Employers, Labour Markets, and Redistribution Under State Socialism: An Interpretation of Housing Policy in Hungary 1960-1983

Abstract

This paper seeks to explain the evolution of housing policy in Hungary in order to throw light on the character of redistribution under state socialism, and on the conditions under which employers intervene in the housing sphere. Changes in housing policy are explained by a model which emphasizes developments in the Hungarian economy, such as the rise of the second economy, changes in labour market competition, and the changing power of large firms, and their consequential effects on employer motivation and capacity to intervene in housing to recruit, motivate and retain their labour force. Whereas for Szelényi state socialist redistribution is inherently regressive, the model advanced here both draws attention to variations in the regressiveness/progressiveness of housing policy and offers an explanation of these changes in terms of the changing balance of forces acting on the state, and in particular the importance of large employers and the opportunities open for them to use housing to resolve their labour problems. The greater role of employers in the housing sphere in Hungary is linked to the `resource-constrained' nature of state socialist economies and to the interpenetration of economic and political spheres, and is hence argued to be a structural feature of state socialism.