Eugen Varga

Eugen Samuilovich "Jenő" Varga (born as Eugen Weisz, November 6, 1879 in Budapest – October 7, 1964 in Moscow) was a Soviet economist of Hungarian origin.

Biography

Early years

He was born as Jenő Weiß (Hungarian orthography: Weisz) in a poor Jewish family, as a child of Samuel Weisz - who was a teacher in the primary school of Nagytétény - and Julianna Singer. Eugen "Jenő" Varga studied philosophy and economic geography at the University of Budapest. In 1906, he started writing in socialist and academic journals, mainly on economic subjects. Before World War I he gained some fame by discussing with Otto Bauer about the origins of inflation in the Austro-Hungarian Empire. In this period he belonged to the Marxist Centrists, of whom Karl Kautsky and Rudolf Hilferding were the most prominent spokesmen.

Hungarian revolution

In February 1919, Varga joined the newly created Hungarian Communist Party. During the short-lived Hungarian Soviet Republic of 1919, led by Béla Kun, he was People's Commissar for Finance, and then Chairman of the Supreme Council of National Economy. After the overthrow of the Soviet Republic he fled to Vienna.

Soviet emigration

In 1920 he went to the Soviet Union with Arthur Holitscher. Here he started working for the Comintern, specializing in international economic problems and agrarian questions. In years 1922-1927 he was working at the department of trade in the Soviet embassy in Berlin. In 1927-47, he was director of the Institute of World Economy and World Politics. In the 1930s he became an economic adviser to Joseph Stalin. He survived the purges of the 1930s, during which Bela Kun and other Hungarians were executed.

During World War II he advised the Soviet Government in matters of post-war reparations. He attended the Potsdam Conference of 1945 as an expert. Like most of his compatriots living and working in Moscow, he joined the Communist Party of the Soviet Union, but he also remained active in the Hungarian Communist Party.

He authored the economic reports the congresses of the Comintern discussed between 1921 and 1935. A large number of his writings were studies of the international economic conjuncture, in which he made great effort to assess quantitative trends in output, investment and employment using official economic data from numerous countries. He also extensively studied German imperialism.

Personality

In 1922, Alexander Barmine, a Soviet diplomat who later defected to the west, travelled by train to Moscow with delegates to the Fourth Congress of Comintern, including Varga, who "showed the most revolting lack of consideration" by demanding a private railway compartment. Barmine considered that he should have content with a berth in a first class carriage. He wrote: "The little luxuries of power go to men's heads."

Another Soviet defector Abdurakhman Avtorkhanov, writing under the pseudonym Alexander Uralov, left a humorous description of Varga, whom he described as having "the pedantry of a German official, the obstinacy of a Russian accountant, and the suppleness of an Oriental fakir", and of his institute, where "share fluctuations were followed more attentively than in any London or New York bank. The most brilliant member of the Stock Exchange would have envied the way in which Varga was kept informed."

Post-War Controversy

In 1946, Varga published ''The Economic Transformation of Capitalism at the End of the Second World War'', in which he argued that during the war, western governments had accumulated great power over the management of capitalist economies, which brought them closer to socialist economies and more likely to last. He was praised by Kremlin watchers in the west as a 'person with a Western orientation' and a 'defender' of the Marshall Plan, but "these implications were highly distasteful to Soviet conservatives" who believed that capitalism was heading for an extreme and possibly terminal crisis. During a closed meeting of economists called by USSR Academy of Sciences and Moscow University, in May 1947, "Varga was attacked for his writings by most, if not all, of the participants."

He was also attacked by Nikolai Voznesensky, then a powerful figure as Chairman of Gosplan and a member of the Politburo, who wrote a book in which he accused 'certain theoreticians' of having 'empty opinions which deserve no consideration'. Varga's book was condemned at a meeting of economists and political experts in May 1947, and the institute he headed was closed and subsumed into Gosplan. Though he remained a leading academic economist, his prestige had diminished - in the second edition of the ''Great Soviet Encyclopedia'' he was qualified as a "bourgeois economist" - but the fact that he was not dismissed or arrested implies that he had powerful protectors. In March 1949, Voznesensky was arrested, and two days later, on 15 March, Varga published a self-critical letter in ''Pravda''.

Years after Stalin

After Stalin's death in 1953, he reappeared on the scene. In February 1956, he wrote the article in ''Pravda'' that rehabilitated Bela Kun. But the new men in power in the Kremlin believing in the virtues of peaceful co-existence were not interested in Varga's predictions of the outbreak of a "necessary" economic crisis in the United States. After his death, his selected works in three volumes were published in the Soviet Union, Hungary, and East Germany.

Varga never returned to living in his native Hungary. Because he was very close to Mátyás Rákosi

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