Ságvári Ágnes (szerk.): Budapest. The History of a Capital (Budapest, 1975)
Budapest in the First Twenty Years of the Council System (1950-1970)
A Modern Capital From about 1960 onwards, a new and realistic line of thinking on economic processes had begun, which was finally crystallized in the new economic mechanism introduced in 1968. The investment policy of maximum accumulation was replaced by a more moderate target and greater emphasis on economy, with the reduction of compulsory production levels an impetus to initiative was given to industrial enterprises. The introduction of profit-sharing gave the enterprise and the individual worker a greater interest in success, produced a wider choice of products and led to a growth in productivity. Recognizing the importance of technological development, and a rational use of investment in technological advances, a switch to the intensive development of industry was made in place of the former extensive development which had proved uneconomical. As compared to the first Five-Year Plan period, infrastructural investment increased by fifty per cent, and a resolute and consistent attempt was made to decentralize industry. These Government measures made themselves felt in Budapest since—despite the rapid growth of industrial enterprises in the country and the transfer of a whole series of enterprises and factories from the capital to the country—Budapest’s share in state-owned industry was still 47 per cent in 1960. Although the total value of production there in fact increased, this share was reduced to 33 per cent by 1972. The quality and choice of durable consumer goods improved, the modernization of light industry, in the clothing and leather industries in the first place, raised the standard of living and made life more agreeable. The rate of housing construction, urbanization and progress in transport quickened. Improvements in prices and wages and the extension of social services also contributed to an advance in the living conditions of the workers around this time. Child allowances were increased, the more meagre pensions raised, single mothers received more support, and mothers were given a maternity allowance for three years after the birth of the child, and re-instatement in their former job afterwards; long-service employees in factories received benefits, workingclass children were given assistance in their further studies, etc. Legislation today embodies the fruits of this experience. The new system of economic management introduced on 1st January 1968, and the Council Act I of 1971 dealing with public administration are all of great importance. These new developments in economic and state policy and the new requirements of the urban explosion then taking place made new demands on the city leadership. Industrial expansion sucked huge masses of workers into the cities and outlying districts with the attendant need for more exhaustive training facilities and the increased burdens of services supplying industry. Budapest maintained its particular role in the process of urbanization in Hungary. Between 1950 and 1960, 36 per cent of state investment was made in Budapest and its surroundings, 54 per cent of the new influx into the town found employment there. The immensity of the tasks confronting the socialist municipality is best indicated by the fact that in twenty years the population of Budapest increased by a quarter. Between 1950 and 1970 the number of town-dwellers increased from a third to a half of the Hungarian population as a whole. A limitation of population in the capital became indispensable to the healthy progress of the country. To enforce this limitation, various measures were taken to restrict “immigration”. But although the earlier administrative measure of 1951 proved relatively ineffective, as a result of the deliberate decentralization policies of the last 70
