Can perestroika—the reconstruction of the Soviet economy—work? The shape of the world economy, in particular the relations of the advanced industrial societies to the markets of tomorrow, depends upon the answer to that question. I distinguish here between Eastern Europe—Poland, Czechoslovakia, Hungary, and to a lesser extent Romania and Bulgaria— and the Soviet Union. The three larger economies of Eastern Europe are engaged in a drastic turnabout of their societies. All three have abandoned central planning and nationalization and are turning to the market. They eagerly want investment from capitalist societies, and some investment, particularly in Hungary, is already taking place. The Soviet
Union is a far different question. And it is not at all clear how far the necessary structural reforms will go.
In terms of its potential and actual performance, the Soviet Union is a mystery. Let me outline some basic data....
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