The Role of Civil Law Institutions in the Management of Communist Economies: The Hungarian Experience

Abstract

In the last decade, Communist economies of the Soviet type have been introduced into Hungary and six other European countries, Poland, East Germany, Czechoslovakia, Romania, Bulgaria, and Albania. In these economies, one of the most important tasks of the government and of the supreme political power, the Communist Party, is the direction of all economic life. The government regulates concrete questions of economic management; political leaders make speeches expounding different methods of solving economic tasks. The development of these economies depends to a great extent on the success that these methods of economic organization will have. However, more is involved than simply the economic life of several countries. An experiment is being conducted in a system of economic organization that claims superiority on a world scale. This article does not consider all aspects of the workings of the Hungarian economy. We investigate the place and role of the or private institutions in societies, such as the Hungarian, in which economic life is centrally planned and directed. The law of contracts, as the West knows it, is an instrument of a liberal society and a free market economy. What functions can contracts serve in Communist societies and what happens to contract institutions, doctrines, and techniques when such societies have recourse to them? These larger problems are illuminated by considering the use in Communist economies of the so-called economic contract and related institutions. Such expressions as law, civil-law sanctions, and the like are used throughout this paper. These are translations of the terms grazhdanskoe pravo, das Zivilrecht, obcanske' pra'vo, and polgdri jog, used in the Soviet law and in the various Eastern European Communist systems. In legal systems of the Soviet type, the concept of civil law operates to exclude a particular subject from the scope of the administrative law. Civil has thus a meaning very different from that given it in the Western world; the term often includes matter which