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Economy

Economy

For several decades the economies of the eastern block countries were operating with a great handicap, in that they were centrally planned and managed.  The economies of Eastern Europe and the former Soviet Union were controlled by central bureaucracies, with little or no flexibility allowed at the local level.
	This controlled economy served the Soviets and their satellites rather well up to the nineteen eighties.  They were able to control not only the means of production, but also people's thoughts and actions.  During the eighties, however, they faced challenges like never before.  On the one hand they had to improve their information processing technology to keep up with the west.  On the other hand, they realized that the information revolution would result in informed citizens who would demand significant improvement in their economic condition.  Additionally, they were presented with a dilemma by former president Reagan: accelerate the arms race at the expense of domestic production.
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