What A Difference A Leader Can Make The Fall of Communism and the Rise of Capitalism

Commentary by Pete du Pont
Slobodan Milosevic of Yugoslavia, Vaclav Klaus of the Czech Republic and Leonid Kuchma of the Ukraine. What a difference a nation's leader can make. All three countries struggled for years under communist rule, but only two have made the transition toward free elections, free press and free markets. What's the difference? Their leaders.

Milosevic is a communist; always has been. After Tito's death in 1980, Milosevic rose in the communist ranks, becoming head of the Serbian Communist Party in 1987, which enabled him to become president of Serbia 1989. However, while some communist leaders began to change with the fall of the Berlin Wall and the dissolution of the Soviet Union, Milosevic never did. He is an unrepentant communist living - and ruling - in a post-communist world. Many of the freedoms that most formerly communist countries and their citizens now take for granted are still denied the Serbs. Dictatorial rule, made possible in part by the control of news and information through state-run media (one TV station is owned by his daughter, another by a close friend of his wife's), are characteristic of communism past.

Now consider Vaclav Klaus, who recently visited the U.S. Klaus, a strong believer in free markets and a great fan of U.S. economist Milton Friedman, was finance minister of the newly named Czech and Slovak Federal Republic after communist rule collapsed in the "Velvet Revolution" of 1989. As prime minister, he presided over the "Velvet Divorce" of the Czech Republic and Slovakia, which became separate nations in 1993. Then, somewhat like Winston Churchill after World War II, Klaus was turned out as prime minister, although he continues to be chairman of the Czech Parliament.

When the communists were deposed after 41 years, Klaus notes, not only were major industries owned by the state, but "there was not a single private hairdresser in the entire country, not a single privately owned grocery." Compared to the task of making such a monumental overhaul of a nation's economy, the proposed revamping of the Social Security system in the United States "is really a marginal change," he says.

And the Czech economy initially had difficulty making the drastic adjustment. Gross domestic product fell by one-quarter, and there was controversy over the transition. But today the Czech Republic is the most prosperous of the Eastern European nations.

Systemic change, says Klaus, "is not an exercise in applied economics. It is not done in a laboratory or in a vacuum, it is done inside a very complicated political process in an open, democratic and pluralistic society. There is no masterminding of it." He is especially disdainful of the views of "bureaucrats of international financial organizations."

Not all of the formerly communist countries are doing as well as the Czech Republic, however, but they are making progress. Take Ukraine, for example. Once the breadbasket of the Soviet Union, with its fertile black soil producing a quarter of the Soviet Union's food, the country has been trying for eight years to break the shackles of the past.

While most of central Europe came under communist control after the war, Ukraine was under communist domination for 80 years. Countries like the Czech Republic still housed individuals who remembered and loved the freedom they enjoyed before communist control, and they were ready to help their countries return. But Ukraine had lost any institutional memory of a free country; it had to start from scratch.

But it's trying. Ukraine's president, Leonid Kuchma, appears dedicated to free and open elections. That means that some old-line communists, who would like to undermine the very economic and political reforms that permit them to speak freely, have been elected to office. That's the price of freedom. It also means that Ukraine's attempt to adopt other Western-style reforms will take a little longer than many would like. Under communist rule, leaders would just eliminate opposition. Those dedicated to freedom don't have that option.

Ukraine has also successfully dismantled and destroyed its entire nuclear arsenal, and implemented policies to ensure that terrorists and rogue nations don't get access to nuclear material or technology.

Whatever the resolution of the situation in Kosovo, Milosevic is an anachronism. Klaus and Kuchma represent the wave of the future in Eastern Europe. "You will find more Marxists at any one American college," Klaus maintains, "than anywhere in Eastern Europe."

The National Center for Policy Analysis is a public policy research institute founded in 1983 and internationally known for its studies on public policy issues.