Claims that the process of transition of former socialist countries has been misguided. The reform of the economic system is but part of the overall process of social transformation, and it is argued that at the root of the disappointing results has been the fact that instead of focusing on moral redemption, the moral decay of these societies has even been enhanced by the infusion of economic egoism. The present transition can be seen as a process of transformation from primitive socialism to primitive capitalism. Without the sanctity of law and order rooted in the value system of the cultural heritage of Judeo‐Christian ethics, the privatization of state industries and public utilities including the commercialization of education, health, the arts and sciences has been creating conditions for a place far removed from an environment conducive to social peace, political stability and economic growth.

Nobody concerned with political economy can neglect the history of economic doctrines. Structural changes in the economy and society influence economic thinking and, conversely, innovative thought structures and attitudes have almost always forced economic institutions and modes of behaviour to adjust. We learn from the history of economic doctrines how a particular theory emerged and whether, and in which environment, it could take root. We can see how a school evolves out of a common methodological perception and similar techniques of analysis, and how it has to establish itself. The interaction between unresolved problems on the one hand, and the search for better solutions or explanations on the other, leads to a change in paradigma and to the formation of new lines of reasoning. As long as the real world is subject to progress and change scientific search for explanation must out of necessity continue.

IntroductionIt has been argued that Ayn Rand's ethics, in particular morality, on which she defends the individual's selfishness and capitalism, makes her doctrine superior to Marx's theory of collectivist socialism [1].Marx and Rand, despite differences, share common foundations in many respects. Both Marx's collectivism and Rand's individualism seek the natural bases of morals and of law, and their philosophies are based on natural reason as an ethical and social ideal, designating all the hopes and aspirations of modern man [2].In opposition to the Christian ideal, they both subscribe to the fundamental (natural) rights of man [3]. Marx to equality and fraternity -these humanitarian demands forming the basis of his collectivism; Rand to full freedom which forms the conceptual basis of her egoism. Thus, while Rand's concept of egoism is the antithesis of Marx's concept of socialism (signifying the uniting and intimate association of men), it also expresses the aspirations of humanity.Common to both Marx and Rand is that they regard ethical life as something added to the natural essence of man. Equally common to both is materialism. Rand's extreme egoism, holding that not ideas, but man's body is his essential nature, gives rise to materialism. In following Feuerbach (man is what he eats), Marx concluded that if the activity of the mind was a product of the body and the body is maintained by nourishment, then the mind is nothing but a product of this nourishment; and since nourishment is secured by work, the mind is finally the result of work and of production generally. Man, then, is what he makes. Marx and Engels found the meaning of history in processes of an economic nature. The determining forces in all social conditions are economic relations. They form the ultimate motives for all activities. Their change and their development are the only conditioning forces for public life and politics, and likewise for science and religion. All the different activities of civilization are then only offshoots of economic life.Doctrines rooted in extreme ethical dualism (à la Marx and Rand) have failed to provide a viable model of social organization. Both Rand's and Marx's approaches are marked by a distorted picture of reality where, on the one hand, living as a true individual would exclude altruism and, on the other hand, living as communal man would exclude rights to one's individuality. Man's nature is probably a measure of both egoism and collectivism, a kind of an unsociablesociability (Kant). If this is so, then there does not have to be absolute opposition between the individual and the collective.

Political changes in the countries of Central and Eastern Europe have created both the preconditions as well as the need for the transition from the old to a new economic order. In the absence of any ready substitute, the institutional vacuum which arose plunged the majority of these countries into economic chaos and anarchy. A way of arresting this continuing drift towards chaos and political discontent is not to be found by striving for the reintroduction of laissez‐faire. A new stable economic order can be established only on the precepts of a just society. Suggests two alternatives delegating decision making in the sphere of economics to groups and formations outside parliament, or establishing a socially reponsible free market economy. The transition process probably would go through the phases: from plan to anarchy to group control to legally constrained market control.

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