Culture, Market Ideology and Economic Reform in Czechoslovakia
As elsewhere in Eastern Europe, the economic reform whose aim is the creation of market economy in Czechoslovakia is the result of the overthrow of the communist regime. Alongside the creation of a democratic political structure and a new system of central and local government, administration of justice, the reform of the system of education, health care, and so on, economic reform is part of the revolutionary process of the creation of a new post-communist social order. In many respects, it is the most important part of this process for the introduction of a free market will inevitably affect changes in all spheres of social and political life.
The need to introduce a market economy in Czechoslovakia is justified both in pragmatic and ideological terms. The view that the Czechoslovak economy has to be restructured to avoid its eventual total collapse predates the political change in Czechoslovakia. Considered in terms of the economists' standard criteria of economic performance, the Czechoslovak economy has been in poor shape for a considerable time and has increasingly acquired the character of an economy of a Third World country: productivity and the quality of manufactured goods are low, the rate of growth has been declining steadily, the internal and external debt of the country and inflation (so far mostly hidden through widespread subsidies) are rising, and international trade is heavily biased towards the export of raw materials and import of technology. All this was recognised a long time before the political change at the end of 1989, and an important part of the post-1968 old regime's political programme was the 'restructuring of the economic mechanism' -- a phrase which replaced the previous slogan 'economic reform' which was ideologically tinted through its association with the reform 'attempts of Dubcek's regime of 1968. 'Restructuring of the economic mechanism' involved some kind of strengthening of market relations but did not aim at abolishing central planning and the public ownership of property. Its main aspects were better planning, tighter central control and more effective sanctions (mainly in the form of the distribution of state subsidies) and increase of productivity through the insistence on a better work discipline.
All this came to a halt in 1990 when the government programme of economic reform took the form of the complete abandoning of any central planning and its replacement by a liberal market economy in which the state would interfere only