Investors Column... Economic Decline


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Money Matters

April 8, 2026 by Scott Crosby

Investors Column... Economic Decline

Nobody can deny the destructiveness of Socialism.  The crushing poverty that enveloped Eastern Europe under the domination of the Soviet Union since World War II made that clear.  

If there remained any doubters, the resurgence of the economies of those Eastern European countries since the collapse of the Soviet Union in 1989-90 demonstrates the contrast between the tyranny of government control versus the freedom of capitalism with crystal clarity.  Only those who are determined to self-inflict their own blindness can avoid perceiving that fact.  

Real Power, Real Growth

The recovery from that period of stunted growth varies across the nations of Eastern Europe.  While the standard of living has improved significantly for people living in Bulgaria, Romania, Hungary, Czechia, and Slovakia, the most radical change has occurred in Poland.

The anti-Communist revolt was nowhere so strong nor so successful as in Poland, where one-time dock-worker Lech Walesa became a dominant leader:  in 1990 he was voted in to be Poland’s first non-Communist President in 45 years.  

During his Presidency, Poland transitioned from a Communist dictatorship into a free-market economy.  Capitalism has rightfully been called the only moral social system.  Poland is a text-book case that so dramatically proves that to be a fact that it leaves no room for debate by any remaining naysayers.  

A World-class Economy

That proof is very much in evidence in a recent Associated Press (AP) article titled, “Poland is now among the world’s 20 largest economies.  How did it happen?”  (see “https://apnews.com/article/poland-economy-growth-g20-gdp-26fe06e120398410f8d773ba5661e7aa”)

When Poland’s Communist government fell in 1989, sugar and flour were rationed.  Its citizens were paid one tenth what workers in neighboring West Germany were paid.  

But Poland’s per capita gross domestic product rose from a poverty-level $6,730 in 1990, to $55,340 in 2025.  A young person starting his career in the late 1980s who is now approaching retirement age is able to anticipate a once-unimaginable level of affluence.

Capitalism Works

The transition included the freedom-oriented introduction of “independent courts, an anti-monopoly agency to ensure fair competition, and strong regulation to keep troubled banks from choking off credit.  As a result, the economy wasn’t hijacked by corrupt practices and oligarchs”, as happened

In some post-Communist countries, the article reports.

Success is telling:  Poland recently passed Switzerland to be the world’s 20th largest national economy.  Its productive output exceeds $1 trillion.  

As one Polish woman noted, Poland adopted “some cultural norms that the West spent 500 years developing.”  

Freedom Works

Whether a person’s education teaches him the meaning of the words “freedom”, “liberty”, and “capitalism” or not, these are the words that describe the foundation of that “cultural norm” which has been developed by Western culture for the past 500 years.  For individuals living in it, that cultural norm makes possible a level of well-being and happiness that far exceeds what is possible in any other culture, past or present.  

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