Versions of Economic Reform: A Complex Debate in Hungary

All too often the impression conveyed by recent coverage of Eastern Europe’s revolutions is that the collapse of totalitarianism has already ushered in an era of “capitalism triumphant.” Stories of nascent entrepreneurial spirit sweeping the region saturate the press while free-market proselytizers report that Milton Friedman and Margaret Thatcher are the new idols of the intelligentsia. The prognosis is thus confidently spelled out: provided the Soviet Union does not intervene, East Europeans should soon be blessed with an unfettered capitalist economy.

This prognosis is premature. It argues that a single ideology has emerged victorious, though even a cursory overview suggests the opposite. Specifically, there i...