were two giant groups of nations within which 99% of the weapons of mass destruction and 80% of manufacturing industry were concentrated. Each group was closely connected with military, political and economic alliances (NATO and the EU, the Warsaw Pact and COMECON) with common military and economic infrastructures, with joint institutions and education of personnel. All other countries and peoples were dependent in some way or another on these groups. It is no accident that hundreds of local conflicts during this period were waged with the weapons of one or other of the military blocs and regarded as the continuation of their undeclared war. On the other hand, the two bloc system existed in the conditions of continuing integration and the growing dependence of countries on each other. This was the main reason for the general trends of world development to enter into contradiction with its existing structures. The extent of these contradictions was so great that there are justifiable grounds to speak of the common crisis of the two bloc system and, in broader terms, the crisis of the entire modern age. The first cause which lead to this crisis was the character and structure of world economic growth. After the Second World War, the global economic product of the Earth increased four-fold. The total manufactured output of the period between 1950 and 1990 is equal to the growth of production from the beginning of civilisation to the present day. There had never been such a turbulent period in the development of the manufacturing powers of humankind. Humankind had never witnessed such a period of dynamic processes reliant on mutual cooperation, discoveries, the multiplication of discoveries and their by-products. The other side of the coin was that such economic growth gave rise to enormous deformations. The competition between the two super powers and their allies assisted in the acceleration of progress but also lead to previously unknown levels of unbalanced growth. In the 1980's the average national product per head of population in the industrialised countries was more than 11,000 dollars. In the majority of African countries this figure was between 250-300 dollars. While in the most developed countries of the world post-war development had lead to an enormous abundance of goods and the domination of consumerism, in the Third World more than 1.9 billion people were suffering from malnutrition and disease. The level of consumerism in the developed industrial countries rose to a level 40 to 100 times greater than in the developing countries. This process of world development gave rise to the most unexpected paradoxes. The money spent by today by the French on pet food would be sufficient to feed the starving children of Ethiopia and Somalia. The iniquities in world development have increased during the last couple of decades. Under colonialism, capital was re-directed towards the poorer countries. After the war, however, it began to move in the opposite direction. Large investments began to be made in the USA, Western Europe and Japan. In the 1980's alone, direct investments in the developing countries fell by about one hundred percent - from 25 billion USD in 1982 to 13 billion in 1987. As a result of this the poorer nations began to rely on large amounts of credit in order to be able to feed their people, resulting in the crippling debt burden which exists today. At present the countries of Latin America owe international creditor banks and a number of governments more than 400 billion dollars. Over 100 billion are owed by the Eastern European countries. These statistics are proof not only of enormous deformations but of the profound crisis which is affecting the foundations of the world financial system. While the processes of international integration do not permit the development of a monocentric world, the seven richest nations of the world and the 300-400 wealthiest banks control the lives of the majority of humanity via debt management. On the other hand, the disproportionate economic development resulting from the mad rush to purchase armaments and conflicts led to the economic overloading of the two superpowers. As a direct result of the exisiting two-bloc geo-political structure the USA managed (or some say was obliged) to amass huge internal debts of more than 4 trillion dollars. In the 1970's and 1980's the debts of the USSR increase enormously and delayed the rates of its development. A second characteristic problem of the two-bloc model of develoment was the increase in environmental problems. For the entire period of post-war development, as a result of uncontrolled industrialisation and the blind faith in political and ideological ambitions the world lost practically one fifth of its cultivable land, one fifth of its tropical forests and tens of thousands of species of animal and plant life. During this same period the level of carbon-monoxide in the atmosphere increased more than ten-fold. The level of ozone in the stratoshpere has diminished and humanity is faced with the threat of global warming. Talk is now of a global ecological tragedy. Even today despite the growth in ecological awareness and "green" movements, the world environmental crisis is seen as something of secondary significance as something less important than the struggle for economic growth, military strategic stability or national domination. Global warming as a result of the industrial boom has already had serious, possibly catastrophic, consequences. The reduction of irrigated agricultural land, the increase in the levels of the oceans, the dessication of entire regions which produce the majority of the world's grain - these are just a small part of the possible consequences. Despite the potential serious consequences for the world the leaders of the two systems did not want, nor were they able to take any decisive measures to allocate more funds for the conservation of the environment and to reduce military expenditure or to pass common legislation to guarantee the priorities of human needs. The third and no less important cause of the crisis of the two-bloc system was the fact that in the 1950's mankind surpassed all logical extremes of military growth. The cold war and the opposition of the two world systems lead the two super powers into a ceaseless race for domination. This contest reached such a level that in the mid 1980's the USSR and the USA possessed enough nuclear and strategic warheads to destroy life on earth several times over. The eight most economically powerful nations on the earth - the USA, USSR, China, the UK, France, West Germany, Italy and Japan continually and deliberately increased their military budgets during the entire post-war period. In 1984, world arms export reached record levels of 75 billion dollars, several times greater than the amount of money necessary to buy food and medicines for the hungry and sick in the world and for investment in the poorer countries. As a result of the opposition of the two blocs in the 1980's between 13 and 15 million people were employed in the arms industry. In 1987, the global military budget of the world was more than 1 trillion US dollars. This extreme overarmament lead to the overall deformation of entire world development and distorted the structure of industrial production. It caused enourmous deficits in the budgets of the industrialised nations and created serious pre-conditions for the future of world finance. No less important was the fact that as a result of the constant increase in arms production and nuclear weapons in particular, the level of nuclear security fell to very low levels. The danger of a nuclear Third World War loomed greater than ever. At the end of the 1980's the two super powers - the USSR and the USA had over 12 thousand units of nuclear arms - which from the view point of common humanity was beyond the realms of common sense. Thus, the deformation of economic development, the world environmental crisis, the wealth of the North and the poverty and disease of the South, the demographic booms, overarming - all these factors are the clear symptoms of a profound crisis. It is true that all these critical phenomena have been frequently discussed before and that some of the problems which I have mentioned here have been the subjects of international summit meetings and research groups but it is also true that they have been looking for explanations to these phenomena in the wrong places. In my opinion the most profound reason for the crises in the environment, manufacturing and population growth can be found in the growing inadequacy of the entire two-bloc structure of the world. On the one hand, during this period, following the logic of confrontation and the struggle for domination, the two super powers, their allies and all the remaining smaller countries established structures oriented towards the development of the economic and military power of the bloc to which they belonged. On the other hand, the inter-bloc and inter-state power-struggle created a manufacturing capacity which lead to the internationalisation of the world and caused world problems which until then had been unknown. The contradiction is manifest. Institutions, politics, propaganda, the training of personnel, the links between manufacture and defence were directly dependent on the profound ideologisation of thinking, while the globalisation of humanity lead to the destruction of the confrontational structures of the two blocs. In the 1970's and 1980's the bi-polar world could no longer cope with global and world trends. This contradiction still exists today notwithstanding the collapse of the two world systems. The reason was the impossibility of bringing a sudden halt to the inertia of the past based in the instutitions, upbringing, education and thinking of people. There is no doubt that in the West, and in particular in the East, humanity has taken too long to come to terms with these problems. Moreover, subsequent generations will bear the consequences and will discover new disasters particularly in the environment and as a result of the abnormal military competition between the two world systems. A number of academics and politicians issued warnings in the middle of the century. The scientists' rebellion against atomic weapons in the 1950's, the courage of Sakharov in the USSR, and the actions of Albert Einstein, Bertrand Russel and Jacques Cousteau are just a few examples. However, the conditions of political opposition continue to exert an enormous power of inertia. This inertia comes from the cultures of the existing civilisation, the nationalism of the modern age and the world conflicts of the 20th century. One of the main reasons for the acceleration in the crisis of the two-bloc system and the collapse of the iron curtain was the growth in world communications. In simple terms, the growth of radio, television, computers and satellite dishes destroyed the iron curtain, pierced the armour of the tanks and lead to the formation of a common culture of integration. The revolution in communications which began at the beginning of the 1960's brought about incredible political and spiritual changes throughout the entire world. The Beatles and the Rolling Stones became a world phenomenon not only as a result of their musical talent but also due to the new methods of information transfer. In 1971 I went abroad for the first time, to the German Democratic Republic. I asked my hosts why all the television ariels faced west and he answered "It makes the German people feel united." Television had begun to erode the Berlin wall even then. After the 1960's and the 1970's people felt a new wave of integration and discovered their common humanity. This was, however, in sharp contradiction to the collapse of the world and the structures of the political regimes. The new generations began to grow up in an atmosphere which was no longer dominated by the dogma of ideology but by music and spirituality and the thirst for contact with progressive cultural images. Clearly this was in contradiction with the two-bloc division of the world and the division between capitalism and socialism. On the other hand, computers, communications and new world media began to exert a direct influence on the human conscience and to create the beginnings of a new previously unknown global culture. Together with the globalisation of commerce and financial markets, this raised questions about the basic structures of the third civilisation - nations and nation states. There is no doubt that their borders had begun to change giving rise to the problem of the formation of another world structure and of another political and economic order. In the 1960's when the cold war emerged from the ice age and the peoples from the two sides began to get know each other, the first barriers in their consciousness came down. In the Eastern bloc, intellectual movements and calls for more freedom caught the leaders quite unawares. In Czechoslovakia the Prague Spring blossomed, Hungary began a process of brave economic reforms and in Poland the workers began to fight for their rights. This period produced the indefatiguable spirits of Vladimir Visotskiy in Russia, the "Shturtsi" in Bulgaria and Ceslav Niemen in Poland. Many people in the West also realised that military, political and cultural confrontation was of little benefit. In the 1960's and 1970's in the USA and in particular in Western Europe movements for peace and understanding gained momentum. The demonstrations against the war in Vietnam, the youth movements in 1968, the hippy peace movements and a number of other phenomena were manifestations not only of the political status quo but also of a new emergent culture. The bearers of the new spirituality in the West in the 1960's were born not so much in the academic environments of Eaton and Harvard but in the fields of Woodstock and amongst the millions of fans of John Lennon, Mick Jagger and Ian Gillan. At the beginning of the 1960's the president of the USA, John F.Kennedy was the first American statesman to evaluate the Eastern European nations not merely as the incorporation of evil but recognised that they had attained certain social achievements from which much could be learned. Of particular significance was his attempt to build intellectual bridges with the East and to break the ice of the cold war. Without accepting the violence of the totalitarian regimes, many intellectuals in the West began to perceive more clearly not only the mistakes and errors but also the successes of the Eastern European countries and to propose the application of certain of the benefits of state socialism, particularly in the social field. Year after year the means of global integration - transport, commerce, radio and television lead to to growth in international contact and slowly lead to the blurring of the iron curtain between East and West. With the appearance of the computer and satellite television in daily life and with the intensity of world radio television and cultural exchange the barriers between the two systems became more illusory. New means of communication made the policies of isolation, concealment of truth and global division absurd. The monopoly of information collapsed as a direct result of the revolution in communications which in turn lead to the undermining of the two-polar model. Despite everything which I have mentioned until now, is it still not overstated to speak of the collapse of the Third Civilisation? Am I not attempting to impose original thought in an aggressive way onto the evolution of human development? I am conviced that this is not so. My arguments for speaking of a general change in civilisation will be developed in the subsequent chapters. They involve technological and geo-political structures, ownership and the transition from traditional capitalist and socialist societies and the blurring of the concept of the nation state. Everything which symbolised and represented the modern age - industrial technology, nation states, capitalism and socialism and the bi-polar world - has undergone change. As a result of the explosion of world communications the process of cultural globalisation has begun to accelerate and what emerged has taken on new sharper features. This trend has gradually created more and more adherents of a new world and a new civilisation. Sooner rather than later the two-bloc system of world civilisation was going to collapse. The question was "when?" and "in what way?" Chapter two COLLAPSE I: THE EXPLOSION IN EASTERN EUROPE 1. DECAY AND DEATH Between 1960 and 1990 a noticeable gap began to open up betweenthe socialist countries of Eastern Europe and the industrialisedcountries of Western Europe. At the beginning of the 1980's there was a growing danger that this gap was going to become insurmountable... A lthough the two-bloc structure of the world was entering a period of common crisis its disintegration began not in the West but in the East. The changes in Eastern Europe were revolutionary" while in the West they were seen as "evolutionary". Why? In my opinion the reasons for this can be seen in the greater inadequacies of the Eastern European totalitarian regimes to adapt to the new trends in world development and to adapt themselves to the new technological and economic conditions which appeared in the 1970's and 1980's. The Eastern European totalitarian bloc was the weakest link in the world of the Third Civilisation. As early as the 1950's the Americans, the Japanese and the Western Europeans had begun to look for completely new approaches to the way in which their lives were structured. On the one hand, under pressure from the new external and internal realities which had to be taken into account and on the other hand as a result of competition with the Soviet Union and other countries of the Eastern Bloc, the most developed industrial nations began to improve their systems. Today the economies of the USA, Japan and France have little in common with what they were in the 1920's and 1930's. By preserving free initiative, the industrialised Western countries managed to overcome the danger of monopolism within their economies and extreme social stratification. In this way they did not allow the predictions of Lenin that "imperialism cannot be reformed and will disintegrate under the blows from its own contradictions"[15] to come true. In fact the opposite was true, after the Great Depression of 1929 and during the post-war period the largest Western European states and the USA undertook a series of measures aimed at overcoming the danger of further monopolisation and achieving greater social equality and harmony. Economic and political power were balanced through moderate state regulation, anti-monopoly legislation and the stimulation of medium and small-scale business. The most significant changes undertaken in the USA and Western Europe were in the structure of ownership. After the passing Legislation allowing the transferring of share ownership to employees in 1974 in the USA hundreds of thousands of employees began to acquire stock in the companies in which they worked. Similar trends can be seen in Great Britain, Germany, France and a number of other Wester European countries. They also undertook programmes to stimulate the development of small and medium business. Millions of small companies sprang up in the areas of services, tourism, trade, electrical goods and a number of other branches of the economy. By some accounts these small enterprises account for up to half the working population of Western European countries. At the same time the large family properties in Western Europe and the USA have lost the position of monopoly and importance which they had at the beginning of the century. Today neither Rothschild, nor Dupont, neither Morgan nor Rockerfeller can exert direct influence on questions of national importance as they could have done a hundred years ago. This has allowed Western European societies to halt their deterioration and to stop the growth of class contradictions and gradually to wipe out the gap between the different social groups. Thirty years after the end of the Second World War the nature of employed labour had changed beyond recognition and the proletariate described by Marx dissolved within a entirely new social and technological environment. If now at the end of the 20th century one is to visit the factories of, for example, Zussler near Zurich or American Standard New York, one will see a completely new type of work force with different interests and a different mentality and, more importantly, a workforce which is integrated within the decision making processes. These are no longer the same workers which lead Karl Marx to write "Capital" and who gave rise to mass political and trade union protests at the beginning of the 20th century. In the post-war period and particularly in the 1970's and 1980's a process of change in the nature of property ownership began which continues to the present. This in its turn has had direct ramifications upon the nature of power. This revolution has allowed the USA, Japan and another twenty or so countries to adapt much more quickly and effectively to the needs of the modern scientific and technological revolution and to become global leaders. At the same time the development of the USSR and Eastern Europe has been halted as a result of the totalitarian nature of their regimes. It is true that when it was formed in 1922, the Soviet Union inherited a poorly developed industrial base and a poorly educated population but it is also true that the totalitarian regime established by Stalin at the end of the 1920's had destructive and devastating consequences upon all areas of life. Tens of million of people lost their lives as a result of violence and repression - this was as a dramatic feature of the Stalinist regime as the complete repression of free creativity and private initiative. Centralisation in the decision making process could only provide temporary benefits in military and defence issues but in all other cases it halted intellectual, technical and economic development. From the very outset Stalinism contained within itself the thesis of forced, coercive growth. The initial results did not hide the truth that, given time, coercive development was to become transformed into stagnation and regression. The destruction of private enterprise, the total and coercive collectivisation of agriculture in December 1922, the substitution of market forces with party and subjective criteria and the repression of the intelligentsia could not do anything but leave a profound scar and cause serious consequences for human development. During the period between 1950 and 1960 total nationalisation could still be explained using complex and serious internal reasons, the general radicalisation of European regimes (especially in the 1930's) and the necessity to achieve military parity. However, during subsequent decades the totalitarian regimes became totally bankrupt. Many people in Eastern Europe still believe that the collapse in the Eastern European systems was due to the mistakes made by Mikhail Gorbachev and his programmes of "perestroika". I, personally, believe that the historical role of Gorbachev was a direct result of the overall negative trends in the development of Eastern Europe and the universal economic and political crisis which had gripped this part of the world. This crisis above all manifested itself in terms of the dramatic technological backwardness which began to become apparent as early as the late 1960's and became most marked during the 1980's. Eastern Europe began to lag behind in electronics, bio-technology, communications, environmental facilities and many other fields. Because all these technological fields are so closely linked Eastern Europe began to fall behind in every other possible field from the production of nails to complex aviation technology. The technological advantages of the West affected daily life, the workplace and management. The rate at which the East began to fall behind in the 1980's was so dramatic that certain experts began to speak of a possible "global technological gorge" opening up between the East and the West, or in other words a "self-perpetuating backwardness". With the appearance of micro-electronics, new communications and space technology, the Soviet military, who had up until now played a key role in the political life of the totalitarian state, began to realise more and more clearly that their economic backwardness would sooner or later affect their military and strategic position. This was also understood by those politicians with greater awareness unencumbered by political dogma. Although the USSR had achieved nuclear parity and, in certain areas, superiority, with the USA, its backwardness in the field of micro-electronics and communications at the beginning of the 1980's began to change this trend. The enormous amounts of money expended on military causes undermined the Soviet economy and doomed it to universal inefficiency. In a comparison of figures, it can be seen that while in 1960 the GNP of the USSR was only about $5000 USD less than in the USA, in 1980 this difference had reached $10,000 and in 1990 - $20,000. In 1960 the manufacturing output of the USSR was $1000 per head of population more than in Japan. Only 20 years later Japan was producing goods to the value of $11,864 per head of population in comparison with $6,863 in the USSR. At the beginning of the 1990's the gap had widened to $30,000.[16] A similar process was taking place in comparable smaller European countries. The German Democratic Republic, Czechoslovakia, Hungary, Poland and Bulgaria were experiencing growing difficulties reflected in the drastic increases in their external debt in the 1980's. Without the need for further statistics, I believe, that the most obvious example was the difference between the type of automobiles produced in East and West Germany. Whether we compare Wartburgs with Mercedes or Trabants with Volkswagens it is quite clear that we are dealing with two distinct generations of manufacturing cultures. My example is based on motor vehicles since they reflect the general level of industry as a whole: metallurgy, chemical production, heavy machinery construction, electronics, textiles and so on.. While industry in Western Europe was already using a new generation of production technology, Eastern Europe was still dominated by a generation of production machinery which was physically and morally at least twenty five years out of date. The majority of Eastern Europeans lived in the conditions of information deprivation. They were fed propaganda of constant progress and achievement, the collapse of world capitalism and the greater and greater victories of world socialism. In actual fact the reality was exactly the opposite. Of course, many progressive leaders in Eastern Europe during this period were aware of the problems but none of them were able to release themselves from the common bonds of Eastern European imperialism. This was made clear by the fate of the Hungarian uprising in 1956 and the Prague Spring of 1968, as well as the unrest amongst the Polish workers and the timid attempts at reform made in Bulgaria in 1986[17]. It was quite clear that changes could only take place in the context of global reforms affecting the USSR as well. The negative consequences of technological backwardness were exacerbated by the changes in the world economic situation in the mid 1980's. The collapse in the prices of oil and a number of other raw materials lead to a sharp decline in the ability of the USSR and its allies to function efficiently and to improve the standards of living of its peoples. In the 1980's the member countries of COMECON experienced their greatest difficulties in foreign trade and were obliged to increase their external debts. From the mid 1980's the Soviet Union and its allies lost their most important comparative economic advantages and were obliged to cover their current account deficits with large external loans which even then came to more than 100 billion dollars. The nature of the technological changes of the 1970's and 1980's also raised doubts about economic centralisation. In the 1930's and after the Second World War technological innovation relied heavily on the centralised accumulation and management of funds. Energy production, nuclear technology and chemical production, large irrigation projects, heavy industry and arms production were very strong arguments in favour of the need for centralised planning and the active participation of the state in the economy. On the other hand the technological wave of the 1970's pre-supposed the decentralisation of the decision making process. The production of software and personal computer applications, the appearance of tens of thousands of different types of services and the progress in bio-technology stimulated and continue to stimulate individual creativity. This was in contradiction to the very essence of the Soviet type of system. Consequently the backwardness of Eastern Europe in the 1970's and 1980's was not only a consequence of political and economic conjuncture but had a long-term and objective character. It was connected with the inherent backwardness not only of individual areas of manufacturing but of the primary governmental and economic structures. As a result of the influence of new technologies on the life of societies, the crisis soon spread to the personal lives of the individual Eastern Europeans. In the 1970's and 1980's personal consumption per head of population in Eastern Europe began progressively to fall behind the average consumption figures for Western Europe, the USA and Japan. According to UN statistics for 1960, for every 1000 West Germans there were 78 motor vehicles in comparison with 20 in Czechoslovakia and 17 in the German Democratic Republic. In 1985 this figure had risen to 400 in West Germany in comparison to 180 in East Germany and 163 in Czechoslovakia. In 1960 in the USSR there were 1.6 telephones per hundred people and in Japan - 5.8. In 1984 this figure was 9.8 for the USSR and 53.5 in Japan[18]. In the late 1960's the economic backwardness of the USSR and its allies began to spread to non-manufacturing environments. In 1960 infant mortality per 1000 newly born infants was 26 in the USA, 31 in Japan and 35 in the USSR. In 1985 this figure had changed to 10.4 per thousand in the USA, 5.7 in Japan and 25.1 in the USSR. Similar comparisons can be made in the area of science, education, culture and cultural life in general. It would, of course, be naive and imprudent to ignore the successes which the USSR and its allies achieved in the area of space research, physics, chemistry and molecular biology and in certain other areas of technology. These were, however, rather oases within the overall system rather than its essential features. They did not change the overall picture of backwardness or its deepening character. Clearly, against a background of increasing internationalisation and more and more intensive exchange of information, the backwardness of Eastern Europe began to become transformed into a universal moral and political crisis. In the context of the boom of world communications, radio and television, satellite communications and information transfer, the truth could not be hidden for long. The attempts of the USSR and the other Eastern European countries to propagate lies reached absurd extents to prove that they were at the head of technological and economic progress. For more and more people in Eastern Europe it was becoming clear that the backwardness of their countries in manufacturing and consumerism was a direct result of the vices of the system itself. It should be noted, on the other hand, that right up until their demise the Eastern European regimes retained certain benefits such as full employment, a low crime rate, universal social guarantees and a number of other features. The price of these benefits from the 1960's onwards, however, had begun to manifest itself in the form of empty shops, the lack of basic products, the low standard of living and the lack of personal freedom etc.. Given such a situation, it was more and more difficult to speak of the successes of the Soviet style system against the background not only of a worsening economic situation but also of the moral and political climate. The Prague Spring in Czechoslovakia, the uprisings and protests of the Polish workers, the reforms in Hungary, the dissident movement in the USSR, the mass movement in favour of emigration to the West was a manifestation of the growing level of dissatisfaction or unhappiness with the existing system. In the 1970's the USA and its Western allies managed to impose a new leading ideology: the issue of human rights and the rights and freedoms of all citizens of the world. A number of "capitalist" countries such as Sweden, Austria and others guaranteed more social benefits, including pensions, unemployment benefit for young persons etc.. In general, in the USA, Japan, Western Europe and a number of other smaller countries with a market economy, life become more attractive and more in tune with the growing diversity and increase in human needs. In contrast with this in Eastern Europe and the USSR, there was a sharp increase in crime, drunkenness, apathy and scepticism. This lead to major geo-political consequences. After the collapse of the colonial model, the Soviet Union, despite its concentrated efforts, was unable to impose its system on the newly liberated countries. The majority of them adopted systems and models closer to those of Western countries. Attempts at "socialist revolutions" in Algeria, Egypt, Syria, Ghana, Somalia, Ethiopia and a number of other countries did not produce the expected results. Poverty remained a problem. The promise of a rapid leap into the "paradise of socialism" also remained an illusion. While the USA and Western Europe and later Japan were keen on expanding their influence in the world via investments, cultural influence and education, the Soviet Union in order to expand its geo-political influences concentrated on the support of "revolutionary" regimes, expending colossal amountsof state money in the process. They maintained the point of view that in states with poor economies progress could only be achieved via nationalisation and centralised planning. Life, however, shows that this is not the case. The upshot was that in the 1970's and in particular in the 1980's the Eastern European regimes were in the grips of a universal structural, economic, political and spiritual crisis, both internally and externally. Geo-politically this crisis was expressed in terms of the widening gap between the role of the USSR as a world super power and its real economic abilities. During the entire post-war period the military expenditure of the USSR exceeded all permissible economic levels. Military budgets undermined national development and seriously threatened the future of the system. On the other hand, despite the economic crisis and evident technological backwardness the Eastern European governments continued their policies of universal social guarantees of employment and wages which in the 1980's in particular lead to chronic increases in foreign debt. Consumption was greater than production. Financial commitments to the military, price subsidies and excessive state investments lead to the creation of enormous budget deficits. Essentially the system was consuming itself from within. While Western countries were reforming and adapting to global technological problems, the crisis in Eastern Europe was worsening. It was becoming more clear that without radical reforms, backwardness would lead to death. 2. REFORMS AND ILLUSIONS Attempts by the Eastern European totalitarian regimes to reformwithout damage to the foundations of their systems were illusory. These were merely attempts to prolong the life of a civilisation on the wane. T he collapse of the Third civilisation, or if you prefer, its "reconstruction" could have been an evolutionary process as it was in the West, through economic reforms and the political evolution of the totalitarian states. Since the creation of Soviet Russia in 1917 and most notably during the last decades of its existence numerous attempts at reform had been made. These reforms merit a general examination and can be divided into five periods within the history of the Soviet model system. The first of these was the period between 1917-1929 which I like to refer to as a time of consolidation and the search for a model of development. Notwithstanding the civil war and widespread violence the possibility of returning to some form of democracy still remained. A certain amount of private property, paricularly in agriculture, had been preserved. The NEP programme (New Economic Policy) introduced by Lenin in 1921 provided the opportunity for the use of foreign capital and private initiative. The second stage of "pure socialism" began at the end of the 1930's with the destruction of the remains of the NEP and a total assault on economic, political and cultural life. The coercive formation of the collective farms, the creation of an enormous army of labour camp slaves, forced economic growth based on administrative and political methods and the extermination of millions of political opponents - these were the foundations of the Soviet Stalinist regime. During this period the Soviet system developed as a monolithic hierarchical organisation in which the violence of the party elite and its subordinated security organisations dominated. From 1930 to 1953 every manifestation of private initiative and free thought was punished with prison or death.[19] The third period in the development of the Soviet system began with the death of Stalin in 1953 and the "thaw" of Nikita Khrushchev. Although to some extent contradictory, the policies implemented by Khrushchev during this period were to leave a lasting mark on the further development of the world. For the first time the truth about Stalin's crimes was revealed and both Stalin himself and his system lost their authority as the proponents of social justice and world progress. The fourth period began in 1964 and ended at the beginning of the 1980's. It was justly named by Mikhail Gorbachev as the period of "zastoi" (stagnation). During these years Leonid Brezhnev brought a halt to the "thaw" begun