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Historical overview of US federal and state regulation and reform.

Privatization Now or Else. — The Impending Failure of Democracy and Freedom in Central Europe.
By 1992, the Common Market may have removed all barriers to internal flow of people and goods, while raising a new Berlin Wall between it and the former East Bloc Countries. Stagnation, deteriorating economies, and lack of opportunities in Central Europe are likely to produce a massive illegal immigration.
The former communist countries of central Europe are facing hard times. Their economies are saddled with bloated, inefficient enterprises. Officials in Czechoslovakia, Hungary, and Poland understand that moving to a market-based economy requires reducing the proportion of their economies owned and controlled by the state. Private ownership of the means of production is necessary in order to produce the appropriate incentives for good economic performance.
The problems facing countries attempting to make the transition from a communist society, where the state owns 80 to 100 percent of all assets, to a private market economy are unprecedented. Western countries that have privatized a very small portion of their economy have had the benefit of widespread markets, stock exchanges, meaningful accounting records, labor markets, and a substantial number of individuals with extensive assets who could purchase a significant number of shares in new companies. None of these conditions exists in countries attempting to throw off Marxism.
These countries envision privatizating small enterprises through an auction of such businesses. However, employees of these concerns have asserted their claim to the properties and demand that they be given priority in purchasing the assets. Privatization of large enterprises presents even more difficulties. In none of these countries does a working capital market exist. The underlying problem is that the public does not have the assets to purchase large firms. The government could sell these firms, at least the profitable ones, to foreign investors ; but this raises xenophobic feelings.
Poland and Czechoslovakia have both proposed using voucher schemes to distribute ownership to their citizens. In addition government ministers plan on selling stock to locals and foreigners, selling the company in a joint venture, and using employee stock option plans. Although authorities in these countries assert the importance of moving fast in privatizing assets, these methods are likely to take years.
Although all three countries project an ambitious program of privatization, only Hungary and Poland have actually begun to privatize any large firms. Most of the privatizations in Hungary has been of the spontaneous type. In Poland the first privatization took place in early January 1991 with the sale of stock in small lots of five concerns to individual Polish investors. Czechoslovakia has announced no major privatizations yet, although it finally passed legislation authorizing privatization in February 1991.