The Škoda car company is in trouble and there is talk of its closure. It is a company that was handed over to a foreign investor for free in the 1990s. In exchange for a promise that he would invest some money in the factory (already his own) in new machines, which he then failed to keep anyway. Škoda Auto regularly received state subsidies and sent hundreds of billions of crowns of profit abroad. Hundreds of billions more went untaxed. Now it is no longer paying out and the investor does not want to put a single crown into it. Understandably so.
It’s true that it provided amazing conditions for its employees. But we must also add that, thanks to its monopoly position in the Czech economy, it passed on the costs to its suppliers. In fact, there was (and still is) a redistribution from the suppliers’ employees to the employees of Škoda. Hence the generous remuneration at Škoda and the even worse salaries elsewhere.
I also remind you that this was not some extraordinary thievery. Škoda Auto is often cited as a typical example of an extremely successful privatisation into foreign hands. What does it look like in those cases that are described as botched?
And now we tremble with fear that at least this is what we have left.
The dream we have dreamt of since the 1990s is crumbling. Namely, that if we take the banks and factories, and hand them over to foreign corporations for free (or give them a chunk of our savings as a reward for taking it), they will then employ us there, give us great salaries, treat us kindly, pay for expensive education, teach us how to use the most advanced technology… in short, take fatherly care of us. We used to look at the employees of West German companies in the 1980s and say: This is how we’re going to be.
And the foreign investors were happy to reinforce that illusion. Similarly, liberal economists and zero-state theorists told us that this is what the market order naturally leads to.
We didn’t realize that:
- in that West Germany, it worked within the framework of the nation state
- in West Germany there was very strict social legislation, an active state and strong trade unions
- it was rather a thing of the past. At that time it was already collapsing in Germany.
There is no point in going back to why we were so stupid. The more interesting question is what to replace it with.