Calling former Eastern Bloc people - private business under communism?

[Martinus]

I just had a thought - what if the relative success of Polish economy during the last 20 years compared to many other Eastern Bloc countries has less to do with reforms enacted in Poland and more with the fact that private SMEs (in production, services and agriculture) were allowed under the "communist" regime in Poland, so Poles entered capitalism while being already quite well versed in it, albeit at a smaller scale, so the mindset switch was not that massive?

What was the situation in Hungary, East Germany etc.?

[The Brain]

Beets me.

[DGuller]

I imagine Ukraine wasn't far along in that respect.  I remember in the early 90ies, there was some guy in my class who moved from Czechoslovakia.  One day somebody found out that his grandmother was a "speculator".  She was buying a product for one price, and selling the very same product for a higher price on the market, intending to pocket the difference.  The teacher had to defend the guy, and say that in these tough times, people have to make money even in unsavory ways just to get by. 

[Admiral Yi]

Beets me.

[Tamas]

We also had small business allowed. Much good it did, altough we are better off than say, Bulgaria. Plus, considering how Slovenia is nearing collapse, I expect Poland admitting they are fat on loaned money any minute now.

And, let's face it: Poland is a huge-ass country. You can only fail with a country like that, success should come naturally

[Zanza]

I just had a thought - what if the relative success of Polish economy during the last 20 years compared to many other Eastern Bloc countries has less to do with reforms enacted in Poland and more with the fact that private SMEs (in production, services and agriculture) were allowed under the "communist" regime in Poland, so Poles entered capitalism while being already quite well versed in it, albeit at a smaller scale, so the mindset switch was not that massive?

Did Poland really do better than the other Eastern bloc countries? Based on OECD data, GDP grew about 3.8% in the period from 1990-2010. Slovakia and Estonia grew more (4.4-4.5%), Russia similar (3.8%) and Hungary, Czechia and Slovenia grew less (1.7-2.3%). All of these countries, except Russia, are richer than Poland on a PPP per capita basis.
Comparing the current with the earliest available GDP PPP per capita (in current prices/ex rates) it looks like Poland did about as good as the rest of the bunch.
Poland grew its per capita GDP PPP by a factor of 7 since 1990, Czechia by 6, Slovakia by 6 since 1993, Estonia by 12 since 1993, Russia by 7 since 1993, Hungary is the laggard here growing by a factor of just 4 since 1991.

What statistical measure do you base "relative success" on?

What was the situation in Hungary, East Germany etc.?

East Germany did have very few remaining private small enterprises, mostly craftsmen and restaurants apparently. But you can't compare its economical development with that of the rest of the Eastern bloc after 1990.

[citizen k]

But you can't compare its economical development with that of the rest of the Eastern bloc after 1990.

Be that as it may. Did it do better or worse?

[Zanza]

But you can't compare its economical development with that of the rest of the Eastern bloc after 1990.

Be that as it may. Did it do better or worse?

Okay, I am not sure if I compare apples and oranges here now. Based on the OECD, from 1990 to 2010 the per capita GDP in current prices and constant PPPs in USD:

Czechia   $11870 -> $25299 = 2.1 times
Estonia $5763 (in 1994) -> $20608 = 3.6 times
Hungary $8197 (in 1991) -> $20325 = 2.5 times
Poland $5988 -> $19747 = 3.3 times
Slovakia $6884 (in 1992) -> $23448 = 3.4 times
Slovenia $13027 (in 1995) -> $27545 = 2.1 times
Russia $5595 (in 1995) -> $19023 (in 2009) = 3.4 times

The figures for East Germany are in current prices in EUR:

East Germany €7330 -> €22384 = 3.0 times

If you look at the numbers of the German statistics office and that of the OECD in 1990 and 2010, there is a factor of 1.05 and 0.81 between the euro and dollar respectively. If you multiply the figures for East Germany with that to account for PPP, it would be:

$7022 -> $27510 = 3.9 times ... however, that would mean that East Germany was much poorer in 1990 than Czechia or even Hungary. Not sure if that makes sense.

So to conclude, I have no idea if I am comparing the correct set of numbers as I am not knowledgeable enough in the methodology they use.



However, my "you can't compare" is based on something else: The shock for the East German economy was different from other East European countries, but also very severe. They were immediately members of the EU single market and had to compete with the sophisticated West German economy on equal terms. That destroyed much of what was left of the East German economy after forty years of communism.

[Martinus]

You are of course missing the whole lot of former Eastern Bloc countries that did much worse.

You should take Russia and East Germany out of the picture - Russia is in a unique situation (and I don't think anyone sane would prefer to live there than in Poland) and the question is how much of this per capita growth is due to Russia losing many "capitas". East Germany otoh is not comparable, since it was pretty much bootstrapped to West Germany.

[Martinus]

So if you take this into account, only Estonia and Slovakia (marginally) did better than Poland, and both have populations that could fit into one or two Poland's bigger cities. So overall Poland did pretty well.

Not to mention unlike many other countries of the bloc, we did not have recession in 2009-2010, and we are not on a brink of bankruptcy like others.

[Martinus]

But you can't compare its economical development with that of the rest of the Eastern bloc after 1990.

Be that as it may. Did it do better or worse?

I heard from an Eastern Germany colleague that it is full of neonazis and unemployed males (since females got educated and moved to the Western part). So I don't think it did too well.

[Zanza]

You are of course missing the whole lot of former Eastern Bloc countries that did much worse.

I took all that were in the OECD statistics database. If you want to make an argument, I suggest you find better numbers to support your claim.

Russia is in a unique situation (and I don't think anyone sane would prefer to live there than in Poland) and the question is how much of this per capita growth is due to Russia losing many "capitas".

I think most (if not all) East European countries had declining populations in the last two decades, including Poland which is in constant decline since the mid 90s.

So if you take this into account, only Estonia and Slovakia (marginally) did better than Poland, and both have populations that could fit into one or two Poland's bigger cities.

Size doesn't matter as Luxembourg or Switzerland demonstrate. The only thing that matters is how well each individual does. And small countries don't have it easier to grow prosperous either as say Moldova amply demonstrates.

So overall Poland did pretty well.

I found another set of data from Eurostat. It shows GDP PPP per capita with 100 being the EU-27 average. From top to bottom in 2010: Slovenia, Czechia, Slovakia, Estonia, Hungary, Poland, Croatia, Lithuania, Latvia, Romania, Bulgaria. So the only country that was richer than Poland in 1995 and isn't anymore is Croatia, which is not in the EU, on the other hand Poland was eclipsed by Estonia. Lithuania and Latvia had passed Poland but had a massive recession. Once they fixed that, they could pass Poland again. Hungary is disappointing really as it has grown the least of the middle group.

Not to mention unlike many other countries of the bloc, we did not have recession in 2009-2010

Yes, and? Two years don't say much about long-term performance, which is what your opening question implied.

and we are not on a brink of bankruptcy like others.

True, on the other hand you are also not having as sound finances as some of the others.

I heard from an Eastern Germany colleague that it is full of neonazis and unemployed males (since females got educated and moved to the Western part). So I don't think it did too well.

Yes, there are some neonazis in East Germany, but then they didn't elect PiS or LPR into government and made Jesus King. The neonazis usually get less than 5% of the votes in elections. Unemployment was and still is high and it is more females than males leaving. But you compared it to Poland which wasn't exactly the gold standard for unemployment in the last two decades only improving in the last three or four years. But I am sure there are some depressed areas in Poland which still have similar unemployment numbers as East Germany, no?
Anyway according to the latest NUTS regional data (from 2008), even the poorest rural area of East Germany is as rich as Warsaw and twice as rich as the "Wschodni" region of Eurostats statistics. So they didn't do too badly.