Date: Wed, 11 Dec 1996 20:28:26 -0500 (EST)
From: louisgodena-AT-ids.net (Louis R Godena)
Subject: M-I: Re: Re-figuring Hungarian Socialism




"Rosser,  Jr John Barkley" (in his pinched,  membranus voice):

>I am shocked,  shocked.   I thought you were an opponent of
>market socialism...

I am *for*  "market socialism" in the same manner Lenin was *for* "state
capitalism"-- it is but a "step forward",  given the present configuration
of forces.    In eastern Europe,  the tattered frame of the  "mixed economy"
(remember, for example,  fully 70% of Polish agriculture was private) will
in my judgement provide the basis for a reintroduction of "limited
socialism",  its present dilemmas can only be rectified by greater State
intervention,  rather than less.    What has been done cannot wholly be
undone.    As an economist with the World Bank recently put it (*East
European Politics and Societies*,  October 26, 1996): "The evolution of the
eastern European economy has tilted back toward many of the features of
developed socialism;  it has failed to evolve into market economy of the
Western variety...there are many implacably endogenous reasons for
this...This process will take many decades,  and may never be complete."
And it is a commonplace that the "end of socialism" has greatly sharpened
class antagonisms in those countries.    The former communist and workers
parties (still containing large,  if circumspect,  blocs of traditonal
"Marxist-Leninists") have benefited --willy nilly-- from this salient
political fact.    It is,  in other words,  a development that has every
claim on my sympathy as a Communist.

And then (triumphantly,  like a Pyraganeic sheep-herder discovering
Tupperware for the first time):  

>Do you deny it was the nature of the Hungarian economic 
>system,  albeit without the element of workers' management 
>found in the former Yugoslavia?


Hungary's was more of a hybrid economy and polity that had striking
similarities, in fact,  to the Yugoslav model -- including a limited version
of "worker management".    It evolved differently.   Workers were able to
force concessions from the State by re-channeling their labor power into
informal economic activities.   Eventually,  the leadership faced a Hobson's
Choice.   Either it had to implement economy wide insitutional reforms like
those currently underway in postsocialist countries,  explicitly
restructuring the State sector and inciting a broad coalition of political
opposition (while risk losing its own traditional constituencies); or do
nothing and risk serious political unrest on the part of a populace
accustomed to a relatively high consumption.

Against this background,  for example,  the 1982 reform of property rights
was at once plausible and radical.   It was a way out of the dilemma,  and
could be conceived of as part of a broader effort to stimulate market
competition in the State sector.    By adding small enterprises on a large
scale -- in short,  by moderating the second economy -- reformers hoped to
create a sector of small-scale firms that would increase the flexibility and
efficiency of State-owned firms.

Party leaders attained their short-term goal of stabilizing consumption
levels because the reform led to the population's almost incredible
self-exploitation (in the 1980s, Hungarians worked the longest day in
Europe).   The much vaunted "workers control" (based more on an East German,
rather than a Yugoslave model -- though there were important parallels) had
far-reaching and wholly unanticipated consequences,  from the unions' point
of view.    Poor in capital,  but rich in highly motivated and skilled labor
power,  the secondary economy produced goods and services far out of
proportion to its capital assets.    They could do this largely because of
the generous safety net afforded by the State (which still controlled,
until 1990,  90% of the economy,  but only 65-70% of the GDP (*Economist
Intelligence Unit 1991*).

Each "reform",  paradoxically,  narrowed the choices for the Hungarian
socialist leadership,  as well as for the trade unions that formed the base
of its support.     While possessing features of  "market " (broadly
defined), it did not truly become one until,  ironically,  the fall of the
HSWP in 1990-91.    The new "socialist" government -- in power since 1993 --
has gradually reclaimed some prematurely privatized sectors of the economy
(with the general assent of international finance capital) while privatizing
(at a more or less snail's pace) others.    The trend since mid-1996,
though,  has clearly been toward greater State intervention (Istvan Gabor,
*State and Privatization in Hungary: Some Trends,  1994-96* [London &
Geneva,  1996: Pollin Press for the International Labor Organization]).


Louis Godena     






 



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