The Relational Economy (2): Corruption, Predation, and Proxies in Post-Communist Economies

Bálint Magyar

Keywords: The role of the state and the new spirit of capitalism(s)

Abstract: Understanding the everyday operation of a relational economy necessitates the reinterpretation of several analytical concepts that have been used for post-communist economic phenomena. First, instead of buyers and sellers in a market transaction, we can observe predators and prey in the process of centrally-led corporate raiding (“reiderstvo”). Second, instead of capitalists whose de jure and de facto property rights coincide, we can observe oligarchs and front men whose de jure property is de facto under the control of their superior patron in the informal patronal network. Third, instead of using direct indicators to assess economic structure in terms of private and public ownership, “indirect indicators” or proxies are needed to analyze the situations of power&ownership (vlast&sobstvennost). The case of Hungary after 2010 will serve as an example for an economy that functions on the basis of neither (private) entrepreneurial considerations nor (public) state incentives but the interests and dynamics of an informal patronal network that controls and uses in a targeted, discretional manner the instruments of public authority.