Full text: The Economics of Transition.

necessary to make a reasonable judgement about how to deal with 
the various cases. 
The question of property. 
It is necessary to deal here with the problem of privatisation. 
This is fairly clear cut in the case of small and medium 
enterprise which is in the hands of owner-managers. The concepts 
of enterpreneurship, personal initiative and risk bearing have a 
clear meaning here. In the case of the large corporation, however, 
ownership is a rather far stretched concept while the power of the 
management is obvious and can be illustrated by the fact that in 
practice it can be removed - unless it is guilty of some 
misdoings - only by a take-over. The question is then what is 
the outstanding difference between a private corporation and a 
state owned concern? The answer is that the state concern can 
count to a very large extent on the financial support of the 
government when it is in difficulties. 
It is only apparently paradoxical to state that this is at the 
same time the chief virtue and the chief danger of nationalised 
industry. It is a tremendous advantage for short term policy where 
it enables the government to avoid the disruption of a sudden 
closing down of large concerns and the consequent unemployment due 
to a possibly temporary crisis. It may become a danger for long 
term policy if the government is not equipped with sufficient 
industrial monitoring and advice to be aware of the inevitable 
necessities of restructuring owing to changes of technology and 
other structural changes in the international field. It may then 
be led to a policy of conservation of ultimately doomed 
structures.The story of Austrian national industries offers a good

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