Deadly Democracy: Lancet Study Confirms Millions Died From “Shock Therapy”

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The world has become so inured to mass death, perhaps the following will merit little comment or outrage among our political punditry, even if the story did make the back pages of the New York Times.

A new Lancet study, “Mass privatisation and the post-communist mortality crisis,” confirms what has been known but little discussed in the past eight to ten years: millions of people, mostly men of employment age, died as a result of the effects of the “shock therapy” transition from a collectivized to a privatized economy in Russia and other formerly “communist” states in East Europe. According to the Times article, by 2007 “the life expectancy of Russian men was less than 60 years, compared with 67 years in 1985.”  

Back in 2001, a UNICEF-IRC study had already claimed 3.2 million unnecessary deaths due to capitalist restoration. The Lancet study cites other figures, with up to “10 million missing men because of system change.” As a result, adult mortality rates soared, up almost 13% in Russia, with much of the increase attributable to the mass unemployment that followed the collapse in state enterprises. The study noted, “the Russian population lost nearly 5 years of life expectancy between 1991 and 1994.”

Other factors affecting the disastrous increase in the death rate included poor health care, rising HIV rates, higher alcoholism and drug addiction rates, as well as the effects of acute psychosocial stress, massive corruption, impoverishment, rising social inequalities, and social disorganization.

The effects of neo-liberal “shock therapy” on Russia and other East European countries (Russia being the hardest hit) were also felt by the children of the region. According to the UNICEF-IRC study noted above, tuberculosis rates rose by 50%; 150,000 children were added to the public care rolls (while overall population was dropping by millions); there were high levels of child malnutrition, and the number of children under age 5 fell by one-third.

This was not just a jolt of “shock therapy,” it was a social tsunami that devastated the region. According to the Lancet, the more rapid the rate of privatization, the higher the death rate.

Radical free-market advisers argued that capitalist transition needed to occur as rapidly as possible. The prescribed policy was called shock therapy, with three major elements: liberalisation of prices and trade to allow markets to re-allocate resources, stabilisation programmes to suppress inflation, and mass privatisation of state-owned enterprises to create appropriate incentives. When implemented simultaneously, these elements would cause an irreversible shift to a market-based economy….

Although a direct cause and effect relation cannot be ascertained and a detailed discussion of their roles is beyond the scope of this Article, all these findings can be linked, in some way, to mass privatisation programmes.

As the U.S. economy teeters on the edge of free-fall, due to the unbridled policies of financial deregulation, and an evisceration of the tax base through so-called “trickle-down” economics with its massive tax cuts to the very rich, we should all ponder, with awe and great sadness, the final denouement of the Cold War, with its frenzy of capitalist restorationist policies in the old Soviet Union, and the tremendous human cost it involved.

It is also important in understanding where Russia is politically today, i.e., what were the social circumstances that produced the Putin regime. Ever since the contrived Georgia-South Ossetia conflict last summer, it has appeared that the military-industrial complex of the U.S. is looking to find new “enemies,” should the public taste for the “Global War on Terror” lessen with an Obama administration, and fatigue over the fruitless and largely fictional “hunt” for Osama bin Laden and the crimes and disasters of the wars in Iraq and Afghanistan.

Perhaps most of all, the sheer horror of the loss of life, the human tragedy of the return of “democracy” (in its free enterprise garb) to the former Soviet Union, is what we need to ponder. The truth behind the privatization policies of economists like Harvard-educated Jeffrey Sachs — now head of the Earth Institute at Columbia University — has been hidden for years now behind glibly optimistic statements of economic progress in now-capitalist Russia. Take for examine this summary of a 1997 article in the Journal of Comparative Economics on “Bank privitization in post-communist Russia”, typical of the way the changes in Russia have been reported by the dominant social and educational Western elite:

The privatization of Zhilsotsbank of Russia demonstrates that the process of privatization can contribute to the eradication of the government’s role in the corporate governance of banks. Incumbent bank managers obtained control rights over new private banks following Zhilsotsbank’s decentralized privatization. The swift eradication of government from direct ownership of numerous banks, combined with broad licensing rules, has enabled the Russian banking industry to be over 75% private. Mosbusinessbank, a big commercial bank formed from 26 Zhilsotsbank branches, is one of the most profitable banks the old state banking system has produced.

There is not a word on the social cost of this increased profitability. In fact, the social disaster in Russia due to privatization and the restoration of capitalism in Russia is barely known or understood in the U.S., outside a sense that gangsterism was increased thereby.

The truth about world history since the end of World War II has largely been kept from the U.S. population, e.g. the recruitment of Nazi war criminals into U.S. government research programs, including the intelligence agencies, the mass murders in the 100,000s by U.S. allies in Korea (with U.S. connivance), the budget of U.S. intelligence agencies and the extent of the latter’s covert actions around the globe, and the CIA’s mind control project with its enlistment of top levels of social, medical and psychological personnel throughout the 1950s-1970s, and the secret medical experiments upon these programs involved.

The level of trust in what the U.S. government says is very low right now, thanks to the crimes of the Bush administration. The incoming Obama administration is sending mixed messages about what it intends as regards the past record of the United States. On one hand, the Obama people promise an open government and transparency; on the other hand, Obama himself says he intends to look forward and not backwards when it comes to former administration crimes, applying this standard even to such crimes as torture.

As we consider the pressing need to hold the U.S. to account, no matter what administration is in power, we might reflect upon the famous words of Nobel Prize-winning author William Faulkner: “The past is never dead. It’s not even past.” Shakespeare made essentially the same point hundreds of years earlier: “What’s past is prologue.”

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