democracy

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Do not quote without the author’s permission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.

 

1

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.

2

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.

3

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.

 4

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.

5

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.

6

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.

7

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.

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Thoughts in advance of the German and Russian visits to Budapest

Yesterday the Neue Zürcher Zeitung published an article about the forthcoming visits of Angela Merkel and Vladimir Putin to Budapest titled “Orbans Tanz auf zwei Hochzeiten,” indicating that Viktor Orbán will be able to have his cake and eat it too. He will remain a member in good standing of the European Union and will be a close friend of Russia at the same time. I, on the other hand, maintain that he will not be able to pull off that extraordinary feat. There are many signs that the Hungarian prime minister is already in retreat.

Let’s start with the Merkel visit. Hungarian and foreign observers have come up with all sorts of explanations for her trip, starting with the simplest one–that she could no longer postpone it. After all, she has not visited the Hungarian capital in the last five years, ever since Viktor Orbán’s Fidesz, which professes to be a Christian Democratic party, won a stunning victory in 2010. Her last trip took place in 2009, on the twentieth anniversary of the Hungarian opening of the Austro-Hungarian border for East German refugees, when the socialist-liberal government of Gordon Bajnai was still in power. If the purpose of the trip was to have a serious discussion about the Russian-Ukrainian crisis and Hungary’s role in it, Merkel’s five-hour stay, with very little face time with Viktor Orbán, would not suffice. She is coming because she promised to and because, according to a 1992 agreement between Hungary and Germany, she has to.

There are analysts who are convinced that Angela Merkel will not even mention the erosion of Hungarian democracy under Viktor Orbán’s regime, the systematic transformation of a fledgling democracy into an autocratic regime akin to the political setup that existed in Hungary between the two world wars. She has more pressing issues on her agenda: Greece, the sanctions against Russia, and the growth of the German anti-immigration movement–PEGIDA (Patriotische Europäer gegen die Islamisierung des Abendlandes / Patriotic Europeans Against the Islamization of the West), especially popular in the former East Germany. It is unlikely that Merkel will waste any time on the woes of Hungarian democracy. Her only aim is to make sure that Viktor Orbán stands by the extension of the sanctions. This hypothesis, in part at least, is outdated: Hungary obediently voted for the extension on January 29.

Others are more optimistic. They maintain that the trouble with Angela Merkel’s visit is that it seems to put a stamp of approval on the illiberal regime of Viktor Orbán. This is certainly how the Orbán government is portraying it. If Merkel says nothing about the state of democracy in Hungary, Orbán’s regime scores a victory. There is pressure on Merkel at home, however, to do something about the Hungarian situation. She has to give the appearance that her visit is something of a warning to Viktor Orbán.

There is some truth in this interpretation. In fact, there are signs that behind the scenes some “disciplinary measures” have already taken place. The successful negotiations with the leaders of  the RTL Group indicate that Orbán got the message: there will be consequences if the Hungarian government blatantly and illegally discriminates against a media outlet just because it doesn’t like RTL’s news broadcast. Orbán caved, and I for one am certain that he didn’t get much in return. I find it interesting that the official announcement of Merkel’s visit occurred very late, on January 28, the day when according to Népszava‘s information the Hungarian government agreed to a substantial reduction in the enormous tax it had levied on RTL Klub. Was this agreement the price, or part of the price, of Merkel’s visit?

Because that’s not all. In his regular Friday morning interview Orbán announced that the exorbitant tax levies on the banking sector will most likely be gradually reduced because the Hungarian economy has greatly improved. “If possible, the interests of the country and the businessmen must be reconciled,” said the man who until now had laid all the financial burdens of his erroneous economic policies on businesses, especially foreign ones.

There might be several reasons for Orbán’s cooperation in addition to German negotiations. One is that the Americans undoubtedly know more about the Hungarian mafia state and Viktor Orbán’s role in it than they let on, but the Hungarian prime minister doesn’t know how much they know. That must be a powerful incentive to stick with the countries that provide Hungary with economic aid and military shelter. Another consideration might be the effect of the sanctions and the sinking price of oil on the Russian economy, which makes close ties with Putin’s Russia a less desirable option than, let’s say, a year ago.

And that leads us to the Putin visit on February 17. It was almost a year ago, in March of 2014, that the United States and the European Union began applying sanctions against Russia. Although Hungary agreed to support the move, in August Viktor Orbán declared that “Europe shot itself in the foot,” meaning that the sanctions actually hurt only the West and did nothing to weaken the Russian economy. Just about this time, however, oil prices began falling. The combination of sanctions and falling energy prices has made the Russian economic situation close to desperate by now.

Orbán was initially very proud of what he considered to be the crowning achievements of his Russia policy: the Southern Stream, which would have brought gas to Hungary circumventing Ukraine, and the Russian loan for the extension of the Paks Nuclear Power Plant. Since then, Russia abandoned the Southern Stream project because of lack of funds, and many people think that the much heralded Paks deal is also in trouble. Thus, the rationale for close relations with Russia has more or less evaporated, which leaves Viktor Orbán in the unenviable position of suffering the ill effects of his overly cozy relation with Putin while reaping practically no benefits.

Depiction of the Trojan Horse at the Schlilemann Museum in Akershagen, Germany

Depiction of the Trojan Horse at the Schliemann Museum in Akershagen, Germany

Under these circumstances I doubt that the initiative for the Putin visit came from Budapest. It is no longer to Orbán’s benefit to make a lavish display of friendship with Russia. And indeed, the government is trying to downplay the importance of Putin’s visit, noting that it is only a working trip and not a state visit with the usual fanfare. For Putin, by contrast, it is an important trip at a time when nobody wants to have anything to do with him. Just think of the humiliation he suffered in Brisbane, Australia. He wants to demonstrate that he has at least one good friend  in the European Union.

Putin’s second reason for the trip, I suspect along with others, is to find out how much he can rely on Viktor Orbán. Will he deliver as promised? Or it was just talk? Perhaps Orbán oversold his usefulness to Putin and is turning out to be a useless ally from the Russian point of view. Last August Jan-Werner Müller wrote an article in Foreign Affairs titled “Moscow’s Trojan Horse: In Europe’s Ideological War, Hungary Picks Putinism.” Well, the Trojan Horse may be just an empty shell and the damage it can cause within the European Union little to none.

Sándor Kerekes: Letter to Angela Merkel

Dear Chancellor Merkel:

I am impelled to write to you on the occasion of your impending visit to Prime Minister Viktor Orbán of Hungary in February. I have no doubt that your able staff is more than adequately preparing your visit; however, I wish to add to that a point of view representing the Hungarian perspective.

Surely, you are aware that the government of PM Orbán and his Fidesz Party have relentlessly attacked and emasculated most institutions of the democratic state ever since their election in May 2010. But, just to keep up appearances, they have maintained them as a façade, populating them with their own appointees, often for nine and twelve-year terms, thus rendering them unable and unwilling to carry out their original, constitutional functions, since the appointees only follow Fidesz instructions. From the outside they look like checks and balances to the unsuspecting viewer. However, nothing could be further from the facts. All those institutions are interconnected through the invisible network of personal and party connections, all serving to promote the political and financial interests of a selected few of Viktor Orbán’s friends. In fact, those institutions are only there to serve as a disguise, hiding the actual operations of a government whose single and concentrated aim is to siphon as much of the country’s resources to the hands of this small coterie, as possible.

The street demonstrations of recent days mobilizing tens of thousands of people almost every other day, demanding democracy and fair government, are largely concerned with the ever-increasing corruption of the government. Those thousands are in dire need of help that could surely come from you Madame Chancellor. This monumental, institutional corruption is seemingly unassailable by the people, because Parliament, as the Prime Minister’s voting machine, legislates and legalizes the constant, obvious thievery. And as it so often happens, if a superficially constructed piece of legislation should prove insufficient to cover up the crime, either a subsequent retroactive law will bend the rules after the fact, or all complaints will be rejected or ignored by the Prosecutor’s Office. Since the election in 2010, not one single corruption case was launched against any corrupt government official, despite the numerous cases submitted. It is not surprising; therefore, if many consider the government of Viktor Orbán as a well-functioning Mafia operation.

The presently concluded contract with Vladimir Putin’s Russia for the building and financing of the Paks 2 nuclear power plant is hugely disadvantageous to Hungary and yet a most rational pact in view of the rapacious corruption system. The contract includes a 20% Hungarian share in the financing – 2.5 billion Euros – that is available for stealing. Since the Hungarian state otherwise has run out of sources for available money to steal, this gigantic project will provide a copious source of corruption money for the coterie. At the same time, it may bankrupt the country, but by the time that will become clear, this Mafia will be long gone.

Under these circumstances, even the government of the United States raised a strenuous complaint and took the unprecedented step of banning certain government officials from its territory for reasons of corruption. At the same time, the United States government made it clear that it will not shirk from the confrontation, and insists that the Hungarian government must address the systemic corruption. So far, Viktor Orbán has resorted to lies, denial, and communications trickery, but taken no action.

Apart from some prestige projects, such as football stadiums and municipal beautifications, public investments ground to a halt years ago. Private capital is fleeing the country. If there is any investment at all in Hungary today, it is funded by European Union transfer money. In fact, over 90% of all public investment projects are financed by the European Union. But invariably, those projects are “one-off” short term ones that create neither lasting effect, nor permanent jobs for people. In fact, all that European Union financing is squandered on useless, short-term veneer, merely creating appearances and an opportunity for kickbacks. Presently, any government public bidding process is tailor-made for the single, Orbán-friendly bidder, and the general consensus is that the “usual” kickback is between 20 and 40%. Despite all this, the Orbán government is conducting an unrelenting verbal and political campaign against the European Union, the United States and most of all the ideals of liberal democracy.

The barren Hungarian puszta

The barren Hungarian puszta

When the European Parliament commissioned the Tavares Report, it was assumed in good faith that the problems of the Orbán Government were mere mistakes and with the help of the Report itself, with some good advice, and genteel prodding, the system could be corrected. Today it is clear that the Orbán government is by no means acting in good faith. In fact, the Tavares Report failed to recognize that Hungary is rapidly and intentionally sliding towards a one-party, single-ruler, authoritarian, illiberal regime. The Report was to no avail; the Hungarian government not only ignored it, but also legislated its rejection. All this was done in front of the uncaring eyes of the European Union.

While the officials and friends of the Orbán government are getting obviously and obscenely rich, the population of the country is sliding into deep poverty. Today, four million people are living under the poverty level, hundreds of thousands are starving and tens of thousands of children cannot get enough to eat. Poverty today is endemic in Hungary and it is increasing. Over the last four years, 500,000 of the mobile, enterprising people of Hungary have emigrated to other countries in the European Union, Germany amongst them.

Not wanting to extend needlessly the list of reasons for writing this letter, I wish to come to the obvious implications.

Hungary today is a disturbing foreign object in the very middle of the European Union. But because its transformation, running counter to everything European, is far from complete, it is likely that in the future she will be a cause for much more, and much more painful headaches within the European Union. The process of transformation is accelerating unbridled, and Hungary will be a source of an unhealthy inspiration, inviting any self-appointed tin-pot dictator to repeat the exercise: build an illiberal, single-ruler dictatorship and do it at the expense of the European Union. Why not? Nobody is raising any objections and the money keeps flowing to finance the process.

Madame Chancellor:

The interest of the European Union, the people of Hungary, and basic common sense dictate to submit to you the humble request that you, a dominant person in the European Union and in the World, give an unmistakable expression of disapproval to Mr. Orbán about what is happening in Hungary. It is inconceivable, and yet a strange fact of life, that the European Union and its citizenry should generously finance Hungary’s corruption, its war against Western Values and Mr. Orbán’s campaign against the people of his own country. Why should the European Union pour billions of Euros into a few people’s pockets, just to enable them to steal even more?

The suspension or denial of the transfer payments would bring the insane policies of the Orbán government to a screeching halt since nothing but these payments keeps it going.

The European Union, on the other hand, would greatly benefit from saving those billions by using them for more worthy purposes than stuffing the pockets of a corrupt regime that uses them as an opportunity to conduct a surreptitious anti-European, anti-liberal, people-busting war in peace time.

Dear Madame Chancellor:

I fervently hope that my suggestions coincide with your own intentions, and that your highly anticipated visit to Hungary will bring the beneficial results most of us are hoping for. It would be a bitter disappointment for the entire country if Prime Minister Orbán could in any way interpret your visit as a public relations success and a stamp of approval on his policies.

Very truly yours,

Sándor Kerekes

—-

Sándor Kerekes is a freelance journalist whose articles regularly appear in Kanadai Magyar Hírlap. He also wrote several articles in the past for Hungarian Spectrum.

In Viktor Orbán’s absence anti-regime forces are gathering

The Hungarian media is full of articles and opinion pieces about Viktor Orbán’s disappearance since Christmas Eve, when he posted a silly selfie peering from behind a Christmas tree. He missed his customary New Year greetings and was not spotted anywhere getting in or out of his Volkswagen minibus. Given the less than friendly domestic atmosphere, the media and the public suspect that he’s in one of his alleged depression cycles that usually happen when things aren’t going well for him. When asked, the chief of the prime minister’s press department claimed that he is not on vacation. He is working as usual, but from home. And those Hungarians who can scarcely wait for one of his Friday morning monologues will be happy to know that the prime minister will deliver his pearls of wisdom tomorrow.

Orban 2014 karacsony

In Hungary everything revolves around Viktor Orbán. If he disappears for over two weeks, the domestic news flow shrinks to practically nothing. Issues that are currently making waves are the results of earlier bad decisions, like the law on Sunday closings and the introduction of tolls on roads that were until now free.

Since nothing is happening on the government front, I’ll turn to a recent article by András Bruck, one of my favorite political commentators. About this time of the year, a day after Christmas in 2013, I wrote a fairly lengthy summary of one of  his essays entitled “The Sign” that appeared in Élet és Irodalom. Unfortunately, the essay is not available for non-subscribers to ÉS, and therefore I suggest that you read my post, “András Bruck’s new encounter with George Orwell’s 1984.” In brief, Bruck recalls that in the early 1980s, when he was first able to read 1984, he was disappointed. The book was about “a different bad world” from the one in which he lived. While making love he felt neither fear nor hatred. He didn’t consider the three famous slogans of Ingsoc, WAR IS PEACE, FREEDOM IS SLAVERY, IGNORANCE IS STRENGTH appropriate for Kádár’s Hungary. However, re-reading the book, he came to the conclusion that “every word of that book from the first to the last is about this sick, deformed regime in which, just like in the novel, the binding agent of power is lying.” His conclusion is that Hungary is a dictatorship pure and simple and that those who claim that Hungary is still a kind of democracy are kidding themselves.

Lately, András Bruck’s essays no longer appear in ÉS but in HVG, perhaps because he would like to reach a wider audience. Earlier he wrote infrequently, but since early November he has published two articles and gave an interview to Sándor Friderikusz on ATV. This radical critic of the Orbán regime seems to be optimistic for the first time in the past five years. The title of his November 7 article is “Before newer demonstrations.” He correctly anticipated that the first large demonstration would be only the first of many. As he said in the interview, he had enough of “a regime in which a well-developed socialism came into being for the rich minority and an underdeveloped capitalism for the majority.” This rich minority receives undeserved benefits without competition while the majority gets only the burdens of a poorly developed capitalism.

It is this deformed political system which at last is meeting resistance, not only by those who went out to demonstrate but also by those hundreds of thousands who are by now openly critical of the regime and want to put an end to it.

Bruck maintains that although a lot of people charge that Orbán’s political decisions are ad hoc, the truth is different: “Here everything happens according to a master plan.” It all started with two concepts cunningly devised: (1) a centralized political field of power that ensures permanent governing with a weak opposition and (2) the introduction of unorthodox economic planning. These two concepts, once put into reality, “enabled Viktor Orbán to establish a one-party system and his own personal rule.” His “illiberal confession” last summer merely marked the finished job.

Just as the socialist one-party system was impossible to reform, the Orbán regime cannot be “corrected” either. But the good news is that “this sick, deformed regime … has as much chance of survival as all its similar predecessors.” And “this new mass on the streets last week sent a clear and understandable message and for a moment the government took notice.” But only for a moment because they are convinced that they will be lucky and “there will never be a last straw.” In dictatorships it is quite often the case that there is a “total lack of any sense of danger” among the perpetrators. The people who have been serving this regime believe that they have nothing to worry about. It doesn’t occur to them that one day a new parliament may declare the present system a dictatorship and hence illegitimate. They think that their clever lawyers will save them and that their wealth will be safe stashed away somewhere outside of the country. But this time these sins shouldn’t go unpunished. Only unblemished individuals should sit in judgment. Some opposition politicians are not worthy of the task.

Bruck finishes his essay by quoting Gergely Gulyás, whom he describes as “the young star of Fidesz’s good cop department,” who said in Berlin recently: “Hungarians know very well the difference between democracy and a one-party system, the rule of  law and dictatorship.” Bruck added, “He said that well. Yes, we know it.”

Viktor Orbán’s speech at the XXV Bálványos Free Summer University and Youth Camp, July 26, 2014, Băile Tuşnad (Tusnádfürdő)

I’m grateful to the editors of  The Budapest Beacon, an English-language news portal, for allowing me to republish their translation of the by now infamous speech of Viktor Orbán. I summarized its main points earlier, but to have the complete text allows the readers to have a fuller understanding of the issues we have been discussing in the last four or five days. The original can be found hereHungarian Spectrum’s blogroll has a link to The Budapest Beacon.

   * * *

Good day to all of you! Respectful greetings to everybody!

When we saw each other here a year ago, I began my speech by saying that we are at the last Tusnádfürdő meeting before the upcoming Hungarian national elections. Now I can say we are on the first Tusnádfürdő meeting after the past Hungarian election, and I can announce the good news that we won the elections. Actually, we won twice. Because we did not only win the national elections, we also won the EP elections. Everybody here may know that the third elections will happen on 12th October this year; these are the municipal elections, which have weight and importance on Hungarian state life. Allow me to start my speech with citing an unworthily overlooked movement of the last national election. As a result of this election in Hungary the governing civic, Christian and national power, Fidesz and the Christian Democratic People’s Party gained a two-thirds majority – by only one mandate. I do remember – we chatted about it years ago – how beautiful would it be, how noble a form of revenge, if the political forces who voted against the re-engaging of the Hungarians living outside the borders of Hungary would be deservedly punished if a majority, or even a two-thirds majority, were gained by the votes of the Hungarians who live outside of the borders of Hungary. I announce that there is a strong suspicion that after all there is a moral balance in politics. We have good reason to doubt it.  However, sometimes this belief is affirmed. For example, now what happened is that the votes of those Hungarians who live abroad were needed to gain the two-thirds majority of the national forces in the Hungarian parliament. Thank you everybody, providence, the voters, the Hungarian lawmakers, and finally those as well who turned against us and provided the chance to win. Because if there is no bad, how could good get mastery over the bad?

Ladies and Gentlemen!

My speech today is not connected to the elections. Our acting president introduced us as regime changers, and did it by recalling the regime change. This represents well that for our generation the regime change is the generational experience to which we compare everything, against which we measure everything, from where we start to define everything that happens around us. It seems natural, although it is rather a disadvantage for us, not an advantage. The regime change as an experience is very valuable because politics – in spite of what people sometimes think – is not a speculative genre. It has to be built from experimental facts and experiences. And today the situation is that – acknowledging that experience is valuable – at the same time the same scale of change is happening in the world, as it was in the experience of the regime change. So the task in an intellectual sense waiting for us is that regime change is to be referred to as an experience but not a reference point in the debates on designing the future paths. We should much rather consider as a starting point the financial, global economic, global power and global military power shift that emerged in 2008. This is the task we should accomplish. We are helped by the fact there there are people who were born later than us. And for them it has long been a hardship to consider the regime change as a reference point, because, let’s say, those who were born in 1985 were five during the regime change in the ’90s, and this was not the same experience as it was for us. They frequently stay out of political discussions because they do not even understand the references in the interpretations of the present and the future from the older ones. I believe that it would have several advantages to consider the regime change a completed historical process, the factbook of experience, and not the starting point in case of thinking about the future. The starting point when we think of the future, because – if I get it right – our task every year is to try to somehow understand mutually what is happening around us, to grab its essential movements, and maybe see what is going to happen to us in the future. So if this is our task, I would suggest to shortly remind ourselves that in the 20th Century there have been three major world-regime changes. At the end of World War I, at the end of World War II, and in 1990. The common points in these were – I might have mentioned this here once – that when the changes manifested it was clear for all of us that we are going to live in a different world overnight. Let’s say it was very clear here after Trianon, just as it was in Budapest after World War II as well. If the people looked around and saw the invading Soviet troops they knew that a new world was about to begin. In ’90 when we succeeded in breaking and displacing the communists, it was clear after the first parliamentary elections that a new world had arrived for us: the wall in Berlin collapsed, elections were held and this is another future.

László Tőkés and Viktor Orbán in Tusnádfürdő/Băile Tușnad Source: aradihirek.ro

László Tőkés and Viktor Orbán in Tusnádfürdő/Băile Tușnad
Source: aradihirek.ro

The statement intended to be the basic point of my talk here is that the changes in the world nowadays have the similar value and weight. We can identify its manifestation – that point when it became clear – as the financial crisis of 2008 or rather the Western financial crisis. And the importance of this change is less obvious because people sense it in a different way as the previous three. It was unclear in 2008 during the huge Western financial collapse that we are going to live in a different world from now on. The shift is not that sharp as in the case of the three previous world regime changes and it somehow slowly resolved in our minds, as the fog sets on the land. If we look around and analyze the things happening around us, for six years this has been a different world from the one we lived in.  And if we project the processes for the future – which always has a risk – it is a reasonable intellectual exercise, and we see well that the changes will only have a bigger impact.

Well, Honorable Ladies and Gentlemen, for the sake of illustrating the deepness of this change, without any particular order, I assembled a few sentences, ideas from the Western World, as well as one or two from the Eastern World, too, that are stunning. If we assessed them through the lens of the pre-2008  liberal worldview, we would be shocked. Yet if we do not view it that way but understand from these sentences how long a way we have gone in terms of public speech, topics and their articulations in these last six years, then these sentences to be quoted will help us understand how profound the change is that is taking place in the world today.

Very briefly: In America, the President of the US has made numerous and repeated statements regarding how America has been engulfed by cynicism, and the task for American society and the American government is to declare war on cynicism originating from the financial sector. Before 2008, such a statement would have resulted in exclusion from gentlemanlike international discourse, additionally because of the characteristics of the financial system, it would probably have even been tainted with as being sinister, making any utterance of such sentences extremely perilous. Contrary to this, these ideas constantly appear in the American press as of late. The US president says that if a hardworking American constantly has to choose between career and family, that America will lose its place in the world economy. Or the President openly speaks about economic patriotism. He says such sentences that would still earn beating and stoning in today’s provincial Hungarian public life. For example, he openly speaks about how companies employing foreigners should pay their fair share in taxes. Or he openly speaks about how companies employing Americans should be supported before anyone else. These are all voices, ideas and sentences that would have been unimaginable six or eight years earlier.

To proceed further, according to a well-recognized analyst, the strength of American “soft power” is deteriorating, because liberal values today incorporate corruption, sex and violence and with this liberal values discredit America and American modernization. Also, the Open Society Foundation published a study not long ago analyzing Western Europe. In this, we could read a sentence which says that Western Europe was so preoccupied with solving the situation of immigrants that it forgot about white working class. Or the British prime minister said that as a consequence of the changes happening in Europe, many became freeloaders on the back of the welfare systems. One of the richest Americans, who was one of the first investors in the company Amazon stated that we are living in a society that is less and less capitalist and more and more feudal, and if the economic system does not reform itself then middle class will disappear, and, as he puts it, “the rich will be attacked by pitchforks”. Therefore, he thinks a middle-up economic model is needed instead of a top-down model. It is not my intention to interpret these sentences, simply to cite them here in order to show the novelty of these ideas that were impossible to talk about only six years ago. Or, similarly from America, the number of unemployed youth has drastically risen, and in the case of the most promising career options, children from families with affluent families receive a far greater advantage – this is said in the homeland of social mobility. Or to cite something else: another respected analyst said that the internet, understood by the liberal world as the greatest symbol of freedom for many long years, is being colonized by big corporations. His statement suggests that the big question is whether great capitalist companies, meaning international corporations, would be successful in doing away with the neutrality of the internet. Going forward, to quote a development that is both dear and unexpected for us, the English prime minister, who awkwardly avoids his party being identified as Christian Democratic, stands up in before the public stating that Christianity is a core principle of British values, and despite multiculturalism, Great Britain is a Christian country in heart, and this is a fact to be proud of.

Honorable Ladies and Gentleman … and I could enumerate these for a long time, if you allow, me I will not waste more time with this.

The question is whether numerous changes surrounding us could be attributed for the sake of understanding to one explanation? Can one-two-three essential aspects be grasped of what is happening around us? Well, they can be grasped – many are thinking and even more are writing about this nowadays. Numerous books have been published on this topic. I would only like to recommend to you a single one of these world-interpreting ideas. In my opinion, the most provocative and exciting question surfacing in the Western world during the last year can be summarized as follows, applying necessary simplification: competition existing among nations in the world, competition existing among alliances, and forces of the world has been supplemented by a new element. Everyone was only talking about competition in the world economy. Globalization on the international scale made it necessary to do a lot of talking, writing and analysis about it, and this phenomenon is known in details. We can more or less know why a major economic interest group, for example the European Union, is competitive, or why it is losing its competitiveness. However, according to many, and I belong to them, today this is not the principal question. It remains an important question. As long as people live off money and economy, this will remain an important question. Yet there is an even more important race. I would articulate this as a race to invent a state that is most capable of making a nation successful. As the state is nothing else but a method of organizing a community, a community that in our case sometimes coincides with our country’s borders, sometimes not, but I will get back to that, the defining aspect of today’s world can be articulated as a race to figure out a way of organizing communities, a state that is most capable of making a nation competitive. This is why, Honorable Ladies and Gentlemen a trending topic in thinking is understanding systems that are not Western, not liberal, not liberal democracies, maybe not even democracies, and yet making nations successful. Today, the stars of international analyses are Singapore, China, India, Turkey, Russia. And I believe that our political community rightly anticipated this challenge, and if we think back on what we did in the last four years, and what we are going to do in the following four years, than it really can be interpreted from this angle. We are searching for and we are doing our best to find – parting ways with Western European dogmas, making ourselves independent from them – the form of organizing a community, that is capable of making us competitive in this great world-race.

Honorable Ladies and Gentlemen

In order to be able to do this in 2010, and especially these days, we needed to courageously state a sentence, a sentence that similarly to the ones enumerated here was considered to be a sacrilege in the liberal world order. We needed to state that a democracy is not necessarily liberal. Just because something is not liberal, it still can be a democracy. Moreover, it could be and needed to be expressed, that probably societies founded upon the principle of the liberal way to organize a state will not be able to sustain their world-competitiveness in the following years, and more likely they will suffer a setback, unless they will be able to substantially reform themselves.

Honorable Ladies and Gentlemen

As the matter stands, if we look at the surrounding events from here, we can consider three ways to organize a state that we so far knew, as a starting point: the nation state, the liberal state and then the welfare state, and the question is, what is coming up next? The Hungarian answer is, that the era of a workfare state could be next, we want to organize a workfare state, that – as I previously mentioned – will undertake the odium of expressing, that in character it is not of liberal nature. What all this exactly means, Honorable Ladies and Gentlemen, that we have to abandon liberal methods and principles of organizing a society, as well as the liberal way to look at the world. I will only mention two dimensions of this, I do not want to get into a longer lecture here, and I only want to touch on them, so that the importance of the matter could be sensed. In the aspects of relationship between two human beings, the fundamental view of the liberal way of organizing a society holds that we are free to do anything that does not violate an another person’s freedom. The twenty years of Hungarian environment preceding 2010 was founded on this theoretical, conceptual starting point. It accepted a principle that is otherwise a general principle in Western Europe. In Hungary however, it took us twenty years, until we can articulate the problem, that this idea, besides being very attractive on an intellectual level, yet it is not clear, who is going to tell, where the point is when my freedom is violated. And as this does not come without understanding, then it has to be set, decided by someone. And as nobody was appointed to decide this, therefore everday life experience suggested us that it was the stronger party decided this. We constantly felt that the weaker were stepped upon. It was not some kind of an abstract principle of fairness that decided upon conflicts originating from a recognition of mutual freedoms, but what happened is that the stronger party was always right: the stronger neighbor told you where is your car entrance, it was always the stronger party, the bank, that dictated how much interest do you pay with your mortgage, changing it over the course as they liked. I could enumerate the examples that was the continuous life experience of vulnerable, weak families that had smaller economic protection than others during the last twenty years. Our suggestion for that, and we will try to build the Hungarian state in this, that is should not be the organizing principle of Hungarian society, we can’t make a law on this, these are principles, that you are free to do anything that does not violate other’s freedom, instead the principle should be that do not do to others what you would not do to yourself. And we will attempt to found the world we can call the Hungarian society on this theoretical principle, in political thinking, education, in the way we ourselves behave, in our own examples.

If we put this idea in the dimension of the relationship of the individual and the community, so far we were talking about the relationship between two individuals, then we will see that in the past twenty years the established Hungarian liberal democracy could not achieve a number of objectives. I made a short list of what it was not capable of. Liberal democracy was not capable of openly declaring, or even obliging, governments with constitutional power to declare that they should serve national interests. Moreover, it even questioned the existence of national interests. I did not oblige subsequent governments to recognize that Hungarian diaspora around the world belongs to our nation and to try and make this sense of belonging stronger with their work. Liberal democracy, the liberal Hungarian state did not protect public wealth. Although now we are hearing about the opposite, as if some acquisitions – I will get back to that, as the Hungarian state recently even bought a bank – and the interpretation of such acquisitions is that the Hungarian state could acquire such pieces of wealth, that surpasses behavior accepted in Europe, whereas if we look at – for example the recent Financial Times list of how big the proportion of public property in individual countries is, then we can see that Hungary could be found at the very-very-very end of the list.  Every other country – no counting maybe two – has higher proportion of public property than Hungary has. So we can safely state that in Hungary liberal democracy was incapable of protecting public property that is essential in sustaining a nation, even compared to other countries. Then, the liberal Hungarian state did not protect the country from indebtedness. And – and here I mostly mean FX loans system– it failed to protect families from bonded labor. Consequently, the interpretation of 2010 election results, especially in the light of 2014 election success can acceptably be that in the great world race that is a race to come up with the most competitive way of organizing state and society, Hungarian voters expect from their leaders to figure out, forge and work out a new form of state-organization that will make the community of Hungarians competitive once again after the era of liberal state and liberal democracy, one that will of course still respect values of Christianity, freedom and human rights. Those duties and values that I enumerated should be fulfilled and be respected.

Honorable Ladies and Gentlemen,

Consequently, what is happening today in Hungary can interpreted as an attempt of the respective political leadership to harmonize relationship between the interests and achievement of individuals – that needs to be acknowledged – with interests and achievements of the community, and the nation. Meaning, that Hungarian nation is not a simple sum of individuals, but a community that needs to be organized, strengthened and developed, and in this sense, the new state that we are building is an illiberal state, a non-liberal state. It does not deny foundational values of liberalism, as freedom, etc.. But it does not make this ideology a central element of state organization but applies a specific, national, particular approach in its stead.

Honorable Ladies and Gentlemen,

After all this, I have to talk about what obstacles we should get over to achieve these objectives. It can well be that what I am saying is self-evident for many here today.  We have to elevate this on the level of political work and program. I will address only some of these obstacles, more precisely two of them. These are not necessarily the most important but the most interesting: the relationship between professional politicians and civil organization members. The state needs to be organized by elected and professional statesmen and lawmakers, yet NGOs and civil organizations will always appear on the fringe of political life. Now, Hungarian NGO landscape shows a very particular image. Ideally a civil politician as opposed to professional, is an individual who is organizing bottom-up, financially independent and the nature of his work is voluntary. If we look at civil organizations in Hungary, the one that appears before public, now debates around the Norwegian Fund brought this on the surface, then what I will see is that we have to deal with paid political activists here. And these political activists are moreover political activists paid by foreigners. Activists paid by definite political circles of interest. It is hard to imagine that these circles have a social agenda.  It is more likely that they would like to exercise influence through this system of instruments on Hungarian public life. It is vital, therefore, that if we would like to reorganize our nation state instead of the liberal state, that we should make it clear, that these are not civilians coming against us, opposing us, but political activists attempting to promote foreign interests. Therefore it is very apt that a committee was being formed in the Hungarian parliament that deals with constant monitoring, recording and publishing foreign attempts to gain influence, so that all of us here, you as well will be aware of who are the characters behind the masks.

I will mention another example that is another obstacle of reorganizing the state. When I mention the European Union, I am not doing this because I think it is impossible to build an illiberal nation state within the EU. I think this is possible. Our EU membership does not rule out this option. It is true that many question formulate, and many conflicts develop, you could follow this in the past years, a lot of battles have to be fought. Now I do not mean this, but rather another phenomenon unfamiliar to you in this form. When the contract, fixing financial contacts between Hungary and the EU for four years expired this year, we are about to fix the contract for the next seven years just now, then a debate erupted. Then, I needed to look up a couple of facts to understand the nature of this debate. What did I see? I saw that that we are talking about hundreds of people here that deal with distributing resources of economic or social development from the EU that Hungary is entitled to (these resources do not come as a gift–as I said we are entitled to them) receive their salaries directly from the EU. Consequently, an extraterritoriality-situation came about in Hungary. Then it turned out from the numbers, that these salaries are 4-5, but often 8 times more than what employees in the Hungarian administration. This means that Hungary was living for 7 years, that such people decided on the majority of resources at the country disposal, who were paid by other people, and received a multiple of what Hungarian administration employees would receive for that job. Similarly, out of 100 forints going from there to the Hungarian economic life 35% could be invoiced as so-called “soft expense”. So for expenses that were not closely related to the objective of the grant, but only connected to it: preparation, analysis, planning, and all kinds of things, advising, for example. There is a debate going on between the EU and Hungary, because we changed this system, and the government decided, that whoever decides on these EU funds, in the new illiberal state conception has to be employed by the Hungarian state, and could not receive more than the Hungarian administrational employee of the same classification. And it is not possible any more to spend 35 forints of every 100 forints on “soft expenses”, because in the next seven years this shall not exceed 15 forints out of 100 forints. These are all decisions that appear to be political decisions in themselves, but in reality it is not the question of one or two political decisions. This is about the ongoing reorganization of Hungarian state. Contrary to the liberal state organization logic of the past twenty years, this is a state organization originating in national interests. Conflicts that erupt are therefore not coincidental, do not originate in ignorance, well maybe only sometimes, but these are debates that necessarily accompany the rebuilding and self-definition process of a new state.

Now, Honorable Ladies and Gentlemen, in conclusion, I would like to tell you that if we are curious about the future  then I would like to tell you something that might seem insufficient from somebody in a high official position: The essence of the future is that anything could happen. “Anything” is hard enough to define. It can happen that a commercial plane is shot down in the airspace of a country neighboring Hungary. It can happen that several hundred die for no apparent reason as a consequence of an, let’s name it for what it was, an act of terrorism. It can easily happen that, I have seen it in the news yesterday, that in the United States, maybe it was the Senate or the Senate and the Congress together decided to sue the President for continuous encroachment of his power. And if I look at the background of this news, it turns out that the President is not only sued, he has actually been sentenced a couple of times for exceeding his power. Imagine this in Hungary, if Parliament sues the prime minister for encroaching on his power, and the court even sentences him! For how much time can I stay in power in a situation like this? I only bring up these examples for you so that you see that we are living in a world where anything could happen. It can even happen that after the judiciary processes end hundreds of thousands of Hungarians will receive money back from banks, money that should not have been taken from them, and even this can happen, honorable ladies and gentlemen.

With all this, I would like to point out that punctual or nearly punctual forecast of events to come is impossible. Just to cite another refreshing example as a conclusion, the government winning the Hungarian elections declares that at least 50%-of Hungarian banking system should be possessed by Hungarians, not by the state but by Hungarians. Three months pass after the elections and this is already a reality. It became a reality that the Hungarian state bought a bank back, a bank that should have never been sold to foreigners. With this acquisition the proportion of Hungarian national property exceeded 50% within Hungary. Now the only question that remains, honorable ladies and gentlemen, and it is a question that I am not entitled to answer, that in times like this, when anything could happen, should we be afraid, or should we instead be hopeful? Because the present order of the world is not exactly to our taste, that this future, although it is uncertain, it could even cause huge trouble, it also holds opportunities and developments for our Hungarian nation. So instead of seclusion, fear and withdrawal I recommend courage, prospective thinking, rational, but brave action to the Hungarian communities in the Carpathian basin but also throughout the world. As anything can happen, it can easily happen that our time will come. Thank you for your honorific attention.

 

Sándor Kerekes: Hungarian democracy in a nutshell*

I am speaking about democracy in a nutshell today, because that’s pretty well all that is left of Hungarian democracy by today. In fact, it is even quite loose in that nutshell, after having shrunk so small.

On December 31 2013, in the late night hours, as the country was well on its way to getting drunk and celebrating the new year, the Official Gazette of the Hungarian government published the text of a theretofore unheard-of Order: “About the memorial to be erected in Budapest’s fifth district and qualifying it as an overriding national economic importance and the appointment of the competent authorities.” This is just the title! You can imagine what follows.

But let me translate the details. The fifth district is the historic center of Budapest. The “overriding national economic importance” is the legalese term lifted from a not so long before enacted piece of legislation that enables the government to avoid any public tender process and, regardless of the size of the project, to award it to whomever they please, without any disclosure or explanation. This is corruption writ large, carved in legislative stone. (The price was found out later to be 311 million forints, or $1,399,671). The memorial is intended to stand on Freedom Square, a storied and beautiful public place, rife with social and historical significance, just under the windows of the US Embassy, and to be ready on the 19th of March 2014, on the anniversary day of the German occupation of 1944.

A short break for explanation
You must forgive the interruption, if I stop to explain. The winged figure, according to the artist’s technical description, is the defenseless and innocent Archangel Gabriel, symbolizing the defenseless and innocent Hungary, savagely attacked by the imperial eagle of the Third Reich. Of course, you all know that, far from innocent, Hungary was a staunch ally of Hitler, benefitted from the alliance and received the occupiers with open, welcoming arms at the time. This memorial is nothing but the most blatant, revisionist falsification of history. The intended spot for the memorial is on top of an underground garage, whose roof had to be enforced to bear the weight, so the deadline had to be extended to the end of May.

Naturally, you may ask: who could think it desirable to memorialize and celebrate the day of national humiliation, the source and the beginning of untold suffering and bloodshed?

Well, it is the government of Prime Minister Viktor Orbán.

As you see, PM Orban himself is not at all averse to flaunting some eagles of his own.

PM Orbán himself is not at all averse to flaunting some eagles of his own.

The rush to the slope
But how did we come to this point?

Well, in the election, May 2010, Viktor Orbán and the FIDESZ party won an overwhelming majority. The electorate was thoroughly fed up with the previous Socialist-Liberal coalition and wanted change. They elected the only alternative available, with a comfortable majority of 53%, and that was enough for a 2/3 majority in Parliament. On the evening of the election Viktor Orbán declared that “the people of Hungary executed a revolution in the voter’s booth.” He set to work within weeks to transform the entire system of government. It worked democratically before: checks and balances. But now, just as he described it previously, in a secret speech in the fall of 2009 to his confidantes, it would be a central “force field.” Eliminate the useless bickering, the bothersome tug of war between disparate interests and replace it with government by the will of a single force.

Before the opening of Parliament he personally received each member in his country house, where they, one by one, assured him of their personal loyalty and pledged cooperation. With one single exception this pledge has endured, their 2/3 of Parliament has flawlessly functioned as a voting machine.

With such legislative prowess it was a cinch to strangle the checks and balances. Some of them were just shut down. Others he replaced with new ones, or only their personnel were replaced with his own loyal followers. Usually placed there for nine-year terms, to carry out his policies, even if god forbid, he should lose an election in the future. After an unfavourable decision by the Constitutional Court, he diluted it, from nine to fifteen members, appointing his supporters, among them his personal lawyer, to prevent any similarly unpleasant decision in the future. And since he was working on the court already, he cut off most legal access to it and curtailed the court’s field of competence.

After these swift and efficient preparations he was ready to implement his “vision” even further!

The Orbán government, in a legislative fury, first issued the Manifesto of National Cooperation to be displayed in every public building. This document stipulates that the national reconciliation, peace and brotherly understanding will be accomplished if everyone just meekly follows the government. A new constitution was secretly prepared, without any consultation, and pressed through Parliament in three weeks, claiming that it was absolutely urgent and necessary, because the previous constitution (to which they all swore allegiance and promised to uphold) was a communist document.

Codified corruption
Concurrently, Orbán personally appointed as state dignitaries his college friends, reduced the number of ministries to eight, thus concentrating power in the most trusted hands. The speaker of the house and the president are his roommates from his college dorm. But there is a fourth college friend who is perhaps the richest man today in Hungary and who, from the beginning, has directed the financial dealings of the party and possibly Orbán himself, and is so obscure in the background that for more than twenty years has not been seen, or photographed: Lajos Simicska. The oligarch par excellence! This man owns the vast majority of billboards in Hungary, the largest advertizing agency, newspapers, TV and radio stations, the largest and most favoured civil engineering firm, and has the largest long-term lease, over 9000 acres of state-owned agricultural land. (While the legal limit is 300 acre per person and 1200 acres per family.) In 2013, his mind-bogglingly complicated company-network was awarded 14% of the entire public works and procurement budget of Hungary: 875 million forints (€2,916,700, or $3,946,418) every day, 39.6 billion forints (€128,721,432=$178,603,644) in total for the year.

All this, of course, was done secretly, through unknown channels and processes. So, it’s no wonder that some people claim that behind the mask of Orbán, it is actually Simicska who is running the country.

At the head of the eight ministries are Orbán’s most trusted people. That would be fine, if they were qualified. But in many cases they are not. Most ministries are covering unrelated responsibilities. For example, the Human Resources Ministry, which controls the greatest budget, has the responsibility for pensions, healthcare, education, employment, funding for the arts, Roma integration and so on. And who is the minister of this complex? He is Viktor Orbán’s spiritual adviser, the Rev. Zoltán Balogh, an ordained minster of the Reform Church, who has not the slightest previous experience in public administration.

Although the individual fields are supervised by undersecretaries whom, in many cases, are at least professionals. (Some of them are also graduates of the Simicska conglomerate.) While the Minister of Finance, interestingly, is an economist, the Minister of Development, in charge of all public works, is a bookkeeper, Mrs. Németh, who is also an alumna of the oft-mentioned oligarch, Mr. Simicska. Her educational attainment is a high school diploma. She hardly ever speaks publicly, or in Parliament. Her voice, (and her professional adviser as well), is Dr. János Fónagy, and with him we arrive at one of our basic subjects: the Jewish contribution. He is one of the two known, openly Jewish members of Parliament. Fully secular, very smart, a truly dedicated lawyer. Dedicated, that is, to upholding and operating the new, practically single-party system. But this savvy, seasoned lawyer was stunned, well-nigh speechless when, in November 2012, one of the openly anti-Semitic MPs demanded the listing of Jews in Parliament. All he could say was that his parents were Jewish, yes, but he had no choice, and no, he is not practicing.

Of course I became interested. One day two years ago I naively walked up to the entrance of Parliament asking to be admitted. They didn’t laugh, just sent me to this office and that, all for naught. In the US and Britain it is a matter of merely asking a representative for a free ticket and entrance to the legislature is assured. In France free entrance for all is outright spelled out in the Constitution. Now in Hungary one can buy a ticket for a guided tour of Europe’s largest parliament building, but visiting the sitting of the Assembly is tied to a special permit, a press accreditation, that must be renewed from week to week, and for me it took several months to obtain. Finally, months later, miraculously I was admitted at last. (The whole thing took only another twenty minutes of phone calls and checking.)

So, now that we are inside, let me introduce you first to Mr. Speaker, Viktor Orbán’s former college roommate, former communist party apparatchik with latent authoritarian inclinations, the intensely anti-communist Dr. Lászlo Kövér. His job is to restrict the House’s operation so that only Fidesz can have its way and to stifle the opposition. Speaker since August 2010, from his appointment on, he imposed control on proceedings. He cancelled all press credentials, then later, after readmitting them, he relegated all press to the loggia above the Speaker’s perch. This resulted in the prevention of photographing him and the person speaking on the rostrum from any angle, except from above and from behind. All rights to video are restricted exclusively to the official parliamentary broadcasting system; journalists are forbidden to make videos. This is not just idle talk, there are guards immediately interfering with any such attempt, if necessary, by putting their hand in front of any camera. The “official” video broadcast is strictly controlled in the government’s best interest and if the opposition should do anything untoward, or unexpected, the screen shows the speaker only, the sound is cut off and the public will never find out what actually happened. The public cannot come in and information cannot get out of there. Is it any wonder, therefore, that the public at large is completely ignorant of Parliament? One of Speaker Kövér’s golden rules is that immediate questions must be submitted in advance in writing, the MP must read them verbatim from paper and the Government’s answer is also read from paper. The whole charade of “immediacy” is a surrealistic farce.

Having sat in that press gallery for some time, I became increasingly frustrated by my failing hearing. I knew I was losing it, but this fast? After some days I realized though that I can hear Mr. Speaker perfectly well, only the rest is a muffled noise. I decided to “investigate.” Looking around the balcony I discovered that two loudspeakers on each end clearly convey Mr. Speaker’s voice from his microphone, but the connections to all other microphones are cut off and the disconnected loudspeakers and wires, as sad leftovers of corpora delicti, have been strewn under the chairs. I went immediately to the Press Office a few doors away. The head of the Press Office didn’t want to believe me. “Nobody has ever complained about such a thing before,” he said with conviction, (Yeah, I retorted, because nobody was interested in what is said in there,) then he put on his jacket and we dashed off to the press gallery to see it. I showed him around in his own domain, explained how the system worked, that is, how it actually didn’t work, showing the detritus beneath the chairs.

I still don’t know to this day, how sincere his astonishment was. We went back to his office and I asked what he intended to do about it. He promised to reconnect the speakers.

A week later, seeing that nothing happened, I went back to him, but another official told me that it was the end of the session, they are swamped, and this must wait until next session. That, of course, never came; soon an election was called for a new, reconstituted Parliament.

Speaker Kövér also called into being a special military unit, the Parliamentary Guard. These live tin soldiers are meant to impress the tourists, but even more, suggest the sinister muscle power at his exclusive personal disposal to apply force against unruly MPs. (The number of guards: 349, in the 2013 budget 2.3 billion forints €7,476,245=$10,373,444 and in 2014 an additional 30 are being hired.) The costume of the Guard is a combination of a little pre-war Royal Hungarian and a lot of German Wehrmacht elements and bears no resemblance to anything historical. But no matter, if Regent Admiral Horthy had such a guard, then Speaker Kövér, the son of a provincial metal worker, must have his too.

Legislating the coup
The Hungarian Parliament has dispatched a prodigious number of bills, produced at a scorching rate. In 2012 the government submitted and the House voted in 364 pieces of legislation. That’s right, one for every day, except Christmas day! So to speak. Regularly the government introduced legislation, several hundred pages long, on Friday evenings and got it read and voted in the following Monday. Amendments were proposed by obscure Fidesz backbenchers, often just half an hour before the final voting, and they passed, regardless of the opposition’s claims that there wasn’t even time to thumb through the papers. Voting was frequently timed to occur in the middle of the night, or later, to avoid possible public scrutiny. To my knowledge, in these four years not one single bill submitted was supported by any corroborating background papers. If ever made, they have been kept secret from Parliament, as well as from the public. Many of these laws are contrary to European Union rules, sometimes contrary even to their own new Fidesz constitution, but the European Union besides ruminating, producing damning reports and furling its collective brow, does nothing. The Machine works miracles.

One of those “miracles” was the new election law pushed through with the same dizzying speed and a mere few months before the election itself. It came out of the machine providing unprecedented advantages to the governing party, while making a win for the opposition nearly impossible. (As one of the opposition MPs noted, the field was not only tilted, it was actually vertical.) It reduced the members of Parliament almost by half and included rampant gerrymandering. Consequently, last month’s election, although free, was neither fair nor equitable. The rules were so skewed that even cheating was not necessary. Thanks to the carefully “calibrated” rules, with 44.87%, of the 61.24% voting, Fidesz won another electoral triumph. This represents a mere 27% of the eligible voters, yet again it was enough for a super-majority.

What system?
This election was a good example of how the Fidesz system works, its aims and its goals. All election-related spending was done to the benefit of Fidesz oligarchs, just like the public works are. The government boosted its success propaganda, often verbatim identical to that of the Fidesz party, the two inseparable; party money mingled with government money and they are indistinguishable. Billions have been paid to oligarchs. Then through unknown channels those oligarchs recycle the government monies into the party– and private coffers. Thus laundered, it buys more power and is rewarded by government largesse, contracts and fat jobs. There it yields new income for the oligarch and the cycle spins ad infinitum. This is the substance of the Orbán system of National Cooperation.

Sense and sensibility
In closing, let’s come back to the memorial, the start of this lengthy presentation.
When the Alliance of Hungarian Jewish Parishes, known as MAZSIHISZ, heard of this bizarre memorial, the normally cordial air between the government and them froze almost solid. Their newly elected board and new president, Mr. András Heisler, sent a memorandum to the government. They set three conditions to participate in the official year of remembrance, one of them being: this memorial project must be abandoned. Anti-Semites were crying foul immediately, talking about an ultimatum.

No sane person could accept the whitewashing of war crimes attempted by this “statue”: the murder of 600,000 Jews, the 160,000 casualties on the front, or the cruelties perpetrated by the Hungarian forces in Serbia and against the Ukrainians.

Grudgingly, Orbán, citing the impending election campaign, suggested adjournment and reconsideration until, after the election, consultations could be held in a calmer, more conducive climate. MAZSIHISZ quietly agreed but were stunned when two days after the election the construction work started without the promised consultations. So, they decided that the Jewish Community “en bloc” would disassociate itself from the official government memorial events. The Jews will remember in their own way, in their own time, and with their own money.

Thanks to his own obstinacy, Viktor Orbán has painted himself into a corner from which he can only come out with a major loss of face and, by the same token, forged a Jewish Community tightly united as never before, and to a degree never thought possible. This is the first time, in an unprecedented way, that the Jewish Community has taken it upon itself to proudly represent civic courage, the advocacy of reason, and the principles of democracy, in the name of all of Hungary, that hardly anyone else dares to do in the ever-deepening and darkening pit that Hungary is rapidly becoming in the middle of Europe, and do it right into the face of the government machine of Viktor Orbán.

—–

* This paper was presented at a workshop organized jointly by the Ben Gurion University and the Konrad Adenaur Stiftung. The topic of the workshop was “Jewish Contribution to the European Integration Project.”

János Kornai: Threatening dangers

The Peterson Institute for International Relations (USA) and the School of Public Policy at the Central European University (Hungary) held a conference on “Transition in Perspective: 25 Years after the Fall of Communism” in Budapest on May 6 and 7, 2014. Among the attendees were Leszek Balcerowicz, Václav Klaus, Anatoly Chubais, and many other well-known economic policymakers and academic economists of the post-socialist transition period. This is the text of János Kornai’s keynote address.

INTRODUCTION

I would really like to give a cheerful and optimistic talk. I was optimistic when I was working on my book The Road to a Free Economy in 1989.  I undertook comprehensive evaluations of the post-socialist transformation later, on various occasions, and although all the essays pointed out the problems, they always ended on a note of optimism. Even today, there are several developments that may give grounds for satisfaction: in many countries in Central-Eastern Europe and in the Baltic regions dictatorship has been replaced by democracy, the command economy by the market economy, socialism by capitalism. My sentiments, however, are overcast by two depressing developments.

David Levine: Business & financial figures, economists /New York Review of Books

David Levine: Business & financial figures, economists /New York Review of Books

I am Hungarian – my mind can barely stop processing the uninterrupted flow of gloomy news for a second.  Hungary was moving forward on the path of democratic development for 20 years. People were tormented by various troubles, however, it was to be hoped that sooner or later we would manage to overcome these too. But the situation changed for the worse in 2010, when the political forces leading the country performed a U-turn. Instead of the strengthening of democracy we saw the abolition or drastic restriction of numerous fundamental institutions of democracy. Instead of private property being reinforced, the security of private property came under attack. Instead of continuing decentralization, the tendency to centralize was revived.

What has taken place here in four years and what will, in all likelihood, continue for the next four is a unique phenomenon: Hungary is the first – and so far the only – one  among the countries that chose the democratic path in 1989 – 90 which made a U-turn. This one example, however, is enough to prove that such a change can happen. The path on which we started in 1989 is not necessarily a one-way road; the changes, of historical significance, are not irreversible. Quite the contrary – and this is one of the terrible aspects of the Hungarian state of affairs -, the situation after the U-turn may become irreversible for a very long time. Democracy, especially in countries where it has not yet taken deep root, might be unable to defend itself. It may be overpowered if it is attacked unscrupulously and with Machiavellian determination.

The other shadow over our celebration is cast by the Ukrainian situation. Nobody can tell for sure what the months to come will bring. But one thing has already happened, and this is the de facto annexation of the Crimean peninsula. One of the fundamental principles of the Accords signed in Helsinki in 1975 was the sanctity of the status quo: the state borders valid at that time were not to be changed for any reason whatsoever. The Crimean peninsula became part of Ukraine twenty years before the Helsinki Accords. One of the basic principles of the Accords was overthrown in March 2014, and the world took note of this and responded only by wagging a disapproving finger and introducing mild reprisals. Like the Hungarian changes, this constitutes a powerful precedent, according to which it is possible to change a lawful border using military force on some pretext or another, and for this purpose the most obvious excuse is ethnic.

All the things I wish to say tonight I will discuss in the light of these two precedent-forming events.

ALTERNATIVE POLITICAL REGIMES

Let us imagine the map of the world and let us look at the Eastern half. We shall use three colors. Let’s cover the new democracies with green, the color of hope. I call them the post-communist democracies. Although many of their features are identical with those of traditional Western democracies, their political cultures still bear the marks of the communist past.

East of this stretches a very wide zone, which I would cover with pale red: this is the zone of post-communist autocracies. Their prototype is Russia. After 1989 the transition towards a market economy was launched there as well. At the very beginning a democratic constitutional structure appeared : parliamentary elections among competing parties, debates between a government relying on its parliamentary majority and the opposition. The rule of democracy, however, proved to be a very brief episode. Following a few stormy years Putin seized power and a new political structure emerged. This has restored certain aspects of the communist system, especially the great power of the state, but it also differs from that in some significant ways. The number one leader (whatever his official legal status might be) is invested with an enormous amount of power and rules over a strictly centralized hierarchical state and political apparatus, but he does not possess the absolute monopoly over power of a real dictator. There are opposition parties, parliamentary elections do take place, although it is true that the opposition is very weak and doomed to lose the elections from the start. There are newspapers, radio and television stations and internet portals that are independent of the ruling group – their voice, however, is weak. This type of autocracy is halfway between the full-fledged Western-type democracy and a totalitarian dictatorship. What mainly distinguishes it from the latter is the fact that, although the regime is very repressive, it does not use the most brutal means: the arrest and confinement in cruel concentration camps or physical liquidation en masse of the representatives of alternative political movements. The other great difference from the communist system is that the autocratic political regime is connected to an economy in which private ownership is dominant. The ruling political powers hold important positions in the economy, both in the still significant state-owned and the very broad private sectors.  The larger part of the economy works according to the behavioral regularities of capitalism

Of the 15 successor states of the former Soviet Union, three Baltic countries have become relatively stable post-communist democracies. I would place Belarus and the Central-Asian republics together with Russia in the post-communist autocracy category. Now, 25 years after 1989, it can be stated that the situation in the post-communist autocratic countries is basically unchanged; there is absolutely no sign of the iron hand relaxing its grip.

Ukraine’s position is uncertain, and has actually now become especially problematic; over the past 25 years it has sometimes displayed the signs of post-communist democracy; at other times those of post-communist autocracy.

Let us go back to our map. To the east and south of the region of autocracies we can see China and Vietnam. These embody a third type, which I shall call post-communist dictatorship. Let us cover this region with a deep red color. The economy resembles, in many respects the Putin-type regime. Although the state sector has remained very significant, the larger part of economic resources are now in private ownership. Here too the political and economic worlds are closely intertwined. The significant difference lies in the fact that in China and Vietnam the ruling political parties have never for a moment given up their own power monopolies. The Chinese and Vietnamese communist leaders did a thorough analysis of the Gorbachev era. The series of events which started with glasnost and ended with the disintegration of the country, the loss of super-power status and the liquidation of political monopoly have been haunting them like horror dreams. Anything but that! The Chinese and Vietnamese leaders have made an unshakeable decision never to open the floodgates of free political movements.

The Chinese and Vietnamese governing parties are only ‘communist’ parties in name: nowadays they have absolutely nothing to do with the Marxist-Leninist program which intended to abolish capitalism. Lenin would classify these political formations as bourgeois. The Chinese and Vietnamese ruling parties accept capitalism in practice, they cooperate with it and profit from it.The case of China and Vietnam clearly demonstrate that capitalism is compatible with dictatorship. It is true that there is no democracy without capitalism, but this statement cannot be reversed. Capitalism can exist and function for a very long time without democracy. In spite of the hopes of many Western analysts, there are no signs of any tendency for the heavy-handed regimes to loosen their grasp.

I will not go on to discuss the situation of certain small countries: North Korea, Cuba and Venezuela. Instead, I will refer back briefly to the introduction of my lecture. In 2010 Hungary changed color: it turned from green into pale red. It is not a post-communist democracy anymore, but a post-communist autocracy. As I have said, this is a first and so-far unique event. But here I ask the participants of this conference: is there no danger that other countries which are still in the green zone will make a similar U-turn?

NATIONALISM

Historical developments show, that the problem of state borders and the relationships between ethnic groups within the borders is one of the most important issues of the post-socialist transformation; it is no less important than the form of political government and the radical transformation of property relations.

The Soviet Union disintegrated into 15 successor states. Czechoslovakia was divided into two. These two changes took place peacefully. The disintegration of Yugoslavia, on the other hand, was followed by bloody wars. Not long after the declaration of independence a war broke out between two successor states of the Soviet Union, Azerbaijan and Armenia. Fighting is now virtually continuous in the southern regions of today’s Russia. And now here we are in the middle of Ukrainian internal strife and the Ukrainian-Russian conflict.

We have divided the post-communist region into three zones on the basis of the defining features of their political structure. What the countries in all three zones share, however, is the existence of ethnic conflict. The intensity of conflicts varies. Relatively speaking, the ‘mildest’ form is nationalist rhetoric: blustering about the superiority of the majority ethnic group, vilifying ethnic minorities, or rabble-rousing against neighboring peoples. A graver situation is when nationalist, racist arrogance is manifested in deeds as well. It can happen in discrimination affecting schooling and the distribution of work places, or in the limitation of the free use and official acknowledgement of a minority language. Unfortunately, the most criminal forms of nationalism also take place. Although infrequently, violent behavior driven by racist motives occurs, such as the desecration of Jewish cemeteries and synagogues, and even Roma murders.

There is not a single country in the post-communist region which is immune to the epidemic of nationalism. There are degrees, of course: at one end of the scale we find the quietly thrown anti-Semitic or anti-Roma terms of abuse in ‘gentlemanly’ style. Next degree: hateful, cruel words. Next, more frightening degree: beating of members of the minority, threatening parades of uniformed commandos. And at the other end of the scale: murder. Who knows where the incitement to nationalism will lead?

DANGERS OF RADICALIZATION AND EXPANSION

In all three zones and every country of the post-communist region significant economic problems make themselves felt. Naturally, the constellation of difficulties, the relative gravity of the different issues varies from country to country. However, there are certain problems which are fairly general.

Post-communist transition has its winners and losers. Large numbers of people lost their jobs, unemployment became chronic. In many countries the inequality of income and wealth distribution escalated. Millions live in abject poverty, while others who have suddenly lined their own pockets enjoy their wealth in front of them. This explains why so many people think of capitalism with annoyance or hate. Few of them expect help from the extreme Left: the chances of a communist restoration are negligible. The number of those, on the other hand, who turn to the extreme Right, is significant. The ears of the disappointed, the losers and the needy quickly pick up the message of the populist demagoguery against profit, banks, and multinational companies.

The atmosphere of dissatisfaction is susceptible to the slogans of nationalism. “Life would be better if we lived again in an empire as large as it was during the tsar’s time” – they say in Russia. “If only we could get back those resource-rich parts of the country that we were stolen from us at Trianon in 1920!” – they say in Hungary.

So, what we have is a mass below, receptive to nationalism and slogans of “law and order”. And we have political parties and movements above which sense the opportunities provided by the angry mood of the masses. A vicious, self-inciting cycle evolves from disappointment in democracy, the attempts at anti-democratic governance, nationalism, and economic dissatisfaction. There are government intentions and mass sentiments at work which mutually reinforce each other.

The holders of power in Russia are anxiously observing how the growth of production is slowing down, how it has almost reached stagnation. This is when attention must be diverted from the problems of the economy towards ‘great national issues’ such as the plight of fellow-Russians living on the other side of the Western borders. Nationalism gives birth to an expansion drive. And this is no longer a domestic issue, but a tendency whose effect crosses national borders and threatens peace.

I have mentioned Russia because the looming monster of Russian expansion has appeared in our immediate vicinity. But we must also speak of China. The idea of nationalism is growing stronger there too. The rate of growth has fallen spectacularly. The inequality of income is extreme. There is a great deal of audible dissatisfaction about the fact that the rise in the living standards is far behind the growth of production.  Here too, nationalism proves to be the best way of diverting attention. Local protests are crushed not by eliminating economic problems, but by police measures. The people in charge are iron-fisted fighters for ‘order’.

Although in my imaginary map post-communist autocracies and post-communist dictatorships were given two different colors, in terms of nationalism, the tendency towards expansion and the heavy-handed restriction of democratic rights they share many features. These create a strong kinship between them, bonds which are strong enough even after the shared beliefs in Marxist-Leninist ideology disappeared. Most likely this political kinship also plays a part in the fact that so often the international political actions of the countries in the pale red and deep red zones correspond.  At important sessions of the United Nations they vote the same way, they support or turn down the same interventions. They have no joint center, but it is as if they were marching to the same drum on crucial issues. The axis of repressive powers opposing Western democracies is in the making – if I may borrow the expression “Axis” from the vocabulary of the period preceding the Second World War, when it was the name of the Alliance between Germany, Italy and Japan.

CLOSING THOUGHTS

I am no Cassandra: I am not blessed or cursed with the ability to foresee the future. All I can say is that present-day events recall historical memories in me.

Hungarian current events remind me of the end of the Weimar Republic. There is great economic dissatisfaction. Millions of patriotic Germans feel humiliated by the terms of peace. More and more join the Nazi side. In the meantime, the anti-Hitler forces are at each others’ throats. In the 1933 multi-party election, which are conducted lawfully, Hitler’s party emerges victorious, but without a parliamentary majority. And then the moderate right-wing Centrum party is ready to enter a governing coalition with the Nazis … I shall stop this story here.

Thinking about the Ukrainian events Hitler’s first conquests come to my mind: the occupation of the Saarland, then the annexation of Austria. The aggression is based on ethnic reasoning: the territories in question are inhabited by Germans. Then comes the Munich agreement; Chamberlain’s joyful announcement: we have saved the peace at the price of Czechoslovak territories inhabited by Sudeten Germans being annexed to the German empire. Soon comes the dismemberment of Czechoslovakia. Then the plan to conquer Danzig, referring to ethnic reasoning… Here I shall leave this story too.

Who knows how the history-writers of the distant future will view the conference on Ukraine recently held in Geneva. Was it merely an insignificant diplomatic event? Or did it give birth to a new, albeit minor, Munich agreement, encouraging further aggression?

It was George Kennan who in 1946 pronounced the principle of containment. It is time to declare this principle again. Now it is not the spreading of communist principles, the Stalinist expansion, but the spread of nationalist principles, the expansion of post-communist autocracies and dictatorships, that need to be contained.

It is not for me to work out the methods by which the new principle of containment could be applied in practice. I can say this in the plural: we academic researchers are not fit for this task. I regret, but I cannot present the present company with a plan of action.

Let me finish here. I am just not able to end my lecture with words of reassurance. My intention was to alarm you, to unsettle you, to arouse in you the sense of threatening dangers.