Problem

Suppression of private enterprise

Nature:

Generally speaking, almost all ruling communist parties regard private economic activity as undesirable. However, there has recently been a trend to the creation of small or private businesses in some socialist countries. This situation has been transformed in recent years with the dissolution of the former Soviet Union and transition of former Eastern bloc countries.

Incidence:

[Former socialist countries] In Hungary 1979, a Western observer noted that there were nearly 11,000 private traders there, assisted by about 500 family members and some 1500 registered assistants. In the same year, 91,000 private artisans and skilled workers supplied 46% of the services available. Shopkeepers were offered tax concessions to open stores, especially in the provinces, and since January 1982 more than 3000 private shops were opened and also several thousand licences for private taxis issued. In addition, 13,000 so-called small enterprises were created. The government started to set up offices where requests for the private services of full- and part-time artisans and skilled workers are matched with offers to provide such services, and private construction teams were found legally building private residences, especially in the countryside. Official statistics show that the private sector then provided about one-third of agricultural output, and that eight percent of all Hungarian industrial exports were produced through some form of private enterprise.

Problem Type:
D: Detailed problems
Date of last update
03.11.2017 – 17:08 CET