Bland Title Belies Thought-Provoking, if Depressingly Ominous, Contents

In 2017, Poland experienced 1,556 strikes, more than neighboring Germany, at 1,170, and vastly more than the United Kingdom at 79. Meanwhile, in Hungary that year, workers downed tools a mere five times, the Czechs just twice.

In May 2018, 11,237 patients, paid-up members of the Hungarian National Health system, needed cataract surgery. They had an expected waiting time of 92 days, although the 76,225 people who had undergone the operation the previous year had only hung around half that time.

The number of illegal border crossings into Europe’s Schengen zone totaled 72,437 in 2012. By 2015, this number had increased by a factor of 25 to hit 1.822 million.

What might link and provide context to these three sets of very disparate statistics? Professor Tsuneo Morita has had a very good try at this, and much more, in his recently published book “Political Economy and the Sociology of System Transformation.”

It is a bland title that belies its thought-provoking, if depressingly ominous, contents. A native of Japan, Morita first sallied into the Soviet Union and Central and Eastern Europe in 1968 as an English interpreter for a large Japanese delegation.

As fate would have it, he’s since spent 33 years in Hungary, working variously as an economic attache for the embassy of Japan, an adviser at the Nomura Research Institute, and as Senior Adviser to software developer Tateyama R&D Europe.

Thus, for more than half his professional life, he has been watching the vast changes across the region in general, and Hungary in particular, first hand. The experiences and contacts he has made along the way make this book a rich mixture of academic insight, leavened at times by examples of human ingenuity and brilliance, though more frequently by incompetence, vanity, foible, and outright greed.

Absenteeism

Who would know, for example, that when Panasonic built a factory in Plzen, in the Czech Republic in 1998, that the company suffered an absentee rate of over 30%? Or indeed that in Hungary, such rates, at least when he was chairman of the Japanese Chamber of Commerce, though better than the Panasonic case, were still in the range of 15-20%.

These business-crippling numbers were, and to some extent still are, he argues, aided by generous sick-leave conditions and what he terms “the guest worker phenomenon,” whereby employees of multinationals feel alienated from their employer and more like expatriate workers in their own country.

Indeed, Morita, though once an advocate of foreign direct investment, reveals he is today highly skeptical of its ultimate efficacy in solving the country’s economic needs, particularly in the manufacturing sector, which he effectively comes to dismiss as a ‘screwdriver economy’ - though he does not use the term.

(In this, however, he ignores the rise of research and development activity increasingly undertaken by foreign investors in Hungary. Your correspondent, for example, interviewed engineers working on self-driving car technology with Robert Bosch in Budapest as early as 2008.)

But if foreign investors are not all they are made out to be, for Morita governing politicians and their advisers are an even more caustic influence on the long-term development of the Hungarian economy.

Morita savages the rise of what he terms the “treasurized economy” in Hungary, whereby domestic companies rely more on state contracts and subsidies obtained through political connections rather than developing high-quality goods and services that fulfill customer needs both at home and abroad.

“I stipulate that an economy in which public orders and subsidies from central and local governments determine the success or failure of a business is neither a market nor a capitalist economy, but a ‘treasurized economy.’ The treasurization of the national economy is a special phenomenon born in a small country in Central Eastern Europe,” he intones, later lamenting that it is a trap and “not easy to get out of this vicious circle.”

Treasure-trove

The book is a treasure trove of post-war political history, with a variety of statistical information (for example, a summary of general election results since 1990, pp 200) plus background context and anecdotal narrative otherwise difficult to find, if not wholly unavailable in English. Invariably, despite the odd syntactical or style blip, this is a delight to read, most especially for a Hungarophile.

Morita brings to life, for example, the name of István Bibó (the hallowed “patron saint” of Fidesz in the party’s formative years) with a delightful summary of the political scientist, sociologist, and expert on the philosophy of law taking up just one page. He describes how, for example, that Bibó “hid in the basement of the Budapest Protestant Seminary until the war ended” after his detention by the Nazi authorities in October 1944?

The author assembles many such insights and observations up to modern times: thus, there is an analysis of the “Borkai sex-scandal” of 2019 when a video emerged of Zsolt Borkai, mayor of Győr, cavorting with escorts on-board a luxury yacht in the Adriatic.

(Politicians and professionals associated with all parties come in for lashings from Morita, but he’s particularly strong on the Fidesz-dominated years since 2010. He is, however, sympathetic to the government regarding the 2015 “migration crisis.”)

Sadly, this otherwise excellent read is marred by one glaring factual error, I suspect probably originating from a translation mistake. On page 107, Morita alleges that András Simor, the then governor of the Hungarian central bank, “was forced to resign after the establishment of the Fidesz government when it was revealed that he had assets in Cyprus (2010).”

This is patently false. While there was undoubtedly enormous pressure from the moment Fidesz took power on Simor to resign, there was no evidence that these assets had been accumulated through other than legal means. (Simor had been a well-paid professional all his life; indeed Morita states that in 2009, Simor’s official monthly salary as MNB governor was HUF 8.1 million (EUR 40,000), hardly a pauper’s income, even in Western Europe.) Simor did not resign but remained at his post until the end of his designated mandate at the beginning of March 2013.

This error apart, Morita’s tome is a fascinating read, and his insights and conclusions will hopefully inspire more research that will further help English-speaking readers better understand the complex political, financial, and sociological changes that swept through Soviet-dominated Europe in the last decade of the 20th century.

The author told this correspondent that after publishing the Japanese version in March last year, he had no intention of producing an English edition. “My Japanese colleagues recommended this,” he said. We are fortunate that Morita has such wise compatriots.

“Political Economy and the Sociology of System Transformation; Thirty Years of Social Change in Central Europe,” 380 pages, is available from the Balassi Kiado, Budapest, Hollán Ernő u. 33, 1136 balassikiado.hu/2-konyveink

This article was first published in the Budapest Business Journal print issue of July 30, 2021.