Saturday, February 21, 2009

Why now?

Because of the crisis, obviously. Even though the question 'how to handle the crisis' has now the foremost importance, it is also a chance to think of more substantial problems than it was usual even a year ago. Although the careful observers could have found signs of systemic difficulties in the so-called transformation countries, in Hungary these were not taken into account. The public, academic and political discourse relegated those to the periphery and treated the lagging economy, the growing tensions in the society as if they were specifically Hungarian phenomenon caused only by incompetent governance and an irresponsible opposition. Lack of information on the countries in ECE led to an illusion that there is a fast and sustainable growth and convergence to the EU 15 in so-called exemplary countries like Slovakia, Estonia, Czech Republic or even Romania and Bulgaria and only Hungary has significant problems. Moreover, it was heavily capitalized by many political and intellectual groups as well. Therefore it was considered as "heresy" to speak of the crisis of the economic model of the transformation, to express doubts about the new fetish of flat tax as the only precondition of sustained and rapid economic growth, to point out that even the rate of GDP expansion experienced in some countries didn't result in a higher standard of living in a broader part of the society (or only with the expansion of credit) and the better employment rate was in a significant proportion due to the emigration of the workforce , to argue that it is not a realistic assumption that in countries with a democratic political system a low rate of social expenditures and a low level of personal income can be kept for decades after joining the EU and taking into account these and many other factors the countries in ECE are facing the same challenges as a result of their almost identical integration into Europe's economic system.

These problems (and a lot more) are not easy to raise in Hungary even at this very moment, but at least they are not a taboo any more in the world. The rapid development of the crisis destroyed the myth of invulnerable and super-competitive flat-tax economies, the unrest in those societies after the austerity measures reaveled the importance of a certain degree of social consensus instead of the "we know it better, your duty is only to suffer" behaviour of the intelligentsia and the common vulnerability of every "emerging" economy in the region ironically restored the neglected and never really accepted region of ECE. An inescapable reality.

As those topics are even now not in the center of the public discourse in Hungary (it is illustrated by he fact that last Thursday a former minister of economy proudly remembered in an article published in the largest newspaper of the country that he had announced the superiority of Estonia's reforms and financial system ten monthes ago from Tallin, while some serious Estonain politicians are considering tax raises, a larger ratio of the taxes to the GDP and even an abandonement of the flat tax rate at this very moment) I decided to publish my observations and reflections at this site. They will deal with many aspects of the crisis and its events, from doubts and questions regarding the viability of the present model of economic integration and the interdependence of Europe as a result of integration and globalization, to the existence of ECE as region bound together by similar social processes, and economic modell (that way at the moment only defined by outside) and to the incompetence or deliberate deceit practiced by experts and scholars as a sign of a peculiar mental map ignoring every other country in the region and their similarity with Hungary, using them only in a nationalistic context with a self-stigmatizing emphasis. (I know it is obscure at this point, but I will be more deatiled in a later post.) As I'm not an economist, only a historian with some modest knowledge of other sub-disciplines of the social sciences there will be many aspects I will rather adress with questions, highlighting problems and not with categorical assertions.

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