ABSTRACT
The main debate in economic reform should be about the means of transition, not the ends. Eastern Europe will argue over the ends: for example, whether to aim for Swedish-style social democracy or Thatcherite liberalism. The process of transformation will be difficult, and a shared vision in East and West of joining in a unified European market will be vital in keeping it on track. Past attempts at reform in Eastern Europe have had a paradoxical result. The countries that have attempted the most market-oriented reforms—Hungary, Poland, and Yugoslavia—are the very ones suffering the greatest economic instability. So the reforms under communism were necessarily self-limiting, and thereby self-defeating. But after the democratic revolution of 1989, Eastern Europe can move beyond the failed "market socialism" and create a real market economy with a large private sector and free trade. The transition program can be decisive and rapid.
