Talk:Shock therapy (economics)

Misc

There's no discussion of Russia in the results section - something of an omission. Has this been cut? If so, why? Regards, Winterstein 16:03, 1 April 2007 (UTC)

Removed the following from the article since it has little to do with economics or shock therapy.

Some judge that the military attack on the Russian parliament in November 1993 reduced the possibility of Russian economists with alternative economic models to participate in economic decision-making.

See also

* Aleksandr Lukashenko

* Poland

References

*analysis 10 years after attack on Russian Parliament

--kudz75 03:53, 9 Nov 2004 (UTC)

Chile

No mention of Pinochet's Chile? Joffeloff 13:50, 25 June 2006 (UTC)

Please add Jonpatterns (talk) 17:01, 7 January 2015 (UTC)

Chech Czeck location

The Czech Republic is not in Eastern Europe. Central Europe includes CZ, Poland, and Slovakia among former Communist satellite states. When parts of the Czech Republic are WEST of Austria, it's difficult to consider it Eastern Europe. About half of the Czech Republic is west of Austria. —Preceding unsigned comment added by 83.208.22.80 (talk) 09:40, 15 April 2010 (UTC)

Please correct Jonpatterns (talk) 17:01, 7 January 2015 (UTC)

Re Recent Edits

I'm leaving most of them in for now because they're factually correct and somewhat relevant. However, Shock therapy as defined in the article and usually, is " the sudden release of price and currency controls, withdrawal of state subsidies, and immediate trade liberalization within a country." Privatization of state industries is a bit more of its own beast. The architects of Shock therapy in Poland (Sachs, Balcerowicz) recognized that effective and beneficial privatization had to be carefully designed and did not push for it immiediately. It is useful to contrast this process with the one in Russia but it is only partially relevant. Most, well, good many, economists would advocate Shock therapy as defined in the article, but caution about chaotic and ill conceived privatization schemes (myself among them). Furthermore Poland usually is the poster boy for shock therapy so calling it "gradualist" is somewhat misleading though I guess it's a matter of magnitude sometimes. I am going to remove/redit the edits soon unless someone wants to argue the opposite case.radek 03:53, 27 February 2007 (UTC)

Katrina

Why is there a link to Hurricane Katrina's economic effects here? Has there been "shock therapy" economic reform in Louisiana? James Haughton (talk) 04:27, 3 June 2008 (UTC)

See Also: The Shock Doctrine?

Along the lines of the Katrina comment, I'm going to question the appropriateness of the placement of "The Shock Doctrine" under 'See Also' because it conflates the economic strategy of shock therapy with the thesis of Ms. Klein's book, which as I understand it has to do with collusion in profiting from natural and humanitarian disasters. The two seem only marginally related, for example in discussion of Pinochet (as humanitarian disaster) who instituted the Chicago Boys' recommended reforms (shock therapy). It seems to me that including Klein's book in the entry gives a false impression of a relationship where there is none; I'm assuming the title of the book is to blame here. Unless Klein figures shock therapy into the collusion--maybe someone who has read the book could clarify? Thanks.

Mackenzie 140.160.11.146 (talk) 11:36, 9 June 2008 (UTC)

I think the sensible thing here is to leave "The Shock Doctrine" in the 'See Also' section but take out the nonsense about Katrina.radek (talk) 05:53, 4 August 2008 (UTC)

Ms. Klein's book is very much consdering "shock therapy" as it is defined in economics. The book, however, claims that "shock therapy" is against popular want, and that making economical reforms like these is much easier, a) if one can heavily oppress the population, or b) if one has something else that diverts public attention from the economics. The reduction of subsidies, the reduction of taxes, the opening of markets and so forth are included in her cases, although she is abviously not pro-shock therapy. --Jakob mark (talk) 20:25, 26 August 2008 (UTC)

The article is bare, and honestly I don't believe it will be possible to have anything resembling objectiveness in such a politically charged area and expect activism to reign over scholarship. Using anything by Naomi Klein is a sure way of automatically discouraging any serious academic contributions here. Howel t (talk) 13:10, 16 January 2010 (UTC)

Ms Klein's book is relevant and significant enough to warrant the "see also" mention. I'm confident Wikipedia contributors will continue to contribute -- there are many contentious articles that manage OK. --winterstein (talk) 13:45, 26 October 2011 (UTC)

Entry now advocates for shock therapy; needs a balanced approach

This article right now is a disaster encyclopedia-wise. There are numerous RS that find the results of shock therapy problematic and in the Soviet Union disastrous and all that needs to be in the entry. And Sachs' 'excuses' and re-definitions of shock therapy on the fly when its results seem poor also need to be in the article.Haberstr (talk) 06:03, 19 December 2009 (UTC)

Agree, this article is POV as it intentionally avoids reporting about short term consequences of shock therapy such as sharp rise in unemploymeny, fall of growth, deep social inequality, skyrocketing of prices and inflation. Concerning Poland, it omits, f.e., that it has been for a certain period the country in EU with the highest unemployment rate. I put the template.--Desyman44 (talk) 23:16, 6 March 2010 (UTC)

I also agree that this article avoids being balanced. I also think it fails to properly define what shock therapy is and point out the changes in the meaning that have come over the years. I've been reading up further and the shock therapy that Bolivia used (and where it was invented) is completely different to the shock therapy used by Chile and the ex-communist countries. There needs to be an acknowledgement of the change in order to do this subject justice. I'm going to try rewriting this article to reflect all of that over the next week. By all means, please leave feedback and discuss. Aphenine (talk) 22:56, 16 May 2010 (UTC)

Rewrite

My feeling is that this page is pretty fragmented and biased that it probably needs a rewrite from the bottom up. What do people think about this?

I'm intending to do something like this:

• Discussion of gradualism versus shock therapy - explaining the economic background to Bolivia (e.g. economic shocks are bad, therefore gradualism, so Bolivia's shock therapy shouldn't have worked).
• West Germany and Bolivia, highlighting the success of shock therapy to fight hyperinflation, background of hyperinflation in Latin America and the success of Bolivia as a democracy in fighting it. Positive lessons for Latin America.
• Post-Communism: highlighting the failures of shock therapy using an argument Stiglitz uses which I thought was really good, comparing like for like countries, so Russia/China, Poland/Czech Republic and (less usefully, because not so similar) Poland/Russia. For balance, I also want to explore some of the countries separately, just in case the Stiglitz argument is flawed, so I might keep some of the sections.
• Neoliberalism: IMF and the Washington Consensus. I want to contrast Chile's growth rates with the rest of Latin America, showing the benefits of its economic policies. I'll also highlight social problems and the debate whether economic growth actually benefited them at all. I also want to talk about the collapse of Washington Consensus economics in Latin America in general and how that's related to shock therapy. I want to also highlight Rogeromics and Reaganomics in this section (although I'm not sure Rogeromics belongs here *shrug*). I want to try and avoid a huge discussion on neoliberalism itself, but I need to mention something, or this article just won't work.

I'm hoping that all of this together will broadly keep a neutral POV, sort the information in a way that's not too rigid and be a so much better than what's already there.

Also, just a reminder that this is my first edit on Wikipedia main (I've done a few on Simple English), so if I'm doing anything very wrong, it's better just to point it out to me so I can learn. Aphenine (talk) 01:36, 17 May 2010 (UTC)

Ok, I think that's more than enough time for consultation. I'm making a start on writing up Aphenine (talk) 19:40, 4 June 2010 (UTC)

Definition - privatisation

After a lot of careful thinking, I have come to the conclusion that privatisation is only a necessary part of the neoliberal interpretation of shock therapy. It is not necessary for the Sachs definition. Therefore, I have decided to revert the edit by Rickproser, and to oppose any such edits in the future as misleading and unbalanced.

Having said that, I have also come to realise that I've not given enough space to the neoliberal interpretation of shock therapy in this article, including Chile in 1975, the Washington Consensus and Argentina in 2001. I need to rebalance the article. It's mainly because I've been focusing my energy in understanding the Sachs interpretation, which is complicated enough, and I've never really understood neoliberalism very well. I've been reading up on neoliberalism since then, to try and modify the article properly. Of course, there's still a lot to do, so it might take me a while to get around to it. Anyone who wants to help out on that is welcome. Just remember to leave the Sachs interpretation alone and clearly differentiate between the two and I'll work around and integrate the text into the main flow of the article. Aphenine (talk) 14:44, 17 October 2010 (UTC)

Original Research

I'm getting a little worried that my section on the theoretical aspects of shock therapy is veering uncomfortably close to Wikipedia's original research prohibition. Broadly, I'm reading other Wikipedia entries and collating the information together, as a result very little in that section hasn't been written elsewhere on Wikipedia. I'm just a little concerned that, in trying to sensibly organise the information, I might be effectively performing original research, or putting my own slant on the information. I haven't been able to find any decent sources which I can quote which have organised information already, and I'm not an economist, so I'm not really likely to get hold of the type of scholarly works that would help. On the other hand, being theory, it has to be logical, self-consistent and self-explanatory, and that's really all I'm demanding from the information. Any opinions, or reassuring words? Aphenine (talk) 20:06, 26 October 2010 (UTC)

Russia, human suffering and Shock therapy

The article needs to include the Russian experience and also to avoid sweeping remarks like on the effects on Polen and Bolivia as "successful". The human suffering inflicted by simple desktop decisions like the mass-privatization (russia) and the reduction in subsidies overnight in Bolivia. The poicies had dramatic effects, deaths in an unpresidented scale. The ground breaking results of this as displayed in King et al's article in the Lancet (Mass privatisation and the post-communist mortality crisis: a cross-national analysi, Lancet Jan 15, 2009). (95.34.149.80 (talk) 19:51, 16 January 2011 (UTC))jjones

I had always planned to write a section on Russia, but I ran out of motivation before I could do it. I agree it's important, especially contrasted with China. Aphenine (talk) 01:08, 3 May 2011 (UTC)

Many problems with this article

Whoever referenced "rational expectations" seems to have no idea what it is, since it is not about the health or freedom of an economy broadly speaking (it is instead best summed up with Lincoln's saying "You can't fool all the people all the time"). Milton Friedman based some of his most notable monetary work on a theory of adaptive expectations, so many of his conclusions were actually overturned by his University of Chicago colleague Robert Lucas using rational expectations. The dichotomy between "neoliberal"/Milton Friedman varieties and Jeff Sachs is also odd since Sachs is probably a more typical neoliberal than Friedman (the more conservative Hayek may be classified with the "ordoliberals" behind West Germany's reforms). And of course there was no citation given to anybody claiming any existing market was "perfect", because no such person exists. Like a car covered with dents, it does not seem worthwhile to work on fixing any one particular defect. If the Encyclopedia Britannica has an article on the subject, it might be best to dynamite this whole page and start from that.TGGP (talk) 02:00, 13 February 2011 (UTC)

I'm sorry to say, but no matter how bad you think this article is, I could not find any sources that were better than this. This page is the number one Google hit for shock therapy, and the original was a lot worse. I know this article is a lot better than when I started, and I still am not happy with it. I'm not surprised you hate it. But it is all there is.

I wrote the lines on rational expectations. I know what it is, yes I agree, and I was summarising like crazy. If you know so much about it, I would appreciate if you improved the article. There is a lot to do. Please help. I was the only one who seemed to care to rewrite this article. I could really, really use some help.

If you look at the sources, there are differences in the approaches of Sachs and those who came to be called neoliberals. I'm not sure I got the difference right, but I wrote the article from the ground up only covering Sach's views, and I couldn't fit Chile into those views. So I tried to rewrite it including Chile.

Stiglitz's whole argument centres over perfect and imperfect markets. He notes that much of the failure due to shock therapy can be explained by assuming that markets are perfect when they are not. I cited Stiglitz. Aphenine (talk) 01:25, 3 May 2011 (UTC)

Complete lack of critical statements - and of criticism as such

The whole article doesn't include any kind of critical statements from scientific sources, and no criticism as such at all. This can be seen by the total lack of headlines like "critical response", which should imho be there, simply because this article is about a *theory* - and theories should be discussed in various ways (including scientific criticism). But there is no discussion.

Everything reads like an overall presentation of a theory, ith applications to reality, but with no hints to where and why this might not work or where it has actually failed.

Everything is written after a simple scheme : - background - application - results

No discussion of the results at all ! - This is simply non-scientific, since *any* scientific article should imho include criticism towards a theory or a finding.

Even the section on Russia, about which is it stated in the first paragraph that the "shock therapy" failed, doesn't include any kind of criticism.

Alrik Fassbauer (talk) 12:33, 26 July 2011 (UTC)

In the absence of government intrusion into the task, (fill in the blank - for example, fixing potholes) will be accomplished by means of entrepreneurs quicker, cheaper and better. Since unregulated capitalism could create an example of prosperity that would stun the world, get rid of government. The difficulty regarding demonstrations consistently producing disaster isn't that the belief is wrong, it's that it wasn't applied with adequate sincerity. If Shock Therapy amounts to faith based economics, then its believers won't be interested in science, logic or reason. It could be seen as a controversial country wrecking religion. - 67.224.51.189 (talk) 06:13, 30 July 2011 (UTC)

Intro rewrite needed

The Intro reads like an opinion article. Certain words are used to bias the reader toward the remainder of the article. Intro should present the essential definitional facts of what will follow, not create a cloud. Rewrite.Wjhonson (talk) 19:00, 16 November 2012 (UTC)

Friedman vs. Sachs

The second paragraph of the lead section tells about M. Friedman and J. Sachs coining the terms shock policy and shock therapy, respectively, and goes on with the difference between the two shock expressions. However, in fact only Sachs's ideas are expressed, so that is not very informative about the difference. There is even a strange signal word in the last sentence: "Sachs' ideas were based on (...) Whereas Sachs' shock therapy notion views (...)" [emphasis added by me] as though there is a contradiction between the two phrases, which of course there is not.

Looking in the article history, I found that the paragraph has had a more comprehensive form:

"So, the neoliberal variant of shock therapy argues that government intervention is the cause of all economic and monetary chaos, and therefore rapid economic liberalisation--alias shock policy--is always the best answer to such chaos, and always includes the large-scale privatisation of publicly owned assets. On the other hand, Sachs' ideas are based on studying historic periods of monetary and economic crisis and noting that a decisive stroke could end monetary chaos, often in a day.[1] Whereas, Sachs' shock therapy notion views liberalisation as a necessary evil, a fast--as well as nasty--way to achieve economic stabilisation."

The first sentence of the quote has been deleted without editing the remainder. I highly distrust such edits. Bever (talk) 01:04, 16 December 2014 (UTC)

bias

We are so enthralled and infuriated by other's understandings of such topics, but I fear, from a humanitarian point of view, the social impacts of shock therapy are not given enough importance in this article. Yes its always blissfully easy to criticize someone else's work, but I just want to chip in and say perhaps hear the stories of unions, poorer people, the dislocated. Has shock therapy every officially worked anyway? Is there evidence of it? I thought it was still a theory, but who am I? I never went to uni, so I guess that disqualifies me from academic opinion.

And please don't write an article based on one person's interpretation of a subject that is a lethal mistake to leave with our children who will one day read this and say economic genocide seemed worth it.

I guess I'm shooting myself in the foot - Im the biased one. — Preceding unsigned comment added by 42.241.9.172 (talk) 14:40, 29 December 2014 (UTC) ~Could you make a specific suggestion on how to improve the bias? Jonpatterns (talk) 17:27, 7 January 2015 (UTC)

Regarding Peso and Dolla (Bolivia 1985)

What changed in the relationship in Decree 21060? This article mentions 'peso to float against the dollar' where as the Supreme Decree 21060 article say 'peso linked to dollar'. Maybe it means the same thing, but 'linked' sounds like it may have had a value fixed. Jonpatterns (talk) 17:27, 7 January 2015 (UTC)

Article is fragmented

I would like to reduce the fragmentation somewhat by folding "3.3 (Applications) Poland" into "2.4 (History) Post-Communist States" (which is largely about Poland anyway atm). Therestlesscat (talk) 12:53, 22 May 2019 (UTC)

I'd second this. 90% of 2.4's word count is dedicated towards Poland, keeping the two as separate sections while covering similar informations seems fairly pointless. PEPPERS (talk) 10:27, 13 March 2022 (UTC)

Citations needed desperately

This article, as it stands, has 22 citations needed and 5 instances of "according to whom?". These vast amounts of text either need to be given proper citations or removed. Currently this article is leaning a lot more towards opinion than verified fact. In some cases (See [(overview)], [(West Germany 1984, Results)], [(Bolivia 1985)], or [(Results in Poland)] among others) several paragraphs go with only one or without a single citation, relying entirely on the personal belief of an editor as to whether or not Shock Therapy was indeed successful. (something that shouldn't be conclusively 'solved' in this article, anyway) — Preceding unsigned comment added by PEPPERS (talk • contribs) 10:33, 13 March 2022 (UTC)

PEPPERS (talk) 10:37, 13 March 2022 (UTC)

Agreed. The lack of citation is dreadful. Some of this is written in an essay-like format (I am thinking of the theory section, for example) which makes me worry that it's copyright vio or someone's re-purposed grad school paper. There's going to come a point when these citation-less paragraphs should be deleted and some of the sections or subsections built back up from foundation JArthur1984 (talk) 21:42, 15 August 2022 (UTC)

References

I suggest rewriting references, as for example Isabella Weber's one book is referenced a dozen of times with each reference stating full book title, ISBN, and such. I'd argue it only makes graphical confusion for a reader. I suggest referencing the book once and the rest just reference by name and year and simply linking to the corresponding pages. 46.205.209.89 (talk) 13:09, 30 January 2024 (UTC)

Thanks for raising, I've consolidated with Weber citations. JArthur1984 (talk) 13:49, 30 January 2024 (UTC)