A new book by a Canadian think tank says Estonia is one of at least four European countries that turned from socialism to embrace remarkable success. The book The Road to Freedom: Estonia’s Rise from Soviet Vassal State to One of the Freest Nations on Earth is the latest release from the Fraser Institute in their The Realities of Socialism project.Authors Matthew D. Mitchell, Peter J. Boettke and Konstantin Zhukov demonstrate how Estonia made a dramatic transformation back to a market democracy.From 1993 to 2021:Estonia has more than tripled its average annual income and is higher than any other former Soviet state except Lithuania (US$39,381).The poverty rate plummeted from 54% to 2.7%.Estonians began to live longer. In 1993 the average Estonian could be expected to die more than nine years earlier.Estonia now has the highest rate of business startups of any European country.Frasier Institute President Niels Veldhuis says the object lesson for Canadians is timely.“This new book on Estonia is especially important given recent polling results from Leger, which found 42% of all Canadians — and 50% of young Canadians aged 18 to 24 — support socialism as their preferred economic system,” Veldhuis says in an email.The book explores the history of Estonia further back than its Communist days. Its first chapter explains its time as a “thriving nation” from the mid-19th Century until it was conquered by Germany, then Russia in the Second World.The book says, “shortages were rampant” in the Soviet era. This was partly because central planning will never achieve a proper price the way that a free market does and partly because the state was corrupt.“Socialist managers set prices below the equilibrium, generating a shortage so that they could then sell goods on the black market. We see evidence of this process in the fact black market prices were typically well above state-determined prices,” the book explains.“Socialist planners took control of several shoe factories in Estonia. State radio reported they were producing between 450,000 to 500,000 shoes per year. But only two to three percent of Estonian workers received permits to buy them. Similarly, Estonians were allowed to buy none of the three to four million tins of fish canned in Estonia’s canneries.It’s a much different country today, according to the Fraser Institute.“Estonia is a testament to the productive and ennobling power of freedom. After waves of successive invasions from East and West, the small and fledgling country on the Baltic Sea was dragooned into the Soviet Union in 1940. There its people were trapped for five decades,” the institute explains on its website dedicated to the book.“Eventually, Estonia’s workers and intellectuals decided they had nothing to lose but their chains. So, they joined hands — literally — in a mostly peaceful revolution. Finally free, the Estonians thrived, achieving a degree of prosperity and equality promised but never realized under socialism.”Previous books in the Realities of Socialism series featured transformations in Poland, Sweden and Denmark. The books were produced in cooperation with the foreign think tanks, the Institute of Economic Affairs from Australia, the Institute of Public Affairs in the UK, and The Fund for American Studies from the US.The 160-page book on Estonia and previous books on other countries can be downloaded for free at RealitiesOfSocialism.org.
A new book by a Canadian think tank says Estonia is one of at least four European countries that turned from socialism to embrace remarkable success. The book The Road to Freedom: Estonia’s Rise from Soviet Vassal State to One of the Freest Nations on Earth is the latest release from the Fraser Institute in their The Realities of Socialism project.Authors Matthew D. Mitchell, Peter J. Boettke and Konstantin Zhukov demonstrate how Estonia made a dramatic transformation back to a market democracy.From 1993 to 2021:Estonia has more than tripled its average annual income and is higher than any other former Soviet state except Lithuania (US$39,381).The poverty rate plummeted from 54% to 2.7%.Estonians began to live longer. In 1993 the average Estonian could be expected to die more than nine years earlier.Estonia now has the highest rate of business startups of any European country.Frasier Institute President Niels Veldhuis says the object lesson for Canadians is timely.“This new book on Estonia is especially important given recent polling results from Leger, which found 42% of all Canadians — and 50% of young Canadians aged 18 to 24 — support socialism as their preferred economic system,” Veldhuis says in an email.The book explores the history of Estonia further back than its Communist days. Its first chapter explains its time as a “thriving nation” from the mid-19th Century until it was conquered by Germany, then Russia in the Second World.The book says, “shortages were rampant” in the Soviet era. This was partly because central planning will never achieve a proper price the way that a free market does and partly because the state was corrupt.“Socialist managers set prices below the equilibrium, generating a shortage so that they could then sell goods on the black market. We see evidence of this process in the fact black market prices were typically well above state-determined prices,” the book explains.“Socialist planners took control of several shoe factories in Estonia. State radio reported they were producing between 450,000 to 500,000 shoes per year. But only two to three percent of Estonian workers received permits to buy them. Similarly, Estonians were allowed to buy none of the three to four million tins of fish canned in Estonia’s canneries.It’s a much different country today, according to the Fraser Institute.“Estonia is a testament to the productive and ennobling power of freedom. After waves of successive invasions from East and West, the small and fledgling country on the Baltic Sea was dragooned into the Soviet Union in 1940. There its people were trapped for five decades,” the institute explains on its website dedicated to the book.“Eventually, Estonia’s workers and intellectuals decided they had nothing to lose but their chains. So, they joined hands — literally — in a mostly peaceful revolution. Finally free, the Estonians thrived, achieving a degree of prosperity and equality promised but never realized under socialism.”Previous books in the Realities of Socialism series featured transformations in Poland, Sweden and Denmark. The books were produced in cooperation with the foreign think tanks, the Institute of Economic Affairs from Australia, the Institute of Public Affairs in the UK, and The Fund for American Studies from the US.The 160-page book on Estonia and previous books on other countries can be downloaded for free at RealitiesOfSocialism.org.
