This chapter concerns the state and the “crucial reform” in the communist societies. While analysis and description of their economic history would require writing on two types of change - spontaneous change, and changes deliberately brought about by the authorities - interest is confined to the latter, and particularly to such as can be called radical, because of their impact on the functioning of the whole national economy or its core. The first wave of economic reforms in the communist world coincided with the period of serious political crises in several countries. The bloody June events in Berlin and the less violent incidents in Pilzno were followed by political crisis and military intervention in Hungary and the workers’ revolt in Poznan and by Gomulka’s triumphant return to power. The need for change in the functioning of the economies of the communist countries seems undeniable. The chapter considers restoration of capitalism in the communist countries to be an unrealistic option.