It is not just those with a professional interest in the social sciences who read Erzsébet Szalai's writings; sizable segments of the politically aware reading public also find themselves arguing over her conclusions. The slim collection under review-four studies based on the author's field work, three journal articles, and the complete documentation of a recent debate on the position of the Hungarian intelligentsia today-is likely to prove no less controversial.
BÉKESI AND BOKROS
The austerity measures introduced by the socialist-liberal coalition that came into power in the wake of the 1994 elections is the subject of two of the writings. One of them, a rather lengthy study, examines the somewhat half-hearted belt-tightening measures that the Horn Government adopted in its first year in office, the period when László Békesi was Minister of Finance.
Szalai's investigation is based on László Antal's analysis of the Hungarian economy's performance in the immediate pre-transition years. One of the salient points of Antal's analysis was that the higher tax rates, subsidy cutbacks and so on of the mid-80s triggered no significant improvement in the performance of the socialist enterprises, neither in respect of their productivity, nor of their adaptability. One reason for this, he argued, was the lack of competition (at least of genuine competition); the other was the fact that "businesses 'with close ties' to the party and state bureaucracy won themselves concessions and exemptions by exploiting-and stretching-the possibilities inherent in the channels of distribution." (p. 14)
Szalai is quite right to point out that after 1989, a new set of "the privileged" rushed in to take the place of yesterday's select state enterprises: "multinational firms, major foreign investors, and some of the principal players in the domestic private sector". (p. 14) What she does not note is the radical changes in supply and demand consequent upon the collapse of the socialist system.
Hungarian companies today no longer have the non-competitive COMECON markets to absorb their products. With the massive influx of new companies, the domestic market, too, has generally become much more competitive. This, combined with the effects of the recession, has meant that demand no longer exceeds supply in respect of most goods and services on the domestic market. It follows from this that no preferential treatment, and no state subsidy, however generous, is able, in itself, to guarantee the survival of any particular company (or set of companies), let alone its growth. All the more surprising, then, that Erzsébet Szalai should attribute no particular significance to the growing pressures of the market, nor to the growing ability of (the management of) private and state-owned companies alike to meet its challenges.
"Who's Eating the Golden Goose?" is the title of the short journal article discussing the stabilization program introduced under Lajos Bokros, Békesi's successor as Minister of Finance. Szalai's main focus here is the consequences of the austerity measures adopted.
Of the longer-term effects, the most dangerous is the significant acceleration of the process of Latin Americanization. The limitation of the upcoming generation's life-chances, its educational and job opportunities, the cutbacks in the funds earmarked for education, health services and culture all point in the direction of making us a country of underpaid wage earners. A nation consisting, on the one hand, of a comprador bourgeoisie and the narrow stratum of elite intellectuals and skilled workers attached to them; and on the other hand, of the powerless and frustrated wage-earning masses, their frustration aggravated by the endless inducements to conspicuous consumption bombarding them day in and day out. (p. 108)
Disregarding for the moment the author's rather offhand use of the phrase "comprador bourgeoisie", a Leninist term (to say no more), and her blurring of the very real differences among the patterns of development followed by the various Latin American countries, we can safely say that what Szalai gives us above is one possible scenario of Hungary's future.
Why does she think that it is the probable scenario? Because, as she sees it, it is the one that squares with the interests of the new elite collaborating with the international financial organizations:
The attack on the system of state-financed education, culture and health services became feasible once the members of the elite were in the position of not having to rely on it themselves: they had an income that allowed them to send their children to private schools (in Hungary or abroad), take advantage of expensive private clinics (in Hungary or abroad), spend part of their winters in some sunny part of the world, etc.; furthermore, the strains on the system were such that its continued operation would have required the mobilization of resources of a magnitude that would have seriously jeopardized the economic position that the elite had achieved, and was determined to consolidate. (p. 99)
This, Szalai argues, was the prime reason for the austerity measures introduced in 1995, and not the macroeconomic variables of the Hungarian economy for the 1993-1995 period: "There is no way to determine the real state of the economy today". And she continues:
The elaboration and introduction of the austerity package had little to do with the country's critical financial position. I've been following the workings of government bureaucracies for over twenty years now. In my experience, evaluations of the state of the economy have never reflected the real situation, nor were they meant to; what they reflected was the intentions and wishes of those in power.The 1989 changeover has just meant more of the same. (p. 100)
Harsh words, these. Indirectly, they seem to charge that the new laws providing for the accessibility of statistical data are regularly infringed (are not allowed to be observed?), that the new system of institutions charged with putting the law into effect does not function, or if it does, it functions subject to the will of those in power, enjoying less independence than its predecessors did under communist dictatorship. A further implication is that private economic research institutions, too, are dependent on the power elite both in Hungary and abroad.
Erzsébet Szalai's line of argumentation reminds one of the boy who cried wolf. Obviously, bureaucracies have lied in the past and will continue to do so, but from this it does not necessarily follow that the apparatchiks lied in the months preceding the introduction of the Bokros package. Effective as it often is to play on prejudices, one can't help thinking that a painstaking analysis of the macroeconomic indicators would have been more persuasive.
THE NEW ELITE'S PERFORMANCE
A thorough analysis of this sort would, perhaps, have lent some weight to Szalai's evaluation of Hungary's new elite-which, as she sees it, is propelling the ongoing transformation in the worst possible direction:
Due primarily to the selfishness, short-sightedness, and omissions of the elites, Hungarian society seems again to be missing the opportunity to embark on a course of organic, stable development, one nevertheless receptive to influences from the world around it. As it is, the country seems headed for the worst variants of capitalism. (p. 8)
Nowhere in the book does Szalai tell us just what the measure of an elite's good or bad performance might be. If non-violence is a measure of success, then the performance of the Hungarian elite is by no means the worst in the post-socialist bloc. Unlike in the successor states of Yugoslavia, in the Caucasus, and more recently, in Albania, there has been no civil war and no genocide here; nor has a military coup been attempted, as there was in Russia. If the predisposition to dictatorship along class or racial lines is taken as the indicator, the present elite is by no means the most odious in Hungarian history. Those who led the country in 1919-1920, 1938, 1944, and later from 1949 to 1952, some great scientists and men of letters among them, were more than a little attracted to political systems based on the institutionalized forms of racial, ethnic and/or class discrimination. One is much less likely to find sympathies of this sort among today's elite.
Judging from the above passage, Erzsébet Szalai seems to be measuring the current elites' performance in terms of the difference between what it has done and what it might have done. Given the uncertain nature of all "might have"s, however, this difference is difficult indeed to establish, even subsequently, let alone in medias res. Consider, for instance, the ongoing controversy (between historians with national-conservative leanings, on the one hand, and those with left-wing/radical leanings, on the other) on the subject of the role Hungary's gentry middle class played in the Second World War. Or, to turn to less touchy examples, consider the perennial "Who was the greater Hungarian, Széchenyi or Kossuth?" dispute, or the never ending argument about whether General Görgey, who surrendered to the Tzar's army in 1849, was a traitor, or just someone with a keen sense of realpolitik.
SOME TAXONOMIC DIFFICULTIES
But let us assume for a moment that we do manage to find some satisfactory measure of the elite's performance; there is still another problem: whose performance are we measuring? In other words, who comprises the elite?
There are two kinds of definitions around. The one speaks of a power elite, an integrated array of top groups in different spheres. The other sees the elite as more than just the leadership stratum. This is how István Bibó put it:
The task of the elite is to provide society with leadership-it almost goes without saying. Society, however, needs an elite not primarily so as to have someone who will lead it; there will be volunteers enough for that even when there is no elite. There have been societies where the selection of leaders took place following no particular order, and guided by the most primitive and most primary of human emotions and abilities: the leader got to be the person who was physically able to terrorize the community into submission, or, by virtue of his intellectual superiority, use his powers of suggestion to bend it to his will; and he stayed the leader until someone more powerful came around and took his place. The task of the elite, however, is more and more comprehensive than just to lead a society in its activities. The chief function of the elite is to provide examples of how life should be lived, set standards of moral conduct in various human situations, and submit models for satisfying human needs at a deeper, more refined and richer level: it is, in short, to create culture.
ONE êLITE GROUP-BANKERS
Szalai follows István Bibó's definition when she focuses primarily on those leading groups which do, indeed, create culture. Listen to her reason for selecting bankers as a pivotal elite group: "A particular cross-section of the cream of this stratum sets the standards for the economic elite, i.e. it is they who formulate and represent the behavior unfolding as a model for the elite as a whole". (p. 45) Yet, while she seems inclined to accept Bibó's definition, Szalai has selected the subjects of her interviews for this particular research project from all top groups, i.e., from the power elite as a whole. At the five banks that she visited, she interviewed a cross-section of top executives: managers, directors, and members of the supervisory boards. (p. 46)
The fact is that István Bibó's subtle definition runs into some major difficulties when one tries to make it the basis of empirical research. Cultural anthropology or sociography may be able to determine whether or not the behavior and way of life of an individual or small group functions as a model for others. Mass sociological surveys (questionnaires and interviews) which collect data primarily on individuals rather than on interactions between individuals-let alone the long-range effects of these interactions-are not really suited for following the transmission of cultural models and values.
Based on the results of 75 interviews with bank executives, and after consultations with independent financial experts, Szalai has set up the subgroups within the bank elite. Taking family background (as reflected in ingrained attitudes) as the indicator, bank executives are found to fall into two types. The first type comes from upper middle class families, "from the bourgeoisie or the bourgeois intelligentsia"; the second type "primarily from the rural lower middle class". The two types also represent different age groups. Those coming from the upper middle class are between forty and fifty, i.e., belong to the "great generation" (p. 47); those with a lower middle class or working class background are either much older, or much younger.
As Szalai sees it, it is mainly executives with a bourgeois intellectual background that fall into the first subgroup, the technocrats. These are the people who "had climbed the bureaucratic ladder of the party and state apparatus prior to the political transformation, were by that time part of the top echelon of these bureaucracies, and took up executive positions with the large commercial banks right after the political changeover". (p. 51)
Members of the other subgroup, the bureaucrats, come mainly from the lower middle class.
Their early career consisted primarily of a slow, step by step climb up the bureaucratic ladder. Some of them started off at the lower levels of the party and state bureaucracy (most often with the National Bank), reached mid-level by the time of the political changeover, and got into executive status immediately after. Others worked for companies or in council offices before starting their "financial" career on the lowest rung of the ladder at one of the large banks (often in some branch office), and got to the top gradually. (p. 84)
The third subgroup, the yuppies, are "the young generation of leading bankers whose career was launched with the introduction of the two-tier banking system" (in 1987, L. M.). (p. 58) The only thing Szalai tells us of their family background in one of her earlier books is that "Their parents belonged neither to the nomenclature elite nor to the great generation." Another thing we know about them is that they are not yet at the top, for that is where the technocrats are sitting. They thus have a long way to go, and a hard row to hoe.
The comparison between the subgroups leads to a rather significant conclusion: under socialism as well as in the post-socialist world, family background is a factor of no small importance-at least in the banking business-if not in determining one's career, at least in determining the speed with which one gets to the top. Szalai makes some other interesting comparisons as well. Based on her findings, she maintains that the technocrats are more indifferent to social issues than the bureaucrats who come predominantly from the lower classes: "They tend not to differentiate between social classes". (p. 53) This is part of the reason that the technocrats are more drawn to neo-liberal economics, and are more susceptible to Western consumerism than their bureaucrat counterparts. They also make more money, and this gives them the opportunity to distance themselves from the ever-less-effectively-functioning domestic public service sector. The technocrat "attains the highest possible standard of living when it comes to spending his leisure time, or to the way he brings up his children (several vacations abroad every year, private schools for the children at home or abroad, and even collecting objects of art)" (p. 83).
The technocrat, with his higher social background, has a decided advantage over the bureaucrat bank executive even in the political field. While the technocrat, relying on his old acquaintances and on the savoir-faire he accumulated in the course of his earlier political career "is at home in bothworlds, and can effectively promote his own interests in both fields", the bureaucrat, even if he is on the top, "must foster his good relations with the political elite and with members of the state bureaucracy, and is even inclined to seek political patronage". (p. 54)
Before we get swept away by the author's spirited style and vivid examples, however, and proceed to generalize from her conclusions-which our everyday experiences tend to bear out-it might be well to consider the fact that Szalai has yet to test these statements as they apply to other groups. Neither in this book nor in any of her previous works has she ever examined the behavior or social background of leading engineers or doctors, for instance. As far as I know, she has never conducted any research into the actions or careers of Church dignitaries, high ranking military or police officers, outstanding judges or other members of the legal profession, just to name a few of the important elite groups. Nor has she ever attempted to compare notes with others who have done research on elites.
Another reason for caution is the fact that her book does not deal with exceptions. Szalai is using her favorite method: she calls on our own powers of association in pinpointing the typical, or seemingly typical elements in her story. Here is a good example:
In their childhood and youth, the bureaucrats did not dream of brilliant careers or professions that required special skills or aptitude, nor were they ever part of the elite that formed and shaped the system. Unlike the technocrats, they have no scientifically-based Weltanschauung or views of the economy, and they always set themselves well-defined, specific goals. To reach these goals, however, they are willing to invest all their energy, and undertake hard, painstaking and often thankless tasks. (p. 55)
Generalization of this kind leaves no room for exceptions; it fails, for example, to account for the bank president who comes from a peasant background, is deeply religious and is yet a doctrinaire neo-liberal. (We know the type.)
A further concern is that Szalai analyzes not the actions of the bankers, but their attitudes. We know nothing about the nature of their transactions, whether in practice they remain true to their economic and social convictions. Szalai, too, is aware of this difficulty, as one of her comments on the late Kádár technocrats indicates:
They considered the neo-liberal ideology based on a free and self-regulating market to be just that: an ideology. The reality was the growing concentration of economic power, the forming of cartels, and the curtailing of the market's regulatory function. (p. 61)
In all this we must bear in mind that Szalai is treading on practically virgin and highly dangerous ground. The mystique that has always surrounded banks, bankers, and money has grown considerably in the post-socialist world. In a world of state-induced or state-mitigated bank hysteria and bank scandals, of suddenly appearing and disappearing monies of unknown origin, even gathering opinions and information may prove to be risky.
We must, in particular, be wary of the author's claim that the technocracy sets the standards for the banking world and the economic elite. Szalai herself has pointed out the many areas in which two subgroups within the banking elite, the yuppies and the bureaucrats, do not follow the technocrats. As for the reactions that other groups of the economic leadership might have to the technocrats' behavior, way of life, and values, the volume leaves us totally in the dark.
THE TREACHERY OF THE INTELLIGENTSIA
One reason why the author keeps focusing on the technocratic elite of the late Kádár regime is that its members were, and are, members of the intelligentsia as well. At some point in their career, they worked in research institutes, or did extensive publishing to qualify as men of letters. As a participant observer, Szalai has for years been monitoring and analyzing their lives and their relationship to two other groups of intellectuals, groups in whose movements she has played an active and courageous part. This personal involvement is the reason why the fate of the erstwhile democratic opposition and of the new reform intelligentsia, and their relationship to the technocrat elite, is not so much a professional as an existential issue for the author.
By totally ignoring other intellectual circles and trends in the presented writings, Szalai inadvertently overemphasizes the weight and significance of these three groups. To quote the former centrist member of parliament István Elek: "All the things that she says, in a rather critical tone, by way of portraying the Hungarian cultural elite is, in effect, about the left-wing liberal elite, and obviously does not hold, for example, of the conservative elements of the cultural elite, which is not as much as mentioned in the essay, but which, nevertheless, exists." (p. 141)
To clearly, or even equivocally, distinguish the three left-wing liberal intellectual groups one from the other is no easy matter. In all probability, by "the democratic opposition" Szalai means those people who had lost their jobs, had consistently taken part in political projects and demonstrations, and had been continually watched and even harassed by the political police. She would probably class those who "worked primarily for state-run research institutes" as the new "reform intelligentsia", and those members of the one-time state or party apparatus who were receptive to reform and to opposition ideas as the "technocracy of the late Kádár regime". If the foregoing interpretation is correct, we are still faced with the fact that the empirical study of the groups thus established is a task of some difficulty, even in retrospect. For one thing, already in the '80s there was a significant frequency of inter-group movement; for another, a substantial number of the players involved belonged to more than one group. Tamás B., for instance, was a leading researcher and scientist in one of the research institutes of the Academy of Sciences, and at the same time regularly contributed articles to the underground publication Beszélô, under a pseudonym. After 1989, the inter-group movements acquired a new impetus. György S., for example, was first a researcher, then filled a high position in the state apparatus, and then was a prominent bank official in the final days of communism, and in the first few years following the free elections. Later, he became the head of a private bank, only to move recently to a leading position with the central bank.
The question that comes to mind is this: To what extent were these rather vaguely-defined groups a part of the communist elite? Speaking of the technocrats of the late Kádár regime, Szalai considers them to have been a counter-elite, one of the active participants in the infighting within the leadership. She can, however, hardly regard either the peripheral intelligentsia held under surveillance by the political police, or the lower-echelon employees of the research institutes as members of the establishment. At this point, the author reverts to István Bibó's definition, and attributes elite status to the democratic opposition and the research institute intelligentsia on the grounds of the informal influence they exerted, and the models of conduct that they provided. "The technocracy of the late Kádár regime discovered in the democratic opposition and the new reform intelligentsia the spokesmen of their own ideology". (p. 120)
The book makes a number of references to the existence of some latent alliance between the Kádár technocrats and the other two groups. The problem with this line of thought is that alliance is possible between organizations and parties, but hardly between social groups (cf. Lenin's and Stalin's notion of the worker-peasant alliance, with the intelligentsia closing ranks.) Szalai sees organizations and closed institutions even where there are none. Dialogues and non-binding agreements between the leaders of loosely organized groups are a far cry from agreements reached between established organizations.
In expounding one of her more important theses, Szalai describes the democratic opposition, too, as a closed, organized and centrally-directed group. The group (formerly decidedly on the far left) gradually distanced itself from Marxist ideology in order to increase its influence on the Kádár technocracy, and in doing so, lost and forgot its solidarity with the working class and with those in need. "The need to ally with the counter-elite was one of the factors in their turning their backs on Marxism." (p. 120) Never mind the possibility that these intellectuals turned away from Marxism-one after the other, and not as a group-simply because they recognized its assumptions as mistaken, and its theses as erroneous! On Szalai's interpretation, the democratic opposition had sinned en masse before 1989: everything that followed was only the logical consequence of this fall from grace. Yesterday's opposition has converted its influence into power. Members of the group (mafia?) are now in important government and party positions: they hold the purse strings to cultural subsidies, and monopolize the important jobs. They've put themselves at the service of the new regime. Their intellectual output has suffered, in consequence.
Having at last "arrived", their fascination
with power and their fragile commitment to the left has resulted in the
weakening of their critical abilities and in the ebbing of their creativity.
It is not just that they fail to subject the fundamental institutions of
the liberal democracies to critical analysis-thereby relinquishing the
opportunity to keep a wary eye on the nascent system. They even fail to
search for the best possible alternatives within these fundamental institutions.
(p. 127)
A great many once creative intellectuals have become public relations men, or have turned to the blind pursuit of wealth. Still, we cannot condone the author's hasty generalizations. Invective reminiscent of the communist party centers' cultural policy decisions, berating groups of writers and intellectual trends, are no substitute for a thorough analysis of the lifework of solid intellectuals. For that, however, one would have to give up the comfortable fiction that conclusions as to individual conduct can be derived from the behavior of groups, and turn to, say, unbiased, professional textual analysis.
LEFT-WING CRITIQUE OR NOSTALGIA
The volume reflects quite well the preoccupations and the modus operandi of one representative of the Hungarian left-wing intelligentsia. Szalai's leftist attitude, her dedication to the poor and down-and-out are certainly commendable. What we have tried to point out, however, is that her sensitivity and her intuitive grasp of the latest developments are no real counterweight for her hasty judgements, and her somewhat unpolished methodology and terminology.
In this period of building a new order based on private ownership, when social welfare programs are being cut back or eliminated outright, it is hardly surprising to see the leftist critique of the system gaining momentum. In these decades of the disintegration of state socialism, when kibbutzim, cooperatives, communes and other organized forms of cooperation the world over are in a state of crisis, when the social democratic model of the welfare state seems well nigh untenable, it will be a long uphill struggle to reestablish what is worthwhile of the leftist traditions. One thing this calls for is a great deal of tolerance and understanding in evaluating the performance of the left-wing intelligentsia. While we look forward to further new analyses of Szalai's, we must draw her attention to a tendency which she herself has pronounced something to avoid. In the course of her "unrelenting criticism of everything that goes on", (and influenced, perhaps, by the current world crisis of leftist thought), she unwittingly extols the last decades of the communist regime and its achievements:
We are now in the process of eliminating our comparative advantages. Excessive market control has given way to uncertainty and to market conditions that are uncontrollable. All that we learned about contracts and bargaining is becoming a thing of the past; brute force is about to dictate the terms. The educational system, instead of being subjected to a comprehensive reform, is being shattered. (p. 102)
Let's hope some of us still remember that other brute force which blighted our lives.