If that's true why is it in say the Czech Republic or Hungary people say "I'm better off now then in 1985." and the standards of living have risen dramatically (outside of Russia and other former Soviet republics)?
Most people in the Czech Republic and Hungary are indeed better off today than they were in 1985. That, however, is hardly a surprise. 24 years have passed since 1985. If you take any random 24 year period in any country after the beginning of the Industrial Revolution, it is almost certain that people were better off at the end of the 24 years than at their beginning. For example, people in Czechoslovakia and Hungary were better off in 1989 than in 1965, they were better off in 1979 than in 1955, and so on.
The question is, are they better off today in the real 2009 than they might have been in an alternate 2009 where the Soviet system was still in place?
Obviously, there is no way to know for sure, but there is good reason to believe the answer is no.
First of all, all Eastern European countries experienced a catastrophic collapse of living standards - and of all economic indicators - in the early 1990s.
In 1988, Czech GDP per capita was $16,645 (inflation-adjusted in present day dollars). In 1994 it was $14,617.
In 1988, Hungarian GDP per capita was $13,399. In 1994 it was $10,821.
Today, both countries have recovered, but the total economic growth of the Czech Republic between 1988 and 2008 was 37% (remember, this is over 20 years, that's why the percent is so high), while over the previous 20 years (1968-1988), Czech economic growth was 43%. In Hungary, growth from 1988 to 2008 was 34%, while growth from 1968 to 1988 was 42%.
Both of these countries have grown quickly over the second decade of capitalism, true, but this is offset by the economic collapse of the first decade of capitalism, and the net result is slower growth than they had under the Soviet system. And today they are hit hard by the global recession, so the future is uncertain.
And these are two of the best performing countries of the former Eastern Bloc...
While all of that happened, the Gini index for both countries skyrocketed, meaning that the gap between rich and poor grew dramatically. As a result, while the Czechs and Hungarians are, on average, a little bit poorer than they might have been today under the Soviet system, the lowest earners among them are far poorer. They are probably actually worse off than they were in 1985, let alone compared to where they might be today had the Soviet system continued.
The introduction of capitalism had social costs and no economic benefits. And that was in the Czech Republic and Hungary, two countries that came reasonably close to breaking even in the economic field. In most other countries, capitalism was not only a social disaster, but an economic one as well.
"When I give food to the poor, they call me a saint. When I ask why the poor have no food, they call me a communist."
- Dom Helder Camara, Brazilian archbishop
"Definition of a conservative: a person who believes that nothing should be done for the first time." - mikelepore