Bálint Magyar: Viktor Orbán’s post-communist mafia state, Part II

We left off yesterday at the point that the concentration of political power and organized corruption cannot be divided because they are both part of the very essence of the system. The mafia state has a distinct advantage over traditional mafias. Whereas the latter must reach their goals either by blackmail or by intimidation, a mafia state by definition has the power of the state behind it. Therefore it can “adjust” laws according to its needs. In brief, the “organized upperworld” makes its own illegal activities quasi-legal. Acquiring ill-gotten riches no longer must be hidden.

The new mafia state is different in this respect from both the Horthy regime and the Soviet system. The Hungarian ruling elite between the two world wars didn’t want to change the “economic elite”–with the notable exception of the expropriation of Jewish property in its last phase; it only wanted to enrich the already existing Christian middle class. In the Soviet Union the communists nationalized all private property. Both decisions were merely political decisions fairly uniformly applied. The situation is different in a mafia state. Instead of a uniform political will, decisions are individual and random. “What they like they take.”

An old picture of the Fidesz family, 1999 / cover page of HVG

An old picture of the Fidesz family, 1999 / cover of HVG

As for the comparisons between Hungary’s mafia state and that of the former Soviet Union and its successor states, although the final result is the same, the road to it is different. In Russia and elsewhere east of Hungary the members of the former party elite managed to “privatize” state property. In Hungary economic power ended up for the most part in the hands of technocrats. In Russia the few non-apparatchiks who managed to get into the select circle of economic moguls were eventually sent packing or ended up in jail.

In Hungary, when Fidesz appeared, “the field” was already taken. In order to change the current state of affairs Fidesz either has to get rid of members of the economic elite or make them part of the “family”  or “service nobility”.  Fidesz’s misfortune is that in Hungary, as opposed to Russia and its satellites, a true democratic process had already begun. In order for Viktor Orbán to reach his final goal, the very institutions of Hungary’s fragile democracy must be eliminated. We are not at this point yet and it depends on the Hungarian voters whether Orbán can succeed or not. In Poland there was a similar attempt by the Kaczynski brothers but their attempt failed.

How is Hungary’s current political elite handling this takeover of economic power? The ideology behind the process is a “national war of independence.”  The first step is trying to achieve a certain percentage of Hungarian ownership in the various business sectors. Next, the government begins to force out legitimate owners of enterprises by levying extra taxes, forbidding the construction of new malls, imposing impossible requirements to obtain a building permit, or as in the case of the French firm Suez in Pécs, by simply taking over the company by force. Often the state itself buys the foreign-owned company and after a short while the company is sold to a friend of “the family.” There have been cases (notably MOL and E.ON) where the elite at public expense purchased large blocks of stock  or buy entire companies at prices way above their market value.

One of the most brazen takeovers of a business sector is the tobacconist shop tenders. This time the mafia elite decided to change the law in order to create a state monopoly by which it impoverished forty or fifty thousand small businessmen. Why did they have to deprive relatively poor mom and pop store owners of their livelihood? Because the “the family” must be continually extended outward, giving gifts to the small fry in the organized “upperworld.” By making tobacco products a monopoly, additional revenues will reach the treasury while those relatively few shops that can sell cigarettes will be owned by “clients” who will have a guaranteed income. Killing two birds with one stone.

Although it is becoming crystal clear that the selection of the future tobacconists was fraudulent, there will be no legal consequences. By now both the police and the prosecutor’s office are part of the organized “upperworld.” We already know that these cases will never reach the courts because the prosecutors announced that there is nothing to investigate.

Analysts often talk about certain Fidesz moves as irrational and self-defeating. The tobacconist shop scandal is one of the examples. Magyar thinks that, according to Fidesz logic, the creation of a monopoly and its distribution to clients is a perfectly rational move. “I can do what I want and therefore I go ahead.” Of course, not all Fidesz moves work out, and we will see whether the tobacco affair does or doesn’t hurt the party and Viktor Orbán personally. For the time being it has not. According to the latest polls Fidesz’s lead is assured. What helps the Orbán government survive these scandals are the limits the central power puts on information flow through its stranglehold on public television and radio and other media outlets.

According to Magyar, the mafia state is waging a national war of independence against its own citizens by taking away their wealth and freedom. It is eliminating the sanctity of private property. It is introducing the right to collect taxes before anyone else. It talks about Christianity but takes care of only its “adopted family”; it is cruel to those outside the charmed circle. It preaches about family but what it actually means is the family adopted by the organized “upperworld.” It heralds a society based on work when it receives its income from “protection money” taken from others. “The mafia state is a privatized form of a parasite polity which preaches work but ‘drinks’ dues. But it is no speculator. It goes for the sure thing.”

To be continued

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45 comments

  1. This is absolutely brilliant. If only a majority of Hungarians could get hold of this analysis! Perhaps some could be persuaded to look at “godfather” Orbán and his organisation differently.

  2. “I can do what I want and therefore I go ahead.”

    Problem for Fidesz/Jobbik is that a Fuhrer leading from the centre mey well lose touch with what *might* happen at the micro level. I have no idea what might be happening at the countryside level but I do know the level of resentment felt in the several Budapest 24/7s that I do pop in occasionally to buy my cans and kenyer.

    Orban needed to keep his corrupt scum on the ground financially connected, hence the tobacco tender,but he runs the risk of pushing the apathetic average voter one step beyond.
    The shepherd needs not to push the sheep too far off their pasture.

  3. @ oneill. Orbán “runs the risk of pushing the apathetic average voter one step beyond.”

    I see a contradiction there. Precisely because the average Hungarians are apathetic (never mind the few thousand vocal opposition manifestations in Budapest) they can be pushed around.

    And then, what voters? Orbán believers behave like those sects in America which were willing to kill their children and themselves at their spiritual leader’s behest. The others just don’t vote. So basically, there are no voters as we know them in a democracy. I have never heard of free and fair elections within any mafia. Have you?

  4. @ oneill. I meant the Jonestown “revolutionary suicide” in 1978. But you can also take the Goebbels Family, May 1945.

  5. @Minusio: I posted somewhere here previously that Orban is like Jim Jones and his followers are like a sect. So that’s an addition to the mafia-state… a mafia-state run by a sect leader, to get the full picture. And he’d rather sacrifice the whole country than give up power.

  6. Hi everybody. Great news. I just received an e-mail from Dell that instead of Friday, the new computer will arrive tomorrow at 3:00 pm.! Bless their hearts.

    I’m so glad that Minusio thinks that Bálint’s piece is an important analysis of the present situation. I will certainly urge him to look at your comments. I’m sure that he will be very pleased.

    I read the article and I said to myself: the outside world must read this. Perhaps they will wake up and grasp what Orbán’s is all about. It seems that slowly they are. See the Tavares report and the committee’s approval of it. But I really would like them to understand the essence of Orbán’s regime. I’m sure that Bálint’s article will help.

    I just read that Ollie Rehn said something like: just because we haven’t used financial punishment against a member states until now it doesn’t mean that we will not do so in the future. I think that Orbán has gone too far.

  7. An acute analysis of what many of us ‘felt’ was happening.

    But with the full power of government, the police and secret services behind them, it’s hard
    to see how this can be turned out of office, let alone stopped.

    Any Hungarian Ataturks around?

  8. Éva, it’s good that your computer arrives sooner. If you had an “image” of your C: drive on some storage media you could be up and running in 30 minutes. [I hope your Dell doesn’t come with Windows 8…]

    Yes, I do believe that Bálint’s analysis is very much to the point and much more useful than many others because he characterises the whole “organisation” instead of just picking out a disagreeable point here or there.

    But you also put your finger on another issue: How to spread the word – both domestically and internationally. Hungarian being an isolated language means that the East and Central European media correspondents who are all located in Vienna don’t have the foggiest of what is going on in Hungary until they read Pusztaranger or Pester Lloyd. But somehow they don’t. Hungary doesn’t happen in our media for most of the year.

    Another factor may be that no one in the EU is used to be faced with such a blatant liar as Orbán.

  9. oneill: “I have no idea what might be happening at the countryside level”

    I can assure you that in my rural location, Fidesz enjoy overwhelming support. Even the ‘tobacco’ scandal is just seen as an evening-up of old scores.

    They DO recognise that there is much less money in their pockets. This, of course, is “because of the EU” or “because of Gyurcsany” or “because of foreigners”. I’m sometimes blamed as one of this latter group, and sometimes I’m an honorary exception – I don’t know which is more offensive, actually.

    And, as a professional, I have much less income than Fidesz’s latest “figures” release and much less money in my bank – than the average Magyar – though I can hardly believe those figures.

    Anyway, the drip feed of nonsense from the state-controlled media continues. And in 12 years in Hungary I am yet to see someone publicly reading Nepszava (there were instances in Budapest of people actually being assaulted when this purchased this reasonable and well-written left-of-centre newspaper). Imagine a UK, where Guardian (a comparable paper) readers were too scared to read their paper in public.

    So most posts here have to end up at the same juncture: How, before the election, are the people to be informed of the true situation? The state-controlled media has credibility; Orban’s spin-doctored mailed leaflets seem good (even though they are hugely inaccurate). And people will go nowhere near a journal outside their political inclination – again, in the UK it’s fairly common for lefties to read the Telegraph (though maybe not the Mail) and for ‘wet’ Tories to read the Guardian – papers will frequently carry columns from both sides, too. Not here.

    So how are we going to get the message across?

    The quotes on Fidesz from the recently resigned minister (agriculture, I think) on big billboards across the country,might be a start – along with a stark comparison of prices and taxes for middle and lower earners in Hungary – ascompared elsewhere.

    People must see the truth. Not too much opinion, not too many words, but facts. On billboards everywhere.

    Now the opposition need to find an ‘untainted’ benefactor to finance this.

    But let’s get thinking!

  10. Eva, I think I found the article you referred to in English:

    http://www.portfolio.hu/en/economy/eus_rehn_urges_hungary_to_focus_more_on_structural_measures_instead_of_tax_hikes.26204.html

    Olli Rehn says if Hungary gets out of the EDP, it will get into the preventive arm of the stability and growth pact, and more focus will be put on medium-term sustainability of the economy. Hungary is not great in that area, and yes, he did sound quite threatening about possible sanctions.

    Another commissioner, Nellie Kroes is also unhappy, she about the new (higher?) telephone tax.
    La-di-da…

  11. @ Ivan. In my mind, billboards look too commercial and are as such not convincing. They also ruin the land- or cityscape. Their information is not in-depth and not “fluid”.

    I presume that most Hungarian citizens outside of Budapest get their information throug TV and a newspaper subscription to their liking. They could get all the information in Hungarian by ATV and Klubrádió – via Internet. Apparently they don’t do this. Whether they have no Internet or are not inclined to find those channels, I don’t know.

    A year or so ago the idea of a new Radio Free Europe turned up again. Nowadays it should be a “TV Free Europe” in Hungarian that can be received terrestrially across Hungary and neighbouring regions with Hungarian minorities.

    It would be meaningful to find a private operator and financing, also from the EU – perhaps even on a larger scale, including all the other countries. The EU sells its convincingly good aspects very poorly. To me this is the main source of euroskepticism: sheer ignorance.

  12. The reason I suggested billboard (without party taint) is that people simply refuse to watch, read or listen to anything outside their own beliefs … in Hungary. This is the biggest secret of Orban’s success. I don’t know any Fidesz man or woman who watches ATV. My father-in-law meanwhile, described our Magyar Narancs as “traitorous filth”. So how to get through?

  13. @Ivan, billboard advertising is owned by Simicska’s company (Orban’s right hand man). It’s not possible to advertise on billboards in Hungary without going through him. That’s why you can see all the Fidesz ads on billboards, but none of the opposition’s. Did you seriously think that Fidesz would leave such a loophole open?

  14. If maffia is the case, the European Union can start an audit, and send out an interpol warrant for the crime bosses of Hungary.

  15. Dear Miss Balogh
    Thanks a lot for you constant flow of information and opinion. Since it’s not easy to get information from inside Hungary in foreign languages, your blog is very valuable source.
    Best wishes and success
    Buendia Bee

  16. A Gift For Trolls:

    (From L.Bitton-Jackson’s, “I Have Lived A Thousand Years”)

    “One Hundred to a wagon!” the Kapo snarls.

    We are shoved and pushed into the wagons.

    More and more people are shoved into the wagon. The heat and stench keep increasing. Air is steadily drained from the wagon. Breathing is becoming difficult.

    The train stands for hours. More trucks arrive. Dogs bark. Shouts. And more shouts. Then we hear a Kapo, “Thirty more in every wagon!”
    Thirty more? That’s impossible. We are on the verge of passing out. The crowding, the heat, and the lack of air are beyond endurance. Thirty more and we will suffocate.” (page 117)
    * * * * * * * * * * * * * * * *
    And, if you listen carefully, you may detect the voice of one L. Csatary…

  17. An :
    @Ivan, billboard advertising is owned by Simicska’s company (Orban’s right hand man). It’s not possible to advertise on billboards in Hungary without going through him. That’s why you can see all the Fidesz ads on billboards, but none of the opposition’s. Did you seriously think that Fidesz would leave such a loophole open?

    Maybe this has changed in recent times but I believe there were 3 or 4 companies running billboards out east. I occasionally run into opposition billboards so I don’t think Fidesz has blanket coverage.

  18. big-lawyer :
    If maffia is the case, the European Union can start an audit, and send out an interpol warrant for the crime bosses of Hungary.

    Well, it’s all done legally so there isn’t anything to prosecute. For example, I bid on building a highway. The bid is high but no matter no one else will be able to bid and I can substitute substandard materials.

  19. ” I occasionally run into opposition billboards so I don’t think Fidesz has blanket coverage.”

    Bajnai recently had some up round the Varosliget area- soon defaced with obscene and racist slogans by local Fidesz/Jobbik zealots.

  20. >________________________________ > From: Hungarian Spectrum >To: andysomos@yahoo.com >Sent: Thursday, June 20, 2013 10:31 AM >Subject: [New comment] Bálint Magyar: Viktor Orbán’s post-communist mafia state, Part II > > > > WordPress.com >petofi commented: “A Gift For Trolls: (From L.Bitton-Jackson’s, “I Have Lived A Thousand Years”) “One Hundred to a wagon!” the Kapo snarls. … We are shoved and pushed into the wagons. … More and more people are shoved into the wagon. The heat and stench keep ” >

  21. LwiiH :
    <
    Maybe this has changed in recent times but I believe there were 3 or 4 companies running billboards out east. I occasionally run into opposition billboards so I don’t think Fidesz has blanket coverage.

    That’s good news.

  22. For a brief while earlier this year Hungary was awash with big orange billboards – pictures of Orban, a few mild criticisms and the MSZP logo. They won’t have achieved anything (due to the logo and the weakness of the attack).

    What is necessary is to fight fire with fire. Fidesz have condemned themselves so often in their own words – these words should be up there, as part of an independent campaign, so that they can condemn themselves and at least make SOME people think.

    There are many people who vote for Fidesz out of patriotic duty – this idea was introduced in March 2002, entirely successfully. Forget about them. But there are others – particularly the 90% who “will not definitely vote” at present, who should be targeted in a campaign aimed squarely at their pockets. It seems that the evidence of their own dwindling income is not enough – it needs to be pointed out, as does the hypocrisy. It might not work. But it’s entirely mysterious that such a campaign has not been even TRIED yet. The information needs to get out there. Now.

    Perhaps there should also be a riposte to the “Csak Magyarorszag” campaign of misinformation that was recently mailed to every household in the country. Use the same language, the same layout, and explain to people how there are many negative policies at work in Hungary – aimed at hard-working regular people – which are also “Only in Hungary”.

    The lack of bite in the opposition is almost enough to make one a conspiracy theorist. Almost. The truth is probably just stunning incompetence.

  23. The free weekly Helyi Tema, financed by one of the Fidesz oligarchs and tucked into every mailbox, features a huge anti-Bajnai attack on its front page.

  24. Perhaps Mr. Magyar should have been a better or at least more successful politician.

    Olli Rehn is joking. They will never use any financial punishment againt Orbán and he knows it.

    Wait, I know, if any new government will try to dismantle the Orbán-systen then will Olli Rehn and his friends force such government to act “in line with the rule of law” and thus effectively force such government to actually do nothing and keep the Orbán-system.

    Orbán won and he won big time, thanks to peopel like Magyar, Rehn and their firends.

  25. Talking about the Fidesz Gang. Coincidentally a company (Continental) from Hodmezovasarhely (mayor Janos Lazar who is also the Minister of State, a close friend of Orban) got very lucky with the tobacco contracts. THey scored 500 stores! OK maybe not all stores are in the company’s name, but every single one is connected to it. Even a retired cleaning lady who worked for one one of the millionaire relatives of the said company’s owner was able to get a store, with no previous experience. Hundreds of stores ended up in the hands of Continental. No, there is no mafia in Hungary!
    http://hvg.hu/gazdasag/20130620_500_trafik_egyetlen_kezben_trafikmutyi

  26. And this “patriotic duty” to be Fidesz is the reason that most people are utterly concerned about the whole “tobacco scandal” (a scandal only here and in those few Budapest cafes). Most see no problem in rewarding good Magyars, no problem at all. We’re getting worked up. Nobody else is. Hopeless, again.

  27. I agree that this was an excellent summary of the current situation. In light of what has happened in Hungary, it is depressing to see the Turks and Brazilians stand up for their rights (in Brazil, this more about economics, but in Turkey it is about liberty), while Hungarians accept the situation. This is a truly fatalistic society. Those who have really had it have left or are planning to leave.
    Anyway, the response of many to the Trafik scandal is that everyone cheats in Hungary, but the amount you benefit is how close you are to people who can do you favors.

  28. Meanwhile on Planet Hungary …

    Do you rember the Alphabet Pasta from your childhood? Now if your kids are not Hungarian enough you can have a Runic Alphabet Pasta.

    http://fn.hir24.hu/itthon/2013/06/20/rovasirasos-betutesztabol-is-kirakhato-jobbik%281%29/

    But wait! That’s not all … And nooooow! The right wing knucklehead of the day!

    The Christian Democrats (KDNP) are suing Vivian Reding (European Commissioner for Justice) and Gordon Bajnai for plotting an election fraud in 2014.

    According to them:

    “Vivian Reding said the following in a secret (sic!) conference: she will do everything to weaken the legitimacy of the [upcoming] Hungarian elections, with the help of American financed organizations and Gordon Bajnai.”

    http://mno.hu/ahirtvhirei/reding-ugy-bajnai-ellen-is-feljelentest-tesznek-1167932

  29. NWO: You completely misread Turkey if you think there will be any regime change.

    Erdogan may be sick (at least this is rumoured) and he might have gone crazy in power, but his party is still the most powerful. There is only a small minority of people who are liberal and Western-oriented (and they are in Istambul). The majority is conservative and like what they have there. They dream about reviving the Ottoman empire and like what they already have (economically extremely influential all over the Arab world).

    The demonstration Erdogan’s party organised was 10 times bigger tha the demonstration of the unorganized liberal hipsters. They will get nowhere. And will soon realize that they are powerless.

    By the way, the limit to get into Parliament in Turkey is 10%.

    Which, among others, makes it exceedingly difficult for an opposition party to get into Parliament.

    In Hungary, in 1990 they started with 4%, and increased it to 5%, but I guess we could increase it further.

    Look for a increase to say 6%. It’s only 1% change, easy to sell, but will make life difficult for small parties (in the proportional segment, most places get decided by first past the post anyway, where all the votes for the losing parties get lost).

  30. Aintitcool :
    Perhaps Mr. Magyar should have been a better or at least more successful politician.
    Olli Rehn is joking. They will never use any financial punishment againt Orbán and he knows it.
    Wait, I know, if any new government will try to dismantle the Orbán-systen then will Olli Rehn and his friends force such government to act “in line with the rule of law” and thus effectively force such government to actually do nothing and keep the Orbán-system.
    Orbán won and he won big time, thanks to peopel like Magyar, Rehn and their firends.

    You are right, increasingly the EU will do what he Germans want, and it is not in Germany’s interest to drastically harm Hungary’s economy.

    On the other hand, if you read the Rehn interview

    http://www.portfolio.hu/gazdasag/megszolalt_olli_rehn_magyarorszagrol_2.185482.html

    (you can click on English version)

    it is clear, that while Hungary was in the EDP, the numbers mattered most. But if Hungary exits the EDP, it will be in the preventive arm of the growth and stability pact, which can focus on medium-term sustainability of the economy. And here, all Orban’s revenue increases clearly harm the growth potential, and can be pointed out as in breech of the pact.
    Will they sanction Hungary? unlikely and definitely never out of the blue. But it is also well-known that these theoretical sanctions are a lot more convincing to the markets and to the world if they are used at least once. And they are not going to demonstrate the power against a big dog, like France…

    As for Balint Magyar – you are right, SZDSZ on the whole were a bad coalition party and they are responsible for Orban’s landslide victory. But specifically Magyar’s attempts in the education area was pro-Europe and constructive and thorough, I think.
    And independent on everything, he sounds very convincing in his description of Orban’s methods today.

    As for

    “if any new government will try to dismantle the Orbán-systen then will Olli Rehn and his friends force such government to act “in line with the rule of law” and thus effectively force such government to actually do nothing and keep the Orbán-system”

    that is very, very unlikely.

  31. @Mutt: “The Christian Democrats (KDNP) are suing Vivian Reding (European Commissioner for Justice) and Gordon Bajnai for plotting an election fraud in 2014.”

    Excellent! Let’s call in international observers, UN, etc, to monitor the 2014 elections… so that Bajnai and Reding cannot manipulate the Hungarian elections! Works for me! :-)))

  32. Aintitcool :

    Orbán won and he won big time, thanks to peopel like Magyar, Rehn and their firends.

    How could he responsible for Orbán’s huge victory in 210 when he wasn’t even a member of the government between 2006 and 2010. Gyurcsány was forced by MSZP to give the Ministry of Education and Culture to István Hiller. And how Rehn and his friends responsible for Orbán’s success I have no idea. Perhaps you have some theory.

  33. Ivan :
    And this “patriotic duty” to be Fidesz is the reason that most people are utterly concerned about the whole “tobacco scandal” (a scandal only here and in those few Budapest cafes). Most see no problem in rewarding good Magyars, no problem at all. We’re getting worked up. Nobody else is. Hopeless, again.

    The usual, dopey, I-am-the-world comment typical of Fidesz types.

    How would YOU like to have been a small grocer in a Hungarian town who, in the past, also sold cigarettes….and have now been deprived of a major profit-producer in your store, thereby immediately plummeting the value of your store? I think there are 50,000 small owners just like that, but why would YOU care?

  34. I should have said “utterly UNconcerned”, of course. Petofi, the problem is this very thinking. How should we deal with it? The national emphasis on “family”, for example, means that there is very little concern for community or for those without family. And absolutely NO concern for anyone who missed out on a tobacco shop. An acquaintance was telling me how wonderful it is that, since 2010, he has been getting all this work from the council (he admits it’s a political thing). The guy who USED to have that work (and doesn’t now – it follows, for political reasons) doesn’t even cross his mind. There’s an awful lot of people around who just don’t care. The government encourages this. And life in Hungary sometimes feels very cheap, as a result. Tragic.

  35. Petofi: problem is that many of those small grocery owners will vote Jobbik. The protest voters will vote Jobbik, and not Bajnai or MSZP or LMP.

  36. @ prode. That’s an interesting and unusual aspect. It implies that the worse people are off, the more likely they are to vote for an even more hopeless – even more barbaric – party. That’s quite irrational for ‘normal thinking’ people. What a bright future!

  37. “According to Magyar, the mafia state is waging a national war of independence against its own citizens by taking away their wealth and freedom.” By the means of citizen’s wealth, do you think about the foreign multinational companies?

  38. @ Wakulicus. The multinationals that keep the export figures up are left untouched. Their employees are the only ones that are paying taxes on above-average wages. The rest of the economy and the people are slowly suffocated by every more sales taxes which are inherently antisocial.

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