murrell+what+is+shock+therapy
TRANSCRIPT
sbhagwat
Sticky Note
"The actions taken in a crisis depend on the ideas that are lying around" - Milton Friedman.
sbhagwat
Sticky Note
So the economy was already looking bad...
sbhagwat
Sticky Note
If I understand correctly, what he's saying is that the argument that "well no one tried shock therapy!!" is not a good argument because the very essence of shock therapy is that a group of people removed from society *can* redesign and radically reconstruct society upon its own terms. If implementation of shock therapy depends upon society then, of course, the idea that you can sit in an ivory tower and effect change is wrong.
sbhagwat
Sticky Note
Basically what happened then, was the typical Keynesian "contractionist measures" -- increase taxes, decrease spending. Of course this has a immediate negative effect on the economy!
sbhagwat
Sticky Note
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sbhagwat
Sticky Note
In other words, the failure of the shock therapy measures gave power back to the old Soviet enthusiasts.
