Four characteristic features. Development in Hungary from the aspect of political economy - II.

János Kornai

Gradualism and organic development also distinguish the transformation of property relations and institutions. Hungary's long reform­socialist phase was not followed, after the political change, by a leap towards a market economy, although the transformation became faster. The article shows how gradualism applies to the proliferating of privatization, with its wide variety of selling strategies, to the foundation process of new firms, to the course of liberalization, and to change in the legal infrastructure. It analyses the effect on Hungarian economic policy of corporatist elements which strengthen during the transition. Finally, it makes some comments summing up Hungarian development in terms of political economy and political philosophy. The government at any time in the last thirty years showed an obvious preference for putting off radical measures and accepting an accumulation of social debt as a way of averting conflict. The article notes differences of time preference between generations and the ethical problems these raise. Finally, it makes remarks on the relationship between democracy and an administration intent on unpopular measures opposed by a high proportion of citizens.

Is the world on a forced path?

András Bródy

It is the downward branch of the long economic wave, rising after World War II and reaching its peak in the mid­seventies (the fourth recognized Kondratiev cycle) that determine everywhere the flexible but not transgressible limits of economic life today. There are, however, some indications that the slowdown of growth is even steeper than usual. Maybe, having arrived at the turning point of some not yet recognized economic swing, we have reached the limit of a new era. The particular and unusual proportions the huge difficulties and possibilities posed deserve our attention. All these we experience as external coercion, a crisis upsetting and even destructing the old relations and ways of life. This is why, setting out from the ideas of R. G. Hawtrey on the money­governed economy, we outline the first and admittedly rudementary logical­mathematical forms of such a long­term swing. This model leads to a fluctuation of about two hundred years. In its last phase the unusually high rate of return (interest) on monetary assets puts a brake on the growth of the basic and traditional branches of the economy. By demanding higher than average returns it forces a radical change not only in everyday actions but also in the mode of our thinking about them.

Privatization in China: facts and assumptions

Gyula Jordán

The Chinese leadership set as its objective to bring about a socialist market economy, but it is reluctant to acknowledge the justification of privatization (even avoiding the use of the term). The author attempts to show that, inspite of that, a dynamic privatization process is taking place in China, mostly spontanaeously and mostly using illegal methods. In the countryside, beside the official collective ownership of land, the individual rights to land are gaining ground in various forms. And the collectively owned village enterprises are, in many cases, in fact in private ownership. But the concealed privatization of large volume is actually going on with state enterprises, causing huge loss of capital.

Our state of health - as reflected by our expenditures

Ildikó Ékes

The authoress reviews in her article - the results of a survey - commissioned by the National Health Service - of tendencies in expenditure on health. Because of the deteriorating financial situation of families, most of the households have no longer free resources, relying on which they could contribute to the financing of health services. Beyond that the family purse does not allow payments for several goods and services that would facilitate the preservation of health. If the declining groups of the population were forced to pay for the health services, they would drop out of the system - and this projects grave economic and social problems. Ever more of these people will be forced out of the labour market, because they cannot have treated themselves in time and, precisely for this reason, will need the basic services. In consequence, the costs of the Health Service will grow, while its revenues and even those of the state budget will decline.