I was browsing though the book yesterday and was reading through the section on the fall of the Iron Curtain. Of particular interest was the discussion on perestroika and glasnost, programs that were designed to revive the stagnant and bankrupt Soviet economy. At that time, economic output was dependent on government mandated projections and not based on normal market pressures (supply and demand). Sovient Premier Mikail Gorbachev tried to use perestroika to open the Soviet economy to normal market principles, recognizing that his citizens were becoming aware of superior western living standards. Anyone can read about this on wikipedia or history books, but the following surprised me when I read it.
"One typical law passed as part of Perestroika was the law of state enterprise,
which allowed companies to determine their own output based upon the demand for
the goods they produced. Furthermore the government was no longer
expected to bail companies out if they went bankrupt."
I am not advocating one way or another for the recent bailout, but I do find it interesting that a Soviet reformer determined that its own economy was stagnant because companies could always rely on a state-sponsored bail outs and thereby could take unchecked risks.