To better understand impact of the global financial crisis on the former Soviet satellite states, one has to go back to early nineties. At that point of time the Central European countries undertook shock therapy of so-called “free market reforms”. The “Second World” economies of that time may be classified as highly industrialized ones. However big portion of their manufacturing capacity was antiquated by the Western standards, and intended mainly to support Soviet military might. Nevertheless, it secured basic needs of the population’s economic and social sustainability.

Poland, Central Europe’s biggest economy, has been world’s major producer and exporter of coal, copper, steel, as well as agricultural products such as sugar and potatoes. She has had competitive segments of light industry such as glass, ceramics, and textile. She has been a major exporter of construction services to the third world countries and merchant ships to the communistic block. Due to the favorable currency conversion rates, her products have been as competitive as the Chinese’s ones, but of far better quality.

Paul Craig Roberts was Assistant Secretary of the US Treasury Department in the Reagan administration. He was Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review. He is coauthor of The Tyranny of Good Intentions.

IN: According to the basic definition an economy is the realized social system of production, exchange, distribution, and consumption of goods and services of a country or other area.” Could you provide a brief assessment of the modern financial systems contribution to the above mentioned functions?

PCR: A financial system matches up savers with investors and higher returns with higher risks. When this becomes global, misbehavior by the reserve currency country causes problems for all.

With the fall of the Soviet Empire in 1989 and subsequently the Soviet state itself; a “unipolar” world has been created.

The United States and its European allies were at this moment free to shape the World in any way they wished.

Post communistic nations of Central Europe, betrayed in Yalta, were now looking for a helping hand from the West in rising from socialistic ashes of the Soviet occupation. Especially Poland, whose Solidarity Movement was a direct cause of the socialistic system demise, was hoping for a better future in European structures.

As always in the past, Poland’s contribution in bringing freedom to enslaved European nations was quickly forgotten. Now, the politically correct euphemism of the 1989 breakthrough is the “fall of the Berlin wall”; although respected German citizens merely physically removed a few concrete blocks of the wall.