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Foreword I started writing this book in the course of 2009, in a year which was to be considered annus miserabilis from the very beginning. The autumn of 2008 wrought havoc on the whole world. Collapsing banks and insurance companies, financial sector meltdown, global recession, fiscal bankruptcy created unprecedented fear and pessimism in many countries. Governments , some acting in panic, tried desperately to mitigate the consequences of the downturn by implementing extraordinary measures of Keynesian stimuli. Financial and fiscal socialism—i.e. state ownership of big chunks of the banking system and profligate overspending—became fashionable once again in a big way. Governments, apparently reluctant to apply the seductive monetary and fiscal shower, were strongly and widely criticized for their lack of imagination and their allegedly harmful inaction . In such an atmosphere and zeitgeist, nothing seemed more remote and unimportant than the so-called transition which had started twenty years earlier in Central and Eastern Europe. The implosion of the vast Soviet empire seemed distant memory and history, having little or no relevance to contemporary events and thoughts. People were celebrating the twentieth anniversary of the fall of the Berlin Wall in a subdued mood and manner. The twentieth anniversary of Tien An Men square tragedy raised more fear than remembrance and not only in the official circles of the People’s Republic of China. Although communism seems to have retreated forever, capitalism now appears once again under serious threat; this time around from within. During the 1990s, communism, an inherently non-market system from economic and societal point of view, was replaced by capitalism not only x Foreword in Central and Eastern Europe—which is the subject of this book—but also in Russia, the Caucasus, Central Asia, China and Vietnam. Nevertheless , in the vast Eurasian mega-continent capitalism did not bring about liberal democracy. Instead, a new formation emerged, which can be called authoritarian state capitalism.1 This is a major difference between Central and Eastern Europe and the rest of what had been called the second world for more than 40 years until 1989. Moreover, authoritarian state capitalism, embodied first and foremost by China and Russia, looked like a viable and attractive alternative to Western democracy as it was producing far higher rates of economic growth. (It was happening not only in China for almost 30 years but also in Russia at least in a short decade from 2000 to 2007). In the contemporary context this book can be considered as an untimely but salient defense of market capitalism and liberal democracy. Celebrating transition today is tantamount to upholding the decidedly superior values and achievements of a market system over a non-market one and that of a democratic system over a non-democratic one. It is definitely not to deny the failures, shortcomings or imperfections of market economy and democracy. Neither do I take the survival of market capitalism and liberal democracy for granted. On the contrary, by highlighting the glorious and painful process of transition and making an attempt to understand its economics and culture, I wish to contribute to the once again badly needed theoretical (academic) and practical (political) defense of Western civilization.2 1 Some scholars even predicted that “a successful nondemocratic Second World could emerge as an attractive alternative to liberal democracy.” Gat (2007). In light of the still unfolding global economic and financial crisis, which has spilled over to many emerging markets and proved the theory of decoupling liberal democracy and capitalism relevant, it can still be considered a real threat. 2 Capitalism—and, in a much wider context, Western civilization—has been considered in terminal decline by countless scholars and ideologues, left and right. Marxist communists obviously took the demise and ultimate disappearance of capitalism for granted for 150 years. But conservative thinkers were also keen to predict the destruction of Western culture and civilization at the crossroads of history in the twentieth century. The first attempt to forecast the ultimate failure of Western culture and civilization was made by Oswald Spengler in his groundbreaking book: “Der Untergang des Abendlandes” (The Decline of the West) the first volume of which was published in 1918, exactly when World War I ended. Another famous and thoroughly pessimistic account of Western civilization was written by Arnold Toynbee: “Civilization on Trial” published in 1945, right at the end of World War II. Countless books and publications, including literary works, made the idea of decline a staple food of Western intellectuals for the second half...

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