Review
Teoria sine praxi sicut rota sine axi.
Praxis sine teoria sicut rota sine via.
[1] The 90s saw dramatic political, institutional and economic changes all over Central and Eastern Europe. Most of these changes occurred either by imposed, or self-imposed, economic mimesis, or by largely empirical adjustment movements. In straight words, there was not enough time to “grasp”, in less than a decade, whatever the free world accumulated during the entire cold war period. Though significant efforts have been made in order to retrieve the informational and educational gaps induced by the communist rule, it is a fact that social sciences (economics included) in particular still lag behind other areas of social life, all over the area.
[2] New approaches were developed in political economy, macroeconomics or the regulation theory. Transition economics emerged as a discipline. But due to the strong entropy noted throughout the 90s, the theoretical realm of economics has still remained highly controversial. This is even more valid for a country like Romania. Erratic policies, documented political cycles, failure to accomplish targets derived from EU benchmarking, all these, and many others, trigger the issue of the existence of theoretical grounds to build upon.
[3] Methodologically speaking, I find the author’s approach comprehensive enough in terms of the investigated literature, and fully relevant when it comes to the titles that illustrate his points. This outcome allows me to concentrate on specific issues (hic locus, hic salta) and elaborate on the pre-1989 situation through some endnotes, mainly to the first chapter, where I feel the outlook of the Romanian society as a whole needs further detailing. I also consider that a certain tension between thesis and comment is constructive, therefore my considerations might seem more critical than they actually are.
[4] 1.1 [“Marxism-Leninism was the official and unchallenged economic paradigm”] observes the author. I would start discussing this point by an even stronger assessment: Stalinism, or what could be described as Stalinism après la letter, was Romania’s case when it came to economic theory. But in the process of unveiling the rationale for a rather peculiar, dogmatic, even by European communist standards, approach - I would go back to the early 60s, when Romanian communists actually challenged the economic supremacy of the Soviet Union within the frame of their criticism of CMEA integration. 1 (Note1: The so called Valev plan assigned industry as the main economic sector for European communist countries north of Hungary, and agriculture for those south of it; falling within the Southern tier, Romania was obviously supposed to abandon its industrialization and other independence bound economic plans and concentrate on agriculture. ) From this point on, “the criticism of the bourgeois economic thinking” leaves the lion’s share to a, bluntly speaking, specific Romanian way of developing and achieving socialism and communism.
[5] 1968 inaugurated almost a decade of erratic practice of political economy in Romania. Its independent moves 2 (Note2: Romania was the first communist country to establish diplomatic links with the Federal Republic of Germany in 1967; it was also the single communist country not to break diplomatic relations with Israel following the Six Day War; it was also host for the first American presidential visit behind the Iron Curtain, when Richard Nixon came in 1969; Romania was the first Warsaw Pact state to enter GATT (1971), the World Bank and the International Monetary Fund (1972); it was granted European Community Trading Preferences (1973) and US Most Favored Nation Status (1975); Romania maintained very good political and trade relations with China, which was ostracized, at the time, by most communist countries; non-aligned countries, such as Yugoslavia, were considered natural allies of Romania; all these were assessed domestically and abroad as anti-Soviet actions above all.) triggered an inflow of foreign money. Since domestic laws, deeply rooted in the communist doctrine, did not favour foreign direct investment, money was lent to the Romanian government to buy Western technology, in order to escape the Soviet monopoly in several critical areas. 3 (Note3: For instance, Western equipment allowed Romania to develop a competitive weapon industry. During the 80’s the country became one of the most important suppliers of conventional weaponry for the developing countries, to the evident dissatisfaction of the USSR. Top industries such as airplane engine manufacturing (along with Rolls-Royce) or military jet aircraft building (a Romanian - Yugoslav joint venture) were established. Romania was the only communist country to escape Soviet monopoly in producing nuclear energy; the Canadian designed, financed and built reactors (including heavy water facilities) are now the only safe, by Western standards, nuclear units throughout the former communist system. Automobile companies such as Renault, Citroen and MAN started manufacturing here cars and trucks.) The scheme went on for almost a decade, until Ceausescu’s neo-Stalinism prevailed.
[6] I fully agree that [“contradictions and specific economic laws”] were considered, during the 1970s and most of the 1980s, the working horse of Romanian economists. What I find to be the most tragic issue within the context, is that at a time when soft budget constraints, flexible management, not to mention the so called goulash communism, were discussed all over Central and Eastern Europe 4 (Note4: Reforms introducing the so called “goulash communism” started in Hungary in 1968; Yugoslavia had already experimented self-management, Poland was also a rather liberal economy by communist standards. Though Romania formally adopted a so-called “New Economic Mechanism” in 1978, allegedly giving more decision power to lower levels of the economy, this was by far a propaganda tool and managed but to fortify bureaucracy and central planning. ), the crucial point of debate in Romania was the “contradiction between market and plan”, to the exclusive benefit of planning. This gives more consistency, if needed, to the author’s assessment of the negative impact of pre-1989 ideological approaches, following annus mirabilis 1989. Unfortunately, the “separation” theory 5 (Note5: There are some objective, psychological grounds in Romania for such a theory: it is the only Latin country encircled by a Slavic world, but the only Latin country belonging to the Orthodox Church, but the only Orthodox country using a Latin alphabet, but… On the other hand, due initially to the Soviet menace and later to the neo-Stalinist approach, communists walked on the same path as the inter-war liberals, vulgarizing their theory of domestic input (through ourselves), which turned Romania, during the late 80s, into a de facto economic autarchy. ) managed to survive the death of communism and gave birth to a very specific and counterproductive third path approach in the Romanian economic policy.
[7] It is not for the sake of finding spots of light in such a grim picture, but for the sake of truth, that one should also mention that, in a comparative frame, Romanian economists did not enjoy the basic freedom of being informed, of influencing somehow the political establishment, of communicating abroad or even among themselves. 6 (Note6: Some economists think that what we actually see is a refuge in theory; at a time when practice had become fully alienated, abstract concepts were still secluded from ideology. Some “ideologically pure” papers provided good pretexts for inserting many scientific, important issues - see Aurel Negucioiu (1987) Proprietatea socialista in Romania, Bucuresti, Editura Politica - with one fourth of the approximately 400 pages offering a comprehensive, documented view on the issue of property. This approach became dramatic during perestroika and glasnost times. So, paradoxically enough, during the late 80s, the most feared emergence point for new ideas was considered to be the Soviet economists standpoint.) The academic frame was being demolished, particularly in the area of social sciences: no junior scholars were hired for almost the entire decade.
[8] 1.2 It is a fact that the inter-war years were productive from our perspective. Patterned mostly by the French school, relevant work covered many of the areas of economics. Adopting the criteria of international exposure and impact, I think that only Mihail Manoilescu’stheory on protectionism 7 (Note7: A personal recollection: during a recent visit in Brazil I was impressed to see Mihail Manoilescu’s widespread ideas (mainly intermediated by Raul Prebisch’ and Celso Furtado’s papers) still put at work. It seems the Brazilian economic outlook of the 50s and 60’s, when these ideas were adopted, was much like that of Romania during the 30’s.) and Nicholas Georgescu-Roegen’sentropy theory made their way worldwide. Both authors were heavily interpreted for the benefit of the economics promoted by the communist regime.
[9] 1.3 Failure to translate the main papers of the classics was probably one of the most important liabilities of teaching economics in communist Romania. 8 (Note8: Interesting enough to be worth mentioning, the generation of economists that were trained in the Soviet Union during the 50s and 60s had full access to the translation of practically all the works of the classics. Moreover, papers in economics from all over the world, assessed as most important, were systematically translated and published in the USSR till the late 1980s. So, an intermediate (in Russian) exposure was possible in Romania too.) This still remains to be properly managed and concluded nowadays. The crop of translations, though meagre, was a genuine feast for scholars at the time of their apparition. I would add to the author’s list, due to the ideatic impact: (Forrester, 1979; Friedrichs, Schaff, 1985; Perroux, 1969; Tinbergen, 1978) and particularly the works of Fernand Braudel, published during the mid 80s.
[10] I think that branding pejoratively a lot of interesting books covering the area of global issues, such as the works of Toffler, Naisbitt, e.a. - it all actually started with Jean Jacques Servan Schreiber’s (1982) book - is too harsh an approach for the closed Romanian society of the time. I think these books were true assets, at least in raising awareness about global issues to a generation that had been cut off from the world’s main flows of ideas.
[11] 1.4 There are sufficient examples (Blaga, 1983; Iancu, 1982; Murgescu, 1986; Silasi, 1986) to support the fact that, though not publicly constituted as an opposition, the economists’ world still produced valuable works. Noted as an exception to the rule, the activity of Tudorel Postolache as director of the country’s Planning Board also bore relevant epistemic fruit in the area of economic cycles (Postolache, 1988).
[12] I would like to end my comments on this chapter by stating the fact that the debate, the spreading of ideas, the sharing of books, the almost “samizdat”-like fashion was common in the chairs of political economy of the major universities throughout the country. 9 (Note9: I rely, in this respect, on my own recollection of the time when I was with the Chair of Political Economy of the Babes-Bolyai University in Cluj-Napoca; reliable sources indicate this was the case in most universities.)
[13] 2.1 In my opinion the “elite change” noted by the author is more of an “elite formation”. True enough, real scholars existed previously but their number and, generally speaking, old age prompt me to remark that, in terms of generation, the change is practically impossible. Most, if not all, the currently relevant names for the theory of the transition process were not visible figures before 1989.
[14] There are two possible answers to the question of the eclectic adoption of Western economic literature in Romania during the early 90s. The first lies with the fact that many young economists had, for the first time in their life, the opportunity to be trained abroad, and all of them grabbed it, generating an even more profound generational gap than that induced by the communist personnel policy. The very start of free economy was, somehow objectively, entrusted to the old (sometimes superficially updated) generation.
[15] The second answer is that the eclectic outcome is nothing but natural after almost half a century of seclusion. As for myself, it is my opinion that the still too important sector of [“airport economics”], fuelled both by political and business interests, has played an evident negative role in shaping the mass culture in this area.
[16] The authors’ concerns regarding the superficiality of the first textbooks printed after the fall of communism could be expanded to the entire stock of textbooks produced during those days. All Romanian universities had to provide their students with new textbooks and the rush often generated weird build-ups. For better or worse, they reflected a strong social need. I will add, as a personal observation, that most of them were compiled according to the linguistic ability of the author (and so it turned out that beyond Samuelson, most of the Romanian textbooks were of French inspiration). From my experience, the most appropriate work that was translated and effectively used by teachers in those days was Mark Blaug’sEconomic Theory in Retrospect.
[17] 2.2 [“As it has already been mentioned”] I am not an unconditional supporter of the author’s theory concerning the [“elite change”]. Or, it might be that we attach different values to the term of elite. I think the elite creation was, and still is, a much more comprehensive process in Romania and that it is mainly targeted at the [“real generational change”]. In this respect I agree with the 10-15 years benchmark, adding that we are probably nearing that spot. If universities and other research bodies, unfortunately so business driven these days, would admit real (read internationally conducted) assessment, it would eventually become much more evident that we are already dealing with the incipient form of a new generation of scholars.
[18] I would be reluctant to label economic leadership as honorific and de facto. Though it is my opinion too that Daniel Daianu is the most prominent new generation Romanian economist today, leadership is yet another and more intricate matter. If the scholarly elite was, in my view, a true elite (acknowledged by the whole society) 10 (Note10: It is a matter of sociological interest to count the number and the input of scholars (academics mostly) within the first post-communist Romanian structures of power (Parliament first, Government second) - empirically perceived as important; no relevant research in this regard has been conducted yet, to the best of my knowledge.) before 1989, this is no longer valid today. Higher education boomed, but that also bore costs in terms of resources quality, as more attractive compensation schemes made the most endowed young scholars head outside the academic world. A motivated and professionally sound body of “young wolves” evidently made their way to the top. But are they truly a social elite? Notwithstanding the previous considerations, I still see the academe as a whole, as anything but conservatory.
[19] 2.3 I would assess the competition among economist professional bodies as the General Association of Romanian Economists (AGER) against everybody not sharing the same conservative ideas. 11 (Note11: I was, myself, a member of AGER, until it became obvious that it was being turned into a political instrument for the conservative power of the moment (early 1990s); the power actually applied the same scheme with the trade unions and several other seemingly independent bodies. ) In good faith, we should mention that their newspaper “Economistul” was important in the professional media landscape and that some of its editors gathered to establish the “Editura Economica”, a relevant publisher for our area of interest. The Romanian Society of Economists (SOREC) was generally and for good reasons perceived as the icebreaker of reformism in Romania, but it naturally and objectively lost impetus to the canopy of think tanks that emerged all over the country starting mid 90s.
[20] The main problem with all these new institutional structures (dealing with economic issues, but not only) lies in the fact that political culture in nowadays Romania has not matured enough to accept a larger and more effective impact of the (institutionalised) civil society over public matters. Noted in a comparative Central and Eastern European frame, this situation could be branded as a major setback.
[21] 2.4 No coherent repatriation could be considered. The economics of Anghel Rugina was the perfect example of what should not be undertaken, so by the adverse effect it could have played a good educational role. Unfortunately, in a fuzzy environment such as the early 1990s, this approach played a truly negative role.
[22] 3.1 The revival of the pre-war tradition, simply put, was not a priority. Even the political parties that acted offensively for retrieving their pre-war legitimacy adapted their economic discourse. The best example in this respect is the Christian-Democrat pattern adopted by the historical National Peasant’s Party.
[23] I stick, myself, to the author’s opinion that most of the efforts to be noted in this respect are actually forms of homage paid to some prominent inter-war economists. I would add to the list the name of Mitiţă Constantinescu.
[24] 3.2 I disagree with the author in respect to points (1) and (2); most of the objective observers of the training and updating process conducted all over Central and Eastern Europe agree that when it comes to the Western world of scholars as compared to the CEE one, we are dealing with highly compatible structures. 12 (Note12: Let me use a simple example in this respect. All CEE countries are struggling to comply with the EU accession rules, formalized into the aquis communautaire. Taking into consideration the fact that a closed negotiation chapter shows potential compatibility, I think the fact is relevant that most of these countries closed the training and education chapter among the first.) Though important differentiations, induced mostly by the level of funding, could be noted nowadays, it is highly probable they will vanish in a predictable amount of time. True enough, social sciences in CEE are not located in the forerunner group.
[25] Unfortunately, I must say the author has good grounds for assessments (3) and (4). As I pointed out under 2.3, the impact of the scholar world over policy makers is almost nil. Until this discrepancy 13 (Note13: Institutionalized impact, if nothing else, is desirable for consolidating the social status of scholars. I always keep in mind the American example, where most of the publicly subsidized universities are consultants by default for the local administration bodies.) and a decent funding level are achieved, asymmetries will persist.
[26] 3.3 The harsh statements nested by this paragraph are 100% correct if we assume a nationwide perspective. Else, most academic and research centres at least ignited a debate over the major issues of economics. Probably the most evident laggard, with a visible negative impact over economic policies, is the econometric sector. This really looks weird in a country where mathematics has always been a front stage science and where, as the author very well points, econometrics made a superb debut back in 1971 (Schatteles, 1971).
[27] 3.4 Like probably all the transition countries, Romania went through several stages when it came to adopting, or at least publicly debating, quantitative and qualitative approaches. The monetarist period of very early 1990’s could be branded as an antithetic buffer zone induced by the alienated, again even by communist standards, policy in Romania. Milton Friedman was probably the most popular foreign economist in those days, though it soon became evident he had no valid solution for our problems either.
[28] A turn towards the classical and neo-classical economics was but natural starting with 1992-1993. Hayek seminars mushroomed in universities. Then, starting with the mid 90s, the background was mostly institutionalist and neo-institutionalist. As a personal assessment, I would dare say that if I were to label the “out of the fuzziness” path of the present days, I would label it as post-Keynesian.
[29] 4.1 The approach of the Romanian economists is only natural considering the circumstances, and backs my assessment under 3.3. Numerous relevant examples such as (Daianu, 1997; Daianu, 2000; Negucioiu, 1999) could be added.
[30] 4.2 The Romanian Academy does not play the role the society expects in the development of economics as a social science. Moreover, it is perceived, not without grounds, as an active political leverage actor (see Endnote 11). All Romanian governments, no matter their political colour, failed to institutionalise basic consensus among economists. This was due either to half hearted, if not dilettante, approaches or to obvious group interest.
[31] 4.3 Honestly speaking, none. The plethora of economic research institutions belonging to the Romanian Academy are better known as trampolines for governmental positions rather than purveyors of coherent impact studies. If the rule of the exception were valid in this respect, the Institute for International Economics would probably be it.
[32] 4.4 The pattern of publicly funded entities practically disappeared. Talking about public universities, usually at least one third of their incomes is generated by non-budgetary sources. So, the potential to fund comprehensive, relevant research does exist, provided there is a will to use it. International, public and private, mostly EU originated, funding is available, provided the necessary expertise could be supplied. So I do not share the author’s view of the [“sheltered’] economics community.
[33] I would assess that the “lack of a market” in several fields (mathematics, physics, chemistry, etc) has generated a leak of government funding towards these imploding areas, thus raising another liability for the largely expanding sector of social sciences. This is obvious within the higher education sector, where departments such as business and economics, psychology and sociology, political science, journalism are generating income that is also spent for maintaining other “non-profit” but socially needed study fields.
[34] What Romania really lacks in this respect is private domestic (national) involvement of the businesses. Partially due to the state of the economy, and partially to an improperly designed law of sponsorship, private funding is mainly provided by multi-national companies operating in the country.
[35] The author makes a proper evaluation of the topics under this hat. I would point out only two issues. Publishing most of their textbooks is a constraint in Romanian universities. This derives from the promotion scheme, which implies that associate professors and full professors print their textbooks. This is both an asset and a liability: asset, because monopolies (as the author notes) were broken, and liability, because up to a point, until enough Romanian textbooks were available, some universities relied on original (mostly American) textbooks. Actually, this is a widely used procedure in well-reputed universities throughout Europe and my assessment is that our students were at no loss due to this approach.
[36] The second issue concerns the economic databases. They are far from being even decent. This is probably the most frustrating area for a result bound researcher. Much of this frustration comes from the fact that investigations are made mostly online and up to the moment few of the potential databases have made the switch. 14 (Note14: I recently counted no more than approximately 30 Romanian online libraries. (see http;//bcu.ubbcluj.ro/alte/html#bib))
[37] It is evident that whatever has been accomplished and is professionally sound has to do with international exposure. It is also evident that different kinds of governmental structures lacked the political will or competence to articulate a coherent plan for generating sustainable policies in our field of interest. But the exogenous impetus works well: EU accession turned into a “national theme” to such an extent that it will probably compensate whatever is lacking from a strictly endogenous perspective.
[38] There is an obvious communication gap between what the world of social science is and how society perceives it. It is the task of the newly emerging generation to fill, against the odds, this gap. 15 (Note15: Several years ago optional classes of Economics were offered to the Department of Journalism of my university; the project was dropped due to the lack of demand. Meanwhile, one could notice that the bulk of information to be tracked in the media has to do with economics. ) Beyond the pathetic tone of this assessment lies the fact that there are lots of hidden long-run opportunities, even in the brain-drain process. Though I consider the brain-drain as extremely dangerous, I see no alternative but to conceive a more comprehensive scheme in order to enrol the minds abroad to the social benefit.
[39] [“To sum up”], Romanian economics and the Romanian economists’ community need to end transition and enter normality. True enough, the legacy of the past constitutes the worst initial conditions one could imagine. But I see no limits when it comes to both human and intellectual capital.
[40] Finally, let me state that, in my opinion, an approach such as the SSCEE project is, should be extended within this field, so as to gather a diversity of research areas, according to the heterodox tradition of economics 16 (Note16: Our study was fatally limited to 4-5 categories of Economics; most sources identify at least 15-16, such as: General concepts and history, Training, teaching and studying, Economics, National economy, Economic policy, Public finance, Economic sectors, Business administration, Management science, Human resource management, Stock and logistics, Production and manufacturing, Marketing, Financial planning, Accounting, Statistics, Econometrics, etc.). Moreover, a sort of multidisciplinary (social science, but not only) triangulation, in which results emerging from other disciplines can be compared, should occur; we can gain policy relevance, the ultimate goal for any entrepreneur of this kind, only through convergence.
Cluj-Napoca, 2002
