In early 1947, the Soviet Union pressed Hungarian leader Mátyás Rákosi,
famous for his use of salami tactics, to take a "line of more
pronounced class struggle." The People's Republic of Hungary was formed
thereafter. What emerged is what Hungarian communist László Rajk (who
was later executed) called "a dictatorship of the proletariat without
the Soviet form" called a "people's democracy." Mátyás Rákosi, the new
leader of Hungary demanded complete obedience from fellow members of
the Hungarian Working People's Party. Rákosi's main rival for power was
László Rajk, who was then Hungary's Foreign Secretary. Rajk was
arrested and Stalin's NKVD emissary coordinated with Hungarian General
Secretary Rákosi and his ÁVH secret police to lead the way for the show
trial of Rajk. At that September 1949 trial, Rajk made a forced
confession to be an agent of Miklós Horthy, Leon Trotsky, Josip Broz
Tito and Western imperialism. He also admitted that he had taken part
in a murder plot against Mátyás Rákosi and Ernő Gerő. Rajk was found
guilty and executed. Despite their help to Rákosi to liquidate Rajk,
future Hungarian leader János Kádár and other dissidents were also
purged from the party during this period. During Kádár's interrogation,
the ÁVH beat him, smeared him with mercury to prevent his skin pores
from breathing, and had his questioner urinate into his pried open
Rákosi thereafter imposed authoritarian rule on Hungary. At the height of his rule, Rákosi developed a strong cult of personality. Dubbed the "bald murderer," Rákosi imitated Stalinist political and economic programs, resulting in Hungary experiencing one of the harshest dictatorships in Europe. He described himself as "Stalin's best Hungarian disciple" and "Stalin's best pupil." Repression was harsher in Hungary than in the other satellite countries in the 1940s and 1950s due to a more vehement Hungarian resistance.
Approximately 350,000 Hungarian officials and intellectual party members were purged from the Hungarian Communist Party from 1948 to 1956. Any member with a western connection was immediately vulnerable, which included large numbers of people who had spent years in exile in the West during the Nazi-occupation of Hungary. Approximately 150,000 were also imprisoned, with 2,000 summarily executed. Additionally, during "social purges" of non-party members, in Budapest at 2:00 a.m. on Mondays, Wednesdays, and Fridays, vans transported purge targets, who by 1953, numbered approximately 700,000. Of those, 98,000 were branded as spies and saboteurs, 5,000 of which were executed. These social purges used enormous amounts of resources, including almost one million Hungarian adults employed to record, control, calculate, indoctrinate, spy on and sometimes kill targets of the purge.
Rákosi rapidly expanded the education system in Hungary. This was an attempt to replace the educated class of the past by what Rákosi called a new "working intelligentsia". In addition to effects such as better education for the poor, more opportunities for working class children and increased literacy in general, this measure also included the dissemination of communist ideology in schools and universities. Also, as part of an effort to separate the Church from the State, religious instruction was denounced as propaganda and was gradually eliminated from schools. The government used coercion and brutality to collectivize agriculture, and it squeezed profits from the country's farms to finance rapid expansion of heavy industry, which attracted more than 90% of total industrial investment. At first Hungary concentrated on producing primarily the same assortment of goods it had produced before the war, including locomotives and railroad cars. Despite its poor resource base and its favorable opportunities to specialize in other forms of production, Hungary developed new heavy industry in order to bolster further domestic growth and produce exports to pay for raw-material import.
Cardinal József Mindszenty, who had opposed the German Nazis and the Hungarian Fascists during the Second World War, was arrested in December 1948 and accused of treason. After five weeks under arrest (which may have included torture), he confessed to the charges made against him and he was condemned to life imprisonment. The protestant churches were also purged and their leaders were replaced by those willing to remain loyal to Rákosi's government.
The new Hungarian military hastily staged public, pre-arranged trials to purge "Nazi remnants and imperialist saboteurs". Several officers were sentenced to death and executed in 1951, including Lajos Toth, a 28 victory-scoring fighter ace of the World War II Royal Hungarian Air Force, who had voluntarily returned from US captivity to help revive Hungarian aviation. The victims were cleared posthumously following the fall of communism.