thanos and became an American superhero, and the New York Times excitedly commented that this dude is the best economist in the world!
3. The seven oligarchs of Russia
As mentioned above, a small number of Russians plundered the wealth of the people through ingenuity, and eventually formed 7 oligarchs, let's introduce who these 7 people are.
1. Gusinsky
This man, of Jewish descent, formed the Bridge Bank in advance in 1989, during which he slaughtered Russian state-owned enterprises through capital operations and relied on abundant cash flow to buy a large number of state-owned enterprise bonds in the hands of the people, and after becoming rich, he bought the Russian Independent Television, controlled the country's main newspapers and media, and had assets of more than $400 million in the mid-90s.
2. Berezovsky
This person was originally a mathematician, went to the sea in the 90s to do business, became rich by reselling cars, and later continued to resell scarce materials, and established the Union Bank to make money through capital, holding 51% of the shares of Siberian Oil Company in 1995, and has shares in Russian civil aviation, television, newspapers and other leading media, and has also served as an official position such as government industrial policy adviser and deputy secretary-general of the Federal Security Council, and has great influence in the government.
3. Khodorkovsky
This man was a Komsomol cadre in his early years, and later became rich by selling fake cigarettes and alcohol, established the Menatep Investment Bank in 1990, and bought 45% of the shares of Yukos Oil in 1995, maintaining the status of Russia's richest man for a long time.
4. Smolensky
In 1989, he founded the Capital Savings Bank, and later became one of the eight major banks in the country through the acquisition of large state-owned banks.
5. Vinogradov
In 1988, he founded the Moscow International Commercial Bank, which made a big profit during the collapse of the Soviet Union.
6. Malkin
In 1994, he became President of the Commercial Bank of Credit of Russia.
7. Friedman
The head of Alpha Group, which owns Alfa Bank, has a weak overall strength compared to the above.
Among the seven oligarchic camps, the top three Gusinsky, Berezovsky, and Khodorkovsky were the most powerful, and they had formed huge chaebols as political investments, when they fully supported Yeltsin, relying on the control of the media and the blessing of big capital, successfully pushed Yeltsin to the throne.
Yeltsin's election as president naturally reciprocated, but after tasting the sweetness of "official businessmen", these people's appetite and ambition also increased, controlling the country's economic lifeline and seriously threatening the central power.
At that time, President Yeltsin once interviewed these seven people in the Kremlin, and talked to everyone about it, you should earn your money, and you should not interfere in the affairs of the country. These seven people looked at Yeltsin and said, big brother, you open the window and take a look, these are all the rivers and mountains that we helped you lay! Are you going to cross the river now to tear down bridges and cut and kill donkeys? Are you embarrassed?
Yeltsin also understood that his position needed their support, no way, let's take people's short hands, eat people's mouths soft, so the seven oligarchs lived ten years of fairy days, under their oppression and plunder, the gap between the rich and the poor in the country is extremely large, the unemployment rate of the people at the bottom is extremely high, the heroes who made great contributions to the Soviet Union in those years can only sell their medals on the street to make a living, and the people's life is full of confusion and despair.
4. Oligarchic nemesis
Yeltsin once said in his autobiography that the most correct thing he had ever done in his life was to find Putin to take his place, and that choice proved to save Russia.
(To be continued)