A human economy brings together many initiatives in a unifying vision, expressed as a shared drive for a better world. It links each of us to emergent world society, one fit for all humanity. We need an economics that can address both levels and many in between. Money has the potential to mediate between these extremes. Simmel saw money’s potential to make universal society while being grounded in everyday life. Forms of association, old and new, can bring democratic norms to economic practice. We cannot afford to return to the Cold War contradiction of market vs. state. 

(Hart 2022, 245)

Keith Hart and I were hired as assistant lecturers in the Department of Social Anthropology at Cambridge just as Jack Goody retired, to be replaced as William Wyse chair by Ernest Gellner. I have a copy of Keith’s treatise on money (Hart 2000), inscribed “for Chris, rookie of the year 1984.” Indeed, he had already acquired vast experience at universities in both Britain and North America, whereas I was ten years younger and had spent five years living in Hungary and Poland. I had almost no teaching experience and Keith put me in my place, frequently. He was also supportive and soon became a friend. I learned to understand economic anthropology in new ways thanks to his guidance.

I recall his reluctance to introduce new departmental courses touching on development, on the grounds that he would be the sole faculty member competent to teach them. His interests had already shifted away from debates about informal labor markets in developing countries. The concept of a “third world” was general currency in the late Cold War era but Keith did not like it. The compulsory second-year course which had this concept in its title therefore fell to me, even though most of my own research had taken place in the second world.

But in reality there is just one world. In this brief contribution I want to consider a reformist variant of Marxist-Leninist socialism in light of Keith Hart’s theorizing of informality early in his career and the conception of human economy that he promoted in his last decades. Following the introduction in 1968 of a “new economic mechanism,” economic activity “outside the plan” expanded enormously in Hungary. Like the daily survival strategies of slum dwellers in third-world cities, but also self-help, mutual aid, and the “black” economy in advanced capitalist countries, the activities of what became known as the “second economy” escaped the purview of the state. They did not enter the national statistics and were difficult if not impossible to tax. Keith was never comfortable with the reification of an “informal sector”: the challenge was always to explore the links between these secondary zones (if not black, often a dark shade of grey) and the formal world, be it that of wage-labor contracts in market capitalism or the planned economy of a workers’ state.

When we collaborated in writing a short introduction to economic anthropology, Keith was content to include a chapter titled “The Socialist Alternative” (Hann and Hart 2011, chapter 7). It fell to me to draft this, just as he naturally took the lead in drafting the brilliant chapters that preceded and followed my exploration of socialism (titled “Unequal Development” and “One-World Capitalism” respectively). I noted how the Hungarian reforms had contributed to economic prosperity in a countryside that was historically underdeveloped and impoverished. Mechanized collective farms could produce grain efficiently and provide cheap fodder to their members for labor-intensive hog-breeding undertaken on a household basis. This was lucrative in comparison with the wages obtained from formal employment in the socialist sector. I noted tensions too, especially when efforts were made to achieve a comparable symbiosis in industry. Urban unemployment did not exist, but factory jobs did not pay well. People therefore welcomed opportunities to increase income through additional work, often using the same skills and “borrowing” the very same tools that they used in their official workplace. This informal activity was driven by consumer aspirations. The aggregate results gave Hungary a rather positive image, as a socialist country that was meeting the needs of its citizens more satisfactorily than any of its neighbors in the Soviet bloc.

As countless Hungarian social scientists showed, there was also a price to be paid for increasing working hours and encouraging an “economistic” mentality in everyday life. Social pathologies ranged from mental stress to high rates of alcoholism and suicide. In my chapter I drew attention to the moral costs associated with the dilution of socialist principles, for example in the proliferation of black markets and bribery. Supporters of the reforms hailed them as opening up precious space for individual initiative and compensating for the rigidities of central redistribution (which had always generated their own corrupt practices). The detractors of reform bemoaned increasing inequality and violations of ethical norms, such as offering a bribe to jump a queue. Villagers were pleased to be able to build new houses with bathrooms. Townspeople were pleased to be able to purchase cheap wine and spirits in plastic bottles as marketed informally by the producers. No one appreciated the taste or the risk to health of chemically manufactured “wine that hadn’t seen a grape.” No one was comfortable with having to pay “gratitude money” (hálapénz—cash handed over discreetly in an envelope) to hospital doctors and nurses as a precondition for treatment. Wealthier citizens could avoid such indignities by buying decent wine imported from abroad and turning to the burgeoning private sector to meet their health needs.

Decades later it might seem that reform socialism, a kind of mixed economy that allowed market forces considerable scope but denied private entrepreneurs the right to own significant productive capital, resulted in the worst of all worlds. It was a “subhuman economy” because the reforms expanded inequalities and stimulated frenetic forms of materialist accumulation that were not conducive to individual well-being or to the cohesion of communities. At the same time, the reforms never went far enough to satisfy neoliberal economists, who insisted that only radical privatization and the extension of the market principle at every level would improve efficiency. This corresponded to the global zeitgeist. Indeed, a form of shock therapy was implemented after 1990 (initially less drastic than the better-known case of Poland but eventually with similar social and political consequences). In the first post-socialist decades Hungary attracted a lot of foreign investment and was perceived to be the biggest success story in the socialist transition, a success often attributed to the cautious experiments with the informal economy undertaken in late socialism, from 1968 onward.

But Hungary is no longer a poster child. Since 2010, the populist governments of Viktor Orbán have intervened systematically in the economy, justifying their actions by the need to protect citizens from the vagaries of global free markets. At the micro level of society, the picture is mixed. Informality persists but fiscal controls have become all-pervasive. When a citizen has to be issued with a written receipt every time she spends a dime to use a public lavatory, people greet this with laughter and scorn. Meanwhile, Hungary has become a pariah in the European Union due to unprecedented nepotism and corruption at the highest levels. However, it should be noted that in some fields Orbán’s governments have succeeded where all predecessors failed. By increasing salaries in the national health service and severely punishing the acceptance of hálapénz, the illiberal populists have managed to eradicate a feature of the socialist and post-socialist gift economy that everyone denounced.

I concluded our chapter on socialism with the hope that new combinations of state and market in East Asia might prove more successful than anything achieved in the Soviet bloc. Today I am less optimistic about developments in China and Vietnam. Neoliberal logics seem to have overwhelmed human economy everywhere. But what exactly is (the) human economy as envisioned by Keith Hart? He railed against the state and the obscene inequalities of a world dominated by capitalist corporations. He championed self-organization, cooperatives, local currencies, solidarity, and alter-globalization initiatives. At the same time, Keith saw private property, money and markets as the indispensable bastions of a healthy economy. In both public and private contexts, you needed to strike an elusive balance between formality and informality. Keith liked to describe himself as a “radical conservative,” distancing himself from both leftist critics of capitalism (Karl Polanyi as well as Karl Marx) and from anarchists such as his friend and colleague David Graeber. For Keith Hart, the “future of the human economy, once material requirements are satisfied, lies in the infinite scope for us to do intangible things for each other—like singing songs or telling stories” (2022, 212). At the end of the day, this is a “religious project” (253).