What's The Economy For? Community or Control? Lessons from Hungary

Communism, capitalism; I just spent a week in Hungary, where anyone in their 50s has spent more or less equal parts of their life under each system and what many of those people find surprising now is just how little has changed.

As one resident of Budapest, exclaimed with a sigh: “Twenty-five years after the transition, the one thing we didn’t expect was for so much to be the same.”

It’s a cautionary tale for those in the US who talk about creating a “new” economy. Just what's really new about it?

In the late 1980s, my Budapest friend and her colleagues believed they were about to make a new world. To some extent they did; they travel more freely now and can start their own businesses. With Western encouragement, Hungary’s state-owned companies were mostly privatized, its cooperative farms split up.

But instead of redistributing assets into more hands, Hungary’s merely passed from one, one-percent to another. Today Starbucks, McDonalds, and Tescos are a common sight on Budapest's broad boulevards but so are homeless people, beggars and the unemployed.

Eurostat, a data firm, reports that more than a quarter of Hungarians were living in extreme poverty last year. And the old practice continues of playing politics with people’s needs

Today’s power elite dispense shrinking benefits and scarce public jobs just as the old regime passed out perks and favors to their allies. To explain the pain, right-wing demagogues blame familiar targets: among them, gypsies, queers, and Jews. In his State of the Union Address this year, Prime Minister Viktor Orban attacked immigrants, foreigners, and multiculturalism (as well as communism) and called for a higher birth rate for Hungarians.

Did Hungarians hope for more? For sure, and gradually they’re figuring out how to get it. As I left, hundreds were in the streets protesting corruption.

But the big picture is that while ownership in their new economy has shifted from public to private hands, the question they have to grapple with now, is what’s the economy for? For community or control?