The crisis of the New Capitalism in Eastern Europe: The Hungarian Example 

A tally of the last twenty years since the transformation of the political system

Synopsis: The main statement of the study is that new capitalism of East Europe is experiencing a deep crisis as a system, and in light of this the system change which started twenty years earlier has in essence collapsed. The study decisively shows and characterizes the path leading to the collapse, the main stages and junctions. All this is presented in light of the global context, as the history of Eastern Europe can only be understood, especially in the age of globalization, in light of developments in international relations.

What do the recent demonstrations in Hungary and in the world have in common?

The wave of demonstrations mounted by civil movements in Hungary are in line with global trends, namely the mounting resistance against austerity measures and antidemocratic tendencies. These unfavourable developments in the wake of  multiple crises have triggered the dissatisfaction of the majority of the society, both in Hungary and all over the world. Three years after the global crises broke out nothing has fundamentally changed. Profits and bonuses are booming for the big corporations and financial oligarchs, while people are paying the price of their reckless speculation with falling living standards, cuts in public services and growing unemployment. On top of that, private debt has put many households at the brink of tragedy. People are fed up and want change.

The first big mass demonstration was started this year in March, when the Facebook Group called 'One Million for the Freedom of the Press' rallied in Budapest demanding change to the media law.

Economic performance of the New Member States of the European Union

By Krisztina Vida*

Erzsébet Szalai

The indiscreet charm of dictatorship

Népszabadság, Sept. 18. 2011

The key to understanding the current situation in Hungary lies in the emergence of the Hungarian bourgeoisie during the transition period, parented by a thin layer of liberal intellectuals, and the technocracy of the late-communist, Kadar era. At the dawn of new Hungarian capitalism it was these two power groups who were dreaming of the evolution of the local bourgeoisie, of the ’real owners’. At the same time, both groups encouraged the inflow of foreign capital as well, and even considered it more important than supporting the birth of the Hungarian bourgeoisie.

Thus, it was not by chance that the layer of Hungarian greater bourgeoisie, which had stabilized its position by the middle of the 2000s, has been jealously keeping an eye on the privileges of foreign capital, not least, the fact that the latter continuously reallocates resources according to its own advantage with the help of state redistribution – at the expense of, amongst others, the Hungarian bourgeoisie.