Wednesday, June 17, 2009

Crisis, but more than one? - Hungary

Well, on the one hand it is clear that at the moment the sense of crisis is receding (or only has receded?), "risk appetite" is growing, everyone is looking and seeing "green shoots" even though the data on real economy is at leats controversial and for more sober observers not really promising. (Just one example: the most prestigeous economic news and analysis website published a news yesterday with the title: Incredibly good news from the real estate market in the USA. In reality although in a m-o-m comparison the data showed growth the level of new construction works was only the half of the same indicator a year ago and only at about a fifth three years ago. It suggests that there is a long way to a recovery and a similar GDP level...) But with the present mood hysteria is not so dominant as it was some weeks ago and it also means that there is not really much to write about. As if normality has been returned ...

Otherwise - at the field of politics - spectacular events happened, but they can hardly be called critical, except in Hungary. For the superficial eye a strong correlation between crisis and the astonishing appearance of a strong and neo-fascist party (in the sense the concept is used by Roger Griffin) and the collapse of the center-left governing or majority parties would be obvious. But to treat the phenomenon in a so simplistic way would be misleading and a self-delusion. It's rather a sign of a more profound problem - if one whises, crisis - the huge divides in a country and in a society, accentuated by an economic and social model that was - as it is clear after two decades - incapable to bridge this gap and give at least hope for a fifth or quarter of the country. Incapable, although the model was once implemeted in a very servile way and later with more reluctance as well, in order to cushion the measures. The consequence: means relying only on market and imagining the solution of social problems in a market oriented way failed to deliver the opportunities for well defined geographical regions, quite the contrary, it led to a deepening difference between those areas and the more developed regions of the country. For example as in the early '90s the per capita GDP of the Northern Hungarian county Borsod was at almost 75% of the national level, today it is well under the 50% percent treshold, although investment in a material sense was not scarce in the last decade.

If one would like to sum up this process from a point of view of social history (or historical sociology?) it is quite similar to the process of spreading of capitalism into rural communities, at least in Hungary. The emergence of a capitalist economy in the 19th century was hardly a singular act, rather a long process, starting from certain centers and slowly diffusing into the countryside. Not only in a geographical sense, but in a social one as well. Even if one can detect a kind of enterprise or entrepreneurship in distant villages it is many times confined to individuals or a small fraction of the population. Meanwhile other models of the integration of localities in a capitalist market (world market) emerged and prevailed, like a strong cooperativist movement, wich were capable to preserve (though in many times in a transformed way) the earlier methods of running a local community and at the same time integrate this community as a whole into the broader framwork of a market. The socialst solution for this problem was surprisingly (or unsurprisingly?) similar. Integrate the rural communities around a heterogenous company, dealing with agricultural and some kind of industrial production and using extensively the labor of the villages in this process, while allowing some leeway for the individuals around their homesteads and imitating a kind of self-governance in this company (cooperative).

But after the change of regime - due to the reemergence of some political forces who's program contained the total restoration of agricultural property to those who owned it before the collectivization and due to ideological opposition to the socialist cooperatives as remnants of a failed system and compromised political power, a new model emerged, based on the gradual concentration of the landed property in the hands of a few who were capable to use state funds for investment in machinery, therefore reducing the demand for labor, and in remote areas even this kind of restructuring fell off, leaving there small communities with ageing populations and urban immigrants from the lower social strata at the fringes of capitalism, many of them belonging to the elargest ethnic minority, the rroma. (In many communities money is scarcely used, credit is given by the shopkeeper in forms of listed debts, work or commodities used as payment etc.) And in the last decades there was no sign of market mechanisms intruding in this space and transforming it... There is still a living memory of a rural countryside with opportunities and regular work and a sobering experience of present-day realities. (One can list other problems, unskilled workforce or people with obsolte skills, uneducated population, lack if iniciatives, ideas, capital etc.)

Quite telling is the fact, that under such circumstances no ideas of more active state policies were promoted, only the private initiative was emphasized and recently it took shape in the idea to implement the "bank for the poor" in some form, but not with state intervention, based solely on the finacial means provided by some charitable businessmen. And meanwhile public works are condemned as useless... Those are the regions, where radical opposition of the system as foreign and alien to Hungary scored good results and in some cases even electoral victory, revealing a more specifically Hungarian crisis, that is accentuated by the global one.

(P.S. It is no consolation that I fairly well foretold this political outcome, at least the collapse of the majority parties. Also I'm not relieved by the fact that I've found someone from Latvia who shares my concerns that the present policies can only lead to the abolishment of the state...;) )

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