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The article seeks to place the workers' road from socialism to capitalism in East Germany and Hungary in a historical context. It offers an overview of the most important elements of the party's policy towards labour in the two countries under the Honecker and the Kádár regime respectively. It examines the highly paternalistic role of the factory as a life-long employer and provider of workers' needs for the large industrial working class which the regime considered to be its main social basis. Given that the thesis of the working class as the ruling class was central to the legitimating ideology of the state socialist regimes, dissident intellectuals challenging this thesis were effectively marginalized or forced into exile. After the change of regimes, the "working class" again became an ideological term associated with the discredited and fallen regime. The article analyses the changes within the life-world of East German and Hungarian workers in the light of life-history interviews. It argues that in Hungary, the social and material decline of the workers -- alongside the loss of the symbolic capital of the working class -- reinforced ethno-centric, nationalistic narratives, which juxtaposed "globalization" and "national capitalism", the latter supposedly protecting citizens from the exploitation by global capital. In the light of the sad reports of falling standards of living and impoverishment, the Kádár regime received an ambiguous, often nostalgic evaluation. While the East Germans were also critical of the new, capitalist society (unemployment, intensified competition for jobs, the disintegration of the old, work-based communities), they gave more credit to the post-socialist democratic institutions. They were more willing to reconcile the old socialist values which they had appreciated in the GDR with a modern left-wing critique than their Hungarian counterparts, for whom nationalism seemed to offer the only means to express social criticism. [ABSTRACT FROM AUTHOR]

An essay is presented on the experiences of the industrial working class in the German Democratic Republic (GDR) and Hungary in 1989. According to the author, the 1989 collapse of communist regimes in these regions can be explained by an examination of their policies towards the working class. It is suggested that contradictions between these regimes' economic and social policies and their communist ideologies led to the demise of their authority and to a working-class embrace of capitalism.