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Transition to a capitalist economy imposes a requisite transition into a capitalistic mindset among people who had been used to a socialized system where they thrived simply by conforming to the technical rules of survival. It is imperative that the people do away with the Weberian protestant ethic and acquire the liberal leanings associated with economic freedom. The systemic change also mandates the judiciary and public administration to acquaint themselves with market rules.

Poland's change from a Soviet-type economy (STE) to a capitalist market economy should be judged as having made significant progress given the formidable difficulties facing the program when it was implemented on Jan 1, 1990. Poland began to dismantle its STE sooner than the other Eastern European countries because it was the first to end the communist monopoly on power. Since 1990, problems such as the government's inability to achieve economic stability have weakened the program. However, the utter lack of precedent for change from an STE makes such setbacks inevitable.

The development of cooperatives and the leasing of and issuance of shares to state enterprises represent futile efforts at privatization. One option is accelerated privatization by way of free distribution of shares to the population or to workers alone. Another is the creation of a legal structure that will allow private enterprises to emerge from state enterprises with a minimum of red tape. Economic units of state enterprises may also be privatized on their own volition. Finally, planners can create enterprises that can be broken up after they have served their purpose.

The early (drastic) output fall has been the major bone of contention among theorists in the early years of transition. This author looks at the issue from the vantage point of the communist economic legacy, i.e. so-called 'pure socialist production', unneeded under a less wasteful economic system. Excessive inputs, excessive investments, excessive armaments, as well as some other excesses disappeared in the early phase of a shift to the market (and democracy). Likewise disappeared trade with the former 'fraternal' countries, which also began restoring economic sanity and did not need 'pure socialist production' anymore. The article reviews the most often found explanations of the output fall in early transition and finds them much less satisfactory than the elimination of the 'pure socialist production' of the past. [ABSTRACT FROM AUTHOR]