The Social Effects of Neoliberalism. The Shock Doctrine in Russia, China and Romania

• Main Author: LUCIAN-ŞTEFAN DUMITRESCU
• Format: Article
• Language: English
• Published: Romanian Academy 2011-03-01
• Series: Revista Română de Sociologie
• Subjects: neo-liberalism; Milton Friedman; shock doctrine; social constructivism; strategic identity
• Online Access: http://www.revistadesociologie.ro/pdf-uri/nr.5-6-2011/08-LDumitrescu.pdf

Initially, the theoretical foundation of the International Monetary Fund was inspired by the economic vision of John Maynard Keynes, who argued that the state may resuscitate economic life when it undergoes a downturn. If the state proved unable to restart its national economy, the International Monetary Fund would intervene, and it would not only grant loans meant to revive the economy, but also recommend infrastructure investments, the decrease of interest rates in order to resume crediting and the reduction of taxes in order to decrease the pressure on the private sector in a quasi-immovable economy. In the 1980s, Keynesian ideas were withdrawn from the theoretical foundation of the International Monetary Fund and replaced by the neo-liberal vision. According to the new economic philosophy, the International Monetary Fund would grant loans only if the states in need reduced their budget deficits, increased taxes and interest rates. In other words, instead of boosting economic activity the new IMF practices were restricting it even more. In the rest of the work we will present, using the social constructivism paradigm and the strategic identity concept, the social consequences of neo-liberal ideas in Russia, China and Romania. The shock doctrine is the state of social disorder imposed from outside, as a result of the political gap between the states of the world.