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Hungary Rise of the Liberal Party
Franz Joseph appointed Gyula Andrassy--a member of
Deak's
party--prime minister in 1867. His government strongly
favored
the Compromise of 1867 and followed a laissez-faire
economic
policy. Guilds were abolished, workers were permitted to
bargain
for wages, and the government attempted to improve
education and
construct roads and railroads. Between 1850 and 1875,
Hungary's
farms prospered: grain prices were high, and exports
tripled. But
Hungary's economy accumulated capital too slowly, and the
government relied heavily on foreign credits. In addition,
the
national and local bureaucracies began to grow immediately
after
the compromise became effective. Soon the cost of the
bureaucracy
outpaced the country's tax revenues, and the national debt
soared. After an economic downturn in the mid-1870s,
Deak's party
succumbed to charges of financial mismanagement and
scandal.
As a result of these economic problems, Kalman Tisza's
Liberal Party, created in 1875, gained power in 1875.
Tisza
assembled a bureaucratic political machine that maintained
control through corruption and manipulation of a woefully
unrepresentative electoral system. In addition, Tisza's
government had to withstand both dissatisfied
nationalities and
Hungarians who thought Tisza too submissive to the
Austrians. The
Liberals argued that the Dual Monarchy improved Hungary's
economic position and enhanced its influence in European
politics.
Tisza's government raised taxes, balanced the budget
within
several years of coming to power, and completed large
road,
railroad, and waterway projects. Commerce and industry
expanded
quickly. After 1880 the government abandoned its
laissez-faire
economic policies and encouraged industry with loans,
subsidies,
government contracts, tax exemptions, and other measures.
The
number of Hungarians who earned their living in industry
doubled
to 24.2 percent of the population between 1890 and 1910,
while
the number dependent on agriculture dropped from 82 to 62
percent. However, the 1880s and 1890s were depression
years for
the peasantry. Rail and steamship transport gave North
American
farmers access to European markets, and Europe's grain
prices
fell by 50 percent. Large landowners fought the downturn
by
seeking trade protection and other political remedies; the
lesser
nobles, whose farms failed in great numbers, sought
positions in
the still-burgeoning bureaucracy. By contrast, the
peasantry
resorted to subsistence farming and worked as laborers to
earn
money.
Data as of September 1989
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