The Value of Labor

The Science of Commodification in Hungary, 1920-1956

Martha Lampland

• Publisher: University of Chicago Press
• Year: 2016
• ISBN:
  9780226314747
• Topic: History
• Subtopic: World History
• Index: History

At the heart of today's fierce political anger over income inequality is a feature of capitalism that Karl Marx famously obsessed over: the commodification of labor. Most of us think wage-labor economics is at odds with socialist thinking, but as Martha Lampland explains in this fascinating look at twentieth-century Hungary, there have been moments when such economics actually flourished under socialist regimes. Exploring the region's transition from a capitalist to a socialist system—and the economic science and practices that endured it—she sheds new light on the two most polarized ideologies of modern history.
Lampland trains her eye on the scientific claims of modern economic modeling, using Hungary's unique vantage point to show how theories, policies, and techniques for commodifying agrarian labor that were born in the capitalist era were adopted by the socialist regime as a scientifically designed wage system on cooperative farms. Paying attention to the specific historical circumstances of Hungary, she explores the ways economists and the abstract notions they traffic in can both shape and be shaped by local conditions, and she compellingly shows how labor can be commodified in the absence of a labor market. The result is a unique account of economic thought that unveils hidden but necessary continuities running through the turbulent twentieth century.

PART ONE

1

Moral Imperatives, Political Objectives

Agriculture was the backbone of the Hungarian economy, the productivity of labor its Achilles heel. Bemoaned as the “country of three million beggars,” Hungary suffered from a surfeit of labor and a paucity of enthusiasm for modern business. Large manorial estates sprawled across the countryside, relying on an indifferent community of impoverished rural families to farm the land, while peasant landowners struggled to make do. Proposals to remedy the problem fell into two broad camps: advocates for land reform anticipated the growth of an intensive peasant agriculture while proponents of scientific engineering imagined a highly rationalized sector of large agrarian enterprises. The debate over these alternatives during the interwar period was framed in terms of economic advantage, both sides citing numbers and graphs to bolster their claims. The divisions, however, were grounded in deep moral convictions about the dignity of labor, the right to property, and the national purpose. Land reform advocates were associated with left wing politics; those endorsing rationalized modernization were strongly committed to conservative, right wing politics. At the end of World War II, the political compass of the debates pointed in new directions. Scientific rationalization became the byword of the Communist Party, making them strange bedfellows with conservative champions of capitalist business whose modernist vision supported collectivization in the late 1940s. Those who received land in the land reform in 1945—most of whom had numbered among the agricultural proletariat—did not vote in the 1947 elections for the Communists but sided with parties on the right guaranteeing property rights. As we shall see, this about-face makes sense once the principles debated in the 1920s and 1930s are outlined. In the following chapter, I will discuss four crucial points of disagreement between the two factions during the interwar period—(1) economies of scale, (2) standard of living, (3) property rights, and (4) morality and the demographic crisis—to show how the debates unfolded. Arguments were legion but shared a common language: a reliance on statistical data and, when that was lacking, a recourse to complex commensuration exercises to produce comparable numbers. After the war certain claims lost legitimacy, such as arguments about property and race; institutions with which claims to land were associated, such as the Catholic Church, were subject to open criticism by social reformers and leftist politicians. Yet the core of the economic argument on behalf of large-scale production continued to be legitimate in the eyes of agrarian economists and work scientists, their position strengthened when thousands of new property owners failed to establish viable farms by the end of the 1940s.

The Lay of the Land

The Austro-Hungarian Empire collapsed at the end of World War I. New nations were formed, such as Czechoslovakia and the Kingdom of Serbs, Croats, and Slovenes, while the territory of Romania vastly increased by absorbing the territories of Transylvania and Bukovina. Hungary shrunk to one-third its prewar size, losing thousands of acres of plowland, meadows, and forests. In the decade following the war land reform was enacted by virtually all countries in the region, but Hungary’s conservative forces forestalled any significant change, leaving it with the most skewed distribution of property in Central Europe. Close to 75 percent (74.7) of the farms in Hungary had less than 5 kh (2.85 ha).1 These small holdings covered only one-tenth of the land under cultivation. At the other extreme, we find that more than a third of the land (37.7 percent) was distributed among 0.15 percent of the total number of farms in the country. Farms between 50 and 100 kh (28.5 and 57 ha)—i.e., those considered large enough to be self-supporting—were scarce; they constituted only 1 percent of the farms and covered only 6.4 percent of arable land (Kerék 1939, 300; see table 1.1).

TABLE 1.1. The size and number of landed properties in Hungary

Size of properties		No. of farms	%	Acreage		%
kat. hold	hectare			kat. hold	hectare
below 1	below .57	628,431	38.5	236,417	134,758	1.5
1–5 kh	.57–2.85	556,352	34.2	1,394,829	795,053	8.7
5–10 kh	2.85–5.7	204,471	12.5	1,477,376	842,104	9.2
10–20 kh	5.7–11.4	144,186	8.7	2,025,946	1,154,789	12.6
20–50	11.4–28.5	73,663	4.5	2,172,300	1,238,211	13.6
50–100	28.5–57	15,240	1.0	1,036,162	590,612	6.4
100–200	57–114	5,792	0.3	805,164	458,943	5.0
200–300	114–171	2,126	0.1	516,875	294,619	3.2
300–500	171–285	1,714	0.1	663,676	378,295	4.1
500–1,000	285–570	1,362	0.1	944,250	538,223	5.9
1,000–2,000	570–1,140	581	—	798,490	455,139	5.0
2,000–3,000	1,140–1,710	187	—	452,109	257,702	2.8
3,000–5,000	1,710–2,850	117	—	451,376	257,284	2.8
5,000–10,000	2,850–5,700	101	—	680,084	387,648	4.2
10,000–20,000	5,700–11,400	48	—	690,953	393,843	4.2
20,000–50,000	11,400–28,500	25	—	855,106	487,410	5.3
50,000–100,000	28,500–57,000	10	—	671,475	382,741	4.2
above 200,000	above 114,000	1	—	209,256	119,276	1.3

Source: Kerék 1939, 298

Manorial estates in Hungary resembled latifundia and colonial plantations familiar in the New World and Far East: an expanse of land, dotted with small outposts for resident workers, and a wealthy owner or renter rarely to be seen in the estate’s vicinity. Among its residents we would find a steward, ten coachmen, three farmhands assigned to the coachmen, a farm boss, seven general-use farmhands, someone in charge of feed for the animals, two dairymen, three cowboys, two pigherders, and one shepherd. Craftsmen lived on the estate as well. There would be several machinists, a blacksmith, an assistant to the blacksmith, a cartwright with his apprentices, a stonemason, and someone in charge of the warehouse. Two gardeners and two viticulturists would be counted among the specialists employed on the estate. The families of estate workers (cseléd) were housed in isolated clumps of buildings scattered across the land. In the summer months approximately fifty migrant workers would come to do all the fieldwork, and all additional tasks throughout the year would require hiring an additional 3,715 days of adult male labor. In contrast to the workers living on the estate, day laborers lived in nearby villages, whereas migrant workers came from farther away, sometimes far-flung counties in poorer regions.2 Landowners who lived in villages adjacent to or in the vicinity of manorial estates treated estate workers poorly—viewing them as little more than animals—and considered them to be as foreign to the region as migrant workers were, even though their families may have lived on the estate for generations.

Workers residing on the estate were paid on a yearly contract, the majority of which was comprised of goods in kind: a fixed amount of grain (wheat, rye, barley), firewood, and in some cases a kilogram of bacon and a measure of salt. A small amount of cash was allotted to each household. Housing was provided, if one could call it that: four large families lived in one room measuring approximately seven square meters. Families were given the right to a small garden plot and often had the opportunity to raise piglets until the age of one. In exceptional circumstances, manorial residents were allowed to keep a cow for milk. Migrant workers were paid with grains and room and board; only day laborers were paid in cash. What workers earned in yearly contracts or by day labor varied from county to county and sometimes from manorial estate to manorial estate. While the means of recruiting migrant workers resembled a labor market—a labor boss recruited a band of workers every spring—the contractual relationship was usually based on long-term ties between specific villages and particular manorial estates that siphoned off better workers, leaving only a motley crew of obstinate and lazy folk for everyone else. Under these conditions, labor productivity was extremely poor, difficult to improve, and even more difficult to measure. Modernizing production—rationalizing farms to compete internationally—was only a a pipe dream. Undaunted, agrarian work scientists and economic engineers sought to make this dream a reality.

Disagreements Economic and Moral

The conservative government often depicted Hungarian village communities as populated by the self-supporting, proud, and deeply nationalistic peasant landowner, wrapping itself in populist clothing while downplaying the need for land reform. Numerous essays and monographs strongly contested the image of a comfortable peasant lifestyle promoted by the conservative government, penned by leftist social critics known under the collective name of “sociographs” (e.g., Illyés 1936; Kovács 1937; Szabó 1937; see also Tóth 1984 and Esbenshade 2006). The land question was rehearsed interminably in publications of every sort (weekly newspapers, journals, pamphlets, dissertations, and book-length monographs). Academics, businessmen, and political activists of every stripe participated. Those who advocated on behalf of manorial farms included professional economists, religious leaders, conservative nationalists, and intellectuals associated with rightist causes, though their motivations differed sharply. Business economists and work scientists, for example, were primarily motivated by their interests in modernization and improved productivity in agriculture, while the Catholic Church emphasized its moral obligations to society. These claims rang hollow, since “the Catholic Church was one of the largest landowners in Hungary, deriving a good part of its wealth from vast estates in the south and west. Given this vested material interest, the episcopate could hardly support any serious effort at land reform that might improve the lot of Hungary’s ethnic Magyar peasantry and so remained skeptical of anything that smacked of populism” (Hanebrink 2006, 130). Advocates for land reform clustered on the left of the political spectrum, though some conservative religious associations numbered among their ranks. Beyond simple arguments in terms of the equitable distribution of land, many in this camp envisioned a rejuvenated agricultural economy based on small farms specializing in intensified production as an alternative to manorial estates dominating the landscape.

PRODUCTIVITY AND ECONOMIES OF SCALE

The relative advantages of small versus large farms preoccupied those on both sides of the land reform debate. Economic arguments advanced by promanorial advocates claimed that large farms were more productive and offered more stable, secure employment. It was a matter of gospel in this camp that large estates were more able to modernize than small farms, in part because manorial properties were better equipped than their poorer neighbors. To assuage their leftist colleagues, conservative writers were fond of citing the debate Kautsky led over proper economies for agriculture as evidence for their position. Land reform advocates were fully cognizant of the distinct disadvantage small farms confronted in relation to economies of scale. Family landownings—accumulated through inheritance and marriage—were frequently divided up into small plots scattered across the outskirts of the village boundaries. In the absence of any substantial land reform, peasant advocates argued that consolidating holdings would significantly improve the viability of small farms. A popular alternative was a vision of “Garden Hungary,”3 intensifying agricultural production to replace the obsolete “wheat factory” (gabonagyár) model of large estates inherited from the previous century (Kerék 1942, 92). This approach was considered a far more competitive and sustainable model for farming, better suited to the nation’s climate and geographical position within Europe. Moreover, small-scale but intensive farming had the definite advantage of requiring greater labor inputs, a must in a country burdened with an unemployed agrarian proletariat.

The economy of scale argument did not necessarily support the idea that manorial estates should be kept intact, since large sections of land on manorial estates were underexploited. This was particularly true of the larger estates. Approximately one-third of the acreage of manorial estates larger than 500 kh (285 ha) was not cultivated (Kerék 1939, 316); the percentage of land devoted to forests at large estates varied from 12.9 to 42.8 percent (ibid., 302). Smaller properties, on the other hand, devoted a larger proportion of lands to cultivation: “The proportion of land under agricultural cultivation (plowlands, gardens, vineyeards, meadows and pastures) is largest at small farms (87.3–95.8 percent), somewhat smaller at medium-sized farms (78.4–80.9 percent), and much smaller at large estates (50.6–77.6 percent)” (ibid.). The discrepancies in land use were seen as evidence that large estates crowded smaller farms, preventing them from growing into more viable economies of scale, challenging the need to keeping estates intact.4

Policies designed to resettle peasants within the country—to distribute the population more evenly and landownings more fairly—were a recurring feature of debates over agricultural modernization, reaching back into the nineteenth century following the abolition of feudalism in 1848. During the debate over the 1935 settlement plan in parliament, Samuel Mándy rejected the view that large estates crowded smaller farms: “In general we don’t have overcrowded small farms. . . . Even though the price of land is more than half as cheap as before, buyers are as rare as a white raven. Small landowners in particular are hard to find” (Köztelek, 20 Jan. 1935). Mándy overlooked the possibility that lands would not be sold off but simply parcelled out to neighboring communities.

To some minds it was folly to spend huge amounts of money dismantling manorial farms when the money could be better spent improving smaller farms (e.g., Köztelek, 24 Nov. 1935). A smarter way to remove the barriers ...