Business Practice in Socialist Hungary, Volume 1

This study aims to reconstruct the activities of enterprises and individuals over two decades in one developing country (Hungary), within and across four politico-economic domains (agriculture, infrastructure/construction, commerce, and manufacturing), from the initial Stalinist obsession with heavy industry (Volume 1: Creating the Theft Economy, 1945-1957) through later reforms paying greater attention to profitable farming and the provision of abundant consumer goods (Volume 2: From Chaos to Contradiction, 1957-1972, forthcoming 2023). It provides hundreds of grounded, granular stories for reflection, as reported by actors and direct observers, ranging from innovation and improvisation to obstruction, failure, and fraud. Further, it offers an otherwise-unobtainable close encounter with another world, familiar in some respects while amazingly peculiar in others. 

The social history of enterprise and work in postwar Central European nations “building socialism” has longbeen underdeveloped. Through extensive macro-level research on planning and policy in Hungary, Poland, Czechoslovakia, and other Bloc countries, a grand narrative has been framed: reconstruction and breakneck industrialization under Soviet tutelage; then eventual mismanagement, stagnation and crisis, leading to collapse. This book seeks to explore what socialism actually looked like to those sustaining (or enduring} it as they faced forward into an unknowable future, to assess how and where it did (or didn’t) work, and to recount how ordinary people responded to its opportunities and constraints. 

This study will appeal to readers interested in understanding how businesses worked day-to-day in a planned economy, how enterprise practices and technological strategies shifted during the first postwar generation, how novice managers and technicians emerged during rapid industrialization, how peasants learned to farm cooperatively, how organizations improvised and adapted, howpolitical purity and practical expertise contended for control, and how the controversies and convulsions of the postwar decades shaped a deeply flawed project to “build socialism.”

“Philip Scranton’s new book highlights a number of very important problems in a very interesting and readable way. … The phenomena examined in the book were deeply embedded in the internal relations of contemporary firms, they were also influenced by power relations between authorities and companies, bargaining over resources and performance, by conflicting inter­ests, by networks of social relations among the workers: complex economic and social pro­cesses that will be worthy of further study by future generations of researchers.” (Ágnes Pogány, Business History, October 5, 2023)

In Business Practice in Socialist  Hungary, Philip Scranton brings his keen sense for the theoretical and empirical aspects of business enterprise to the fascinating setting of Hungary’s nascent socialist economy. Through a richly contextualized reading of some astonishing primary source documents, Scranton illustrates how capitalist and socialist organizations shared more characteristics than is widely acknowledged. Anyone interested in the challenges that face business enterprises—to say nothing of the contradictions between socialist visions and organizational realities—will cherish Scranton’s insight and marvel at the tales and the toil he uncovers.                                                                                                                  Andrew Russell, Dean, New York Polytechnic Institute; Co-director, themaintainers.org

Philip Scranton’s new book, Business Practice in Socialist Hungary, brims with gritty archival detail and packs conceptual heft as it explores how managers and employees, farmers and peasants, party apparatchiks and party bosses, struggled – and fought – to build an economic system that “worked, more or less” in newly socialist Hungary in the years following WWII.  Centering the concepts of coping and maneuvering, Scranton reveals not only the limitations of strategizing and planning, already well-established, but also how, working from the bottom up, ordinary Hungarians developed creative workarounds that made the best of what was at hand, whilst frequently embracing shirking, resistance and theft, in order to meet the absurdities and cruelties they often faced. In doing so, they placed themselves at the heart of the development of this new economic system. Students and scholars of Hungarian and wider Soviet era economic history will find much to learn and enjoy in this deeply researched and tautly written book. But it has wider resonances and lessons. Once we begin looking for them, we will likely find coping and maneuvering somewhere at the heart of the constitution of all economic systems, even the most apparently smoothly humming capitalist machine.                                                                   

 Andrew Popp, Professor of History, Copenhagen Business School 

Via this study of Hungary, Phil Scranton shows that socialist enterprises were not so simple as has been generally asserted. He looks at them both from top down and from bottom up, from the viewpoint of the government and the ministries and from that of the peasants and all the men and women who worked, traded or consumed. He sees how the choices made at the top prolonged the shock of World War Two and limited technological choices and learning processes. For years, the predatory behavior of the Russians and the constraints exerted by the government and the Party squeezed peasants especially, but in fact everyone. Instead of a socialist alliance of science and democracy, an economy of theft was born, often at the expense of the environment and nature. One of the many forms of the people’s agency was to reciprocate such theft, through frauds, embezzlements, or stealing materials and goods. Civil society in general, technicians and engineers in particular, were creative and called for alternative strategies and regulations but their voices were turned aside – one source, among many, for the 1956 Revolt.                   

 Patrick Fridenson, Ecole des Hautes Etudes en Sciences Sociales, Paris

 

Philip Scranton is University Board of Governors Professor Emeritus, History of Industry and Technology, at Rutgers University, USA. His publications include fourteen books and seventy scholarly articles, multiple contributions to exhibit catalogs, and numerous reviews of books and conferences.