Hungary's Turbulent Transformation to Capitalism: Corruption, Mismanagement Exemplify "New" Europe's Challenges

By Csath, Magdolna | The Futurist, September-October 2004 | Go to article overview

Hungary's Turbulent Transformation to Capitalism: Corruption, Mismanagement Exemplify "New" Europe's Challenges


Csath, Magdolna, The Futurist


Hungary is a country of 10 million mostly frustrated and pessimistic people, who no longer believe that the post-communism transformation begun in 1990 has brought genuine change. They are equally skeptical about the possibilities of any positive developments from Hungary's membership in the European Union. These feelings are fostered by their everyday experiences. A general sentiment is that the system change only means that those who once had been devoted followers of Karl Marx have transformed themselves into neoliberal capitalists and kept all the capital for themselves.

In Hungary's transformation to capitalism, changes have been imposed on the people, who pay the price in job losses, high unemployment, lack of opportunities to live a decent life, poverty, and a growing gap between the new rich and the many poor. Hungarians are very cynical about the argument that, in spite of all the problems, they at least have democracy and a functioning market economy. The average citizen feels otherwise, thanks to the ways the "transformation" has been managed.

Hungarians who dare to voice opinions different from those of the "rulers" are still silenced, threatened, or economically ruined. The majority of the media speaks with one voice, which is the voice of the government leaders. No questions are allowed to be asked. Hungary's election into the European Union is a typical example. Those who opposed or merely questioned Hungary's proposed membership were excluded from the campaign, silenced; they received neither money nor media time to express their doubts. This should have been a warning sign about the status of democracy in Hungary. The result of the referendum was that actually fewer than 40% of the potential voters were in favor; the others rejected EU membership or simply did not vote.

Corruption vs. Democracy

Corruption is alive and growing. Hungary ranked just 33rd on Transparency International's 2002 Corruption Perception index, tied with Malaysia and Trinidad and Tobago. (Finland was "least corrupt"; Bangladesh placed at the bottom of the list.) In 2003, Hungary slipped back to the 40th position. Now, Kuwait, Estonia, Bahrain, Oman, and Botswana are considered less corrupt than Hungary is. Corruption and democracy do not go hand in hand, and corruption is a poor vehicle for developing a functioning market economy.

[ILLUSTRATION OMITTED]

The economy in Hungary has shifted from a few large socialist enterprises subsidized by the government at the expense of the population to a few huge global companies subsidized by the government at the expense of the population. These subsidies include tax holidays, cheap (sometimes free) land offered to foreign businesses, and wages that are kept low so new enterprises can be established in a low-cost location. Companies also typically force the government to devalue the national currency by arguing that it will help increase economic competitiveness. But an undervalued national currency has never made an economy more competitive; rather, it only helps exporters make more money. About 80% of Hungary's exports are produced by a few large foreign companies. Hungary cannot be described as a functioning market economy when the big players receive significant subsidies while the rest get none. This distorted market situation is unfair and uncompetitive.

Another defect of Hungary's "new" economy is that foreign investment is largely in low value-added "screwdriver" operations--plants requiring diligent, disciplined line workers rather than creative, original thinkers. More than half of Hungary's working population works in these screwdriver operations and have no opportunity to become independent entrepreneurs and new-idea creators. This is one major reason why the knowledge base of the society is rapidly deteriorating.

Hungary has relatively few young graduates in science and engineering compared with the rest of the European Union. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Hungary's Turbulent Transformation to Capitalism: Corruption, Mismanagement Exemplify "New" Europe's Challenges
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.