Czechoslovakia's 'Socialist Miracle'

I want to thank one of my Patrons for suggesting this idea. Deep appreciations to K for his help and links

Links:

[Skawagon]

Both of my parents worked there in the second half of 80's Neither of them would describe it as a sweatshop. Trough both of them were employed in white-collar jobs, earning well above-average salary. Indeed, laziness and incompetence were not tolerated unlike in many state-run enterprises.

First of all one thing one has to understand is that all JZDs were formally allowed by the state to have side production that didn't have to be agricultural - The reason was to keep people economically active in winter. Čuba was clever in both bending the rules to his favor and identifying areas of production to focus on.

One example from the early days (as was told to me by my father): The JZD was building new cow sheds and it needed corrugated metal sheets for roofs and sidings. However due to the "greatness of the planned economy, " none was available. However flat sheets were plenty abound and it took just a few days for a few tractor mechanics to weld together a metal breaker - then it is off to the races - because if you can't get corrugated metal, no one else can. It is this attitude to problem-solving - and there are plenty of supply problems in a planned economy - that can make you up lot of money. Others were doing this too, but no one was scaling up quite as fast as Slusovice did. With that being said, they also have a whole department focused on extracting government grants, and even favors.

One major thing was that they established their own PZO - podnik zahraničního obchodu - Foreign trade company - This will need a bit more explanation: In communist Czechoslovakia, companies could not trade directly with foreign companies, the trade must have been routed through PZO. There were multiple reasons for this, The major one was keeping the balance of the internal economy where prices were set by the committee, and if free trade was allowed the system would collapse as the goods that were sold under value would be siphoned from the local market causing (or more likely worsening existing) shortages. However, through what I can imagine only as a bribery the JZD was able to set up its own PZO. This was in the early 80's and I believe that is the point when their revenues took to the stratosphere.

This allowed them to set up a trade center in Vienna, where they sold raw goods such as timber for hard currency (and at a very competitive price), buying Class Jaguar combine harvesters and thus pushing yields above what was possible on comparable fields with eastern machinery. Combine that with Western pesticides and seeds... Anyhow they exported basic stuff and invested the hard currency primarily in technology, be it new kinds of seeds, fertilizer, pesticides, or computer parts.

Just like with anything else, they were forced to build their own computers because there were none available. And it was far cheaper to import parts and integrate them (i.e. build the computers) than importing whole systems.

Also, I would like to dispute one of the closing segments of the video: That is that most of what was left of the collective went bankrupt, as that is simply not the case: The agricultural part of the business was the least profitable and was broken up to number of companies as well as a land being returned to its rightful owners. Some of them do well some less so. The Yoghurt division was sold to Danone in the 90's and was closed in the late 2000s. The joint venture with Austrian plastic maker Greiner became wholly owned by the Austrian firm and the Czech branch was instrumental in growing its presence in eastern europe. Two modular building manufacturers rose from JZD Slusovice, with Koma Modular being the leader in modular construction, now delivering its second fully modular airport to Senegal and with clients like BASF and Audi. Speaking of car manufacturers, BMW signed a contract with JZD Slušovice to manufacture wiring harnesses for their cars in the late 80s - this particular manufacturing activity was ceased, mostly due to its colorful privatization mr. Cach (but still lasted for some twenty years) However former employees of this factory found a new one, supplying harnesses for all Class 345 trains running on London's Elisabeth line among others. The construction business formed the backbone of Zlinstav building and development company. The SWS company - Microsoft and other SW as well as HW distributor, one of the largest in the country and direct descendant of TNS division of JZD was sold just this year to a Swiss multinational. Last but not least the TNS company also still exists and produces automotive electronics parts and production automatization tools.

[timavoievodin]

Man, I live in central Europe, it's 1 am, and you releas new video about Czechia.
What a legend

[pacfic]

Last time I was this early Tito was sending threatening letters to Stalin

[PainCreator]

It is always so funny to here JZD in english. Hello from Czechia.

[TymexComputing]

Few weeks ago I saw a flee market seller, Slovak in Cracow who had a special box with the name Slusovice PC or computer on it. He didn't want to sell it.

[timavoievodin]

The end of video reminded the fact, that baltic countries used to produce electronics and other high-value products for whole soviet union, making them the richest in ussr. Of course after collapse it was all gone

[grimwaltzman]

> Socialist miracle
> Looks inside
> Capitalism

[bobgroves]

Thank you, Jon.
You have a fascinating network of patrons and contacts.

[kyisin]

During my China studies years, I've studied Xiaogang's miracle, the village that kicked start the economic reforms in China but I didn't know an earlier precursor existed (perhaps more successful one) in the Eastern bloc. It's such an amazing story

[miroslavhoudek]

It's fun that someone says Jay Zee Dee unironically, because people used to use the english spelling as a joke (stemming from one particular comedy skit, where a foreigner comments on idiosyncrasies of Czechoslovakia).

[Ethans]

What a breath of fresh air to learn about a topic that isn’t covered by 500 other channels. Almost sounded like the Singapore miracle, crazy to imagine what it could’ve been.

[laylatrix]

I haven't seen the video yet but the trick was JZD Slušovice functioned and invested like a special private bank without relying on central money allocation from government.

[Makimars]

Wasn't expecting to see my country on this channel. Two notes:

Kudos on the pronunciation. It was great for a foreigner.
When the communist party took over, it was still called Czechoslovak republic. The name change to add "socialist" into the name was done in the 60s with a new constitution.

[glg]

At those time I was a teenager, but from era of socialism I remember, that the most precious products from Czechoslovakia were:

- cars: Skoda S100 (later: 105S, 120S, etc),
- motocycles like Java (from skuter till 350 Sport)
- tractors: Zetor
- trucks: Tatra
- sweets: Lentilki
- cartoons ("Krtek", "Pat a Mat" "A je to")
- Tv serie "Arabela"
- Singers: Karel Gott, Helena Vondráčková

Greetings from Poland 😀

[MrBar_]

Never expected my country to covered on this chanel

[AttilaSVK]

Thanks for making a video on this topic. Fun fact: I visited Slušovice exactly 12 years ago before this video came out, and was in the former building of the JZD, where the TNS computers and later PC clones were manufactured. Since 1991, it's the headquarter of SWS a.s. (SoftWare Slušovice - one of the divisions of the JZD), which is an IT and consumer electronics distribution company.
At that time I worked for Dell in Bratislava, Slovakia, as a tech support agent on their Alienware customer support phone line for the UK, Ireland and South Africa. A colleague came over from the Czech and Slovak support department with a strange case of an Alienware Aurora R3 (or maybe R4) doing some shenanigans (I can't recall the exact problem) and the customer being a distributor, didn't really had the time to do more trobleshooting with us, and I was not allowed to dispathch any parts without further troubleshooting. We were always told to think outside the box, so I went after my boss to get an approval for on-site diagnostics, a thing we, as phone agents didn't do, nor our service providers (who would just replace the parts dispatched with them). It got approved and on the 26th of April, 2012, we went to Slušovice with my colleague to diagnose the system, a thing which Dell would never do. It wasn't the only time I bent the rules in order to make a customer satisfied :)

[SlickMona]

I'm Czech and I've never heard of this story, thank you!

[XxLIVRAxX]

Great subject, BTW the Mondragon Coop Group of Spain's Basque country is a great subject to explore.

[michalformanek]

Should be mentioned, that nearby Zlín city was one of the most progressive cities, before commmunists came to power. Zlín was headquarter of Baťa shoe company, it had first skyscraper in central europe and the company was famous for modern technologie. After comunist coup, Baťa company was nationalised. So region had both educated people and good infrastructure long before. Also there was propagandistic value in JZD success, that is the reason, why some activities were allowed in Slušovice, but not in other places.

[the-quintessenz]

Imagine that guy had lived in a market economy. He'd be known today like Warren Buffet.