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The law stipulated that state enterprises were free to determine output levels based on demand from consumers and other enterprises. In July 1987, the Supreme Soviet of the Soviet Union passed the Law on State Enterprise. Gorbachev and his team of economic advisors then introduced more fundamental reforms, which became known as perestroika (restructuring).ДЄt the June 1987 plenary session of the Central Committee of the Communist Party of the Soviet Union, Gorbachev presented his 'basic theses', which laid the political foundation of economic reform for the remainder of the existence of the Soviet Union.

The program was furthered at the 27th Congress of the Communist Party in Gorbachev's report to the congress, in which he spoke about 'perestroika', ' uskoreniye', ' human factor', ' glasnost', and 'expansion of the khozraschyot' (commercialization).Дuring the initial period (1985вЂ“87) of Mikhail Gorbachev's time in power, he talked about modifying central planning but did not make any truly fundamental changes ( uskoreniye 'acceleration'). In May 1985, Gorbachev gave a speech in Leningrad (now Saint Petersburg) in which he admitted the slowing of economic development, and inadequate living standards. Perestroika lasted from 1985 until 1991, and is sometimes argued to be a significant cause of the collapse of the Eastern Bloc and the dissolution of the Soviet Union. Gorbachev first used the term in a speech during his visit to the City of Togliatti in 1986. Furthermore, it is often blamed for the political ascent of nationalism and nationalist political parties in the constituent republics. The process of implementing perestroika added to existing shortages, and created political, social, and economic tensions within the Soviet Union. The alleged goal of perestroika, however, was not to end the command economy but rather to make socialism work more efficiently to better meet the needs of Soviet citizens by adopting elements of liberal economics. Perestroika allowed more independent actions from various ministries and introduced many market-like reforms. The literal meaning of perestroika is 'reconstruction', referring to the restructuring of the Soviet political and economic system, in an attempt to end the Era of Stagnation. Perestroika ( / ЛЊ p Й›r Й™ Л€ s t r Й”ЙЄ k Й™/ Russian: РїРµСЂРµСЃС‚СЂРѕР№РєР°) was a political movement for reform within the Communist Party of the Soviet Union (CPSU) during the late 1980s widely associated with CPSU general secretary Mikhail Gorbachev and his glasnost (meaning 'openness') policy reform.

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