The eastern European systems, Hungary included, need complete restructuring. Radical political reform needs take precedence over the economic reforms: no genuine economic reform is possible without a legitimate, democratically elected parliament and government. The transformation of the planned into a market economy has started before the elections. Marketization and privatisation have been pressed in the fields where resistance has been the smallest, i.e. where the losses hit the weaker groups — i.e. in case of health, social security, and such like. Also, inflation and unemployment are accepted as inevitable. The result of neoliberal measures introduced in a totalitarian way is the rapid impoverishment of the population and the increase of inequalities. The mounting tensions may become an obstacle to genuine reforms.

We try to operationalise Sen’s concept of the living standard using questionnaire data on the economic situation of the Belgian unemployed. We use factor analysis to reduce the number of basic functionings and to avoid possible overlap between them. The factors obtained can be interpreted in a natural and transparent way : they refer to social isolation, general feeling of happiness, physical functioning, microsocial contact, degree of activity and financial situation. Factor scores on these functionings are related in a meaningful way to the socioeconomic characteristics of the respondents.