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Whoa. I never knew this "couponing" was how the post-Soviet economies went about privatization. It seems like perhaps the exact worst way to go about de-central

Whoa. I never knew this "couponing" was how the post-Soviet economies went about privatization. It seems like perhaps the exact worst way to go about de-centralizing an economy, especially when little-to-no financial and corporate management expertise existed in the population steeped in generations of collectivism. I don't think this is an anti-capitalism lesson -- it's a lesson on the dangers of the widespread implementation of good-sounding academic ideas with little basis in reality. A good-sounding idea of my own: I wonder what would have been the result if all privatized operations had been sold to the highest foreign bidders, with the cash disbursed to the citizens who had been the putative "owners" of these enterprises. Instead of the post-Soviet kleptocracies, perhaps a real industrial base would have developed, with intimate global ties.

guard-of-terra 15y ago
What if the highest foreign bid would be below reasonable price? (Not uncommon if we're talking hundreds of risky operations arriving on finance market at once) What if the foreign owner then proceeds with dismantling and closing the purchased operation to decrease competition? Siemens did just that as far as I know. They bought a new phone plant in Riga (Latvia) and they shut it down. Have their own phone manufacturing business, why risk it?
pgeorgi 15y ago
Your good-sounding idea failed gloriously in a large scale in East Germany (just that the money was used to pay back part of the debt). The problem is that most sales processes can be rigged (ours definitely was), if only by making up such a complex procedure that only those in the know are able to fill out the forms in the short time allocated by the same people. I guess that every "simple" idea on how to approach decollectivization was tried in one of the former socialist or communist countries (there were a whole bunch to try theories on, after all). That the author probably chose the one they could most easily pick apart.

guard-of-terra 15y ago

What if the highest foreign bid would be below reasonable price? (Not uncommon if we're talking hundreds of risky operations arriving on finance market at once) What if the foreign owner then proceeds with dismantling and closing the purchased operation to decrease competition? Siemens did just that as far as I know. They bought a new phone plant in Riga (Latvia) and they shut it down. Have their own phone manufacturing business, why risk it?

pgeorgi 15y ago

Your good-sounding idea failed gloriously in a large scale in East Germany (just that the money was used to pay back part of the debt). The problem is that most sales processes can be rigged (ours definitely was), if only by making up such a complex procedure that only those in the know are able to fill out the forms in the short time allocated by the same people. I guess that every "simple" idea on how to approach decollectivization was tried in one of the former socialist or communist countries (there were a whole bunch to try theories on, after all). That the author probably chose the one they could most easily pick apart.