ABSTRACT

Europe’s economic and social systems went through a significant period of change during the late 1970s and 1980s. The economic crisis had forced the systems to accommodate the changed conditions and large manufacturers therefore became increasingly exposed to the economic downturn. In the West, economies were restructured with a greater role for smaller and medium enterprises. The cost came in terms of higher unemployment and in the restriction of some of the social services. The communist world found it much harder to adapt. While the policy of capitalist governments was not to intervene and prevent the rise of a poverty gap, thus giving the markets even more liberal conditions, the communist economies found it much harder and never actually recovered. As Mark Mazower argues, The economy was run according to the Plan, not the market, in conditions of information scarcity and total political responsibility for economic performance.1