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The Transformation to the Market: At High Cost, Often with Long Lags, and Not Without Question Marks

Published online by Cambridge University Press:  28 November 2008

Jan Winiecki
Jan Winiecki*
Affiliation:
Economics, European University Viadrina, Frankfurt an der Oder*
*
Chair of International Trade and FinanceEuropean University-ViadrinaPO Box 776Grosse Scharrnstrasse 59D-15207 Frankfurt an der Oder, Germany Fax: (49) 335 5534 857
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Abstract

The shift from a command economy to a market economy is not only a question of following appropriate macro-economic policies but also a matter of instilling a market ethic in the minds of people who had been socialized and rewarded in a non-market command economy. In that system, many concentrated on technical rules of survival. The lumpenproletariat in favoured industries were rewarded even when they shirked or pilfered from state enterprises. The ethics of the lumpenintelligentsia reflected Communist party values, as professional. associations were under party control. The maintenance of such attitudes creates substantial resistance to the transformation of the economy, because a Weberian protestant ethic is lacking. Transition does occur, but the legacy of the old ethic imposes high transaction costs, inefficiencies and inhibits forward direct investment.

Type
Articles
Information
Journal of Public Policy , Volume 17 , Issue 3 , September 1997 , pp. 251 - 268
Copyright
Copyright © Cambridge University Press 1997

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Footnotes

*A revised version of a paper presented by the author at the Mont Pelerin Society General Meeting, Vienna, September 9–13, 1996.

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