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The history of the world economy - Polyak GB

30.3. economic problems in the socialist countries in the third phase (1960-1970)

With the depletion of resources, extensive growth became apparent disadvantages created in socialist countries economic system. Sharply falling industrial growth and national income, especially in the industrialized countries of Eastern Europe, which caused the need for economic reforms.

In Hungary, Czechoslovakia, Yugoslavia landmark reform was the use of the market mechanism to be included in the system of international division of labor and the world market. In these countries, changes in the economic system were the most radical. In East Germany, Poland, the changes did not go further modernization of the existing administrative system of economic planning and management. Countries such as Romania and Mongolia, as well as Cuba, Vietnam, to the reform of national development models at that time did not start.

Economic reforms in Eastern Europe 60 years, were, however, collapsed, as pricing liberalization has yielded positive results in the agricultural sector, but in a monopoly position of the majority of industrial enterprises did not lead to the formation of a competitive regime, and to the implementation of monopolistic advantages - including higher prices. At the same time it began "eating away" income businesses when their teams were given the right to influence the distribution of income on consumption and accumulation fund fund.

Therefore, folding reforms after the events of 1968 was due not only to political pressure and aggravation of social contradictions caused by the difficulties of transition to commercial principles of management *.

* Since January 1968 the new Czechoslovak leadership was to carry out a course of gradual liberalization and democratization. Progress was interrupted by the introduction of reforms to Prague troops of the Warsaw Pact.

China

China began a departure from the policy of "Great Leap Forward" in 1960. Were officially recognized some "leftist mistakes", especially in agriculture, attempts were made to correct them. Increased production of main industrial products: cotton yarn, steel, coal, electricity, oil, machine tools, new for the country's industries such as electronics and petrochemicals, increased length of railways and highways. Soon, however - in 1966, the country began the "cultural revolution", which lasted until 1976, again to slow down economic growth, although the official statistics showed China's economic growth: grain production in the period from 1966 to 1976. It increased by 34% and were put into operation new advanced industries (about 1570), railway lines, created the hydrogen bomb, put into orbit the first space satellites.