Search

The paper deals with two kinds of illusions: the former ones, according to which a socialist economy could become efficient, and the present ones, according to which privatization ought to transform the former inefficient socialist economy into an efficient economy. Until less than a decade ago, acquisition of income based on the ownership of the means of production - the essence of capitalist exploitation - was unacceptable for half of the world; therefore "the people", state or society were their owners. A mere ban of capitalist exploitation, however, suffices for a static (allocational) and dynamic (consumption related) inefficiency. The transition from a socialist to a market economy began with an illusion that market mechanisms would transform the former socialist countries easily and straightaway into welfare states. All former socialist countries declared a resolute faith in capitalist market mechanisms and a firm commitment to full scale privatization. The transition is reflected by constitutional foundations of property rights. The new constitutions in East-Central Europe depart radically from their socialist predecessors and return to the principles of the French revolution. The right to private property is declared amongst basic, natural and unavoidable rights of man in all newly born capitalist countries. Privatization ought to ensure efficiency, fairness in the distribution of wealth and welfare, and the abolition of a monopoly party system. In reality, these aims have often been reduced to a political one: strengthening and legitimating of a new (old) political elite. Thus, the velocity of privatization - which is essentially a process, and not a "switch" - becomes a criterion of the quality of the economic transformation. But unwarranted expectations did not materialize, and illusions were gradually replaced by disappointments. Even the excitement of Western observers about political freedoms and economic changes in the postcommunist societies disappeared when it became clear that the amount of money needed to prevent nostalgia for the previous social rights far exceeded the alms they were willing and able to dispense. [ABSTRACT FROM AUTHOR]