I would like to address three sets of questions. First, what do we mean by successful, capitalist, free-market systems, toward which many central and East European countries seem to be striving? Second, what can be said about the strategy for introducing such a system? And third, what role is there for the West in effectively promoting the transition?
In spite of many notable systemic differences between successful market economies in North America, Western Europe, and Asia, they share certain basic common features. These are:
Predominantly private ownership of the means of production. State-owned companies generally cannot be efficient if they are not operating in a predominantly private, market economy setting. In centrally planned and transition economies, most means of production are not private. That is why privatization is essential.