The role of money in hungary

Abstract

It is well known that in the traditional system of central planning money continues to function, but its role is subordinate. Earlier it was directly said, that ‘it is not possible to eliminate money immediately after the socialist revolution’.’ ‘ Contrary to capitalism, where money turns into capital and is the means of expropriation of un-paid alien labor, in the socialist economy money is means of economic development corresponding to the interest of the masses and of national planning, and of accounting the commodity production and trade.” Money has functioned undisturbed after the socialist turn-over in every country indeed. Scholars both in East and in West are speaking about the passive role of money or about the semi-monetized economy.3 The subordinate role of money is not in contradiction with the fact that the center often has exerted pressure upon the enterprises rather through money than through the sometimes contradictory physical targets in the national plan.4 Albeit the system of mandatory planning did show some success, it was never able to satisfy the needs of the people nor to construct well functioning links between people and actors. Thus it was - against its promises - never able to increase efficiency and to develop the delight of creative work substantially. Inadequacies are thus leading to necessity of reforms when the reserves for extensive (thriftless) development are exhausted. One of the main questions of reform is the role of money in socialism. Due to the economic dis