Final answer:
János Kádár introduced the 'New Economic Mechanism' to reform the Hungarian economy by implementing market-oriented policies within the socialist system.
Step-by-step explanation:
János Kádár, after becoming the leader of Hungary post-1956 uprising, introduced the “New Economic Mechanism,” aiming to reform the Hungarian economy.
János Kádár became the General Secretary of the Hungarian Socialist Workers' Party in 1956 after the Soviet suppression of the Hungarian Revolution. In an effort to recover from the political and economic turmoil, he introduced a set of economic reforms known as the New Economic Mechanism (NEM) in 1968. These reforms aimed at introducing market-oriented policies within the socialist framework, thereby decentralizing economic control and allowing some level of market mechanisms to influence production and pricing. This approach was a significant shift from the previous Soviet-style planned economy and was considered relatively liberal for a Warsaw Pact country.
The NEM allowed for an increase in consumer goods production, limited private enterprise, and foreign trade, which spurred economic growth and improved living standards for Hungarians, setting the stage for a more liberal and reformed socialist system.