When socialism meets capitalism: Post-socialist transition and labor relations in Hungary

This study undertakes to find the uniqueness of emergent post-socialist relations as formed by the interaction between the socialist past and the capitalist present. I address a question growing from Western European experiences of labor movements that needs to be reexamined in the post-socialist setting: given that the ideological fuel of Western European labor movements was provided by socialism, how does the past experience of socialism--now officially discredited in this former socialist country--affects the formation of labor relations?; This study gives an answer to this question through a case study of three Hungarian companies: two privatized companies and a state enterprise. My cases reveal how managerial rationality is exercised in a way to consolidate managerial power and also how it is seriously challenged by labor with organized power.; First, in the small-scale employee-owned company the most-despotic nature of managerial domination quickly emerges and management exercises a crude version of managerial rationality, simply equated with a drastic reduction of labor force. Second, in the joint-venture, run by professional managers trained in a multinational corporation, managerial rationality is hegemonic because there is a wide consensus in the company that capitalist principles of organization are superior to those of socialism, especially in efficiency and productivity. Third, in the state enterprise, management's rationalization efforts fail, as the organized strength of the unions successfully obstructs rationalization efforts and discredits managerial rationality. Management's role in the company is reduced to that of a caretaker and unions bring back elements of the welfaristic and paternalistic state--a tradition established during the socialist era. The unions also manage to introduce their own version of rationality that is largely based upon an egalitarian principle.; The generalization that I infer from my findings is that labor, when it is equipped with organizational strength, draws on the past experience of socialism, especially the tradition of the paternalistic employer, in an effort to come up with ideological tools to counter capitalist managerial ideology which now appears hegemonic in the industrial sphere.