The Free Enterprise Corps to the Rescue
WE all rejoiced at the collapse of communism in Eastern Europe and the movements for democracy and freedom. Efforts to win authoritarian nations to the democratic way of life, however, never adequately defined the critical role played by private enterprise and free markets. All eyes were on the prize of human rights. The force that changed the face of Eastern Europe was not only the cry for political freedom, but also the yearning for adequate food, clothing, shelter, and even television sets and refrigerators. This yearning requires capitalism's competition and entrepreneurship.
Democracy has essentially arrived, but consumer goods haven't. One unemployed Hungarian said to me, "When my children have empty stomachs and bare feet, I lose my enthusiasm for the ballot box." Without the productivity of free enterprise, material wants are unmet.
Much has been achieved by the brave men and women in Poland, Hungary, Yugoslavia, Romania, Bulgaria, and Czechoslovakia who have thrown off their political yokes. But these same people have been heavily indoctrinated in an authoritarian economic culture. In our highly advanced technological global village, they will find it nearly impossible to remove their economic bonds alone.
Skilled technicians and trained professionals increasingly are leaving their native lands in Eastern Europe. Last year alone more than 1 million people left the region, and the exodus grows. Two and a half million passports have been issued in Romania alone. During the last year, gross national product has declined more than 3 percent in that nation, with similar declines throughout the region. In Poland, GNP fell more than 10 percent. Such statistics are reflected in exploding street riots, reduced liv ing standards, and ever-mounting unemployment.
The political achievements of well over 100 million struggling people need to be buttressed from the outside by constant, even aggressive assistance in promoting free enterprise. Unproductive, archaic government-run enterprises and centralized controls must be replaced. Privatization, the transfer of state-owned enterprises to private ownership, could play a key role.
The United States Congress and administration are obligated to take the initiative in this effort, even though the wind-down of the Gulf war dominates the thoughts of Americans. To miss the opportunity to take firm, helpful action in Eastern Europe at this crucial time could allow the seeds of disillusionment to take root and grow into reactionary political movements. Authoritarian rule could reassert its dominance, offering phony promises of a strong new order. I am ever mindful that this part of Europ e spawned two world wars in this century.
Americans can make a significant contribution by establishing a structure to promote aid for nations seeking economic guidance. This structure could take the form of a Free Enterprise Corps. Such a corps, run by a small staff, could serve as a clearing center for qualified policymaking entrepreneurs and senior executives of major corporations willing to serve for periods of three to 12 months.
They would serve as advisers to government and business leaders in nations striving to transform government enterprises to private ownership and control. Part of their mission would be to guide managers and policymakers into an understanding of the workings of a free-market economy. The nominal costs could be met by the nation seeking assistance - or, if need be, underwritten by private funds raised in this country.
We have two successful models to guide such an initiative: the Peace Corps, which helps poor nations improve their living standards; and the Executive Service Corps, which assists business operators by improving their management skills.
Indigenous executives in developing nations need to be guided away from a management culture where all decisions are directed from the center and toward a style of free and creative initiatives, through meaningful privatization and other efforts. A Free Enterprise Corps could help fulfill that need.