Home > BC: Hungary 1919-1945, In English > Consolidation, that is the reality of capitalism

Consolidation, that is the reality of capitalism


After the defeat of the revolution the capitalist landlords bore rule, who dominated together with the Church and lived their proletarian-murdering everyday life. The ruling class consisted of gentry left-overs, peasant proprietors, and urban bourgeoisie, that is to say group of great landlords, agrarian small capitalists, and industrial, commercial capitalists. The regime was headed by Governor Horthy who nominated the actual prime ministers. In this period, after the bloody retorsion, less brutal means were enough to maintain the seeming social peace, so the ruling class started the gradual “consolidation” of the regime. Under Pál Teleki’s and afterwards István Bethlen’s prime ministership the white-terrorist guards were pressed back and eliminated. Moreover, the far-right forces had to be harmonized with the liberals, the smallholders’ party, and with christian democrats, social democrats, thus finally the practical and ideological feature of the ruling class was formed. Within this the Catholic Church was determinant: the “Christian direction” remained the biggest landowner, with its one million acres’ land-owning. The members of the Catholic episcopacy owned one thousand acres per head at least. A lot of workers fell a victim to the politics and ideology of the conservatives, several Christian, racialist, far-right para-military groups were formed, which even more acerbated the life of the working class persecuted by the white-terror.

The Horthy regime amalgamated the features of fascism and of bourgeoise conservatism and in this manner took the floor as the hangman of the working class. To indicate its backround we use György Ránki’s one essay. The program of the “Christian direction” had two important elements. It was phrased by Gyula Gömbös as follows: “I will be led by two guidelines. One of them is the Christian thought, briefly we can call it racialism, the other one is the agrarian thought.” It meant that, under the aegis of the „Christian thought”, taken advantage of the anti-capitalism of the exploited masses, they acted against big capital which comprised many bourgeoises of Jewish origin. They wanted, however, neither to reform nor to modernize capitalism, but to expropriate the capital of the bourgeoisie of Jewish origin and to subordinate it to the “national interests”. Moreover, the gentry-officer guards wanted to take advantage of the conflicts between big capital and the latifundium (naturally this period is the headspring of latter-day nationalism), thus they propagated the necessity of defence of „Hungarian land”, and of „Hungarian interests” as means for pressing back „foreign” big capital (later the Hungarist movement used the same methods to frame the nationalist part of the working class). All this was integrated with very lively social demagogy and with promises for land reform; the ruling class was fooling the agrarian, and industrial workers like this.

From capitalist point of view, the world-wide situation became partially steady in the early twenties. The revolutionary wave in Germany was defeated (it was not without a hitch, as Max Hoelz and his comrades continued their grim struggle), but in China the uprising was permanent which couldn’t be defeated for a long time. In Italy, after the factory occupations and struggles in the works, Mussolini started to cement his position. In Russia, after eliminating the anarcho-communist forces in Ukraine and pulling down the anarcho-communist movement in general, the Bolsheviks consolidated their power. The Leninist-Stalinist-Trotskyist epidemic became even more drastic. In Mexico, the revolutionray movement weakened, in Argentina it had already to be on the defensive earlier. In Hungary the retorsion, the nationalist framing, the cretinizing of the working class also delivered the goods, so the political stabilization could be continued as well as the economic reorganization could be started.

In the spring of 1921 a government led by István Bethlen came into office, and soon after the Egységes Párt (‘Unitary Party’) was formed, which by uniting the fractions of the ruling class, consolidated the government. To maintain the seeming social peace the new government, parallel with the retorsion, tried to blarney different political forces. The land reform started in 1920 continued – they tried to win the landless agrarian workers over to support the regime. The latifundia, however, remained dominant, only 5% of the arable soil were allotted, from which the recorders, gendarmes, as well as those who had been active in carrying out the white-terror got foremost. The landless peasants also got some land which were faraway from their homes, droughty and were between only 0,5-1,5 acres. Furthermore they had to pay a fine for them. In fact the peasants got land charge in order that the state, or the domanial treasury could gain more money. The fact remained that most of the agrarian workers worked as a landless day-wage man, a farm-hand or, parallel with farming their small lands, as wageworkers. This mass, which comprised more than two million workers, felt the pinch: due to the great labour-power surplus their wages were very low, on an average 25000 workers left the agriculture yearly, most of them couldn’t find any jobs even in the industry. The day-wage men engaged themself for the season, so they always had to wander from one latifundium to an other in order to find any work for a short time. After the daylong, sweated work they were usually accomodated in the stable. Thus during the Horthy regime there were a lot of actions in the countryside carried out by agrarian proletarians, which were in general beaten back by the gendarmerie.

Bethlen entered into negotiations also with the social democratic party. They agreed on that the MSZDP (‘Hungarian Social Democratic Party’) would control any workers’ actions and would hold them between democratic framework, would avoid the organization of postmen, railwaymen, public servants and of ground-men. So it would practically function under conservative control and would back the government. It was easy to carry out these politics doubly so as the MSZDP got 25 electoral mandates in 1922. Thus they had even more capability to work together with the government. The Bolshevik party, on the other hand, was banned in 1921. By this time the bolshevization of the party had already been finished and, except for a few heterodox members, it followed Leninist ideology.2 Béla sat on the central committee just like Jeno Landler and György Lukács, too. Before the party would have been able to cement itself, fractionalism emerged in the emigration. The fraction in Moscow led by Kun was for the formation of an illegal mass-party; it wanted to act as an independent force. The fraction in Vienna led by Landler, on the contrary, regarded dangerous to send a lot of activists back to the white-terrorist Hungary. They thought that the agitators had to infiltrate into the trade unions and into the MSZDP, meanwhile the illegal party had to be cemented and established. The Comintern first backed the fraction led by Landler and even adopted a resolution about this, so the popular frontist tactics were dominating for a space. The Bolshevik activists were infiltrating into trade unions, workers’ societies and sport clubs in order to agitate. A few commissioned were trying to reorganize the party in Hungary and they succeeded in organizing a couple of party-cells, for example in Csepel, Ózd, Salgótarján, Budapest, etc. Their journals got to Hungary, so the Proletár (‘Proletarian’), Kommün (‘Commune’) and others were available for the workers. The still not too strong Bolshevik party, however, was pulled down by sectarianism so it couldn’t get great ascendancy over the proletariat, its framing activity was not so effective than during the revolution.

On the bases of the political stabilization led successfully by the ruling class, the reorganization of the economy, had been disorganized by the war and the revolution, could be started. The bourgeoisie first had to solve two problems. On the one part the economy had to be retooled from the war production to the normal production, the extant structure of production had to be reorganized, the very low productivity had to be increased and they had to restrict the inflation increasing sharply. On the other part the economy had to be accommodated to the new circumstances which emerged after the breaking up of Austro-Hungary. Due to the peace-treaty the territory and the population of Hungary decreased greatly and these meant smaller market, less raw materials, smaller arable soil, so both the industrial, and agricultural productive capacity decreased. Hungary formerly had been carrying its export and import on mostly inside Austro-Hungary, there were common money-market, unitary price-level, common customs area. Since all these ended, the bourgeoisie had to build up a new system of external trade accordantly to the world-market, they had to find new markets, had to solve the problem of shortage of raw materials, had to restructure the production. For these tasks they needed considerable capital. The state tried to put up the sources for these by increasing the bank-note issue, so from 1921 the inflation was gearing greatly and gained more thousandfold degree till 1924. Due to this the miserable conditions of the working class acerbated even more, the food shortage and the unemployment worsened. The average labour-time in the industry was 9,5 hours, and Péter Veres wrote down that the day-wage men, the farm-hands, the ground-men worked 14-16 hours a day, in exchange for this now they got lower wages. In 1920 there were 40000 unemployed day-wage men at reaping-time, 30000 agrarian worker families made a precarious living, according to certain sources during the ages of the white-terror 300000 workers were unemployed. Then most of the agrarian workers were starving, the children were begging in groups, and the situation changed not too much afterwards…

The bourgeoisie channelled the money won by the inflation to the large-scale industry and to the latifundia as credit, in order to revive the production and to increase productivity. This project was also backed by the increasing inflation which decreased the real wages (the increase in price was more than twice as much that the wage increase), thus decreased the production costs, too. Because of the very low wages of the agrarian workers, this effect was even stronger in the agriculture. As a result of all these the rate of production approached the pre-war level in a few years, the industrial and agricultural export increased. Meanwhile the Hungarian bourgeoisie took a loan up form the League of Nations, so they were able to pay the state deficit and stopped the man-made inflation in 1924, since they didn’t need that on further. The inflow of western capital as credit geared, however smaller part of it was applied to develop production, the rest was used for pay-off, buying lands and for building. They invested against us: prisons and barracks for the gendarmerie were built. In spite of this the Hungarian bourgeoisie, thanks to the relatively high prices of the agrarian products in the world-market (in Hungary the agriculture was still predominant over the industry), was able to revive the agricultural production and to ground the economic growth in the following years. The same tendency in the industry was slower, since, due to the shortage of capital caused by the stoppage of the inflation and to the increasing unemployment (there were 120000 urban unemployed in 1924) the level of industrial production was decreasing between 1924 and 1927. The revival started only later and was relatively slow.

Meanwhile the coming alive social democratic party and the trade unions organized several strikes. The Népszava (‘People’s Voice’), daily paper of the social democrats, was shooting his mouth off actively, and their monthly theoretical journal Szocializmus (‘Socialism’) was also published. Most of the industrial workers were forging the railing of their prison inside the MSZDP and the trade unions. In 1921 the union membership was 200000 approximately. The MSZDP was strong principally in Budapest as well as in the near suburbs (Újpest, Kispest, Budafok, etc.), its membership was constantly changing and after the first revival, in the late twenties and early thirties it decresed to 70000-100000 members. Both the party and the trade unions were functioning under the control of the Ministry of Home. It meant among other things that they had to announce all the gatherings, strikes, demonstrations in advance. It can be said about their activity that they were competing with other bourgeoise forces for the title: „vanguard of the counter-revolution”. They regarded the safeguard of workers’ interests inside capitalism as their main aim, so its deceptive when we report on hundreds of workers’ actions. Since most of these were under the control of the mentioned political forces or of the Bolshevik gnomes. The spread of the strikes was backed by the fact that the Hungarian economy was going under a transformation and the heavy industry was gaining ground. Due to this, during the recovery of mining, iron industry, textile industry strike movements of whole industries were able to emerge (typical data that from the beginning of the era to its end the number of the exploited in the textile industry increased from 20000 to 60000).

In the works and factories the Christian organizations and the system of informers were also present. As a contemporaneous observer noted, the strikes were not merely of economic but also of political importance in the mid thirties. Under the Gömbös era, and also even earlier, the conservative governments backed the formation of different far-right or fascist workers’ organizations (Nation-wide National Alliance of Hungarian Workers, Parochial Workers’ Organization, etc.) in order to frame the proletarian struggles even if they were carried out for reformist demands. Most of the strikes were organized for higher wages, so they were defensive. Pál Demény, with his ulterior coherence, wrote about the relation of the ruling class to the strikes as follows: „Horthy and his associates had to willy-nilly tolerate them. Their state apparatus knew that it’s no use bearding with the organized workers struggling for more food, better sanitary conditions, holding down their jobs, against wage cuts, increasing efficiency. Being aware of their right, they had got backbone, were faithful and united. The strike-breakers consisted only of non-union Christian-socialists, members of far-right organizations, and miser, idifferent workers. Right these are the bad workers, the production can’t go with them. The loss of the profit is huge, and the municipal officers don’t rejoice over the striker, desperate men and women. The union leaders usually back the strikers, but they are for the agreement when the strike-pay empties their pay-box.” Being aware of this, it’s worth mentioning the typical features of the strikes which became frequent from 1922. There were hundreds of strikes, however these didn’t achieve real class-militancy. After demanding and getting wage-rise, the workers usually moved back into the works and factories. Moreover, due to the lack of co-ordination the strikes confined to single regions. Although the capitalists sometimes lost huge profit and had to take care of defeating the repining workers in time. Conflicts often occurred between the union leadership and the rank and file, and not always from political motive, but on „trade-unionist” terrain. One of the partakers disregarded the organizational agreement, so they had a row, but the conflict was usually solved soon after. So the masses of the working class were framed by classic social democracy, trade union bureaucracy and in a less degree by Stalinism. The far-right forces were gaining ground better and better and from the thirties onwards the antifascist framing were also strengthening.

The conditions for the evolution of very class struggle in Hungary were becoming increasingly complicated. On the one part the ruling class had a well-organized inspectoral system (police, system of informers, acts against the proletariat and communist organization), and was able to effectively defeat the proletarian actions. They tried to counteract the reorganization of the proletarian movement, which had been crushed after 1918/1919, also by legislative measures: they banned and persecuted the communist organization, propaganda activity, the so-called „class instigation” by all means. To commit this, it was enough to sing the International or to pass on a communist leaflet. There was censorship, all publications were banned which propagated against the order in class struggle way, the distribution of the emigrant communist and Bolshevik publications and of memoires about the Hungarian Council Rebublic was also prohibited. Some works of the following persons, among others, were banned: Trotsky, Ervin Szabó, Kropotkin, Lajos Kassák, Radek, Lenin, Buharin, Lukács, Marx, Gorter, Pannekoek, Attila József. The Bolshevik journal Front and a lot of other books, brochures, journals regarded as subversive were also banned. On the other part the MSZDP together with the trade unions and the Bolsheviks (who acted as an effective framing force even in the illegality) were able to function as a massive counter-revolutionary camp, even if it was not exempt from inner struggles between the different fractions, and to carry out its splitting activity. Today the situation in Hungary differs in that: then the left counter-moved stronger in the rivalry of the democratic forces. Today in Hungary the left is agonizing on the periphey and due to its identity crisis it is always flirting with the liberal government or its openly nationalist-conservative like the Munkáspárt (‘Workers’ Party’), the Bolshevik successor-party.

  1. The Destructionist
    May 30, 2010 at 12:47 am


    Capitalism was founded upon basic principles: production, supply and demand, and capital accumulation. It is a social theory whereby prices are determined by profit and loss, as well as market interest and fluctuations.

    Although I understand the need for a free market enterprise, such a theory should not imply that we are willing to disregard our environment, or sacrifice the needs and comforts of our humanity in an attempt to realize higher profits (a.k.a., BP, Lehman Brothers, Goldman Sachs, etc).

    Capitalism may be wonderful, but like anything else, it is still a flawed system. It’s a work in progress. It needs to be tweaked here and there in order to perfect its balance and to soothe the inordinate swings that occur day-to-day in our financial markets. If left unchecked, however, such a system will prove to be our economic downfall.

    How so?

    Well, for one thing, there is only so much profit a business can make from a product before it is left to cut costs in both quality and workmanship. In order to continually sustain a profit, businesses have to create those same products with lower quality ingredients and cheaper labor: which means that they must pull up stakes and move to other countries like China, Taiwan, or Mexico in order to survive. What does this eventually mean for people like you and me? It means that the very financial theory that promoted our country to super power status has turned on us. It means that the American workforce is now expected to work harder, longer, cheaper, and faster if we are to compete with the global economy now breathing down our necks.

    Where do we go from here?

    George Orwell had it right, to some extent, when he wrote his book1984. Many years from now, money will become worthless and the global populace will be employed and subject to hundreds (if not thousands) of individualized corporations that managed to survive attrition through merger aquisitions. It will be a feudalistic society: every corporation out for blood and vying for global dominance and absolute power. Our children and grandchildren will be there too: housed, clothed and fed by these various corporate entities; all the while being sent out on occasion, like brainless automatons, to errands of war, in an effort to absorb the weakest corporations into the fold. After all the dust settles, and everything is said and done, the remaining corporations will finally merge into a one-world government.

    Science fiction, you say?

    (…I’m left wondering.)

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