The Economics of Transition.

Steindl, Josef

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Document type:: Works

Collection:: Josef Steindl Collection

Title:: The Economics of Transition.

Author:: Steindl, Josef

Scope:: Typoskript, 11 Seiten, nummeriert

Year of publication:: 1991

Source material date:: [25.09.1991]

Language:: English

Description:: In this article Steindl makes some propositions for the economic transition of the former socialist countries and points out the necessity to avoid unrealistic promises of quick recovery. He suggests a two sector model of transition that will need ten or twenty years - a policy of gradual adjustment to avoid mass unemployment. The model demands that the modern sector should gradually expand to the extent the old sector should gradually shrink. This shift would most naturally be operated by a a wage differential. Therefore it will be imperative to protect the old sector from foreign competition in some form for a certain period of time. Furthermore he argues that there are advantages and disadvantages concerning the question of property and especially the privatisation of state owned concerns, but that it would be irresponsible policy to throw away these assets at this particular time the more so that historical experience had shown that similar large scale dispostion of public property contains the danger of a mire of corruption. The transition requires intense communication with the capitalist world, but unrestricted opening would lead to a one sided stream of products while fuel and raw material reserves will be sold at bargain prices. Therefore Steindl proposes a special form of protectionist policy and a control of capital movements. However, there will be a shift in income distribution and an increase in the inequality of incomes.

Note:: Unveröffentlichtes Typoskript.

Topic:: Economic policy

JEL Classification:: P20 [Socialist Systems and Transitional Economies: General]

Shelfmark:: S/M.58.6

Access:: Free access

2 various European countries after world war II. This is perhaps not a bad comparison, seeing that we are badly in need of historical analogies or similarities in face of a very unusual problem. It is difficult to define the reconstruction period but I should say that on a conservative estimate it lasted at least ten years in Austria. Comparisons like this are necessary in order to dispel the rather frivolous and irresponsible promises of miraculously quick recovery. Organisation. The need for change is certainly very urgent here. It has to be stressed how much here depends on the human factor and that substantial changes depend on replacement of management by a new generation which can only be gradual - it would be fatal simply to forgo the experience of the people who have done the job so far - and that the concern for continuity will necessarily limit the speed of the process. Motivation. It may be surmised that many of the actual policy makers in some eastern countries have been motivated by the idea that the scourge of unemployment will restore the damaged morale of the workers. It is rather to be feared that a prolonged unemployment will destroy both their skill and their morale. I think that the motivation of the workers can only be restored by the establishment of a climate of democracy at the work place and in the village. This is the opposite of the spirit of rigid hierarchies and petty tyrants which has made so much of a mockery of socialist ideals. Perhaps it is not inappropriate to remember that there has been a spirit of initiative and sacrifice in the early stages of socialism , such as in the post-war reconstruction of Warszaw. This was before

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