The Czechoslovak economic reform has died, and almost nothing was salvaged. It is sad, particularly because the courageous attempt to transform the rigid command economy into a more efficient system of market socialism was accompanied by an even more daring attempt to transform the authoritarian political system into a truly humane socialist democracy. This combination of a quest for economic efficiency in conjunction with a deep and thorough democratization of all political and social life, made the Czechoslovak reform movement unique compared to those of other East European countries

downIt was not just ‘another unsuccessful reorganization’ which can beup easily forgotten. It was a rare historical opportunity for the Czechoslovak people, as was clearly expressed by Milan Kundera at the Fourth Congress of Czechoslovak Writers in 1967: 

"The whole story of this nation, the story of democracy, fascist oppression,  Stalinism and Socialism . . . contains in itself all essential ingredients of what makes the twentieth century what it is. Thanks to this, we, who have had this experience, can ask perhaps more important questions and create perhaps more meaningful myths than those who have not had it. This knowledge could be transformed into the liberating step over the existing border, into the step over the border of existing knowledge about man and his lot, and thus give a true meaning, maturity and greatness to the Czech culture. It is still only a chance, only a possibility. ... We are obliged to ask once more: Is our nation aware of this chance? . . . Does it know that the historical opportunity comes only once? Does it know that to lose this chance means to lose the twentieth century for the Czech people?"  

updownThe people of Czechoslovakia, aware of their opportunity attempted to make profound changes in the economic and political systems during the few months which became known as the Czechoslovak Spring of 1968. Their enthusiastic endeavor was, however, terminated by the Soviet military invasion and it is not likely that they will have another opportunity to demonstrate the feasibility and viability of a system of democratic market socialism with a ‘human face’ which they had hoped to create.
downupPractically all the important changes which were introduced during the years of economic reform (1965-9) have already been rescinded so that the present economic institutional arrangements are only marginally different from those of a typical Soviet-type economy. It would not make much sense, therefore, to write this paper if its purpose were only to provide information about the contemporary state of the Czechoslovak economy. But its aim is different. In spite of an unhappy fate, the Czechoslovak reforms will retain their historical importance because they demonstrated the possibility of a peaceful transformation of a command economy and totalitarian political system into democratic market socialism.  It is particularly important to note that this peaceful transformation was accomplished exclusively by forces endogenous to Czechoslovak society and with the support of the overwhelming majority of the population. An invasion of an incredibly strong foreign army was needed to arrest and reverse the process.
 Rather than concentrate on the most recent measures and institutional arrangements, the present paper will attempt to review the whole history of the reform and to examine the interaction of the economic, political and other social forces which led to the vigorous growth of the Czechoslovak reform movement.
To provide an overall framework, a brief survey of institutional changes in the period after World War II will be given in Section 2. Section 3 will provide a more detailed description of the most important aspects of the economic reforms. Finally, the underlying causes for reform and the strategy employed will be discussed in Section 4.up


























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