Sample Essay On Privatization And Change In Economic Policy In The Post 1989 Era.

Type of paper: Essay

Topic: Socialism, Economics, Capitalism, People, Politics, Government, Socialist, Germany

Pages: 3

Words: 825

Published: 2021/01/27

The post 1989 era saw the emergence of capitalism in Eastern Europe. Most socialist governments in Europe reformed their economic and political policy. The need to develop a global economy in these states saw the countries align to the western concepts of economic policy. There were reactions about the emergency of capitalist economies Eastern Europe. There were several readjustments which had to be adopted by many States such as Poland, Germany and Hungary. In these states the governments had taken up factors of production from private persons. The governments owned property which it redistributed to the people. The rapid change to capitalism was, therefore, expected to elicit the reactions that it raised.
In the socialist governments, the government plans for its people. The factors of production are in the hands of the State. The state makes decisions regarding investments. This means that individual autonomy in making investment decisions is not promoted in socialist regimes. The state exercises power over its subjects. The socialist governments were undemocratic. East Germany which exercised socialism exercised absolute power over its subjects (Moralia, 33). It is the resentment that so people migrate from East Germany to West Germany after the collapse of the Berlin Wall. The death of socialism in East Germany could be associated to the undemocratic ideals. The need to construct a democratic society was one of the reasons why there was opposition to socialism in East Germany (Moralia, 35).
Poland was on the countries that charted a new political ideology after 1989 in order to develop a global economy. The political decision to move from socialism changed the economic discourse of the country (Pozniak 3). The move to capitalism saw the privatization of enterprises owned by the government, allowing of free trade and the elimination of subsidies (Pozniak 4).
The coming in of capitalization resulted into privatization of property. The property and factors of production being in the hands of private individuals meant that the government lost control on factors of production. This was intended to revitalize the economy of most states. The move from a controlled market to a liberal economy was part of the reforms in the post 1989 era. The 1989 economic revolution led to the advent of capitalism. The conflict between socialism and capitalism saw the emergence of capitalism. There were prepositions that socialism which embraced democratic ideals would have been better than capitalism (Trumpets, 43).
However, the socialist governments were criticized by opponents claiming that it promoted totalitarian governance. The governments in essence controlled every aspect of people lives. Socialist governments were built on communism ideologies. They were believed to be autocratic and powerful and thus imposing things on the subjects. West and East Germany practiced socialism. This scenario is presented by case of Friedman family who laments the top down approach to decision making. The government even after giving back land they still had quotas (5). The government determined the quantities that the farmers could plant. Government influence on the people was high. Decisions were made by a few people according to Werner’s case. Five people made decisions for thousands of people in East Germany. The socialism in East Germany destroyed the solidarity and good neighborliness among the people. The cooperatives formed lacked democracy. There was no opportunity to associate voluntarily. The coercive associations led to dictatorship.
The move to capitalism meant that states moved from heavy industrialization and focused on the technological and service industry. The move from socialism had many effects including increasing unemployment (Pozniak 117). The number of unemployed youths increased in the most countries that had embraced capitalism. Under socialism there was nothing like unemployment. These were the realities that people had to live with under socialism.
The proponents of capitalism and, therefore, the privatization of property were of the view that privatization of state owned enterprises had profound benefits and should, therefore, be speeded up in the implementation of the economic policy. They believed that the strategy of wealth accumulation which was the main agenda of privatizing government’s enterprise was the best way of ensuring economic success of the state. The capitalization agenda, therefore, got support from the people who believed that with globalization, it was the best way of promoting economic property.
Those opposed to privatization have claimed that it may not be possible to ensure equality during the rapid privatization of the resources that are in the hands of the government. Those opposed to privatization claimed that it would not lead to increased productivity. The efficiency of managements would not be improved by the rapid privatization agenda. Equality that had been achieved under the socialist regime could not be achieved in the post socialist era. Inequality was a representation of capitalism (Pozniak 119). Most people found capitalism a bad thing. Even in places where socialist governments were considered undemocratic and, therefore, bad missed socialism when capitalism took shape (Friedman 236).
The transformation of the economy was not without criticism. The move to a liberal economy was going to have far reaching implications on the people and the governance style. This is why there were even proposals of drawing beneficial elements of the different economic approaches. Increased globalization in post 1989 led to increased pressure on states to adopt capitalism.

Works cited

Moralia, T The autumn Revolution of 1989, Print
Trumpets J One Night in Jericho: The wall comes down, Print
Pozniak, K. Reinventing a Model Socialist Steel Town in the Neoliberal Economy: The Case of Nowa Huta, Poland
Friedman, J. Shame and the Experience of Ambivalence on the Margins of the Global: Pathologizing the Past and Present in Romania’s Industrial Wastelands

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