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I'll explain: 50 years of communism in the eastern Europe countries left most of the people with no wealth as it was forbidden to own a company, unless you whe

I'll explain: 50 years of communism in the eastern Europe countries left most of the people with no wealth as it was forbidden to own a company, unless you where co-operating with the secret police and singed a deal with them. This caused the issue that after the collapse of communism and soviet union people with wealth were communist collaborators (there were informing about non-safe people and helping throwing them into jails and sharing money with police officers). Then after communism collapsed they've created TV, media and obviously there was still TV, Radio and press which was government owned, where the same people were working. So as you can see everything is post-soviet countries is still mostly owned by communists and police informants.

pas 8y ago
Not so simple. The GDP and the country's wealth grew very significantly since 1990, and don't forget the enormous amount of foreign capital that entered Hungary. (For example "RTL Klub" is owned by the German RTL Group. And it is the last TV channel that airs segments critical of the government.) Also, don't forget the privatization boom during the early 90s, when every government sold whatever they could find to fund the country. Early on this of course benefited friends of the old guard. Furthermore, police informants liked to remain hidden. Secret police officers on the other hand liked to make the deals with the informants, especially those with some kind of business ambition. But these deals produced a very pathological market state. As soon as the old regime fell, new businesses sprang up, and they soon eclipsed these old protected inefficient ones.
- mac_was 8y ago
  1) true, so they bought and created big supermarkets, factories and kept the salaries low, this did not help people on building wealth anywhere... 2) Privatisation is true - so you agree with me. 3) And? 4) New business? You mean old police informants with capital, investing in what was interesting for them...
  - pas 8y ago
    Where do you think that GDP per capita growth came from? The economy benefited immensely from those factories and access to cheap stuff on international markets. Salaries are low because there is not enough high paying job, because there are not enough high-skilled workers to attract/fund businesses that would employ them. Furthermore, the Hungarian economy and demography suffers from the same problems as other developed economies. Technological improvements made a lot of mid-value jobs so efficient (via automation and of course through global institutions and multinational organizations), that the demand for them disappeared. See David Autor's seminal paper: https://economics.mit.edu/files/11563 https://economics.mit.edu/files/11563 (for example page 13, figure 2 is very telling. middle class jobs "disappeared"). Hungary, just as the US suffers from the problem of transforming labor markets (middle class jobs are hard to find, plus typical worker class male dominated fields are shrinking, whereas female dominated service oriented sectors are rising). And whereas in case of the US a lot of people are simply caught in a vicious cycle of poverty and incarceration, about two hundred thousand Hungarians left the country since 2010. (That of course did not help the active population ratio, though people working abroad send a lot of money back.) The education system is also regressing in the last 5-10 years, now the research institutions are in upheaval too, due to centralization and inefficient restructuring by the government. This will slowly swing back one way or another. The recent "overtime work hours" law is a good example, because it doesn't make much difference, as the labor market for low-skilled workers is in a gridlock. (A friend of mine works as a HR manager and they can't find enough local workers, so they recruit Ukrainian foreign workers, for a simple, but big warehouse, 1000+ workers.) And don't forget, wages will rise when labor share of profits increases, but that means more competition, less government protected oligarchs. Privatization resulted in a lot of foreign companies owning stuff, not commies and informants. Secret police driven businesses were not particularly successful even back then, they haven't accumulated much capital. There are bound to be some folks living off that, but investors in the early 90s were usually high income individuals. (Doctors, company directors, etc.) They got there during the 80s, which of course required the right party signals, but these people then sold stuff (real estate, companies, etc.) after its value appreciated to foreigners or the new guard. It's very unlikely that "everything [in Hungary] is still mostly owned by communists and police informants."

pas 8y ago

Not so simple. The GDP and the country's wealth grew very significantly since 1990, and don't forget the enormous amount of foreign capital that entered Hungary. (For example "RTL Klub" is owned by the German RTL Group. And it is the last TV channel that airs segments critical of the government.) Also, don't forget the privatization boom during the early 90s, when every government sold whatever they could find to fund the country. Early on this of course benefited friends of the old guard. Furthermore, police informants liked to remain hidden. Secret police officers on the other hand liked to make the deals with the informants, especially those with some kind of business ambition. But these deals produced a very pathological market state. As soon as the old regime fell, new businesses sprang up, and they soon eclipsed these old protected inefficient ones.

mac_was 8y ago
1) true, so they bought and created big supermarkets, factories and kept the salaries low, this did not help people on building wealth anywhere... 2) Privatisation is true - so you agree with me. 3) And? 4) New business? You mean old police informants with capital, investing in what was interesting for them...
- pas 8y ago
  Where do you think that GDP per capita growth came from? The economy benefited immensely from those factories and access to cheap stuff on international markets. Salaries are low because there is not enough high paying job, because there are not enough high-skilled workers to attract/fund businesses that would employ them. Furthermore, the Hungarian economy and demography suffers from the same problems as other developed economies. Technological improvements made a lot of mid-value jobs so efficient (via automation and of course through global institutions and multinational organizations), that the demand for them disappeared. See David Autor's seminal paper: https://economics.mit.edu/files/11563 https://economics.mit.edu/files/11563 (for example page 13, figure 2 is very telling. middle class jobs "disappeared"). Hungary, just as the US suffers from the problem of transforming labor markets (middle class jobs are hard to find, plus typical worker class male dominated fields are shrinking, whereas female dominated service oriented sectors are rising). And whereas in case of the US a lot of people are simply caught in a vicious cycle of poverty and incarceration, about two hundred thousand Hungarians left the country since 2010. (That of course did not help the active population ratio, though people working abroad send a lot of money back.) The education system is also regressing in the last 5-10 years, now the research institutions are in upheaval too, due to centralization and inefficient restructuring by the government. This will slowly swing back one way or another. The recent "overtime work hours" law is a good example, because it doesn't make much difference, as the labor market for low-skilled workers is in a gridlock. (A friend of mine works as a HR manager and they can't find enough local workers, so they recruit Ukrainian foreign workers, for a simple, but big warehouse, 1000+ workers.) And don't forget, wages will rise when labor share of profits increases, but that means more competition, less government protected oligarchs. Privatization resulted in a lot of foreign companies owning stuff, not commies and informants. Secret police driven businesses were not particularly successful even back then, they haven't accumulated much capital. There are bound to be some folks living off that, but investors in the early 90s were usually high income individuals. (Doctors, company directors, etc.) They got there during the 80s, which of course required the right party signals, but these people then sold stuff (real estate, companies, etc.) after its value appreciated to foreigners or the new guard. It's very unlikely that "everything [in Hungary] is still mostly owned by communists and police informants."