ABSTRACT
The discussion of direct state engagement in the Hungarian economy should begin with the classic industrialization policies of the Hungarian state after gaining independence from Austrian dominance in terms of its economic development policies after 1867. Prior to 1867, within the Habsburg Empire, Hungary’s role was reduced to supplying food and raw material to the industrialized Austrian and Czech lands. This involuntary division of labor was reinforced by Habsburg monarchs and supported by administrative regulations like the double customs decree enacted in 1754, which practically banned deliveries of Hungarian industrial goods to other regions of the empire outside of this historic Hungarian Kingdom and supported food supplies instead. Prohibitions were lifted only in 1850. In 1867 also, when the political structure of the Habsburg empire changed, and the “Dualist” system was established. Political and economic repressions of the Hungarian parts of the empire were eliminated.
