Academic journal article East European Quarterly

No Future for Small Trade? Elimination of Czechoslovak Traders by the Totalitarian System 1948-1960

Academic journal article East European Quarterly

No Future for Small Trade? Elimination of Czechoslovak Traders by the Totalitarian System 1948-1960

Article excerpt

This paper brings forward an outline of history of the so-called old urban middle class in the post-WWII Czechoslovakia, i.e., during the first period of the formation of 'People's Democracy' up to 1960--most difficult times for the social stratum (1) that was systematically harassed by the Communist Party of Czechoslovakia (KSC), the apparatus of the state, and authorities in general, which eventually resulted in virtual elimination of traders as an autonomous class of private entrepreneurs. The hostile approach of the new regime towards traders was based on an assumption that small-scale industries--being a 'hotbed of private-sector trends'--would become superfluous under the planned economy of the socialist era and could be fully replaced by modern large-scale production or, as the case may be, by new collectivist manufacturing plants (cooperatives, municipal enterprises). Only entrepreneurs who could retain some freedom of free enterprise--however limited and only temporary--were those in the sector of services (tertiary sector), which the nationalized economy was not able to saturate. This approach was purely ideological and resulted in a complete failure of the socialist economy; the service industries were first to collapse.

Browsing through historical studies, we can se that the post-war developments and the period of 'laying the foundations of socialism' in Czechoslovakia have been, in general, thoroughly examined. However, most works on Czechoslovak traders fail to go beyond the early 1950s; actually, they assess outcomes of the 1st Five-Year Plan (1948-1953) and there the story ends. Therefore we felt it necessary to focus our attention on the period after 1952 and to write the history at least up to 1960, i.e., to the year that closed the decade of painful decline of the traders' class. From then on, only very small groups of traders were ticking over in trades of peripheral importance, while the remainder had been integrated into the 'socialist enterprises' of various kinds. The goal of this paper is to divide the developments of Czechoslovak traders between 1945 and 1960 into periods, thus establishing a useful guideline for future studies. Grounded on older works by Karel Kaplan and Zdenek Deyl, it above all draws on records of national and provincial provenance kept with the National Archives (Prague) and Provincial Archives (Brno, Opava, subsidiary archives of Olomouc). Comparing the manifold sources, we wish to ascertain whether, how, and to which extent the decisions made by the central government were reflected in measures introduced by regional and local authorities and in practical steps that were taken.

Clearly, 1960 was a watershed year; communist leaders, gathered round the first secretary of the Communist Party and President of Czechoslovakia, Antonin Novotny, (1904-1975), boastfully declared that foundations of socialism had been laid, which was to be confirmed by a new 'socialist' constitution (1960). From this point of view, it was a year landmarking the process of eradication of traders as an autonomous entity. The other landmark, 1945, however seems less obvious, being rather a minor event--a single link in the chain of measures that had started to reduce opportunities of small entrepreneurs as early as in the years of the Great Depression between the two world wars. The former Austrian-Hungarian Empire had had a fairly permissive trade law since 1859. Adopted by the Czechoslovak Republic in 1918, the law guaranteed almost unlimited freedom of enterprise, which caused--according to judgments of the times--'hypertrophy of all branches of trades and business' thus resulting in existence of too many companies with too many employees, often (allegedly) redundant and unproductive. For this reason, Czechoslovak authorities started to replace the laissez-faire legislation by more restrictive government regulations justified by momentary economic circumstances. This trend was palpable during the Great Depression (especially in 1932) and also later, from 1934 to 1939. …

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