Polgári Szemle - Archívum - Pénzügyi kormányzás - Gazdaságpolitika

Editor-in-Chief’s Welcome

Polgári Szemle, 18. évf. 1–3. szám, 2022, 10–13., DOI: 10.24307/psz.2022.1102

Journal of Economic Literature (JEL) codes: B20, N01
Keywords: New world order, Russian-Ukrainian war, sustainable economy, Hungary, European Union, China, United States

Just as the Western liberal intelligentsia constantly interprets current world events and expected trends, we the bourgeois-conservative thinkers organized around the idea of a sustainable economy, do the same. However, we believe that the principles of a sustainable economy and the sustainable market economy that will emerge from it will be a real alternative to the neoliberal market economy, which has frequent crises and weak resilience. After all, it has been proven time and again that the excessive autonomy of market players, the resulting market under-information, information asymmetry, and the marginalization of cooperation and the state’s role as a regulator and controller, often lead to crises. And when there is a crisis, the enterprise that has too much management autonomy, or even demands it, immediately calls for state support. This has been the case since 2020, and after the initial crisis years of 2007-2008, just as it was during the Great Depression of 1933-34. In Hungary, we can see that the over-liberalized, imported mode of production that replaced the four decades of the socialist planned economy system has had harmful effects. It has ensured temporary development. It has ensured social catching-up, but only for a narrow section of society not for all society. 

In Hungary, the market economy model based on active state involvement, reorganized after 2010, has delivered results. We experienced the most successful decade of the 100 years after Trianon.¹ There was financial balance, and economic growth associated with it. ² A significant part of the national wealth that had disappeared since the 1980s, especially the strategic sectors, returned to national ownership. Furthermore, most importantly, based on all of this there has been a sustained, society-wide rise in living standards.³

But difficulties came. The COVID-19 pandemic and the accompanying pandemic crisis. Shutdowns forced withdrawal of labor from the labor market and other community spaces. But sectoral wage subsidies have been introduced to protect jobs, at a huge budgetary cost to the state.

We might even have overcome the epidemic and the financial difficulties it caused, but in February 2022, the fights between the Russians and the Ukrainians renewed. The war, on the other hand, is more than a fraternal war between two Slavic nations. From the background, through the United States of America to the liberal elite of the European Union, all political and financial interests intervened, in favor of the Ukrainians. This and the misguided sanctions led to energy supply problems, financial market turmoil and turbulence around national currencies. Input costs in the manufacturing and service sectors are rising sharply, inflation is skyrocketing. If the war drags on, literally. While perhaps unusual on first hearing, a war that hurts everyone may also be a way forward in terms of lifting the veil on the true nature of the neoliberal economic order and the political-financial liberal elite that sustains it.

The status, which the 1944 Yalta Convention projected on Europe, the political-geographic division is collapsing right now. Just as the Bretton Wood structure, which was supposed to ensure the role of the United States of America as a world power after the war, is also crumbling.⁴ A new situation, a new structure of the balance of power is emerging, in which the unipolar world becomes multipolar, and a dual world order is created, which, alongside the United States, will bring China into a position of world power. Thus, in this new world order, the European Union will have no place among the great powers. ⁵ Therefore, we must focus on innovation, knowledge, an economic policy based on our own resources, food, and energy self-sufficiency, in other words, a gradual separation from the world order that has prevailed so far. Initially, we must clarify the basic principles of a sustainable economy,⁶ and then establish the political and economic institutions that are subordinate to it. Because now is the time to entrench everything that we have done since the second half of the 2010s, amid our spectacular successes, only without slack.⁷ Now, when energy is more expensive, now is the time to strive for energy independence, now is the time to lay the foundations for a knowledge-intensive economy. Now is the time to value the role of natural, renewable energy. The role of natural, renewable energy has now been appreciated. In addition to the enforcement of environmental protection aspects, the mass adoption of energy-saving and cost-saving technological procedures must be put on the agenda. The liquidity, profitability and capital availability of domestic small and medium-sized enterprises bleeding from a thousand wounds must now be improved. Mainly through their efficiency of scale, they should be put in a stronger role as investors and employers.⁸ And the time has come to increase knowledge capital, human capital, education, and healthy life years spent at work. This is the basis of competitiveness. If these factors were to characterize us more strongly, our economy would be even more resilient to inflation and war-induced recession.⁹ 

So let us strive for innovation and renewal, let us build on fusions, let us take advantage of the new technologies emerging in the world, the opportunities provided by the Internet and the data-information economy, as the new „tectonic” plates of the 21^st century. It is only by building on them that Hungary can be brought into a competitive and sustainable catching-up process.

In the Hungarian-language issues 1-3 of Volume 18, members of the Polgári Szemle’s intellectual workshop, including several young researchers and PhD students, deal with the nature of crises, the Hungarian value model, the links between governance and growth, the natural history of Hungarian science, budgetary issues, the mechanisms of financial culture and the effects of the coronavirus crisis. Our articles on a wide range of disciplines continue to seek answers to the new challenges of a changing world and propose solutions.

It is worth reading the Polgári Szemle!

And we look forward to the publication in Hungarian of György Matolcsy’s book „On the Edge of Times”¹⁰ which provides a comprehensive overview of the classical economic thinking of the Western liberal elite and the sustainability-focused mindset that has been built up in contrast to it. A new book on systemic economics is thus awaited, interpreted by the President of the National Bank, who for decades has been the leader of the school of thought that has been preaching unconventional doctrines and, whether as a minister or as Governor of the Magyar Nemzeti Bank, has been its practical implementer.

Budapest, November 2022

Dr. Csaba Lentner, university professor
Editor-in-chief of Polgári Szemle