Question

1. What were the consequences of the "liberalization" of the Russian economy in the 1990s? How did "shock therapy" affect the results? How has this affected the Russian State today? (8-12 sentences)

2. The process of globalization, and in particular the neoliberal world economy, faces many critiques and criticisms. What are some of these critiques? To what extent do you agree or disagree with these critiques? Is neoliberal globalization an inevitability or something produced by historical factors? (Three paragraph essay)

Answer 1

1.In 1991 there was a collapse of Russia's controlled economy .A new Russian federation was formed in 1991.This newly formed Russian federation had multiple economic reforms including liberalization ,privatisation due to collapse of communism.As a result of liberalization the Russian economy made a significant turn towards developing a market economy.Liberalization stimulated foreign funds to the Russian economy.The price liberalization helped the Russian government to immediately solve the problem of shortage of funds.Shock therapy refers to the sudden release of price control ,withdrawl of state subsidies and promoting trade liberalization.Some of the major results were the transition of controlled economy to an open economy.Shock therapy increased unemployment and civil unrest in Russian economy.

2.Critics of neoliberalism argue that extensive privatisation and liberalisation is not good for sectors like health, education etc. These are public services not to be functioned on profit maximisation. Under globalization firms with monopoly power exploits the customers and widens the inequality in the society. Instead of bolstering the economic growth, neoliberalism contributed to increased financial instability and causing persistent shocks in the global market. It reduced state supremacy and transferred the authority into the hands of unaccountable MNCs. Another important critique of globalization is it increases income inequality.
Even though I completely agree with these criticisms, one should accept that LPG helped in widening global market, increasing market competition and bringing heterogeneous and efficient product into the market

Neoliberal globalization is a political ideology promoting negative liberty .It provides more freedom to pursue individual goals without much intrusion.It believes in increasing social welfare .It is a cultural paradigm.The historical factors such as war did play a major role in shaping of Neoliberalism.