Have you heard about CEAUSESCU?
Nicolae Ceauşescu was the leader of Romania from 1965 until he was overthrown and killed in the revolution of 1989. Early in his life he played an active role in the Communist party, which resulted in imprisonment in 1936 and 1940. In 1939 he married another highly devoted Communist, Elena Petrescu. Once the Communists fully gained power in Romania in 1947, Ceausescu headed the nation's ministry of agriculture and served as deputy minister of the armed forces. Eventually he rose up to the second highest position in the party, holding important posts in the Politburo and Secretariat. After Gheorghe Gheorghiu-Dej's death in 1965, Ceausescu became the leader of the state and president of the State Council. In the 1960s he ended Romania's participation in the Warsaw Pact and condemned the invasion of Afghanistan by the Soviet Union. After becoming President in 1974, Ceausescu began to run the country in a militant fashion. His secret police held tight control of free speech and the media. In 1982 he ordered most of Romania's products to be exported in order to pay off a ballooned foreign debt due to his mismanagement. The lack of agricultural and industrial resources crippled the country and the lack of medicine, food, energy, and other basic necessities drove the people to the brink of starvation, while the Ceausescu's outrageous consumption continued unabated. The population finally rebelled when Ceausescu ordered his forces to fire on antigovernment demonstrators in Timisoara. On December 22, 1989 he and his wife were captured and on Christmas Day they were both executed by a firing squad.
Elena Ceausescu was born on January 7, 1919. Born into a poor family - her father was a plowman - her formal education ended after the fourth grade. In the 1930s she met her future husband Nicolae while being active in an underground Communist party. They were then married in 1939 and from that point on they were a team, never parting. Nicolae appointed her to the Nation Council of Scientific Research. Two years later Elena was awarded her Ph.D. in industrial chemistry despite having had other people do the work for it. All her supposed scholarly achievements and awards were entirely fraudulent. Indeed, she was seen many times dozing off, open mouth, when scientific papers were discussed. In 1980 she was appointed the first deputy Prime Minister in the Council of Ministers, the number two position behind her husband. By the time Elena started to gain power in her husband's government the country was starting its downfall. In the end, the much despised Elena was executed by her husband's side on December 25, 1989.
Although originally regarded by the West as a sort of maverick Communist, due to his opposition to the 1968 Soviet invasion of Czechoslovakia, it soon became apparent that he was one of the most brutal leaders that Europe has ever seen through his attempts to personally dominate the Romanian people.
Nevertheless, Ceausescu was actually very consistent in his policies. His unyielding Stalinist ideology to create a 'homogenous Socialist population out of the traditionally peasant based Romanian people' was what caused Romania to be in the situation that it is today. To achieve his aims, the population would have to be subjected to his control - most easily achieved if they were contained in large urban centres.
The economic consequences of such a policy was an all out drive to create a heavy industrial base in Romania and a determination to make Romania self sufficient through the elimination of its foreign debt. A policy of 'systemisation' was also proposed in which the rural population was to be moved to larger urban centres - but this was later abandoned.
Initially, the development strategy was very successful, as vast pools of underutilised labour in agriculture was mobilised for industry with the proportion of the non-agricultural labour force increasing from 30.3% in 1956 to 63.5% in 1977. However, this growth was not sustainable - being based on structural shifts - and soon the labour force was faced with inadequate employment and income opportunities with a reduced supply of food and other consumer goods. However, Ceausescu's ideological inflexibility allowed for no changes in his policy and the regime resorted to coercion to achieve the production targets which enterprise managers were then forced to fabricate.
The effects of this flawed system soon became apparent as the benefits from the labour force shift were reduced. Economic growth fell from 10% in the early 1970's to 3% in 1980 with food and other consumer goods becoming very short in supply.
The situation was worsened by the energy crisis of the early 1980's. Despite the fact that Romania had one of the best endowments of natural resources in Europe and in 1985 produced more electricity per capita than Spain, Italy or Portugal (excluding imports of electricity) the streets were dark and people died from the cold in their homes. In 1989, household consumption of electricity accounted for only 5.1% of the total.
This crisis was a consequence of the continuation of the drive towards heavy industry, making Romania a net importer of electricity at a time when World energy prices were at a peak. When the crisis became apparent, instead of curbing this drive, it was, in fact speeded up - hitting the population more.
Apart from the obvious social consequences of this policy, the demand for many household appliances fell sharply while light industry was often forced to run at less than full capacity. Agriculture was also affected as a high proportion of irrigation couldn't be used.
Yet Ceausescu's vision was not swayed and he turned to even more ambitious projects such as the Danube-Black Sea canal and the Bucharest civic centre - to create a capital worthy of the New Socialist Man. All this while his people starved and sat in the dark at night.
Ceausescu's policies soon became seen for what they were as the economy became unable to meet the basic needs of the population such as food and health care. In 1981, rationing was reintroduced as agricultural output fell sharply. This was mainly due to unrealistic food prices and agricultural wages that were too low. As a consequence, the private sector became more important for providing food and by 1985 it accounted for over half the total production of milk, wool, eggs and potatoes despite only holding 13% of arable land.
Ceausescu's response? The 'new agrarian revolution'. A plan which aimed to incorporate the agricultural sector properly into the plan. Economically it made no sense as farmers were now forced to deliver quotas of food to the state at a third of the market price - with these quotas being even higher for private farms. University graduates were forced to spend several years in the countryside and the introduction of the 'closed town' scheme made it very difficult to get back to the cities.
To worsen the situation, in 1988 Ceausescu announced that systemisation was being reintroduced. The idea behind this was to structure all villages into a well-defined hierarchy with some 300-500 villages selected for promotion into modern towns while another 6, 500 villages were to be phased out entirely.
It can be seen, therefore, that by this time Ceausescu had completely lost control of himself. He was now insisting on visiting factories himself and choosing their production targets according to his own personal whims. In other words, by 1989 he had succeeded in subordinating the entire Romanian economy to his own personal 'off the wall' ideologies. Happily, Ceausescu was deposed before either the New Agrarian revolution or systemisation could do damage but it is clear what their effects would have been. Firstly, the agricultural production base would have been eroded further while removing any form of production incentives from the farmers. Furthermore, the systemisation imposed rural-urban migration would have reduced the supply of labour further while alienating the Romanian peasantry even more. Ironically the net result of this would have been to increase the population's dependence further on private production - something which Ceausescu abhorred.
Eventually, in 1989 as GNP fell by 10%, shortages became more pronounced and unemployment began to rise, Ceausescu was deposed. The economy was in a shambles. The entire information base for planning had been eroded and physical infrastructure was severely run down - despite high government investment rates. The actual physical well-being of the population had deteriorated through malnutrition, pollution and the decline in the health sector. Furthermore, the fall in investment in education had been so severe that the numbers enrolled in University education had actually fallen despite the increases in the size of the 18-22 age bracket.
Thus, Ceausescu left Romania with an ineffective, underproductive industrial base, a highly weakened, unmotivated agricultural sector and an unhealthy, unproductive population. It is this legacy which provides the foundation for the 'basic needs' approach to the Romanian economic programme. Many economic resources have been diverted back to the population with the net effect of providing confidence in the economy and through the increased supply of food, reducing the need to hoard.
Nevertheless, it would be wrong to think that all of economic problems have been resolved. Although the population has a sense of real improvement, the macroeconomic indicators show a bleak situation. Output has plummeted, labour productivity has fallen and hard currency imports have risen significantly. Much of this decline is merely due to the adjustment process that is necessary in economic transition. However, it would be wrong to underestimate the extent to which structural factors such as oversized industries, price controls and highly inefficient managers have contributed to the decline. It is these factors for which the Ceausescu regime is responsible and it is these distortions which will prove the greatest challenge to reformers.
Elena Ceausescu was born on January 7, 1919. Born into a poor family - her father was a plowman - her formal education ended after the fourth grade. In the 1930s she met her future husband Nicolae while being active in an underground Communist party. They were then married in 1939 and from that point on they were a team, never parting. Nicolae appointed her to the Nation Council of Scientific Research. Two years later Elena was awarded her Ph.D. in industrial chemistry despite having had other people do the work for it. All her supposed scholarly achievements and awards were entirely fraudulent. Indeed, she was seen many times dozing off, open mouth, when scientific papers were discussed. In 1980 she was appointed the first deputy Prime Minister in the Council of Ministers, the number two position behind her husband. By the time Elena started to gain power in her husband's government the country was starting its downfall. In the end, the much despised Elena was executed by her husband's side on December 25, 1989.
Although originally regarded by the West as a sort of maverick Communist, due to his opposition to the 1968 Soviet invasion of Czechoslovakia, it soon became apparent that he was one of the most brutal leaders that Europe has ever seen through his attempts to personally dominate the Romanian people.
Nevertheless, Ceausescu was actually very consistent in his policies. His unyielding Stalinist ideology to create a 'homogenous Socialist population out of the traditionally peasant based Romanian people' was what caused Romania to be in the situation that it is today. To achieve his aims, the population would have to be subjected to his control - most easily achieved if they were contained in large urban centres.
The economic consequences of such a policy was an all out drive to create a heavy industrial base in Romania and a determination to make Romania self sufficient through the elimination of its foreign debt. A policy of 'systemisation' was also proposed in which the rural population was to be moved to larger urban centres - but this was later abandoned.
Initially, the development strategy was very successful, as vast pools of underutilised labour in agriculture was mobilised for industry with the proportion of the non-agricultural labour force increasing from 30.3% in 1956 to 63.5% in 1977. However, this growth was not sustainable - being based on structural shifts - and soon the labour force was faced with inadequate employment and income opportunities with a reduced supply of food and other consumer goods. However, Ceausescu's ideological inflexibility allowed for no changes in his policy and the regime resorted to coercion to achieve the production targets which enterprise managers were then forced to fabricate.
The effects of this flawed system soon became apparent as the benefits from the labour force shift were reduced. Economic growth fell from 10% in the early 1970's to 3% in 1980 with food and other consumer goods becoming very short in supply.
The situation was worsened by the energy crisis of the early 1980's. Despite the fact that Romania had one of the best endowments of natural resources in Europe and in 1985 produced more electricity per capita than Spain, Italy or Portugal (excluding imports of electricity) the streets were dark and people died from the cold in their homes. In 1989, household consumption of electricity accounted for only 5.1% of the total.
This crisis was a consequence of the continuation of the drive towards heavy industry, making Romania a net importer of electricity at a time when World energy prices were at a peak. When the crisis became apparent, instead of curbing this drive, it was, in fact speeded up - hitting the population more.
Apart from the obvious social consequences of this policy, the demand for many household appliances fell sharply while light industry was often forced to run at less than full capacity. Agriculture was also affected as a high proportion of irrigation couldn't be used.
Yet Ceausescu's vision was not swayed and he turned to even more ambitious projects such as the Danube-Black Sea canal and the Bucharest civic centre - to create a capital worthy of the New Socialist Man. All this while his people starved and sat in the dark at night.
Ceausescu's policies soon became seen for what they were as the economy became unable to meet the basic needs of the population such as food and health care. In 1981, rationing was reintroduced as agricultural output fell sharply. This was mainly due to unrealistic food prices and agricultural wages that were too low. As a consequence, the private sector became more important for providing food and by 1985 it accounted for over half the total production of milk, wool, eggs and potatoes despite only holding 13% of arable land.
Ceausescu's response? The 'new agrarian revolution'. A plan which aimed to incorporate the agricultural sector properly into the plan. Economically it made no sense as farmers were now forced to deliver quotas of food to the state at a third of the market price - with these quotas being even higher for private farms. University graduates were forced to spend several years in the countryside and the introduction of the 'closed town' scheme made it very difficult to get back to the cities.
To worsen the situation, in 1988 Ceausescu announced that systemisation was being reintroduced. The idea behind this was to structure all villages into a well-defined hierarchy with some 300-500 villages selected for promotion into modern towns while another 6, 500 villages were to be phased out entirely.
It can be seen, therefore, that by this time Ceausescu had completely lost control of himself. He was now insisting on visiting factories himself and choosing their production targets according to his own personal whims. In other words, by 1989 he had succeeded in subordinating the entire Romanian economy to his own personal 'off the wall' ideologies. Happily, Ceausescu was deposed before either the New Agrarian revolution or systemisation could do damage but it is clear what their effects would have been. Firstly, the agricultural production base would have been eroded further while removing any form of production incentives from the farmers. Furthermore, the systemisation imposed rural-urban migration would have reduced the supply of labour further while alienating the Romanian peasantry even more. Ironically the net result of this would have been to increase the population's dependence further on private production - something which Ceausescu abhorred.
Eventually, in 1989 as GNP fell by 10%, shortages became more pronounced and unemployment began to rise, Ceausescu was deposed. The economy was in a shambles. The entire information base for planning had been eroded and physical infrastructure was severely run down - despite high government investment rates. The actual physical well-being of the population had deteriorated through malnutrition, pollution and the decline in the health sector. Furthermore, the fall in investment in education had been so severe that the numbers enrolled in University education had actually fallen despite the increases in the size of the 18-22 age bracket.
Thus, Ceausescu left Romania with an ineffective, underproductive industrial base, a highly weakened, unmotivated agricultural sector and an unhealthy, unproductive population. It is this legacy which provides the foundation for the 'basic needs' approach to the Romanian economic programme. Many economic resources have been diverted back to the population with the net effect of providing confidence in the economy and through the increased supply of food, reducing the need to hoard.
Nevertheless, it would be wrong to think that all of economic problems have been resolved. Although the population has a sense of real improvement, the macroeconomic indicators show a bleak situation. Output has plummeted, labour productivity has fallen and hard currency imports have risen significantly. Much of this decline is merely due to the adjustment process that is necessary in economic transition. However, it would be wrong to underestimate the extent to which structural factors such as oversized industries, price controls and highly inefficient managers have contributed to the decline. It is these factors for which the Ceausescu regime is responsible and it is these distortions which will prove the greatest challenge to reformers.
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