No-decision with consequences: The oil crisis of the 1970s and the state socialist leadership in Hungary

Abstract
Within the historiography of the state socialist era, the oil crisis of 1973–74 is predominantly regarded as a pivotal moment in the progression of indebtedness. However, the period from late 1973 until the end of 1974 also witnessed the rise and eventual resolution of another significant crisis: the removal of the reformist faction within the political leadership of János Kádár and the temporary ascendancy of anti-reform forces. This political turmoil coincided with the economic crisis, creating a complex situation. The economic crisis and the leadership crisis are undoubtedly intertwined; consequently, the Soviet leadership expressed dissatisfaction with the Hungarian reform efforts. Despite the challenges faced by the Hungarian leadership, decisions regarding the crisis emerged from a comprehensive process that considered multiple alternatives. The leadership of the Hungarian Socialist Workers’ Party (MSZMP) remained committed to its ideological narrative, which emphasized the neocolonialist strategies of capitalist powers, their conflicts with one another, and the overarching political influence of monopolies in global energy markets. Records from party and foreign offices during the crisis suggest there was a continuous exchange of information behind the scenes. Meanwhile, party and state propaganda, along with media policy, was employed to maintain ideological and economic coherence. However, the delay in addressing the crisis was primarily due to political and economic indecision, which was closely linked to changes in leadership and the urgency to resolve the situation at an inconvenient time.

Keywords
crisis, decision-making, political leadership, energy policy, indebtedness, Hungarian socialism, one-party system

Cite this paper
Milán Pap, No-decision with consequences: The oil crisis of the 1970s and the state socialist leadership in Hungary , SCIREA Journal of Management. Volume 9, Issue 2, April 2025 | PP. 189-209. 10.54647/management630172

References

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[ 44 ]	Yegor Gaidar, the architect and implementer of Russia's economic reforms and shock therapy in the 1990s, saw the main cause of the collapse of the Soviet economy in the inefficient use of revenues from energy exports. See: Yegor Gaidar: Collapse of an Empire: Lessons from Modern Russia. Washington: Brookings Institute, 2007.
[ 45 ]	Proposal to the Secretariat for taking out foreign loans (April 27, 1974). MNL OL M–KS 288. f. 24/1974/3. ő. e. 80–82. See also Attila Mong: op. cit. 156–157.