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Property relations in the period of transition

In: Privatization and Entrepreneurship in Post-Socialist Countries

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  • Márton Tardos

Abstract

The changing value of assets is one of the most important economic success indicators in a market economy. It shows how much the investor pays for a firm or how much the old proprietor asks for it on the capital market. Asset value is determined by the present value of profits that the given assets may produce, and its objective value may be approached through capital market bargaining among several independent economic actors. It is also well known that, in market-oriented variants of socialism, during the transition from the socialist economy to a market economy there are no true proprietors behind real assets and firms who would have any vital interest in expected profit. From this contradiction it readily follows that one cannot speak of a efficient market until firms and their managers have been subjected to the pressure of proprietory interests. Without proprietors, a market becomes only a quasi-market where success may be manipulated; and manipulation is much more important than realised profit.

Suggested Citation

  • Márton Tardos, 1992. "Property relations in the period of transition," Palgrave Macmillan Books, in: Bruno Dallago & Gianmaria Ajani & Bruno Grancelli (ed.), Privatization and Entrepreneurship in Post-Socialist Countries, pages 59-68, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-1-349-12393-3_4
    DOI: 10.1007/978-1-349-12393-3_4
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