Category Archives: Hungary

What’s in store for the Károlyi Palace in Fót?

Károly Czibere, one of the many undersecretaries of the ministry of human resources, announced that the István Károlyi Children’s Center, situated in the town of Fót, will be closed by the summer of 2018. The centerpiece of the Children’s Village, as it used to be called, is the Károlyi Mansion, built in the first half of the nineteenth century. Once upon a time the mansion was surrounded by a 600-hold (about 300-acre) magnificent park, but between 1960 and 1990 several buildings were erected around the mansion which served as dormitories, schools, a post office, even a store, as well as a dining area and kitchen facilities for the approximately 1,000 children who lived there.

Czibere’s announcement was not unexpected. Already in the 1980s experts argued that these huge facilities for children under public care were not the best solution for the children, even if they were well endowed. Instead, children were increasingly moved into smaller facilities or went to live with foster parents. By 2004, when Judit N. Kósa of Népszabadság visited the place, only 150 children were living in the facility under the watchful eyes of 180 people, 100 of whom were teachers. The mansion, in which in the 1950s all the children lived and studied, was by then already empty.

Kósa’s report indicated that the staff running the place wouldn’t mind getting rid of the mansion. They were, however, adamant about the surrounding buildings and the remainder of the park. Some of the buildings were used as schools, others functioned as service apartments for the staff. Ten hectares of the park were rented out to an equestrian therapy association. The Children’s Center, which receives little money from the government, badly needed this income.

One of the oddities of the current setup is the presence of the son of the last owner of the palace, László Károlyi, who rents an apartment in the Károlyi mansion. He has given up the idea of ever owning the mansion again, but he would like to negotiate an arrangement whereby his foundation, The Fót Foundation of the Károlyis, would get a 99-year lease on the mansion and the park. In that case, he told Judit N. Kósa, he was sure that he could get a loan for the reconstruction of the palace as a 35- to 40-room “castle hotel.” Almost 15 years ago Károlyi estimated the cost to be about $15 million. That was a very optimistic figure.

In January, when Undersecretary Czibere announced the shuttering of the Children’s Center, he was rather secretive about the government’s plans for the Károlyi Mansion. It will remain a palace on which the government will spend half a billion forints, but he claimed total ignorance about the “function” of the building.

It didn’t take long, however, before Fót was buzzing with the alleged news that the new owner of the palace will be Lőrinc Mészáros, the front man of Viktor Orbán. The rumor originated in “Fidesz circles” of Fót and was spread by those who are against closing the Children’s Center. The locals claim to know that the contract will be signed only after the elections of 2018.

On February 9 the SOS Children’s Fund organized a demonstration against closing the center, which will entail moving some disabled children to Zalaegerszeg and some troubled children to Hatvan. The Orbán government has no plans for the 39 refugee children who are currently housed in Fót.

I suspect that the rumor about Lőrinc Mészáros’s purchase of the Károly Mansion is without merit. My hunch is that László Károlyi is behind the government’s plans for the palace and the park in some way or other. As Index pointed out recently, several members of the Károlyi family have maintained very good relations with the Orbán government. Viktor Orbán and his friends seem to have a special affinity for wealthy historical families. The descendants of Archduke Joseph, Palatine of Hungary (1776-1847), who constitute the Hungarian branch of the large Habsburg family, are particular favorites. The Károlyis also seem to be in the good graces of the government. György Károly, who after 1990 moved back to Hungary and restored with his own money and some EU grants a gorgeous Károlyi mansion in Fehérvárcsurgó, was appointed Hungarian ambassador to France in 2014. József Károlyi, who lives in Switzerland, was just named government commissioner in charge of the 2021 World Hunting Expo to be held in Budapest. József Károlyi’s grandparents were reburied in Fót last October, and János Lázár delivered the eulogy. László Károlyi, who is a passionate huntsman and rider, apparently convinced János Lázár, who has become an avid hunter himself, that the Károlyi Mansion in Fót should be converted into an international equestrian tourist center. What Károlyi’s own role in this scheme is we don’t know, but I doubt very much that the Orbán government will sell the roof over László Károlyi’s head.

After reported that “Orbán’s favorite foundation may build a riding school in the shuttered Children’s Village,” people who have a very low opinion of the Orbán government were outraged. This regime has committed an awful lot of despicable acts, but repurposing the Children’s Village, at least in my opinion, is not among them. It has been clear for some time that herding hundreds of children into one big center is pedagogically problematic. Moreover, it would be unsightly to leave scattered buildings around a renovated “castle hotel.” And without a park it would be impossible to have a profitable hotel-mansion. So, the buildings must be razed.

And this is what lies behind the attractive facade

As for the riding school, ten hectares of the land belonging to the property are already leased to the International Children’s Aid Foundation, which is expanding its existing facilities for equestrian therapy. So far these plans are acceptable.

Of course, we don’t know who will reap the benefits of a very expensive reconstruction and renovation of a historic palace. If it’s one of the oligarchs, I will be outraged. But if, let’s say, a foundation that does good work, like a children’s aid society, benefits from it, I would find the arrangement satisfactory.

Finally, a footnote to the Orbán government’s fascination with the Károlyis. They may like György, László, and József, but they really hate Mihály, prime minister and later president of Hungary in 1918-1919, whom they blame for the Treaty of Trianon.

February 26, 2017

Amnesty International: Devastating report on Hungary

A few days ago Amnesty International (AI) released its 2015-16 report “on the state of the world’s human rights,” which includes a scathing analysis of Hungary’s record. Since the refugee crisis dominated public discourse in the European Union during this period, AI paid special attention to Viktor Orbán’s policies regarding the refugees who gathered at the southern border of the country. AI describes Hungary as a country that “led the way in refusing to engage with pan-European solutions to the refugee crisis” and opted instead to seal its borders. The report stresses the anti-Muslim rationale for Hungary’s refusal to admit refugees.

AI’s report deals with four problem areas: (1) refugees, (2) freedom of association, (3) discrimination against the Roma population, and (4) freedom of religion. The space devoted to Hungary is fairly long. It begins with the statement that, according to a report compiled by the Eötvös Károly Institute, the Hungarian Helsinki Commission, and the Hungarian Civil Liberties Union, “the replacement of judges of the Constitutional Court and the 2010 constitutional amendments undermined the Court’s independence.” Thus, the whole legal foundation of the country is flawed.

The report traces out the stages of fence-building and the amendments to the Asylum Law. AI comes to the conclusion that “the application of the law could lead to the violation of Hungary’s obligation of non-refoulement,” a practice of not forcing refugees or asylum seekers to return to a country in which they may be subjected to persecution.

The AI report also points to the fact that “NGOs critical of government policies faced harassment and threats of losing their registration.” The section on discrimination against the Roma lists several court cases, including the so-called “Numbered Streets” neighborhood in Miskolc, which is still pending because of the municipality’s appeal. As far as freedom of religion is concerned, the Hungarian government, although it should have changed the 2011 Church Law to comply with a 2014 European Court of Human Rights judgment, has done nothing and therefore “freedom of religion continues to be restricted” in Hungary.

It’s not a pretty picture, and Júlia Iván, director of Amnesty International Hungary, expanded the list of complaints by pointing out that the Hungarian government in the past six or seven years has done everything in its power to deny assistance to and protection of refugees. Moreover, the Hungarian government incited a level of xenophobia in its citizens that is becoming something of a record in the western world. “Trump, Orbán, Erdoğan, and other similar populists dehumanize whole groups of people and make them scapegoats,” says Salil Shetty, secretary-general of Amnesty International, as quoted in Magyar Nemzet.

I’m sure that those of us who are familiar with the refugee record of the Hungarian government could have anticipated the findings of AI. So I will move on to the Orbán government’s reaction to AI’s assessment.

No more than a couple of hours after the Hungarian media began reporting on AI’s analysis of the Hungarian situation Magyar Idők published an article about Amnesty International which, according to the Government Information Center, encourages “the violation of the law of illegal immigrants.” This is especially unacceptable because “the government is only trying to defend the rights of European citizens and Hungarian families.”

A few days later Magyar Idők continued its attack on Amnesty International. It repeated Fidesz’s accusation that George Soros, who helps fund AI, was behind the negative report on Hungary. It also speculated about another reason for AI’s negative view of the Hungarian situation. The bad report card was expected because the Hungarian parliament will soon debate the government’s new proposals on restricting the free movement of migrants whose status is still pending. Of course, this is a ridiculous accusation since such a lengthy report cannot be put together in a couple of weeks and the new government proposals are of fairly recent vintage.

Röszke, September 8, 2015 / Source: Magyar Nemzet / Photo: Béla Nagy

Today Magyar Idők once again returned to the topic of Amnesty International, arguing that last year the organization inundated the office of László Székely, the Hungarian ombudsman, with complaints. In one year the poor man had to deal with 7,500 complaints. Of that number 2,600 dealt with immigration. Only ten of these complaints came from Hungary, the rest arrived from abroad. Surely, Magyar Idők wrote, AI is behind this deluge of mail. Associates of the ombudsman’s office said that among the letters there were even some written in English, German, French, and Spanish. The associates proudly announced that all the complaining letters were answered in the appropriate language.

Reporters from the government paper confronted Áron Demeter, who deals with human rights violations for Amnesty International Hungary. Why does Amnesty International encourage its followers to write such letters? Demeter’s explanation was that HHC had asked the ombudsman to turn to Hungary’s Constitutional Court on the question of the government’s criminalization of irregular border crossings. They hoped that as a result of receiving so many letters the ombudsman would be moved to act. But the letters didn’t change the ombudsman’s mind. Magyar Idők’s reporter didn’t hide his disapproval of such “pressure tactics.” Demeter explained that ever since its foundation AI has undertaken letter-writing campaigns to authorities that keep innocent victims incarcerated. In many cases, he added, this tactic had proved to be successful.

That explanation didn’t impress Magyar Idők’s reporter, who kept repeating that the behavior of AI was unconscionable. Their letter writers burden the already overworked ombudsman, who is supposed to represent those citizens who have grievances and who seek remedies from the offending authorities.

Finally, I would like to call attention to a short video that records complaints of police brutality along the Serbian-Hungarian border.

If the stories are true, and I fear they are, one can only be ashamed of what’s going on in the “center of Europe,” as Hungarians like to refer to their country’s geographic position.

February 25, 2017

Viktor Orbán avoids humiliation at the hands of the International Olympic Committee

It may not be official yet, but Budapest’s bid for the 2024 Olympic Games is dead. It is only a question of time when the proposal will be formally withdrawn.

The resounding success of the Momentum Movement’s referendum drive is widely interpreted as the first sign of the awakening of a depressingly inactive and uncaring public. The time might be ripe for action if there is a political force that can take advantage of the mood of the country. According to the latest poll, of the 1.5 million undecided potential voters only 300,000 would like to perpetuate Viktor Orbán’s political stranglehold on the country. All in all, the number of people who are dissatisfied with the present government far surpasses the 2.2 million core Fidesz voters even without the 1.2 million undecided voters who, given a viable alternative, would be inclined to vote for an opposition force.

Fidesz politicians themselves indirectly admit that what happened was a political defeat. They talk disparagingly about Momentum’s leaders, who used Viktor Orbán’s Olympic “dream” as a vehicle to fulfill their political ambitions. These unpatriotic youngsters made a political issue out of a “national cause,” they argue. There was once absolute unity on the issue, but oppositional forces drove a wedge between people for political reasons. Or, at least this is the story Viktor Orbán wants Hungarians to believe.

This morning in his Friday interview Viktor Orbán expounded on the topic of the Olympic Games and hinted at the real problem with Budapest’s bid. The telling sentence was his very first on the subject: “Look, the referendum is a Hungarian affair but the Olympic Games must be won abroad in an international race in Switzerland, in Lausanne, before the International Olympic Committee.” Indeed, this is the case. Hungary was supposed to convince 88 men and women who determine the venue of the 2024 Olympic Games, and the likelihood of persuading the majority in Hungary’s favor was slim. Perhaps even impossible. That is the truth which most likely Viktor Orbán has known for some time. According to rumor, he learned the sad truth of Hungary’s poor chances in Rio de Janiero. The referendum drive therefore came in handy. He can withdraw from the competition and blame the opposition for it.

In fact, this is exactly what he decided to do after a few days of hesitation. While Orbán was trying to figure out a good story, Fidesz politicians gave interviews with wildly disparate messages, as usually happens when an autocrat rules a country. His minions, lacking instructions, are completely lost. Now that they have the word from above, the parrot commando can begin to work in earnest.

The story is as follows. Cities which in the past held referendums, even if these referendums were successful, were never awarded the privilege of holding an Olympics. Thus, with this referendum drive Hungary’s chances have become practically nil. It is therefore useless to hold the referendum because the whole enterprise has become hopeless. In fact, so hopeless that “it is questionable whether we would be able to garner even one vote.” This would be exceedingly shameful. “One can lose but one shouldn’t be beaten to smithereens.” According to Orbán, “we shouldn’t expose the country to such shame because we deserve better.” Hungary’s proposal was excellent, “we were honest, we really wanted to do it, and after all that, the world downgrades us to zero or just one or two votes while the other two [contenders] receive the trust of the members of the International Olympic Committee. This would be a humiliating defeat.” What these young people did was “a murder of a dream.”

To be the murderers of Viktor Orbán’s dream is no small feat, so from here on we can be certain that Orbán’s propaganda machine will be hard at work trying to discredit the organizers of the referendum drive. In fact, the character assassination has already begun. Orbán compared the group to SZDSZ, and we know what that means for Hungary’s illiberal leader. They are the greatest enemies of everything Orbán has been fighting for. He already sees a repeat scenario of what happened in 1994 when the leadership of the liberal SZDSZ, despite the fact that the socialists won an absolute majority in the national election, decided to join them in a coalition government. Orbán is certain that this young crew, which at the moment claims that their future party will face the electorate alone, will, after all, make peace with MSZP. “We must be ready for that scenario.” I’m sure he has already made plans.

According to those who are in the know, Orbán’s “whole story is nothing but a lie.” Hungary’s chances had been slim from day one. Initially commentators couldn’t understand how Momentum got permission to hold a referendum drive when earlier attempts had failed. I think it is pretty clear why Momentum’s request for a referendum was approved: it gave Orbán a way out. Some people thought that perhaps the approval had been simply an oversight on the part of the government; others argued that Fidesz thought the drive would either never get off the ground or would fail spectacularly. I think today we can safely say that Viktor Orbán is begrudgingly grateful to Momentum for allowing him to avoid a major embarrassment at the hands of the IOC.

As for Orbán’s decision to withdraw the bid, anti-Orbán forces, including the leadership of Momentum, consider it a sign of cowardliness. In general, large segments of the Hungarian public consider Orbán to be a coward, and not without reason. For instance, the last time he agreed to a political debate with his opponent was in 2006, when he cut a pitiful figure in his debate with Ferenc Gyurcsány. That was a lesson he never forgot. And his reticence is not limited to political debates. He consistently refuses to answer questions from reporters and rejects all requests for interviews from any organ that is not part of the government media empire.

It seems that portraying Orbán as a coward is not limited to his antagonists. Just yesterday a forceful article appeared in the right-wing Mandiner accusing Orbán of being afraid to discuss the pros and cons of holding the Olympics in Budapest and refusing to ask the people their opinion on the matter. Even his supporters are coming to the conclusion that their idol’s brave countenance is but a mask. Inside there is a quavering little fellow.

February 24, 2017

The chairman of the Hungarian central bank discovered a U.S. plot to topple the Orbán government

The independent media outlets have a jolly good time every time György Matolcsy, the chairman of Hungary’s Central Bank, opens his mouth. Well, he spoke again today. By now even usually polite politicians have gotten to the point that they openly say that Matolcsy is not quite of sound mind and suggest that the chairman of the National Bank seek medical help.

So what happened to prompt such a response? The bank chairman delivered his report to parliament on the performance of the Hungarian National Bank in the last two years. As expected, he said that the institution under his direction had performed superbly. Under his excellent stewardship the bank’s monetary strategy added at least 1.5 percentage points to Hungary’s already respectable economic growth.

Not too many members of parliament were interested in Matolcsy’s self-praise. Only four or five MPs, just those who had to attend, were sitting in the huge chamber. I must say that those who were absent missed a great performance and a by and large incoherent speech about “a very grave shadow, a very dark shadow, a deep grey shadow” that darkened the otherwise sparklingly sunny Hungarian sky. This shadow was a treacherous ally’s attempt to topple the Orbán government with the help—you won’t believe it—of Hungary’s National Bank. But thanks to Matolcsy’s vigilance, the coup was averted.

I believe that for readers to truly appreciate Matolcsy’s muddled, rambling speech I must translate the relevant passages:

Here we should stop for a minute because there was a shadow on the year 2015, right at the beginning, in the first four months. That shadow had been visible already from August 2014 on. In 2015 one brokerage firm after another went belly up. First it was the deceitful Buda-Cash, then the deceitful Hungária Insurance Company, and finally the even more deceitful Quaestor failed; it failed because the central bank with its new methods of investigation found all the tricks this company had used in the last 10-15 years.

However, this shadow was actually good tidings. It was a good piece of news, something the whole country can be happy about, because we cleansed the Hungarian financial system by removing these robber barons. . . . But this good news was overshadowed by the fact that a large country which is a NATO ally via its embassy in Budapest began activities aimed at toppling the government and the central bank in the fall of 2014. . . . The central bank naturally would have found the deceitful brokerage firms, but it mattered when we found them: in January, February, and March. Why did we find them in January, February, and March?

Because some people wanted to use the Hungarian National Bank to create a bank panic in Hungary in April. And this bank panic actually occurred. It lasted for four hours in four different cities. We could say that this isn’t much. But it was shocking that some people, our allies and friends, wanted to use the Hungarian National Bank to topple the government by methods using the military and intelligence services.

This is a very grave shadow, a very dark shadow, a deep grey shadow. It has no different shades: it is just dark.

The few people in the chamber were stunned. It was immediately clear to everybody that Matolcsy was talking about the United States.

This muddle is full of unanswered questions. In what way did the United States want to influence either the brokerage firms or the central bank? Why was the so-called coup timed for April? How did Matolcsy manage to foil the Americans’ plans?


The opposition politicians who had gathered to engage in the usual parliamentary debate after such a report were stunned. They were simply not prepared for such astonishing nonsense and concentrated instead on refuting the glowing report presented to them by the chairman of the central bank. János Volner of Jobbik pointed out that the bank did nothing until Quaestor actually went under although it had been known ever since April 2010 that Quaestor was misleading its customers. LMP’s Erzsébet Schmuck also questioned the success story reported by Matolcsy and commented on the unorthodox way the central bank operates nowadays. It was only Attila Mesterházy who had recovered enough from the shock to question Matolcsy’s accusations against the United States. He even managed to inquire whether the bank chairman had reported his knowledge of a foreign power’s meddling in Hungary’s internal affairs to the competent authorities. He called on the appropriate politicians to convene the parliamentary committee on national security to ask the Hungarian intelligence services to clarify the situation.

Well, I have a few questions of my own. My very first one would be whether Matolcsy shared the information he received about this alleged American plot with Viktor Orbán. I suspect he did and that, for one reason or another, Orbán decided that the so-called revelation was useful at this time. I wouldn’t be surprised if Orbán, banking on Donald Trump’s extremely low opinion of his predecessor’s “democracy export,” thinks that this kind of news, coming from the chairman of the Hungarian National Bank, will float in Donald Trump’s Washington.

The U.S. Embassy rarely gets engaged in arguments with the Hungarian government, but Matolcsy’s accusation was too much even for the normally calm American diplomats in Budapest. Both Népszava and Index wanted to know the U.S. reaction to Matolcsy’s garbled nonsense. The Embassy spokesman, Richard Damstra, released the following statement: “Hungary and the United States are partners and NATO allies. The United States didn’t attempt to overthrow the Hungarian government either in 2014 or at any other time and we can’t find it credible that any other NATO member state would attempt such a move.” Perhaps this will convince the Hungarian government that American diplomacy, at least for the time being, hasn’t changed all that much and that even the Trump State Department, such as it is, won’t believe that the Obama administration was planning to stage a coup in Hungary.

February 23, 2017


This study originally appeared in Acta Oeconomica, vol. 66 (4)

♦ ♦ ♦

The term paradigm was introduced to the philosophy of science by Thomas Kuhn – he used this term to denote the specific approach applied by a school of research to examine its subject matter. Researchers using the same paradigm seek answers to similar questions, and employ similar methods and concepts. In an article published in 2000, the author of this essay introduced the term system paradigm, which focuses on the systems functioning in a society. This study develops the theoretical considerations outlined in that earlier article on the basis of experience on post-socialist transition. The first part compares the socialist and capitalist systems, describing their main characteristics, and concludes that the capitalist system has become established in former socialist countries, except for North Korea and Cuba. The second part analyzes varieties of capitalism within a typology which classifies prevailing forms of politics and government. Three markedly different types are identified: democracy, autocracy, and dictatorship. Huntington wrote about the “third wave” of democratization. This study concludes the third wave has dried up: for the 47 post-socialist countries, only a tenth of the population live in democracy, while autocracy or dictatorship prevails in all other countries in this group. The third part of this essay applies the conceptual and analytical apparatus to Hungary, where capitalism exists, and autocracy is the prevailing politico-governmental form – here we can find important characteristics common to other capitalist countries or other autocracies. This finding is compatible with the observation that there are some, less fundamental, characteristics unique to Hungary, or “Hungarica”, which differ from the characteristics of all other countries.1


What prompted this study? What type of readers am I addressing? My prime motivation in my academic life has been to discover what kind of society we live in, what its characteristics may be. As any researcher does, I have taken a conceptual apparatus and methodology as a point from which to view my subject matter. Still, as most researchers, I have rarely chosen the method itself, the outlook or approach driving my research, as the subject of a separate paper. The primary aim of my article “The System Paradigm” (Kornai 2000) was to summarize my principles in the theory of science. Seventeen years have passed since and I have been much influenced by new experiences: the changes that have occurred in China, the consolidation of the Putin regime, and most strongly of all, the events in Hungary under the political group headed by Viktor Orbán, the prime minister since the election in 2010. It is high time to review the conceptual framework, along with some other matters underlying comparative systems theory.

This study is intended above all for past and future readers studying my works, whether many or few. Apart from them, I target researchers into comparative economics, comparative political science and comparative sociology, and historians of the present-day period; researchers working at universities, research institutes, international bodies, financial institutions, and think tanks, or more specifically, those who professionally analyze the changes occurring in the post-socialist region.

One aim is to sum up, more thoroughly than my first study of the system paradigm did, some elements of my conceptual and analytical apparatus. I do not offer a survey of the literature on the problem. Were I to do so I would need to deal proportionately with views, concepts and methodological principles I agree with, and those I consider incorrect. I am not setting out to do that, I am simply setting out to describe my own paradigm. I mention others’ works only if I wish to stress my agreement with them, or the fact of adopting something from theirs into my own thinking – or if I dispute their statements. In that sense the study is not balanced or impersonal, and cannot be so.2

Although these aims have motivated me, I hope the study will go beyond my message concerning the theory of science, and as a side-product assist the reader in understanding some major phenomena of our time. For example, Huntington spoke of democracy’s “third wave” (Huntington 1991). Where has it gone? Is  it moving on or has it retreated? Or what place does Viktor Orbán’s Hungary hold in comparative systems theory? Is it a specific Hungarian model, a “Hungaricum,” or does it have close or distant relatives?3



The word “system” in everyday language and in many sciences occurs in several different senses, from the universe to living organisms, man-made machinery to various human communities, existing, directly observable systems to notional, intellectual ones. In all cases this term conveys the meaning that several lesser parts form a coherent whole. These parts interact. They are not separate items thrown together, for there are comprehensible relations among them organizing them into a structure. The first part of the study uses the term “system” with two meanings. I compare the socialist and the capitalist systems. On occasions I add an attribute, calling them the two great systems,4 but the attribute contains no value judgement: I am not bowing before the greatness of either.

A distinct, specific system may emerge in a country over a shorter or longer period, as far as a distinct combination of forms of political power, dominant ideology, ownership relations, and coordination of social activities are concerned. In this sense it has become customary to refer even colloquially to the Putin system or Orbán system. The use of the word system here has an important clarifying force: it points to the mutual effects of various elements in the public state of affairs, operation of the country, and structure of the machinery of power.

I use the capitalism versus socialism pair of concepts purely in a descriptive, positive sense. I am not referring to an imaginary socialism – not to conditions that socialists or communists think should pertain under a socialist system – but to existing socialism (to fall back on an old communist party jargon).  Likewise, I am not examining an imaginary capitalism – not what uncritical devotees of capitalism think should be present – but existing capitalism, as it is.

I obviously did not invent the two terms. Historians of ideas report that both expressions antedate Marx, “capitalism” appearing in Louis Blanc and Pierre-Joseph Proudhon, and “socialism” in the works of Henri de Saint-Simon. However, they became widespread through Marx’s main work Capital (Marx 1867/1990, 1885/1992, 1894/1992), and not simply among Marxists, believers in socialism and antagonists of capitalism. They are used by several moderate or radical opponents of socialism as well, such as Ludwig von Mises and Joseph Schumpeter (Mises 1922/1981; Schumpeter 1942/2010). These days they are heard constantly from politicians and the media, and have been taken up in everyday speech, as well.

However, it must be said that many people avoid this pair of concepts. With “capitalism” there are several reasons. Former reform communists were ashamed to find formations of capitalism appearing out of their efforts. German economic politicians after the Second World War, sensing anti-capitalist feelings among broad swathes of voters, thought it wise to give the long-standing system a new name: “social market economy.”5 Nor are conservative populists fond of calling their institutional creation capitalism, as they wish to be seen as anti-profit, anti-bank anti-capitalists.

There are several considerations behind the avoidance of the term “socialist” as well. Marxists reserve the word “communist” for the Marxian vision, where people share goods according to their needs. Existing socialism was seen as a transitional state that would last only until communism appeared.6 Meanwhile many Westerners, including politicians, scholars and journalists, referred consistently to the Soviet Union and other countries controlled by communist parties as “communist countries,” and do so to this day. The same people would reserve the term “socialist” for the welfare states created by social democratic parties.

It is vital in the theory of science to distinguish sharply between the content of a concept and the name it bears. Many terms in the social sciences and the political sphere have a political slant – associations redolent of value judgement and Weltanschauung. In this respect, it is impossible to reach a consensus on  terms.

My experience, especially in the academic world, is that people cling more tightly to their vocabularies than to the views they express with the words included in those vocabularies. Their compulsive insistence is upon a vocabulary which have been hammered into their heads, or to use a more elegant term, which has become imprinted in their minds by the reading matter and lectures that have affected them most. If that is how it was put by Marx, Max Weber or Polányi (or whoever made the biggest impression on them), it cannot be put otherwise. Or it may happen that the favored term is one they invented themselves and wish to establish as their own terminological innovation.

I abandoned long ago my efforts to end the conceptual confusions. I acknowledged that an absence of conceptual consensus often leads to a dialogue of the deaf. This applies not only to the capitalism versus socialism pair of concepts, but to many other expressions, on which this study touches later (e. g., democracy versus dictatorship). I am attempting only to ensure that readers of my works will understand clearly what one expression or another means in my vocabulary.

Types and their characteristics

The capitalist system and the socialist system represent two types of socio-political formation in the recent past and in the present.

The creation of a typology is among the major steps in scientific examination. It has played a big part in developing many disciplines (e.g., biology, genetics, medicine, linguistics, cognitive sciences, anthropology or psychology).7 A type  is a theoretical construct. Actual, individual historical constructs such as Hitler’s Germany or Churchill’s UK differ from each other in important respects. Nonetheless, I describe, within my own conceptual apparatus, both of them as capitalist countries. Similarly different in their essential characteristics were Stalin’s Soviet Union, Kádár’s Hungary and Ceauşescu’s Romania. Still, I call all three socialist countries. To distinguish the types within a typology calls for describing their characteristics, which may differ sharply.8 Here the task is to find the characteristics which, on the one hand, distinguish the two types, the capitalist and socialist systems; and on the other hand, they show what is common to the many individual phenomena occurring in each country belonging to the same type in a given period.

Although a type is a theoretical construct existing only in researchers’ minds, it is based on the observation of reality and underlines important common features of past and present structures. Given the specific realizations of the “great system” that vary between countries and periods, the type is created to embody their common characteristics in a theoretical generalization.9 So the usable, operable typology is based on observation of the historical reality. Social science distills it from experience.

In the rest of this study I employ the pairs capitalist system/capitalism and socialist system/socialism as synonymous.10

In creating types, the method here is to pick out the various characteristics in which each type differs markedly from the others. The aim is not profuse description. On the contrary, it is to grasp the relatively few, highly characteristic, conspicuous features. The best would be to list as few as possible – simply those necessary and sufficient for differentiation.11 I do not claim that the number of such characteristics should be exactly nine; I would be open to altering Table 1 if there were convincing arguments for doing so.

It is essential to list among the characteristics only those that are system-specific. The comparative table should by no means include phenomena which are found frequently in both great systems, important and influential though they may be to the operation of certain institutions or the lives of citizens. For example, repression cannot appear as a system characteristic because it does not appear exclusively under the socialist system. Ruthless examples have occurred and continue to occur under the capitalist system as well: in Hitler’s Germany,  in Hungary under the Horthy and the Nazi Arrow-Cross regime, Franco’s Spain, and many Latin American military dictatorships. Under both systems it may happen that incompetent people gain leading positions. In both, the major economic indicators fluctuate strongly. However great the effects of these phenomena, they are not system-specific.

I do not want to give an impression of exactitude. In describing the characteristics, I have to allow myself to use umbrella terms such as “state ownership” and “private ownership,” although I know that both categories can take many different legal forms.12 There appear repeatedly in the table words like “dominant” and “largely”, without mention of a quantitative value for them. If it is 70 per cent, then it is dominant but if it is 69 per cent, it is not? I content myself with not describing the system in terms of quantification but in a qualitative fashion, and relying on the intuition of those using the conceptual apparatus, in the hope that they will likewise sense the meaning of these inadequately precise words. My professional conscience is quieted by knowing that many scientific typologies do the same. Taking that into account, caution must be shown in using such typologies: there are some analytical tasks to which they are fitted and some to which they are not.

Another reason I tend to use expressions like “dominant” and “largely” is because I know that there can appear in a given type of country phenomena that differ from, or are even contrary to, the dominant phenomenon. For example, while the Soviet or Polish economy was tormented by the shortage economy there were still unsold goods in the stores and warehouses. In the western world with its typical surplus economy, there are long queues of consumers waiting for tickets to a new and exciting film.

Is there not a discrepancy of size in comparing capitalism, which has been around for centuries and will probably continue to exist for several more, with socialism, which existed historically for only a few decades and then collapsed? Is my reason for bringing the latter up not that I was a citizen under the socialist system for much of my life? I firmly answer both questions in the negative. Now, 25 years after the collapse, I am convinced that such a comparison has great explanatory power. History, at a price of suffering for millions of people, set up a laboratory experiment by bringing into being a system markedly different from capitalism. Comparing them yields a better understanding of what capitalism is. Such randomly generated experiments also teach a lot in other branches of science. Examining the victim of an accident marked an important step in neurology. Part of the patient’s brain was damaged and researchers knew precisely which part, and from that they could deduce what functions that part of the brain played.

What is to be understood by a hierarchy of characteristics? How do primary and secondary characteristics differ?13 In my line of thought, primary characteristics determine the system as a whole, including secondary characteristics. The joint presence of the primary characteristics is a necessary and sufficient condition for the appearance of the secondary ones. It could also be said that primary characteristics form the minimum conditions for the existence of the capitalist or the socialist system. A sensible first stage when beginning to study a country is to concentrate on these primary characteristics. The results of doing so will then have predictive force. However, the primary characteristics do not generate all the secondary ones in a deterministic way. The effect is stochastic. There is a very good chance of finding the secondary characteristics in a country examined if the primary characteristics have already been identified.

This relationship is shown in Figure 1. The figure shows mutual effects: the primary and secondary characteristics have mutual influences on each other. The thick arrow denotes that the primary characteristics are the decisive ones, and the thin arrow in the opposite direction that the reactive influence is less strong.

The expression “decisive,” as I have noted already, shows a tendency, not full determination. Many people whose forebears have suffered from heart disease will inherit that susceptibility. But whether the disease actually emerges depends to a large extent on the patients’ way of life – if they drink alcohol, smoke, fail to take exercise, or find themselves in stressful situations, they are more likely to suffer acute heart disease than if they live moderate, cautious lives, do sports and live calmly. All socialist systems are inclined to develop a shortage economy, but the intensity of shortage was very strong in the 1980s in the Soviet Union, Poland and Romania, but less so in East Germany (Kornai 1980a, 2014c).

Within the two blocs shown in Figure 1 there are also interactions among the characteristics. To simplify the explanation, these are ignored in the figure and in this textual commentary on it.

Classifying the post-socialist region’s countries by the typology of capitalist versus socialist systems

Let us apply the conceptual apparatus introduced above to the countries which qualified as socialist countries in 1987 (Kornai 1992). Altogether 47 countries belong here; let us call the area they occupied the post-socialist region.14 The word “region” is not applied in a geographical sense, as this is not a group of adjacent countries; most are in Europe and Asia, but some in Africa and Latin America also belong here.15

Rule under the socialist system is marked in black.16 The whole region would be black if the map showed the situation in 1987. Now the only spot of black on the world map is the territory of one country, North Korea – a tiny dot on the map of the world. Countries in transition from socialism to capitalism are marked in dark grey. Again, this applies to only one country, Cuba, making a single spot of dark grey at a global scale. Most of the region is colored light grey: these are the countries where the capitalist system operates.17

A sizable part of the region has a diagonally striped pattern. This denotes uncertainty: I am uncertain whether these countries should be marked black, light grey or dark grey.

The sources for placing the countries in these categories are considered again in the comments on another world map (Figure 3). There I will shed light on the relation between the two world maps and the background materials accessible on my website.18

There is a broad if not full consensus among experts as to when the change of system occurred in the countries affected. This expression, often used in political jargon and everyday speech, gains considerable content in the conceptual and analytical framework already discussed. With a few exceptions, the countries in the group qualifying as socialist in 1987 all have undergone a transition from socialism to capitalism.

Static representation and the transformations

 Figure 2 presents a still image, as if a snapshot were taken of the world and a specific group of countries within it. The shot shows a static state of the present, but if a motion picture camera were to be used instead, it would show the dynamics of the changes of system as well.

The map conveys the presence of the two systems at a point in history when both are operating according to the characteristics apparent in Table 1.19 It does not depict the creation phase of the system. I draw attention to this primarily in connection with Characteristic 1. The initiatory role in the genesis of the socialist system is played by the political sphere; the communist party makes very rapid moves in historical terms to impose state ownership and centralized bureaucratic coordination on society. By comparison, the transitions in most countries from pre-capitalist forms to the capitalist system were very slow. Initially, the political authorities only tolerated and took advantage of the services and resources of the bourgeoisie. The relation of the political forces to capitalism changed gradually until they had become active defenders of private ownership, market coordination and enforcer of private contract. Different again was the role of the political sphere in the route back after 1989–1990 from socialism towards capitalism, in which the processes of transformation were instigated and headed by the pro-capitalist political forces.

Only one country in Figure 2 is marked in dark grey, to show that it is in transition from socialism to capitalism. As mentioned before, the one country I put here when writing this study in 2016 was Cuba. Though a member of the Castro family remains at the pinnacle of power, this is no longer the Cuba of Fidel Castro. Cautiously, the country has begun to display the characteristics of capitalism.

To continue the earlier comparison, of using a motion picture camera instead of taking a still image, many more countries would appear as dark grey in the squares representing the 1990s and 2000s. The speed of change and the pace of the transformation of certain characteristics varied from country to country.

Historians and historical recollections like to focus on a particular calendar date for the beginning or end of a historical period. The October Revolution in 1917 Tsarist Russia is often understood to have been started by the blank shot from the Aurora cruiser signalling the attack on the Winter Palace in St. Petersburg. In fact, most period changes are more blurred in time.

Figure 2 shows the world-historical defeat of socialism through the lens of my conceptual apparatus. Three decades earlier, the socialist system prevailed over 34.7 per cent of the world’s population and 30.7 per cent of its area (Kornai 1992). Nowadays, when the socialist system persists only in North Korea, the proportions have shrunk to 0.3 per cent of the population and 0.1 per cent of the area.20

The explanatory power of a capitalist-versus-socialist typology

When examining a complex historico-social phenomenon, it is rare to find a convincing single-factor explanation to account for its appearance and/or long-term duration. Complex phenomena are complex indeed and call for a multi-factor explanation.

Both under capitalism and socialism appear several important complex phenomena, explained by several factors; one of them is the system. I emphasize the word one because not for a moment do I claim that a full explanation of a certain complex phenomenon can be gained by simply pinpointing the great system in which it appears. But there can often be found within a larger ensemble of explanatory factors some that are system-specific. Indeed, one or two may turn out to be the most important elements of explanation. Here are two examples.

One is the speed and quality attributes of technical progress, which is affected by several factors, e. g., the country’s level of economic development, the state of its education system, and the size of its state support for research. Alongside these, the system-specific effects are notably important. It can be shown how large numbers of revolutionary innovations have appeared under capitalism, which deeply affect production and people’s lives, whereas the socialist system could produce just one outside the arms industry (Kornai 2014c, pp. 3–24). Promising inventions that appeared in a socialist country could find no innovator able to spread it on a mass scale; this function would be usurped by a capitalist innovator instead. One well-known example is Ernő Rubik’s invention, Rubik’s Cube. In then-socialist Hungary, Rubik had no luck touting his creation round the industrial leaders. Rubik’s Cube began its worldwide conquest when its manufacture and mass marketing were taken over by capitalist firms abroad. Even the distribution process for this first pioneering innovation was immeasurably swifter under capitalist conditions than under the socialist system.

The other example is the labor-market situation. Search processes take place under all systems: employees seek employers that meet their needs and vice versa. The search process is accompanied by ubiquitous frictions: everywhere there are temporarily unfilled jobs and ready workers unable to find jobs. This  is a complex matter explainable by many concurrent factors. One example is the flexibility of knowledge generated by the education system. Does it facilitate quick adjustment to the rapidly changing demand for labor? Other factors include legal constraints on dismissing employees, the effectiveness of labor recruitment agencies, and so on. But some basic explanatory factors are system-specific. What are the general labor-market proportions of supply to demand? Does it tend towards excess supply (capitalism) or excess demand (socialism in its mature, relatively developed stage)? That determines to what extent employees are at the mercy   of employers. An employee is under constant threat of dismissal and unemployment, they feel more defenseless than those who find jobs easily. Here we have arrived at deep-rooted system-specific effects, namely the relative power of employers and employees (Kornai 1980, 2014b).

The two examples enhance in a further way the argument for the explanatory power of the capitalism-versus-socialism typology. The nine system-specific factors listed in Table 1 were compiled with a positive approach. They do not reflect the author’s desires or choices of values. These are the characteristics of countries considered socialist or capitalist, an observable group from which the list of characteristics in Table 1 can be “distilled.” Those who acknowledge this as a positive description, and shift to the normative approach, can append to them their views on the capitalism-versus-socialism pair, based on their own system of values. For my part, I do not reach any summary moral conclusion. By my system of values, dynamism and rapid technical advance form a great virtue in capitalism, but I see the risks and drawbacks of such development. For one, I see the vulnerability of the workforce as a repugnant characteristic of capitalism. As for the socialist system, it did not just have repulsive characteristics. Many of them were attractive: upward social mobility for the poor, some reduction in social distances, and employee security stemming from the labor shortage. The typology described above offers methodological assistance to evaluating the great systems. Value judgments should be based upon considering the whole set of characteristics for the system in question.

It is not unlike the marking system in education. Let us assume that the individual marks reflect each student’s attainments. Then it is up to the teachers, the parents, the classmates or the personnel department of a future workplace, to decide what configuration of the marks to take as a basis for forming an opinion of each student: the simple average of the marks, or the mark in some successful subject taken by the evaluator to be the most important. I will return to this question later, but before discussing the value judgments about the great systems, let me present the typology I use for the alternative forms of politics and government.


1Let me express my gratitude here first of all to my wife, Zsuzsa Dániel, who encouraged me to write this study despite all hardships; she was the first reader of several earlier drafts, supporting my progress with several thoughtful suggestions. I also owe my thanks to all the people who read the manuscript and supported me with their recommendations, helped me to collect data and explore the literature. I would like to emphasize Ádám Kerényi’s role, who helped me most with his initiatives and exceptional working capacity. It would be really hard to compare the invaluable support from the other contributors, therefore I simply list their names: Dóra Andrics, Réka Branyiczki, Rita Fancsovits, Péter Gedeon, Péter Mihályi, Quang A. Nguyen, Ildikó Pető, Andrea Reményi, Eszter Rékasi, Miklós Rosta, András Simonovits, Ádám Szajkó, Zoltán Sz. Bíró, Judit Ványai and Chenggang Xu. I am grateful to Brian McLean, my friend and permanent translator for many decades, for the faithful and well readable translation. I would also like to thank Corvinus University of Budapest for providing me the conditions of undisturbed work and “By Force of Thought” Foundation for its contribution to research funding.

2With most subjects it is thought immodest for authors to quote their own works repeatedly and thus to crowd the bibliography, but many such references are inevitable if the subject is an author’s own work. This study is aimed primarily at those who have read my works, whom I am trying to assist in the “maintenance” of their ideas evoked by those works.

3The term “Hungaricum” was used originally to mark goods which are produced in Hungary  and became worldwide known as “Tokaji aszú”, a desert wine called ‘The King of Wines’ already in the Middle Ages, or “barackpálinka”, a brandy made from apricot.

4What I call a great system is related, but not identical, to the Marxist “mode of production” or the neo-Marxist concept of “social formation.” I stand aloof from the simplified, primitive theory that political economy lecturers of the socialist period would drum into seminar students, citing in a deterministic, ostensibly “progressive” order of primitive communism, slave-owning society, feudalism, capitalism, and finally, victorious socialism or its full-fledged version, communism.

5 Nowadays, when the use of the term “varieties of capitalism” is widespread, we could say:    they wanted to create a variety of capitalism with strong welfare-state characteristics. This intention was inherent in the term “social market economy”, dissociating the capitalism of Northern and Western Europe from its Anglo-American counterpart.

6While the socialist system existed, no country in the bloc ever termed itself communist. That is why I entitled my work The Socialist System, not the “Communist”, which many would have recognized more easily. It can be disputed whether the decision was apt, but it left no room for misunderstanding, as I wrote down clearly what I meant by “socialist system” (Kornai 1992).

7Of special interest are the typologies of modern psychology and the cognitive sciences. Studying these could be very useful to comparative system theory in the social sciences.

8There are several synonyms for the word “characteristic” in this context: trait, feature or attribute, for example.

9In my phraseology, I employ the unqualified word “type.” It has the same meaning as what   Max Weber calls an “ideal type” (Weber 1922/2007). Yet I avoid Weber’s term, since I find that the attribute “ideal” has a distractingly normative ring. However, Weber too used the expression “ideal type” to denote an abstract theoretical mapping of existing systems.

10The second term in each pair (capitalism and socialism, respectively) denotes, for many authors, a system of ideas rather than a formation that exists or has existed. It should be clear from the context that I am discussing the latter: “capitalism” denotes the capitalist system as it exists or has existed, “socialism” likewise.

11Table 1 contains many expressions I have taken over from my earlier works, where I discussed their meanings in detail. They include coordination mechanism, market and bureaucratic coordination, shortage economy, surplus economy, labor shortage, labor surplus, revolutionary innovation, soft and hard budget constraints. For space reasons I cannot go into these again here.

12 The category of state ownership includes both central- and local-government ownership. This needs mentioning as the Hungarian vernacular often inaccurately confines state ownership to central-government ownership. If a school, say, or a hospital passes from local-government into central-government hands, this is labelled “nationalization”, while it means only that the execution/implementation of the state’s ownership rights has been centralized, important though that change may be as well.

13Basic and fundamental are commonly used synonyms for “primary” in this context.

14Like many authors, I apply the epithet “post-socialist” to the countries that were under the control of the communist party in 1989–90. Here again there appears a conceptual mix-up: many politicians and political analysts apply the labels “post-socialist” or “post-communist”, usually with a pejorative ring, to parties that emerged from the former ruling communist party after the change of system, taking over many officials of the previous party and most of its assets. This they do regardless of what changes have occurred in the leadership or membership or in its ideology.

15 A list of the post-socialist countries appears on my website as Tables 1 and 2 in Background Material 1.

16Background Material 2, appearing on my website shows the two world maps, Figure 2 and 3, not in black-and-white but in various colors. The colors might help in recognizing the distribution of various types in the region.

17Empirical support for the classifications would be much clearer if there were reliable statistics on the developments in ownership relations and the spread of the market mechanism. Unfortunately, the data available are only partial and sporadic. All countries prepare statistics on production and added value, broken down by industries, geographical regions, occupations, or output produced, but nowhere do national statistical offices calculate or publish regularly any breakdown of output data by form of ownership, or the proportion of total production sold at administratively set prices. It is surprising to find that only non-state institutions in a handful of countries concern themselves with ownership relations and the radical transformation of coordination mechanisms, although these were among the basic requirements for the change of system. Prestigeous international organizations regularly publish comparative figures on production, foreign trade, or financial affairs, but – in my view – they pay insufficient attention to the transformation of ownership relations and the relative weights of bureaucratic and market coordination.

18See Background Material 2 and 3 on my website.

19Cuba is an exception. It has been qualified here as a country at a transitional stage.

20See Background Material 4 on my website.

February 22, 2017

Multinationals accused of selling inferior food products to Hungarians

It cannot be a coincidence that Magyar Idők, the mouthpiece of the Orbán government, only now discovered a three-year-old study about the alleged poor quality of imported food from Western Europe. Just as it cannot be a coincidence that the following day János Lázár called the incident “the greatest scandal of the coming years.” Another battle against Brussels seems to be setting up. The charge is that allegedly identical products sold in East European countries are inferior to those sold in Western Europe. A few days ago the Slovak Ministry of Agriculture came out with this piece of news based on comparisons of products sold to Slovakia with products sold to Austria.

Upon inquiry, Magyar Idők learned that the Hungarian Ministry of Agriculture had done a similar test and that their findings were practically identical to the Slovak results. Since one must be extremely careful with Magyar Idők’s wording, let me quote the passage. It was in 2014 that “The Nemzeti Élelmiszerlánc-biztonsági Hivatal [Nébih] compared 24 identical or very similar products on the basis of their sensory qualities and their composition and description.” I don’t think a comparison can be scientific if the testers compared not only identical products but “very similar products” and if they relied on the products’ “sensory qualities.” But let’s go on. They found that all the chocolate tested was of equal quality, but in products with wafers the Austrian variety was crisper. Again, one doesn’t have to be an expert on the consistency of food products to know that age and atmospheric differences might make the wafer soggy. Nutella’s hazelnut cream, according to Nébih, was less soft than the one Austrians got. And although a certain chocolate bar filled with marzipan had exactly the same ingredients, the chocolate melted more slowly than the one in Austria did. The complaints went on and on. Even Hungarian Coke was found to be inferior to the Coke sold in Austria. Magyar Idők summed up the sad situation in Hungary with a caption under a picture of a woman looking intently at grocery store shelves: “Often in vain does a domestic shopper search, she can’t find Western quality on the shelves.”

Coca-Cola HBC promptly explained the difference in taste between the Coke sold in Austria and that sold in Hungary. In Hungary the company uses, just as it does in the United States, high fructose corn syrup, in this case made from Hungarian corn. In some other countries Coca-Cola uses sugar because of local regulations. The sugar Austria uses in its Coke may make an appreciable difference in taste. According to a Huffington Post article, 85% of people could tell the difference between regular American Coke and Mexican Coke, which still uses sugar. Moreover, 80% of them preferred the Mexican variety.

Company after company denied the existence of double standards. In the case of the Manner wafers, the company spokesman cited possible differences in transportation and storage. Some of Nestlé’s products were among the samples tested. Its spokesman pointed out that Nesquick OptiStart is actually made in Hungary and supplied from there to 17 countries, while two other Nestlé products are produced in Spain and in France. All from the same recipe. Knorr didn’t offer any explanation, but according to Zoltán Fekete, secretary general of the Magyar Márkaszövetség (Hungarian Brand Association), it is likely that Néhib was comparing apples and oranges because even the amounts of the products tested were different.

Regardless of the merits of this test, which sounds haphazard at best, the government finds it useful. There are few subjects that can arouse a Hungarian more than stories about the inferior quality of food grown and processed elsewhere. Farmers and their representatives in particular like to call all food coming from abroad “garbage.”

The claim that Hungarians are being fed Western “garbage” will turn the people against Brussels and multinational companies. Fidesz politicians add fuel to the fire when, for example, Lajos Kósa tells Hungarians: “I find this affair deeply humiliating, outrageous, and intolerable. This cannot be explained by differences in consumer taste. They bring their junk here because it is good enough for you.”

Perhaps the government is frustrated that after years of propaganda against the European Union Hungarians still overwhelmingly support Hungary’s EU membership. So now as a result of what some people call an urban legend, Agricultural Minister Sándor Fazekas, one of the least illustrious ministers in the Orbán government, ordered an all-encompassing test of 100 products. Testing has already begun. Even an opposition party, Együtt, fell for the “garbage” propaganda.

Instead of getting entrapped in all that hyperbole, let’s turn to an expert whose opinions I think we can rely on. György Raskó was a member of parliament (Magyar Demokrata Forum and later Magyar Demokrata Néppárt) between 1994 and 1998. He is an economist with a specialty in agro marketing and, together with his wife, runs a large modern farm. He is a real expert on anything to do with agriculture. I might add that he speaks English, French, German, and Spanish with such fluency that he can conduct high level negotiations in all four languages.

According to Raskó, different standards are applied to foodstuff in different countries, and the international companies have to be in compliance with these rules. In some places, for example, beet sugar must be used; in others only glucose-fructose syrup can be used. There are, of course, other considerations as well. Supermarket chains order products they can sell. It is a well-known fact that for Hungarians price is a prime consideration, given the low wages in the country. Therefore, the chains order cheaper products in the first place. The high-quality products are also available, but they don’t dominate the market because they are too expensive for most people.

One mustn’t forget that the Hungarian exporters are “biased” too. While Hungarians send their Tokaji Aszu 6 Puttonyos to Great Britain and the United States, the 4 or 5 Puttonyos go to Poland. As far as cold cuts are concerned, two-thirds of the kinds available in Hungary are not allowed to be marketed in Austria or Italy. Interestingly, the government which is so fussy about the quality of Hungarian food products allows certain ingredients in hot dogs and bologna that are not permitted in, let’s say, Austria.

I have no idea what will come of all this. It is possible that the Visegrád 4 will complain about their inferior food imports in Brussels. Since the government-inspired food scandal broke out in Hungary, the Czech government also discovered that the Germans and others are sending them “garbage” instead of food. The Hungarian media reported that the Visegrád 4 countries discussed the matter already at their last meeting.

One possibility, which an expert who was not ready to reveal his name suggested, is that the Hungarian government will try to exclude some western processed foods from the Hungarian market. Considering that domestic products are often more expensive than imported ones, such a move would only penalize the hard-up Hungarian consumers.

February 21, 2017

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