PERESTROIKA AND SOCIALIST PRIVATIZATION: WHAT IS TO BE DONE? AND HOW?

This paper examines the question of whether a communist nation, characterized by state ownership of the means of production and a centrally planned command system of allocation can be transformed into an efficient market oriented economy without fully compromising the socialist ideals of an egalitarian society that insures a high degree of economic security for its citizens. In short, is it possible, for the first time in history, to create a capitalistic society on the foundation of an egalitarian distribution of income and wealth? I propose a sequential set of stabilization, privatization and liberalization policies designed to provide the necessary, albeit not sufficient conditions for a transition to a market economy that minimizes the costs of adjustment by providing a social safety net in the form of an initial equalitarian distribution of a considerable portion of the state’s current ownership of the means of production. To be published in Comparative Economic Studies Vol. XXXII, No.3 Fall 1990