Reflections on Week 2

This week’s readings provided an overview of how the structure of

political power was closely intertwined with the economy in Eastern
European countries.

These countries shared the common feature of having one party

rule where economies were very much directed by the state. Such a
form of political power resulted in two pressing issues following the
breakup of USSR- the extent of privilege and the nature of civil
society under state socialism. Fragmentary evidence from Poland
and the CEECs suggests that personal corruption of the political elite
existed and civil society was generally weak and unable to survive
during times of crisis. Ultimately, it was the weakness of the party’s
support base, their inability to fulfill promises on economic
performance, and pressure for reform from members within the
party itself that led to impetus for change in these countries. Even
then, transformation varied amongst the countries. Some countries
adopted democracy, whilst others adopted closer to
authoritarianism. The author observed that the path adopted by
these countries was very much influenced by their proximity to
Western Europe, and to their pre-Communism political traditions.
The political transformation also had important bearing on the
subsequent economic strategy adopted by the countries.

The success and failures of central planning were also highlighted.

State socialism did initially achieve economic growth and provided
social protection for the population. However, signs of stagnation
occurred in the 1970s. Economic failure, ultimately led to the
demise of state socialism in Eastern Europe. The experience of
stagnation after growth in these socialist regimes is not unfamiliar
to me. From prior reading, I know that a similar situation occurred in
China during the 1990s too. China’s decision to adopt a privatization
strategy towards its state run factories resulted in chaos amongst
the population during the early years of privatization. However, it
was this painful decision that prevented further economic
stagnation and effectively kept the China Communist Party in
power.

I liked the fact the text provided a balance argument about socialist
economy. It highlighted pros of how state socialism achieved some
form of egalitarianism and economic growth during the early years,
but also pointed out the fundamental weaknesses of central
planning-the absence of a price mechanism and free enterprise
prevented efficient supply of goods to meet consumer demands.

The text, as well as in class presentation also highlighted peculiar

roles that emerged due to the shortage of goods/material in such
centrally planned economies. It was interesting to note that
shortages resulted in greater importance embedded personal-flavor
networks, which allowed one to gain access to products. Examples
include the role of the Tolkach from Russia (a dedicated supply
specialist for enterprises) and the autonomy and solidarity
experience by workers on the shop floor in these centrally planned
economies.