During the two decades following World War II, Hungary was transformed from a predominantly agricultural land into an industrial-agricultural state. This transformation was carried out under a system of central planning patterned on that of the Soviet Union. Consumer desires were ignored, tight labor discipline was enforced, and living standards were depressed, so that the largest possible share of Hungary's resources could be used to develop an industrial base. Investment in industry was encouraged by a tax and subsidy structure that overpriced consumer goods and underpriced the components of heavy industrial goods. The highly centralize panning process often led to inefficiencies, while strict discipline and low living standards led to poor labor performance and popular discontent. After 1960 the rigid planning policies of the regime were somewhat liberalized. To increase efficiency, modern techniques were adopted to establish production targets, to determine prices, and to allocate resources; and the regime began changes brought about a rise in the standard of living but slowed the country's economic growth rate. Nevertheless, by the middle of the 1960's Hungary was one of the most industrialized states of Eastern Europe. Moving onto production and investment, Hungary is quite detailed. Annual national income in Hungary, as in other centrally planned economies, is measured in terms of net material product (NMP), which assigns values to material goods and "productive" services. In Hungary the NMP includes the values of the goods and services provided by forestry, mining, manufacturing, construction, transport, communications, and trade, and it also includes turnover (sales) taxes. No values are attached to such "unproductive" economic activities as public administration defense, and moist private and professional services. Hungary's NMP in 1975 stood at 395.9 billion forints. The GNP as calculated by the World Bank was about 26$ billion, or 2,470$ per person.
