To understand recent developments in Eastern Europe requires a method of analysis that is capable of internalizing into a theoretical framework (i) the logical premises deduced from the costs of transactions and incentive structures generated by various institutions and (ii) the evidence for refutable implications of those premises. The economics of property rights is such a theory. It expands the scope of the ability of economic analysis to explain a wide range of institutional structures and provides empirical corroboration of its logical implications. The economics of property rights is, then, an effective scholarly instrument that offers more significant understanding of the three current issues in the area of comparative economic studies: (i) evaluating the performance of alternative institutional arrangements, (ii) explaining the failure of socialist institutions in Eastern Europe, and (iii) identifying the costs (political as well as economic) of institutional reforms in that part of the world. In that sense, the book is both timely and relevant. In the late 1980s East Europeans crossed the threshold of fear and forced their leaders to abandon Marxism. With that theory of history dead and buried, the cost of current sacrifices in the pursuit of socialism has risen relative to the present value of its expected future benefits.

Inhalt

Economic Systems, Institutions and Scarcity.- Scarcity, Institutions and Economic Behavior.- The Rise of Capitalism.- The Rise of Socialism.- The Private-Property Free-Market Economy.- Basic Institutions of Capitalism.- Exchange in a Private Property Capitalist Economy.- Production in a Private Property Capitalist Economy.- The Right of Ownership and the Firm.- The Attenuated Right of Ownership and the Firm.- The Role of Financial Markets in a Private-Property, Free-Market Economy.- The Soviet-Type Economy.- The History and Development of the Soviet Union Through the 1980S.- Basic Institutions of the Soviet-Type Economy: State Ownership.- Basic Institutions of the Soviet-Type Economy: Economic Planning.- Basic Institutions of the Soviet-Type Economy: The Political and Economic Monopoly of the Politburo.- The Behavior of the Soviet-Type Firm.- Performance of the Soviet-Type Economy.- Toward the End of the Soviet-Type Economy.- The Yugoslav-Type Economy.- Basic Institutions of the Labor-Managed Economy.- The Behavior of the Labor-Managed Firm.- Failure of the Labor-Managed Type Economy.