Published December 1, 1994
The non-celebration of the West’s victory in the Cold War, coupled with the ideological shock that many Western academics and journalists felt when a system they considered merely an alternative form of modern society showed itself inherently incapable of developmental reform, has led to a lot of curious, even bizarre, writing over the past half decade. Even as the opening of the archives of the USSR, the Soviet communist party, and the KGB has made unmistakably plain the aggressive intent of Stalin and his heirs, tenured American refugees from the radicalisms of the sixties continue to argue that the Cold War was all Harry Truman’s fault.
Even as Mikhail Gorbachev conceded the singular role of Pope John Paul II in shaping the revolution of conscience that made the non-violent revolution of 1989 possible in east central Europe, many leading lights in the Western professoriate kept insisting that the collapse of the communist project was essentially a matter of economic failure. As for the anti-communist “zealotry” of the benighted Reagan Administration, well, all that foolish rhetoric and wild military spending didn’t really do anything except unbalance the budget: or thus many in the ivory tower seem to think. (As Orwell once said, some things are so preposterous that only an intellectual could believe them.)
Finally, even as the states of east central Europe made remarkably swift and seemingly secure transitions to democracy (no democracy, including our own, is ever finally secure, democracy being an ongoing experiment in a people’s capacity for self-governance), Western reporters disgorged reams of commentary about how bad things really were in Poland, the former East Germany, the Czech Republic, Slovakia, and Hungary.
All of which rather missed the truth, and the genuine drama, of things.
Some sober-minded historians have written that the collapse of Stalin’s external and internal empires was comparable in magnitude to the collapse of the Roman Empire. And if that is the case, a certain modesty in deciding, now. What It All Meant is becoming. We don’t know what the outcome of the Revolution of 1989 will be, nor can we. But we can know, with reasonable surety, what the struggle that culminated in the revolution represented, in worldly terms. And, knowing that, we can know with some clarity what the transition from communism to democracy and the free economy involves.
The editors of the Wall Street Journal put the matter well when, on the fifth anniversary of the fall of the Berlin Wall, they wrote:
The continuing transition … from communism isn’t from one “system” to another but from systems to nonsystems, to a natural state from an unnatural state. A few superegotists attempting to direct the infinitely complex economic interactions of several hundred million people was an artificial construct that invited cruelty and corruption. It was in reality a political model, designed to provide a small elite with absolute power.
Given that, and given a basic confidence in the elementary good sense of ordinary people, what was needed economically in post-communist societies didn’t seem all that hard to figure out. The Journal editors, again:
The only economic model that was needed was one that confirms the sanctity of contracts, protects private ownership of property and recognizes the rights of citizens, either individually or corporately, to be free of excessive and unreasonable state regulation and taxation. With that model in place, national economies grow in an organic way as individuals apply their labor and creativity to improving their own lot in life and securing a better future for their children.
The results over the past five years suggest the truth of this analysis. The biggest economic success story of post-communist central Europe has been the Czech Republic, where prime minister Václav Klaus has pursued a simple and yet seemingly effective consolidation strategy: empower the Czech people by putting the ownership of businesses in their hands. Some 80 per cent of the Czech economy will have been privatized by early 1995. And the result has been steady growth, the lowest inflation rate in the region, and low unemployment.
Poland has also done well because its first post-communist governments took some hard and courageous economic decisions. Not the least of these was for currency convertability, a decision whose immediate result was rapid devaluation. But making the zloty a real unit of exchange instead of a sad joke has produced, as hoped and expected, a rush of foreign investment. Poland now enjoys the fastest rate of economic growth among major European nations. On the other hand, privatization has been less aggressive than in the Czech Republic, with resulting rates of inflation and unemployment that are too high.
Hungary, with its so-called goulash communism, thought it had things figured out even before the fall of the Wall. It didn’t, and its economic performance has been laggardly, as post-communist political leaders have too often failed to break decisively with the statist past.
East Germany is another problem, and a case study in good intentions gone awry. As the Journal put it, “Chancellor Helmut Kohl’s decision to coddle and cosset the East Germans to speed reintegration instead slowed the process. Had the easterners been issued a greater challenge to compete, they would have recovered more rapidly and suffered less damage to their self-esteem. They [recently] rewarded the chancellor for his generosity … by almost bringing down his government.” The old German Democratic Republic is, today, one gigantic construction site, and, German industriousness being what it is, one risks little by suggesting that the old DDR will make it, economically. But whether its people have made the psychological transition to the culture of freedom is less clear.
Thus the economic picture, five years after the revolution, is both encouraging and strikingly diverse. But the basic pattern seems set for the foreseeable future: further privatization, more entrepreneurship, more private and foreign investment, continuing growth, inflation and unemployment within tolerable ranges. This revolution-after-the-revolution has had its undeniable shadow side, the worst of which has been the ability of former communists to “morph” into heavy-duty businessmen, in part by grabbing assets that had belonged, theoretically, to “the people.” The nomenklatura networks that once ran central and eastern European countries for the benefit of the Communist Party and the Moscow hegemon have, in too many cases, now gotten themselves positioned to run highly profitable businesses. Thus the nomenklatura elite has, on the whole, done very nicely for itself in post-communist central and eastern Europe; half of the higher apparatchiks had become top executives of private business in Poland by the end of 1993.
Moreover, while the “Wild East” atmosphere in the old Warsaw Pact has its exhilarating dimensions, it has also led to dramatic increases in criminality.
All of which suggests that one key to the continued success of the new east central European democracies is the firm establishment of the rule of law.
George Weigel is Distinguished Senior Fellow of the Ethics and Public Policy Center in Washington, D.C. and holds EPPC’s William E. Simon Chair in Catholic Studies.
