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[The Political Analysis of Postcommunism. Kyiv: Political Thought, 1995, pp. 187-204.]

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Adaptation Strategies of Former Communist Elites *

Georges MINK, Jean-Charles SZUREK.




1. Which social class was the revolution for?


If we wished to apply conventional Marxist reasoning to explain the revolutions of 1989, we would have to ask: Which social class was the revolution for? Or, put more simply, who profitted from the crumbling of the former communist regimes? Was it the new entrepreneurs? They still hardly exist. Was it the "working class" which, through the actions of Solidarity, dealt the decisive blows? It seems almost certainly destined to live precariously and undergo a deep restructuring, resulting, primarily from the obsolescence of the former industrial bastions that created it. Moreover, it is scarcely probable, in an ideological environment dominated by "market" principles, that the founding myths which the working class has now rejected will reemerge. Are the beneficiaries the former bosses? Surely not, for their nonexistence as a social class and the diverse problems which now prevent them from reclaiming what was theirs does not place them in a very favorable position. Finally, most paradoxically of all, yesterday's dissidents, who until recently were still present in the forefront of the post-1989 governments, are now being progressively asked by a confused electorate to return to the anonymity of civilian life.



* This analysis is based on the data of sociological polls in Poland, Hungary, Czech Republic, and Slovakia. /188/



Who, then, stands to profit from the revolution? We must conclude that the revolution took place for a class that does not exist, even though we can already clearly distinguish that, of the new winners in society, many are strong, even dominant economically. Thus, the few capitalists, those who dispose of accumulated capital and put it to work either productively or speculatively are also those who now undeniably profit most from new post-revolutionary freedoms. This is all the more true since they hold the three trump cards that are so cruelly lacking in Eastern Europe, namely capital, know-how, and the ability to hire labor.

It is common knowledge that among these nouveaux capitalists and other private entrepreneurs is a large section of the previous political elite. By various methods they managed to acquire political and economic power, and despite losing the former they have nevertheless managed to hold onto the latter. This leads us to another paradoxical situation: it is wholly possible that the ex-nomenklatura could play a leading role in structuring the future owning and leading class, and consequently exchange its position as a class swept aside by history to that of an elite regaining its dominant position, albeit by adapting to new standards.1

This reasoning also has a political dimension: is there or is there not a reconversion strategy of the former communist parties, passing through the establishment and control of an economic area, able to reinforce a national and international political network and finally become able to hold their own and even reconquer power?






2. The Barrier of 'Decommunization'


It is far from easy to check these hypotheses, and we therefore first need to develop a methodology. Certainly, no "confrontational" approach would be of any use in breaking through the necessarily discrete and often undercover methods of people who are keeping increasingly low profiles as political campaigns are stepped up for the radical "decommunization" of the new Eastern European democracies. No one yet knows what the future holds for these attempts at /189/ decommunization and it is wholly possible that they will be reduced to witch-hunts. Nevertheless, this hypothesis must be taken into account in our line of investigation.

We should also clearly define the nomenklatura in question, for the category is extensive, and can be applied to just the upper echelons of the former State/Party, the upper levels, plus some of the lower rungs'on the political ladder, or even the whole Party structure. Insofar as we are concerned with the nature and modalities of reconversion strategies, we will focus on the nomenklatura that has been able to build on the privileges and positions of power held under the Old Regime in order to attain for itself a private economic capitalist base.

The various national nomenklaturas are, moreover, distinct from one another, a heterogeneity that can be traced back to the differences in the history and political culture of each country. Their future evolution, despite common and uniform origins, nevertheless appears to have diverged since 1989. The strategies of political and economic adaptation are directly related to these historical differences. Their individual approaches to the changes in regime also have varying effects on the conversion strategies, their possibilities to change their status, and to consolidate any change in their favor.

Consequently, we must distinguish between two types of nomenklatura:

The "rationalist" nomenklatura that almost deliberately gave up political power over society, and which managed to achieve a transition in the economic space that was all the smoother for its having been prepared earlier or, which at least, seemed to have been prepared. Poland and Hungary fall into this category. We will note that these types of nomenklatura are closely associated with two factors: (a) a long-established private sector (with 20 years sustained growth) and (b) a long tradition of openness to the West (political and economic migration), with the effect that the rules by which liberal systems work had already been learned;

The "reactive" nomenklatura that were taken by /190/ surprise by the sudden overthrow of communism and were powerless both politically and economically. The case of the Czech Republic is a perfect illustration of this type of structure. Economically, the emergence of a proprietary class from the nomenklatura was all the more unlikely as the economy had been totally state-run. For most of these countries the lack of capital will probably lead to the eventual money laundering. From this point of view Poland and Hungary differ largely from other former communist countries in their comparatively early legalization of the private sector. The relationship between political power and the private economy goes back sufficiently far for the influence of the nomenklatura to be considered, if not beneficial, then at least desirable. Will the same situation arise elsewhere, where the constitution of private capital will visibly be the result of the acquisition of public property (the Czech Republic, Ukraine, Bulgaria, etc.)?

It is interesting to note that an opinion poll carried out simultaneously, and with the same set of questions, in the three Central-European countries (Poland, Hungary, and the Czech Republic), showed a correlation between the differentiation of the nomenklaturas and in how they are perceived by public opinion. In response to the question "should the former nomenklatura be removed from major governmental posts?" 80 % of Czechs were in favor of a radical purge as opposed to just 40% of Poles and 35% of Hungarians.2






3. The Invisible Transition


This movement of appropriation came within more general framework of the anticipatory phenomena that characterized these two countries, the spectacular culmination of which came with the break-up of the regime. In retrospect, it is easy to pick out these structural characteristics, scarcely compatible with Soviet-type societies, which preceded the 1989 implosion and which flourished in its aftermath. The previous decade had been marked by major movement towards economic autonomy by private actors. There was a progressive growth of private schools, the development /191/ (sometimes illegal) of an independent health service, a proliferation of garages and restaurants, plus growth in private agriculture. It was in this context that the last governmental teams of the old regime pushed through measures for the privatization of public-owned business to the clear advantage of the managers, company executives, and more generally to those responsible for the state economy. While it may be an exaggeration to say that the former elites deliberately passed a series of custom-made laws, they certainly profited considerably from the situation.

In Poland, on December 23, 1988, the Rakowski government passed a law generally held to favor appropriation of state property by the nomenklatura, and which was severely criticized as such. The gist of this law was that private companies could be created if they were partnered with state-run industries with the aim of revitalizing them. According to this law, state industry could sell, rent, or transfer management of its assets to private companies. For their part, the new companies were allowed to set their own prices (unlike the socialist-run sector that was obliged to follow a fixed price system). Managers could therefore sell-off state assets, machinery, and installations at greatly reduced prices to a private company, a company which, in all probability, they either owned or in which they had a controlling interest. For example, the manager of a state-run company could transfer to himself or to a group of associates whole factory workshops or departments. By then taking orders from the same production sector as the original company, the new company became a provider of services which concentrated on maximizing its own profits. On the other side of the fence, no manager-shareholder was concerned with increasing production costs inside his company, which he turned to the benefit of his private enterprise. He simply minimized energy costs, outlay on pollution control, factory rent, transportation, and communication. As the manager of a state-owned company he could legally incur costs, simultaneously feathering the nest of his private concern.

Foreign investors took an interest in these private companies, not least because of the fact that although the state /192/ was providing the industrial plant (buildings, machinery, tools, and transportation) it was not financially involved. The value of this material contribution was underestimated, consequently increasing the relative value of foreign cash investment and resulting in a greater share of the profits for foreign capital.

Ostensibly aimed at revitalizing the public sector, it would appear that the negative effects of this law outweigh its positive ones, especially when we consider that the deliberate crime was not exposed in time. Instead, it was allowed to spread, assisted by the fact that, at least initially, there was no limit to the number of managerial posts that could be held in state-run industry.

The results were:

exchanges between publicly-owned companies and the new limited private companies never favored the former.

private companies, contrary to their initial claims, almost never worked in the production sector. Most of their activity was purely commercial.

the managers, the economic nomenklatura, were able to take advantage of financial operations, either directly, or indirectly through figureheads and this brought them rapid wealth.

The movement of state assets into private hands had the effect of converting a large section of the former economic nomenklatura into private capitalists. Consequently, during these few months of transition (between the end of the old regime and the beginning of the new), many of them began a primitive accumulation of capital which could prove decisive in a society on the threshold of the market economy. Obviously, we must now examine what role in this process was played by spontaneous movement (every man for himself) and what role was played by organic relationships (networks).

Hungary saw a real surge of privatization. From the beginning of the* 1980s, the flourishing second economy had already led to a law legalizing company autonomy. Then, in 1988 and 1989, two successive laws, creating true private /193/ economic actors, laid down rules for public companies wishing to privatize.3

Hungarian law first imposed an increase in company capital before transformation could take place. Sellouts were encouraged for the injection of new capital into the company, which would, if it was sold, become part-owner. The company could also choose its buyers and set its own price.4 In this way every encouragement was given company managers to profit from these legal "instruments." For example, the managers of a hotel chain (Hungarhotel) were suspected of having sold at a knock-down prices some fifty hotels, including the famous "Forum" and "Intercontinental." We should also mention that, up to 1989, the State encouraged entrepreneurs with tax incentives on sales.

Therefore, in the case of Hungary between 1988 and March 1990 when a law was passed for the "protection of national property held by the companies" the possibilities for primitive accumulation were similar to those in Poland, benefiting the Hungarian economic nomenklatura. Hence, it is valid to ask how this still concerned the nomenklatura not only in Hungary but in other postcommunist countries as well now dispersed in a new social configuration, despite the fact that public opinion constantly connected their increased wealth with their current activities and initial political status. The Hungarian press certainly took a weaker stand against the nomenklatura's abuses than its Polish equivalent, except where the issue concerned real estate held by the Communist Party and its organizations. This leads to the hypothesis that, in the context of increased privatization in the economy, the Hungarian economic nomenklatura vanished "into thin air" behind legal-economic machinery with greater adeptness than their Polish counterparts. We also still have to determine which device, Hungarian or Polish, was most effective for the development of "capitalism" in general and the enrichment of the nomenklatura in particular. We must also take into consideration the fact that just 4% of national property had been sold since the end of 1991: buyers were not tripping over each other in the rush; it is the sale of a state-owned company that makes it possible for /194/ its managers to become part-owners. Accumulation of capital also took place before 1989: during the constitution of the second economy, when inside the companies, private companies were set up in a situation similar to that which resulted from the Polish law of 1989.

In the accounts of the partisans of the integral "decommunization" and in the stereotypes put across by a section of public opinion, we are presented with the conviction that the actions of the ex-nomenklatura members, today holding positions in the private sector, were totally premeditated, and wittingly concerned with the theft of public property in a wave of "every man for himself." In reality, the laws of 1988-89 were not aimed at a deliberate political capitalization but the search for a rational economic solution in a closed system. Our interviews clearly show that when the laws were made public, the managers of state-run companies who finally tried the private way, were not always thinking of this. Their initial motivations were rather more closely linked with political calculations than the realization of an opportunity for a change in status.

Among the reasons for founding a limited company, foremost was the urgency to transgress the rigid barriers of the industrial policy of the communist government of the time (the reform implemented by Polish Premier Z. Messner, for example). Designed as a deflationary reform as far back as 1987, the industrial policy, obeying orders of the IMF, was an attempt to stop inflation by controlling prices and wages. Thus, it was impossible to stimulate production to any extent by giving companies free rein in setting their own price and wage policy. Company managers were to see the law of 1988 as a real godsend, and they simply had to graft production or workers onto the private company to find a competitive position again. And if they themselves did not see the immediate advantages of taking such a step, it was their workers who took on the job of showing them the example of the company next-door that had been able to increase wages thanks to the creation of a new legal structure arising out of private commercial law. To these motivations we can add another, more existential reason, relating /195/ to their own professional future. The "modernist" decision taken by the communist authorities, attempting to generate mobility for company managers by taking on Solidarity's idea of organizing competition for the top jobs, immediately brought out the self-defense reflex in these same managers. They preferred to increase their chances of holding on to their jobs by creating a private legal and independent structure where they were responsible only to their shareholders, rather than the uncertain verdict of open competition where meritocratic criteria could come into play together with trade union pressure. These three motivations taken cumulatively, and the type of behavior that they resulted in, were certainly not perceived by their authors as anticipatory action designed to counter the events of history.






4. Who Are They?5


With the help of some thirty non-directed interviews in Poland, we tried to throw some light on the economic route taken by the new company bosses, all of whom held important posts prior to the events of 1989. We settled on an approach that effectively gets around the spontaneous mistrust evinced by the group in question, carrying out our study under the guise of research into the new economic elite. From just one interview we were able to reconstruct the former networks and trace the new bonds of solidarity. In addition, we tried to avoid the major cities, concentrating instead on provincial towns.

These interviews, which were undeniably easier to conduct with the former Party reformers and who, as a result, are over-represented in our sample, confirm and serve to illustrate the fact that a process of legal appropriation of public property had been concluded by a section of the nomenklatura. This process had been made possible by laws passed shortly before the downfall of the Communist regime, particularly in Poland and Hungary.

a) Educated and Modernist

The individuals in the non-representative sample studied are characterized by a sufficiently large number of com-/196/mon features for us to be able to speak of a relatively precise profile. Within the Party, they represented a modernist, educated, and reformist trend. Between ages 35 and 50, they had often joined the Party during the Gierek period and were influenced by his economic program. Frequently of working class origins, they had achieved a double social goal: higher education plus a career in the Party structure. It is also symptomatic that their professional credentials couple management training with a technical degree.

We should not be surprised that in postcommunist Poland the members of this group became private entrepreneurs, for they were already skilled in building a company structure. They became the new captains of industry who treated the state-owned company as a field of action: obviously, having their own company enabled them to better express themselves.

Gierek's policy had been very beneficial to competent performers, and his ideological risk, based on bonding competence, would, according to its promoters, lead to a society where all needs were satisfied. Indeed, it was under this "umbrella" that the nomenklatura could develop hitherto unknown levels of racketeering. With Gierek the money was earned legally. It is clear that it was much easier for this "economic" nomenklatura to instrumentalize the party now that the first secretary was speaking their language. The future historian will doubtless explain to what degree their aspirations were met by the strategies implemented by the government, but what interests us is the interplay between a modernist group and its ideology and the evolution of the system in which the private company made its way.

For it was under Gierek, and then later in the 1980s, that the private economy began to develop with bridges to the nomenklatura (a phenomenon already observed in Hungary)6 and the conditions for accumulation were born. We know that, at the end of the 1970s, there were already regional information cells that were designed to make it easier for individuals to create "agencies" (as the private commercial enterprises were christened). Here we have a form of support for the creation of businesses, a phenomenon that /197/ would only take on wider dimensions in 1991. So, who knew how to make use of these devices? The "economic nomenklatura," people like this Katowice shop owner who, during the 1980s, at the peak of social crisis, doubled his role as a manager of a state-run company with the management of his own shop, without displaying any particular role:

"In Cracow, in the Voivode offices, I was given much advice on how to start up my own business. At that time (1979), an office like that was a real revolution. It was anarchy, no control at all. Thanks to the network, I was able to import foreign goods for the whole of Poland. It was a mixed status shop: the walls were owned by the state, but the merchandise was private. The Voievode office put me in touch with suppliers and buyers, including foreigners (Yugoslavia and East Germany). I ran the shop from 1979 to 1986, and was then appointed to manage a state-run company, leaving the shop to my wife, to live. After six months I had paid for a car and a trailer. Prices were like that in '79-'80: maximum profits! I built three-quarters of my house in '80-'83."

b) Reformers

Moved more by a feeling than by real preparation, the future capitalists of the nomenklatura, like everyone else, could not have imagined what was going to happen. They considered themselves reformers battling against conservatives, although still in a monocratic country, with only a partial market economy. The more the Party became reformist, the more their continued flourishing was assured.

They spontaneously felt closer to the elite of Solidarity, and hated the betons (concrete blocks, a Polish metaphor for the CP conservatives) against whom they at the time waged divisive war.

"Solidarnosc was a danger for the betons, but not for us." "Here, most Solidarnosc members were also Party members." "We believed in the Party slogan of renewal."

It is certainly easy to rewrite history in retrospect. Nonetheless, the reformers place great importance on their role in events, as if, blinded, they needed a legitimating device permitting continuity between a before and an after: /198/

"We didn't want power, such as it was." "It was we who did everything: the opposition in 1978 was just a handful of people." "From 1979 on it became clear that the system was crumbling. Previous governments lacked courage: prices needed to be freed. People were being treated badly." "Changes in Poland came as the result of several influences, and above all from the progressive option of the POUP. That was an option that came from the well-supported basis for reform. In 1980 there was no difference in basic thinking between Solidarity and Party reformers. They wanted to throw us out in 1980. We wanted to introduce free elections within the Party. People have forgotten our role in the changes. If there was reform, it was thanks to us."

Where reforms were concerned, they mention precisely that they had been organizing market economy training courses for businesses since 1985, and that they were employing greater numbers of non-party members to positions of responsibility simply because they were competent. In a word, they see themselves as the fathers of neo-capitalism.

"We made the greatest qualitative leap forward during the 1980s. The new rules do not date from today, but from the time of Rakowski (the last communist premier) who let anyone create a private company. No one says it now, but it was the Rakowski government that made it all possible. If it had happened ten years earlier, maybe communism would have had a better chance of surviving, whatever you think of that." "The 1980s were the years of the peaceful abandon of power and transition towards a market economy."

c) Elites in Search of an Identity

Elites they were, and elites they remain. But they regret the fact that the postcommunist authorities are not aware of the fact. Having anticipated their future dismissal by opening up in the private sector or just simply being sacked, most of them created consulting firms (usually specializing in reconversions) or trade outlets, or a company directly related to their skills (including networks). Some of them also became the informed plenipotentiaries of leading Western companies (for example, in the banking and insurance sector). /199/Now captains of industry for their own profit, finally giving free rein to the spirit of enterprise without hindrance, they found themselves in a schizophrenic role, missing their former role as political leaders, regretting the fact that they now have only the economy.

"A lot of good people were got rid of, and they ended up in the private sector. Nowadays only the weakest managers are left in the State sector. A public sector manager only earns about as much as a private sector laborer. A lot of these managers have been chased out of state-run companies. But the movement to the private sector represents a waste of human resources, since a guy who can run a 5000-man factory ends up managing just five. Today, society treats us very unfairly. Poland is going to miss our generation, and it will take quite a few years to replace us."

Since 1989, this group has had to adapt and alter its world view. This is a group of bosses who know how to use and structure the old networks, particularly on the regional level, in favor of economic and political activities. In this process of identity construction, they aspire to find the values of an economic and national elite. With a taste for hard work they can boast of having made risk part of their way of life, and they accept instability and the feeling of stress. They know stress very well: before, in the Party machinery, they were in constant fear of changes in a direction that might exclude them, and now they are getting used to living in the climate of decommunization.

Already they are becoming dissatisfied with their enhanced economic status, and want to play a role in the life of their towns, their region, their country, to have representatives and create a political lobby. Yet, still they come up against a barrier, a contradiction that has its roots in their origins: by their tradition, habits, and sense of reform, they constitute potential clients for social-democracy, but the instant their own companies come into the reckoning (having a trade union in their factories), they immediately become very liberal. They would like to become society bosses and be perceived as such. While their votes and sympathies lie naturally with the new Socialist (formerly Communist) /200/ Party, the "social-liberals" would also appeal to them: they admire the likes of Kuron and Kiss.






5. Consolidation of Political Status?


The "classogenous" process may take different paths. It is probable that certain elements of the former communist elite truly do wish to organize and give the whole process a political expression. The political organizations that were offshoots of communism would be useful for this. On the one hand, there would be a political group in need of financing, and, on the other, an economic group in need of political representation, or even a pressure group, the socialdemocratic ground being the ideological link.

The meeting of the political and economic actors of the old regime could take place naturally because of these logical convergences. But it could also be the object of a well thought out strategy. In November 1991, the Soviet press revealed the existence of documents stating the hypothesis of an international concentration of economic conversion strategies, where the pre-August putsch CPSU was to have had the coordinating role. For this reason, a seminar had been held in Warsaw in March 1991 by the CPSU, which, as one of the participants wrote in a private letter, was to have: "given priority to the creation of structures that had no formal links with the Party, like joint stock share companies, foundations, and limited companies. In other words, it was to create institutions that could not be expropriated for political reasons."7 At the same meeting, on the proposal of L. Miller, head of the Polish Social-Democrats (SDRP), a database was to be set up along with a coordination center for the business and industrial activities of the communist parties.8

The behavior of the former communist elites reveal at the present time, rather more adaptation strategies, especially in Central-Eastern Europe, than reconquest strategies. Doubtless the surprise of the general collapse of the system, which the communist leaders wanted to control up to the very last minute, thanks to power sharing (the "Round /201/ Table" compromise in Poland and the "Triangular Table" in Hungary), upset the sophisticated constructions and led instead to survival reflexes. However, no keen observer could have failed to notice that in the midst of the uprisings (December 1989/January 1990), both in Poland and in Hungary, ritual, theatrical ceremonies were held to end the communist past and to herald the new social-democratic era (for example, carrying the flag out of the POUP congress). The manipulation of symbols could mean that there was, if not a ready-made script for the bowing out of communism, then at least the wish for it to go out in an orderly way.

The publication of documents concerning strategies for the coordination of the economic activities necessary for the reconstruction of a (non-communist) left, shows that the hypothesis is possible that anticipatory strategies were made up of several phases, following the watershed that introduced the "Gorbachev effect" into Central and Eastern Europe. The political conversion towards a social-democratic formula was boosted by the reformist triangle (Moscow-Warsaw-Budapest) before 1989. After the wave of revolution, its was the conservatives who took the initiative for coordination in most of the ex-Soviet bloc countries (in the same way that Gennady Yanayev granted a loan to the SDRP, it was most of the representatives of a hard line policy who were wise to financial movements, such as L. Miller, etc.).

However, there are historical reasons that clarify the leading role of Poland and Hungary (in addition to the various above-mentioned aspects): the tradition of competition with a dynamic opposition whose peaceful political plans "rubbed off" onto the morals and behavior of the communist elite; the nature of the reformist trends and the weight of a kind of invisible network made up of successive layers of communists excluded for reformist views; the frequency of the renewal of generations and the existence, on the eve of 1989, of a younger generation, educated and attracted by heterodox economic or political activity; the degree of political openness towards the liberal systems of the West and the tradition of contacts with "Eurocommunists" or Western social-democracy. In general, it can be said that the deeper the /202/ awakening of civil societies and their political cultures, the more sophisticated were the attempts of the elite at anticipating the change in regime. The real strategy of political conversion consisted in transforming programs, structures, and names in order to come as close as possible to the socialdemocratic model.

Other formulae have but a residual nature, most often revolving around the negation of the process of "social-democratization." Thus, some people are tempted by national-communist ideology or even nationalism. It is particularly true in those areas where ethnic and national antagonisms rise to the surface (for example, the problem of the Turkish minority in Bulgaria, the German in Poland or even the question of Slovak separatism). This tendency is particularly strong where the former powers had managed to arouse nationalist feelings in certain classes), today filled by organizations such as, in Rumania, Vatra Romaneasca or Romania Mare, where former members of the Securitate are used, or in Poland with the heirs of Moczarism, such as the Grunwald group, supporters of the 'X' Party of S. Tyminski. In Slovakia, separatist pressure has led ex-communists like Vladimir Meciar to espouse radical nationalist doctrines.

Another metamorphosis in this recomposition of the communist machinery are the orthodox. Largely in the minority, they cultivate continuity with the communist heritage, referring back to the birth of communist ideology, which they claim has been betrayed (for example, the Union of Polish "Proletariat" Communists), or to the legendary leaders such as the Hungarian Workers' Socialist Party (Kadarian) of K. Gross, or the Association of Enver Hoxha Volunteers in Albania.

Undoubtedly most ex-communists who chose the socialdemocratic path are looking to find in it ideological inspiration, a new legalization which will enable them to make connections with certain aspects of the past, without, however, risking on the electoral level the negative effects of a heritage towards which public opinion remains very sensitive. Social democratization as a repositioning strategy on the political chessboard, however, makes it difficult for /203/ them to have recourse to populist social demagogy. For the new social-democrats are in search of a European identity and international recognition as being on the side of Western social-democracy (see their repeated attempts to join to the Socialist International), which would have the effect of giving them a legal identity, disputed internally by much weakened historical social-democratic parties.

The hard core of reformers remains a group who will deny nothing of their past. Quite the opposite, in fact, as they continue to claim "author's rights" as the destroyers of communism and speed the move towards capitalism of a regime they considered outmoded and reactionary. An ideological conflict could ensue in the not too distant future between these economic actors and their political neo-social-democrat partners, a conflict whose ingredients are already to be found in the vision of the sociopolitical battlefield that we have been able to reconstruct from our series of interviews. The cohabitation of two contradictory syndromes (a social-democratic vision of social relations on the world scale and a liberal vision of professional relations on a local level, in particular at company level) must logically lead to a political social-liberal choice, i.e., towards the establishment of ideological and institutional affinities with the socio-liberals, such as the Democratic Union in Poland, the Szdsz in Hungary, the Union of Democratic Forces in Bulgaria, the Civil Alliance in Rumania, and certain trends close to Vaclav Havel from the former Civic Forum in Bohemia. This phenomenon could in turn have a carryover effect in the traditional field of influence of social-democracy, where a break in the social-democratized postcommunist formations could logically serve to strengthen social liberalism.

The remaining question is therefore whether the congruence of the status attributes that this social group, necessarily located at the intersection between the new proprietary class and a political group in competition for power, will revive discord with the tradition and ideological components that are pushing former communist parties towards platform functions for the underprivileged classes. In other words, this former communist nomenklatura, still fragile, /204/ will have to navigate the reefs that postcommunism creates for it. The first of these is decommunization, with the former nomenklatura representing the perfect scapegoat. Second, its political identity may fluctuate: it may be rejected by its original family for being too liberal, and by liberals for being still too connected to its former communist family. These possible rejections underscore the fact that this is a group with a very strong personality, ready and able to play a political role. In any event, in the new race for power, the former nomenklatura has the best starting position and the most advantages, not only in the private sector, but also in the state sector where its skills could one day once again prove to be indispensable.




1. Put forward by T. Bauer, "Building Capitalism in Hungary," lecture given at the IRSES (Paris, 1991) and-taken up by E. Hankiss, East European Alternatives, (Oxford, 1990). See also J. Staniszkis, "Nowa karta konfliktow," Tygodnik Solidarnosc, December 15, 1989, pp. 1, 7.

2. See: Gazeta wyborcza, December 27, 1991.

3. "Law VI 1988 on companies of an economic vocation" (passed in August 1988 and therefore before the change in regime) and "Law XIII of 1989 on the transformation of public companies, cooperatives, etc. into private companies."

4. For a company to convert itself into a private concern it needed to expand its capital, finding external shareholders, by at least 20%. Two examples illustrate the implementation of these rules: (1) the state holds 20% of company shares. The other 80% can be sold by the company. If not sold within three years the state will take back the 80%. If the company is sold, 80% of the value of the company returns to the State, 20% to the company (the State retaining the original 20% of shares). The law authorizes managers to sell with the agreement of the company board. (2) In the case of companies in debt, the company may convert its debts into shares by establishing the lending bank as shareholder. This enables possible national and international strategies. The 80% of shares are, in this case, shared between the company and the bank, according to the level of debt (the bank may, in addition, buy new shares). Here there is even more reason to sell, as the company and the lenders share 80% of the /353/ company's worth (20% remaining in the state's hands) and the state reaps no profit from its holding.

5. The framework of this paper requires us to produce a summary of the actual sociological research undertaken. This will be published in exhaustive detail elsewhere.

6. S. Szelenyi, Socialist Entrepreneurs: Embourgeoisement in Hungary (Madison, 1988); I. and S. Szelenyi, Classes and Parties in the Transition to Postcommunism: The Case of Hungary, 1989-1990 (Stanford, 1990).

7. "How to Steal a Billion and Preserve Mind, Honor, and Conscience," Komsomolskaya Pravda, November 19, 1991.

8. Gazeta wyborcza, November 12, 1991.





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