THE FINANCIAL CRISIS & POST-DEMOCRACY

FINANCE AND ECONOMY IN CEE, THE DANUBE REGION: ECONOMIC AND SOCIAL DEVELOPMENTS, , , , , , ,

Trieste,”Generali Insurance Company”

In his book „Post-Democracy“ Colin Crouch analysed the state of democracy in Europe. Democracy thrives when there are major opportunities for the mass of ordinary people to actively participate through discussion and autonomous organisations in shaping public life and when they are actively taking up these opportunities. Societies probably come closest to this democratic ideal in the early years of achieving democracy or after a great regime crisis, when enthusiasm for democracy is wide-spread. Most of Western Europe had its democratic moment after World War II. For the first time in the history of capitalism, the general health of the economy was seen as depending on the prosperity of the mass of wage-earners. A certain social compromise was reached between capitalist business interests and the working population. Business interests learned to accept certain limitations on their capacity to use their power. The democratic political capacity concentrated at the level of the nation state, which could guarantee those limitations because firms were largely subordinate to the authority of nation states then.…

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A COMPARISON OF THE TRANSFORMATION OF BANKING AND INDUSTRIAL DEVELOPMENT IN CEE IN THE 1890s & THE 1990s

FINANCE AND ECONOMY IN CEE, THE DANUBE REGION: ECONOMIC AND SOCIAL DEVELOPMENTS, , , , , ,

Trieste, maritime trading centre of the Habsburg Empire

Close ties of banks with the industry of the Austro-Hungarian Empire can be identified, yet a leading role of banks in the industrialisation process cannot be seen. On the contrary, Austrian banks were for years averse to industrial promotion in the 19th century. The caution which pervaded the banking circles in Austria and the Czech Lands was evident in the general lack of risk capital, and in the preference for participating in or granting extended credit to only the booming enterprises. The caution and the lack of entrepreneurial spirit of the banks can be seen from the fact that in the periods of economic expansion the banks lagged behind with their investments. So industrial development was not triggered by investments of banks, but was preceded by private investment or an expansion of government programmes such as railroads. This was not only true for Austrian and Czech, but also for Hungarian banks. Yet despite the fact that economic development was not bank-led in the Austro-Hungarian Monarchy, the banks did fulfil the important role of providing financial intermediation services. The widespread development of banking services, such as credit on current account, open book advances, and discount of bills, were the main contribution of banks to industrial development. They were very efficient in mobilising capital.…

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