Photo: Juraj Bartoš

Socialism was an economically successful system able to compete with the West

“Socialism was an economically viable system and was doing well economically”

according to 59.3% of respondents participating in the April 2018 poll carried out by the FOCUS agency. 

Facts and disproval of the myth ↓

Between the years 1918 and 1938, Czechoslovakia ranked among 20 most developed economies of the world based on the GDP per capita and enjoyed only a slightly lower or almost identical economic level as Austria and a higher level than Finland. After World War II, the country had a slightly lower GDP per capita than Finland, reached the level of Germany devastated by the war, which used to perform better before the war, and even exceeded the level of decimated Austria. 

The moment when communists seized power in February 1948 led to a turn and the economic scissors between socialist Czechoslovakia and the above mentioned and other Western countries started to open to the disadvantage of Czechoslovakia (see Annex 3 to the publication).

While in 1948, the GDP per capita in Czechoslovakia was higher than in Austria (at the level of 121%), until 1989, it dropped down to 58%, even according to the officially overestimated data. 

The real economic gap between socialist Czechoslovakia (and other socialist countries) and Western countries with market economies was even bigger. 

The substantial fact was that the increasing lagging behind Austria and other countries of the West resulted in the increasingly worsening standard of living of people, e.g. their real wages and purchasing power, the level at which households were equipped with various durable goods, and the life expectancy. 

Socialist experiments in other countries in Europe and around the world have failed in a similar way and even worse in terms of the economy and other aspects. Germany is a good example. While at the time of its division into the West Germany (the Federal Republic of Germany) and the East Germany (the German Democratic Republic) both countries enjoyed approximately similar economic levels, in 1991 the GDP per capita in the GDR reached only one third of that of the Federal Republic of Germany. 

The drop is even greater when we compare North Korea with South Korea, for instance. 

The example of Czechoslovakia and other countries that have implemented the socialist experiment provides historical evidence of economic unsuccessfulness of socialism, its economic and technological falling behind market economies and systematic failures that resulted from implementation of socialist ides. The core of the socialist ideology is central control of economy and prohibiting people from owning any means they could use to carry out business activities (more in the context of the following myth “The socialist economy in Czechoslovakia was developed, met real needs of people, and functioned more efficiently that the ´chaotic´ market system” and in chapter 2.1 Economic falling behind the West and 2.2 Centralized economy without private ownership).