Communism in Hungary

After World War II, the Paris Peace Treaties of 1947 established that Hungary again lost all the territories that it had gained between 1938 and 1941. During this time, Hungary was aligning itself more and more with the Soviet Union, which was trying to slowly introduce Communism to Hungary.

The Social Democratic Party merged with the Communist Party, forming the Hungarian Working People's Party, which was dominated by the Communists. A new constitution makes Hungary the "People's Republic of Hungary", described as "the country of the workers and peasants" where "every authority is held by the working people" with socialism as the country's main goal. Industry became nationalized and agriculture was collectivized.

The leaders of the Hungarian Working People's Party were practically in charge of the country. Mátyás Rákosi, chief secretary of the party, imposed a totalitarian dictatorship on Hungary, executing and imprisoning hundreds of thousands of people who disagreed with him.

The state had nationalized most of the economy by 1950. A lot of Hungary's resources were spent on building new industries from scratch, rather than embracing the country's traditional economic strengths such as textiles and agriculture.

Imre Nagy became the new prime minister and struggled with Rákosi for power. Nagy relaxed state control over the economy, politics, and society, encouraging the people to speak up about reform that they wanted. He increased the production and distribution of consumer goods and reduced tax burdens. Nagy quickly gained widespread popularity with these small but meaningful changes.

There is a national uprising as protesters demand the withdrawal of Soviet troops along with social and political reforms and more freedoms. Imre Nagy (prime minister) announces plans for Hungary to withdraw from the Warsaw Pact and become a neutral power. Nikita Khrushchev and Soviet forces crush the rebellions. Nagy was arrested and later executed. Janos Kádár becomes head of government.

Kádár introduced a relatively liberal cultural and economic course aimed at overcoming the post-1956 hostility towards him and his regime. Over the next 20 years, the government responds to public demands with minor political and economic reforms.

The "New Economic Mechanism" was established to improve Hungary's economy and increase productivity, making Hungary more competitive and stronger in the international market. Despite its benefits, the New Economic Mechanism led to increasing foreign debt.

Hungary began to suffer from inflation during the 1980s, which especially hurt those on fixed incomes. The inflation, coupled with foreign debt, led to widespread poverty and calls for more reforms. Kádár fell from power in 1988 and was replaced as the General Secretary of the Communist Party. This was a time of great political and economic chaos.

In 1989, Parliament adopted a "democracy package", which entailed trade union pluralism, individual freedoms (association, assembly, press), a new electoral law, revision of the constitution, etc. The Communist Party reestablished itself as the Hungarian Socialist Party, and they allowed multi-party parliamentary elections and a direct presidential election.

The new Republic of Hungary now had civil rights and a balance of power that allowed for a more democratic government. More political parties, other than Communists, were allowed to form and obtain power. Democracy and capitalism began to replace Communism. Overall, the transition to a multi-party democracy (caused by internal pressure for change and the collapse of Communism) was a peaceful one in Hungary.