Eastern Europe (comprising the eight socialist countries of Bulgaria, Czechoslovakia, East Germany [German Democratic Republic], Hungary, Poland, Romania, the Soviet Union and Yugoslavia) achieved an even better economic performance than the west in the 1950s and 1960s. But this was accomplished under a different political and economic institutional framework. Whereas in the west, the mixed social market economy prevailed, in the eastern bloc the means of production were owned and operated by the state. After the war, the eastern countries followed the Soviet model, though with some variations, of economic and political control, and by the early 1950s, they had emerged as fully edged socialist states, rmly embraced within the Soviet sphere of in uence. The partial exception was Yugoslavia, which after 1948 distanced herself from the Soviet line.

Socialism in more than one country For a second time war shattered the economic and social life of central and eastern Europe, including the Soviet Union (see Chapter 6). The uni cation of a considerable part of central-east Europe within the Third Reich collapsed on the expiry of Hitler’s regime, and the result was another rede ning of national frontiers, together with the migration of millions of people. But the geographical carve-up of territory was less extensive and less damaging than that after the First World War, and the region did not return to the fragmented state that prevailed after 1918. Instead, the countries drew inspiration from their larger eastern neighbour (the USSR) and quickly established themselves as socialist states using the Soviet model as a benchmark. The main objectives were seen to be industrialization and the transformation of the social structure, tasks that could best be carried out by the abolition of private ownership of the means of production and the creation of a centrally administered and planned economic system.