Full text: The Economics of Transition.

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 
Comparisons like this are necessary in order to dispel the rather 
frivolous and irresponsible promises of miraculously quick 
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. 
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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