Unemployment and the production of state space in Hungary in two crisis periods

Abstract

This article compares the job-creation policies of the Hungarian state during the crisis periods of 1929–1933 and after 2008. The theoretical basis of the study is derived from Marxist historical-materialist state theories that argue that the primary role of the state as an economic actor is to facilitate capital accumulation and social reproduction. Geographers expanded this approach by pointing out that the state produces spaces and geographical scales during the /process of controlling capital accumulation. Times of crisis are important turning points in which the accumulation of capital, the role of the state, and thus the production of state spaces and scales change significantly. Historical-materialist state theories provide a useful analytical tool to systematically understand why the state pursues job-creation programmes in times of crisis and why these programmes unfold geographically unevenly across the country. Common points in space production during the two periods of crisis analysed are, firstly, that the state actively sought to restore capital accumulation through direct actions, including the propagation of public investment in infrastructure works (roads, water management, etc.) and the construction of public buildings (schools, hospitals, police stations, military barracks, etc.), as well as employment in the field of public works in these actions. Secondly, since financial resources were distributed unevenly, the state created geographical inequalities. Thus, most construction projects in the 1930s were concentrated in southern Hungary and Budapest, while employment in public works after the 2011 reform concentrated on small villages in the country's least developed peripheral regions. Thirdly, we can see that the state budget was too limited for measures to combat unemployment. With regard to the production of scales, both crisis periods showed a decline in the financial autonomy of local authorities as the central government took direct control of the distribution of resources for measures against unemployment. County authorities and local governments received most of the funds allocated for specific investment purposes according to individual government decisions, differentiating them according to the lobbying forces of the municipalities. The supranational scale provided credit for the expansion of investment programmes to create jobs in the 1930s and made it possible to increase EU transfers to maintain employment after 2008.