Recently I listened to a podcast where it was mentioned that during the reunion of Germany shock therapy was applied to East-Germany through the Treuhand organization. I tried to google about this and learned that shock therapy seems to be a technical in economics but I don’t understand what it means and how this was applied in East Germany through the Treuhand.
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Shock therapy referred to kindof a *rapid* approach to dismantling socialism and reintroducing the capitalist market economy to former Soviet satellite states. Privatizing nearly all-state-owned industries overnight, laying off the enormous government workforce, ending subsidies and trade restrictions, sometimes slashing social welfare and government services.
The idea was that it would be painful in the short term but necessary and beneficial in the long run.
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