On January 2, 1992, in accordance with a decree by Russian President Boris Yeltsin, “price liberalization,” known as “shock therapy,” began in the country. This measure resulted in galloping inflation, widespread impoverishment, and a sharp decline in the standard of living for the country’s population.

In 1991, a counterrevolution occurred in the USSR, resulting in pro-bourgeois forces seizing power in Russia and the union republics, beginning the dismantling of Soviet power and the socialist system. A major step in the “reform” of Russia was taken on January 2, 1992. On that day, in accordance with a decree by Russian President Boris Yeltsin, the country began “price liberalization,” known as “shock therapy.”

The essence of the measures taken by the country’s leadership was the abolition of state price controls in order to establish a “free market.” However, the introduction of free pricing was not coordinated with the state’s monetary policy, resulting in enterprises losing all working capital, and the Central Bank being forced to “turn on the printing press,” which led to rampant inflation. The result of this “price liberalization” was widespread impoverishment, a sharp decline in living standards, and the bankruptcy of thousands of businesses.

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