The US have taken advantage of the invasion of Kuwait to carry through an international reorganization of their forces: it even involves counter measures to European unification. The US policy will underline their domination of the Third World as well as their superiority over the European capitalist powers and Japan. American imperialism is also trying to resolve economic problems of its own. But the war is also meant to freeze the period opened by the East European events.
The political and economic costs of the war will of course be transferred to the Third World. US interference in our internal affairs will grow - even if, in the immediate sense, Bush's plans for Latin American integration are on ice, while the debt question has dropped out of the headlines. In any case, if the dominant capitalist countries feel able to burn up hundreds of millions of dollars in a war, then they can also lift the debt burden! *
BRAZIL / HUNGARY
A country up for sale
FROM EADERE
3 WORLD
ATYPICAL 2º WORTH THE Hungarian example illustrates the need to take into account national specificities when analyzing current developments in Central and Eastern European countries. Here, the economic reform process started earlier than in the other countries in the region. At first the reform was undertaken by the Hungarian bureaucracy, but in 1988, even before the coming to
MALE FORS COUNTRY
DA
Against a background of profound popular demoralization, after 1968 measures were taken to extend the role of the market: the so-called "New Economic Mechanism" (NEM) replaced administration of the economy by the autonomous decisions of the enterprises concerning matters of production. In the framework of overall planned long-term objectives and government policy, the enterprises took production decisions according to "regulators", the April 1990 elections, the reforms were growing into a movement for the restoration o capitalism. HENRI WILNO A FTER the crushing of the Hungarian Revolution in 1956 and the subsequent repression, the Hungarian leadership felt compelled to seek to strike a compromise with the population. A limited political relaxation was undertaken, expressed in the famous formula of Party general secretary Janos Kadar: "whoever is not against us, is with us."
Nonetheless the single party retained its monopoly. The terms of the compromise were the maintenance of the political system on the one side and better living conditions than in the rest of the Soviet bloc on the other - "goulash communism."
if that is to say norms concerning financial matters, prices, wages and foreign trade. Investment remained under the control of the centre. Furthermore the NEM did not affect state property. There was no talk of privatization, even if private activities were to be progressively permitted, and the country's membership of Comecon was not questioned, despite an effort to but after this period market mechanisms gained a greater and greater place in the economy. Pricing policy was modified and liberalized, increased wage differentiation was brought in, and the proportion of investments determined by the centre decreased. The branch ministries responsible for controlling enterprises producing the same types of products in Soviet-style planned economies were effectively abolished, while the big state enterprises were
17 split up into much smaller units.
The private sector was authorized and
April 1, 1991 • #203 International Viewpoint power of a conservative majority in insert Hungary more into the world capitalist market.
Steps back from these pro-market policies took place between 1972 and 1978,
HUNGARY even encouraged in commerce and crafts. Nonetheless in practice the central bureaucracy continued to exercise some elements of control over the economy; in 1985 the election of enterprise managers by the employees was introduced, more with the aim of reinforcing the autonomy of these managers than from an interest in self-management. In reality, the enterprise councils have practically no autonomy in relation to the leaders.
During this period, the main reference for Hungarian economists was a theoretical schema according to which any rational economic policy had to be based on the model of general equilibrium, according to which prices and quantities of goods adjust harmoniously and freely on the market, while the property relations upstream and the division of the revenues downstream are social and political questions that each state decides according to its own nature.
In Kadar's Hungary this schema posed the question of the continuing, if lessened, power of the single party in political life and overall economic decisions. Any serious balance-sheet of the "New Economic Mechanism" has to take into account the articulation of all its dimensions: the market, the role of the central bureaucracy in the economy and the maintenance of the monopoly of the single party.