European countries in the Eastern Bloc were faced with a dilemma after the fall of Soviet Russia. They were tasked with transitioning from a centrally planned economy to a market-based one. That proved more difficult for some than for others. How quickly those countries should make the transition was also a hot topic of debate. Gently nudge the economy along, or rip off the bandage and change everything all at once?
Nobel laureate Gary Becker lays out his main reason to fast-track the process, “In any country when you experience rapid change, the window of opportunity to make major changes before the political forces arise, (is small). It’s clear that in Eastern Europe the Communist and people who had depended on the Communist system were thrown on the defensive as a result of the, basically, revolutions that went on in these nations. … We see that in some of these countries that are going slowly, in Romania, in Bulgaria, and some, in Poland which went rapidly in some respects, and in Russia and some of the other Russian Republics where they’ve been frozen – it’s been very difficult to do anything. So move quickly and have a chance to make changes that are irreversible before the political forces can organize.”
Or, are some aspects of a market economy at least better than none at all? Join Becker as well as British Nobel economist Ronald Coase as they discuss their differing opinions on the matter in the latest episode of the Free To Choose Media Podcast, European Markets.