"Collaboration, Coordination, Cooperation and Subversive Entrepreneurship in Socialist Hungary"

Due to the many “holes in the plan,” whereby allocations of capital and deliveries of industrial materials and supplies proved unreliable, Hungary’s leading socialist enterprises found themselves compelled to forge collaborative relationships with one another and to secure timely, reliable assistance from a congeries of small specialist, private firms which functioned at the edges of legality in the 1950s and 1960s. In the absence of market ordering, project-centered alliances among firms helped generate outputs sufficient to meet plan goals, if incentives among the participants could be aligned. (This proved a persistent challenge, encouraging corruption.) As well, in a small industrializing state (1960 pop.: 10 million), particular firms often served as the nation’s sole makers of specific components, spare parts, or production machinery. In consequence, purchasing agents became eager suitors, seeking a share of such firms’ working capacity. Similarly in agriculture, Hungary’s producer coops formally divided arable land between collective acreage (for bulk crops: grains, sugar beets, potatoes) and household plots (for seasonal fruits and vegetables, meat and eggs, and notably, vineyards for wine grapes). The latter products were far more profitable than staples and could be sold in public markets, rather than to state agencies. Moreover, they were politically essential to the state’s 1960s project of building a consumerist socialism. Household plotters thus collaborated with coop leaders to expand incrementally their mini-farms, becoming socialist entrepreneurs provisioning villages and cities while doing essentially nothing to “build socialism.” Drawing on contemporary newspapers and trade/industrial/farming journals, this paper will detail the tensions such practices created and the ways in which what some have termed socialism’s “second economy” proved integral to the successful operation of the “first” (planned) economy, while exposing contradictions in