Reform phobia - the legacy of consumer socialism

Society has trouble accepting that the Hungarian economy as it is currently performing cannot sustain the existing social security structures. The free-lunch social security system appears to be falling apart - regardless of whether the population realises this.

The government crisis has put an end to reform plans that were in any case badly thought through. There is no hope now of carrying out a root-and-branch reform of our social care systems. Almost all analysts agree that we are falling behind in our region. We are being overtaken by neighbours who used to be weaker than us. Almost everyone else in the region has carried out the kind of reforms that make them competitive. Why have we failed? The answer is to be found in the Kadar era.

It's clear why Slovenia is doing better. Slovenia - and Croatia - counted as "almost Western" to subjects of the Soviet bloc in the Tito era. Private initiative was strongest here. Yugoslavia's westernmost republic had no time for socialist equality, but Slovenia and Croatia still had to pay for the poorer republics, financing Bosnia's and Macedonia's deficits.

But why are our Visegrad siblings, and even Romania, doing so much better? Unlike Yugoslavia, they ended up as planned economies of want - unlike Hungary, which was of course the "happiest barrack". Hungary had consumer socialism at a time when queues and shortages were commonplace on the streets of Prague, Bratislava and Warsaw. Romanians lived in misery at the end of the Ceasescu era.

While the Czechs, Slovaks, Romanians and Poles saw the drawbacks of Socialism for what they really were, the people of Hungary lived the lie of "refrigerator socialism." The new economic mechanism, introduced 40 years ago, only survived until the beginning of the 1970s. Not even Kadar wanted to continue it. He knew that reforming the economy would lead to income differentials and temporary declines in standards of living for many. The party apparatus, which feared popular discontent, would not take that risk.

So they filled the gaps by taking out loans from the west. As people's incomes rose and prices stayed under control, Hungarians concluded that socialism wasn't so bad. Of course, they didn't realise that the entire system was making massive losses and only surviving on credit and the profits of a handful of successful companies. So the welfare system became fat and overdeveloped. The state was generous with income support, wages, education, discounts, disability pensions and fuel subsidies.

Kadarism, which in the 1970s made Hungary the most acceptable party state in western eyes, is now being turned on its head. We can't thank our own achievements for our quality of life. We've grown used to it being handed to us on a plate. At the same time, our careful, paternalistic dictatorship spared us from the worst ravages of five-year planning. That is why Hungarian society now finds it so hard to make sacrifices and take responsibility.

László Tamás Papp