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The Power of Freedom - Central and Eastern Europe after 1945
Mart Laar’s book „The Power of Freedom” offers an unprecedentedly compact overview of the history of Central and Eastern Europe since 1945. The author covers topics ranging from Red Terror and anti-commumist resistance in Eastern Europe to reasoning why communism fails and freedom works, all delivered by a historian who lived on the isolated side of the Iron Curtain. Additionally, Mart Laar’s role at the epicentre of economic reforms as Estonia’s Prime Minister provides a basis for particularly insightful analyses on post-communist reforms and European integration.
353 pages, Kindle Edition
First published January 31, 2011
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July 27, 2024
The books shows the data showing the failures of state socialism:
"In order to examine the developing picture in greater detail, we shall now return to the case studies mentioned at the beginning of this book: Spain and Poland, Finland and Estonia. These countries had been very similar in many ways in the 1930s but were then carried in different directions with very different results by 1989. In 1989, Finland had become a developed country, Spain made rapid progress after the restoration of democracy, while Poland and Estonia were poor, underdeveloped and failing countries still under Communist dictatorships. So what happened to these countries during the 20 years of transition, has the gap between them widened or has it become smaller? The main problem when seeking an answer to this question is, again, the lack of precise data. We know quite accurately where they stand now, but data concerning their starting points is often contradictory. According to the World Bank, in 1990, the GNI per capita in PPP for Poland was $5,160 and for Spain it was $13,240, yet Jeffrey Sachs quotes figures of $1,860 for Poland and $7,740 for Spain. Similar problems exist concerning data for Finland and Estonia between Finnish-Estonian analyses and the World Bank timetable. The overall picture is, nevertheless, the same: the differences between Spain and Poland have certainly decreased; the question is, to what extent? According to Sachs, the Polish GDP per capita was 24% of the Spanish level in 1989, yet by 2007 it was 50.4%. According to the World Bank, however, the Polish GDP per capita was 38.9% of the Spanish level in 1989. Development has also been positive in other areas; for example, while infant mortality in Poland was 58% higher than in Spain in 1989, by 2007, this figure had dropped to 37%. In 1989, there were 50% more telephone lines in Spain than in Poland, yet by 2007, the difference had fallen to only 17%. Poland actually reduced the difference between itself and Spain in terms of the ownership of household durables. At the same time, the differences in some areas are still remarkable, not so much in material as in mental terms. According to the OECD’s evaluations of subjective satisfaction, the index of positive feelings is 72.3 in Spain and 19.1 in Poland, while the index of negative feelings is 24 in Spain and 65.9 in Poland. As for 1989, more information is now available on Finland and Estonia. Here, the picture is actually much clearer: during the 20 years of transition, Estonia has rapidly approached Finnish standards in nearly all areas of life. This has not happened because Finland has been a weak performer over this period of time. On the contrary; Finland has in fact performed well, but Estonia has simply made speedier progress. According to the World Bank, the Estonian GNI per capita in PPP was 54% of the Finnish level in 2007, while Eurostat puts the figure at 58%. In 1990, the World Bank’s optimistic evaluations placed the value of the Estonian GDP at 43% of Finland’s. More realistic estimates put it at 15-25%. In any case, the overall direction of development is clear and demonstrates swift gains by Estonia. The differences between Finland and Estonia have decreased in other areas too. In 1996, life expectancy in Estonia was nearly 10 years lower than in Finland; by 2007, the difference had decreased to 8.3 years. Infant mortality too has fallen in both countries. In 1989, infant mortality was 54.5% higher in Estonia than in Finland but by 2007, the difference had dropped to 37%. If we consider living standards in the average household, Estonia and Finland have reached parity in many respects. Taking the Finnish level in 1989 as 100%, only 36.5% of Estonians had a telephone, 82.7% had a television set, 76.4% had a washing machine and 42.1% had a car. Now, however, household ownership of telephones and TV-sets is slightly higher in Estonia than in Finland, while ownership of washing machines and cars is comparable to the Finnish level at 86.9%. The difference is not great either in terms of the ownership of newer and more costly items such as personal computers and Internet connections. The household ownership of personal computers has reached 79.6% and household Internet connections, 82.4% of the Finnish level. Compared to some other transition countries, Estonia and Finland have also become more similar in terms of their attitudes towards life in general. According to one OECD study, the happiness index is 72.8 in Finland and 61.6 in Estonia, while the unhappiness index stands at 18.4 in Estonia and 15.3 in Finland. As we can see, within 20 years, Estonia has successfully narrowed the gap between itself and Finland created by 50 years of Communist occupation. Although differences still persist, the achievements of the last 20 years give us reason to believe that circumstances in Estonia will soon more closely reflect those of its neighbour across the Gulf of Finland. Having considered all this positive data, however, we must still remember that despite the commendable developments that have taken place, Central and Eastern European countries are still poor compared to the European average. The wounds inflicted during 50 years of Communism cannot be healed by 20 years of transition. Such experiences again highlight the importance of Central and Eastern Europe’s success story. Even though not all dreams have yet come true, development in the region has, nonetheless, been very positive. At no point in history has Central and Eastern Europe been so rich compared to Western Europe or the United States. According to the World Bank’s evaluations, the region’s GNI per capita in PPP stands at 38.46% of the American level. In 1989, it was 32.16%. Data from Eurostat, which is currently the most reliable source of information on European economic and social development, gives an even clearer picture. According to Eurostat figures, the Central and Eastern European (nine countries) GDP per capita in PPP grew to 63.26% of the European average in 2008. Even by the most optimistic Communist statistics, it stood at only 40% in 1989. This also clearly exceeds the previous best result in this area, which was 59% in 1820 (Figure 9). As this unprecedented growth was achieved in just 20 years, there is good reason to believe that it will also continue into the future. If, indeed, this does turn out to be the case, then the leading former transition countries will match average European living standards within the next ten years. Two Central and Eastern European countries, Slovenia and the Czech Republic, already surpassed the living standards in the poorest ‘old’ Member State of the European Union, Portugal, in 2007. This again demonstrates what people’s free will, with the help of democracy and market reforms, can accomplish. "
"In order to examine the developing picture in greater detail, we shall now return to the case studies mentioned at the beginning of this book: Spain and Poland, Finland and Estonia. These countries had been very similar in many ways in the 1930s but were then carried in different directions with very different results by 1989. In 1989, Finland had become a developed country, Spain made rapid progress after the restoration of democracy, while Poland and Estonia were poor, underdeveloped and failing countries still under Communist dictatorships. So what happened to these countries during the 20 years of transition, has the gap between them widened or has it become smaller? The main problem when seeking an answer to this question is, again, the lack of precise data. We know quite accurately where they stand now, but data concerning their starting points is often contradictory. According to the World Bank, in 1990, the GNI per capita in PPP for Poland was $5,160 and for Spain it was $13,240, yet Jeffrey Sachs quotes figures of $1,860 for Poland and $7,740 for Spain. Similar problems exist concerning data for Finland and Estonia between Finnish-Estonian analyses and the World Bank timetable. The overall picture is, nevertheless, the same: the differences between Spain and Poland have certainly decreased; the question is, to what extent? According to Sachs, the Polish GDP per capita was 24% of the Spanish level in 1989, yet by 2007 it was 50.4%. According to the World Bank, however, the Polish GDP per capita was 38.9% of the Spanish level in 1989. Development has also been positive in other areas; for example, while infant mortality in Poland was 58% higher than in Spain in 1989, by 2007, this figure had dropped to 37%. In 1989, there were 50% more telephone lines in Spain than in Poland, yet by 2007, the difference had fallen to only 17%. Poland actually reduced the difference between itself and Spain in terms of the ownership of household durables. At the same time, the differences in some areas are still remarkable, not so much in material as in mental terms. According to the OECD’s evaluations of subjective satisfaction, the index of positive feelings is 72.3 in Spain and 19.1 in Poland, while the index of negative feelings is 24 in Spain and 65.9 in Poland. As for 1989, more information is now available on Finland and Estonia. Here, the picture is actually much clearer: during the 20 years of transition, Estonia has rapidly approached Finnish standards in nearly all areas of life. This has not happened because Finland has been a weak performer over this period of time. On the contrary; Finland has in fact performed well, but Estonia has simply made speedier progress. According to the World Bank, the Estonian GNI per capita in PPP was 54% of the Finnish level in 2007, while Eurostat puts the figure at 58%. In 1990, the World Bank’s optimistic evaluations placed the value of the Estonian GDP at 43% of Finland’s. More realistic estimates put it at 15-25%. In any case, the overall direction of development is clear and demonstrates swift gains by Estonia. The differences between Finland and Estonia have decreased in other areas too. In 1996, life expectancy in Estonia was nearly 10 years lower than in Finland; by 2007, the difference had decreased to 8.3 years. Infant mortality too has fallen in both countries. In 1989, infant mortality was 54.5% higher in Estonia than in Finland but by 2007, the difference had dropped to 37%. If we consider living standards in the average household, Estonia and Finland have reached parity in many respects. Taking the Finnish level in 1989 as 100%, only 36.5% of Estonians had a telephone, 82.7% had a television set, 76.4% had a washing machine and 42.1% had a car. Now, however, household ownership of telephones and TV-sets is slightly higher in Estonia than in Finland, while ownership of washing machines and cars is comparable to the Finnish level at 86.9%. The difference is not great either in terms of the ownership of newer and more costly items such as personal computers and Internet connections. The household ownership of personal computers has reached 79.6% and household Internet connections, 82.4% of the Finnish level. Compared to some other transition countries, Estonia and Finland have also become more similar in terms of their attitudes towards life in general. According to one OECD study, the happiness index is 72.8 in Finland and 61.6 in Estonia, while the unhappiness index stands at 18.4 in Estonia and 15.3 in Finland. As we can see, within 20 years, Estonia has successfully narrowed the gap between itself and Finland created by 50 years of Communist occupation. Although differences still persist, the achievements of the last 20 years give us reason to believe that circumstances in Estonia will soon more closely reflect those of its neighbour across the Gulf of Finland. Having considered all this positive data, however, we must still remember that despite the commendable developments that have taken place, Central and Eastern European countries are still poor compared to the European average. The wounds inflicted during 50 years of Communism cannot be healed by 20 years of transition. Such experiences again highlight the importance of Central and Eastern Europe’s success story. Even though not all dreams have yet come true, development in the region has, nonetheless, been very positive. At no point in history has Central and Eastern Europe been so rich compared to Western Europe or the United States. According to the World Bank’s evaluations, the region’s GNI per capita in PPP stands at 38.46% of the American level. In 1989, it was 32.16%. Data from Eurostat, which is currently the most reliable source of information on European economic and social development, gives an even clearer picture. According to Eurostat figures, the Central and Eastern European (nine countries) GDP per capita in PPP grew to 63.26% of the European average in 2008. Even by the most optimistic Communist statistics, it stood at only 40% in 1989. This also clearly exceeds the previous best result in this area, which was 59% in 1820 (Figure 9). As this unprecedented growth was achieved in just 20 years, there is good reason to believe that it will also continue into the future. If, indeed, this does turn out to be the case, then the leading former transition countries will match average European living standards within the next ten years. Two Central and Eastern European countries, Slovenia and the Czech Republic, already surpassed the living standards in the poorest ‘old’ Member State of the European Union, Portugal, in 2007. This again demonstrates what people’s free will, with the help of democracy and market reforms, can accomplish. "
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