Contested Concepts, Contested Experiences
Edited by Wilfred Dolfsma and Charlie Dannreuther
Chapter 4: Transformation, integration and inequality: the case of the Czech Republic
1 Milan Sojka Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes a by-product of the activities of a casino, the job is likely to be ill-done. (Keynes, 1953, p. 159) The original Czech neo-liberal transformation strategy failed to achieve its promised goals. This chapter argues that this was because of the failure of neo-classically inspired reforms to recognize the importance of key social institutions in economic reform. It is divided into three parts. First I look at the central tenets of the Czech neo-liberal transformation strategy. I then point to effects on two selected topics that may serve as good indicators of the problematic outcomes of the Czech neo-liberal transformation strategy. The second part deals with the reintegration of the Czech economy into the World economy during the 1990s. Among the issues of concern are a general macroeconomic performance that is worse than expected, private property rights that are not respected, slowly improving living standards, a tendency to rely on cheap labour as the most important comparative advantage and (thus) a slow modernization process generally. Prospects for the Czech economy for the medium to long term are still bleak. A third section shows the effects of the neo-liberal transformation on earnings and incomes distribution. An analysis of income distribution changes during the 1990s may serve as an indicator of the very incomplete and distorted modernization of the Czech economy and society. Developments in the distribution of incomes...
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