János Kornai: Hungary’s U-turn

János Kornai, the renowned Hungarian economist, Professor of Economics Emeritus at Harvard University and Corvinus University of Budapest, has written a new paper about the situation in Hungary. He notes that the main direction of the changes up to 2010 was progress toward democracy, the rule of law, and a market economy based on the dominance of private ownership. Hungary is the first, and so far the only, member of the group of 15 post-socialist EU member countries to execute a sharp U-turn and set off resolutely in the opposite direction. The country has shifted from democracy to autocracy. The final version of this paper will be published in the October issue of Journal of Democracy. I’m grateful to Professor Kornai for allowing me to share this prepublication working paper with the readers of Hungarian Spectrum.

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Hungary’s U-Turn

János Kornai

 Prepublication working paper

January, 2015

Do not quote without the author’s permission

Hungary is a small country, poor in raw materials, with a population of only 10 million. No civil wars are being waged on its territory, nor is there any popular uprising or terrorism. It has not got involved in any wars, and it is not threatened by immediate bankruptcy. So why is it still worth paying attention to what is going on here? Because Hungary – a country that belongs to NATO and the European Union – is turning away from the great achievements of the 1989-1990 change of regime – democracy, rule of law, free-working civil society, pluralism in intellectual life -, and is attacking private property and the mechanisms of the free market before the eyes of the whole world; and it is doing all this in the shadow of increasing geopolitical tensions.



Let us consider the ensemble of the following countries: Albania, Bosnia-Herzegovina, Bulgaria, the Czech Republic, Estonia, Croatia, Poland, Latvia, Lithuania, Macedonia, Hungary, Romania, Serbia, Slovakia and Slovenia. All of these now independent countries reached a crucial turning point in 1989-1990. Previously, they had functioned as independent states or as separate parts of states within the socialist system, ruled by the Communist party. Then the change of system started. The structure and pace of the transformations varied from country to country. Severe failures occurred in all of them, including Hungary; one step forward was often followed by a period of regression. However, despite the colorful variations, the main direction of the changes was common up to 2010: progress towards market economy based on the dominance of the rule of law and of private ownership.

Hungary is the first, and so far the only, member of this group of 15 countries which has performed a sharp U-turn and set off resolutely in the opposite direction. At the 2010 elections the coalition formed by Fidesz – Hungarian Civic Alliance with the Christian Democratic People’s Party (henceforth Fidesz for short), led by Viktor Orbán, won a landslide victory. That was when the turn began.[1]

  1. By 2010 the fundamental institutions of democracy had been established in Hungary – however, with the U-turn their systematic destruction started. It has already been completed to a significant degree.

In actual practice the executive and legislative branches are no longer separate, as they are both controlled by the energetic and heavy hand of the political leader who has positioned himself at the very pinnacle of power: Viktor Orbán. No worthwhile preparatory work on bills is being done either within or outside the walls of Parliament.  Parliament itself has turned into a law factory, and the production line is sometimes made to operate at unbelievable speed: between 2010 and 2014 no less than 88 bills made it from being introduced to being voted on within a week; in 13 cases it all happened on the same or the following day. Without exception, every single attempted investigation of the background of a scandal that has just broken, which would have been carried out objectively by a parliamentary committee with the effective involvement of the opposition, has been thwarted. ‘Reliable’ people close to the centre of power occupy decision-making positions even in organizations which are not under the legal control of the executive branch and which, in real democracies, should serve as a counter-balance to monitor the executive and legislative branches: in the constitutional court, the state audit office, the fiscal council, the competition authority (the office in charge of enforcing pro-competition laws), the ombudsman’s office and the central statistical office, as well as the national tax and customs office.

  1. The basic institutions of the rule of law had emerged by 2010; however, since the U-turn they have been abolished or significantly weakened. The new Hungarian constitution was drafted by a small group within Fidesz, and no wide public discussion ensued. All protests were completely ignored, and it was dragged through the defective filters of the law factory in very short order. The text abounds with shortcomings, which were pointed out immediately (and in vain) by outstanding Hungarian and foreign legal experts. It contained so many clauses which served the immediate political purposes of the people in power that the document, officially called ’Fundamental Law’, has had to be amended five times. In 2011-2013 the Fundamental Law was complemented by the passing of 32 so-called ‘cardinal laws’, which future parliaments will be able to modify only by a two thirds majority. This collection of laws almost completely covers every aspect of the country’s life.

One of the fundamental principles of the rule of law is that no-one, not even those who hold the most power, should be above the law. The law must be respected. In Hungary, the situation has changed: the holders of power are able to elevate any decision to the status of law quickly and without let or hindrance, at the push of a button. They pass retroactive laws, disregarding the prohibition of such legislation which goes back to Roman times. If they wish to arrange especially generous treatment for an individual or an organization, they pass laws using legal tricks which ensure de facto favoritism.

Moving on to the juridical branch of the state, the Prosecution Service is a centralized organization in Hungary. It is theoretically independent, not under the control of the government. In practice, however, and that is what is important, the chief prosecutor is chosen by the holder of supreme power, followed by a purely formalistic appointment by the parliament, which from then on is unable to effectively control him. The chief prosecutor executes the central will through the hierarchy that he heads. With a few insignificant exceptions, the investigation of all public scandals and cases of corruption involving individuals close to the present government party has got stuck in either the investigative or the prosecution phase of criminal proceedings. The Prosecution Service has, on the other hand, brought its full powers to bear on other economic scandals and cases of corruption in which people belonging to the current opposition are implicated. Dramatic, spectacular arrests are carried out for the benefit of the cameras, which arrive in droves. Compromising facts are often leaked while investigations are still in progress. No effort is spared to make sure that these cases come to court, though it is true that all too often charges have to be dropped in the prosecution phase, for lack of sufficient evidence; in other cases the charges are rejected by the court. And it is noticeable that the timing of a leak, of the bringing of charges or of a court hearing coincides frequently with some event on the political calendar: the mine which will destroy a rival’s reputation is detonated just before an election.

We seem to be witnessing a decided attempt by the ruling political group to take control over the courts as well. The President of the Supreme Court, who had been appointed before 2010, was dismissed early, before his mandate expired. A new institution emerged, the National Office for the Judiciary, which from the very start acquired exceptionally wide powers: not only to appoint judges, but also to decide which cases should be heard by which courts. Later, as a result of protests in Hungary and from abroad, the sphere of authority of Office was reduced, but its influence has remained significant. The retirement age fixed for judges was conspicuously different from average age limits and from the previous norms, with the result that the older generation was expelled. This affected several judges in leading positions within the judiciary system, who had been appointed before the present ruling group came to power, and although this measure was subsequently annulled by the relevant international court, so that the people involved obtained at least moral redress, most of them were not able to return to their previous leading positions.

Numerous members of the judiciary are unable to escape from the intimidating effect of the government’s measures. Some cases which come to court have political ramifications, and impartial experts in the field believe that some judgments are biased in ways that favor Fidesz policies. Nobody ventures to express an opinion about the number of cases involved. What is sure, however, (and encouraging) is that the ruling regime has not managed to subjugate the judiciary to the same extent as they have done in other spheres.

  1. By 2010 private rather than state ownership had become the dominant form of ownership. Since the U-turn, however, private property has become the target of frequent legal, economic and ideological attacks; the weight and influence of the state sector is rising again. The nationalization of private pension funds financed from the obligatory contributions of employers and employees, which was carried out using unique legal tricks, dealt a heavy blow to the principle of respect for private property. A similar form of indirect nationalization took place in the sector of saving and loan cooperatives. The state-owned sector has expanded significantly in the branches of banking, energy, public works, transportation, the media and advertising. In these areas the harsh means of disguised confiscation were not so often applied: property rights were bought instead. In many cases the previous owners were forced into a position where they felt they had no other option but to sell their property to the state, and at a price well below its market value.
  2. Up to 2010, decentralized mechanisms played an increasing role in the coordination of various activities. However, since the U-turn the tendency to centralize has become noticeably stronger.

This is primarily true of government administration. One of the major achievements of the change of regime was a significant increase in the powers of local government. The most obvious sign of regression is the fact that schools and hospitals no longer belong to local authorities, but are run from the bureaus of the central government. It is unprecedented – even on a world scale – that a misshapen bureaucratic giant has emerged, which decides over the heads of teachers, parents and local governments about staffing, curricular and financial matters in thousands of schools.

The obsession with centralization, which is intertwined in many ways with the aforementioned tendency to nationalize, affects almost all spheres of society: more and more  questions are decided at the highest level. A pyramid-like vertical hierarchy has emerged and solidified, with the supreme leader at its summit. Below him, ready to obey his every command, stand his hand-picked henchmen, who owe him unconditional loyalty.  Moving on down, we find the next level of the pyramid, and the next: for each position people are chosen for their loyalty to the regime. Commands which take obedience for granted tightly bind each subordinate to his or her superior. It is only the leader at the top who does not depend on his superior, only those at the very lowest level do not give orders to anyone. Everyone else incorporated into the levels in-between is servant and master at the same time. It is in their interests to hang on in there, to move further up in the pyramid. Their position is not decided at elections, but depends on winning the trust of their superior by services and flattery, or at least by uncritical obedience. Hundreds of thousands of public employees, including those who work in the state-run educational and health sectors, feel defenseless: few dare to speak up, to protest, because they fear for their jobs. The regime is robust, partly because it can surely count on the fear of the majority of people dependent on it, as well as on the ‘keep a low profile and obey’ mentality.

A very important decentralized mechanism is represented by civil society, a number of non-market based organizations and associations which are outside the control of state bureaucracy. In twenty years these have developed too, and have also become a means of scrutiny without which it would be impossible to expose and fight abuses of power. One manifestation of the U-turn is the methodical harassment of civil society. When parliamentary bills are being drafted trade unions and other relevant organizations are not consulted. Or if the people concerned express their point of view, in declarations or at demonstrations, their voices are disregarded. The indignant protest of the Norwegian government against the Hungarian government’s plans to interfere in their generous offer of assistance to Hungarian civil society is widely known.

While describing the processes of reversal I did not discuss the causes that induced   the U-turn. There were several important factors here: the grave mistakes made by the governments between 1990 and 2010 and the political parties functioning within and outside the parliament, the spread of corruption, the trauma caused by the appearance of mass unemployment, the increase of social inequality and the disappointment of a large proportion of the population after the high expectations brought by the change of system. It takes a long historical process for democracy to mature, and Hungary has just begun that learning process. It would be essential to complete a thorough causal analysis of the historical past; this, however, exceeds the limits of this paper. Therefore I will only deal with the new period starting with the 2010 elections.


When describing the coordinating mechanism of economic activities we cannot apply the metaphor of the U-turn: it would be more precise to call it a half-turn. Market mechanisms became dominant in Hungary in the first two decades after the change of system, and remained so even after 2010. Just as before, state and market continue to coexist in a symbiosis: there is no modern economy where these two social formations would not coexist and exert reciprocal effects.  The change that Viktor Orbán’s regime introduced is that now the state impinges on the economy in a much more aggressive fashion than the governments before 2010 did: it exerts more efforts to rule over it. This is done in many ways.

We are not talking about a case of ‘state capture’ carried out by a small group of oligarchs in order to establish regulations and pass measures in their own interests.  The direction of the process is the reverse. Orbán and the people who are close to him at the peak of political power decide who should become an oligarch, or who should remain an oligarch if he already is one, and how far his sphere of authority should extend.  Something similar takes place at lower levels too. The natural selection of market competition is overwritten by political considerations. “The important thing is that our man should win the public procurement tender, get permission to run a tobacconist’s or a casino, obtain tenure of that state-owned piece of land”. Tobacconists, casinos and land tenure all work on capitalist principles, but at the same time clientelism, a kind of feudal master-servant dependency, is asserted between the politician/bureaucrat and the capitalist entrepreneur.

A new term has been introduced into everyday Hungarian: ‘Fidesz-közeli cég’, meaning ‘a near-to-Fidesz company’.  Such firms do not belong to the party, but the sole or principal owner of the company is a crony of the political center. Maybe the association began a long time ago, at university or when the party was founded; or an individual’s career may have included a succession of political, bureaucratic and business activities. ‘Crony capitalism’ evolves. The intertwining of the worlds of business and politics is a global phenomenon, and provides fertile soil for corruption everywhere. What comes on top of this in Hungary is the social environment created by the aforementioned U-turn: the very organizations which should be fighting, with the authority of the state behind them, against the intertwining of business, politics and government and against corruption are not independent: they themselves are cogs in the same machinery. Just like any member of the Mafia, a corrupt politician or bureaucrat knows that the Mafia state will protect him – unlike the ‘whistleblowers’, who take personal risks to unveil corruption. The latter are not sufficiently protected, but often harassed, and even ‘character assassination’ campaigns are launched against them.

Viktor Orbán and those who implement his economic policies are swift to emphasize that if the state needs more income this will not be a burden for the people, and there will be no  ’austerities’. The new tax will be paid by companies, out of their profits. The word ‘profit’ itself has as bad an undertone as it did in the good old times when Marxist political economics was an obligatory subject for study. Above the usual forms of taxation special supertaxes have been used to pillage whole sectors, especially banking but also telecommunications, insurance, houehold energy supply, and a few other sectors. The effect of special taxes contributes to the fact that the volume of investments by private companies financed from their profits stagnates or barely increases. An unpredictable tax policy, legal uncertainty and anti-capitalist rhetoric discourage the ’animal spirit’; the propensity to private investment.[2] The extra-ordinary tax burdens ensure that the budget is balanced, which is reassuring for international organizations and credit rating agencies who are extra-sensitive to this indicator, but it does undermine an extremely important factor promoting growth and technological development. Moreover, it is not true that the extra burdens hit on the companies only, as they pass the extra costs, if possible, to the consumers.

While companies are held to ransom, the individual tax burden based on dividends has been significantly reduced. One of the first measures introduced by the Fidesz government was the abolition of progressive personal income tax, which was replaced by a flat rate of 16 percent, while at the same time value added tax was raised to an unprecedented 27 percent. It is known that in relation to the income of a given household, these tax rates impose a much greater burden on the living standards of people with low incomes than on those who earn more. Government propaganda proclaims as a great achievement the reduction of household expenditure on utilities through price-cap regulation. In reality, this price-capping policy is far more beneficial for the rich, as the bigger the flat, the more electricity, gas and water it uses, and the more rubbish it produces, the more it saves. We are all too familiar with the consequences of artificially depressing prices from the days of socialism. Companies make a loss, which in the end has to be scraped together by the community of tax-payers.

Restricting the functioning of the price mechanism is an important feature of the general phenomenon which has just been discussed: the state leans heavily on the private sector, using, among other means, administrative micro-interventions, fine-tuning of control and excessive regulation. Every economist who has studied the theory of market failure knows that appropriate regulation and well-aimed intervention can correct many problems caused by an uncontrolled market mechanism. This theory, however, at least tacitly, supposes that the state is at the service of public interests, and that regulation is carried out professionally and without bias. What happens if the levers of regulation are seized by incompetent or even corrupt people? What happens if a state whose masters use the state mechanism to preserve their own power interferes in the economy? Such interventions happen so frequently and affect the coordination process of the economy so deeply that sooner or later the half-turn can become a U-turn in this field as well.

The economic policy followed by Fidesz cannot win the approval of the conservative economist because of the upheaval that it causes to market mechanisms and the way it threatens private property. At the same time, it arouses rightful indignation in the liberal economist who is sensitive to the injustice in the distribution of income. It is not only the tax policy mentioned above, but various other measures must be disagreeable for them. The adherents of Keynesian economic policy must not let themselves be deceived by aggregate employment statistics. The revival following the depression is dragging its feet, the private sector is creating few new workplaces. The growing number of people in ’public work’ is supposed to make up for that. But they are employed for rock-bottom wages, 31-33 percent of the average salary, under degrading circumstances; they are not guided into the employment market this way, but kept permanently in their humiliating condition. Poverty and social exclusion are increasing at a dramatic rate. Enlightened societies would never tolerate the tone of voice that is used to stigmatize the poorest, or the way the homeless are chased out of cities by mayoral decree.

Any attempt to squeeze the classification of the Hungarian government’s economic policy into boxes labeled ’right wing’ or ’left wing’ is off-track. There is no question of the government intending to restore the socialist system, even though some phenomena are surprisingly reminiscent of the socialist era. The Orbán regime is not only compatible with capitalism, but each member of the power pyramid uses the opportunities offered by capitalism to their own advantage. When they launch an attack on banks or other sectors, they immediately conclude a special deal with this or that bank, sign ’strategic agreements’ with this or that large company in front of television cameras. ’Divide and rule!’ Instead of the left-right division, let us put the economy into another kind of spotlight: what best serves the survival of the existing power structure, the power of the central will, the interests of the higher levels of the power pyramid, including their financial interests? Suddenly it all falls into place and we know why this new institution or that new law emerged.


Hungary’s friends abroad, intellectuals, journalists, political and economic analysts, diplomats and politicians who take an interest in the happenings here, do unintentionally fall into various traps or misunderstandings. One of these is to overestimate the value of the letter of the law.  At first, the Fidesz government created a law which failed to guarantee the complete independence of the central bank. Not only the media, but also the competent international organizations exerted pressure on the Hungarian state to change the law. This finally happened. Those who had demanded the change felt they had achieved success. The propagandists in Budapest used it to illustrate how flexible and ready to compromise the Hungarian government is. In reality, what happened to the law was irrelevant. Having resigned from his position as minister of finance György Matolcsy, who the prime minister publicly dubbed “his right hand”, stepped out of the ministry, walked a few hundred yards and entered the doors of the Hungarian National Bank, as its theoretically independent governor. Without exception, every single member of the highest body of the central bank, the Monetary Council, was hand-picked by the supreme leader and his advisers; they are all loyal members of the consolidated machinery of power.

According to the letter of the law, every single selection process conforms to various seemingly neutral legal regulations. For example, for one position the current Prime Minister nominates a candidate, the competent parliamentary committee expresses an opinion, and he is appointed by the President of the Republic. For another position the parliament not only expresses an opinion about the candidate, but also makes the final choice. Does this matter? The parliamentary committee, the majority of the complete session of parliament (a two thirds’ majority, at that), and even the President of the Republic are all cog-wheels in the same machinery of power.

Another important example is how the regime leans on the press, television, radio and other means of telecommunication. This is about nothing less than the independence of the ‘fourth branch of power’, the liberty of one of the most important checks and balances which function in real democracies. The competent bodies of the European Union and the international press dwelled at length upon the question of whether the rights allocated  to the centrally appointed media authority were excessive or not. Finally, a few regulations of the law on the media were amended. The critics considered this a victory. Viktor Orbán and his colleagues, however, knew perfectly well that it was irrelevant. What really mattered was the fact that they had put their own people in charge of all television channels and radio stations owned, controlled and financed by the state, who then purged their staffs and turned all of them into the collective mouth-piece of government propaganda. The government or near-to-Fidesz entrepreneurs seized the freely distributed and very popular advertising broadsheets and other free local media products. The state media are obliged to use material provided by the news agency controlled by the government. This is not obligatory for the country’s privately owned media, but the latter are offered new state-produced material free of charge, while purchasing news from independent international agencies or trawling the foreign press is expensive. It is hardly surprising that they are reduced to using the free material. Self-censorship, a form of behavior all too familiar from the communist era, is becoming widespread.

There are newspapers, television channels and radio stations which are independent of the government, and critical of it. This is very important; it is part of the impartial description of the present Hungarian situation. However, many obstacles are raised to their functioning, for example during the distribution of broadcasting frequencies, when licenses are granted. Their main source of revenue is advertising. Not only the government’s own agencies, but also private companies which wish to maintain friendly relations with the political masters refrain from advertising with them. Discrimination manifested in the advertising market has been compounded by an advertising tax piled on top of the existing corporation tax. The relevant decrees were worded in such a way that 81 percent of the advertising tax was to be paid by one broadcaster, RTL, even though its share of the advertising market is only 15 percent. This is how one company has been punished for its dogged independence and regular criticism of Fidesz politicians.

No matter how hard the authorities try to subdue the organizations which form public opinion, the IT revolution has made their task more difficult. Stalin was able to surround his empire with almost impenetrable barriers, but nowadays this is impossible: computers, tablets and mobile phones connect the individual with the world through the internet, hundreds of thousands can express their opinions and organize themselves on social networking sites. The Fidesz government would love to find a way to prevent this too.  Not long ago it proposed the introduction of an internet tax. Each gigabyte data transfer would have been taxed to the tune of 150 forints (roughly 55 USD cents). Within a few days, mass demonstrations had been organized; images of the protesters circulated in the international press. Viktor Orbán retreated – half-way: as I write these lines it is not yet clear if the plan has been abandoned for good or merely postponed. Whatever may happen, the image of tens of thousands of demonstrators raising their mobile phones to the sky has become a symbol. The light from the tiny screens might even have illuminated the clouds of the internet – today no regime is able to raise impassable barriers to the flow of free speech.


Here is another frequent intellectual fallacy: certain recently established Hungarian institutions, or new procedures that have been introduced lately, are similar or even identical to the parallel institutions of a traditional Western democracy – at first sight. Many changes have been made in the Hungarian judicial system. What is wrong with that? After all, even after these recent changes, in many ways it still resembles the systems of some European countries. The tobacco trade used to consist of small shops competing with each other. Now  only the government is allowed to issue a license for the sale of tobacco. What is wrong with that? After all, in Sweden a state monopoly with similar or even greater powers covers the trade in alcoholic beverages.

What we have is a mosaic, many pieces of which are original Hungarian products, while others have indeed been imported from democracies abroad. However, if we look at the mosaic as a whole, the outlines of Viktor Orbán’s Hungary emerge. It is actually better to move away from the static image of a mosaic to represent the relationship between ‘part’ and ’whole’. It is not a fixed state that we have to interpret, but a dynamic process. What we have to recognize is the direction that has been followed by each small component of the machinery since the starting point in 2010. From then on, at every new change, we, the observers, must notice which direction the change has taken. In the US, the mandate of the members of the Supreme Court lasts for the rest of their lifetime. There, this regulation has emerged within the framework of a stable democratic order, with many checks and balances in operation. In Hungary, on the other hand, for the first time now the vast majority of members of the Constitutional Court were chosen by the current prime minister – and in a few years all the members, without exception, will be Viktor Orbán’s nominees. If their mandate, is being extended right now, this move, along with other similar moves, will shift the legal status of the country towards irreversible power relations. Thousands (yes, the number is no exaggeration) of discrete changes, all moving together in the same direction, create a new system. Understandably, the Budapest correspondent of a foreign newspaper might write about only one outrageous measure without putting the event into the whole context of Orban’s system. An international organization or a foreign government might be justified in protesting against a specific measure taken by the Hungarian government, and in trying to exert its influence to have this measure modified or withdrawn. This article is intended to help those who form public opinion abroad and those who plan and implement measures taken in the world outside that concern Hungary to a better understanding that more is at stake than a momentary event:  this is now a strongly forged system, whose essential properties cannot be altered by partial modifications.

Another intellectual fallacy is the faulty evaluation of the legitimacy of the Orbán government. “Although I don’t like what is taking place in Hungary, it seems to be what the Hungarians want.” This opinion is further reinforced by the official propaganda, which is busy announcing that the regime won a two-thirds majority for two successive parliamentary cycles; there is no other government in Europe that enjoys such strong support.  Yet let us take a closer look at the facts.

Kornai table
At the last election only every fourth person entitled to vote expressed the wish that Viktor Orbán and his party should govern the country. The others either voted for another political faction or expressed their weariness and disappointment in politics by abstaining. By staying away perhaps some people wished to indicate that they found the regime repellent, but they did not believe that their vote would bring about any change. Political legitimacy is not a binary variable: no government is simply either legitimate or not – but measured against the continuous scale of legitimacy, support for the Hungarian government is low. The election system itself, introduced after the change of regime, has offered the opportunity for a considerable difference between actual political support and the proportions among the representatives.[3] That gap has further widened as since the 2010 elections the electoral laws have been modified seven times; while Fidesz lost more than half a million votes, and the fraction of all eligible voters who voted for Fidesz dropped from one third to a quarter, the regime used legal tricks to maintain a proportion of deputies which is higher than the critical minimum needed to pass laws requiring a two-thirds majority.[4]

There is another intellectual trap connected to the misinterpretations that I have just mentioned; those who have fallen into it may see the Hungarian state of affairs thus: “It is true that the Fidesz regime has abolished many democratic achievements. However, the present form of government must still be considered a democracy.” At this point the debate about what we call ‘democracy’ begins. There is no consensus between academic political philosophers and political scientists. The terminology used by people who are actively engaged in politics is interwoven with elements of political rhetoric. Where the term ‘democracy’ is an honor, the status of democracy is awarded or denied to the Hungarian form of government by the journalist, political analyst, politician or diplomat according to whether they hold a favorable or an unfavorable opinion of the present Hungarian system.  The terminological confusion remains even when ‘democracy’ receives a defining attributive. The expression ‘illiberal democracy’ was originally introduced to political science with pejorative connotations, while Viktor Orbán uses the term ‘illiberal state’ with self-assured pride to describe his own system.

An apt description of the present Hungarian political system / Source 168 Óra

An apt portrait of the present Hungarian political system / Source 168 Óra

Let us look at the set of previous and present historical forms of government that have characterized recent history. In one group we find democracies. Members of the European Union before its expansion, the US, Canada, Australia, New Zealand, Switzerland and Israel surely belong to this group, and as far as this article is concerned the question of which other countries might also belong can be left open for the time being. What is sure is that the essential common features do not exist only in theoretical texts, but can actually be experienced.  ‘Checks and balances’ are not merely requirements supported by arguments put forward by political philosophers – they really do exist, and their functioning can be experienced by observation. We can say the same about respect for minority rights; there are written and unwritten limits to what the majority, however large it may be, can do against the will of the minority. We could go on listing other important common features.

In the other group we have dictatorships.  For me, and for several hundred million other people, this is no abstract theoretical concept: it is a cruel, personally experienced reality.  Thirty years ago 28 countries belonged to one kind of dictatorship: totalitarian communism.

In between the two extremes, the set of all kinds of governments includes a subset; countries which belong here are neither democracies nor dictatorships, though they bear characteristic features of both. In my own work I have joined other authors in calling them autocracies.[5] This class is made up of a colorful multitude: I would place in it the pre-war regimes of the Hungarian regent Miklós Horthy and the Polish statesman Jozef Pilsudsky, or that of the Argentinean president Juan Domingo Peron in the post-war era. In our own time, besides the Russian president Vladimir Putin, the leaders of Belarus and many Central Asian post-soviet states rule over countries which belong to this subset.

I believe that under Viktor Orbán Hungary has moved from the subset of democracies  into the subset of autocracies. I am not talking in the future tense, about the danger of the country becoming an autocracy. The move has already taken place: the change has happened.

To consider Orbán a dictator would be to misunderstand the present Hungarian situation. Hungary today has a multi-party system, opposition parties function legally, newspapers opposing the government can be published. Political opponents are not imprisoned en masse; nor are they liquidated. We know all too well what real dictatorship is; we have experienced it, and what we are experiencing now is not that. However, to believe that Orbán is the leader of a democracy, and that although he breaks the rules of democracy from time to time, in the end he still behaves like a democrat, would also be a misunderstanding.  I do not even want to raise the question of whether Orbán, in the depths of his heart, is a true democrat or not. This may be an important question for his future biographer, but it is irrelevant for our analysis. We have to investigate what has actually already happened. And what has already happened is enough for us to say that Hungary now belongs to the wide subset of autocratic countries that are “neither democracies nor dictatorships”.

It would be a mistake to believe that Orbán is copying Putin. All autocracies are built on different historical traditions; they have emerged in different domestic and international environments, and the personalities and aspirations of their highest leaders differ. Orbán is not an imitator of others, he is a self-determining personality. This does not alter the fact that both the Putin and the Orbán regimes belong to the same subset of autocracies.

Hungary is the first of the post-socialist democracies that has joined the autocracies, but there is no guarantee that it will be the only one.  The balance of power might shift in other countries in such a way as to turn them into autocracies. There are foreign politicians who see Orbán as a model; there is a real danger that this contagion, leading to the loss of democracy and of the rule of law, will spread.


One of the sources of Viktor Orbán’s support is the fact that many see him as the staunch defender of the sovereignty of the Hungarian state, and of Hungary’s independence.  However, anyone who wishes to understand the Hungarian situation must realize that the problem cannot be shrugged off by simply labeling Orbán as a nationalist.

Worldwide, we can see two opposing tendencies. Globalization, the internet, the technical ease with which we travel, the emergence of transnational integration are all making the world more international. At the same time, national sentiments within the boundaries of a nation-state or in communities which reach beyond national frontiers but use a common language, and share common historical traditions, still persist; indeed, they are growing ever-stronger.

The change of regime not only brought about internal revival, but also coincided with the restoration of Hungarian sovereignty. “Russians go home!” was the first slogan; a happy separation from the East, an expectant turn towards the West. Western exports and imports were becoming more and more significant. Plenty of foreign capital was flowing into the country. Hungary joined NATO in 1999, and became a member of the European Union in 2004. In both cases, the intention to join was confirmed by a referendum, and in the campaigns leading up to these all the parliamentary parties, Fidesz among them, encouraged their followers to support the move. Although counter-opinions have always been present and voiced, for twenty years the direction of changes in foreign policy remained unambiguous. Hungary must be an organic part of Europe: it must unambiguously belong to the Western world; it must further strengthen the links binding it politically, economically and culturally to the West.

The year 2010 saw a peculiar U-turn in this area as well: unambiguity has been replaced by ambiguity. This emerges mostly in the rhetoric of official statements. Leading politicians grieve at public meetings about the crisis of world-wide capitalism and Western civilization. The leaders of the regime make use of the anti-EU, anti-American atmosphere; sometimes they go as far as to compare directives from Brussels with the pre-1989 dictates of Moscow. But if yesterday there was talk of the emasculation of the West and of the great things to be expected from the East, today’s discourse will be just the opposite. Orbán is proud of his Janus-face, and considers it the sign of his political shrewdness.[6] The content and tone of the words change, depending on whether they are intended for the Party faithful or spoken in Munich or Vienna at a conference for businessmen.[7] It is hardly surprising that both followers and opponents, both Hungarian and foreign observers, are mightily confused.

In the world of foreign policy and diplomacy official or semi-official statements can carry a lot of weight. Hungary is still member of NATO and the European Union; there has never been the slightest hint of any intention to leave either body.[8] The Hungarian government is happy to receive the plentiful financial support that flows from the EU; the only thing it insists on is full control over its distribution. (We have already mentioned the real motivating forces and intentions which govern state allocations.) At the same time the representatives of the ruling political regime regularly support Euroskeptic declarations.

The Hungarian diplomatic corps resolutely attempts (without much success) to establish business relations with various Asian autocracies and dictatorships, from Azerbaijan, Kazakhstan, Uzbekistan and the Arab Sheikdoms to Vietnam and China, pointing out that other countries do the same. This is purely about business; taking a stand for democracy and human rights is another issue. But they sometimes ’rise above’ this point: recently Orbán called Azerbaijan a “model state” when its dictator was on an official visit to Budapest.

Understandably, other countries take the keenest interest in Hungarian-Russian relations. As we noted earlier, the present Hungarian and Russian forms of government share several features; in this respect both regimes belong to the same subset of autocracies. But now we are not focusing on this similarity, but on the economic connections and relations in foreign affairs between tiny Hungary and huge Russia. In this relationship, how far can the sovereignty of Hungary be maintained; to what degree is it committed now and for the future to its Russian partner? The corollary is another question: how far do these present tendencies endanger Hungary’s commitment to the European Union, to NATO, to the Western world?

In order to be able to answer the question, we would need, for example, to know more of the conditions under which in January 2014 the Hungarian and Russian governments reached an agreement over the expansion of the largest Hungarian power plant, the Paks nuclear power station. I am not in a position to judge whether this large-scale expansion of Hungarian nuclear power capacity is justified, and if it is, whether the Russian proposal was the most advantageous in technical, financial and geopolitical terms of the possible alternatives.  What many people in Hungary and abroad object to, and with good reason, is the way in which the decision was brought. It was not preceded by public debate among experts; the government’s plans were pushed through the parliamentary law factory without the least publicity.  In this crucial issue, which will have a deep impact on the lives of many future generations, on European integration, on the foreign affairs of the country, on its commitments to its allies, the government confronted the public with a fait accompli.

Reflecting on the relationship between Hungary and other countries, the following question must be considered: what can Hungarians who worry about the U-turn, who fear for democracy, for the rule of law and for human rights expect from their foreign friends? A new development may be followed by cries of: “the West won’t put up with any more of this”. I am afraid many people nourish false hopes. The learning process is painfully slow; it takes years for foreign observers to realize there is anything wrong, and even longer before they put the different elements of the phenomenon into the right context.  And comprehension is only the beginning, what else is also needed if recognition is to be followed by some kind of action? This is a task that international organizations are not used to; they are at loss as to how an allied state can be forced to abide by the rules of democracy. Not many means are available. The European Union is unprepared for a situation where one of its members keeps turning against the value system and formal and informal norms of its community. And let us not forget that Hungary is only one small point on the map of the world; conflicting interests influence the motion of political forces. The special interests of countries, political groups, social classes and professions pull the main actors in many different directions. Threatening situations more important than the Hungarian one have proved impossible to solve reassuringly by peaceful agreements.


I have left the survey of the changes which have taken place in the ’ideological sphere’ to the end. A fundamental characteristic of communist dictatorship is the existence of an ‘official ideology’. The roots of its ideological history go back to Marx and Lenin, its terminology comes from the language of Marxist-Leninist party seminars. The communist party kept it up-to-date, and adapted it to the propaganda needs of whichever party line prevailed at the time. The citizen, especially the ‘cadre’ with a role in the system, was obliged to accept the ideology; he had to articulate it both verbally and in writing.

Following the fall of the old regime, the same main direction of change unfolded in this sphere too: the dominance of ‘official ideology’ was replaced by pluralism in the ideological world. Compared to this main tendency, we can observe a U-turn here too. The government strives to limit and discredit the principle of pluralism. It tries to force on society those theories, beliefs and norms of behavior that it considers the only acceptable dogma.

First of all, it vigorously established institutions which promote the execution of the central will. For the world of artists, pluralism and diversity are essential elements. Accordingly, in free societies many kinds of associations and unions, schools and groups coexist side by side, competing or even fighting with each other. The regime which seized power in 2010 selected a small group and invested it with powers that would be unimaginable in the West. Their main organization is the Hungarian Academy of Arts (Magyar Művészeti Akadémia). Other organizations and groups do still exist, but the name of this privileged body appears even in the constitution. It was given one of the most beautiful palaces in the capital as its headquarters, and made responsible for distributing the majority of publicly-funded cultural grants, as well as most awards and marks of recognition which come with financial rewards.

In the scientific world, the situation is similar. The Hungarian Academy of Sciences boasts a long history, and though its independence was severely curtailed by the party state under communism, its autonomy strengthened after the change of regime. It used to exercise considerable influence over decisions about which research projects should be funded by the state, through an institution which, like the American National Science Foundation, relied on expert opinion. Now, however, centralization has taken place here too. The National Innovation Office (Nemzeti Kutatási, Fejlesztési és Innovációs Hivatal), a leading state organization, was established. The Academy and other scientific organizations might try to express their opinion before final decisions are taken, but the days of a decentralized, professional and civil approach to funding allocations are over – the president of the office has sovereign decision-making powers. And who is that president? None other than the minister of education from the first Orbán government.

Turning to the sphere of education: the change of regime made the emergence of a real text-book market possible. The writers and publishers of school books could compete with each other; schools, or even individual teachers, could decide which books to use. Right now, competition is being abolished here too: a mammoth state text-book publishing house has been set up and granted what is effectively a near-monopoly.

What ideas is this increasingly centralized, nationalized, standardized machinery trying to promote? A return to the past is perceptible here too; not to the previous regime with its Marxist-Leninist ideology, but to an earlier ideological past. The official ideas of the pre-1945 Horthy period are being revived in various forms, with increasing strength. It is impossible to describe these with a handful of concise expressions such as nationalism, chauvinism, ethnic or religious prejudice or a conservative view of the family, because they appear in a variety of shades. Official politicians never make open and extreme declarations that would offend the ears of the civilized world; there are, rather, many covert hints and indirect expressions. But in that muted music, the marching tune for boots tramping out the same rhythm can be heard. To the ears of my generation the sound is familiar and frightening.

The images of cultural and academic life and of the world of ideas that I have highlighted here dovetail with the general description of the present-day Hungarian system, which was summarized in an earlier section of this article.  This sphere too bears the mark of an in-between state that is ‘neither democracy nor dictatorship’. The regime is trying to encroach in an increasingly aggressive fashion. Luckily there are large numbers of writers, poets, musicians, film-makers, artists, scientists, teachers and free-thinking intellectuals who will not allow themselves either to be intimidated or to be bought by money and rewards, and who protect their intellectual autonomy. Any visitor to Hungary can testify that intellectual life is thriving: great artistic works are born and significant scientific advances are made.


When I was giving lectures in the USA on a delicate and complicated situation, during the post-socialist transition, I was always asked the question: what should be done? What can we do? I admire and respect this readiness to act, but it is not my task to answer the question. My paper solely aims at revealing the situation; I wished to contribute to our American and other foreign friends’ better understanding of the Hungarian scenario.

What does the future hold for Hungary? One of the theories of democracy, linked mainly to the name of Joseph Schumpeter, deserves close attention. It does not dwell on how far a certain form of government expresses the ‘will of the people’, or at least of the majority. It considers democracy primarily as a procedure which enables the people to get rid of a government, not through the murder of a tyrant, not through conspiracy, military coup d’etat or a bloody popular uprising, but in a peaceful and civilized way, through elections which are well defined in legal terms, with many competing parties. The feasibility of dismissal is not a sufficient condition for a viable democracy, but it is a necessary one: it is the minimum condition.

It will be some time before we can say for sure whether this minimum condition is met or not. In Sweden it took forty years before the social-democratic government was dismissed at the 1976 elections. In Britain the conservative party ruled for eighteen years, from 1979 to 1997, before it was voted out of office. The historians of the future will give a final answer to the question of whether the minimum conditions of democracy are met in Hungary or not. However, many things are already clear.

Viktor Orbán and his party have ‘cemented themselves in’  – to translate an expression which has become commonplace in Hungary. The repeated modifications made to election laws were intended to favor a Fidesz victory, or rather, to make it an absolute certainty.  Should the need arise, the laws can be further modified without any hindrance. Fidesz was prepared for the unlikely but not impossible event of its failing to win a parliamentary majority at the elections. The mandates of many key positions, most importantly that of the chief prosecutor, the president of the republic, the head of the central bank, of the audit office and of the judicial office, extend beyond the current parliamentary cycle; they can all sit tight , even if the opposition wins. The Fiscal Council, a body appointed by the present government, but which would remain in office even in case of an election defeat, has not only an advisory role but also the right of veto over the budget submitted by a new government, and if that veto is used, the president of the republic may dissolve the parliament and call for new elections. In other words a few hand-picked men loyal to the present government would be able to overturn the next government.

All of this leads to the logical conclusion that it would probably be extremely difficult to effectively dismiss the government at parliamentary elections. In this sense, the situation that has emerged is nearly irreversible. Historical experience shows that an autocracy can only be brought down by an ‘earthquake’ that rocks the very foundations of the system.

Other future scenarios are also possible. The great events of history cannot be predicted on the basis of mathematical probabilities; every constellation is unique and unrepeatable. The situation could turn out a lot worse than today. The present Fidesz autocracy could react to the growing protests by hardening the repression. Or another way of events is also possible. Jobbik, the party of the extreme right, already represents a significant force; in more than one city its candidates have been elected as mayors. They speak undisturbed in parliament and in the street. What would happen if in a future election Fidesz did not manage to win a parliamentary majority? Would they be prepared to make a coalition with the extreme right? There is a historical precedent: towards the end of the Weimar republic the moderate right-wing conservative party entered into a coalition with Hitler’s party; together they constituted a parliamentary majority.

At the same time, favorable scenarios are not impossible either. What if more moderate groups within the ruling party are getting the upper hand, who are ready to stop on  the wrong track and turn back, in the direction to democracy and the rule of law? What if the opposition pulls itself together? What if new political movements emerge and win over millions? What if somehow, in spite of an electoral system which almost guarantees the defeat of future democratic forces, the tables turn?

Let us not give up hope.


The printed text here contains very few footnotes. Further footnotes as well as a list of sources on the topic, in both English and Hungarian, will be available in a Web version of this article, available on the authors website: http://www.kornai-janos.hu.

[1] A few months after Fidesz took over the government I wrote an article entitled “Taking Stock”(“Számvetés”), which gave a summative overview of the main characteristics of the changes that had already taken place and which could be expected. Two volumes in Hungarian, edited by Bálint Magyar, were published under the title The Hungarian Polyp – The Post-Communist Mafia State.

The text here contains very few footnotes. Further footnotes as well as a list of sources on the topic, in both English and Hungarian, will be available in a later Web version of this article.

[2] The spectacular new projects inaugurated with pompous ceremonies by political leaders are mostly financed by European Union funds or are established by multinational companies.

[3] About half of the seats are divided among the parties in direct relation to the proportion of the votes. The other half are allocated in every constituency following the ‘winner takes all’ or ‘first past the post’ principle best known in the British system. That secures a large number of seats for a party which has even a small relative advantage over their rivals in several districts.

[4] Compare these figures with German data from 2013. The CDU/CSU received 29.7 per cent of the vote (41.5 per cent of those eligible actually voted). This is only slightly lower than the Fidesz results. But the actual proportions of votes are represented by parliamentary proportions in the Bundestag. Thus, Merkel did not have a majority, and a coalition with the Social Democrats is governing that country.

[5] In the related debates in Hungary, referring mostly to international sources, diverse terms have been in use, for example, ’managed democracy’, ’Führer-democracy’, or ‘elected despotism’.

[6] Viktor Orbán said the following in 2012: “There is a dance routine in international diplomacy. This dance, this peacock dance … has to be performed as if we wanted to be friendly. These are, let’s say, exercises in the art of diplomacy. … So we accept two or three out of seven proposals, those two or three that we have followed already, except they didn’t notice, and we reject the remaining two we didn’t want, saying ‘C’mon, we have accepted the other ones.’ This is a complicated game. Unless you insist, I’d rather refrain from entertaining you with the beauty of the details.”

[7] A characteristic scene of the ’peacock dance’ is the duplicity shown by Fidesz and the government towards Jews. More than once the government has emphatically  declared that it will not tolerate anti-semitism, and if necessary it will defend its Jewish citizens against any kind of attack. At the same time several government measures gravely profane the painful historical memories of Hungarian Jews. For example, it is falsely suggested in various ways that the deportation of hundreds of thousands of Hungarian Jews was forcibly imposed by Nazi Germany, while in fact Horthy’s state machinery was actively involved in it.

[8] A noteworthy exception: the Speaker of the parliament, a Fidesz member, at one point publicly referred to the possibility of ”backing out” of the EU.



  1. Thank you Mr. Kornai for this excellent paper. I can only hope that your writing is available in Hungarian, and will be shared by many.

    I am afraid that the “rise” of the extreme right will make any democratic transition impossible very soon. The economical hardship Fidesz created by the indirect distribution of wealth will result the same blaming game what happened in the Weimar republic. You believe that there are many “what if”, but I must ask: Now that we know what happened after 1939, what advise would you give to the then Europe?

  2. I was deeply impressed with János Kornai’s book “The Socialist System” it grasped the internal mechanisms of the communist command economy and is justifiably seen as a classic. The current essay I think is not as deep as that body of work and it’s not just because of the length of the current essay. The book in two volumes the “Hungarian Octopus: The Post-Communist Mafia State,” edited by Bálint Magyar and Júlia Vásárhelyi gives readers a deeper understanding of the evolution of the Hungarian state than does the current essay by Korami.

    Kormai in his essay writes: “It would be a mistake to believe that Orbán is copying Putin. All autocracies are built on different historical traditions; they have emerged in different domestic and international environments, and the personalities and aspirations of their highest leaders differ. Orbán is not an imitator of others, he is a self-determining personality. This does not alter the fact that both the Putin and the Orbán regimes belong to the same subset of autocracies.” I think here Kormai is not seeing the forest for the trees obscuring the larger picture.

    Effectively the Orban regime is not copying Putin, but the it is following the same path to a fascist corporate state with favored oligarchs running the economy with the helping hand of foreign capital looking for low wage production in the case of Hungary and oil in the case of Russia. in particular I would recommend a close reading of Becker chapter in the Hungarian Octopus “Orbán Inc.” Possibly what we have could be called might be equally be called Goulash Putinism.’ While Kormai’s essay is not inherently incomparable with Bálint Magyar and Júlia Vásárhelyi’s work, it is in my opinion no where near as profound.

  3. Hungarians are such monstrous poseurs.

    There can be no Democracy without the dimunition of individual political power, leading to the
    necessity of cooperation of the citizenry and its politicians. The basis of a democratic evolution
    is the necessity to protect the workers from manipulation and intimidation. Has this been
    done, or even attempted, since 1989? Without stringent laws to protect workers, the society
    falls into the age-old patronage system–the mainstay of tribal/feudal societies. This is what
    Hungary blatantly sports now. To a lesser, perhaps more subtle sense, it always maintained
    the possibility to return to massive patronage since nothing was enshrined in law to prevent
    the wholesale dismissal of government personnel after every election.

    Every Hungarian government since 1989 is guilty in maintaining this ‘lever’ of mass control.
    Orban has just applied it more forcefully than others…

  4. @ István The world economy has been shaken to the core since 2008, but the establishment wants to hide this fact by flooding the economies with fiat money (perpetual QEs). But most of the experts realise that it is only a short-term solution and by now it is running out of steam.

    History is returning with a vengeance in countries, like Japan, Russia, Turkey, Hungary, etc. and we witness the re-emergence of traditional, feudal and militaristic power-structures in these countries, along with (long forgotten) internal and external disputes, which were buried 70 years ago.

    This article from last fall describes it vividly:


  5. Let’s not forget that Orban flew to Munchen on Friday on a non-official visit.

    Orban – among others – could have met Simicska over the weekend or gone to Switzerland for yet another of his strange visits.

  6. I am grateful for this piece. I consider myself a friend of Hungary, and this article strengthens my understanding and my determination – but of course I am just one of those who ask “What can be done?” (like those students described in 7). Gripping, straightforward and thorough, but at the same time wise and compassionate. Thank you. I am looking forward to the official publication.

  7. Instead of comparing public works wage to the average salary (I don’t think it is as much as 60% in fact), it should be compared to the minimum wage, and the official subsistence level. Otherwise an excellent and informative article.

  8. I have not read it. I am not going to read it for the time being.
    I can imagine that this article will be withdrawn, and nobody will miss it.
    Maybe it is part of the spin.
    Maybe Krisztina Morvai will adopt it into the coming Jobbik constitution.
    Was it actually Kornai’s work?

  9. This is a great summary of the broad strokes of what has been going on over the last 4-5 years! Thanks to Mr Kornai.

    I think that one of the difficulties of getting to grips with the current situation and therefore understanding all the changes, is that there are so many of them day after day. It’s very easy to lose track of the meaning and scale of all this unless periodic summaries are made in order to see the snapshot of where we are “today”

    I think that a lot of the apathy demonstrated by the Hungarian public in general is due to the difficulty in having this overview. The “opposition” parties seem to have given up/forgotten/not have the guts to be pointing this all out in a systematic and understandable way.

    And the protest that exists doesn’t seem to be converted into a grass roots working movement, who are educating, activating and connecting with people on a day to day level.

    My fear is that Mr Kornai’s work, as good as it is (or any coherent summary and call to action), will only be discussed by intellectuals and never be translated into a call for action or rebellion from the masses.

    Oh for a grass roots movement translating the meaning of all this in a systematic, easy to understand, translatable to daily life way (err…. but not the neo-Nazi kind)!

  10. In one sentence:
    Hungary has been turned into a mafia state by Fidesz!
    That’s what Mr Kornai describes in detail and what I’m telling my friends and others who ask me in Germany …

  11. Eva and Istvan: I tend to agree with Mr. Kornai regarding Putin. Orban is not Putin just yet. Putin is not Stalin either. I mean there are some steps on the road, and Orban did not used (yet) the kind of tactics Putin does. It is not to say that he is not on his way, but certainly he is not there. While I would call Putin’s state an early dictatorship marching toward a kind of North Korean model, Hungary is “still” in the state of autocracy. It would be nice to find a graph that puts democracy at the one end and dictatorship at the other with autocracy somewhere in the middle with various indicators marked. On such scale Putin would clearly be placed closer to N. Korea than Orban.

  12. Sorry, I had no idea the graphs will embed. Eva, you are free to take them down, as they are taking over the conversation. My apologies again.

  13. Kornai is failing us with this style and method.
    It is a mistake to add material to the confusion.
    A “csattanos” hard-hitting Clearing-up is needed.
    Talents wanted.
    A Hungarian Goldhagen is needed.
    In the meantime watch out for Morvai. A master of misinformation.

  14. Of course those graphs (thanks, some1!) are an oversimplification because they show only two dimensions but they are helpful.
    Now where do we put Orbán?

    Other dimensions that I’m thinking of are:

    Family orientation vs value of service:
    A kingdom e g is family oriented while other systems reward anyone who does a good service

    Introvert vs extrovert:
    Does the system try to have good connections with other states/international organisations etc

  15. @good –
    If you didn’t and won’t read it, why are you commenting on it?
    It’s obvious that you have no idea what Kornai has said. It’s about as far away from Krisztina Morvai and Jobbik’s ideas as could be. Your (otherwise okay) comments about Morvai are simply irrelevant in this context.
    If you’re going to copy the monkeys See No Evil and Hear No Evil, please also follow the example of Speak No Evil.

  16. In February 2014, Russian ‘export ideologue’ Alexander Dugin sent to his associate Georgy Gavrish a list of “countries and persons, where there are grounds to create an elite club and / or a group of informational influence through the line of Russia Today”.

    Above the names of three Jobbik officials (Vona, Kovacs and Sipos), the Hungary section listed “Viktor Orbán, Prime Minister and his entourage”.


    PS: Gavrish’s mailbox was hacked in December. Several journalists are working on the leaked emails, among which Christo Gozev, as well as Die Welt’s Meike Dülffer, Carsten Luther & Zacharias Zacharakis.

  17. Kornai has presented the best summary of the wrekage wrought in Hungary by Viktor Orban. Eva has reported all of it in installments over the years, but Kornai shows that the whole is much worse than its parts.

    Discussing the dimensionality of charts in stead of looking for some way out may be a human displacement activity.


  18. @AOpp – excellent interview!
    I think the most important part is about the Hungarian secret services, Russia, and the lack of lustration. It’s a shame that Szeky didn’t pose a question to his interviewer – Why, with a 2/3 majority, has Fidesz kept the communist secret police files closed? Why is there no lustration? If a majority of people in Hungary ask those questions of themselves, again and again, they will sooner or later come to the only possible conclusion.

  19. @Webber

    The only thing I don’t get is that if the left (Gyurcsany and Bajnai, but also including the SZDSZ) were in power why didn’t they publish any files or tangible information on leading fideszniks, if that is what you’re implying?

    I am willing to assign high probability to this conclusion nevertheless as there have been some implications (indirect documentary evidence), but the lack of firm info is a bit strange, after all the left wing was in power for 12 years out of the last 25, Gabor Kuncze was minister of interior even.

    That Fidesz has been controlling this deep state network is clear, I accept that as undisputable fact.

  20. “to consider Orbán a dictator would be to misunderstand the present Hungarian situation. Hungary today has a multi-party system, opposition parties function legally,”

    In the Communist era, Bulgaria, Czechoslovakia, Poland, East Germany – all had a multiparty system. But they were dictatorships in my definition.

  21. Until now, I was a secret admirer of Eva and her Blog. This pre-published essay called “Hungary’s U-tun” managed to change my status. Not my admiration though. 😉

    It is an excellent and well-written paper as one may expect, rightfully from a leading scholar. The Achilles point of this essay lays in these two sentences: “In one group we find democracies. Members of the European Union before its expansion, the US, Canada, Australia, New Zealand, Switzerland and Israel surely belong to this group, and as far as this article is concerned the question of which other countries might also belong can be left open for the time being.”

    In my opinion, labeling these countries as “democracies” is an outright infamy: Ladies and Gentlemen. Please allow me to highlight some fundamental points of argument for the side of dissent. Only a few points I would like to make from the mile long report card based upon realities on the ground.

    The Rule of Law argument. The worst report card goes to Israel in this section of criterions of practical democracy. Israel does not have a constitution, this state created and enforcing three layers of laws for its habitants. These current laws based on religion and race. Separate set of laws applies to the elite white group of people called “European-Jewish descents. “ The second set of laws governing the group of Arabs having Israeli citizenship. And, the third group is the brutally oppressed native habitants, called Palestinians. As fare, voicing dissent from the ruling parties in political spheres is a big no-no these days. ( …when a journalist like [Haaretz’s] Gideon Levy needs a bodyguard… *)

    The Sate Protection of Citizens argument. In this category, cannot be any doubt the USA is the champion. Beside, this country having the highest rate of incarceration, the police force murdered the most of its citizens. These murders based mainly on race. The government is using the same policies to camouflage these crimes, what the infamous D.D.R. use to practice. There is no data collected on this type of government activities (murder and other criminal activities by US law enforcement). If someone not thrilled by institutionalized murder by law enforcement in the USA, can choose like roadside robbery. There is some nationwide data available on these police activities. Some claims, US law enforcement agencies robbed 4.2 billion dollars from its citizenry in 2013. **

    A few thoughts of mine: about the Orban/FIDESZ regime in Hungary. I have noticed, they (FIDESZ) PR and policy people reading and trying to implement lot of policies developed in the so-called “western democracies” to close and rule the Hungarian society. *** I am sure; some of these policy makers at FIDESZ feel’s quite antagonistic about these criticisms from their western colleagues. They may try hard to figure out that, why these western policies getting attention and criticized in the west. Hmm, I think, this topic, “How to close a semi-developed society having no nukes.” may be worth for another essay from a distinguished scholar.

    Best regards to all,


    * “Signs of fascism in Israel..” http://www.haaretz.com/news/features/.premium-1.610368
    ** “Civil Forfeiture (HBO) John Oliver” http://youtu.be/3kEpZWGgJks
    *** “The End Of America 2008″ Naomi Wolf” http://youtu.be/2xJ76iAZmiA

  22. I am just wondering….while Hungary has such high esteemed economists as Dr. Kornai and churned out thousands of young economists, why the Country has gotten into deep econoomic and political sh*t creek by 2006, so the Prime Minister of the time had to present false economic data to EU? Why the Country has gotten into a near bankruptcy situation in 2008? Yes, there is an u-turn no doubt , but above article makes me think, that Dr. Kornai liked Hornistan and Aproistan much better.

  23. RIght wing media editing at valasz.hu (the internet version of Heti Valasz a political weekly positioned for moderate conservative intellectuals, instead it’s of course a partizan fidesz rag).

    The journalist published an article first with the title “The EU blackmails Russia with new sanctions” then the title was changed retroactively to “The nook tightens around Putin’s neck”.
    Old habits dies hard at the Simicska empire.


  24. @Webber

    But what’s your solution then to this riddle?

    At least SZDSZ could have had access to some tangible, meaningful piece of information (like who were those who recruited the fideszniks, I dont’ know, something), even if not the reports themselves. I know that on kuruc.info there are some pictures of documents which strongly imply recruitment, but no smoking gun.

  25. @Ms. Balogh
    With great respect, I am not wrong. But let’s say I am wrong (who cares if a kormos were wrong)…still Dr. Kornai did not address the issue of economic demise of the Country under the Medgyesi/Gyurcsany/Bajnai-The-Great management.

  26. @Benji – In one of his books Janos Kenedi mentioned that ALL major political parties blocked lustration, without exception. When he wrote that, SZDSZ was one of those parties.
    Anyway, it’s no great surprise that a party (SZDSZ) that allied with the heir of the communist MSZMP (i.e. MSZP) might not be that interested in uncovering the reach of the secret police (precisely that alliance was a betrayal for many SZDSZ supporters). It’s easy to connect the dots between the bricks (tégla) as the interview with Széky suggests.
    I note, before 2010 no party had a 2/3s majority and some argued that without 2/3s support in parliament proper lustration could not be passed.’
    The great “betrayal” comes after 2010. Fidesz-KDNP presents itself as anti-communist. The Fidesz-KDNP government has a 2/3s majority and has shown it can pass any law it likes. In open votes in parliament, and with party instructions to do so, Fidesz MPs voted down the lustration legislation proposed by LMP. Only a very few Fidesz people defied party instructions and voted for lustration. I wonder how many of them are still in parliament now, after the 2014 elections? I had the list somewhere of the vote… it was open information.

  27. I watched the index.hu video about the question in which the journalist asked Orban whether he was afraid that Simicska was going to leak info about him, and Orban of course refused to answer, but I thought this person standing there with his strange smirk licking his lips is crazy, he is mentally unstable, I wouldn’t wanna deal with this guy. Why would a Putin or cooler Russian heads deal with him and trust him long term? Because they trust Lázár, that he will be there to deliver anyway? Or because the Russians anyway coopted all potential competitiors to Orban? Or they are used to crazy dictators?

  28. Sorry Kormos, but it is a lie. The statistics given to the EU were always correct numbers. What Gyurcsány was talking about was not telling the Hungarian people the seriousness of the financial situation and that the country can’t afford additional social benefits parties were promising.

  29. P.S. I don’t want to imply that there were no honorable people in SZDSZ, or in any other party you might want to mention. Of course there were.
    There were some honorable people in Fidesz, too – people who acted and voted according to their consciences (Angyán, for one – you might disagree with him, but you can’t deny he has a spine).

  30. @Webber. Yes, Ángyán, János Bencsik, and Zoltán Pokorni. Zoltán Illés made sure that he is not there when they voted for Paks. That’s all. The rest voted and voted and voted. They didn’t even know what they are voting for.

  31. Notwithstanding your views, naturally you are entitled to your opinion, but I am not talking about the “speech”. I am talking about falsified statistical data was presented to EU, and the PM at time was pulled through hot coals in Brussels. It does not really matter today, but situation then has contributed to 2010 landslide. I understand that the present 2/3 situation is not healthy on a long run and I wish for an opposition which wants to bring Hungary and the Hungarian People forward with meaningful debates in Parliament. Even without a proper opposition, things need and will change.

  32. @Eva.
    Pokorni, as far as I’m concerned, is just a “reform fideszista.”
    I don’t expect much from such people.

  33. @Webber: I agree, but my point of fascination is still that Hungary is a small country and information on any agent must be stored in several places so one would expect that during a longer time period something important could have come out, if not about everybody than about one’s adversaries at least (such as about Orbán, Kövér, Szájer etc.).

    But given the info already available, and other undisputed facts such as the Russians have the entire data base just because they were physically sitting in the Hungarian ministries up until 1990 or because they have worked together abroad with those who were involved in foreign oriented matters, I have no doubt that Orban and his friends/family were part of this very network which now they rule. Orban’s known to be crazy about using people with to us probable association with the services.

  34. It’s an excellent piece indeed.

    Nevertheless, as much as I appreciate and agree with what was written here in terms of political science, law, ideology and History, I have one criticism regarding the absence of a socio-economic approach.

    For instance: since the transition, the employment structure has experienced drastic changes, from a relatively balanced 20/40/40% (Agriculture/ Industry/ Services) to a ‘post-modern’ 5/30/65%. The transformation occurred over a very short period, making it impossible for an already weak labour movement to inspire a growing service industry. The result is an almost complete lack of engagement in workplace-related political issues. In my opinion, democracy in Hungary won’t grow again until this is resolved.

    Thinkers, artists, politicians? Sure. But people have to fight for it for themselves, in their everyday life. It’s never achieved through the ballot box only.

  35. @Kormos – There weren’t falsifications what caused the upheaval, but the different point of view regarding the cost of the highways: whether or not loan taken by the otherwise mostly state owned companies should- or shouldn’t count into the debts of the state. Finally they went along with the EU and accepted that they surpassed the 3% limit.
    As I recall Orbán fiercely protested that time against that the EU shouldn’t go with the Hungarian line, because they are cheating, and so on.
    As far as I remember he was a true patriot already then.

  36. Full text of the agreement between Government – Erste -EBRD dated Feb 9, 2015:

    1. the Parties agree that a sound banking sector represents a key foundation for long-term sustainable economic growth;

    2.the Government of Hungary is seeking to strengthen its relationship with the banking sector in order to promote a stable and predictable framework to support macroeconomic stability

    3.the Government of Hungary does not intend to take direct or indirect majority ownership stakes in systemically important local banks, except in case of a threat to the stability of the overall banking system, and is committed to transferring all direct and indirect majority equity stakes it currently holds in local banks to the private sector within the next three years;


    ” With a view to increasing its support for the Hungarian economy, Erste Bank Hungary will introduce several programmes over a period of three years, as follows:

    A €250 million loan disbursement programme, including a complete financial package for public sector employees
    A €100 million lending package for energy efficiency programmes
    A €200 million loan facility to primary agricultural producers.

    In line with the Erste Group strategy of focusing on core central and eastern European markets, and in order to support the implementation of the joint measures taken by the government of Hungary and the EBRD, Erste has invited the two parties to invest in Erste Bank Hungary Zrt. by acquiring a minority stake of up to 15 per cent each. Negotiations are in progress and the completion of the transaction is expected within the next six months.”

    “In the proposed transaction, the government and the EBRD will each have the right to appoint one non-executive member of the Board of Directors and one member of the Supervisory Board of Erste Bank Hungary. The purchase price will be negotiated between Erste and the two parties based on market valuation methods”


  37. @Tappanch

    I hope it is clear even to non-lawyers that that this document is not a binding, enforceable agreement, but a non-binding MOU (memorandum of understanding, a kind of szándéknyilatkozat).

    Even if it was a binding agreement a provision containing text like “the Government of Hungary does not intend to take direct or indirect majority ownership stakes in systemically important local banks, except in case” would itself not be binding since intentions can change in good faith.

    And if it’s non binding, then Orban loughs at poor Erste and EBRD who believe in this non-binding bulls***.

    Orban wants to own and control as many banks as he can. At Erste this was his method. At other banks he uses other methods.

    It is rumored that Sperbank Hungary will be purchased by an entity related to the Coop grocery chain (apparently it has a financing arm). In this way Sperbank would not be legally owned by the state and its debt would not be added to the government debt even if Coop would be a simple front company directed from MNB or from Fidesz HQs.

    Since Sperbank Hungary has been heavily lossmaking for at least three years the Russian may even sell for 1 eur but of course taxpayers would foot the bill while fideszniks loot the remainders of the bank so the price would be much higher as it would another opportunity too syphon money off the budget.

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