Economic_History_anim.gif (3797 bytes)   ROMANIA 



Exercise in a prison yard (1)

by Tobin Mulshine


"President Nicolae Ceausescu is well-known for maintaining tight internal control, nepotism, and a 'cult of personality.' His domestic economic policy--Stalinist emphasis of capital investment and heavy industry at the expense of agriculture and consumer goods--has always been unpopular." (2) Throughout the 60's and 70's Ceausescu's heavy foreign borrowing to juice up industrial production seemed to have positive effects, but in fact he was building up a tremendous problem for the people of Rumania. This problem, which was aggravated by his lack of concern for agriculture would not become evident until 1980 when he had to start a crash program to pay back Rumania's $10 billion debt. The austerity imposed upon the people would push their living standard further bellow already low level.


The new plan was geared towards exporting, in order to earn hard currency for the payoff of the huge foreign debt. The first aspect that I will discuss is the shortage of food. "The shortage of food--and the lines that form as soon as some scarce goods appear on the market--are creating a feeling of growing deprivation in this hard-pressed society, already burdened with the lowest living standard in the Soviet Bloc." (3) Rumania is considered to be one of the most fertile lands in all of Eastern Europe, yet Ceausescu never placed an emphasis on agriculture. Now with this plan, he was exporting all of the best foods to other countries. A western diplomat is quoted as saying, "They're exporting everything they can get their hands on. They're taking economic recovery out of the hides of their own people." (4) Ceausescu was taking food away from the Rumanians, and giving them the brunt to live with. The brunt was the scarcity of meat, eggs, cooking oil, and potatoes etc... Now, the lines were becoming longer and they were forming quicker as the scarce goods came into markets. When a professional woman was asked what she did during her free time, she responded, "I go hunting."(5) This hunt that she was referring to was the hunt for scarce goods mentioned above. From the days of having plenty of goods around, they now found that, "everyday Rumanians stand in long lines for food and often cannot find cooking oils, sugar, dairy products, fresh meat or eggs." (6) People were becoming accustomed to the fact that once the winter started they may not see fresh milk until the following fall. The only chicken being sold were the feet and the wings, the rest of the bird was no longer there. Many of the butcher shops had virtually closed, and people said that those that stayed open had, "slabs of pork fat and a kind of gray sausage. None has seen a potato in months." (7) The goods that are usually available are carrots, beets, spring onions, pork fat, and sausage etc The winter of 1988 ,was ,"the 7th straight winter that meat, butter, sugar, and cooking oil are being rationed."(8) Obviously standard of living has worsened.

The physical attributes of the cities testified about the attitudes that has been generated through cut-backs in energy. An example of picturesque Bucharest around winter time, "The city sinks at night into a gloom that seems unreal for a capital with 2 million inhabitants. Store windows are unlit, the few restaurants close by 8 or 9 o'clock. Half the street lamps are off-winter mists rise out of wet streets." (9) This picture portrays a truly dismal atmosphere..


A few specific examples:

  • The completely preposterous Ceausescu order that families were limited to 35 kilo-Watt hours of electricity during a winter month deserved the following comment: "this past winter's energy-saving is actually asking workers to commit suicide by freezing in their bedrooms."(10)

  • People, who were fortunate enough to afford the opera, wore their coats throughout the performance.

  • The families who exceeded the 35 kW hours of electricity limit were billed an equivalent of a monthly salary.

  • In the neighborhood of the old city the gas for cooking came on only about 10 o'clock at night.

  • Many goods were highly overpriced. A 70 year old typewriter costed a monthly salary.

I understand Ceausescu's wish to pay back the debt, but he apparently overdid it. Yet in the Soviet type command economy, it was all in his power.


Rumanians had also very little personal freedom. As the night would sink into darkness in the streets, anyone out there would be stopped by the police. They would be questioned: "What are you doing? Where were you? Where are you going,? Give me your papers!" and things like that. The police and Government were everywhere. Nobody would talk to a foreign visitor of Rumania in fear that they would be informed upon. Those that chose to talk were in hiding. One woman said that "they have a thousand ways to make your life miserable, your job, your apartment, the police - jail if they want. They will always find a way."(11)

Another examples of the poverty is that in public restrooms and even in better hotels there never was a toilet paper.

The austerity that their president inflicted upon Rumanians was absurd, and it can be best described by three words: the Soviet-type economy. The people on the top and specifically president Ceausescu usurped all the decision power. We can see the effects of their decisions for Rumania. The famous writer Saul Bellow described it as "that bug-house country, where the guys in charge were psychopaths; there were no rational grounds for what they did." (12)



  • (1) Aron, Raymon L.A. Times March 9, 1988

  • (2) Fischer, Mary Ellen N.Y. Times Jan. 26, 1982

  • (3) The N.Y. Times Apr. 26, 1981

  • (4) Aron Ibit

  • (5) Eder, Richard N.Y. Times Dec. 16, 1980

  • (6) Howe, Marvine N.Y. Times Nov. 1, 1981

  • (7) Aron Ibit

  • (8) Ibit

  • (9) Ibit

  • (10) Ibit

  • (11) Eder Ibit

  • (12) Ibit



  • 1) Aron, Raymond The heritage foundation policy review:(L.A. Times Mar. 9, 1988

  • 2) Binder, David N.Y. Times Mar.9, 1981 "Food shortages in Rumania reported to set off protests"

  • 3) Kifner, John N.Y. Times Dec. 26, 1983 "Rumania's enforced austerity"

  • 4) Reuters N.Y. Times Apr. 26, 1981 "Rumanians disgruntled over shortages of fresh food"

  • 5) Fischer, Mary Ellen N.Y. Times Jan. 26, 1982 "Ceausescu's tightrope"

  • 6) Howe, Marvine N.Y. Times Nov. 1, 1981 "Rumania determined to avoid Poland's plight"

  • 7) Eder, Richard N.Y. Times Dec. 16, 1980 "A reporter's notebook: The gloom in Bucharest"




OK Economics was designed and it is maintained by Oldrich Kyn.
To send me a message, please use one of the following addresses: ---

This website contains the following sections:

General  Economics:

Economic Systems:

Money and Banking:

Past students:

Czech Republic

Kyn’s Publications

 American education

free hit counters
Nutrisystem Diet Coupons