Market alternative to state activism in restoring the capitalist economy

The theory of economic transition is concerned less with the end product of building a capitalist economy than with intermediate solutions and the appropriate pace of institutional change. This article advances theoretical arguments on the advantages of a self-grown, evolutionary restoration of the capitalist economy in Eastern Europe or any country abandoning the socialist experiment.The article develops the point that of the two basic methods of setting up an economic order—the state or a market-type mechanism—only the latter can assure the emergence of a genuine, complete market. Further, it suggests that markets with self-interested individual actors at the center are not only superior to states in the allocation of scarce resources, be they economic or political, but are also the best vehicle for institution building.