Full text: The Economics of Transition.

the dead hand of burocracy was laid accross this spirit.Again,the 
restoration of a climate of cooperation, sensibleness and 
democracy at the workplace is a job which will not be finished 
from one day to the other. 
A model of transition. 
Once it is realised that transition will need ten or twenty years 
it becomes obvious that we must have a policy of gradual 
adjustment for this period of transition. This may be contrary to 
the spirit of most of our present day reformers who ressemble the 
revolutionaries of old in their enthusiasm for tabula rasa. To 
avoid mass unemployment lasting over many years, however, we must 
accept the necessity of continued operation of part of the old 
structure and eguipment roughly with the old methods over some 
time. In the transition the economy will consist of two sectors, a 
modern one, consisting of the newly emerging small and middling 
private enterpreneurs and of new large concerns which will be 
mostly foreign firms or joint ventures; and an old sector in which 
the national industry with its more or less obsolete equipment is 
operated by the workers accustomed to it. The success of the 
transition demands that the modern sector should gradually expand 
and to the extent to which this happens the old sector should 
gradually shrink. The method by which this shift would most 
naturally be operated would be the maintenance of a wage 
differential: The modern sector, being more productive, would 
offer higher wages; to the extent to which the employment capacity 
of this sector increases it is bound to absorb labour from the old 
sector which is correspondingly reduced. 
To make this pattern work as described it may not be sufficient to 
keep the wage in the old sector low enough to make it viable. If

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