Cabbies, cows in Hungary's private sector

Eating out here can be great fun. Enjoying life - come what may - is as much a part of the game for Hungarians as for their Austrian neighbors in Vienna. Ever since the state-run catering chain offered options on leases to would-be private entrepreneurs a year or so ago, individualism in restaurants and numerous small eat-eries has mushroomed.

It is one of the simplest examples of supply and demand in the officially encouraged private sector now flourishing all over Hungary.

Owners of hundreds of restaurants set their own prices on meals and services. The only restraint upon them is their own awareness that if they pitch prices too high or fail to offer a good product, the public will quickly put them out of business.

Private enterprise is still only a fringe factor in the Hungarian economy.

But there are some 14,000 private business ventures ranging from architects to private language schools and automobile repair shops.

All but a few taxis operate under private ownership and it is refreshing to see a cabby here automatically switch on his fare meter. In other East-bloc countries, too many taxi drivers expect - or demand - that Western passengers pay in hard currency.

Private initiative is even being admitted into the state sector. Large ''socialist'' factories now permit privately formed groups to use plant equipment after working hours and on weekends. The factories then buy the products on terms that give the groups a nice profit.

Such activity is still taboo in most of Eastern Europe. But in Hungary it is increasingly significant.

Agriculture is the success story of Hungary's experience in its ''new economic mechanism.''

Big farm cooperatives, themselves largely free of government control, and private plots keep shops regularly stocked with an abundance and variety of food not enjoyed in most other Soviet-bloc capitals, Moscow included.

The cooperatives involve some 3 million people. Though bulk production is their job, one-quarter of Hungary's crops and 42 percent of its livestock and meat come from more than 1 million private small holdings. These are owned by cooperative members, townsfolk who farm in their spare time, and pensioners.

Hungary's current overall economic position is still difficult. Its credit standing with Western countries has been restored after a temporary reluctance among Western creditors to loan money to East-bloc countries because of the massive debts of Poland and Romania. But US insistence on annual review of ''most favored nation'' tariffs on Hungary's goods and quota restrictions by the European Community on its traditional exports to Western Europe have put brakes on the volume of business the Hungarians would like to do with the West.

In a move to meet Western prejudice against exports of ''state'' production, enterprises are being given more latitude to deal independently and directly with Western business partners.

At the same time, stronger enterprise management is being related to capital efficiency. There is also a new emphasis on profit motivation, though managers long accustomed to lax criteria and ''easy'' credit are still slow to react to the new situation.

When the next phase of reform comes into effect at the end of this year, they will have to make up their minds to do so or lose their jobs, because there will be much more competition among enterprises for tight money. Banks, and not the state, will decide on credit on very strict terms of viability.

Another topic now under discussion is the place of Hungary's 850,000-member Communist Party in society. The party leadership is examining its exact relation to the 10 million Hungarians who are not party members.

The party's dogmatic and bureaucratic hand has been much lightened in recent years, the old gap between rulers and ruled greatly reduced. The idea seems to be to carry the process further. Room is being made within classic ideas about ''socialism''/ egalitarianism for due recognition and material reward of merit and for better work performance.

The only major worry about further progress is that the present state of East-West relations might fall to a further low. Budapest might then have to draw in its pragmatic horns in the interest of greater bloc unity.