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Wednesday, February 15, 2012

Malév "Hollowing-Out" Plot Thickens

http://atlatszo.hu now offers some additional details about what I see as a recent case (that of the national airline carrier) in the ongoing robbery of public assets in Hungary. I wrote about it here and here.

It appears that there are extensive social network ties between company X--appointed by the government to serve as bankruptcy guardian for Malév--and the one-person microenterprise that had precipitated the bankruptcy proceedings in the first place. And at least some of those links have emerged from cooperation in the bankruptcy-cum-privatization of erstwhile public assets.

There is a, by now very distinguished, literature on corporate social networks. In "interlocking directorates" that literature has coined one of the earliest concepts through which critical work on late-20th-century capitalism and the emerging new technique of social network analysis have gained intellectual traction. By now, this is fairly standard material in, say, third-year Economic Sociology courses.

What is interesting about the Company X link to the one-person micro-firm has to do with size. The corporate networks literature focuses, understandably, on linkages among some of the largest (i.e., most powerful and most complex) economic organizations. Here we have a slight variant, with a tiny spot of a company serving as the mosquito that delivers the Dengue fever virus in the body of the corporation that is to be dismantled.

From public court records on company ownership and board membership, atlatszo.hu also reconstructs some interesting details about techniques whereby previously state-owned companies have been "hollowed out"--still valuable pieces transferred to private owners at steep discounts and with the elimination of open competition or public oversight--through bankruptcy. (I wrote about this about twenty years ago, in a piece entitled "Simulating the Great Transformation: Property Change under Prolonged Informality in Hungary," published in the European Journal of Sociology. Subsequently, I have argued extensively about the significance of informal arrangements in the post-state-socialist transformation.

I often wish I had been wrong.

1 comment:

  1. To update: the person who was introduced, at the point where he was given the job of government-appointed bankruptcy commissioner, as the CEO of "Company X" has no office in the building of "Company X". What he does have, instead, is an improper connection to Malév, having a connection to a company that is one of Malév's creditors, according to http://atlatszo.hu . This is excellent investigative journalism.

    I want to insist, however, that the question is not the immediate personal improprieties of the people involved--i.e., corruption in the immediate sense of the word--but the deep-structural absence of protections for public property against plain old robbery. In other words, the web ought to have been cast much more widely.

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