Labor & Politics in Hungary: Toward a Left Alternative

John Barzman interviews Tamas Krausz

HUNGARY IS OFTEN presented in the Western media as the East European country the furthest on the road to capitalism. The following interview, which examines only Hungary, suggests there is still a long way to go.

Hungary has had the longest experience of market reforms and praise of capitalist efficiency. The old (post-1956) regime of Kadar and his successors introduced such reforms consistently since the early 1970 and with increasing speed, under the pressure of the International Monetary Fund, in the last few years. Yet after twenty years, Hungarians have only about $900 million available to purchase private property. That is only about 3% of the public wealth that could be put on the auction block (about $10 billion in land and $20 billion in other assets).

Who will get this property is one of the biggest issues in debate. Few people challenge the idea of privatization at this time, but there are many possible ways to implement it and, so far, only a small share of the economy is privately owned.

Elections were held in March 1990. The old Stalinist party had split in two: the Hungarian Socialist Party, which received 9.5% of the vote, and the Hungarian Socialist Workers Party, with less than 4%.

Two major new parties emerged: the Hungarian Democratic Forum (HDF) with 415%, and the Alliance of Free Democrats (AFD), with 23.2%. The HDF is identified as nationalist and Christian, and the AFD as committed to free enterprise, ‘Europe and internationalism.”

In fact, both parties are ill-defined and include many renegades of the old regime as well as currents ranging from social-democratic to ultra-conservative.

The nationalist HDF took over the government in May 1990. At the time, about 60% of the people interviewed expected things to get better under the new g overnment, according to a public opinion poll published in the daily Magyar Hirlap on August 17, 1990. Only three months later, according to the same poll, the proportion is reversed: over 60% of the people expected things to get worse.

This is only one sign of how unstable the situation is. Wages have already been terribly affected by inflation and many people fear the end of subsidized prices, unemployment and a collapse in agricultural production.

In the October 1990 municipal elections, only29% of eligible voters cast their ballots, and the HDF fell to 30% while the ADF got 36.5%. Taxi drivers and truck drivers struck for three days in November, forcing the government to cut an announced 65% hike in the price of fuel to 33%.

The following interview gives an insight into the mood of the workers, one of the great unknowns in the present situation.

Tamas Krausz is a Hungarian historian and a leader of the Left Alternative, a loose political association created recently. He has been actively involved in the formation of several workers councils in Hungary. John Barzman interviewed him for Against the Current in Budapest on August 24, 1990.

Origins of the Workers Councils

ATC: Over the last year, workplace organizations have emerged in Hungary. One person told me there were perhaps” at the beginning of 1990, and perhaps one hundred and forty now. Is the creation of these workers councils a reaction to already existing attacks on the workers, or is It motivated by fear for the future?

Tama Krausz: Nobody knows how many workers councils exist in Hungary today. But it is true that when these councils appeared in Hungary, two years ago, everybody knew that they were self-defense organizations of the working class. They were organized from below by the workers who were afraid of losing their jobs or even their whole workplace.

They understood very fast that the new conception, that of Thatcherism, neo-liberalism and the International Monetary Fund, would attack the workers. If they didn’t understand it fully, they felt it: the new conception would close factories, bring unemployment and inflation, after which there LW would be a lot of poor people alongside new owners, a thin stratum of the population that would get rich.

While workers understood this, they did not understand from what side the real danger came. They identified the left and Stalinism, because the East European systems used the traditional Communist symbols and traditional terms of the left and everybody who thought in those terms was discredited by the system.

Workers hoped that the new government would help them. This was the biggest illusion. Nevertheless, a year ago workers began to understand that the idea that the new government would help them was only a hope and would not necessarily come about.

In the later period of the Kadar era, the workers and the population got new passports and were able to visit West Europe and the United States. If they had money, of course! A lot went to Germany and Austria—there was traditional connection with Austria. There they saw that shop windows were richer than ours and Moscow’s, etc. But they did not see that this wealth was not for everybody.

People and workers now have a lot of illusions about so-called developed capitalism. Many believe the new nationalist government’s claim that the capitalist world is much better than the other part of the world, and that we have to replace Stalinism with the world of developed capitalism. This was the majority view.

Only the poorest sectors of the working class and those in the most backward workplaces—and therefore with the most exposed and endangered positions—began to organize the traditional workers councils that had existed in Hungary in the first revolution in 1918-1919, then in 1945-1948 and in 1956.

ATC: When you say “workers councils,” you mean that eachplace had its own separate workers council?

T.K: Yes. And whoever wants to be a member of a workers council can be a member. They are organized from below.

The Issues

ATC: You’ve explained the general concerns. What were the specific issues?

T.K.: The workers wanted to defend their jobs and therefore the means of production that made up their workplaces. The first case was that of trusts which wanted to sell off part of their means of production and assets piecemeal. The state bureaucracy wanted to sell off, close, dismantle the machines and everything in the plants they considered bad plants. But workers wanted to defend the continued existence of their workplaces.

The second case was privatization. The factories considered good would be bought by new owners, either foreign or Hungarian capitalists.

The new bureaucracy wants to be the new owners. In fact, both the old and new bureaucracy want to be a new ruling elite, a new ruling class. And this new ruling elite wants to destroy the traditional workers trade unions; but it does not like the new organizations either, the workers councils, because many of these did not want to be simple trade unions. Some workers councils wanted to control how privatization took place, or even to become the owners.

ATC: So the first case was in less competitive factories which the government wanted to close down. The goal was to prevent closure?

T.K.: Yes. The workers were willing to go on working without any state supervision. When the state warned: “Our banks and ministries will no longer help this factory,” the workers in some factories, replied: “We don’t need your credit and banks; we will run the factories ourselves; we will look for new markets and contracts ourselves.”

The banks said: “But you have to pay our past credit back.” and the workers replied: “Right now, there is a total crisis, the whole country cannot pay! Why should we? We will pay back after we have found new markets and recovered our old ones.”

ATC: Give me some examples. How many walkers participated in these actions?

T.K.: Here is the example of a little agricultural machine factory in the poorest part of Hungary, the county of Sobolis Magye. It is an affiliate or satellite or daughter factory of a trust based in Budapest. They wanted to split from the Budapest center because the profits had to be paid to the Budapest center and they couldn’t control what happened to these profits. About three hundred people work in this factory.

We participated in this discussion, defended the workers interests. We belong to the National Center of the Workers Councils.

The workers there said: ‘Okay, you can’t give us any work anymore. That’s okay, we will be alone and we will get some markets in the Soviet Union.” Nowadays, the Hungarian government doesn’t want any economic connections with the Soviet Union because the Soviet Union can’t pay.

Here is another example: The biggest bus factory, Icarus, produced a lot of buses for the Soviet market But the government interrupted this connection. The workers protested; they wanted to continue to work for this market. But the government prohibited it.

At that point, Mercedes went to the same Soviet clients instead of Icarus. The workers rebelled; they said: “It’s very bad. The Soviets can’t pay Mercedes either, right now. We are interested in the Soviet market now and the Soviets will be able to pay in one or two years. That’s no problem for us because we want to work now.” They have lost some markets, but they are going back to regain them.

ATC: So these actions take the form of demands for decentralization?

T.K.: From one side, decentralization and self-management. The workers councils can control their workplace leadership and management more easily, whereas they can’t understand the broader picture and don’t have enough experts to control the Budapest center.

National Union of Workers Councils

ATC: You mentioned a National Council of Workers Councils. This is the name of the national coordination?

T.K.: Yes, Munkástanáczok Országos Szóvetszege. It means Union of Workers Councils in the Whole Country, or National Union.

ATC: What does this national center do for the local workers councils?

T.K.: Fifteen or twenty workers councils, with the help of our Left Alternative, organized a Parliament of Workers Councils, the first on December 2, 1989 and the second on February 24, 1990. The second founded the National Union of Workers Councils. Only the real presidents of the real workers councils had election rights, that is, people who had real workers councils behind them.

ATC: What were the minimum criteria to be met?

T.K.: Legal recognition. You know every workers council had a real legal right foundation before the so-called judge. The workers councils are part of civil society. They are a legal workers organization, just like organizations of stamp collectors are legal.

ATC: So they don’t have to register their statutes, etc?

T.K.: That’s right. But now the government and the parliament would like to regulate them. When a National Round Table was organized at the end of the One-Party State Period, an amendment was made to new constitution, on the initiative of the Left Alternative, to include the right of workers self-government.

Gyorgy Drucker, from the Left Alternative, was allowed to participate in these discussions and demanded a sentence allowing the ‘possibility for the producers to govern themselves’ be included. This was a big discussion in the Fall of 1989.

ATC: Was he an elected official?

T.K.: No, every social organization could have a representative at the National Round Table: there were the two new parties, HDF (Hungarian Democratic Forum) and AFD (Alliance of Free Democrats), as well as the old party; the fourth part was the social organizations: trade-unions, Left Alternative, etc. The Round Table accepted this sentence.

But the new constitution adopted last month, in July 1990, changed this. A member of Parliament elected on the Socialist Party slate who is a supporter of the Left Alternative reintroduced this “old” sentence. This man is a worker and he asked that “workers’ production be self-governed.” But the majority,  HDF and AFD, voted against it. The Socialist Party voted for it.

ATC: Good for them!

T.K.: Well, on this issue, yes. But Miklos Nemeth voted against it. He was the last Prime Minister of the old party, but he has become a strong anti-Communist.

ATC: He is the one who now claims that he was a convinced Catholic all along?

Three Currents

T.K.: Yes. So we were defeated. But the workers councils didn’t pay any attention to this and have grown despite the lack of a solid legal foundation. Since then, there has been a realignment in the National Union of Workers Councils.

Laszlo Toma, ex-Communist and Marxist theoretician who wrote a very good Marxist article in the last issue of Eszmelet, number 5, was bought by the government (You may publish this If you want.) He now leads one wing of the workers council which is drawing closer to the HDF. The HDF wants to turn the workers councils into a simple trade union organization or co-management institution.

In July, Laszlo Toma, who was still a member of Left Alternative, succeeded in getting all the supporters of the Left Alternative, all leftists, removed from the leadership of the National Union. He had joined Left Alternative only a few months earlier; after he was bought, he said that the left parties wanted to take their revenge for their defeat in the elections through the workers councils.

Toma announced that he was quitting all parties and dedicating himself to the workers councils alone.In fact, he is acting for the HDF.

There Is a second wing: it is led by Sandor Racz, the legendary leader of the Budapest workers council of 1956. He is somewhat Catholic, nationalistic, it is not important because he remembers the real function of the workers councils in 1956, to take over the property. He is against uncontrolled privatization of the state’s property.

ATC: What was his ideological outlook in 1956?

T.K.: You know he was in jail for a long time after that. At the time, he was 23 or 24 years old. He would have defined himself as a socialist Now, I don’t know, it is hard to define. We want to make an alliance with him for the reasons I just gave.

The third wing—it is really ours—is leftist. It wants either to control the privatization or if possible, to control the state-owned property, and it wants workers’ shares, you know what they call ESOP in the United States, Employee-Shared Ownership Plans, a form of collective ownership.

We are for different forms of collective ownership. The Free Democrats are against it they want share companies or private ownership. We are against state ownership.

ATC: Against all state ownership?

T.K.: No, in the sphere of energy, of course, you cannot get rid of the state; in railroads too.I know you know this problem.

We can promote and support the workers getting some part of the formerly state-owned things.

The left wing of the workers councils includes leaders of the Icarus bus factory, like Ferencz Steer and Csaba Kemeny. But the whole situation is very complicated, very original. How will they react? I don’t claim to understand exactly what is happening in Hungary now.

The Old and the New Trade Unions

ATC: The workers councils are only one of the existing workers organizations. There are also the old traide unions, which used to be affiliated to the old party, the Socialist Party, but have disafflhiated, and there are new trade unions.

T.K.: The new trade unions are influenced by the Free Democrats (AFD) or the nationalists (HDF). The HDF had a two-pronged strategy: new unions and workers councils. Now the HDF hopes to get the workers councils, while AFD hopes to get the new unions. The Socialist Party can’t find a space for itself. It doesn’t really have people in the workers organizations.

ATC: What about the Hungarian Socialist Workers Party (a pro-Stalinist splinter from the SP–ed.)?

T.K: Ah, those poor people, very poor people!—not in a material sense. We feel sorry for them because they don’t understand anything; they are like a little religious circle; they think in terms of the old system and don’t understand what happened in Hungary.

ATC: Yesterday, Cotti  Krausz said that the Teachers Union, which is the former affiliate of the old union federation, was able to wage a successful struggle, in alliance with the new union close to the Free Democrats, against the introduction of religious education in the schools.

T.K.: Yes. You know the socialist intellectuals [note: often used to designate diploma-holders of all sorts] in the trade unions and other areas can achieve some successes in those areas where the Free Democrats also have influence. For example both AFD and the Socialists protested against religion in the schools; together they were strong enough to force the HDF and Church to retreat.

ATC: Is it true that the new unions were created out of whole cloth when the leaders of the Free Democrats proclaimed themselves the Union of Intellectual Research Workers, a local of a broader federation to be? They then used that base to approach other workers.

T.K: Yes, to tell the truth neither HDF nor AFD could organize real new unions, that is big unions of real workers. The workers remained in the old trade unions of SzOT (National Council of Trade Unions), the old Stalinist federation. SzOT changed its name to SzOSz (National Union of Trade Unions) and made some structural changes.

Workers remained either in unions affiliated to SzOSz, or in unions which had been in SzOT but split away from it to become autonomous. They are afraid of intellectual leadership and want to control their own leadership. For example, the Commercial Workers Union, the Railway Workers Union, who had built very large unions in SzOT, decided to go independent in order to control their own leadership. They were afraid of the national center.

The new unions, mainly of intellectuals and a few workers, cannot become as big as these old ones. The government wants to destroy the old unions because the workers in them have some force now. Of course, a lot of people support these unions out of tradition.

Expropriation of the Workers

ATC: What kind of benefits do these unions provide their members?

T.K.: They can fight against the government, they can organize strikes, they can organize a national petition campaign against privatization, they have a free newspaper, headquarters, etc. They also have a lot of vacation homes. They sometimes provide additional medical benefits. But now a lot of workplaces are selling off the facilities that used to be attached to them for the benefit of their employees, in order to pay back their debts to banks, or else the whole workplace is being sold.

The workers councils and many new unions want to divide these assets and property which used to be in the hands of the big old trade unions or the state by law. It is a very interesting and complicated juridical problem.

One of the big problems in this respect is the position of the Free Democrats. It is quite ironic because it is being put forward by two leaders who used to be Marxist critics of the old regime.

Gyorgy Bencze and Janos Kis, who is now Secretary of the Alliance of Free Democrats although rumored to be a secret social-democrat, published a famous book in the 1970s, Soviet Types of Societies, which was written from a Marxist viewpoint. Now they are liberals and Gyorgy Bencze gave an interview today to the big daily Nepsabadsag arguing that the former private owners of these state enterprises must be paid a symbolic sum of money by the government for their loss. He says expropriation without compensation is unjust.

But then, the proposed massive privatization is a very dangerous thing too, from this viewpoint, although they don’t realize it yet. The fact is, for forty years, several generations of workers, materials, energy were put into the state-owned property; and now this will be expropriated without compensation?

ATC: You mean they are expropriating the wealth produced by ten million workers in forty years.

T.K: They are really expropriating under the slogan of privatization. We have to think about this.

Strikes Vs. Old Stalinist Management

ATC: Interesting approach … Have there been any strikes or threats of strikes?

T.K.: To tell the truth, the workers understand that they are lost, but part of the workers think that the other workers lost a lot, while they may be able to win a little through these changes. But the whole working class has lost a lot.

It is very interesting. The workers won a lot of political advantages and rights but lost economically. So now many workers are afraid of strikes because they believe that whoever organizes strikes will not get any work Everybody’s concern now is to preserve their job and they are afraid of strikes.

In some places however, two types of strikes have occurred. The first type of strike occurred when the workers understood that the government or the local leadership wanted to close their factory. Too late of course, they tried to organize a type of strike.

ATC: They occupied the factory?

T.K: Not occupied. At Icarus, the workers council president told me that they had a special plan to occupy the whole factory, and some workers council do too. I myself gave that advice in several places. It’s a threat only at this point.

The other case involves strikes against the local leadership. For example, under the influence of the HDF, workers protest against the old Communist leadership; they say the old leadership created many problems—which was true—and had to go.

The government wants workers councils to have this kind of strikes. Not against privatization, not against the government, but against only persons, their own directors. This is not dangerous: Instead of the old Stalinist or Cornmunist directors, there will be HDF directors.

ATC: Give me an example.

T.K.: One of the biggest coal mines had a very big strike. But the government was able to control it because the workers protesting the Stalinists or Communists were under the influence of the HDR. In the West, there is a big simplification: every workers’ strike in Eastern Europe has a lot of revolutionary potential. It’s not true.

ATC: So why were the coal miners angry at the old leadership specifically?

T.K: They wanted to get more money. But the leadership answered that the mine was losing money. The workers pointed out ‘You have a lot of Communists among you, you made a lot of mistakes, and that’s why we can’t get enough money.’ On the one hand, this is true. But on the other hand, they go to the HDP thinking it will be better than the Communist; but it will do the same.

ATC: The new HDF leadership will be new managers of state-owned firms or trusts: The mines are still public?

T.K: Yes. They don’t want the mines privatized. They want a special kind of privatization; some call it “Latin Americanization.” The former state-run factory will become a share company, but in principle still owned by the state. Do you understand?

ATC: That means it will no longer be controlled by the ministry in Budapest, but operate independently under the authority of the local director.

Hungary and Eastern Europe

ATC: Last question: how would you compare the situation of the Hungarian workers movement today with that of the Soviet Union and other East European countries?

T.K: The old Stalinist and bureaucratic regimes could not allow workers solidarity and consciousness to develop; they destroyed it. Now, the workers of every East European country have to organize themselves from scratch.

The most revolutionary potential was accumulated, I thinlc in the Soviet Union, because the Soviet workers are not as nationalistic as the Polish workers, who are traditionally inclined to a conservative authoritarianism, around Walesa or a Catholic variety for example. The position of socialism in Poland is very bad now.

Czechoslovakia is the most developed country and I think that the anticapitalist tradition is stronger than Poland, though less than in the Soviet Union. Bulgaria, Rumania and the Balkan countries may hate the Communist leadership but, traditionally, they can’t imagine private owners.

In Hungary under Kadar, a process of bourgeoisification began, Hungarian workers went to the west, the influence of technological civilization was felt The Hungarian workers have more illusions about this. Workers in other East European countries also have these illusions, but they don’t have as many bourgeois traditions as in Hungary. It is a historical difference.

ATC: You said the nationalism of the HDF was, in a ray, a distorted form of resistance against the sale of Hungarian public wealth to foreign capital and a desire to limit changes to a moderate pace.

T.K: Yes, but national capital is no better than foreign capital; Hungarian capital may even be worse, who knows. But the new nationalist bureaucracy is medieval (anti-semitism, etc.) whereas the modernist Western capital includes many new phenomena of civil society, like ESOP (Employee-Share Ownership Plans).

ATC: But these plans are a tiny minority in the United States, and not the wave of the future.

T.K: Ten million people work in factories with workers’ shares in the United States. I read about it three days ago and a lot of Hungarian experts have written about it Of these one million work in plants owned 100% by the workers, and nine million in plants partly owned by their workers. This is an interesting possibility.

ATC: Maybe there are 900,000 partnerships with three people involved, described as employee-owned?

T.K: Yes, but you know partnerships are better than national bureaucracy.

Postscript (8 December 1990)

ATC: (By telephone:) Do you have any comment on the recent taxi and truckers’ strike?

T.K: Taxi drivers are closer to workers than to the middle class, because they own only one car and work very hard. The taxi strike was the first step toward the self-organization of the population of Budapest against the new government, not a revolution but a first step. The new parliamentary-bureaucratic dictatorship wanted to use economic shock therapy, but the people were against it.

This government is very weak, but the left in Hungary, from the anarchists to social-democrats and liberals, are in deep crisis: They have no alternative program. The Left Alternative does, but there is no now support for socialism now.

In two years, people will begin to lose their illusions about capitalism.

January-February 1991, ATC 30