Short cuts lead to 'miserabilism'

January 16, 1998

A critical review of the socio-economic upheavals across Eastern Europe since the collapse of communism is emerging in universities in the region.

The heady days of transition from strictly controlled political and economic orders to the freedom of market capitalism and democratic government have given way to stark realities in nations unused to the complexities of the new order, a growing number of observers argue.

Troy McGrath, deputy director of international relations and European studies at the George-backed Central European University in Budapest, says reviewing the consequences of the rush to the market nearly a decade after communism's collapse is a key topic for students and academics in the political and social sciences.

"We are between six and nine years down the road since these societies started shifting. Now is the time for some initial critical assessments of who has benefited from this revolution, and to ask whether it really has been a revolution or the swapping of one elite for another," says Dr McGrath, who has worked and studied in Russia, the Czech Republic, Albania and Hungary over the past decade.

In a debate published in the Prague-based Transitions, a monthly magazine covering the changes in Central and Eastern Europe, Russia and Central Asia, Dr McGrath argues that attempts to take a short cut from communism to capitalism has resulted in an age of "miserabilism".

He says that the emergence of capitalism in the West during the 19th century "took generations before a civil society emerged to buffer individuals from the existential uncertainties and rapacious self-interest bred by competitive capitalist individualism".

Post-communist societies "have yet to develop the necessary infrastructure and organisational support systems that underpin a modern capitalist order. So far, the pro-market reforms have produced not the anticipated liberalism but a new situation that often exhibits the worst characteristics of both capitalism and socialism, which I call miserabilism."

"We in the West should do more to support the development of new local government organisations to replace those support systems that have been swept away," he says.

But not all share his bleak vision. Czech academic Kresimir Zigic, deputy director of graduate studies at the Center for Economic Research at Charles University, Prague, argues in the same issue of Transitions, that Eastern Europe can learn from the economic success of the Pacific Rim countries in the past 20 years to bypass the worst obstacles of a rapid shift in economic systems.

"The main lesson that former socialist countries can learn from tiger economies is that economic fundamentals - price stability, limited fiscal deficits, positive real interest rates, and equilibrium exchange rates - must be respected.

"Creation of human capital is a self-reinforcing process I most transition economies already possess that in critical mass, and that largely explains why countries such as the Czech Republic or Slovakia have not experienced any increase in income inequality between 1989 and 1992," he says.

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