In This Review
Socialism, Capitalism, Transformation

Socialism, Capitalism, Transformation

By Leszek Balcerowicz

Central European University Press, 1995, 377 pp.

In one of the most dramatic social experiments of modern times, Poland in 1990 initiated the big bang in its economic policies: "rapid liberalization of prices, tough macroeconomic policy, convertibility of the Polish zloty, the liberalization of the foreign trade regime, the fastest possible privatization, and so on." The author of this book, deputy prime minister and finance minister of Poland for 28 months, including all of 1990 and 1991, was the main architect and executor of that policy, and he defends it eloquently.

A collection of writings going back to 1986, this book gives a cohesive treatment to the intellectual foundations of Balcerowicz's approach, along with reflections on the nature and internal coherence of socialism, the transformation of formerly socialist countries, and the author's practical experience in carrying out Poland's radical reforms. In contrast to most Western economic theorizing, which takes institutions for granted, Balcerowicz urges close attention to them in determining how well an economy performs. He reveals an uncompromising commitment to the notion that innovation or enterprise is the main source of economic prosperity, which he believes requires competition and private ownership and suspects is also necessary for a durable democratic society.