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communism kills

After decades of communism, Central Europe and Eastern Europe are seeing the end of the tunnel

Since the end of communism, countries suffering from the economic destruction of collectivism have risen out of the ashes, and are turning into prosperous and modern countries. Time to celebrate!

Just recently we remembered the 50th anniversary of the crushing of the Prague Spring by Soviet forces. This event shed light on the situation in Central Europe in particular, which is constantly in the news do to an illiberal political disruption. Be it Poland, Hungary or the Czech Republic, those who consume European media are bound to think that 29 years after the end of the Cold War, those countries are back to normal. 

In "25 years after the fall of communism: Eastern European Economies", the Visio Journal, edited by the Slovenian researcher Tanja Porčnik, the authors also reach the conclusion that in the domain of the legal system, Central and Eastern Europe remain weak. Judges and lawyers are taught and rewarded to validate the governing political system, and corruption remains an issue. 

But regardless how much we enjoy pointing out the bad news, there are some phenomenal conclusions to be drawn from the end of communism, and the journey that these countries have gone since. 

First, we need to envision that under forced collectivism, the economy of Europe's East was fundamentally unproductive, causing food shortages, no technological innovation (except for military infrastructure and weaponry), crumbling infrastructure, and a deep-rooted resentment towards any sort of effort that could foster inequality. Since the opening of border and markets, the increase in productivity and prosperity has been breath-taking: in Hungary, GDP per capita is on its way of being twice the amount it was in 1990, while in Bulgaria it actually has, from a little under $4,000, to over $8,000. Only a number of countries have seen slower growth, such as Ukraine - much affected by the still ongoing internal and external conflicts, or Belarus, which quite frankly hasn't changed that much since 1989. 

James Gwartney and Hugo Montesinos' contribution to the latest edition of the Visio Journal also reveals that not only is Europe's East more prosperous, it is also demonstrably happier. The World Values Survey (WVS) asked people: “All things considered, how satisfied are you with your life as a whole these days?” Respondents answered on a ten-point scale, ranging from dissatisfied (1) to satisfied (10).

"Turning to the dummy for former socialist countries, the main effect of this variable is negative (1.358 units) and highly significant. This indicates that during the period of WVS survey wave 3 (1995-1998), holding all else constant, individuals in FS countries were significantly less satisfied with their life than individuals in other countries. However, this effect has been partially mitigated with the passage of time[...]."

The facts are in: freedom to innovate, create, and make yourself into something also makes you happier. What shouldn't come as a shock to most people, needs considerable reiteration.
All it takes is the real-life experiment, by going to Poland, Croatia or Albania. There are two main disparities that become visible fairly quickly: the mindset and education gap between the younger and the older generation, and the rift between old infrastructure, paired with the availability of modern technology. Yes, Krakow's post offices are still run much like in the times of communism, with two old ladies grumpily staring down a long queue of impatient customers. But those customers are now playing Angry Birds on their iPhones, and they are able to drive electric cars and fly to Spain on vacation, made possible by low-cost flights and Airbnb.

On every aspect that individuals were able to move on, they did. In spire of the regressiveness of the state of the rule of law, of persisting mindsets about the role of the State, young people are seeing the opportunities through technology and innovation. 

This is why Central and Eastern Europe remain fascinating places to visit: they are achieving within a handful of decades, what required Western Europe hundreds of years of crafting the concept of property rights and the rule of law. 

It's not perfect, but by God it's a lot better.

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