Czechoslovakia’s First Small Business Auction Is a Spirited Affair

With a fellow worker clutching her free hand for moral support, Anna Wertheimova won a tense bidding war Saturday to became the proud owner of her neighborhood food market and one of Czechoslovakia’s first private entrepreneurs.

Zuzana and Samir Begic also came to seek their fortunes in the world of free enterprise, but went home empty-handed after being soundly outbid for a tiny greengrocer’s shop.

Czechoslovakia’s inaugural auction of small businesses was but a baby step along the road to capitalism. But it represented the first move to undo the colossal damage inflicted on millions when Communists seized all private property in 1948.

The opening selloff drew hundreds of curious spectators and often took on the air of a sporting event, with the crowd cheering on underdogs gambling their life’s savings against well-heeled black marketeers and those acting as fronts for foreign investors.

The first round of commercial auctions that will privatize nearly 100,000 stores, restaurants, hotels and other small businesses by midyear was limited to Czechoslovaks whose citizenship was acquired after 1948.

Foreigners looking for promising investments will be allowed to compete only after local citizens have had a shot, and Czechoslovaks who were in the country before 1948 are due compensation of a different and more extensive kind.

The question of who owns what is greatly complicated in this country that has weathered a century of war, invasion, economic tumult and revolution, each of which redivided the wealth.

Most Czechoslovak industries and commercial properties can’t be put on the auction block because former owners have come forward to ask for them back.

President Vaclav Havel and the reform-minded government are attempting to correct injustices committed in the past, but they also want to stimulate entrepreneurship and competition in a society grossly lacking in simple services.

Finance Minister Vaclav Klaus has put the capitalist juggernaut in motion, setting out a rapid privatization that will get the state out of small businesses by the end of this year.

But he has also warned that in a nation used to treating customers with thinly veiled contempt, about 70% of the new private businesses are likely to fail.

The auctions are likely to increase unemployment because the new owners can hire and fire as they choose.

A state food store on Pod Kavalirkou Street closed its workweek in an industrious flurry Friday, as employees seemed intent on keeping their minds off the risk of having no jobs to come back to on Monday.

Waiters, sales clerks and other employees of the businesses up for bids have been grousing about what they see as an unfair advantage for those who made money illegally through black-market speculating or by bilking state enterprises they ran under the old regime.

But Prague officials contend the occasional injustices will be outweighed by the benefits of escaping the stagnant economy bequeathed by communism.

Buoyed by loyal employees, Anna Wertheimova prevailed in a 30-minute bidding war for her neighborhood grocery, which sold for 1.65 million crowns, or about $55,000.

But many other newcomers to the cruel world of capitalism went home disappointed.

“We set a limit for ourselves of 250,000 crowns (about $8,300),” said Samir Begic, a 26-year-old computer programmer who clutched his wife’s hand hopefully through the early bidding. But the small produce store they hoped to own went for more than $11,000.