'To what extent was there a systemic crisis in Eastern Europe during the 1980's?'

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'To what extent was there a systemic crisis in Eastern Europe during the 1980's?'

There was not one issue affecting Eastern Europe to suggest that there was 'a systemic crisis' during the 1980's, but rather a series of broad systemic crises affecting Eastern Europe. These crises had different effects in different countries and each problem had a different role to play in the collapse of communism in Eastern Europe. The most major of these problems was the economic crisis that had severely affected every economy in Eastern Europe. The late 1980's saw the emergence of new leaders and organisations in countries that ran counter to the communist hegemony and these groups were able to gain the people's support or influence there opinions. They criticised the regime for the poor economic situation and at the lack of pluralism because, to this generation the communist ideology had lost its legitimacy to govern unopposed. The people of Eastern Europe increasingly learnt of life in the West as more information seeped in. The people also experienced Western culture via the booming black market in Western consumer goods being run under the help of corrupt officials. The reforms of Gorbachev in the late 1980's were also a major factor in why the crisis in Eastern Europe came to a head at the time that it did, this has to be considered when answering the question.

The Communist system offered eastern European citizens many benefits, e.g. guaranteed employment, subsidised prices for both food and shelter, free education including university and universal health care. Few in the East wanted to give up such safeguards, although in some countries (Yugoslavia and Hungary) experiments in market socialism had already undermined job security, while budgetary deficits threatened the social benefits.

Declining rates of growth and technological stagnation led to a loss of confidence in central planning and eventually to massive protests against communist rule. Policy-makers debated whether economic decentralisation and western-style markets might solve the problems of Eastern Europe. Although the debate was not entirely new (it echoed discussions of the market socialism in the 60's) and although reform meant different things to different people, many seemed to conclude the East could catch up by adapting to the ways of the West.

One area in particular the East couldn't match the West on was that they could not compete in supplying the consumer sector and in providing a variety of foodstuffs, adequate housing and many everyday goods needed to raise the standard of living. There were shortages of just about everything, while Eastern technology was relatively backward compared to the West.

Industrial pollution was rampant, thus undermining the health of the pollution and negating many of the benefits of universal health care.

Productivity problems were endemic in the bureaucratically controlled, centrally planned economies of Eastern Europe. Many economic planners favoured reform, industrial, commercial and agricultural enterprises were still burdened by an entrenched managerial elite more interested in protecting themselves than in risking innovation. The rapid advance of technology in Japan, Western Europe and the USA exacerbated the differences between East and West. The Eastern bloc was simply unable to equal the technological virtuosity of the West, with serious implications not only for the living standards of its own people but for the competitiveness of Eastern bloc products in world markets. They often lacked the infrastructure to support the latest innovations. This backwardness exacted heavy costs in productivity. Perhaps the best known cases were in the agricultural sector, where crops sometimes lay rotting in the fields because of shortages of equipment and fuel, unpaved and sometimes impassable country roads and inadequate storage and processing facilities. Now we'll look into the financial situation in a few of the countries in Eastern Europe.
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Poland's economic policy from the 1970's onwards was industrial development financed by borrowing from the West. Continuing growth was to be driven by industry, supposedly rejuvenated and reoriented to the export market. This transformation was supposed to be brought through new high-tech technology, principally by new imported machinery to boost industrial productivity. The imports were to be financed by foreign loans. By the early 1980's economic growth had gone catastrophically into reverse. The allocation of investment had remained a highly centralised process, subject to bureaucratic interests and distortions, and with a heavy bias towards heavy industry. The failure ...

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