Experts recall 'the Czech miracle'

Just a note to wish everybody kind regards and enjoy celebrations. Personal responsibility bekons here.

The Adam Smith Institute of economics had little regard for the social fabric of peoples identity. For the greater good of the many; some will go to the wall. Economics from a plush office does not account for a family unable to pay medical bills as factory gates closed. The civic forum had those who's real experience of community differed from economic growth stocks and shares mentality. The Bush administration gave the top 3% huge tax breaks in the USA; the Bush administrations financial legacy to the people of the U.S.A. is now stark reality. The dangers of economic expansion of economy by giving more wealth to the wealthy has a casualty list of millions. Home reposession; small buisness collapse; banking bail out's; however, few of the 3% are on food stamps. Inward investment with help from the E.U. is a hope for many whom the economics of 'those people' left behind. Membership of the E.U. will benefit those who are a miricle of self dignity and struggle; those who's voice was never represented by the privilaged few.

"The reason why wages are so much lower in the CR compared with Western Europe is that productivity is also very low. This is why so few investors have stayed here."

We don't ,perhaps,differentiate that radically about this.I believe I sort of hinted on that too in my previous comment.
People will have to adjust and fairly rapidly.In this new post communist age it is up to them -not government-to make a better life for themselves.Bad habits die slowly.
The work is not artificially guaranteed anymore.

Jiri: it makes no difference whether somebody sets up a new factory or buys an old one. If they buy an existing factory the wages may not increase at that factory; however, by increasing the demand for labour wages will go up elsewhere.

The reason why wages are so much lower in the CR compared with Western Europe is that productivity is also very low. This is why so few investors have stayed here.

"Eh...Jiri. If investors come into a country offering jobs which don't exist before they will push *up* the wages. Think about it."

Most "new" investors buy old,established business and continue to pay old wages.
Those who open new business set the wages in such a way that it will not promote significantly higher levels of remuneration than similar business.
That is how capitalism work and I do not have problem with that.
I do have problem however if they whine about taxes and regulations and mask it as a political comment.

>>Very large reason for it is an influx of "investors" from the west who come to Czech Republic with an idea to make a quick buck in low wages areas and continued to pay these low wages when in such position to increase their profits.

Eh...Jiri. If investors come into a country offering jobs which don't exist before they will push *up* the wages. Think about it.

" Of course, the having to let go of bad habits, of having to put in a hard day's work was never factored into the scheme of things for this prosperous future. Such is the corrosive legacy of the socialists. "

Yes Karel,

There were many people that thought the money grows on the trees in the west.(and many still are)
In Czech Reoublic -since the end of WWII-we had forty years of nanny,totalitarian government that discouraged any real advances in its fear of loosing control(you can see a paralel in China with its treatment of Falung Gong movement)over the masses.
As a result of that people with no hope of advance beyond the limits imposed by government survived by any means-legal or illegal.
This attitude did not disappeared even after twenty years.Anybody who predicted that it would be the same like in the countries that only had interruption by the war but not beynd(the west)was illusional.

People both in the west and eastern parts of Europe still must work to make living(at least majority of them).And that is how it should be.
Another person on this blog said that people only make about one third of wages that is being earned in the west yet the prices in the stores are the same.
That is of course part of the problem with disillusion of many in Czech Republic-especially in outlaying areas away from the big cities where most of industries are now located.
Very large reason for it is an influx of "investors" from the west who come to Czech Republic with an idea to make a quick buck in low wages areas and continued to pay these low wages when in such position to increase their profits.Therefore their outrage about the taxes and regulations.

However,I remain optimistic.There is nothing inherent in Czech people that would -in due time-prevent them to reach the level of economic prosperity that is largely common in the west.

Because,in the final analysis it is not a fear of present political system that is making some unhappy.It is an economic hardship that is causing this.In time this hardship will mostly disappear together with the true symphatisers of communism.

The people I knew expected the standard of living to reach that of Austria within five years. The question now is whether this will ever happen.

" .... most of the dreams of 1989 have come to nothing."

What were those dreams? What were they really? I think, with some exceptions, what was really dreamed of generally was 1968's Communism with a Human Face allowed to flourish; another Prague Spring sans the Russian tanks. And wages and salaries would, over time, become the same as Austria's and Germany's - in 1968 Ota Sik predicted it would only take 15 years to catch up with Austria. Of course, the having to let go of bad habits, of having to put in a hard day's work was never factored into the scheme of things for this prosperous future. Such is the corrosive legacy of the socialists. Someone over here even said the 'revolution' ought not to have been a velvet one and that heads ought to have rolled, literally; the top echelon of communists ought to have been liquidated, just as the SS were hung from lamp posts in Prague in 1945.

Quite why you are so optimistic isn't clear. The reality is that, twenty years on, most of the dreams of 1989 have come to nothing. Average salaries here are still a third of what they are in Austria or Germany, yet prices are the same. Many of the best state assets were stolen in the early nineties because of the criminality and corruption of the ruling class. And today, a full 20% of people (and a far higher proportion in other ex-socialist countries) say that they prefered the old regime. Taxes are so high and bureaucracy is so stifling that the country is unlikely to experience any significant growth in the future. And people's attitudes - most obviously customer service - have barely advanced at all. And yes, and the stock exchange is a joke even compared with the stock exchanges in third world countries. What you didn't mention here is that, not only does it have a pitiful 16 listings but much of the trading takes place on the basis of insider dealing, which is never prosecuted.

It would be easy to find dozens of countries around the world which have achieved more than the Czech Republic has over this period. The only "miracle" is how they managed to achieve so little.