The Crisis of Capitalism and the Revolutionary Perspective In Hungary

The forces of capitalism both in Europe and Hungary make enormous efforts to hide the fact that contemporary capitalism is in a deep crisis. They cannot deny the existence of serious problems of capitalism, but they try to demonstrate that all problems can be solved in the frameworks of capitalism by capitalist reforms.

But the truth is that the serious internal crisis of capitalism cannot be solved by traditional capitalist reforms. The revolutionary perspective of solving the problems of capitalism is becoming more and more real.

Hungary is one the weakest elements of contemporary European capitalism.  Hungarian capitalism is in a deep crisis independently of the worldwide crisis. But it is being made even deeper by the general crisis of capitalism. The crisis is far from being solved, and nobody can foresee its consequences.

Under these circumstances we should not only criticise the capitalist system but we should as well demonstrate to the people the real possibility of establishing a new world. We should demonstrate socialism as a real alternative to existing capitalism.

It means that the communist movement in Hungary is entering a new situation which means new possibilities and new tasks.

The Crisis Of Hungarian Capitalism

Hungarian capitalism is in crisis and the general crisis of international capitalism makes it even deeper. The crisis of contemporary Hungarian capitalism can be explained by the following factors:

1. The overwhelming majority of the Hungarian economy, industry, financial system, trade and services have been sold to foreign capital.

Hungary was the first ECE country to open its economy to foreign investors in 1989. According to the statistics of the UN organisation UNCTAD, also dealing with foreign investments, at the end of 1990 foreign direct investment (FDI) in Hungary accounted for 1.7% of the GDP. Today this ratio is over 70%. In the EU this ratio is just 40.9%, in Romania 36.7%

Almost 100 percent of banks belong to international capital. 80 percent of industrial production comes from multinational companies. The Hungarian economy depends much more on foreign capital than any other of the countries of Europe. After 2011 there is a real danger that Hungarian agricultural land can be also bought by foreign capital.

The decisive role of foreign capital is one of the characteristic features of Hungarian capitalism. 20 years ago the capitalist counterrevolution was the result of the activity of international capitalism, the internal betrayal of the revisionist forces of the ruling communist party and the activity of the bourgeois opposition.

There had not been a strong Hungarian capitalist class. The new capitalist class was created partly from the elements of the former ruling elite of the socialist system which used their political position to take active part in the privatisation of state property, partly from intellectuals and enterprisers of the socialist period, partly from new generations which appeared on the scene during the last two decades.

The extraordinary big role of multinational capital is the result of different processes. First, the capitalist forces were aware of the fact that the period of socialism was a successful period of Hungarian history and the social forces of  socialist society, the working class and the cooperative agricultural farmers, were quite strong.

The capitalist forces were interested in liquidating these social classes and groups. They saw only one way: to involve multinational capital. Second, the liberally minded intellectuals were always oriented to the USA, Israel and the multinational capitalist forces, and they have always considered the big role of foreign capital as something absolutely normal.

All Hungarian governments have supported foreign investments by giving cash subsidies determined by individual
government decision, development tax allowances, training subsidies, job creation subsidies etc.

The Hungarian capitalist class consists of different groups. First, a small but influential group of big capitalists has positions in financial area, trade, services. It is closely connected with multinational capital. Second, hundreds of thousand micro, small and middle-size enterprisers are engaged in industry and trade. Their position is very weak. They are under a double pressure of EU capital and Chinese capital. Without strong support from the state they are sentenced to death.

These developments have serious consequences, now that the capitalist system is in crisis. First, foreign capital controls the basic areas of Hungarian economy. They have absolute power in financial area and they control the most sensitive area, internal trade. Inasmuch as there is not any strong national production, there are very limited possibilities to defend Hungary by its own means. It can be clearly seen that multinational companies are trying to solve their own problems by reducing  production and by closing plants in Hungary,  which contributes to the rise of unemployment.

2. The gap between the wealthy and the poor groups of society has widened enormously.

This is one more reason for the crisis of Hungarian capitalism. The original accumulation of capital meant that people have been deprived of their resources. It is the result of the inflation policy, tax policy, credit policy of capitalist governments of the last 20 years.

Hungary has a population of 10 million. 9 millions can be considered as people living on a very limited standard of living or even under poor circumstances, and only one million can consider themselves as winners from the social changes, EU membership etc.

As the following figures show, the number of the desperately poor, those living under the poverty line, has drastically increased over the past years. The poverty line is the sum of incomes of a household which allows those in the house- hold to feed and clothe themselves, and pay for heating and electricity. In 1993, according to reliable statistics, 27% of Hungary's population lived under the poverty line. There were about one million poor people in Hungary in 1980.

Today their number exceeds 2.5 million. The richest tenth of society makes 7.3 times more money than the lowest tenth. Perhaps children are in the most severe situation. Almost half of the people under 18 live in a family under the poverty line. In the past years in the 53% of households' real wages have decreased. This means that in these families the growth in incomes was slower than the growth in prices.

The number of so-called long-term poor is rising. The long-term poor in Hungary are comprised of several distinct social groups: the homeless, rural population particularly those living in micro-communities, unemployed or withdrawn from the labour market, households with more than three children, single parent families, single elderly females, and the Roma (the so called "gypsies"). A third of the long-term poor are of Roma ethnicity, even though this group is only approximately 5 percent of the Hungarian population.

In the first months of 2009 the average monthly income in Hungary was 402 Euro. Manual workers receive 295 euro, white collar workers 511 euro. The minimal salary is 250 euro. One should take into consideration that the consumer-prices are practically on the EU-level.

During the last 20 years the working class has lost its savings which they built up during the socialist times. Now working people use their last reserves, and many of them have no more reserves at all.  The same can be said about the intellectuals, teachers, and medical workers.

Most of the working class and the intellectuals have taken on recently large debts to buy an apartment, car, television or just to cover the costs of everyday living. These social groups cannot mobilize new resources in order to face the consequences of the actual crisis.

3. The third reason and characteristic feature of the crisis of the Hungarian capitalism is the extraordinary high level of corruption.

Hungary ranks 39th out of 179 countries in Transparency International's Corruption Perceptions Index for 2007. Despite anti-corruption laws, non-transparency leads to persistent rumours of corruption in government procurement.

The reasons of these phenomena are connected with the Hungarian capitalism itself. First, the privatisation of the state property meant practically free robbery.  Now the different political and economic circles fight for a greater share from EU-money, state orders, and central investments.

Second, the system of laws is very confusing which is beneficial for those in the black economy. Today about 30 % of GDP is produced in the black economy. Third, the actual political and juridical system is a result of compromises concluded 20 years ago between different groups of the capitalist class.  Many of its elements have already lost their vitality.  As a result of this situation. the capitalist state cannot fulfil some of his basic functions, including the work of police, local administration etc.

Possible Ways Of Development


The future development of the Hungarian capitalism depends on the development of the international capitalism and the processes going on in the different social groups of Hungary.

1. The international capitalist forces do not want to lose Hungary.

Hungary was one of the first countries changing from socialism to capitalism, and it served as a demonstration of the correctness of US and German policy of peaceful counterrevolutions. This is one reason. The second is that  international capital has invested large amount of money in Hungary. Now the debts of Hungary are equal with 97% of the Hungarian GDP. The international capitalist forces would like to get back their money. That is why they are ready to help. In 2009 Hungary received 20 billion euro as standby-credit.

The IMF and the international capitalist forces want a more or less stabile political situation in Hungary, the oppression of all possible anticapitalist movements but with “EU-conform means”. The Obama-administration seems to understand better than the EU-countries that the collapse of Hungarian capitalism can lead to series of collapses in the region. They could not convince their EU-partners yet to invest much more money into consolidating Hungarian capitalism.
For the US it is quiet indifferent which group of the capitalist class rules Hungary politically. They demand from any Hungarian government absolute fidelity to US and NATO, participation in NATO military missions. In the internal policy the US administration expect a consequent and demonstrative fight against anti-Semitism, communist forces.
The leading EU-countries do not express special worry about the situation of Hungarian capitalism. According to their experience they are convinced that in a Hungary which is member of the EU and the NATO there cannot be social revolutions, not even social upraises of great measure. The different political groups of the EU express their sympathy to different political parties in Hungary. It seems that now both Germany and France are not satisfied with the performance of the Hungarian Socialist Party and would not oppose a change of government.

2. The Hungarian capitalist class consists of different groups.

The Hungarian Socialist Party (MSZP) and the Alliance of Free Democrats (SZDSZ) represent the big capital closely connected with the multinational capital. They are traditionally oriented economically and politically on the US, Israel.

The coalition of the socialists and liberals has been an optimal solution for international capitalist forces for a long time. Hungary takes active part in all US and NATO inspired military actions from Kosovo to Afghanistan. The majority of the Hungarian economy was privatized, first of all sold to foreign capital, during the governments of these parties between 1994-1998 and since 2002. The government headed by the Hungarian Socialist Party has been able to split the trade unions fighting against the government and to guarantee “social peace”. The socialists were able to subordinate to the MSZP all left political and civil organisations with the exception of the Hungarian Communist Workers’ Party. The coalition of the socialists and the liberals have declared fight against anti-Semitism and guaranteed excellent possibilities of development for those who belong to the Jewish community in Hungary. According to statistics of different Jewish organisation today between 50,000 and 200,000 Jews live in Hungary. The inter-marriage rates for Jews are around 60%.

The MSZP-SZDSZ government make great efforts among others to change the constitution and to declare that "Holocaust denial and public incitement of racial hatred” is considered to be criminal offence. The government, which asserts that Hungary is the place in Europe where some of the worst neo-Nazi incidents took place in recent months, planned the reform in response to public outrage at recent provocations.

In spite of all these developments the international capitalist forces are not satisfied with the actual performance of the socialist-liberal coalition. The neoliberal economic policy led to a serious worsening of the people’s standard of living. Millions are unsatisfied and begin to express their antigovernment and even anticapitalist attitude in different forms. The worsening of life conditions has strengthened two tendencies in Hungary, anti-Semitism and anti-Gypsy actions.

The Fidesz – Hungarian Civic Union (Fidesz) represents much more the small and middle capitalists, although does not deny the big capital. It is more oriented on Germany and the EU generally. The Fidesz which had been originally a liberal party now is a party which tries to unify all conservative, nationalist forces. They cooperate closely with the Christian Democratic People's Party (KDNP).

The Fidesz during its ruling in 1998-2002 basically fulfilled the expectations of international capital. Hungary took active part in the war against Yugoslavia and the „process of democratisation” of Eastern Europe. The policy of the Fidesz government supporting the desires of Hungarian minorities in Romania, Slovakia and other countries for national autonomy led to criticism from the part of some EU-countries.  The US political circles criticised the Fidesz because according to their estimation their government did not fight enough against anti-Semitism. The Fidesz while supporting the multinational capital realised a lot of measures in order to support the Hungarian capital, first of all  middle capitalists.

Since 2002 the Fidesz demonstrated that it is the largest oppositional party and able to influence the political processes in Hungary. It was the organisator of large antigovernmental demonstrations in 2005-2006, initiated a referendum on basic issues of educational and health policy of the MSZP-SZDSZ government. The congress of the Fidesz declared that it is necessary to create a “new majority” including not only the traditional allies of the Fidesz but other political forces, trade unions, civil organisations, too.

At the same time the Fidesz demonstrated that they do not want to exceed the frameworks of parliamentary democracy or violate the general rules of political behaviour in the EU. The Fidesz did not support the large demonstrations of trade unions in 2007-2009 although it meant great possibilities. The idea of a new majority has not been realised and the Fidesz has not opened demonstratively towards other political parties.

The two groups of the capitalist class of Hungary represented by the basic political parties have common and different interests. All of them are interested in maintaining the capitalist system. They do not to change the existing political system. That is why the 5% limit for entering the parliament will be not changed. All groups of the capitalist class fight for better position in privatisation, in getting EU-moneys and great state investments. At the same time all of them know that their internal fight cannot threaten the common interest of capitalist class. The HSP would like to save the power, and the Fidesz would like to get it. Both of them understand that the EU allows using only parliamentary methods.

The MSZP uses different methods to save the power. First, they are interested in the activity of the Movement for a Better Hungary (Jobbik).  The Jobbik is the storm troop of the capitalist class. They play a similar role like the MIÉP played earlier. The Jobbik fulfils different functions. Using national feelings, radical anticapitalist slogans they can manipulate the people. They are able to get votes from the Fidesz. At the same time they use other „weapons” which are not used by other capitalist forces. These are anticapitalism, anti-Semitism and anti-Gypsy slogans. They can take away votes also from the communist forces. The Jobbik registered the Magyar Gárda, the extremist paramilitary Hungarian Guard movement in June 2007 as a "cultural organization" to "prepare youth spiritually and physically for extraordinary situations when it might be necessary to mobilize the people." According to the recent report of the Progressive Institute, today in Hungary there is a greater openness towards extremist movements because of poverty and job losses resulting from the current economic crisis.

Second, the socialist try to get all left votes. They could not subordinate the Hungarian Communist Workers’ Party to the MSZP but they were able to create in 2006 „the Hungarian Workers’ Party of 2006” which is a revisionist party, in words criticising capitalism but supporting the socialist-liberal government.
Third, they helped the birth of new organisations, like the party called „There can be another policy”,  which together with the Humanist Party can create an alternative to the liberals.

3. Under these circumstances there are two basic ways the Hungarian society can go on: the way of  capitalism and the way of socialist revolution.

From the point of view of the capitalist alternative of a decisive importance is the fact that the field of action of Hungarian capitalism is  principally  determined by  enormouse influence of multinational capital in the Hungarian economy, by political, military and ideological dependence of Hungary from USA, NATO and EU.

Within the capitalist development – we emphasize, inside the capitalism and not as alternative to it -  different courses are possible. One of it is a further subordinating of Hungary to the IMF, EU and other capitalist centres.

The Hungarian governments will serve the interests of multinational capital by liberalising fully all areas of the Hungarian market, liquidating the rests of the Hungarian enterprises, suppressing all forms of protest of the working classes. It is the way of giving up fully the national sovereignty of Hungary, the way of limitation and oppressing the democratic rights.

This policy will continue if the socialists remain at the power. They declare about it clearly and demonstrate it in the actual policy.

We have no illusions and we can not have any: this policy can be revived in some form even if the Fidesz comes to power. The Fidesz is also the party of big capital just as the MSZP, the only difference between them is that in the social base of the Fidesz are much more representatives of small and middle bourgeoisie.

The Hungarian Communists should not and will not support this way. The Communists should know that the neoliberal, pro-IMF way will worsen the conditions of the people, and can lead to a further radicalisation of the masses. The Communists should prepare for this situation. We should fight against such development which would lead to a radical right turn in policy. There is not a real danger that fascist or even radical right forces would come to power. The actual extremist right forces are not strong enough and such a development would lead to an immediate intervention of the EU, as we could see in Austria some years ago.

But there is a real threat that the capitalist forces would use the crisis in Hungary and the strengthening of extremist right forces for establishing a “democratic dictatorship” in order to “save democracy.”

Within capitalist way of development we can also imagine such a course, which provides more opportunities for national capital, for Hungarian small and middle enterprises. Neither can we rule out  the possibility that in order to avoid mass resentment and outbreak of large-scale social conflicts  capital will make some concessions to masses, will try to mitigate social and economic problems of people.

In foreign policy also can happen that Hungary will pursue more balanced course while keeping main commitment to EU and NATO. For example will develop more close relations with Arab and Latin-American countries.  We can observe the development of similar alternative within the capitalist system in a number of Latin-American countries.

This way is possible under the circumstances of capitalism. The actual government and the Hungarian Socialist Party are against it. The main oppositional party, Fidesz representing the interest of the Hungarian middle capitalists expresses its readiness to limit multinational capital, to support the Hungarian enterprisers, to limit the incomes of  big capital and to give more to the wide masses. It is a question whether the Fidesz - coming to the power – will really do it or will look for a compromise with international capital.

This way does not meet completely the interests of the working class and means only provisional improvements. But this way means some improvements for the working masses. It allows the HCWP to cooperate with small and middle bourgeoisie on the basis of common fight against multinational capital, supermarkets, foreign exploitation.

This course will be successful if we are able to turn popular resentment into an organised force and thus to force capitalist governments to restrict capital.  The Hungarian Communist Workers’ Party takes part in trade union fights, in the movement of “home defenders” (against evictions), in civil actions in order to increase the influence of Communists and to build the forces of mass resistance.

Lenin wrote in the Two Tactics of Social-Democracy in the Democratic Revolution: "The proletariat must carry to completion the democratic revolution, by allying to itself the mass of the peasantry in order to crush by force the resistance of the autocracy and to paralyse the instability of the bourgeoisie. The proletariat must accomplish the socialist revolution, by allying to itself the mass of the semi-proletarian elements of the population in order to crush by force the resistance of the bourgeoisie and to paralyse the instability of the peasantry and the petty bourgeoisie.”

Another way is the  way of socialist revolution. It is clear that the basic problems of the working class can be solved only on the way of the socialist revolution by overcoming capitalism. The Hungarian Communists have always been in this position but since the capitalist counterrevolution in 1989-1990 we did not speak about the possibility of the socialist revolution. Now we should do it!

“The current crisis is an expression of a deeper crisis intrinsic to the capitalist system which demonstrates the capitalism’s historical limits and the need for its revolutionary overthrow.” – we can read it in the common declaration communist and workers’ parties in Sao Paolo. 

Our parties have also declared: “Emphasizing that the neo-liberalism’s bankruptcy represents not only the failure of a policy of management of capitalism but the failure of capitalism itself, and confident of the superiority of the communist ideals and project, we affirm that the answer to the emancipatory  aspirations of workers and peoples can only be found in the rupture with the power of big capital, with the imperialist blocs and alliances, and through deep transformations of a liberating and anti-monopolist character… Certain of the possibility of another world, a world that is free from class exploitation and the oppression of capital; we declare our commitment to continue the historical path to building a new society, socialism,  free from class exploitation and oppression.”

The Hungarian Communist Workers’ Party will go on the way of socialist revolution. Now we consider our basic and most important task to demonstrate to the Hungarian people that capitalism is not the only way of living. We should demonstrate that capitalists will never give to us better life, never will give us any place in the parliament. We should win these things by serious struggle. But this way is a realistic way and we can create a new world, socialism.

Naturally, we remember the words of Lenin: “Every revolution means a sharp turn in the lives of a vast number of people. Unless the time is ripe for such a turn, no real revolution can take place.”

Now we cannot speak about a revolutionary situation in Hungary. But we can speak about the possibility that the general development of the crisis of international capitalism and their consequences in Hungary can lead to the birth of revolutionary situation.

We consider our main task to prepare the communist party for such a situation. The historical experiments show the real revolutionary situations remain unused if the subjective circumstances do not exist at due time.

We strengthen our Marxist-Leninist education. The members and activists of the party should understand the current situation and the real meaning of the revolutionary way.

We study the historical experience of socialist revolutions in Hungary with the aim to use those experiences which can be applied today.

We study the experience of the communist parties of Greece, Portugal, Brazil, Venezuela and other countries how to organise and stir to greater activity the masses.

The party organises its leading bodies on a new basis. We are creating „local revolutionary centres” with necessary mobile informational equipments.

We create mobile „combat groups” which can participate in different demonstrations, street-actions, and solidarity-events.

We build up a new youth organisation with young people deeply devoted to idea of revolution.

We began to go directly to the factories to meet the workers. The experiences are very positive.

We are opened to all anticapitalist, antimonopoly initiatives and participate in all social actions which fight against supermarkets, against neoliberal housing policy, against ejections of those who cannot pay for gas and electricity.

We create a more effective system of alternative media, using the weekly paper Szabadsag, internet and other means.

We build up a wide system of homepages of local organisations, using You Tube technology, and other modern internet-technologies.

We fight for a more effective cooperation of communist forces on the international area.

The HCWP has left the European Left Party because we do not agree with the revisionist and opportunist policy of the ELP.

We are convinced that we need not a “new European political culture” but a very consequent fight against capitalism, for rights of the working masses. We should not only criticize capitalism but we should organise the everyday fight of the workers.  We want to liquidate capitalism; the European Left wants to make it better.

We are standing on the basis of Marxism-Leninism, theory and practice of the fight of the classes, the principles of proletarian internationalism. The European Left unfortunately is standing on the basis of reformism.

The European Left fights against capitalism only in phrases, but in practice it helps to strengthen the “democratic” image of the European Union, the European Parliament, and the capitalist system generally.

Lenin said: “It is impossible to predict the time and progress of revolution. It is governed by its own more or less mysterious laws. But when it comes it moves irresistibly.” We should be prepared for it.

International Communist Review Issue #2, Mid 2011

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