Parallel System Narratives – Polish and Hungarian regime formations compared / Part I of III

Like in the 1980s when the Polish activists of the Solidarity movement cooperated with the opposition in Hungary, we have now re-established contacts with our Hungarian friends. They have supported the Committee for the Defence of Democracy since its very beginning. During the demonstration in January 2016 in Warsaw, Balázs Gulyás warned us against the Hungarian scenario of Viktor Orbán, while Betram Marek, a student of political sciences, created a Facebook group called Dwa Bratanki, a name which alludes to a well-known proverb about Polish-Hungarian friendship “Pole and Hungarian brothers be, good for fight and good for party”. In March 2016, KOD and Gazeta Wyborcza daily organized a panel discussion with the former and present Hungarian opposition, entitled „Budapest in Warsaw, or Warsaw in Budapest”. One of the panellists was Róza Hodosán, a sociologist, who in the 1980s wrote and disseminated samizdat texts and publications and several times visited Warsaw trying to learn from the example of the Solidarity radio, which she wanted to organize in Hungary. Bertram Marek and Balázs Nemes spoke about the contemporary, young activists who are now in opposition to the Orbán government.

Last year, a few hundred Hungarian people expressed their solidarity with the Poles and support to the KOD activity, organizing demonstrations in front of the Polish embassy in Budapest.

To offer our readers a more analytical approach to the issue, we are pleased to be able to publish on our website a comparative study written by Bálint Magyar and Miklós Mitkovits. We wish to thank the Authors for this in-depth analysis of the Polish and Hungarian history, which may be very helpful in the context of the present political and economic situation in both countries. The study draws a parallel between the Polish and Hungarian history, showing similarities and pointing out significant differences, which may lead to interesting conclusions.
Since the text covers a wide spectrum of historical events, we will be publishing it parts. We welcome your comments and ideas. It is the authors’ intention to start a discussion about the activities which could be undertaken together to prevent Poland from the Hungarian scenario coming true.

If you wish to contact the authors personally, please write to us:

Part I     Part II     Part III

The Polish election results of 2015 seem to have brought Hungarian and Polish development into synchronicity again, a congruence that is apparent throughout history. A first glance may give the impression that we are dealing with regimes of identical nature, especially taking into account the similarities of the authoritarian politics practiced by Jarosław Kaczyński (PiS) and Viktor Orbán (Fidesz), characterized by a tendency to eliminate autonomous social forces and control mechanisms, as well as the application similar ideological frames.

But beneath the similarities on the surface these are attempts at establishing different types pf autocratic regimes—as our paper is to finally conclude. Orbán’s regime, which we can define as a Mafia state, is built on the twin motivations of power centralization and family accumulation of wealth, the subject of its power is the adopted political family freed of the limitations posed by formal institutions. Kaczyński’s regime is better described as a conservative-autocratic experiment driven by ambitions of power and ideological inclinations. The active subject of the Polish experiment in autocracy is the ruling right-wing party, the PiS. While the Hungarian regime essentially operates with ideologies, the Polish one is more ideology driven.

The widely held kindred spirit of Polish and Hungarian people is cemented in historically extant socio-structural parallels—rather than any number of particular historical links—among them the high proportion of gentry, the feudalistic culture they transmitted, to be exact, its gentrification and assimilation into the structure of state power. The shared historical fates are, on the other hand, as much myth as based on true fact. In much of the nineteenth century the lack of sovereignty, the independence struggles against absolutist dynasties, and the similarities in the way the nations were formed, the feudal serfdom, the absence of industrialization are common. But while Poland, separated into three parts, was almost homogenously Catholic, Hungary, in most part Catholic, had strong, influential Protestant churches as well. While the Protestants churches were more in favor of independence, the Catholics institutionally stood more for loyalty to the ruling house. The introduction of dualism (under the Austro-Hungarian compromise of 1867) meant a quasi sovereignty for Hungary and nearly half a century of extraordinary economic prosperity for the nationalities that composed a majority of the population, while also involving many restraints and efforts to assimilate. World War I concluded differently for the two countries: Poland regained its territory, independence and sovereignty; Hungary not only lost two-thirds of its territory and half of its population, but also the notional middle power status it had with the Monarchy. In addition, it was meted out a liability for material compensation and its military development was capped. Both countries gained experiences of the perceived or real betrayal by the West (Hungary in 1920, 1947, and 1956; Poland in 1939, and 1945).

A long quarter century after regime-change, certain elements in the rule of both the PiS and Fidesz can be observed to have roots in the regimes between the two World Wars. The eras hallmarked by the figures of Horthy and Piłsudski show a good deal of similarity, but there are also a number of structural differences between the two regimes. In spite of the dissimilar roles the two countries played in World War II, both became communist dictatorships integrated into the Soviet empire after 1945. At the same time, divergent courses of development in the period from 1945 to 1989 are also apparent, and these still determine the dissimilar attitudes of their societies today.

From regaining independent statehood to World War II
At the end of World War I, an independent, autonomous and sovereign Polish state was established after a lapse of one hundred and twenty-three years. The borders of new Poland were the result of military conflict, uprisings, and a war fought against the Soviet-Russian state. The Polish political elite and society felt they were victors, and became defenders of the new European status quo. The new Poland had become a remarkably heterogeneous state in ethnic and cultural terms, while no significant number of Polish people were left outside its borders. Only a small segment of the large Jewish population assimilated, a majority kept apart in externalities as well. Paradoxically the birth of an independent Hungarian state was at once entwined with national trauma. In the new Hungarian monarchless monarchy, brought about by the Peace Treaty of Trianon following the dissolution of the Austro-Hungarian Monarchy, Hungarian society felt beaten and humiliated, and strived to change the European status quo. The Little Entente constructed around Hungary with French backing isolated the country internationally. The new Hungary became and ethnically homogeneous nation state, but remained heterogeneous denominationally, while a quarter of ethnic Hungarians were stranded in the neighboring successor states.
The formation of the Polish state was closely tied to the person of Marshal Józef Piłsudski, who however did not accept any formal political office. The constitution of 1921 was one of the most democratic constitutions in Europe, with the predominance of legislative power.  Miklós Horthy’s authoritarian regime was limited to the forced path of grievance politics grounded in Trianon, with growing power for the Regent. No constitution was ratified in Hungary, and the political praxis shifted weight towards preponderant executive powers.
According to Piłsudski’s concept the citizen’s consciousness would be more important than a national patriotic one, where the relationship of the individual to society was concerned, it being a linguistically and culturally heterogeneous state. Piłsudski’s state (rather than ethnic) nationalism declined to give a unified ideological image to the nation. He considered loyalty towards the state of prime importance with regard to the ethnicities as well. Piłsudski’s concept of the nation was relatively democratic: all who are loyal to the state are members of the nation. Piłsudski’s chief opponents were the national democrats, composed in part of the large land holding aristocracy, and in part of the petite-bourgeois educated classes in close ties with the Church. At the same time however, the middle classes were rather weak per se. And besides, the existence of a five-million strong repressed, and separatist Ukrainian minority meant quite a problem, destabilizing his premise of the state.  The politics of the Horthy era realized the concept of a homogenous nation state (with Schwab and Jewish minorities). In the relationship between the individual and the community the nation overarched everything. Horthy’s ethno-nationalism gave the regime a unified ideological image proclaiming a “Hungarian cultural superiority”. The most important factor was not loyalty to the state, but belonging to the Hungarian state ethnically. Though a decisive majority of Hungarian Jewry assimilated, even this did not make it possible for them to win acceptance into the state apparatus, and did not protect them from discrimination, or their overwhelming proportion from death in the final run. This was a “controlled democracy”, in which it was always “the nation” that governed, that is, the large landholding aristocracy and the nobility with estates. And the defensive mechanisms of the state-dependent gentry elite only strengthened the feudal enclosedness of the regime.
  •  The political system was largely in pieces, and due to the democratic electoral laws not a single party could gain a majority in the Sejm until 1930. In the system reminiscent of the former Polish “noble republic”, governments crumbled one after the other. Society soon became disillusioned with the unstable political system, and Piłsudski took advantage of this in his 1926 takeover coup. Even the communists, forced underground, welcomed this turn.
  •  Continuing electoral constraints and an open ballot (unlike anywhere else in Europe) ensured the operation of a dominant party system overseen by the government parties, in which marginal roles were afforded the left, liberal, and until the mid-1930s, extreme right-wing parties. Mandates of a two-thirds majority were frequent (Unified Party 1922: 58%, 1926: 69%, 1931: 64%; Party of National Unity 1935: 69%; Party of Hungarian Life 1939: 73%).
  •  At the time, in Poland, there was still the right to strike and freedom of assembly, there were independent workers’ unions. The communist party was finally brought to its knees and liquidated not by Piłsudski, but the Comintern (Stalin). The main opponents of the system were the radicalized and anti-Semitic national democrats (Camp of Greater Poland, National Party, National Radical Camp). No anti-Jewish laws were passed or Jewish wealth expropriated and redistributed after the coup, or under the so called rule of the generals after Piłsudski’s death. Still, there were many atrocities committed against Jews during this time here as well, apart from hate filled local regulations, the ghetto seats fore Jews at the universities to which the government turned a blind eye, and attacks on shops and markets. After Piłsudski’s death the whole government camp also shifted heavily to the far right.
  •  In 1922 Hungary, Prime Minister István Bethlen forced a pact upon the social democrats, who in order to be permitted to exist, renounced recruiting state employees, rail workers, and postal workers, and limited their propaganda work among agricultural workers as well, gave up organizing mass strikes and republican propaganda, as well as desisting from criticism of foreign policy, taking up a moderate stance in opposition. The government also took forceful steps against extreme right movements after consolidation, however it itself swung to the extreme right in the final run. At the 1939 elections however, with the introduction of a secret ballot, the Arrow-cross Party received 14.3%. Between 1938 and 1942, four anti-Jewish laws were passed. By means of the anti-Jewish laws the Jewish properties were robbed and redistributed in a wide circle, without any notable social or agricultural reform however.
  •  Poland was threatened by Germany from the start, a danger that became even more stark after Hitler’s taking power. The German-Soviet Treaty of 1922 (in Rapallo’s spirit) hung as the Sword of Damocles over Poland all of the time. Piłsudski and Foreign Minister Jósef Beck rejected the block policies, did not join either the Little-Entente or the Anti-Comintern Pact. Beck’s Intermarium (between-seas) concept served the purpose of building an alliance of states between the Baltic-Adriatic-Black seas.
  •  Hungary went out of its way for a good relationship with Germany and Italy from the start. It joined the Anti-Comintern Pact. This alliance made it possible for Hungary to regain a significant portion of the territory that had been handed to successor states (1938 – Upper Hungary, 1940 – Northern-Transylvania, 1941 – South Hungary). The Country was swept into war alongside the Germans, and attacked the Soviet Union, with catastrophic consequences.
  •  Following the Soviet-German occupation of Poland in 1939 the armed resistance organizations were immediately formed. The largest Polish armed opposition organization of World War II, The Home Army was established, but the communists (People’s Guard), the radical national front (National Armed Forces), and even the peasantry (Peasant Battalions) had their own armed units. The leadership of the earlier opposition parties formed the government in exile, which directed resistance at home from Paris, and later London. Two significant uprisings broke out against the Germans: the ghetto uprising of 1943, and the Warsaw Uprising of 1944.
  •  Hungary attacked the Soviet Union as an ally of Germany, and suffered a major defeat there. At the same time in a Europe mostly under occupation, Hungary formally preserved its independence, its internal set-up remained unchanged. No significant resistance movement formed within the country, either against the regime, the German occupation that took place in 1944, or of any mass character in solidarity with Jews stripped of their rights, or against their later deportation. In October 1944—after an unsuccessful attempt to exit the War—Horthy handed over power to the leader of the Arrow-Cross, Ferenc Szálasi.
 Poland came out of World War II victorious, but the Allies—in difference to Stalin—did not acknowledge the merits of Poland, they were not allowed to take a seat among the victors. After they were tried in Moscow, leaders of the Home Army, which had leanings to the West, were executed or given life sentences by the Soviets, as were the delegates sent to Poland by the London government in exile.  Hungary came out of the war defeated, and branded as Germany’s last ally, continuing to fight on the side of Germany even at the end of 1944. The prime ministers responsible for the war (Bárdossy, Imrédy) were executed, as was Ferenc Szálasi. Horthy however escaped a court trial.
 The new Poland established after the War lost significant territories in the East, but gained huge western territories to “compensate”. The new borders were determined by Stalin’s strategic interests. By the beginning of the War the Soviet leadership had made up its mind that if any Poland would be left at the end of the War, it must have Soviet leanings. This was the master plan into which the Katyń massacres fit, it was aimed explicitly at the liquidation of the middle-class Polish elite categorized as anti-Soviet.  After the war, Hungary once again lost the territories it had regained through the revisions, territories it could at most have had a chance to keep if it had been able to break the alliance with Germany in time. Hungary was not of special importance to the Soviet leadership, and although it was placed under the oversight of the Allied Control Commission (Marshall Voroshilov) a checked course for democratic development was left open,  allowing for a pluralism built on a multi-party system.
 The adaptation of Polish Stalinism began with the active participation of the NKVD from the last day of the War. Having learned from the Hungarian parliamentary elections of 1945, the free parliamentary elections were not even announced—with all probability, Stanisław Mikołajczyk’s Polish People’s Party would have won. The Polish Labor Party established in Moscow formed the government instead in Lublin, and though under western pressure it was made to appear as a coalition government, the internal ministry and the police remained in communist hands. The West accepted the fact of Soviet occupation, while a serious civil and partisan war was underway in the country, against the Soviets and their Polish followers. Finally, in January 1947, through election fraud the communists took full control of the country, and then the communists devoured the socialist party in December 1948. This was when Gomułka was removed from the post of chairman of the communist party, since he would have wanted to incorporate the traditions of independence from the socialist party into the new party program. Hungarian Stalinism began with the “strangling of democracy”. The Soviet type of regime had weak internal support. This was proven by the parliamentary elections of 1945, where the Independent Smallholders Party won a landslide victory of 57% under the leadership of Zoltán Tildy. The communists were given a far greater sway in the coalition government than their mandate. The internal ministry, the political police, and practically even the the economy came under their direction, making way for the salami-slice strategy against the Smallholders’ Party and then the rest of the parties. But even so they could only secure 22.2% of the votes in the rigged elections of 1947. Power was nevertheless more and more openly concentrated in their hands, though the first completely communist government was only formed in December of 1948—after the annexation of the Social Democratic Party.
 After the War, Poland counted as the most important area for Stalin, both in geopolitical and military terms. After the liquidation of the national forces and the de facto division of Germany into two (1949) it ceased to be a frontier country, and thereon simply meant paths of military conveyance.  Immediately after the war, Hungary did not have any particular strategic significance, since Soviet troops were stationed to its west, in Austria, and Tito’s still friendly state neighboured it from the south. From 1948–49 however, with the heightening Soviet-Yugoslav conflict, the strategic importance of the country grew from a Moscow perspective.
In Poland power came to be held by the Bolesław Bierut-Hilary Minc-Jakub Berman trio. All three were Moscowites, and excepting Bierut, who was of catholic peasant stock and of Jewish origins. Power came to rest in the grasp of the trio, Mátyás Rákosi-Ernő Gerő-Mihály Farkas in Hungary. All three were Moscovites, and of Jewish origin.
 In the series of show trials launched in Eastern Europe in 1949 the Polish communist Władysław Gomułka was marked for the role of chief accused, however Bierut did not show too much willingness to organize the trials. Though mass executions did occur in the army. Later the trials took an anti-Semitic turn, for which Gomułka no longer fit the description, but he was nevertheless kept under arrest for three years from 1951. Polish Stalinism had fewer victims in comparison to the other Eastern European countries. Attempts to break the Catholic Church were unsuccessful, in fact Primate Wyszyński signed an agreement ensuring the Church relative autonomy, though he was under arrest for three years from 1953 onwards without trial. Collectivization also ran aground.  In the series of show trials that began in Eastern Europe in 1949 the Hungarian communist László Rajk was picked out for the role of chief accused, and Rákosi, “as Stalin’s best pupil” led the way and already had him executed by September 1949. Hungarian Stalinism became one of the blood thirstiest regimes in Eastern Europe. One of ten Hungarians were being prosecuted for some reason or other. The church was completely broken, with the Prince Primate, Archbishop of Esztergom, József Mindszenty imprisoned as the result of show trials. In agriculture “a dekulakization” and a violent, though never completed collectivization was underway.
 After the 20th Congress of the Soviet Communist Party—Bierut’s death—and the worker’s uprising of Poznan Gomułka became the most popular “local” communist, who was expected to loosen the ties of dependence from the Soviet Union and introduce reforms of the Soviet model. In October 1956, Khrushchev finally agreed to Gomułka’s return, and Stalinism ended with a bloodless revolution. The Polish Stalinists did not defend their positions, accepted Gomułka’s person, and did not begin bloody rear guard actions. The Soviet defense minister and councilors were sent home.  After the 20th Congress of the Soviet Communist Party Gerő became General Secretary of the Hungarian Communist Party instead of Rákosi, while Imre Nagy became the most popular communist, though he had been thrown out of the party earlier, and his return raised expectations of loosening ties of dependence from the Soviet Union and a reform of the Soviet model. Following the first Soviet intervention in the aftermath of 23 October 1956, and the bloody response from state security forces the revolution turned into a freedom struggle. When events got out of control for the Soviets—and the reticent stance of the Americans was taken to mean a continued recognition of the existing status quo—on 31 October they decided on the repression of the revolution.
1956: The consequences of the two revolutions
 In the year following the events of October 1956 further reforms were the subject of hot debate. Polish society felt more than sympathy for the Hungarian Revolution—many watched the young people fighting against the Soviets with envy—they also believed that the reforms could be continued, that Gomułka would carry through with the reforms of the Soviet model, and a decentralized, grass-roots, democratic socialism would come into being and take into account the specificities of the polish nation. Instead, Gomułka progressed in the opposite direction, and in the autumn of 1957 there were protests against him for banning the weekly Po Prostu, which supported the reforms.  As Soviet troops repressed the Hungarian Revolution of 1956, around two-hundred thousand citizens fled the country. In the course of the reprisals following the Revolution Imre Nagy, the reform-communist prime minister of the Revolution and hundreds of its participants were executed. Meanwhile, in spite of the Soviet occupation and reprisals, Kádár not only did not rehabilitate the first line of the earlier Moscovite-Stalinist leadership, but from 1962–63 he began to openly distance his economic, social, and cultural policies from the practices of the Rákosi Regime, and not only in word.
After 1956, Gomułka took leadership of an unbeaten society:

  • Polish society largely experienced the events of October as a victory;
  • The leadership of the party was dominated by moderate communist forces, Gomułka was a rather popular political figure; though keeping it as a program officially, they in fact gave up on the experiment of forcibly collectivizing private farms, but at the same time their modernization was also neglected.
  • The Catholic Church held onto its integrity, social influence—under the leadership of the earlier imprisoned Cardinal Wyszyński—and at a later stage became a support to forces critical of the regime.
After 1956, János Kádár gained power over a beaten society:

  • Hungarian society suffered its third defeat of the twentieth century after 4 November 1956;
  • Kádár’s political circle was composed of representatives of the orthodox communist line, and his person was reviled at home and abroad alike;
  • between 1959 and 1962 agricultural collectivization was completed, followed later by the modernization of agriculture and the villages;
  • the communist regime made the Church its vassal; Archbishop Mindszenty took refuge at the American embassy, and was forced into emigration years later.
Processes of consolidation and deconsolidation from the mid sixties
 The result of the ’56 uprising in Poland was not a society degraded and broken to the extreme. The grounds for negotiation between society and politics were not—as in Hungary—the presence of the Soviet troops, the mass executions, the imprisonments and hundreds of thousands of fleeing émigrés. What followed was not a social compromise based on constant concessions made by a hardline dictatorship, but a permanent deadlock between the powers that be and society. Though the communist party ruled over society, it could not settle into a mellow sense of security. In order to strengthen its legitimacy, it constantly looked for closer relations with the Church. In the Polish socialist system society moved constantly in the triangle of resistance-acceptance-participation, but there was no sharp boundary between these three forms of behavior.  The reprisals following the repression of the Revolution of ’56 made it clear to Hungarian society that there would be no return to either the coalition governments of the period prior to 1948, or the regime that existed between the two world wars. With the acknowledgement of these conditions there came to exist a new form of unspoken “social contract”, a “compromise” between the regime and society (including a significant segment of the intelligentsia, and the Church leadership), which developed and functioned until the end of the eighties. As has been often put forward, a consensus was reached, which essentially meant that so long as citizens would not seek to interfere with politics, the regime would not interefere with their private lives, and even ensure their incrementally rising, though limited prosperity. The foundations for this were laid in early 1957 with a large hike of wages among labourers.
 The Polish leadership did not have a socialist “national strategy”, because it was not able to create the economic foundations for the gradual and predictable improvement of its citizens’ living standards.  The Kádárian “national strategy” meant that everyone could be a part of the nation so long as they accepted the rules of the game. This strategy meant the building of an opposite to the nationalist nation, an anti-nationalist nation to be exact.
 Polish society did not become depoliticized, because it expected further reforms, while the regime took the opposite direction. They turned away from the path of reforms, while the standard of living did not improve, and the cultural freedom that had been secured was also increasingly curtailed. As a result, the first opposition debate circles and critiques appeared already in the sixties. There was also no socialist petite-embourgeoisement such as that in Hungary.  The popular epithets found to describe the soft communist dictatorship of the following decades reflect the burgeoning of such a depoliticized petite-bourgeosie: among them “gulyás communism”, or “refrigerator socialism”. In the phrase, “the happiest barracks in the socialist camp” on the other hand, there is a reference to the forced social acceptance of the geopolitical realities and collusion with power.
 A characterization of the period:

  • The nationalization program for private farms was never taken off the agenda, it in fact existed as a threat throughout, only the time of its execution was continuously delayed by new party decrees. But the absence of collectivization did not mean the rehabilitation of the private farms, but merely a hibernation in the state that had preceded collectivization. Cold collectivization meant that even if the state could not expropriate the land, or take it into farming collectives, it expropriated the economic environment of the private farms:
    • it prevented the concentration of estates, which meant that the ownership structure of the private farms remained essentially the same from 1945–1970;
    • it upheld the system of compulsorily submitting produce until 1972;
    • wide use of state-set prices;
    • the trade in agricultural tools was in state hands; put curbs on the growth of free market trade.
    • The Polish leadership—not having a cultural politician of such weight as György Aczél—showed disinterest towards cultural issues: apart from demanding respect for the basic taboos, a relatively free cultural life came about, with great variety in genres (jazz, beat, rock, abstract art). This intellectual-cultural stratum had become the direct, or indirect opposition to the regime already by the mid sixties.
 A characterization of the period:

  • the communist party proclaimed a new, relatively de-ideologized way of building a relationship with society at its Congress of 1962: “those who are not against us, are with us”;
  • in education, the system of discrimination on a basis of class of origin (“class alien”) was ended;
  • in agricultural cooperatives—unlike during the collectivization efforts of the fifties—the former semi-rich or rich farmers (kulaks) and their their descendants could make it into leadership positions; the establishment had a clear and unequivocal offer for them: either you fill the position of a leader in the collective, or you will be stripped of your land and be thrown out of society; from the mid sixties onwards, agriculture was provided with large development resources, the collectives functioned increasingly as independent economic organizations rather than as kolkhozes;
  • in ’63, amnesty was declared for the majority of political prisoners and that put an end to the period of reprisals;
  • party leaders sought to demonstrate that there will  be no return to the Rákosi-Stalinist period by decommissioning the majority of the pre-’56 hardline state security guard, and relocation in the sphere of production;
  • the official Marxist-Leninist Dogma still held primacy in cultural life, but certain “civic” trends were also accepted. In a cultural policy directed by György Aczél the politics of the “three Ts” (in Hungraian: támogatjuk [support]-tűrjük [tolerate]-tiltjuk [prohibit]) predominated. The system was able to integrate broad swaths of intellectual life placed in the tolerated category, which did not require displays of ideological commitment.
 The Gomułka-leadership had no strategy for modernizations, it neither could, nor would want to substantially change the political system, or the mechanism of economic control. Even though it was clear that the growth of living standards could not continue without a surge of development in agriculture and modernization of the countryside, since the LEMP never had a total control over society, any attempt at decentralization and sharing of decision-making authority would have led to the further weakening of the establishment. On the other side, the concentration of estates and modernization of the countryside would have further encouraged the flow of the population to the cities, which was not desirable if merely on account of the consequences of an ongoing population boom. This had caused 2–3 hundred thousand new people to appear on the employment market from the mid sixties, a cause for great concern. For this reason, the “well tried and tested” program remained in place: a majority of the investments went into construction and large-scale industries, that could engage such large labor forces.

The establishment did not have the strength to:

  • vanquish the peasantry, but could prevent the development of peasant farms. By these means it not only caused tensions among the peasantry, but also undermined the foundations of food supplies to the cities.
  • to earn the loyalty of a majority of the laborers, but meanwhile it shut them up in the large state corporations, stripping them of any opportunity for a legal extra income.
  • to win the ideological battle with the Catholic Church. In fact the Church became the most important support for society.
  • to educate the young intelligentsia to become followers of socialism, or even accept it. But it did have the means to “reward” its efforts with prison sentences from time to time.
In order for the compromise of “don’t politicize, but prosper” to become sustainable, a restricted marketization of the economic system had to be carried out under the banner of a modernization strategy, that would uphold the monopoly of the state and cooperative property and not encroach the least bit on the political system. The establishment of the socialist market economy and fulfillment of the requirement of continuous growth in standard of living was assisted by the introduction, in 1968, of the New Economic Mechanism (NEM):

  • In the field of production and development the role of central organization was reduced, and company independence in decision-making was supported, excepting Yugoslavia, this was the only communist country where the command economy was abolished (decentralization);
  • the price system was reformed with a widening of the circle of the, so called, freely priced products, which contributed to preparing the conditions for the market activity of companies (price liberalization);
  • average wage regulation was introduced to the wage system, which made it possible for companies to decide about the salaries of employees based on a provided overall fund for wages (wage liberalization);

an extended system of secondary manufacturing branches and small farms attached to the cooperatives developed. The secondary manufacturing branches simultaneously served rural needs for part-time employment and diversification of consumer goods, as well as that of flexible suppliers to the rigid state structure. The over one and a half million backyard farms ensured families who were both peasants and industrial laborers working away from home a stable source of food and income.  

In summary the regime obstructed every social layer from pursuing its own interests, achieving its goals, fully playing its roles, but on the other hand it could not present a positive vision for the future either. The bleak prospects led to violent action in 1968, when the establishment assaulted the young intelligentsia, and on the pretext of the Arab-Israel War, started a brutal anti-Semitic campaign with which it drove away most of the remaining people of Jewish origin, mostly intellectuals. Two years later, with the seaside bloodbath it also turned the laborers against itself permanently. The regime was still successful in turning the various social layers against one another at this time, but in 1976 it no longer had strength even to achieve this. After the brutal repression of the summer strikes, the workers and intellectuals found an alliance.

In the seventies the regime tried to dampen social tension through renewed investment in—outdated—large-scale industry, financed from western loans. While the Hungarians spent their western loans on maintaining the growth of living standards, Poland brought about outdated large-scale industrial concerns using them.

The New Economic Mechanism was strongly influenced by Polish economists such as Oskar Lange, Michał Kalecki, and Włodzimierz Brus, who had in fact completed the theoretical aspect of the work in Poland, but their ideas had never been realized in practice.

The halt called upon the processes of economic reform at the end of the seventies, and a partial withdrawal from some changes already introduced drove the country into a crisis situation. The broadening of mechanisms offering means of self-exploitation served to uphold the compromise based on continuous growth of living standards: within state companies, small-scale production on the sly, often during official working hours and using the tools of the company was legalized by the creation of the, so called, economic labor associations (gmk). The introduction of this form of economic association was prompted by a fear of the spread of the demands of the Polish Solidarity Movement. This simultaneously increased the income of the cleverer workers and at the same time eased the inflexibility of the rigid state companies. But the mid seventies also gave way to an increasing reliance on western loans necessitated by the continuous increase of consumption and the provision of state-subsidized services, which however also came to be employed to stave off financial bankruptcy, and made the Hungarian economy comparable to a collapsing pyramid-game.

Part I     Part II     Part III

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Bálint Magyar (b. 1952) is a sociologist and a liberal politician. He graduated from Eötvös Loránd University, where he obtained a degree in sociology and history, and then a doctorate in political economy with the dissertation about the post-war history of Polish agriculture. His first job was as a scientific researcher at the Institute for World Economics of the Hungarian Academy of Sciences, specializing in East Europe. From 1979 he became a human right activist within the developing “democratic opposition” and was involved in the production of the “Beszélő” samizdat periodical. In 1981 he was expelled from Poland because of his contacts with the activists of Solidarność. In 1988 was among the founding members of one of the major oppositional political parties in Hungary, the SZDSZ (Alliance of Free Democrats), consequently took part in the architecture of the new democracy and negotiating with the Communist Party the peaceful transition at the “National Roundtable” discussions. He served as an MP of SZDSZ from 1990 until 2010, and was part of the party’s leadership (president between 1998–2000). From 1996 until 1998 and from 2002 until 2006 he held the position of Minister of Education.

Miklós Mitrovits (b. 1978) historian, Polonist. He graduated from the History Studies of Eötvös University in Budapest and parallel with his M.A. studies he completed specialization courses in Historical Russicistics and Modern Sovietology. In 2009 he was granted his PhD in the 19th and 20th Century Eastern European History Doctoral School. Between 2004 and 2008 he was studying at the Polish Studies and Central European Studies of the Pázmány Péter Catholic University. Since 2014 he has worked as a research fellow at the Department for Contemporary History of the Institute of History at the Hungarian Academy of Sciences.
His main research field is the contemporary history of Eastern Europe after WWII, principally the history of Poland, the Polish-Hungarian relationships and the characteristics of the political, economic and cultural development of the East-Central European countries. The comparative research of the countries of this region, mainly the entanglement history of these countries after WWII: relationships, interactions and attempts for integrations between Czechoslovakia, Hungary and Poland. He has several publications concerning the foreign policy of the Kádár era in Hungary, particularly the Hungarian-Polish and Hungarian-Czechoslovakian relationships. He has edited numerous collections of studies and documents. His main books: A remény hónapjai… A lengyel Szolidaritás és a szovjet politika 1980–1981 [Months of hope. The polish Solidarity movement and the soviet politics between 1980 and 1981], and Lengyel–magyar “két jó barát”. A magyar–lengyel kapcsolatok dokumentumai, 1957–1987. [Pole and Hungarian, “two good friends”. Documents on the Hungarian–Polish relationship, 1957–1987.]. In 2014 he received the Knight’s Cross of the Order of Merit of the Republic of Poland.

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