Twenty-five years ago this month two remarkable events took place in Washington.
On Sept. 27, 1989, in the musty embassy ballroom of the Polish People’s Republic on upper 16th Street, Leszek Balcerowicz, finance minister in the new non-communist government, outlined a plan to transform Poland’s economy from communism to capitalism. Shock therapy would be launched in three months.
Balcerowicz’s message was breathtaking. Prices would be decontrolled, individuals allowed to start businesses, the survival of state enterprises determined by the market. There was more — the printing press would be shut down — halting hyperinflation, the worthless Polish currency redeemed USDPLN, +0.61% .
Financial journalists in Washington for the annual meeting of the International Monetary Fund were astonished. Some sprang from their seats to file stories after the modest man in the ill-fitting East European suit stopped talking. For those of us remaining the room was electric. One reporter said, “there are lots of books about transforming capitalism to communism, none for going the opposite direction.”
This was six weeks before the Berlin Wall came down.