With much of the Soviet bloc troubled these days by economic woes and unruly intellectuals, things remain "reasonably good" within the more liberal and relaxed brand of "goulash communism" practiced here, a Hungarian writer says.
The hotels here in the capital are jammed and last year the number of tourists, many of them from elsewhere in Eastern Europe, almost equaled the country's 11 million population.
The crowded shops stocks of consumer goods are among the best in Eastern Europe.
A taxi driver stuck in rush-hour traffic curses the 85,000 new cars that roll onto the road here each year, but he is proud of the better material life that brings the smog and congestion.
Along county roads, new farmhouses dot the flat landscape. Primitive by U.S. standards, they are nevertheless another sign that the Communist government of Janos Kadar continues to achieve some success inmeeting rising expectations.
"This is still a poor country," the writer says, "with a peasant class of 4 million or 5 million. But they are really living quite well now, so they don't think much about politics or things like the Helsinki agreements. It's not that they are indifferent; it's just that for the first time they have a chance to do something - maybe get a house or a car or travel a little.
"Practically everything is available and nothing is outrageous. The construction is cheap by Western standards, but it is a relative improvement, a matter of pride to have a bathroom and tub. It seems a bit pathetic, "he says, "but it is not."
To be sure, the Hungarians are confronted with many of the same economic problems as the rest of the East: Too few raw materials, a shortage of workers, rising prices for Soviet oil and Western technology. The balance of trade with the West steadily worsens: Budapest has just acknowledged that the balance for the first half of this year is 4 to 5 per cent worse than planned.
Nevertheless, the Kadar regime - in power now for 21 years - has achieved a degree of leeway from the Kremlin on domestic affairs that has led to a political acceptance and relative normality at home unique in the Eastern bloc.
The Hungarian economy is also relatively more efficient. Farmers continue to cultivate small private plots in addition to the huge collective farms, so that a variety of produce is available. Small, privately owned shops are also permitted. All this means that Budapest has managed to avoid some of the strains afflicting its Warsaw Pact allies.
Carefully planned price increases were carried out this spring with some grumbling, but without the riots that hit Poland last year.
Hungary has also managed to avoid the widespread signs of unrest among intellectuals and dissidents that have surfaced during the past year in the Soviet Union. Poland, Czechoslovakia, East Germany and, to a lesser extent, Romania.
The only public flirtation with dissent here came in January, when some 35 intellectuals signed a document supporting the Charter 77 human-rights activities in Czechoslovakia.
"For a few days, there was a stunned silence," one Hungarian author said, referring to both the intellectual community and the government.
"Then things gradually relaxed and nothing happened."
There was no crackdown, he said, and the writers among the signers continue to work and be published.
The dominant mood is that things are reasonably good and most of the writers want to preserve that and not disturb it," he said.
There is no outspoken dissent here, he says, "because the conditions are totally different than in East Germany or Czechoslovakia. Compared to them, we are ultra-liberal. The condition for repression and anxiety don't exist, thank God. There are no political prisoners, and all significant literary works are published sooner or later.
"The censorhip is within us," a poet adds. "Certain things are not written about because it is quite clear where the limits of intellectual expression are. Nothing can be questioned about certain Marxist dogmas, and saying anything about the Soviet Union is the great taboo. But if you don't talk ideology, you can criticize many things."
Behind the scenes, however, there are indications that things are not quite so relaxed.
Sources here say that three or four of the 35 who signed the Charter 77 support document are being quietly encouraged to leave Hungary, a technique being used elsewhere in Eastern Europe with varying degrees of severity to rid countries of the more articulte dissidents.
Sources say the one most likely to leave is Agnes Heller, a Marxist-oriented philosopher and disciple of the late and famous Hungarian philosopher Georg Lukkacs. Heller is viewed as the intellectual leader and the most prominent member of the signers. Others say they are uncertain whether Heller, who also protested the Soviet invasion of Czechoslovakia in 1968, is being pressured to leave or has decided on her own to accept a rumored offer to join sociologist Ivan Szelenyi, a former Hungarian dissident now teaching in Australia.
In the economic sphere, it is said authoritatively that the Soviet Union is pressing Budapest for an increase of several per cent in the 1978 Hungarian military budget - a move Badapest is resisting.
The increase would be for modernized equipment. Some here interpret this as a soviet effort to put a little more strain on the Hungarian economy that, in turn; might tone down Budapest's appeal for travelers from elsewhere in the bloc.
Others see it as part of widespread Soviet pressure throughout the bloc aimed at helping the Soviet arms industry, which has lost clients in the Middle East and elsewhere lately. No one here seems to attach any military significance to the pressure.
Meanwhile, the Kadar regime continues to move cautiously in its foreign policy to strengthen relations with the West, especially in the economic field and especially with the United States.
This month the Nationl Bank of Hungary is to open a branch in New York - a first for a Soviet-block country.
Recently, Hungary became the only country besides Finland to have paid off allthe interest on debts from the post-World War era. This now allows Hungary to borrow in America capital markets.
The government here is also now allowing so-called "illegal immigrants," those who fled after eht 1956 uprising, to come back in as tourist.