and inequality. Privatization is increasingly unpopular, cynically referred to as privatizatsiya (in Russian), or "grabification," the giving away of government wealth to a few well-connected and unscrupulous businesspersons and bankers. Moreover, critics have pointed out, only a few state monopolies are denationalized and benefit mainly the rich, and many of the companies that CEE governments planned to privatize will not be privatized in the near future. Governments still influence denationalized enterprises, while rapid and premature privatization threatens jobs and sociopolitical stability. Former elites and Communist managers are dominant on boards of enterprises. Most important, national objectives may no longer be achieved by privatized companies taken over by foreign or even domestic investors. In brief, privatization is not a goal in itself but, rather, a means of improving the quality and cost of living.
Several crucial questions remain for each CEE country. What is the most effective state-market relation and public-private mix of responsibility? Is privatization the answer, or are broader institutional redesigns, through which the state-market relationship and development planning can be balanced and enhanced, better solutions? Should CEE countries follow the North American or European style of capitalism or introduce yet another model of public-private responsibility? Should they have first prepared the legislative, social, psychological, legal, ideological, and educational groundwork and educated the public for radical societal changes? Should the welfare state be enhanced (rather than dismantled) to deal with new poverty, unemployment, inequality, social stratification, deprivation, and the concentration of power in the hands of a few elites (mainly former functionaries, managers, and members of the organized mafia) (on this point, see Frydman and Rapaczynski, 1994a; Frydman, Rapaczynski, and Earle, 1993; Hemming and Mansoor, 1988)? Should citizens have adequate opportunities to participate in and experiment with privatization methods, rather than being exposed to models suggested by foreign consultants and international financial organizations? Is the issuing of shares to all citizens and the investment fund approach an effective way to privatize state-owned enterprises?
In a time of global technological change, the two central problems facing the East and West are social and economic insecurity and a sense of moral purpose- distributive justice amid widespread social fragmentation. The challenge is to integrate systems of social and economic exchange that link human-social and economic factors in balanced ways. The balanced relation of public responsibility and market freedom, of social and economic markets, is crucial if transformation is to succeed in the modern global economy. In this context, global privatization marks the beginning of a significant new chapter in the great debate about how much government is good for us.
Bass A. ( 1995, January 25). "Weld to Privatize Acute Care for Uninsured Mentally Ill". Boston Globe, p. 1.
Bendick M., Jr. ( 1989). "Privatizing the Delivery of Social Welfare Services: An Idea toBe Taken Seriously"