Economic transformation: industrialization on an obsolete technological basis

State socialism was a mixture of a pragmatic modernization model for backward agricultural countries to industrialize, and a Utopian model for creating a more ‘just’ society, without private ownership, and a secure society where no one may be rich but no one is left in poverty.

To realize these goals, the regime was, at certain periods, highly dictatorial, and was always strongly authoritarian, ready to sacrifice individual freedoms and redistribute incomes to create an assumed homogeneous community and assure the future national interest. The road to modernization and equality was thus paved by human suffering, humiliation, and sharp social conflicts for millions. What was social justice for the lower social layers became injustice and elimination for others.

Militant state intervention and the tremendous sacrifice imposed on the populace had, however, a profound socio-economic impact. During its four decade-long experiment, state socialism had a rather mixed record. A great many of the modernization goals were accomplished and a previously rigid, traditional society was dramatically transformed. However, lacking the socio-economic achievements which had originated in the nineteenth-century Industrial Revolution, the regime could not keep pace with contemporary ‘modern modernization’ that emerged in the advanced world during the second half of the twentieth century. Both catching-up and a new lagging behind characterized the performance of state socialism. While the former predominated during the early period, the latter did so in the later years.

It was an experience of historical dimensions, similar to that of Alice in Wonderland when she was ‘running … [and] felt she could not go faster. … The most curious part of the thing was, …