Austerities and Aspirations: A Comparative History of Growth, Consumption, and Quality of Life in East Central Europe since 1945 9789633863527

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Central European University Press Budapest–New York

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© 2020 Béla Tomka Published in 2020 by Central European University Press Nádor utca 11, H-1051 Budapest, Hungary 224 W 57th St, New York, NY 10019, USA Tel: +36-1-327-3138 or 327-3000 E-mail: [email protected] Website: www.ceupress.com All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the permission of the Publisher. The translation of this volume was funded by the Laszlo Tetmajer Fund of the Hungarian Studies Program, Department of Central Eurasian Studies, Indiana University Bloomington. The research was supported by the Hungarian National Research, Development and Innovation Office (K119671) and the Office for Research Groups Attached to Universities (0322107). ISBN 978-963-386-351-0 (hardback) ISBN 978-963-386-352-7 (ebook) Library of Congress Cataloging-in-Publication Data Names: Tomka, Béla, author. Title: Austerities and aspirations : a comparative history of growth, consumption, and quality of life in East Central Europe since 1945 / Béla Tomka. Description: New York : Central European University Press, 2020. | Includes bibliographical references and index. Identifiers: LCCN 2019058315 (print) | LCCN 2019058316 (ebook) | ISBN 9789633863510 (cloth) | ISBN 9789633863527 (adobe pdf) Subjects: LCSH: Europe, Eastern—Economic conditions—1945– | Economic development—Europe, Eastern—History—20th century. | Quality of life—Europe, Eastern—History—20th century. | Europe, Eastern—Politics and government—1945– | Post-communism—Europe, Eastern—History—20th century. | Europe, Eastern—History—20th century. Classification: LCC HC244 .T64546 2020 (print) | LCC HC244 (ebook) | DDC 338.9437—dc23 LC record available at https://lccn.loc.gov/2019058315 LC ebook record available at https://lccn.loc.gov/2019058316

Printed in Hungary

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Contents

Foreword 

 vii

1 Introduction: Comparisons and the Triple Approach to Well-Being 



1

1.1 Economic Growth, Consumption, and Quality of Life in Comparative Research 



4

1.2 The Aims and Scope of Research 



16

1.3 Methods and Sources 



17

1.4 The Structure of the Volume 



21

2 Economic Growth: Catching Up and Falling Behind 



23

2.1 Measuring Economic Output 



24

2.2 Trends and Stages of Growth in Western Europe 



41

2.3 Trajectories of Growth in East Central Europe 



66

3 Consumption: Structures, Practices, and Policies 

 89

3.1 Changing Consumption Patterns in Western Europe 



3.2 Consumption in Communist East Central Europe 

 147

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Contents

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4 Quality of Life: Towards a More Comprehensive Understanding of Well-Being   203 4.1 Conceptual and Methodological Issues 

 203

4.2 Trajectories of Well-Being in Western Europe 

 207

4.3 The Quality of Life in East Central Europe 

 222

5 Determinants of Change: Accounting for Growth and Beyond 

 227

5.1 Factors of Economic Growth 

 227

5.2 Determinants of the Quality of Life 

 238

5.3 Causes of Convergence and Divergence 

 242

6 Passages to the New Millennium: The Evolving Order of Divisions 

 253

6.1 Economic Growth in Western Europe at the Turn of the Millennium: Changes in the Quality of Life 

 254

6.2 East Central Europe after the Regime Change: Economic Transformation, Consumer Aspirations, and the Pursuit of Well-Being 

 267

7 Conclusions: Lessons of the Triple Approach 

 289

Appendix 

 301

Notes 

 319

Bibliography 

 377

Index 

 431

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Foreword

Robert Lucas, the American Nobel-prize-winning economist, is c­ redited

with the oft-cited quip, “Once one starts to think about economic growth, it is hard to think about anything else.”1 Given its ambiguity and broad implications, Lucas’s remark might serve as an epigraph to the present volume. On the one hand, the subject of economic growth has, in the last few decades, become one of the most significant and intensely debated issues not only in economics and economic history, but in the social sciences generally. Even more importantly, economic growth has also come to play a central role in politics, the media, and wider public discourse. Here at the beginning of the twenty-first century, discussions of factors that influence—or might be expected to influence—economic growth have become regular features of mainstream news coverage. Leading stories might include growth indicators for a given country or region, for the eurozone, or for a particular economic sector—with numbers calculated on a quarterly or annual basis, compared by purchasing-power or not, based on various kinds of data, and taking into account specific determinants or neglecting them. All this is a relatively new development. Although various sorts of production data have been collected for some time now, the systems of national accounting that make comprehensive measurements of economic growth possible became widespread only after World War II. Thus, the evolution of concepts and measurements of economic growth is itself a complex historical problem, as estimates of growth are intimately connected not only to the economic development of modern industrial societies, but

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also to their social and cultural transformation. And this brings us back to Lucas’s motto, which also reflects the contemporary narrowing of perspectives on economy and society. Economic growth is, without a doubt, a fundamentally important phenomenon worthy of thorough examination. Still, even if it is hard to think about other aspects and determinants of prosperity, it is necessary to go beyond economic growth. If one intends to broaden the perspective, the study of consumption patterns seems to be indispensable to the analysis. This is not merely because, despite every long-term correlation, a  certain measure of economic growth does not necessarily produce a similarly proportioned increase in consumption. It is also because a better understanding of the peculiarities of consumption will help improve our comprehension of the connections between economies and cultures, and between economies and political systems. In the last decades of the twentieth century, it became obvious that it can be problematic for governments to focus on increased growth rates as their ultimate goal. Within the social sciences, too, it became necessary to re-evaluate certain tenets of economic thought and to transcend the growth paradigm, or at least to broaden its purview. At the same time, the concept of the quality of life emerged. Adherents to this approach seek to judge the success of social and economic development according to more complex criteria than simple increases in production. These include considerations like sustainability, the valuation of goods and services in relation to the actual social welfare and well-being they produce (sometimes conceptualized as subjective well-being), as well as other, similar notions, with which we will deal in greater detail in the course of this book. It is not an exaggeration to assert that over the last two or three decades, critics of the economic growth paradigm have coalesced into an ever-growing camp. Nonetheless, it is easier to formulate criticisms than to establish a viable alternative to the economic growth paradigm. This is particularly true in historical research, where the scholar who employs the concept of the quality of life is confronted not only by the usual problems associated with the increasing prevalence of value judgments, but also collides with other stark limitations, namely the lack of historical sources related to developments in the factors that contribute to quality of life. It is not by chance that we rarely encounter historical examinations of the quality of life, especially in the context of East Central Europe. This book, however, attempts to explore these phenomena: economic growth, consumption, and

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Foreword

ix

quality of life, from a long-term perspective and, where possible, to examine their relationships with one another. At the same time, I argue that a parallel analysis of these three topics, which I call the triple perspective, will be most productive if we seek to characterize the twentieth-century evolution of living conditions in East Central Europe in an international context. In the course of this research and in the preparation of the draft manuscripts, I have enjoyed the support of several institutions and the helpful suggestions of numerous colleagues. The tranquility provided by the Institute for Advanced Study at the Central European University in Budapest made it possible for me to complete this book. I am also indebted to those who took part in the workshops organized by the Imre Kertész Kolleg in Jena, especially to Stanislav Holubec, Włodzimierz Borodziej, and Joachim von Puttkamer, whose advice helped me to prepare a  manuscript on the history of consumption, which I utilized for this volume. I would also like to mention the seminar participants at the Institut für Ost- und Südosteuropaforschung in Regensburg, and especially Richard Frensch. László Csaba, Tamás Faragó, Éva Fodor, György Kövér, István Orosz, Ágnes Pogány, and Ignác Romsics responded to earlier versions of my manuscript with useful suggestions, for which I am grateful. Together, they helped me to correct several—though certainly not all—of my mistakes. I also owe a debt of gratitude to László Borhi, who made great efforts to organize the translation, and the translator, Jason George Anthony Vincz, as well as the other institutions and organizations that have helped me with my work in numerous ways over the last few years. In the course of the research for and writing of this book, they have supported a number of other research projects in social, economic, and comparative history, the lessons of which I  have tried to make use of here. Among these, I  would especially like to mention the University of Szeged and the Alexander von Humboldt-Stiftung in Bonn. Finally, I wish to express my gratitude to the anonymous reviewers for their useful comments on the manuscript. Szeged, June 2018

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1 Introduction: Comparisons and the Triple Approach to Well-Being

Over the course of the twentieth century, social scientists introduced

numerous concepts to approach the well-being of societies and the living conditions of individuals. These include gross domestic product (GDP), national income, standard of living, quality of life, and subjective wellbeing, terms that cover a range of competing notions. In applying any of these concepts, a  researcher will encounter advantages and drawbacks of various magnitudes, which we will discuss in detail later. At the same time, it is beyond dispute that there has been an observable shift in the way these notions are employed: moving from simpler conceptions that foreground economic performance and material consumption toward more nuanced analyses that attempt to involve numerous other aspects of living conditions beyond the merely material. Up to the 1960s, the well-being of a  society was described primarily in terms of material and economic factors, and accordingly, economic output was considered the chief indicator of welfare. Since then, however, the idea that measurements of economic output, whether in the form of national income, gross domestic product, or something else, do not adequately describe a  society’s well-being has gained more and more ground, as has the notion that economic growth is not unconditionally beneficial, in that it is often accompanied by social and environmental costs. These alternative conceptions, along with efforts to develop new indicators of well-being, have produced significant results, but the conceptual problems associated with them continue to appear on the research agenda of the social sciences.

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In analyzing the history of these phenomena and processes, significant gaps and regional disparities can be encountered. Concerning the Western European and North American countries, a great amount of historical and economic research has been devoted to the process and sources of economic development and economic growth, and in such works, international comparisons have proven to be important tools. However, in the case of East Central Europe, as in the case of several other regions of the world, research has not adequately clarified the dynamics of economic growth in the twentieth century. In assessing living standards or the history of consumption, we encounter even more significant problems, while questions about the “quality of life” have barely been formulated, though in fairness, historical explorations of the latter are, almost everywhere, still in their infancy. Accordingly, the chief goal of the present work is to provide an account of the economic development, consumption, and quality of life in East Central Europe in the period between 1945 and the turn of the millennium with a focus on Hungary. The peculiarities of East Central Europe in this period will be mapped out by outlining the broader European context, and by making use of more systematic comparisons than have prior analyses. In the course of the study, a  special emphasis has been placed on examinations of economic convergences and divergences as part of an attempt to determine which time periods widened or diminished the disparities between East Central European and other European (especially Western European) societies in terms of output, consumption, and quality of life. This approach is motivated by several factors. Above all, research into convergences and divergences is one of the most important approaches of comparative-historical scholarship because it deals with temporal variations in differences and similarities, and thus tends to conform noticeably to the research interests of historians. There is also another set of incentives for raising such questions. Convergence was one of the key concepts in European political and economic discourse in the 1990s. The European Union always considered one of its central tasks to be helping less developed regions and countries of Europe catch up to more advanced ones, a process often referred to as the strengthening of cohesion. When the idea of a monetary union appeared on its agenda, the European Union set certain common goals to be achieved and quantitative targets to be hit by countries that wished to implement the common currency; that is, in certain areas, for example, government deficit, gov-

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ernment debt, and price stability, it prescribed a policy of convergence for its members. The enlargement of the European Union implemented after 2004 further broadened the use of the concept of convergence. Insofar as the majority of the recently joined, formerly communist countries were significantly less developed than previous members, this strengthening of cohesion through catching up—that is, closing of the gap between the older and newer member states—has become a fundamental issue for the functioning of the EU, and will continue to be for the foreseeable future. The developments of the last few years, including the economic crisis that has unfolded since 2008 and the subsequent difficulties within the eurozone, have further intensified this problem. The uptick in research into convergence and divergence, which began around the turn of the millennium, also resulted from developments within economics itself. That is to say, if there has been any observable convergence between the less developed and more developed economies, it should serve as confirmation of the neoclassical hypotheses that came to dominate the field of economics toward the end of the twentieth century. Neoclassical theory presupposes the existence of convergence, in that the factors of production are cheaper in less developed economies, and thus the return on investments there is greater, and consequently capital must flow in that direction. These investments, in turn, result in productivity growth, which leads to convergence. Thus, if we observe any attenuation in these differences in development, we may regard it as empirical justification for this theory and as an argument for facilitating the free and unobstructed play of market forces. Conversely, if we observe economic divergence between the richer and poorer countries, it will serve as a serious argument for market interference by governments and international actors, which might help close these gaps in development. After briefly sketching the historical context of this topic, the introductory chapter will be structured as follows. First, the most important features of comparative research conducted on twentieth-century European trends in economic growth, consumption, and quality of life, including investigations of economic convergence, will be reviewed. Thereafter, a detailed outline of the goals and plan of this research will be offered along with the most important sources on which it was based, the methodologies employed, the limits of such analyses, the most relevant methodological problems inherent in comparative research, and, finally, the organization of the rest of the volume.

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1.1 Economic Growth, Consumption, and Quality of Life in Comparative Research The first attempts to measure economic development and economic growth are found in the writings of seventeenth- and eighteenth-century thinkers.1 These authors, like the British scholars Sir William Petty and Gregory King, compiled datasets with the intention of illustrating levels of economic prosperity, though they were insufficiently systematic and rigorous, if only because wide-ranging collections of economic statistics were still lacking at that time.2 Such databases were first assembled starting in the latter half of the nineteenth century, and were improved at the behest of governments that wanted to be able to monitor and influence economic processes in the course of World War I, and later during the Great Depression.3 Though it had several important but, by contemporary standards, methodologically fairly primitive precursors in the late nineteenth century, the work Simon Kuznets did between the world wars is generally regarded as the starting point for the actual measurement of economic development and growth.4 In 1932, a resolution in the United States Senate proposed to assess the country’s national income in the prior three years, a work that Kuznets was to supervise. This endeavor soon inspired imitators in Europe, where the theoretical and practical problems associated with determining national production levels had also attracted attention in the 1930s, and in 1941, James Meade and Richard Stone in Great Britain developed a system of national accounting to help steer their country’s war economy.5 The idea of international comparison appears at a relatively early stage of these calculations, and has since become one of the most important motives for measuring economic output. Among the pioneers of the systematic use of comparisons in that area, Colin Clark distinguished himself by implementing several methodological innovations in the 1930s. For instance, he introduced the concept of the “international unit” as a  way to compare the real value of various nations’ national incomes given the problems caused by variations in the purchasing power of their different currencies.6 Comparative analyses of growth processes gained even more steam after World War II, especially as a consequence of the formation of the two divergent systems of political economy. The United Nations’ effort to systematize the methodology for measuring national product was genuinely significant. The System of National Accounts (SNA), which was intro-

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duced by the UN in 1949 and updated several times since, made it possible to apply related concepts and methods of measurement more consistently than before.7 In the decades following World War II, growth theory evolved into several important branches and schools, which sought, above all, to investigate the determinants of economic growth and to refine the theoretical foundations on which definitions of economic development would be constructed. The aforementioned Simon Kuznets completed surveys of the historical output of numerous developed and less developed countries, and on this empirical foundation, he attempted to explain the factors that produced growth.8 The theoretical and empirical works were mutually enriching; on the one hand, theory-oriented experts made use of empirical studies that assessed the level of economic development, while on the other, researchers concerned with measurements of economic growth took the achievements of growth theory into consideration as they refined their methodologies. This effort was aided in the wake of World War II by an increase in the demand for data related to economic growth and development. Governments dedicated more and more resources to the expansion of their statistical bureaucracies. They made efforts to gather information about households, businesses, and specific sectors of the economy. They set up enormous longitudinal databases, prepared statistics on input and output, and produced representative income studies. Further improvements in comparative methodologies continued to appear on the agendas of international organizations. The International Comparison Project (latter Programme), launched by the UN in the 1970s, was perhaps the most ambitious undertaking of its kind; one of its chief goals was to rectify the distorting effects that different price levels in national currencies were having on comparative analyses.9 A close relationship was formed between economics and economic history after 1945, and thus it is not surprising that representatives of the latter also began to participate in investigations of economic growth. While economists tended to compile and analyze indicators of present activity or those related to the recent past, economic historians often produced estimates for considerably longer time periods, while also paying particular attention to international comparisons. At the same time, they utilized the theoretical results of modern economic research as well as econometric and statistical methodologies. Among historical GDP estimates, several have been truly ambitious: looking back, in some cases over several hundred

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years, they have retroactively tabulated the gross domestic product of certain industrialized nations. In this same period, two economic historians were particularly influential in the fields of historical and comparative research on economic growth. Angus Maddison published his first works on the subject toward the end of the 1950s, and in the succeeding decades he continued to enlarge and refine his previously compiled datasets.10 In one of his works from 1995, he published long-term GDP data for sixty-four countries including almost all of Europe; then, a few years later, he further expanded the time series.11 Maddison explored various aspects of growth theory such as the determinants of economic growth and the causes of economic convergence and divergence. Moreover, he established the Groningen Growth and Development Center (GGDC), a research institute at the University of Groningen in the Netherlands, through which he intended to spur internationally comparative historical analyses of economic output and other macroeconomic investigations.12 Remarkably, Maddison’s intensive research and networking notwithstanding, Paul Bairoch’s historical analysis of GDP was for a  long time equally prevalent among historians. His work essentially consisted of a single study that appeared in 1976.13 One probable cause of its popularity was that Bairoch’s scholarly apparatus was kept short and his work lacked the specialized terms and detailed information that characterized Maddison’s publications. We will return to Bairoch’s series, but for now it should suffice to say that the data in his early work were not only incomplete, but in several respects fairly unreliable. Today, researchers of international economic history unequivocally prefer Maddison’s most recent calculations.14 Concerning the region covered in the present volume, numerous explicitly comparative analyses of twentieth-century economic growth in East Central Europe have also been published, though these works have often arrived at divergent conclusions.15 Scholars like Doreen Warriner, Michael C. Kaser, and Derek H. Aldcroft, among others, have used fairly dark tones to depict the region’s economic growth in the period between the two world wars. However, as David F. Good has pointed out, such observations are rarely based on methodologically sound comparative analysis.16 The chief problem with the period following World War II, as noted by Thad P. Alton, Frederic L. Pryor, and Paul Marer, was to find a method for correcting distorted official statistics.17 David F. Good and Angus Maddison have also prepared accounts of the development of East Central

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Europe over the entire course of the twentieth century.18 These works and the methodological problems of the calculations of economic output will be covered in the relevant chapter. A number of economists and economic historians have, in recent decades, studied economic growth in East Central Europe in the latter half of the twentieth century, several of whom have attempted to describe this region’s development as part of a  wider international context. The most influential among these efforts is the scholarship of Iván T. Berend and György Ránki, which appeared in the 1970s and 1980s.19 In their early studies of economic output, however, they based their observations on calculations—principally on Paul Bairoch’s 1976 datasets, mentioned above— that were substantially less reliable than the ones that have since become accessible.20 Berend’s later works on the subject supplement Bairoch’s calculations with other, more consistent data.21 At the same time, a narrative approach continues to predominate, and East Central Europe is considered a single, peripheral entity.22 Using a distinctive methodology, Éva Ehrlich attempted to assess the levels of economic development in Eastern European countries and to describe the place they occupied in the international arena, or as she calls it, the contest between countries. By using the so-called physical indicator method (PIM), Ehrlich intended to substitute GDP data, but in the logic of her calculations she did not really depart from it: by means of a single indicator based on production data in natural quantities, she hoped to describe trends in economic output, primarily with the interest of evaluating the performance of socialist economies that operated with artificial prices.23 Economic output and the various methods by which economic growth might be assessed will be dealt with in greater detail below. For now, it will only be stated that the physical indicator method, employed by others as well, did not prove effective, and thus produced some misleading interpretations of twentieth-century growth trends in East Central Europe. Several other historical works have also examined trends in economic growth in the region, though as a rule, they tend to rely on one or another of Berend’s and Ránki’s studies. This is the reason Bairoch’s obsolete data continued to find its way into even more recent historical literature on East Central Europe. For example, in Hungarian research, there was a  prevailing notion that, over the course of the twentieth century, Hungary’s level of economic development came closest to that of Western Europe by the beginning of the 1970s.24

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It is not possible to review the relevant economic literature in East Central Europe here. Nevertheless, it could be argued that historians often find it difficult to rely on the results of economic analysis, since most of the studies produced on this subject up to 1989 were, in general, heavily ideological even if in the 1970s and 1980s academic freedom in Poland and Hungary clearly diverged from that of the less permissive Czechoslovakia.25 After the regime changes, there was a  proliferation of studies conducted with a higher degree of technical expertise, though with some exceptions, these economic analyses tended to deal with the final decades, or even just the final decade of the twentieth century.26 Though investigations of trends in economic growth and development have represented the mainstream of economic history in recent decades, standard of living and patterns of consumption have also long been important topics of research.27 This is illustrated by the fact that for decades after World War II, British historians engaged in an intense debate about changes in the living conditions of the populace, especially the working class, during the initial phase of the Industrial Revolution. They wanted to determine whether those changes should be described as absolute pauperization or just relative impoverishment, or whether they, in fact, signified a rise in standard of living.28 Researchers use the term standard of living primarily to denote the material dimensions of living conditions, usually measured by income and the consumption of goods and services. In recent decades, social science and historical research into living standard has moved beyond simple quantifications of consumption to discuss other characteristics such as structural transformations of consumption and changes in attitudes toward consumption. As a result of this shift, historical research into standard of living currently appears primarily as the history of consumption.29 Nevertheless, investigations of consumption have a relatively long history, in that, even if we disregard narrowly defined, economic approaches, the origins of such studies can be traced to the middle of the nineteenth century, when data concerning household expenditures was gathered in various European countries with the goal of determining the subsistence minimum.30 These surveys focused on the consumption of foodstuffs and lacked any serious methodological foundations.31 Theoretical considerations of consumption would soon appear, for example, in the works of Karl Marx. But for most nineteenth-century thinkers, consumption remained a  secondary phenomenon in compari-

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son to production. Thus scholars began to treat consumption as a separate field of inquiry only around the dawn of the twentieth century. Among the canonical sociologists, several, such as Max Weber and Werner Sombart, treated consumption as an important aspect of modern society. The consumption of fashion and luxury goods emerged as a decisively important theme, which was a significant development as it represented a departure from the outlook of classical economists. Classical economic theory had given birth to the concept of consumer rationality, the notion that consumers spend their money in strict accordance with the principle of utility maximization. This view would continue to be dominant in economics over the course of the twentieth century, but already Georg Simmel suggested that money served considerably more complex social functions and that several phenomena connected to consumption, such as fashion, did not simply evolve as a result of individual deliberations over costs and benefits.32 Research done between the two world wars led to further advances in the analysis of the social role played by consumption, as illustrated by the work of Thorstein Veblen, who considered consumption to be driven by competition and imitation, and who formulated the concept of “conspicuous consumption,” the chief goal of which was the maintenance or improvement of social status.33 The formation of the Annales School was an important development within social history proper, as its manifest interest in material culture proved to be a significant source of inspiration for historians of consumption.34 Following World War II, the analysis of consumption was enriched by new themes, like gift-giving and phenomena related to mass consumption.35 It was also the case that depictions of processes related to consumption provided space for representations of broader social interactions, as David Riesman demonstrated in his work about “other-directed people” in whose lives consumption plays a  particularly important role.36 The most significant development, however, was the appearance of vigorous critiques of consumption. Though such interpretations had already long existed, members of the Frankfurt School, and then others, began to offer much more comprehensive criticism of consumer culture than had ever been produced before.37 From the late 1970s, consumption research became a separate, independent field of inquiry within both sociology and social history.38 The number of studies published on the subject grew significantly; consumption often seemed to hold a central position among the changes taking place in mod-

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ern society. A series of publications demonstrated that consumption could be a  truly important factor in social stratification. This school of thought featured names like Pierre Bourdieu, who assigned particular significance to the role “fine distinctions” in consumption played in the reproduction of class distinctions in French society.39 Another milestone in consumption history was the work of Neil McKendrick, John Brewer, and J. H. Plumb, which traced the origins of consumer society back to the eighteenth century. 40 Colin Campbell’s book shifted attention to new areas, as he did not root the dynamics of consumption in competition between social groups or in imitation, but instead traced them back to a kind of romantic pursuit of desire.41 Representations of the significance of consumption that dated back to its old traditions were an important subject for research at the end of the twentieth century as well. Researchers did not regard fashion, habits of dress, and consumption of luxury goods simply as messages to other members of society; instead, following postmodern schools of thought, they interpreted them as decisive factors in the formation of social identities.42 Empirical research continued to devote great attention to patterns of consumption, in particular habits of food consumption. In addition, a host of new themes and approaches appeared in consumption research, such as the production and handling of garbage, and consumer protection, the results of which can be difficult to fit together with the findings of earlier research.43 Consumption history’s quick diffusion was the result of several factors working in concert. On the one hand, its practitioners regarded it as an alternative capable of counter-balancing the traditional themes of sociology and social history, including social class, the division of labor, and bureaucracy, which had been dominant since the nineteenth century. These phenomena were characteristic of early industrial societies, and their discussion emphasized production as a crucial determinant of social systems, conflicts, and interpersonal relationships in general; thus, moving the focus onto consumption appeared to be an innovation. This shift was also spurred by critics who could not accept certain suppositions of the dominant neoclassical economic theories, such as the notion that consumer behavior was simply defined by demand curves based on supplies and prices. Moreover, rising interest in postmodernist social theory and cultural studies at the end of the twentieth century, which laid the groundwork for research into fields like identity studies and symbolic meanings, also influenced the development of the field. The fall of communism was another factor insofar as that system’s inability to satisfy its citizens’ consumer

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demands played a decisive role in its demise. The failure of those regimes further strengthened the conviction, already prevalent among specialists, that consumption and consumer culture could exercise considerable influence over the course of history.44 Nevertheless, historical research into consumption is a diverse field of inquiry with an equally eclectic range of themes and methodologies. One of the most serious obstacles to the writing of a comprehensive introductory work about the history of consumption in the latter half of the twentieth century in Europe, or even just a region of that continent, is that studies related to consumption do not fit neatly into a central paradigm or set of paradigms. While in most fields of social research we come across consistent approaches accepted by a majority of scholars, the methodologies and thematic concerns of consumption research are still fairly divergent.45 One of the field’s leading authorities, Colin Campbell, suggested that the cause of this diversity is the rather “pre-paradigmatic” state of the field. 46 This proposition was made several years ago, but the divergences in the research area have persisted until now. It can be argued that the high degree of variability is not a characteristic of a specific developmental stage of the field; rather, it results primarily from the nature of the subject. There are very few social phenomena that cannot be conceptualized as some form of consumption. The number of studies concerned with consumption history has multiplied enormously in recent decades, and a large portion of them have involved a rethinking of phenomena that had traditionally been investigated by other branches of history and social science but are now being interpreted more and more often as instances of consumption.47 As a result of these factors, any account of this field of inquiry will necessarily be fragmented, and the problems associated with the consumption history of East Central Europe would appear to be even more complicated. This complexity is rooted not only in the significant social disparities within the region and the historical ruptures that shaped the region over the last century, but also in the fact that research only fairly recently began to focus on the region’s consumption history. Moreover, it did so in the period during which cultural history dominated the field, and cultural history itself can be considered a particularly non-paradigmatic discipline, further facilitating an increasingly diffuse narrative. For these reasons, themes have to be identified that will allow us to incorporate the most significant directions of research into the analysis,

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which will make it possible to produce a comprehensive and coherent representation of the consumption history of East Central Europe in the latter half of the twentieth century. At the same time, the distinctiveness of East Central Europe in this respect, as well as the ways its development was related to general European trends, should be determined over the course of the century. As Gábor Gyáni has shown, consumption could never have become a  significant field of inquiry in Marxist historiography because Marxist views of history and society were so deeply focused on production.48 Consequently, it is not surprising that the most significant studies of this subject were to appear in East Central Europe only after the fall of communism.49 The Hungarian case demonstrates that we are much more familiar with the developments of the final decades of the century because sociology, economics, and statistics were already effectively integrated into consumption research by that time.50 Even so, such research was largely disconnected from international scholarly discourse. One important sign of this disengagement is that comparative investigations of consumption, with the exception of a few statistical studies, were rarely conducted in the region.51 The turn of the millennium brought a change; social historians and sociologists in Poland, Hungary, and the Czech Republic discovered this field for themselves. Taking the Hungarian example again, Tibor Valuch wrote a history of fashion in Hungary in the second half of the twentieth century and explored the history of everyday life there in several other studies, extensively analyzing various aspects of consumption during the period.52 Another, possibly even more influential factor was that just as the popularity of consumption history was starting to grow in East Central Europe, researchers from Western countries began to more intensively study living standards and consumption in the communist period.53 Though East Central Europe was not fully neglected by such works, most of these studies focused on conditions in the Soviet Union and East Germany.54 The investigations mainly analyzed communist society in accordance with the everyday life research paradigm. The dominance of cultural approaches here is palpable, with the research interests of economic history pushed almost completely into the background. These investigations often resembled case studies in their approaches, and though their results include numerous important observations, they produced a fairly fragmented body of knowledge about the region, both thematically and geographically. Hardly anyone conceived of the sort of comprehensive studies that would have employed

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comparative perspectives, nor did they ask how generalizable their particular results might be. A survey of the literature shows that present-day historical research into consumption has become significantly more comprehensive than simply defining past levels of consumption.55 Besides structural and quantitative trends in consumption, other important areas of analysis have opened up, which—for lack of a  better term—can be called qualitative aspects. Among these are the autonomy of the individual as a  consumer and the evolving significance and function of consumption and leisure in the lives of individuals and societies.56 Consumer practices and social differentiation through consumption, along with the involvement of the state—that is to say, consumer politics—are also important aspects of the structure and functioning of consumer societies, and thus of consumer research as well. These are the perspectives that will be discussed in the course of this study. As we have observed, social scientists have made noteworthy efforts to measure and compare economic performance, track changes in living standards, and identify various consumption patterns in Western countries since at least the end of the nineteenth century. In contrast, quality of life research is a relatively new development.57 As the use of economic output indicators diffused in the second half of the twentieth century, a conceptual change took place: GDP was no longer employed as a  simple indicator of production levels, but as a measure of general well-being. In this way, any growth observed in the production of goods and services was assumed to signify a rise in well-being. As we will see in more detail later, starting in the 1970s, the connection between physical production and well-being began to seem rather doubtful. It was argued that on the whole, economic growth in the most developed countries was doing less and less to improve well-being and the quality of life, or possibly doing nothing at all; that is, the traditionally narrow understanding of economic growth was not sufficient to assess living conditions. The criticism suggested that indicators of economic growth fail to account for the depletion of natural resources or damage done to them, for example, as a  result of pollution in the water, soil, or air, even though such problems are likely to undermine future growth. It was also problematic that expenditures aimed at ameliorating the social and environmental damage created by economic expansion are themselves direct contributions to GDP growth. Similarly, another array of processes in modern societies, urbanization, for example, generate the kind of costs that serve only to nullify their negative effects. These, too, show

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up as GDP growth, though they tend to be counted as costs rather than as final products. Scholars have also criticized the methods by which economic output is calculated because they do not take into account non-market economic activities in private households or in the black market or informal economy, even though these phenomena can be especially significant in less developed economies.58 It is, therefore, not surprising that new conceptualizations of wellbeing, most notably quality of life, and the demand for new indicators of well-being have emerged. Many researchers have made efforts to improve their quantifications of economic output, primarily with regard to goods and services that do not reach the market, and in some cases take quantities of leisure time into account. Others estimate the components of GDP that do not actually increase public welfare (for example, the so-called regrettable necessities like military spending and police expenditures or the costs of commuting), and exclude them from their output data.59 There have been other experiments in which scholars have not concerned themselves so much with GDP—by attempting to filter out those items that do not improve well-being, or incorporating other elements into their output figures—but have instead approached the problem from a different angle, attempting to supplement their output calculations by including other, non-material elements.60 This other type of effort at improvement starts with the proposition that evaluations of well-being must take into account components that are not, or are not completely, economic in character, including healthy life expectancy, average life expectancy, environmental quality, levels of crime and poverty, educational standards and accessibility, and even civil rights, such as freedoms of speech, the press, and assembly. The common element among these efforts is the desire to compress several indicators of well-being into a single numerical measurement so as to facilitate direct international comparisons. Scholars have not reached a consensus about the factors to be taken into account, however, especially with regard to their relative weight, and thus there is still no generally accepted indicator of quality of life. Even though the backlash against the dominance of purely economic measures began as far back as the 1960s, and while the so-called indicator movement, which sought to devise more nuanced gauges that would reflect the diversity of social reality, has by now lost much of its initial momentum, the intellectual foundations of such reactions have withstood the test of time. As the Stiglitz-Sen-Fitoussi report, conceived a  few years ago, demonstrates, the debate continues

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about the sorts of yardsticks that should be used in characterizing and comparing well-being in various countries.61 While the investigations described above tend to regard the quality of life as an objective phenomenon, there has also been an expansion of research into subjective well-being. The chief goal of this approach is to describe the ways in which individuals evaluate their own lives, their levels of satisfaction (that is, how satisfied or happy they feel themselves to be), and the factors that stand behind such assessments. This line of questioning, however, is obviously not applicable to investigations of a historical nature, in that it is not possible to conduct surveys among the people of bygone eras, and for this reason, such an approach will be omitted from the present analysis.62 Even though quality of life research began at a relatively early date, in the 1970s, in East Central Europe, it was fairly fragmentary for a considerable period. Additionally, it remained mainly isolated from similar lines of research in other regions of the world, for example, the aforementioned indicator movement.63 Researchers in the region began to explore specific aspects of the issue such as the relationship between values and quality of life, but faced a  paucity of the long-term empirical results that might be useful in an historical analysis.64 Other studies have incorporated elements of subjective well-being, and thus lie beyond the boundaries of the research strategy applied here.65 In summary, investigations of growth, consumption, and quality of life will all play a  part in any study of well-being in twentieth-century East Central Europe, and Europe in general. At the same time, each of these approaches has its own advantages and disadvantages for historical research. For this reason, a simultaneous exploration of these three areas permits the characterization of the evolution of well-being in these societies more accurately than it has been done by previous scholarship.66 As far as postwar East Central Europe is concerned, the comparative approach has been only employed to study economic growth, and research dealt with problems related to trends in consumption and standards of living solely from this perspective. Quality of life has been omitted from such investigations and this study remedies this void. Over the last few decades, socio-economic convergence and divergence in Europe emerged as significant problems for international comparative research, and professional interest in this field appears to have intensified after the turn of the millennium. The historical dimensions of such phe-

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nomena are so important precisely because convergence or divergence can be studied properly only over long periods. Yet, this historical context has, up to now, never been studied systematically in East Central Europe. Economic growth appeared to be the exception, as a fair number of historical analyses have dealt with its evolution. These, however, have shown shortcomings in several respects, not merely due to the sources they have used, but in their analytic methods as well. A more systematic comparison including constant units of comparison could produce numerous new results concerning the postwar social and economic history of East Central Europe.

1.2 The Aims and Scope of Research Among the most important lessons to be gleaned from the reviewed literature is that comparative research on quality of life—alongside studies of economic output and consumption—is desirable because it provides the most accurate information on the evolution of living conditions. Measures of quality of life, however, are not sufficiently developed, do not extend back far enough historically, or are simply unavailable. In addition, serious methodological difficulties crop up in the course of such research. The farther we get from analyses of economic output in our investigations of more complex phenomena related to quality of life, the greater the chance we will produce more relevant observations about well-being. However, the research problems produced by value judgments will grow. There will be less and less consensus about the factors we should explore and about their relative weight in our analyses. In conducting research into standards of living and consumption, value judgments are obviously also unavoidable, but they are even more problematic in analyses of quality of life. These considerations have led us to employ the “triple approach.” First, we investigate the development of economic output, followed by a look at historical trends in consumption, and finally these approaches will be supplemented by analyzing several aspects of quality of life. This triple perspective will offer the most complete assessment of the evolution of well-being in postwar Europe. Beyond the general lessons of the related scholarship, research that focuses more narrowly on East Central Europe—briefly surveyed above— will also allow us to draw some important conclusions. Among these is the fact that there have been relatively few long-term investigations of East Central European economic growth over the second half of the twentieth cen-

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tury, and that their observations have not always been based on the most up-to-date methodologies and data. In addition, such research has, up to now, moderately made use of the potential of systematic international comparison. With few exceptions, the comparative work that does exist has dealt with limited periods of economic history, and long-term comparisons that would establish connections between them were heretofore hardly available. Research into consumption and standards of living in East Central Europe has been even less systematic, and analysts of these subjects have not even clarified the most elemental processes in this regard. There has been almost no effort to discuss East Central European societies’ levels and patterns of consumption in a wider European context, and the concept of quality of life has hardly appeared in historical analyses of East Central Europe. As indicated above, the book investigates how East Central European societies’ levels of economic development and consumption were related to socio-economic processes in Western Europe in the decades after World War II. In the course of this work, we hope to find answers to the following questions, stated in their most general form: did the levels and patterns of economic development, consumption, and quality of life in East Central Europe (or any part of it) approach those of Western Europe in the second half of the twentieth century, or did they lag behind? In which periods and in which areas of development were there signs of convergence or divergence? It is the book’s intention to approach this investigation in a way that will reflect the most important frames of reference devised by prior analysts of European societies and economies, and, at the same time, elaborate on the kind of historical analysis that will facilitate measurements of the dynamics of change. In addition, the goal is to avoid biasing the discussion in favor of any particular socio-economic system, and instead, help pinpoint the idiosyncrasies of every system, not just those of postwar Western Europe, but also those of East Central Europe.

1.3 Methods and Sources At this point, it seems necessary to offer a few observations about the strategy of comparison chosen here, as well as the other methods of investigation, the limits of such research, and the sources.67 There exist a variety of comparative research strategies, each of which has its own methodological consequences.68 One possibility is to choose a  small number of societies

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and to analyze their development over a short period—a few years, possibly a decade or two. We also, however, often encounter the kind of research that attempts to compare a large number of countries over a relatively long period, sometimes comprising several decades. Both of these options have their advantages and disadvantages. The former strategy, generally favored by historians, allows for more thorough consideration of circumstances and factors that might be more difficult to quantify. This approach, however, is obviously not capable of responding to the kind of questions that are important to the present investigation, which require the study of several cases over a relatively long period of time. Then again, those researchers who utilize the second of the approaches mentioned above generally analyze quantitative factors, looking for general trends. With this research strategy—used fairly extensively by sociologists and other social scientists—it is possible to test the validity of hypotheses and theories and to determine more precisely the significance of various factors. However, this quantitative research strategy makes it less possible to account for the context that is essential in historical studies. In order to respond to the questions posed earlier about economic and social convergence and divergence in twentieth-century Europe, it will obviously be necessary to study a number of countries over a significant period of time. For this reason, this work will apply quantitative methods fairly extensively, though not exclusively. Consequently, given the nature of this study, this will require more significant methodological compromises than would a less comprehensive investigation, and its comparative dimensions will have limits beyond simple thematic constraints. It is also true that the research interest of this book itself functions as a kind of constraint: insofar as its chief investigative foci isolate East Central Europe’s socio-economic characteristics and describe convergences and divergences between that region and Western Europe, other approaches will have to be relegated to the background. Beyond that, and above all, there are the practical difficulties resulting from deficiencies in the sources available (primarily on East Central Europe), and thus such irregularities will be reflected in this work. Another important methodological problem, which appears in every comparative study, is deciding on units of comparison. East Central Europe, or the societies that compose it, will serve as our primary units of analysis, and thus as our points of comparison as well. Comparing them with the countries of Southern Europe could provide us with important lessons insofar as the development of these countries in the course of the twenti-

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eth century in many ways paralleled that of East Central Europe. However, these very similarities make it difficult to engage in a so-called contrasting or individualizing comparison, which is also a  useful research strategy.69 In this way, we can make comparisons only when the differences between the units of comparison are sufficiently significant. This consideration also speaks to the fact that we can choose societies that exhibit patterns and trajectories of development that diverge considerably from those of East Central Europe—such as those of the societies of Western Europe—as further units of comparison. Beyond that, a comparison of the societies of East Central and Southern Europe will obviously require an analytical approach that diverges from my own. As noted earlier, the process of economic convergence became especially conspicuous in the relationship between the more industrialized regions of the European Union and the less advanced member states, including the countries of East Central Europe. In contrast, arguments over the existence and degree of convergence between East Central European countries and other groups of nations have yet to attract significant attention. And here the use of the concept “East Central Europe” will also require some explanation, because researchers often define this region in disparate ways. It is sometimes understood as the zone that stretches from the Baltic states to Bulgaria, between Germany and Russia. The concept of East Central Europe applied in this book is narrower, and includes only Poland, Czechoslovakia (and the two successor states), and Hungary. For practical reasons, within this region, the main focus lies on Hungary. It is even less obvious which countries should be considered part of “Western Europe.” In choosing Western Europe for this comparative work, it was my intention to group together countries that had achieved similar levels of socio-economic and political development over the course of the twentieth century. Thus, the thirteen countries studied in the book include the EU–15 states, with the exception of Luxembourg, Greece, Spain, and Portugal but including Norway and Switzerland. Nevertheless, the inclusion of other countries would not be unwarranted; in some cases, such additions were impeded simply by practical concerns like the lack of accessible sources. Many of the comparative studies published in recent decades have documented in various ways the fact that Western Europe’s economic development was not uniform over the course of the twentieth century; that is, to treat this region as a single unit for the purposes of comparison is some-

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what problematic. We hope to compensate for this methodological difficulty by providing a differentiated assessment of specific paths within Western Europe. Moreover, the undeniable differences between certain societies should not obscure the fact that modern industrialized states, especially those of twentieth-century Western Europe, have exhibited considerable similarities in their economic, social structures, and policies. In addition to the discussion of the variations within the region, these similarities can also provide us with the basis of a comparison between Western Europe— taken in the sense above—and East Central Europe. Besides, the statistical methods employed here measure not only the processes of convergence and divergence within the western half of the continent, but also, as we will see later, make it possible to compare the societies of East Central Europe with those of Western Europe, even if the variations in the latter region are significant, and even if there has been observable divergence between certain societies within it. Nevertheless, it is obvious that our comparison will be “asymmetrical,” and will exhibit all of the methodological consequences of being so: we will not be able to describe the economic and social patterns of specific Western European countries in as much detail as those of East Central Europe.70 This study comprises a  time period stretching from World War II to the end of the twentieth century. We do not regard this period to be anything like a  uniform historical era: several important dividing lines could be drawn through this span of more than half a century. At the same time, it is precisely the relatively long time span that will allow us to mark off various phases and contrast them. Nonetheless, the emphasis will unquestionably fall on the interval between 1950 and 1990, in essence, the communist era in East Central Europe. The end of World War II and the collapse of the communist regimes were obviously crucial historical turning points for Europe and for the world. It is arguable that the severe internal confrontation within Europe gave a kind of inner uniformity to this period. Nevertheless, these great political changes did not necessarily signify economic changes. Thus, if it proves necessary, the book will deal with developments from the period before World War II as well. With regard to research methods, statistical means will be used to investigate how the processes at work in East Central Europe corresponded to trends in Western Europe, and thus the existence of convergence or divergence, though the comparability of the available data will often create obvious difficulties, and the formal (measurable) similarities and differ-

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ences can often be misleading in the way that they function. The details of these statistical methods can be found in the Appendix. There exist several studies and statistical time series containing data related to the twentieth-century economic development of various countries as well as the levels and patterns of consumption and quality of life.71 None of that collection, however, completely covers the themes, time period, or all of the countries that figure into this study. For this reason, a variety of sources have been used to compile a database containing a variety of indicators of econom