Superficially, the debate revolved around the scientific rigor and
usefulness - or lack thereof - of the "Washington Consensus". Opposing
monetary and fiscal policies, free trade versus protectionism, capital
controls and convertibility - these occupied the minds and writings of
all manner of economic and development "experts" in the first decade
after the fall of the Berlin Wall.
Yet, deep underneath, transition - perhaps because it was so thoroughly
botched - taught us unforgettable lessons about markets and the way
they work, namely that "objective", "mechanical" capitalism is a mirage.
Perhaps the most important moral is that, like all other economic
processes - transition is, mostly, in the mind. Successful capitalism
requires education and experience. The blind in east Europe were led by
the one-eyed. Capitalism was presented - especially by Western
protagonists of "shock therapy" - as a deus ex machina, a panacea,
guaranteed to transport the region's derelict economies and destitute
people to the kitschy glamour of the tacky soap operas that flooded
their television screens.
Bedazzled by the alleged omnipotence and omniscience of the "invisible
hand", no one predicted the utter meltdown that ensued: the mass
unemployment, the ubiquitous poverty, the glaring abyss between new
rich and always poor, or the skyrocketing prices even as income
plummeted.
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