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Szalai Erzsebet

Chapter 4. Actors of the Open Crisis

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1The internal tensions and contradictions that resulted in the disintegration of ‘existing socialism’ cannot, however, be fully explained by the immanent characteristics of the system. What ultimately decided its failure was the fact that the fundamental operational mode of the system, which professed itself socialist, did not, and could not, differ from the logic of world capitalism. (The countries of ‘existing socialism’ had to trade with the countries of ‘world capitalism,’ and, in addition, the ending of the first, dictatorial Stalinist period necessarily meant, among other things, a cultural opening towards countries outside the ‘camp.’) The extent to which the system did differ—with the exception of some positive elements mentioned earlier—resulted in grave distortions. To put it more precisely: as the socialist experiment was conducted at the semiperiphery of world capitalism, in countries with weak democratic traditions, the system it brought into being could only produce a far weaker societal output than the welfare capitalisms emerging in response to its challenge. Basically this interrelationship is the reason why I have called ‘existing socialism’ a semiperipheral socialism.

2Nevertheless, ‘existing socialism’ could more successfully solve those problems that derived from its semiperipheral character, at least in the East-Central European region, than those societies that had begun with similar conditions but then followed the road of capitalist development in their main features (primarily the Latin American countries). In contrast to the latter, ‘existing socialism’ abolished the oligarchic economy and sharp societal inequalities, and was able to produce better results in industrialization, modernization, and even competitiveness (Arrighi, 1991).

3However, unlike world capitalism, ‘existing socialism’ was unable to offer a truly new alternative which could be viable in the long run. In addition to the internal causes listed earlier (or more exactly, partly manifesting itself in those internal causes), the great vulnerability of the system, resulting from its semiperipheral nature, was the basic reason why its classical period—which followed the first, Stalinist, period—was a period of practically complete disintegration almost from the outset.

4As far as the concrete mechanisms and the movement of the societal actors within them are concerned, this has the following implications— concentrating this time on the case of Hungary.

5The spiraling debt of the country from the mid-1970s catalyzed the birth and growing influence of a market-focused monetarist branch of reform thinking. This despite the fact that there were signs not only of an economic crisis, but also of a general societal one, as I noted in a paper written in the second half of the 1980s.

6The signs of the crisis are shown most tangibly by the chapter headings of Ágnes Losonczi’s contemporary book (1989): “The Lack and Importance of Financial Means—Over-burdening, Exhaustion”; “Freedom of Acquisition—and Its Confinement”; “The Status Losers—Economic and Societal Decline”; “Greed and Clinging to the Present”; “Societal Gulfs— Obstacles to Community Building”; “Centralization of Living Communities”; “Material Divisions”; “On the Isolating Effects of Operational Disturbances.”

7András Lányi (1988) characterizes the societal conditions of the day as follows: “During the past thirty years, state socialism has undergone profound changes. It has gradually incorporated into its system some elements of societal bargaining and competition and of individual initiative, which enabled it to consolidate. However, its solidity was not based on the acceptance of norms suggested from the top, but on the fact that these norms were no longer consistently examined anywhere … It has been convincingly shown that the uncertainty of the rules of the economy favored an externally directed passive behavior, and at the same time inevitably led to voluntaristic improvisations, or so-called manual controls. Less has been said about the socio-psychological consequences of this situation. If solid points of reference are missing, no strategies that can be consistently followed and no moral principles that confirm them can evolve in any area of life. I am convinced that the loss of balance in the economy hides an intellectual chaos. Our dominant ideas do not point beyond the maintenance of our current practice and its self-justification at all costs; and when it appears that this practice can no longer be maintained, society is at a loss, irritated and perplexed as it views its own growing difficulties. In fact, the latent contradictions did not manifest themselves in the form of open conflict for a long time, because it proved to be more advantageous for all to reach compromises on the quiet instead of articulating and openly representing conflicting interests.”

8According to Ferenc Erős (1988), the crisis of individual careers and life strategies was also becoming increasingly obvious in this period. “Clinical experience, surveys based on in-depth interviews, literary works, etc. indicate that in Hungary a significant proportion of the people have settled for survival at all costs. Today these survival strategies are ending in total failure, and what comes next is some form of self-destruction, often a more or less spectacular suicide. This is particularly conspicuous among the intellectuals (see, for instance, the great ‘paradigmatic’ suicides), but it is certain that other strata are at least as much affected. One effect of the crisis may be that it confirms these negative life strategies, located as they are between the only alternatives of survival or destruction, to the detriment of the quality and values of life.”

9In a paper I wrote at that time, I defined the crisis as that of ‘lopsided autonomy,’ a situation in which freedom rights accruing slowly and in an evolutionary way could not be asserted evenly in the different spheres of the individual’s life, so that serious disturbances of identity arose as a result. “The proliferation of the phenomena of social crisis, however, does not meet an external barrier similar to that of the economic crisis. Signs of crisis, such as alcoholism, the spread of suicides, the growing number of divorces, the increasing proportion of deaths at an active age, etc., are not—or at least not direct—legitimizing factors in the face of possible bankruptcy and its consequences” (Szalai, 1988).

10A further important tendency was the continuous erosion of the economic strength of the Soviet Union, including its armament capability, from the late 1970s and the early 1980s, as was pointed out by János Kis (1982). In Kis’s words, the Soviet leaders “are keeping unchanging control of the East European influence zone of their state, although they are no longer able to help it out of its economic troubles. In fact, the Soviet Union itself is in crisis. Its national income is growing at an ever slower pace, the supply of goods to the population has been constantly deteriorating since the mid-1970s, the economy is less and less able to bear the burden of the arms race and other expenses of the state’s commitment as a global power. The Soviet interpretation of détente has become untenable. The uneven rhythm of the growth of the different nationalities is increasingly consuming the demographic basis of Russian dominance. The top political elite is ageing, important decisions have been postponed for years, and succession seems to be uncertain. The current Soviet leadership wants only one thing in Eastern Europe: to maintain some order. But their successors will have to decide what to do with their inherited bankruptcy. Their decision will obviously depend on their choice of a way out of the internal crisis of the Soviet Union and its unstable position as a world power. That is, if they really make a choice, rather letting the—more or less favorable—political events trigger each other.”

11By the middle of the decade, it had become clear that the economic decline of the Soviet Union was providing a broader bargaining position for market-oriented reformers, on the one hand, and more economic and political room for maneuver for the East European countries of the ‘empire,’ on the other (Kis, 1985). In parallel, the attractiveness of the model of Western consumer society had been continuously growing in the broad strata of the society as a result of the earlier slow reforms within the system, which made the opening towards external markets irreversible and led to the spread of the behavioral patterns of ‘lopsided autonomy.’ At the same time, as social mobility slowed and social inequalities grew more rapidly, the ideal of community society openly disintegrated. In the unofficial ideology of the system, the ideal of ‘community man’ was replaced by the no less idealized individual consumer, whose advancement was now endangered primarily by the restrictions on consumption resulting from the growing external imbalance of the economy.

12From the late 1970s, the structural crisis outlined above catalyzed the birth and activities of societal counterelites that articulated the crisis and sought a way out of it. It was primarily these domestic counterelites, voicing the demand for economic balance, urging a further opening of the market and the external economy, and advocating the emulation of the Western consumer model—above all the technocracy of the late Kádár era (in other words, the new Westernized generation growing up under the shelter of power)—that gained strength as a consequence of the processes described earlier.

13At the same time, the birth and activities of these counterelites—as I have already stressed—was by no means an autonomous process that could be interpreted merely within the framework of the nation state, but—particularly from the early 1980s—primarily a consequence of the expectations and pressures of the so-called international financial and economic superstructure. (The international financial and economic superstructure is the product of the expansion of economic power over continents and nation states, i.e. globalization, and its agents are the international financial organizations and large multinational global companies, linked as status groups. In creating this concept I have strongly relied on the theories of Held, D. McGrew [1988] and Kamilla Lányi [2001].)

The role of this ‘superstructure’ has been growing since the mid-1970s, when a comprehensive neoliberal change began under pressure from international big capital, which wished to cast off the fetters of welfare capitalism. Robert Went (2002) writes about the main cause of this development:
“The post-war economic growth created the material conditions for constantly improving living standards and low unemployment as the foundations of the welfare state, which allowed for a significant increase in social and communal services. On reaching the depressive phase of the long wave of expansion it was no longer possible to ensure almost full employment, enhance social security, increase real wages, or reduce poverty. The main concern of employers was the restoration of a reduced profit rate (italics mine, E. Sz.), which called working conditions, living standards and the achievements of the welfare state into question.”
The ‘international class struggle’ was intensified by the economic crisis, with international big capital, intent on eliminating the welfare achievements of capitalism, being represented by the international economic and financial ‘superstructure.’ This ‘superstructure’ was becoming even more interested than before, not only in breaking down the welfare achievements of core capitalism, but also in liquidating the ‘collectivist experiments,’ that is, ‘existing socialism.’ It had two reasons for wishing to do so. On the one hand, in relation to its neoliberal transformation, the very existence of a rival social structure imitating communality disturbed it more than it had done earlier. On the other hand— due to the narrower economic motivations of the international big capital represented by it (acquisition of markets, a cheap and well-trained labor force, cheap means of production)—it wished to extend its power over the semiperiphery embodied by ‘existing socialism.’ This was not necessarily a conscious effort on the part of the ‘superstructure.’ Rather, in Marx’s phrase, they “don’t know it but they are doing it.” Thus the class struggle affected the societies of ‘existing socialism’ in this specific form.

14In close connection with the factors listed above, the growing strength of the ‘superstructure’ (the effects of which in Hungary are subtly presented by László Andor [2003]) played a major role in enabling precisely the late Kádárian technocracy and its allies, the democratic opposition and the new reformist intellectuals, to organize themselves as a societal counter-elite. It was no coincidence that earlier we identified the debt crisis as the external barrier: for among all the crisis phenomena, the debt crisis was not only primarily suited by its nature to attract the attention of the ‘super-structure’ but, to put it more strongly, it was actually that focus of illness to which the ‘superstructure’ could attach itself. In fact, the debt crisis was primarily brought into the debate by the late Kádárian technocracy. The democratic opposition and the new reformist intellectuals, whose main aim was political democratization rather than the management of the debt cri-sis, joined the late Kádárian technocracy because the basic condition of overcoming the debt crisis was the full opening towards the West and unlimited expansion of the market, which had proved to be the decisive thesis by the mid-1980s.

The decisive factor in this process was that by now the leaders of the democratic opposition and the new reformist intellectuals had openly abandoned their earlier Marxist or neo-Marxist identity.
It is astonishing that this transformation and its causes were predicted much earlier by György Bencze and János Kis in their Marxist study quoted above: “There must be changes in the organization of society and in the situation of the working class to ensure that the institutions of power are not strong enough to atomize the working class. As long as such changes cannot be foreseen, Marxism in opposition to the official ideology will be in danger of disappearing or being dissolved in non-Marxist ideologies better suited to the social isolation of nonconformist intellectuals. But at least it will no longer be in danger of continuing to be a parasite of official Marxism.”
As we have seen, the organization of the ’working class,’ with the exception of Poland, did not take place, and the marginals who had broken away from Marxism, missing societal support, entered an informal but gradually more formalized alliance with the late Kádárian technocracy under the shelter of power in a continued attempt to change (at first by reforming and then by overcoming) the system, which by the early 1980s found itself in open crisis. However, in this casting they were inevitably subordinate to the late Kádárian technocracy (Szalai, 1995).

15As both György Földes (no date) and Tamás Krausz (2003) point out, intellectuals and social politicians demanding the democratic reform of socialism were also present in the intellectual life of the crisis period of the 1980s. (It was within that trend that neo-Keynesian and Kaleckian economists, such as Róbert Hoch, Éva Radnóti, Andrea Szegő, György Wiener, and Károly Lóránt, formulated their theses, urging a turn towards the internal market in response to the economic challenge, and analyzing the ‘debt trap’ at a world-system level. [They further included the North– South problem in the relationship of the core and the periphery, calling attention to the role of the developed countries and the international financial organizations in generating and aggravating the crisis by approaching matters from the angle of the world economic power relations.] Their analysis resulted in the message that there was no point in trying to move towards the core because it would not admit the applicant, and that one should not make a fetish out of the market mechanism, and particularly of the crisis-management capability of private property, as the state could not be eliminated from structural change and modernization. A more important process in the period of Soviet perestroika was the activation of intellectuals who believed in self-management and who saw an opportunity for the ‘real’ democratization of property and social relations in the disruption of former power relations.)

16There are two basic reasons why the intellectual advocates of democratic socialism could not be the catalysts of effective societal forces. On the one hand, the ‘superstructure,’ and its domestic ‘favorite’ within the power structure—the late Kádárian technocracy—naturally did not, and could not, support the intellectuals’ objectives. On the other hand, the intellectuals—in contrast to the democratic opposition—neither distanced themselves from nor openly confronted the status group in power. That (among other things) was why they were unable to marshal broad societal forces behind them.


17Turning to the collapse of the Soviet empire and its causes—including the role of the ‘superstructure’—one recognizes two parallel but intertwined processes from the early 1980s.

18On the one hand, it became obvious to the Soviet leadership that it was unable simultaneously to perform three ‘tasks’ set by the ‘superstructure’: to offer a lifeline to the East-Central European countries slipping into a deeper and deeper debt crisis, and thus prevent their political ‘erosion’; to keep pace with the escalating arms race; and to maintain the internal living standards, political stability, and investment capacity of the country.

19The East-Central European countries’ perception of this situation was described by András Köves (2003) as follows: “The increasing dynamic disadvantages of trade with the Soviet Union united with the decreasing static advantages, and the more the makers of domestic economic policy and the managements of many companies oriented to the Soviet market tried to gain static advantages by maintaining or reinforcing the existing structure, the more pressing the problems and the more severe the dynamic disadvantages became. The crisis of the Soviet economy was obvious; the Soviet ability to deliver and to pay was decreasing.”

20In addition—or, more precisely, in close connection—acute socio-political tensions developed in East-Central European countries (Szelényi, I., Szelényi, B., 1994), first in Poland (where the working class revolted against its rulers) and then in Hungary (where the societal counterelites became highly active [Szalai, 1991]).

21On the other hand (as mentioned in part before), a technocracy and an economic elite, which may be called late state socialist and which were oriented to the West and the market, came into being under the shelter of power, not only in Hungary but in all the other countries of the region, and most of all in the Soviet Union. This development—the intensity of which significantly differed in the different countries—was the result of the behavioral pattern, and in some cases the direct pressure, of the ‘superstructure’ (Krausz, 2003; Hanley–Matějů –Vlachová–Krejči, 1998).

Iván Szelényi and Balázs Szelényi (1994) see the fundamental reason for the emergence of rival elites inside the ‘communist’ elite in that the ‘communist’ elite failed to bring up its own successors, not wishing even its own children to make a ‘nomenclatura’ career. I rather believe that those ‘children’ refused to be ‘brought up’ in keeping with their parents’ taste. Their teens and young adulthood coincided with the beginning of the disintegration of ‘existing socialism,’ the opening towards the West, and the appearance and spread of Western behavioral patterns and consumer models in the countries concerned, and it was in consequence of those processes that the ‘children’ resolutely revolted against their parents (Szalai, 1990, 1999).

22Under the combined influence of the factors listed above, from the mid-1980s the “Soviet leadership let go of the reins” (in Márton Tardos’s phrase), and by the late 1980s, seismic changes were taking place in the entire region, including the ‘center of the empire’: ‘mediated’ by the local counterelites, the transformation of the political system had begun.

23Western literature on transitology tends to explain the beginning of political system changes by the overwhelming pressure of civic movements (see, for instance, Timothy Garton Ash, 1990). I believe that (with the exception of Poland) ‘existing socialism’ could give birth only to civic movements of limited strength and the decisive battle was waged not between civil societies and the ‘communist nomenclatura,’ but between two factions of the power conglomerate, the old ‘nomenclatura’ and the late state socialist technocracies. (This battle is well portrayed by Bozóki, 1991; Kis, 1997; in the case of Bozóki 2000, 2003 [although his conclusions in the latter work partly differ from my own].) This tendency was strengthened by the fact that from the beginnings of political change (after conflicts of different intensity in the different countries) the late state socialist technocracies had allowed the weak germs of parties to grow out of the weak civil society very fast towards the forums of power, rather than letting them move down, towards society (Szalai, 1989b; G. A. Bryant– Mokrzycki, 1994).

24During this period, the intellectual supporters of democratic socialism were more exercised by the question why society did not resist the political changes, which could ultimately lead to the dismantling of ‘communal’ ownership. (Experiences of ‘participant observation.’) According to Péter Szigeti (2003), the decisive reason for the lack of resistance was that society did not really regard the system of ‘existing socialism’ and the so-called ‘communal’ ownership relations as its own; it did not believe that the property that was soon to be ‘privatized’ was its property. And, as I explained earlier, it had every reason to feel that way.

25Ultimately, as far as the major issues of the unfolding change of the system were concerned, the society basically remained passive and, with by and large positive expectations from change, did not express any doubts even concerning the foreseeable privatization. (Demands for the creation of at least partially direct employee ownership were not [and could not be] decisive [Szalai, 1994].) In addition to the ‘democratic deficit’ of ‘existing socialism’ and the strong attraction of the Western consumer model, the sociocultural traditions also played a major role. (This will be discussed in greater detail in the next chapter.)

26The changes in the political system were soon followed by the beginnings of changes in the economic system. The primary beneficiaries of this process, which lasted about ten years in the societies concerned, were basically none but the late state socialist technocracy and economic elite (Granville, 2000, Szalai, 2001, Krausz, 2003).

27Here only a brief reference can be made to the Yugoslav case. Although Yugoslavia was not an integral part of the Soviet empire and the Yugoslav attempt at self-governance presented a specific, strongly democratic, alternative to socialism, the crisis and open failure of that ‘model’ coincided roughly in time with the crisis and disintegration of the Soviet empire (if only as a result of the general loss of opportunities and the mood of crisis within the ‘socialist camp’). The crisis of the attempt at self-governance— which for many years was also one of the chief sources of the positive hopes of the Hungarian reformers—was caused mainly by the bureaucratic restrictions and the related failure to create a real ownership interest among workers, in addition to the effects of the world capitalist framework and the pressure exercised by the debt crisis of the ‘superstructure,’ as was established by József Juhász (2001).

28China, Cuba, North Korea, and Vietnam are ‘holding out’ to this day. In my view, the reasons for this are found in the specific historical development, the cultural traditions, the economic starting conditions and, primarily, the hard political dictatorship of the one-party status group in power in these countries. (However, in the limited space available, I cannot discuss these still ‘existing socialisms’ here.)

© Central European University Press, 2005

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