Observations: When Nothing Works

In the last fifteen years, Hungary has made impressive strides toward a western-style society—which it had never ceased to be, except in the economic area. In the last two years a foreseeable catastrophe struck: people, with their expectations and efficiency, have been ready to effect the final push for a dynamic and modern economic structure, but their efforts have been blocked both by the Party’s inertia and by the sins of the past decade.

While in Budapest last summer, I tried to understand the nature of the blockage which is so severe that some speak of the impending uprising, as in 1956, while others argue that people will accept the new, draconian restrictions because they still have too much to lose. Both sides agree that it is a revolutionary situation. No such talk has been heard in the last twenty years.

Try to visualize the blockage experienced directly by workers, employees, and the professional class. East European nations, with the possible exception of Czechoslovakia, never had the necessary infrastructure for a highly industrial society. One may argue that this was to their advantage—no social-cultural dissolution as in the modern West—but the communist ideal was to leap into machine paradise within decades, by forced industrialization, including industrialization of agriculture. It is now too late to go into reverse, and communist incompetence is too massive to forge ahead. It is this half-way house that has created the present dramatic situation. It seems that there is no way out: either the political structure must crack (impossible, because of Soviet occupation), or economic progress must come to a halt.

The situation is less dramatic in Czechoslovakia, where the regime never allowed the development of middle-class prosperity, foreign imports, and the rise of at least parts of the citizenry to bourgeois standards. Prague, in many ways still a splendidly beautiful city in spite of its scandalous state of neglect, is increasingly drab, with shoddy shop windows and inedible food. Compare it with Budapest or the Balaton-lake area, and you find yourself on two different planets.

But back to the Hungarian economic blockage. In order to manufacture exportable goods, such as textiles, electric appliances, buses, and boats, Hungary obtains raw materials and semi-finished products from COMECON countries, including Russia. Those items are generally of poor quality. When the export product reaches the Western market and is examined for quality, the flaws and defects are detected by sophisticated processes, and the merchandise is returned. This is how Hungary’s world-famous buses and trucks have been recently sent back from Argentina where they created accidents. Metal obtained from the Soviet Union did not stand up under stress. So much for “socialist cooperation” in the economic area.

Hence the need to import raw material from the West—steel from Sweden in this case—and new machines. These new machines, however, break down when utilized on defective material. A vicious cycle develops. Hard foreign currency can only be earned through the export of quality goods, yet since the merchandise is shoddy, no currency is earned with which to purchase the needed machinery. The failures are thus numerous, when, for example, the Raba trucks must run with German (Mannesmann-manufactured) motors. For the same reason, the cost of launching new industries or of introducing new lines of production is prohibitive, although these are desperately needed. Some plants succeed through the ingenuity of engineers, yet internal efforts are often halted at some stage of the manufacturing process.

I was told of an engineer who invented an important machine, bound to save great expenditures, and first of all for foreign imports. His condition was that he must earn a modest percentage of the profits. His director refused, and when our man went to court, which ruled in his favor, the furious director had the machine thrown out. (There are those who doubt the veracity of the story, noting that the courts are not that independent.)

Suppose now that for millions of dollars machines are imported from the West. In many instances, they are sabotaged. Not directly, but due to the peculiar conditions under a communist regime. Let us take it as axiomatic (and Gorbachev’s alleged reforms will be reduced to nought for the same reason) that directors of state enterprises, each flanked by an inevitable Party delegate, have no interest in sticking their necks out by introducing improvements of any sort. The attitude, always and everywhere, is against rocking the boat. A new set of machines (let’s say) would mean new methods of work, disturbing the routine and the vested interests which bank on mediocre efficiency. Not only on the executive level, also on the level of workers, that is of “work brigades” consisting usually of fifteen or twenty men, linked by common interests and tied also to other work brigades in other, related enterprises.

The older ones among the workers who may still be communists at heart accept the improvements brought by more efficient machinery and methods, but the younger ones, cynical and preoccupied with their own comfort only, discourage any serious effort. Now if greater productivity and initiative earned higher wages, the matter would be different. This is, however, not the case. Agreement with other work brigades (often a telephone alert is sufficient) acts to slow down the new process of production. If nothing else does, this “buddy-system ” works.

The consequence is a poor and uneconomical utilization of the tools of production, insistence on routine, sabotage of entire lines of merchandise, and the wear and tear on industrial equipment. Can one blame the apparent culprits? Yes, for the above-described actions and non-actions; no, since they are aware that even with the best will on their part, the system functions on the basis of a built-in self-sabotage, so that nearly everybody tries to appropriate on his own level whatever he can put his hands on, including the almost open stealing of “socialist property.” But suppose Factory A contributes more than its share according to the sacrosanct Plan. If others, Factories B, C, and D, do not supply the needed parts, the production line will be interrupted and Factory A will take the blame or worse, its director will be accused of sabotaging the Plan. Therefore: let’s stick to the routine!

Wages and social services, anyway, will be received, no matter what failures occur. According to the stipulations of Marxist doctrine, the state must supply the services regarded as sacred. For an impoverished country the overhead becomes enormous. Food, rent, medical care, drugs, transportation, and education are obtained for pennies, although nowadays when the system faces economic collapse prices are shamelessly hiked, salaries are blocked, new taxes are imposed, and even inflation is secretly encouraged. In short, in Hungary the burdens both of a partly socialist and a partly capitalist economy are aggravated by an incredible corruption on all levels, widespread not only within Party circles, but affecting civil society just as much. It is this, and not the regime’s incompetence, that makes the two young people with whom I conversed in Prague, hesitate whether to become Party members as a way of promotion in their field of work. Oppression and the struggle for economic survival are one thing, they told me; enforced moral abjection is another.


  • Thomas Molnar

    Thomas Steven Molnar (1921-2010) was born in Budapest, studied at Columbia University, and was a Catholic philosopher, historian and political theorist.

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