The phrase "communism with a capitalist facelift" refers to economic reforms attempted by

Hungarian leader Janos Kadar.

The "New Economic Mechanism" was the official name of his policy, begun in 1968, which was sometimes called "Goulash Communism" because of its mixture of communist and free market principles.

Kadar came to power in Hungary in 1956 and remained General Secretary of the Communist Workers Party in Hungary until 1988.