The Shaken Middle-Class: The Rise and Decline of Hungarian Large Entrepreneurs

Professor Julia Szalai (Institute of Sociology of the Hungarian Academy of Sciences, ASRF Visiting Senior Research Fellow

5.30pm (tea and coffee from 5pm), CEES Seminar Room, 8 Lilybank Gardens

Abstract

The paper is based on a follow-up study among Hungarian large entrepreneurs. The first wave of the research was completed in 1999-2001 and explored the sources of the spectacular success that, during the 1990s, a selection of 50 sizeable firms, owned exclusively by Hungarian owners, achieved both in economic terms and concerning their owners' social and socio-political influence. In the second wave the same owners were interviewed again to find out the potential changes that the completion of marketisation and, especially, Hungary's new membership in the European Union (2004) has induced in their economic situation, social standing and political influence. In order to filter out the impact of ageing, a second group of young entrepreneurs starting after the millennium was also approached as part of the follow-up phase.

The study revealed that early success was mainly due to the one-time historical event of the overall post-socialist transformation. Although our "old" entrepreneurs quickly acquired the skills and the toolkit of successfully navigating the market, this knowledge was basically rooted in experiences of late-socialism and proved insufficient in the longer run. Substantial shrinkage of their business (or their ultimate closing down) has been accompanied by deep frustrations and has led to their claiming  financial support, tax exemptions and state-guaranteed purchases exclusively for domestic firms and owners and to proposals for protectionist government policies in future. Declining roles in economy have been accompanied by a right-wing political turn with frequent blaming of the poor and the Roma who "eat up too much of the limited resources of the country".

As to the "new" generation, they differ in their entire "philosophy". They are keen to keep growth within limits, so that they will not share the fate of the older generation of entrepreneurs who, in their interpretation, had run ahead too far and too fast  Further, members of this new group do not aspire to any influence on power (but see themselves as deliberately "apolitical"), although are oriented toward the political right by their pronounced "nationalism". At any rate, the data demonstrate the weakness and instability of a key group of the Hungarian middle-class that the entrepreneurs represent. Their shaken and diminished position both in economic and socio-political terms implies the weakness of a potential elite that should or could play a key role in visualising the future development of a country currently drifting towards the lower margin of the European Union.

In conclusion, the paper will outline some dramatic socio-political consequences of the lack of such stage-setting visions.

All welcome.

The CEES Seminar Series is supported by the MacFie Bequest, named after Professor Alec MacFie, Adam Smith Professor of Political Economy at the University from 1945 to 1958. 

Enquiries: Ammon.Cheskin@glasgow.ac.uk, +44 (0)141 330 2845/5585

First published: 13 September 2012

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