Necroeconomics – the theory of post‐Communist transformation of an economy

Abstract

The paper offers a new view of the process of post-Communist transformation of an economy. The collapse of the Communist regime had the result that with rare exceptions all goods produced in these countries were incompatible with international standards due to low quality and/or high prices. The economy of that type can be referred to as``dead'' economy, or`n ecroeconomy''.``Routine'', which has been deeply rooted in the command economy over many decades, is the reproductive base of necroeconomy. The``routine'' which reproduces necroeconomy depends, inter alia, on the behavior of the homo transformaticus, who in the realm of entrepreneurship assumes a title of``post-delets''. The end of necroeconomy is the only true indicator of the end of post-Communist transformation.

Human Transformation in the Transition Economies

“…Thus, at the early stage of transition to a market economy, there appeared another type of man who is steadily developing the qualities of homo economicus but who has not yet liberated himself from the qualities characteristic of homo Sovieticus. This type of man was coined and called homo transformaticus (Papava 2002). One of the illustrative examples of the behaviours of homo transformaticus in the early years of independence is that sellers in the market place used to exhibit only very few of the goods they sold and concealed the most remaining somewhere in fear that government might seize them.…”

“…With rare exceptions, the goods produced by these economies were incompatible with international standards and could not compete with the Western products due to low quality and/or high prices. The economy of that type was called "dead" economy, or "necroeconomy" (Papava 2002). In the late 1990s many contemporary entrepreneurs may be considered striking examples of homo transformaticus.…”

On the theory of post‐Communist economic transition to market

“…It is just in the process of developing (Papava, 2000). Nevertheless, some well-known economic theories and combinations of certain elements of the latter could be used more or less successfully to produce a complete analysis of the collapse of Communist economic system (e.g.…”

“…Becker and Becker, 1997, p. 259;Stiglitz, 1996, p. 3). It might be stated without reservation that there is no economic theory of transition at all (Bertenev, 1996, p. 301;Papava, 2000). Birman (1996, p. 521) in his traditionally radical and, therefore, debatable style has asserted that economic theory reaffirmed its "convincing impotence" in dealing with the problems of transition to market economy.…”

“…It is obvious, therefore, that no generally accepted definition of "transitional period" has been developed yet (Berezin, 1999, p. 253;Papava, 2000).…”