4 SOCIAL SCIENTIST The essential features of the new economic system in East Europe can be traced to increased autonomy of micro economic units, that is, enterprises, and consequently greater devolution of powers in economic management at different levels. The introduction of this system of autonomy was aimed at eliminating the in-built de6-ciencies of centralized command models of economic growth in most of the European socialist countries before 1965. In these countries planning and management of the economy both at micro and macro levels started becoming increasingly difficult because at the micro level the tasks were simply to "obey" instructions for fulfilling the physical targets of output and report back the level of performance. Even the composition of product mix used to be determined by the people at the higher echelons of decision-making. In addition, the extensive pattern of development—an exclusive reliance on material and labour inputs for increase in volume of output without proper emphasis on an increase in labour productivity, development of science and technology, quality and cost of production—created bottlenecks in the form of diseconomy in the sphere of production. As a result, in the late fifties, losses from the point of view of economic calculations started to mount up in staggering proportions. The whole network of information had become faulty. Reports from below to the higher authorities in most cases contained a distorted picture of the production capacities of enterprises—an understatement of such capacities. At the same time, the state planning authorities too had started with the assumption of this distortion, while fixing targets and allocating resources. Therefore, management, whether at the macro or at the micro level, rested on the hypothesis of untruth and disbelief. The philosophy of such a management led inevitably to diseconomy, waste and stagnation. In this situation the prestige of an enterprise and efficiency of management did not depend on the efficiency in production in terms of higher productivity of labour and better quality of output but on the fulfilment or overfulfilment of targets in physical terms alone, where costs were of no concern to the management. Moreover, a plan of more or less uniform production throughout the year was conspicuous by its absence in an enterprise. Overwork in one quarter to fulfil targets and slackness in another also had become the common practice.1 The new system in planning and management was introduced in the light of such an experience and amid mounting controversies regarding efficacy of stubbornly persisting in a model of economic growth that simply augmented the intensity of waste and stagnation leading to economic ostracization of European