Article

 

The political economy of the transition and the transformation crisis in Eastern Europe

by

George Liodakis, Technical University of Crete

JEL classification : O190, O200, O210, P200, P210, P500

Abstract

In this article it is argued that an adequate understanding of the character of the former regimes of the so-called ‘existing socialism’ is a requirement for a proper understanding of the transformation and the crisis facing the Eastern European countries. The conclusion of a relevant analysis is that these regimes can be characterised as a specific form of state capitalism. Seen in the context of the plans vs market debate, this characterization makes possible a specific and adequate interpretation of the transformation crisis currently facing these countries. This crisis is specifically associated with the impasses and the legacy of the former regimes, as well as with the difficulties in the institutionalisation and establishment of the preconditions for the development of capital as a specific mode of production. As indicated by the evidence available, these difficulties make the direction of the relevant transformation highly uncertain and far from self-evident.