The purpose of this investigation is to criticize a prominent view of the transition in Eastern Europe. In this perspective, a simple change in the structure of institutions would be necessary to transform these economies, removing barriers to participation in international commerce (Åslund 1994; Brada 1993). Missing from this view is the simple but crucial insight that institutions are peopled by local actors, for whom the patterns of thought and action characteristic of the previous regime are normal and routine. The difficulties aid agencies and other frontline organizations have encountered in Eastern Europe are not due to intransigence, ignorance or incompetence, as some would have it, but to the very simple problem that learning new ways of doing business takes time. It is difficult to alter habits, ideas, opinions people hold of themselves, of others and of the world around them in short order. Moreover, people live within complex social relations: ties of affection, respect, obligation and reciprocity. A radical change in economic activity requires not only a change in thinking, but a restructuring of the larger social world of which one is a part. Actually, refiguring one’s social relationships is far more difficult than learning new habits. In contrast to the views of liberal economists (and ironically, their Marxist-Leninist predecessors), I do not believe that attitudes and practices change quickly or easily, even when much effort is expended in altering the institutional context. It takes years of altered circumstances and new experiences to change the way people think and act. We are witnessing this transformation in Eastern Europe, but must recognize it for what it is: a slow yet thorough transformation of social community and social thought.