DEVELOPMENT DIPTYCH IN THE POST-SOCIALIST GROWTH EXPERIENCE−WITH REFERENCE TO SERBIA-
DEVELOPMENT DIPTYCH IN THE POST-SOCIALIST GROWTH EXPERIENCE−WITH REFERENCE TO SERBIA-

Summary/Abstract: An unusual, seemingly incompatible combination of facts has occurred in a not so small number of post-socialist economies. All of them switched from collectivistically structured, administratively ruled economies to the market based, appropriately decentralized institutional systems. The firmly held theory and a mountain of empirical evidence implied that this historical institutional shift would greatly enhance efficiency of the economies and their badly needed growth potential. The actual movements did not follow the theoretically indicated directions and the performance of the newly reformed economies left much to be desired. Some episodes of the renowned extensive socialist growth delivered the rate of growth of the economy which turned out incomparably higher in comparison with current post-socialist times. Similarly and in line with that, the output of basic necessities expanded much more rapidly, hosing construction offered incomparably larger number of apartments and social policy system seems to have taken a more conscientious and more efficient care of the needed. Finding a job for people of quite different educational profiles was much easier and more reliable. On account of what is just enumerated, and equally discernible, on account of many unspecified results and thereby implied standards, the public developed the beliefs that the old collectivist system had been superior and that reforming economies towards decentralized structures and market coordination might have been a big strategic mistake. Public opinion surveys revealed high evaluation of the old socialist order and intensive yearning for bygone ways and means of going about material wherewithals and necessities of daily life.The paper comes to grips with the convictions relating to the alleged superiority of the socialist institutional order. The main point in proving that the old systems had in fact been inferior consists in underlining their unsustainability.The high rates of growth achieved in some past periods are not the true indicators of the old systems’ efficiency because they could not be maintained permanently. The very fact of the massive breakdowns of socialist arrangements is the best proof of their inferiority. A high rate which could only be maintained in the course of a limited period is neither superior nor preferable to the lower rate which is sustainable for an indefinite future. It is shown that formerly prevailing extensive growth unfolds through mechanisms which inevitably lead to irreparable deceleration and would ultimately end with secular stagnation. As stagnation is not acceptable as a systemic option, the arrangements ruling in socialist societies had to be replaced by the lump. The important fact is that dramatic slackening of the development trends began while socialist systems were in full operation and that low rates of growth cannot therefore be ascribed to the institutions which were introduced visibly later. Historic institutional turnaround pulling the economies out of centralist shackles came as a consequence of the already languished and developmentally blocked conspicuously paralyzed socialist systems; institutional innovations are not the cause but the result of the previously disabled and hopelessly stopped socialist development. Moreover, there are growth hampering and efficiency reducing legacies deriving directly from previous systems and policies, so that much of what is presently perceived as unsatisfactory – indeed paradoxically – is not the effect of the presently functioning system but arrives as a set of consequences of a nonexistent system, of the past socialist order which generates costs and losses even following its historic, definitive demise.The inefficiency of the socialist systems is analyzed on an additional plane. Having been based on coercion and terror, such systems have, generally speaking, imposed enormous costs in terms of human sufferings, annulment of human freedoms, impairing dignity and trampling on citizens’ rights which constitute an indispensable pillar of civilization. The prototype of the collectivist system is estimated to have, in one way or the other, annihilated between 12 and 15 million people, most of them representing nonsensically destroyed innocent lives. The system imposed and operating with so high and such costs cannot be sustainable and has to meet its historical debacle. With unbelievable waste in all principal walks of life it cannot survive. And – if it could, that would be a pity, a veritable evil course in the unfolding of civilization.

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