Privatization, Dogma-Free Self-Management, and Ownership Reform

Abstract

Many people assert that the most self-evidently necessary and urgent part of radical economic reforms is to transform as many as possible of the large and medium-sized enterprises into joint-stock companies as fast as this can be accomplished. I, on the other hand, feel that, while a share-based system is very important, we would endanger the very future of such a system if we were to force its rapid adoption. After all, the main aspect within the transformation of ownership conditions is privatization. A move to share-base our economy at a pace more rapid than the process of privatization, posited on the prevalence of state-created institutional shareholders or intraenterprise crossowners, whose behavior would be unpredictable or, based on our past experience, quite predictable, would very soon prove to be a course of pseudoaction resulting in frustration. As for the form of enterprise self-management introduced just a few years ago, there is still no rational solution to replace it that is broadly adoptable, and this fact should give food for thought to those Hungarian economists who, often quite superficially, criticize this form and call for its immediate elimination. While this form undoubtedly is the product of state socialism, its centrally dictated elimination would also represent a step that is reminiscent of state socialism. Does autonomy present an obstacle to the development of a pluralistic ownership system? Can it be an important factor in driving an economy to bankruptcy? There are many people who answer these questions in the affir-