MARKET-COMPLIANT METHODS IN THE SOCIALIST REAL ESTATE SECTOR. A CASE STUDY OF PAST HUNGARY

One of the main objectives of the system of state socialism was the abolition of private property.In this spirit, the market was also to be eliminated from the economic process as a method and instrument of price formation.The real estate sector has been the arena of state influence, but the state bureaucracy has never managed to achieve total control.In socialist Hungary, which served as a case study, the private real estate market survived.Partly in opposition to the bureaucracy of the State and partly in acknowledgement of it, a 'grey' market sector developed in which the methods of the market economy continued to operate.Such methods were to be found in property law, such as the creation and trading of tenancy and management rights, in the private market trading of state-owned companies in the field of real estate brokerage, and in small-scale, house-building organisations such as the "kalka".This article describes these grey market methods and how they survive in a market economy.It concludes that market methods are emerging and taking root even in the strongest socialist polity.