The political quiescence of the new democracies in Central and Eastern Europe: an opportunity cost framework

East European Quarterly, Summer, 2006 by Pieter Vanhuysse

Private Earnings and Protest Opportunity Costs in Late Communism

Observers of communist politics have often pointed to the widespread informal markets under communism, even though these were diametrically opposed to state ideology. In the case of Hungary, this has been interpreted as part of a tacit no-opposition/pro-consumption 'social compact' that was struck between state and society after the brutal repression of the 1956 revolution. (8) But what is less clearly emphasized are the channels through which these informal markets affected citizens' capacity to organize protests. In his notorious 'whoever is not against us is for us' speech of 1962, Party Secretary Bela Kadar proclaimed that 'all people who earn their living by work--and do not spend their days and nights plotting and making bombs--go to their jobs in the morning and work; they are actually with us even if this is not a conscious attitude on their part.' On another occasion, a Hungarian Party official went public saying that 'eight hours of work a day is one's duty as a citizen. Design machines, build bridges, drive the tram, heal the sick ... and then weed your strawberry seedlings, go to the cinema, paint your friend's flat if that's what you want to do' (quoted in Baxandall, 2000:628, 630). The Czechoslovak Party Secretary Gustav Husak later followed his Hungarian counterpart's footsteps by stating that 'whoever is not against us we can do business with.' (9)

Starting from the early 1980s, the Hungarian Communist Party moved to recognize private markets still further. Whereas in the early post-war decades, private household farms of cooperative members were considered a core 'bourgeois remnant,' the Party now declared them to be 'a permanent component of agriculture under socialism.' State cooperatives were encouraged to assist these private households by providing seeds and machinery and by helping with transport, advice and marketing. The production of food on household plots and the sale of food on free markets were legalized and restrictions on keeping animals and owning machinery were lifted (Kornai 1986:1702). As a result, private household farms already produced 18 percent of total Hungarian agricultural output by 1984, and private auxiliary production by individuals with nonagricultural professions produced a further 15 percent (Kornai 1986:1701-1703; Szalai 1991:335).

In the same vein, far-reaching new laws were implemented in 1982 to relax existing limitations on private work by artisans, tradesmen, taxis, trucks, shops, pubs, and restaurants. And for the first time, these laws allowed the setting up of four new types of private business. Two types, economic work partnerships (services) and civic legal associations (small retail trade), were completely independent from state firms. Two other types, specialized work partnerships (cooperative agricultural work) and company work partnerships (industrial manual work), still operated under the auspices of state firms. Participants in the latter partnerships were now legally allowed to make after-hours contracts, at wages up to three times higher than those they received during working hours (Rona-Tas 1997:146-149). The legalization of private work partnerships was massively successful. By 1987, there were 17,000 full-time and over 51,000 part-time participants in economic work partnerships, 20,000 full-time and 65,000 part-time participants in specialized work partnerships, and 4,000 full-time and close to 240,000 part-time participants in company work partnerships. If everyone had registered only once, this would have amounted to 9 percent of the labor force (Rona-Tas 1997:146). Similarly, by 1986, about 4 percent of the labor force worked full-time as private artisans, tradesmen and such, and 25 percent did so part-time (Rona-Tas 1997:145-146). As a result, the Hungarian private sector reached astonishing proportions by the mid-1980s--for a communist state. In 1984 this sector accounted for a third of total active time (excluding time spent on household work and transport), and for more than half of new residential constructions. In repair and maintenance services, private work accounted for close to nine-tenths of production in 1983 (Kornai 1992:441). (10)