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University Daily Kansan Wednesday, April 14, 1965
Bold Changes in Czech Economy Said to Indicate Red Policy Shift
Changes in Czechoslovakian economy may amount to the most radical departure from the directed type of economy ever undertaken in any communist country except Yugoslavia, a political economist told the recent Mid-West Slavic Area Conference here.
By Harihar Krishnan
Harry G. Shaffer, associate professor of economics, said the New Economic Model resolution recently adopted by the Central Committee of the Communist Party in Czechoslovakia entails such far reaching decentralization of economic decision making, and such fundamental features of a market economy that some Western sources refer to it as a new modified free enterprise economic system. Others, he said, see it as an indication that European Communism is moving toward Western ways of thinking with great speed.
SHAFFER, WHO CONDUCTED his research in Munich with the cooperation of Radio Free Europe there, said that Western observers should not go too far in thinking this new system in Czechoslovakia will ultimately lead to a restoration of capitalism.
"Al lhough Czechoslovakia's leadership does regard the proposed changes as the most important reform since the nationalization of industry, it certainly would not agree with the interpretation of the Western thinkers," Shaffer said.
Shaffer said that after the communist takeover of Czechoslovakia in 1948, the attention of the economic resources in that country was diverted to heavy industry at the expense of agricultural and consumer good sectors. Central planning authority left few economic details to be decided upon at lower echelons of the economic machinery, he said.
"Under its system of detailed economic planning from the center, the Czechoslovakian economy did achieve notable progress for many years," Shaffer said. "But the growth rate of industrial output and national income began to drop rapidly and by 1963 had gone on the negative side."
in the opinion not only of Western non-Marxists and of most Czechoslovakian economists, but also of some non-Czechoslovak communist observers. Shaffer said, it became clear as the mid sixties approached that the attempt to dictate most aspects of economic production from the center was a hindrance rather than an aid to efficient economic performance.
"Of all the communist countries in the world today," Shaffer said, "Czechoslovakia has had the longest tradition of capitalist democracy; it entered the era of the 'dictatorship of the proletariat' at a considerably higher stage of industrialization than any of the others. In 1963, she had become the only industrialized country in the entire world to register an actual decrease in industrial output, national income and real wages. Product quality, moreover, was pitifully inadequate and frequently entirely unacceptable even to the unsophisticated purchaser.
"Along with the problem of 'inferior quality,' Shaffer said, "there also arose the problem of housing shortage and shortage of consumer goods. One third of all families are reported to have less than eight square meters (about 80 square feet) per person.
"Czechoslovakia has also been suffering from severe labor shortage," Shaffer said. "By late summer of 1964, there were at least 50,000 job vacancies in a population of 14 million."
"There are two reasons for the manpower shortage," Shaffer said. "First, the number of people at work is inadequate to cope with the tasks to be performed, and secondly, the labor power of the people is not utilized to the greatest advantage."
The primary sources to be tapped, Shaffer said, are the two million pensioners and the unemployed housewives, in addition to those members of the present labor force willing to engage in after-hours work. The bait he said, is a limited and a reintroduction of small-scale private enterprise primarily in the service trades.
The first partial reprintization decree was passed early in 1964. Individuals who decided to take advantage of the new decree were told that they would not only have to obtain a permit, but would also enter into a contract with a supervising socialist enterprise which sould set prices.
"The partially independent business man was also required to pay insurance, taxes and certain overhead costs to the state enterprise before he could pocket any remaining income over and above costs as profit," Shaffer explained.
"In recent months," Shaffer said, "official Czechoslovak sources have pointed out that up to 70 per cent of the officials employed on na-
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