Hungary moves toward 'white capitalism'

April 24, 1991

A popular joke in Hungary has it that the former communist Socialist Workers Party (HSWP) government needed 40 years to lose moral support of the people; for the Hungarian Democratic Forum, one year was enough. The HDF-led government is shifting rapidly to the right. In Budapest, PETER ANNEAR spoke with Left Alternative leader TAMAS KRAUSZ about these changes.

Changes are conditioned, says Krausz, by last October's nationwide blockade — when taxi and transport workers stopped traffic for four days to protest against declining living standards and "showed that a section of the population realised the so-called change of system will not bring in Western-style capitalism but 'white capitalism'".

The HDF has introduced several measures to strengthen and centralise the state power and remove the popular movement from the political process. Its strategy and the resulting mass disillusionment are illustrated by several recent events:

  • Outlawing strikes: in a seemingly strange manoeuvre, the parliament voted to give an "amnesty" to the hundreds of thousands of participants in the transport blockade even though not a single person was charged or arrested. The explanation for this riddle is that, while the HDF was powerless to do anything about it at the time, by granting an amnesty it has declared the blockade illegal retrospectively.

"This means that the parliament declared the mass movement unconstitutional. The HDF behaves now like the old HSWP Communist government did in 1958 when it wanted to reorganise power. And the HDF attitude to the taxi blockade is very similar to the HSWP's opposition to the 1956 popular uprising."


  • Indifference to elections: "In March, only 16-20% of the electorate turned out to vote in parliamentary by-elections, because voters have seen that the new parliamentary elite are not interested in really improving the way of life for most people and that they cannot overcome the state socialist economic crisis or improve the worsening economic situation.

"The low vote was not caused by popular indifference to politics. Rather, people understood they could not change anything through the by-elections. Now, they hate the parliamentary parties and they hate parliamentarism. They also hated state socialism, but they know they can lose a lot of the advantages of the past, like a level of economic security: low-cost food, guaranteed employment, a relatively high standard of life compared to the poorest areas, free education, free health care and so on."

  • Strengthening the army and police: "After the taxi blockade, the HDF realised it had to reorganise the police. For example, the chief commander of the Budapest police was sacked because he was given an order to prepare an attack against the transport , and he answered: 'I won't attack the people'.

"I have heard the HDF will change the whole leadership of the army. They understand that a government which has no real mass support must have an army. The majority of this army and of police officers were members of the Communist Party and were trained in the Soviet Union. The new conservative Christian-nationalist government regards these people as politically unreliable."

  • Controlling the media: "The government has occupied the main television channel. The media propaganda system is increasingly filled with nationalism, religiosity and rightist populism. The government has also used the media to get the message across that it will fulfil every command of the IMF, without any shame."

Buying opposition

  • Social contract: "The HDF wants to carry through its program over the head of parliament, not just over the heads of the people, by making compromises, elite pacts, directly with the heads of the mass political organisations to head off further social unrest. The government attempts to buy everyone it can, like the leaders of the old trade unions and others in the so-called state socialist left."

  • Curtailing local government: in recent local council elections, the opposition parties won a majority and took control of several local councils. In true Thatcherite spirit, the HDF has denied the councils sufficient funds to carry out their normal social programs.

"The government wants to control everything. The Hungarian people do not have any real historical roots in well-developed civil society, including the practice of democracy even in the parliamentary form. The government is afraid of these local councils, and it wants to restore the Horthyist tradition. [Until World War I the country was part of the absolutist Austro-Hungarian empire; between the wars it was ruled by the fascistic regime of Admiral Miklos Horthy.] But they call this authoritarian dictatorship 'West European parliamentarism'.

"We will live under real socialism sooner than under bourgeois democracy, because you cannot create a capital-owning class from above. I call the Hungarian example a 'nomenklatura bourgeoisie', meaning it is a ruling class made up of the old high-ranking Communist officialdom. The government is centralising the state apparatus on the basis of state, not private, ownership. You could call this new system a special variant of 'state capitalism'.

"The government promised to create a way of life on a par with Austria or Germany or Sweden — and they did just that for 5% of the population. For the rest, it is many times worse than British Thatcherism."

But political developments in the east are not completely one-sided. "After the east German demonstrations in March against unemployment, it is clear that we can only talk about an unfinished process in Eastern Europe. "In the end, the reform communism of the former HSWP government failed because it wanted to construct capitalism. It is absurd that the HDF government could find nothing new in respect to economic reforms. Miklos Nemeth, the last ruling leader of the HSWP, was very much under the direct influence of the IMF, which saw the removal of communism in Hungary as the most direct way to capitalist reform."

Three currents

Since the fall of the HSWP government, three major currents have emerged in the Hungarian left: 1. the parliamentary left constituted by the Socialist Party, which split away from the HSWP after its demise; 2. the remnants of the HSWP, which failed to win a single parliamentary seat; 3. the trade unions, the most important component of the left.

"The Socialist Party is in turmoil because it has been unable to create a populist movement from the left, against the rightist HDF. To survive, the party thought it would have to compromise with the right, and as a result it has betrayed workers' interests on many issues.

"For example, an old party member has complained that when the government brought in legislation to take minor pension privileges away from former Communist Party members, which was purely an act of victimisation, the Socialist Party parliamentarians did not oppose it."

The HSWP, divided by factions, also lacks a united political strategy. "Few people now listen to what the party says because the intense anticommunist propaganda and the party's own history have discredited it."

The blockade led to the reorganisation of the unions. "This is a new and very important development. For example, in Ozd, a steel town and important industrial centre, six months ago the unions could not raise enough support for an organisation, yet recently they wanted to take over the whole factory. If the banks refuse to extend loans, in the traditional industrial centres there will be a lot of hardship, and the unions have the chance to develop real alternative strategies."

While the left faces the problem of little public credibility, sections of the left are reorganising. The left approach will include two crucial points:

  • "Defence of the democratic achievements that have been made: freedom of press, speech, demonstration. We don't want to go back to state socialism, but these achievements are in danger now.

  • "An end to privatisation — the defence of workers' property in some form. If the left does not do this, the far right will. Very recently, a Fascist Workers Party was founded, a small group, but this is dangerous.

"The state-owned sector can be privatised only by workers' ownership, nothing else. And foreign capitalists can do business with the workers' councils — why not? They need only real, stable owners. And the workers' collectives are the most stable owners because they nterprise."

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