Abstract
This chapter analyses the seemingly contradictory fusion between authoritarian state practices and neoliberal economic policies in Hungary under the Orbán regime. Since returning to power in 2010 on a popular backlash against austerity, the hard-right Fidesz-Kereszténydemokrata Néppárt (Fidesz-KDNP) government, led by the charismatic and dexterous Viktor Orbán, has carried out a root-and-branch transformation of Hungarian society. While officially proposing a break with neoliberalism at home and abroad, the chapter argues that the Orbán regime has rather deepened it, producing a specific variety of neoliberalism, which skilfully combines some of the central tenets of neoliberalism (maintenance of a balanced budget, introduction of a flat tax system, and the pursuit of regressive social policies) with ‘authoritarian-ethnicist’ measures that seek to co-opt, coerce, or manufacture consensus among subaltern groups in society against alleged ‘enemies’ of the Hungarian nation. While Orbán’s ‘illiberal’ politics have been strongly criticised by international and regional institutions, such as the International Monetary Fund (IMF) and the European Union (EU), they have taken little concrete action against the Hungarian government. The reason for this is pragmatic: the Orbán regime has not only been a model for neoliberal austerity in Europe since the 2008 crisis, but also its authoritarian-ethnicist policies are not that different from those practised by other EU states.
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Notes
- 1.
Although the authoritarian roots of neoliberalism are explored by Bruff in his contribution to The Handbook of Neoliberalism (Bruff, 2016) and in some of the contributions to Tansel’s States of Discipline (De Smet & Bogaert, 2017; Özden, Akça, & Bekmen, 2017; Sotiris, 2017), the question arguably needs further attention in order to elucidate how the current conjuncture differs from previous phases of neoliberalism.
- 2.
The Hungarian-born sociologist Iván Szelényi has recently provided an account of the Orbán regime that in many ways resembles Magyar’s, although Szelényi argues that property relations in contemporary Hungary are ‘neo-patrimonial’ or ‘neo-prebendal’ (i.e. property is allocated by political bosses, not by personal masters) and that the Orbán regime does follow a coherent ideology, which is similar to US-style neo-conservatism/traditionalism (Szelényi, 2015; Szelényi & Csillag, 2015).
- 3.
Magyar was a founding member of Szabad Demokraták Szövetsége (SZDSZ ) and served as Minister of Education between 1996–98 and 2006–08.
- 4.
For example, already in the early 1940s, the likes of Theodor Adorno, Max Horkheimer, and Friedrich Pollock suggested that capitalism was evolving into an era dominated by mafia-like networks of organized ‘rackets’ (Adorno & Horkheimer, 2016; Pollock, 1941; see also Granter, 2017; Schulte-Bockholt, 2006; Wilson, 2009).
- 5.
Paradoxically, such views echo official government propaganda in Budapest. The idea that the Orbán government’s economic policies were ‘unorthodox’ was first introduced by György Matolcsy, then Minister of National Economy in the Orbán cabinet.
- 6.
As Pogátsa (2016, p. 185) notes, this is a flagship policy for ‘market fundamentalists’ in the US. In the EU, similar flat tax systems currently exist in the Baltic States, Bulgaria, and Romania, while the Czech Republic and Slovakia recently abolished theirs.
- 7.
Of course, corruption existed in Hungary before 2010. However, under the Orbán regime the scale of the phenomenon seems to have changed. The most emblematic example of the growing collusion between the state and local business interests is that of Lőrinc Mészáros, originally a gas fitter and small-scale businessman from Orbán’s native village Felcsút, whose wealth increased from approximately € 20 to 350 million euros in 2017. His vast network of companies (including 82 created in 2017) won public tenders worth almost € 1 billion in total, and gained significant (or even dominant) positions in the national and regional media industry, as well as bought up the biggest tourism company around lake Balaton (Koltai, 2018). The similarly rapid enrichment of Orbán’s son-in-law (István Tiborcz) and a host of other new oligarchs has made headlines in international media (Buckley & Byrne, 2017; Fletcher, 2017; Verseck, 2014). As Mihály Koltai explains, ‘We are seeing the birth of a new state-dependent bourgeoisie that cannot afford a change of government, as they owe their wealth to the current leadership through myriads of shady deals. There is a noticeable change from Lajos Simicska [an old personal friend and former economically of Orbán, recently turned deadly enemy] to new oligarchs such as Lörincz Mészáros.’
- 8.
According to the government, the reductions were necessary because household energy prices in Hungary were significantly higher than the EU average and besides it was right to ‘give back the profit to the people’ (‘Hungary: Energy Prices Cut Again’, 2014). The move was highly popular and allegedly contributed to Fidesz’ election victory in 2014.
- 9.
Many of the ideas and practices advocated by the Orbán regime show a strong continuity with the proto-fascist Horthy regime that ruled Hungary during the interwar years (i.e. rabid anti-communism and anti-liberalism, suspicion of the West, promotion of Magyar irredentism, the veneration of law and order and ‘natural’ social hierarchies, the restoration of a genteel, property-owning middle class, etc.). However, the social forces supporting the Orbán regime arguably differ from those of the Horthy regime (Krausz, Mitrovits, & Szarka, 2013; Wiener, 2014).
- 10.
According to Tamás Sárközy (2014), nowhere in the world (except for the dictatorships in Africa and Latin America) is there a democratic country in which a small group of 10–20 people, who have known each since university or their time in the military, control to such an extent the key positions of power. The highest positions in the country (President, Prime Minister, and Speaker of the National Assembly) are held by three old friends: János Áder, Viktor Orbán, and László Kövér. The core of the Hungarian state is thus composed of a close-knit group of friends, who are united by their unreserved personal loyalty to Orbán.
- 11.
In response to the criticisms, the Hungarian parliament has approved a number of modifications to the law, but according to Freedom House the amendments were ‘relatively minor’ and did not do enough to stop the decline in press freedom since 2010 (Hungary: Country Report, 2015).
- 12.
At times, these attempts border on being farcical. For example, in 2012 the Orbán regime attempted to rebury József Nyirő, an anti-Semitic writer and member of the fascist Arrow Cross parliament in 1944–45, in his hometown of Odorheiu Secuiesc, Transylvania, Romania. Although the Romanian government banned the move, arguing that it refused ‘to pay tribute on its soil to people known for anti-Semitic, anti-Romanian, and pro-fascist conduct’, the Orbán regime ignored the decision and smuggled Nyirő’s ashes into Romania where a small, ecumenical service was eventually held for the writer. The ceremony was attended by the leadership of the Jobbik party, state secretary for culture Géza Szőcs, and speaker of the Hungarian Parliament and founding Fidesz member László Kövér (‘Orbán Snubbed by Romanian PM as Nyirő Affair Escalates’, 2012; Verseck, 2012).
- 13.
Since returning to power in 2010, the Orbán regime has gradually sought to restore the Horthy regime. At a speech in June 2017, Orbán described Horthy as ‘an exceptional statesman’, along with István Bethlen and Kuno Klebelsberg. Thanks to them, he noted, ‘history did not bury us under the weight of the lost war, the 133 days of red terror, and the Diktat of Trianon. Without the governor there is no prime minister, and without the prime minister there is no minister. Even Hungary’s dismal role in World War II cannot call into question this fact. (‘In Orbán’s Opinion Miklós Horthy was an Exceptional Statesman’, 2017; see also Berend & Clark, 2014; Verseck, 2012.)
- 14.
In 1920, the Horthy regime introduced the numerus clausus law, limiting the access of Jewish students to higher education. The law was the first anti-Jewish law introduced in twentieth-century Europe.
- 15.
The ‘constitutionalisation of austerity’ is, of course, not a phenomenon limited to Hungary. As Bruff (2014, p. 124) notes, Spain passed a constitutional amendment in 2011 that strongly limited the scope of budget deficits and a similar law was passed by Italy and Austria in 2012. However, the real shift has come with initiatives such as the Euro Plus Pact (adopted in March 2011) and the Fiscal Compact (signed into law on 1 March 2012). These moves have effectively ‘locked in’ EU members into a path of ‘permanent austerity’ by introducing mechanisms that automatically impose sanctions on states that do not comply with highly restrictive fiscal benchmarks (see also Schneider and Sandbeck in the forthcoming special issue on ‘authoritarian neoliberalism’ in Competition & Change).
- 16.
Out of the € 360,000 required up front, € 300,000 are refunded after five years. According to data from the Hungarian Debt Management Authority (Államadósság Kezelő Központ, ÁKK), 3515 residency bonds were sold between 2013 and 2016 (‘Hungarian Residency Bond Program’, n.d.).
- 17.
A recent report by German business weekly Handelsblatt showed that German investors held a similarly positive view of the Orbán regime, with 95 percent of German businesses expressing their happiness with the economic situation in Hungary (Book, 2018).
- 18.
In 2013, the European Parliament’s Committee on Civil Liberties, Justice and Home Affairs carried out a detailed study on the erosion of liberal democratic rights in Hungary under the Orbán government. Authored by Portuguese radical left-wing MEP, Rui Tavares, the so-called ‘Tavares Report’ provided a systematic critique of the Orbán regime, calling on the European Commission to ‘focus not only on specific infringements of EU law … but to respond appropriately to a systematic change in the constitutional and legal system of a Member State where multiple and recurrent infringements unfortunately result in a state of legal uncertainty’ (Tavares, 2013). Following a heated debate in the European Parliament, the Orbán government escaped sanctions from the EU.
- 19.
According to figures from KPMG, Hungary received 24.9 billion euros in EU funding (25.4 percent of GDP) in the EU’s 2007–13 budget cycle (KPMG, 2014, p. 10). However, there have been broad-ranged symptoms of corruption during the Orbán regime and in March 2016, the European Commission (EC) finally decided to suspend 121 million euros earmarked for development projects in Hungary, after having found severe irregularities related to the financing of projects during the 2007–13 budget cycle (MTI Econews, 2016).
- 20.
- 21.
The Orbán regime has expressed its disapproval of political sanctions against Russia over the Ukrainian conflict. Moreover, the government has also signed a strategic agreement with the Russian state company Rosatom for the construction of a new nuclear plant in Paks (Paks II Nuclear Plant). According to the agreement, the expansion will commence in 2018 and 80 percent of its costs will be financed with a € 10 billion credit line from Russia. On 6 March 2017, the EC gave its green light to the project (Posaner & Ariès, 2016).
- 22.
In the run-up to the 2014 general elections, the government spent nearly 800 million forint (ca US$ 3.6 million) of Hungarian taxpayers’ money on advertisements in newspapers, radio and television channels, online platforms, and public spaces, in order to transmit this message to ordinary Hungarians (‘800 millióért tudtuk meg, hogy Magyarország jobban teljesít’, 2014).
- 23.
A recent exception to this were the mayoral elections in Hódmezővásárhely (a traditional Fidesz stronghold), where Fidesz suffered a heavy defeat against a locally well-known ‘independent’ candidate supported by all opposition parties (including Jobbik).
- 24.
Income earned and sent home by Hungarians abroad reached 3.4 percent of the country’s total output in 2014, according to the World Bank—one of the highest remittance levels in the EU.
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Fabry, A. (2019). The Consolidation of the Orbán Regime: Towards ‘Authoritarian-Ethnicist Neoliberalism’?. In: The Political Economy of Hungary. Palgrave Pivot, Cham. https://doi.org/10.1007/978-3-030-10594-5_6
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