Hungary - Economic and Social Developments

Economic and social developments

By the turn of the nineteenth century, the aim of Hungary's agricultural producers had shifted from subsistence farming and small-scale production for local trade to cash-generating, large-scale production for a wider market. Road and waterway improvements cut transportation costs, while urbanization in Austria, Bohemia, and Moravia and the need for supplies for the Napoleonic wars boosted demand for foodstuffs and clothing. Hungary became a major grain and wool exporter. New lands were cleared, and yields rose as farming methods improved. Hungary did not reap the full benefit of the boom, however, because most of the profits went to the magnates, who considered them not as capital for investment but as a means of adding luxury to their lives. As expectations rose, goods such as linen and silverware, once considered luxuries, became necessities. The wealthy magnates had little trouble balancing their earnings and expenditures, but many lesser nobles, fearful of losing their social standing, went into debt to finance their spending.

Napoleon's final defeat brought recession. Grain prices collapsed as demand dropped, and debt ensnared much of Hungary's lesser nobility. Poverty forced many lesser nobles to work to earn a livelihood, and their sons entered education institutions to train for civil service or professional careers. The decline of the lesser nobility continued despite the fact that by 1820 Hungary's exports had surpassed wartime levels. As more lesser nobles earned diplomas, the bureaucracy and professions became saturated, leaving a host of disgruntled graduates without jobs. Members of this new intelligentsia quickly became enamored of radical political ideologies emanating from Western Europe and organized themselves to effect changes in Hungary's political system.

Francis rarely called the Diet into session (usually only to request men and supplies for war) without hearing complaints. Economic hardship brought the lesser nobles' discontent to a head by 1825, when Francis finally convoked the Diet after a fourteen-year hiatus. Grievances were voiced, and open calls for reform were made, including demands for less royal interference in the nobles' affairs and for wider use of the Hungarian language.

The first great figure of the reform era came to the fore during the 1825 convocation of the Diet. Count Istvan Szechenyi, a magnate from one of Hungary's most powerful families, shocked the Diet when he delivered the first speech in Hungarian ever uttered in the upper chamber and backed a proposal for the creation of a Hungarian academy of arts and sciences by pledging a year's income to support it. In 1831 angry nobles burned Szechenyi's book Hitel (Credit), in which he argued that the nobles' privileges were both morally indefensible and economically detrimental to the nobles themselves. Szechenyi called for an economic revolution and argued that only the magnates were capable of implementing reforms. Szechenyi favored a strong link with the Habsburg Empire and called for abolition of entail and serfdom, taxation of landowners, financing of development with foreign capital, establishment of a national bank, and introduction of wage labor. He inspired such project as the construction of the suspension bridge linking Buda and Pest. Szechenyi's reform initiatives ultimately failed because they were targeted at the magnates, who were not inclined to support change, and because the pace of his program was too slow to attract disgruntled lesser nobles.

The most popular of Hungary's great reform leaders, Lajos Kossuth, addressed passionate calls for change to the lesser nobles. Kossuth was the son of a landless, lesser nobleman of Protestant background. He practiced law with his father before moving to Pest. There he published commentaries on the Diet's activities, which made him popular with young, reform-minded people. Kossuth was imprisoned in 1836 for treason. After his release in 1840, he gained quick notoriety as the editor of a liberal party newspaper. Kossuth argued that only political and economic separation from Austria would improve Hungary's plight. He called for broader parliamentary democracy, industrialization, general taxation, economic expansion through exports, and abolition of privileges and serfdom. But Kossuth was also a Magyar chauvinist whose rhetoric provoked the strong resentment of Hungary's minority ethnic groups. Kossuth gained support among liberal lesser nobles, who constituted an opposition minority in the Diet. They sought reforms with increasing success after Francis's death in 1835 and the succession of Ferdinand V (1835-48). In 1843 a law was enacted making Hungarian the country's official language over the strong objections of the Croats, Slovaks, Serbs, and Romanians.

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