ABSTRACT
The shift from a strategy of reform to one favoring the dismantling of the socialist system and the transition to a market economy represents a fundamental change in their basic orientation and is vital to an understanding of the upheavals in Central and Eastern Europe since 1989. The evolution of reformist ideas often went unnoticed at the time because it occurred gradually and because of the reformers' prudence. The radical reformers of the 1960s wanted to combine state ownership and a regulated market, which one could call a model of market socialism. The capital-holding organizations could thus accomplish the task, so far unresolved under socialist conditions, of reallocating capital. The 1980s saw a wave of economic liberalism in the West with the accession of Margaret Thatcher and Ronald Reagan to power, followed by the widespread infatuation with the theses of the Chicago School and the return to favor of the Austrian tradition.
