Alienating Labour

Front matter

International Studies in Social History Volume 22

Workers on the Road from Socialism to Capitalism in East Germany and Hungary

Eszter Bartha Berghahn [Sea]

Contents

List of Figures and Tables Vil Abbreviations Vill Acknowledgement ix Introduction

Welfare Dictatorships, the Working Class and Socialist Ideology:

A Theoretical and Methodological Outline 1

Introduction

WELFARE DICTATORSHIPS, THE WORKING

CLASS AND SOCIALIST IDEOLOGY A Theoretical and Methodological Outline

In the Hungarian ‘hot’ summer of 1989, when the newly formed parties had already agreed with the Hungarian Socialist Workers’ Party (Magyar Szocialista Munkáspárt | MSZMP ]), the ruling Communist Party of the country about the transformation of the political regime from the ‘dictatorship of the proletariat’ to parliamentary democracy and the holding of democratic parliamentary elections, many people in the countryside were still unaware of the forthcoming sweeping political and social changes.! Although the Hungarian democratic opposition was concentrated in the capital, there were, however, several signs across the country that displayed the crumbling legitimacy of the ruling communist regime. In the industrial town of Gyór the recently launched oppositionist journal entitled Tér-kép (Map) put forward a provocative question to its audience: *Would you call the capitalists back? In an important industrial town and after many years of communist propaganda, it is less of a surprise that most of the respondents analysed the question from the perspective of the workers. The conclusion is, however, more surprising or at least detrimental to official socialism, which was the dominant legitimizing ideology of the regime,” because the majority of the respondents argued that workers would benefit more from a capitalist regime than they did from socialism:

If one provides for the workers the same way as Zwack promised on TV, he can come tomorrow. Many Hungarians have been in the West and everybody can see the standard of living and social security there even if there is unemployment. I have read somewhere that the labour movement achieved real results precisely in the capitalist countries. And I don't think that the defence of the workers' interests would be only demagogy on behalf of the capitalists.?

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That the above opinion was indeed widespread in the county of Györ- Sopron, whose centre was Győr, had been confirmed in an interview with Ede Horvath, the chief manager of Raba Hungarian Wagon and Machine Factory ( Rába Magyar Vagon-és Gépgyár, Rába MVG), the largest factory in the county, which he gave to the same journal. In many aspects Horvath was an emblematic figure of the attacked regime. A former Stakhanovite, who started working in Raba as a turner, Horvath’s life followed an exemplary communist career: after serving in different managerial positions in the 1950s, in 1963 he was appointed the chief manager of the Wagon Factory. Later he was also elected onto the Central Committee of MSZMP, a position that he held from 1970 until 1989.* He was also nicknamed the ‘Red Baron’: this was a reference not to his lifestyle — because contrary to the image of the ‘idle and corrupt’ cadre, which was widely criticized not only by the hardliners (‘dogmatic’ or ‘orthodox’ communists )° but also by the leftist critics of actually existing socialism, Horvath was a workaholic, who led a disciplined and modest life — but to his high power position in the party and the county. At the time of the interview he was increasingly attacked for his prominent political role. Horvath agreed to give an interview to the oppositionist journal with the purpose of defending himself against the charge that he held to be the most unjust and undeserved: he was accused of pursuing an ‘anti-worker’ policy. In the interview Horvath, who never denied his working-class origins and background, protested not only against this charge but he also sought to find an explanation for the ‘pro-capitalist’ feelings of the workers of his factory:

At one time we tried to motivate the people with the slogan that the factory is yours, you are building it for yourself. This did not prove true. People are interested in two things: that they have honest work and they receive fair wages. If these two are fulfilled, they will regard their workplace, if not the factory, as their own. And then they will be satisfied and their political attitudes will reflect their content. We could not provide this, and we continuously darkened the political climate. This partly holds also for Raba. Despite the fact that we pay honest money in comparison to the national wages, we could not solve this problem completely. I said for a long time that we would pay a very heavy price for cheap labour. But I am not to blame for the fact that today there is a bad political climate for the regime in every Hungarian factory."

The local drama was not yet finished. The trade union supported the workers’ strike in the Mosonmagyaróvár Tractor Factory, which belonged to Rába - a protest act which would have been unthinkable at the heyday of communism, when the party held the trade unions under its firm control. The conflict eventually led to the resignation of the charismatic

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leader of the factory, who had been elected ‘man of the year’ in 1986, in acknowledgement of his managerial success: the enterprise council asked him to retire, to which he agreed on 18 December 1989.’ In the political atmosphere of 1989 it was unlikely that he would have ever kept his position.?

The above documented local conflict was indicative of the crisis of actually existing socialism, which unfolded on a significantly larger scale in other East European countries, where the change of regimes was triggered not by parliamentary negotiations like in Hungary but by mass demonstrations and large, widespread and sometimes violent protests like in Czechoslovakia, East Germany, Poland and Romania.’ The history of the collapse of communism in Eastern Europe has been narrated several times, from different disciplinary and methodological perspectives. The history of the workers under late socialism is, however, either underrepresented or, asin the Hungarian case, is outright missing from the otherwise vast literature on the demise of the East European socialist regimes.!? The contention of this book is that a careful examination of the micro histories of two large factories, one located in Jena, East Germany (Zeiss) and the other in Gyór, Hungary (Rába) offers novel insights into the nature and politics of these regimes as well as the causes of their rapid and apparently unexpected collapse — which has been confirmed by many contemporary Observers and Western scholars of the former communist bloc.!! In what follows I will elaborate three main themes, which are directly connected with the design and presentation of my research based on the two aforementioned factory case studies. Firstly, I will introduce and explain the terms ‘welfare dictatorship’ and the ‘party’s policy towards labour’ in a historical context. Secondly, an attempt will be made to elaborate the claim of there being a relative lack of literature on the workers in the examined period as well as to designate the key themes of inquiry. Thirdly, I will justify the comparison of the two countries under examination — East Germany and Hungary - as well as reflect on the applied methodology.

After the Bolshevik revolution of 1917 when the ‘impossible became possible’ many people for a long time continued to believe that the new, socialist society would be capable of changing the basic needs of human beings, or at least the ways of satisfying these basic needs." In an illuminating study Somlai shows how over-zealous party functionaries sought to realize the model of an ideal ‘socialist family’ and force people to a large, common household, where workers have their meals at their workplaces and they send their linen and dirty clothes to the socialist laundries (‘where more clothes were spoilt and more were stolen than what were washed’ — as Trotsky later ironically commented).? Kotkin depicts with a similar insight how the State attempted to raise ‘the socialist man’ in

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Magnitogorsk, who has different, higher cultural and educational needs than an exploited wage worker, and he is motivated not by material incentives but he works unselfishly for the new, socialist regime.'*

The pioneers could still believe in this naive ideology; but time shortly showed that the universal liberation and emancipation of the working class, which the Marxist programme envisaged, was not realized in the Stalinist regime. A theoretically influential answer to Stalinism was given by Trotsky in his famous critique, The Revolution Betrayed (1937) that he wrote in exile.’* The work was not only meant to be a fierce polemic against his victorious political rival, but the author had the more ambitious goal to understand the social roots of Stalinism which he linked with the ‘degeneration’ of the revolution. Trotsky concentrated on the issue of property, arguing that, contrary to the original Marxist programme, it was not the working class which took control of the means of production, but the Stalinist nomenklatura. The bureaucrats themselves were not proprietors, but their control of redistribution enabled them to appropriate surplus and reproduce social inequalities. Even though Trotsky used the term ‘state capitalism’, he claimed that the nomenklatura has not yet reached the stage to be called a new class. Only if they restored the old forms of private property relations could they be called proper capitalists, which, unless prevented by the Soviet people, would have meant the betrayal of the October revolution."

Stalin, however, had a major advantage over his theoretically more trained and respected rival: he succeeded in finding an answer to the question of how to implement socialism in one country after the world revolution, in which Lenin and the Bolshevik leaders believed, had failed to materialize. Being conscious of the economic backwardness of Soviet Russia, Stalin gave priority to *catching-up' development (the task of catching up economically with the advanced Western capitalist countries) over the original emancipating goals of Marxism." The ‘revolution from above’, which Stalin led from 1929, combined a radical change of property relations (the prohibition of the private ownership of the means of production and labour) with a gigantic programme of extensive industrialization and collectivization, which demanded enormous social and human sacrifices but it quickly and drastically transformed a backward, predominantly agrarian country into a nation, which in the Second World War triumphed over the leading industrial and military power of Europe.!? Some Western authors called the Great Patriotic War the ‘acid test? of Stalinism.”

The victory over Nazi Germany enabled Stalin and the Soviet Union the export of the Stalinist regime, albeit it was only with the outbreak of the Cold War that Stalin demanded an exclusive communist influence within the East European bloc. The Stalinist programme of extensive in-

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dustrialization and collectivization was adopted in all socialist countries, with the exception of Yugoslavia, which Stalin solemnly excommunicated from the communist bloc. The Stalinist experiment in Eastern Europe undoubtedly had important emancipatory achievements. The Hungarian sociologist Ferge wrote:

We have done an honest survey of social inequalities in Hungary and at the end of the 1960s we could even state that poverty continued to exist in socialist Hungary. We, however, did not put another question, which at that time would have been viewed as flattering to the ruling regime: why and how social inequalities — and with them, poverty — could have been decreasing so radically in comparison with prewar Hungary? Even today we have no valid answer to this question.”

There were, however, important social differences among the working classes of Soviet Russia, East Germany and Hungary, who had to build a socialist regime, where the working class is the ruling class — as was widely propagated by the official Marxist-Leninist doctrine. In the political sphere, the ‘dictatorship of the proletariat’ was not attained by the working classes in East Germany or Hungary but it was forced upon them by their communist dictators, who enjoyed the confidence and support of the Soviet Union. Whatever myths the local party leaders created about the ‘new socialist man’, the Berlin working-class demonstration in 1953 and, even more radically, the Hungarian revolution and freedom fight of 1956 where the majority of freedom fighters came from the working class,” clearly demonstrated that many workers thought they had lived better in the past regime than under socialism. The widespread working-class protests in the East European countries proved the opposite of the communist propaganda, which celebrated the birth of a ‘new, socialist hero’: that people had the same needs in the socialist countries as under capitalism, and they wanted to consume not differently but in the same way as their counterparts in the Western, capitalist countries. After the Hungarian revolution of 1956, slogans such as ‘socialist lifestyle’ and ‘socialist family’ could only occur in the vocabulary of agit-prop”? and in political jokes.??

Janos Kadar, the Hungarian party secretary, who reorganized the Communist Party after 1956 and changed its name to MSZMP,” was fully conscious of the political mood of the working class. After the violent suppression of the revolution, Kadar quickly became one of the most — if not the most — hated leaders in Eastern Europe.” He, however, succeeded in rebuilding the party as the main instrument of power and, more importantly, he won popularity by consolidating the economy and satisfying the most important material demands of the working class. This

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was reflected in the 1958 resolution on the working class, which determined the party’s new policy towards labour. Workers’ wages significantly increased, and further pay increases and a continuous improvement in the standard of living was promised to the population — with the condition that the working class would be the main beneficiary of the government’s new standard-of-living policy.” An ambitious state housing construction programme started, with the main focus on Budapest, the capital city, where workers’ living conditions were particularly poor and inadequate, and many lived in real misery in overcrowded cellar dwellings, which lacked basic comfort (bathrooms and heating), or in workers’ hostels where conditions were often ‘intolerable and unworthy of human beings’ — even in the wording of contemporary party reports.” The resolution also put a great emphasis on the development and support of working-class culture, community building and education: the education of a new intelligentsia, who had working-class roots, was supported through the provision of free and extra classes for working-class children and means of positive discrimination (at the universities and colleges special quotas were set for working-class children). The high leadership of the party was determined to put the resolution into practice: national surveys had to be conducted at regular intervals in order to ensure the implementation of the policy towards labour.??

The term ‘welfare dictatorship’ derives from this new, consumption-oriented policy of the party towards the working class, as well as from the recognition that the workers’ needs under socialism failed to develop differently than under capitalism. Rainer argues that Kadar sought to win over all segments of the population (at least those social strata who were not directly opposed to socialism);? I, however, attempt to show that the ‘workerist’ ideology?? that the party advocated was not only an integral element of socialist propaganda (at least until the end of the 1970s) but it reflected a social reality. The party held the large industrial working class to be the main social basis of the regime; therefore, it concentrated its welfare policy on this group. Having failed with the project of creating a new, socialist man and building a classless society as envisaged in the Marxist programme, the party sought to offer material concessions to the working class in exchange for their political support, or at least quiescence.

As the 1956 revolution showed, workers had not only economic but also political demands. The demand for national independence and national self-determination was completed with the demand for a change of political structure and enterprise management. As recent studies concluded, the revolutionary intelligentsia and the majority of the working class did not want capitalism back; they supported a reformed, democratic socialism.?! The role of the workers' councils in the revolution gave a fresh

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impetus to the theoretical debates about workers? self-management.* In many places workers’ councils continued to maintain control of the factories even after the defeat of the revolution, and the Kadar regime could consolidate its power only by satisfying a significant number of working-class demands.??

After the official dissolution of the workers’ councils in 1957,** there were at least formal attempts to increase enterprise democracy. These councils had been formed as revolutionary organs to replace the so called ‘shop triangle’, which effectively secured the state and party control of the factories. The ‘shop triangle’ consisted of the state management, the party secretary and the secretary of the trade union committee. The secretary of the newly established communist youth organization (Kommunista Ifjúsági Szövetség, KISZ) was added to form the ‘shop quadrangle’, and instead of the workers’ councils, enterprise councils were formed to increase the participation of the employees in management. Employees elected one-third of the members of the council and the trade union delegated the other two-thirds. The managers, the party secretary and the secretary of the KISZ were officially members of the council. The chairperson was the secretary of the trade union committee. The enterprise council had the right of oversight over issues of economic efficiency, it received reports on the management of the enterprise and decided the distribution of bonuses and the social and cultural funds. The managers were accountable to the enterprise council.

The reality of enterprise councils was, of course, distant from ideas of workers’ self-management, and they were soon reduced to a formal role. Since they were regarded as institutions parallel to the trade union, they were eventually placed under the direct control of the trade union committees. The appointment (or replacement) of the managers was decided state leadership trade union state leadership party trade union party League of Communist Youth 1. Shop triangle 2. Shop quadrangle

Figure 0.1 Two models of enterprise management

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by the central authorities? and not the trade union; thus, the criticism of the managers was often a theoretical right that few people exercised.*° Although in the 1970s there was an academic debate about the scope and nature of enterprise democracy, state — and thus party — control of the factories remained unchallenged.*”

After the revolution of 1956, the concept of workers’ self-management was discussed only in narrow intellectual circles, and there is no evidence that these debates reached the workers themselves, nor did they become well known at the shop floor. The programmatic essay of George Lukács, Demokratisierung heute und morgen (1968)? in which he argued that the direct control of producers could establish a more democratic society without returning to capitalism, was published in Hungary only in 1988, when the restoration of private property relations was already on the political agenda. Socialist alternatives to Stalinist society were widely discussed and partly experimented with in Poland and Yugoslavia, but since they had even less influence on the two examined cases than the tradition of the workers’ councils, the present chapter omits the introduction of these debates. While in Hungary the improvement of enterprise democracy appeared at least among the political slogans and was discussed even in the executive committee of the county, in the GDR there is no evidence of any criticism of the existing structure of enterprise management in the official discourse or on the shop floor. While dissident intellectuals voiced their criticism of ‘actually existing’ socialism, the party in both countries succeeded in confining any critical discussion to the academy (in ‘liberal’ periods), or critical intellectuals were silenced, persecuted, imprisoned or forced to emigrate.* In both cases it can be argued that even though there was an intellectual tradition of criticism of Stalinist society, the idea of self-management could not be embedded in the consciousness of the workers because the political regimes effectively prevented any public discussion of left-wing alternatives to their system.*°

From the 1970s, Erich Honecker implemented the East German variant of the standard-of-living policy. Immediately after his takeover he increased the rate of growth of consumption. The new draft of the Five- Year Plan put increases in consumption at the head of the national tasks; this was the first time that a Five-Year Plan had put the rate of increase of consumption above that of investment. In 1971 Honecker announced that the main task of the Five-Year Plan was ‘the further improvement of the material and cultural standard of living of the population on the basis of the rapid development of the socialist production, the increase of efficiency, the scientific-technical advance and the increase of labour productivity".*' In 1976 he felt confident enough to announce the ambitious programme of the ‘unity of economic and social policy’ (die Einheit von

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Wirtschafts-und Sozialpolitik), which aimed to implement a socialist welfare programme suitable to beat the GDR’s West German rival. Honecker promised ‘a constant improvement of working and living conditions’ to his people, which, according to his later critics, largely contributed to the growing indebtedness of the GDR. Even in the 1980s, when the GDR faced a deteriorating balance of foreign trade, Honecker consistently refused to increase the prices of consumer goods with the argument that the ‘counter-revolutionary attempts’ in the other socialist countries such as Poland all started with the increase of the prices.? The most important elements of his programme to which he remained loyal until the collapse of his regime were wage policy, state housing construction and support for families, with a special emphasis on working women.*

The term ‘welfare dictatorship’ is therefore appropriate to describe both regimes, which pursued a similar policy towards the working class. In order to pacify the workers and preserve the status quo in the power structure, both regimes were willing to give concessions to consumerism; and, moreover, they were constantly worried that left-wing critics would destroy the consensus, which they held to be the basis of their political rule. There is evidence from both countries that repression was used against left-wing critics of the system, which was occasionally harsher than the retribution they handed out for ‘Western revisionism’. In Hungary for example, Miklós Haraszti, the author of A Worker in a Workers? State (1977), was also held to be a left-wing dissident and prosecuted on that basis.** In the GDR there was the case of Matthias Domaschk, a young worker from Jena, who joined a commune at the beginning of the 1980s. Because of his alternative looks, dress and political views he was placed under police supervision. After travelling to Berlin by train to visit his friends at the time of a party conference, he was arrested and subsequently he committed suicide in custody. There is an archive in Jena, which bears his name (Thüringer Archiv für Zeitgeschichte, Matthias Domaschk).

The thesis that the present book will demonstrate through an in-depth analysis of the party's policy towards labour and the local implementation and reception of this policy is that the welfare dictatorships were open to the right (towards consumerism) while they remained closed to the left, effectively blocking the public discussion of any leftism other than the official legitimizing ideology. Official socialism was, however, increasingly undermined by the wide gap between the practice of welfare dictatorships and the egalitarian socialist project." It well describes the extent to which people became disappointed with “actually existing’ socialism in Hungary, and many workers thought that there was more social justice and a better life for them in a capitalist society than in a socialist one (as is shown by the answers to the question ‘Would you call the capitalists back?’). East

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German interview partners would repeatedly tell me that it was only after they started to live in capitalism that they believed the Marxist critique that they had learnt at school. Burawoy, who conducted fieldwork in Hungarian factories, among others the Lenin Steel Works, recorded that the workers persistently asked the American professor how much money a worker earns in the United States, while they forgot even to mention the proud achievements of the socialist regime such as free health care, education and highly subsidized cultural products (theatre, concerts, books, cinema), let alone the scale of social mobility after the Second World War, which was unparalleled in Hungary." While welfare dictatorships did establish social peace, in the long run they paved the way for capitalism because they essentially failed to demonstrate a viable socialist alternative. After they could no longer increase the standard of living of the people, they lost popular support. As a result, by the time the authority of the communist parties collapsed, the majority of the workers did not see capitalism as a major enemy; and many expected that they would be better treated under capitalism than under socialism because they saw that the standard of living of the workers was higher in West Germany and Austria than in the GDR or Hungary. Western shops and supermarkets, which were full of goods, were better at convincing people of capitalism’s apparent superiority over the bankrupt socialist economies.*”

By turning the attention to the experience of the socialist working class, the book seeks to raise new questions, which examine the history of labour in the region from novel perspectives. In Hungary, like in other socialist countries, working-class histories were characterized by an ideological approach both under state socialism and after the collapse of communist regimes. The East European Communist parties everywhere claimed that the working class was the ruling class; the thesis that the struggle of the working class against capital triumphed under the leadership of the party became part and parcel of the official legitimizing ideology of the regime, and it became a recurring slogan of the official communist agitation and propaganda." Thus, any researcher who came to a conclusion which contradicted this official socialism risked his or her academic career, at least behind the iron curtain. Even in the face of repression, however, internationally recognized studies were written on class and socialism in the ‘merriest barrack’ as Kadar’s Hungary was nicknamed at the time. The Hungarian sociologist Kemény conducted fieldwork in various working-class communities. His research led him to the conclusion that the Hungarian working class, which was formed as a result of the extensive communist modernization project, was recruited predominantly from the peasantry, and many of them continued to preserve the original peasant culture and lifestyle. He also identified impor-

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tant factors in the stratification of the working class (origin, living place, skills, education, family size and the nature of work). Kemény eventually came into conflict with the regime because of his research on poverty; his claim that poverty continued to exist in socialist Hungary triggered sharp political responses, and he was forced into emigration.

Ferge was one of the most distinguished scholars of the Marxist structuralist school, which obtained international reputation after the reinstitutionalization of Hungarian sociology." Her research showed that the orthodox communist class distinction (two classes: workers and peasantry, and one stratum: intelligentsia) was not adequate for the structural description of socialist society. She distinguished between hierarchical occupation groups, which replaced the old and useless model.*! One of her main achievements was the study of educational inequalities: she showed that after a brief postwar period characterized by educational mobility, cultural capital became again inheritable, and the children of intellectuals were more likely to enter higher education than the children of less educated social strata.??

The third school was that of industrial sociology. Raba was the focus of sociological research as a model factory under socialism. Makó and Héthy conducted a pioneering study of the plant in the early 1970s, which led to official discussions on the informal bargaining power of groups of workers who were highly skilled or who occupied other key positions in production. Mako and Héthy published their first report of the research in English in 1972. Héthy later studied other groups of workers in the construction industry to prove the thesis that workers who were indispensable for production because of their skills or their advantageous position in the production process could successfully represent their interests in wage disputes even against the enterprise management.”

The ideologically more rigid GDR tolerated far less deviance in this respect than Hungary. After a brief period of cultural liberalization, Honecker tightened the ideological grip of the party over the intellectual life of the GDR: the surveys of the Institute for Public Opinion Poll ( Institut für Meinungsforschung) bear the label of ‘strictly confidential’ although the authors of the reports did their best to demonstrate the development of socialist consciousness in the GDR: in 1968, 65 per cent of the respondents thought that the GDR was more developed socially than West Germany, while in 1973, this ratio grew to 72 per cent. We have to add, though, that 20 per cent of the workers chose not to give an answer to the question of whether socialism would dominate future development." The ideologically repressive climate continued to dominate Honecker's state: Eberhard Nemitz conducted a survey among East German trainees, in which he found that the majority of the respondents had a positive at-