This is the Cato Daily Podcast for Friday, September 25, 2009.

I'm Caleb Brown.

Once communism had fallen in Eastern Europe, the next steps toward markets were not simple or easy.

Baslav Klaus, the president of the Czech Republic, remembers the intense resistance to the move to markets.

Klaus now believes that capitalism, even in its highly regulated form, faces new and powerful opposition.

He spoke at the Cato Institute September 21st, 2009,

to mark the 20th anniversary of the fall of communism.

This is the second of two portions of his speech.

Immediately after the fall of communism, it was necessary to open the markets,

both internally and externally, to liberalize and deregulate them,

to desubsidize the economy in order to reveal the true costs and prices of all kinds of economic

activities to denationalize and privatize the whole economy.

The quick disappearance of the institutions of the old system

led, however, to an institutional vacuum which had to be filled with alternative institutions

as soon as possible, to avoid huge costs of anarchy or semi-anarchy.

Waiting for Godot, waiting for the existence of a perfectly prepared box of rules and institutions of a market economy

before the starting of the whole liberalization and deregulation process

would have been a tragic mistake.

The scholastic dispute of what should come first, markets or market supporting institutions,

reminds me of the eternal chicken egg sequencing question.

We had to go ahead and to use that analogy and work on chickens and eggs simultaneously.

The moralistic preaching coming even from this country and maybe even from this place, that there must be the rule of law first

...