Tamás Kolosi on Lex MOL and the unfinished regime change


The law known as Lex MOL, whose declared aim is to protect Hungary's strategic companies, has stirred up a hornet's nest.

Some believe the law presages the advent of the Russian capitalist model. We asked the sociologist Tamás Kolosi, who researches the Hungarian social elite, to discuss whether Hungarian oligarchs exist. His answer has implications for people on the lower rungs of society and for party financing.

Lajos Bokros, the former finance minister, said of Lex MOL that it protects Hungarian business oligarchs and the politicians whom the oligarchs support. Mihály Kupa, another former finance minister rejected the allegations as president of MOL’s supervisory board in an open letter. Paul Lendvai, the famous Austrian public intellectual of Hungarian descent also expressed a view on Bokros’s statement.

Why is there such intense argument, and what caused it? There is no oligarchy - in fact, we have the opposite in certain senses. Civic societies are constructed of two key strata - the owners and the intellectuals. It seems to me that one of the fundamental problems of the Hungarian regime change is that there was no property-owning class before 1990. The regime change was brought about by the intellectuals, under their leadership and active participation.

I’m thinking not just of those who played a prominent role, but of a much broader spectrum of people, because the intellectuals furnished the real basis for the regime change, and the intellectuals ruled politics in that period. This is shown by the composition of parliament at the beginning of the 1990s - and by the fact that the then prime minister was a historian.

This was rule by the intellectuals. I said then that if we want to build a modern civic society, then we have to change this one-sidedness. This means not just building up capital, making greenfield investments and carrying out privatization, but also preparing ourselves for the property-owning class wielding influence. It wasn’t hard to predict the emergence of a property-owning class in Hungary, following the west European model of political generations.

We followed the German-Austrian model, but also the Italian, Spanish, Portuguese and Greek models to some extent. In modern civic societies, the influence of the property-owning class is stronger than the influence of intellectuals. Elsewhere, a kind of consensus emerged between the entrepreneurs and the intellectuals, but the intellectuals did not have the kind of excessive power they held in Hungary in the 1990s.

The conclusions of intellectual preponderance
The intellectuals’ preponderance clearly distorted the power structures, and it may have changed the way the public looked at the state. What were the consequences of this one-sided regime change? It had two negative consequences. Once results from the fundamentally differing attitudes of the property-owning and intellectual classes. The property-owning class is interested in utility: what is good for me, what benefits me, what creates profit. The intellectuals are interested inhuman values.

In the 1990s, therefore, a conception of what was good for individuals, for companies and the country itself was lost. Values questions came into the foreground, as did battles over morality. Lajos Bokros wrote in 2005 that new democracies like Slovakia, Croatia, Serbia, Romania, Bulgaria, Ukraine and Russia had seen an incredibly swift emergence of national oligarchies.

Insiders who went from being company directors to company owners immediately found a route to the directors of the finance houses, which were still state-owned, to local government leaders and to governments. Democratic governments had more or less success dealing with this frightful dual inheritance - the communist system and the legacy of oligarchy which had proven to be a blind alley. The greatest achievement, even if it came late, was to break this oligarchic structure with a successful liberalization program.

I don’t want to diminish the role played by some politicians in creating the ugly public discourse we now have, but there is a structural reason as well. If a society is founded on values, then that society will be dominated by moral arguments. In such a society, ideological differences run very deep. One negative consequences is that for 15 years, utility played second fiddle to values. Another negative consequence was that the regime change ran its course in all those areas where the intellectuals were not directly involved.

From agriculture to industry, in the services sector - everywhere, a market economy replaced socialist redistributive economics. Realizing that this had a price, the regime-changing intellectuals had bad feelings about this, but they didn’t make a fuss. That a third of workers in heavy industry lost their jobs was accepted as a price of the regime change. But there are lots of areas where intellectuals had a direct interest. And there, they did not let changes run their course, even preventing them from taking place.

If a teacher or a doctor became unemployed, the whole of Hungarian public life was outraged. So the major spending portfolios - education, health - and public administration, scientific research, art - were spared the influence of market conditions and the logic of the regime change. We still feel the consequences of that today.

The leaders of the main opposition party continue to say that culture is not a product. It’s like hearing an echo of the Hungarian Socialist Workers’ Party. And it’s still because the intellectuals’ excessive power prevented the regime change from taking place, and continues to fight a rearguard action against the government parties’ reform plans.

Lex MOL appears to borrow from the utilitarian and values perspectives. Or is this law about utility only? Over recent years, there have been signs that the property owners have become so strong that they are becoming the major influences on political life. We can see this from the fact that many entrepreneurs are taking on political roles, by the way Gábor Szeles is building a media empire, and the way the banker Sándor Csányi’s name is often mentioned in a political context.

So there are clear tendencies towards the entrepreneurial class trying to influence political life for its own utility. And they are no longer going up fighting against values perspectives. Values did play a role in Lex MOL’s inception. I couldn’t tell you to what extent Lex MOL reflects national values, or how much it serves the interests of a particular group, but it is clear that these tendencies should not be confused with the oligarchic tendencies you see in Russia’s development.

Furthermore, the limits to the Russian oligarchs’ political influence is well illustrated by the fate of the energy giant Yukos and its former owner, Mikhail Khodorkovsky. A property-owning class emerges in many different ways. What happened in Hungary is the most democratic and best route, while Russia’s approach was far less satisfactory, since privatization was the main factor. The proof of this is that the list of the richest central and east Europeans contains few Hungarians, although it is packed with Russians. In Hungary, property acquisition was a far more organic part of the overall social changes. (HVG, Read more)

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