Kádár's New Economic Mechanism

Kádár's New Economic Mechanism, introduced in Hungary in 1968 under János Kádár, was a reform aimed at easing central planning within a socialist economy. It allowed for limited market-like practices, such as small private businesses and pricing adjustments, to improve efficiency and productivity. This mechanism maintained state ownership of major industries but introduced incentives for innovation and responsiveness to consumer needs. Essentially, it was a controlled experiment to make the economy more flexible and capable of meeting people's needs without abandoning socialist principles entirely.