Hungarian Octopus

Bálint Magyar’s “systemic characteristics of the post-communist mafia state”

Earlier I published several reports on Bálint Magyar’s theory of the mafia state. In fact, I devoted three consecutive posts, the first of which appeared on June 18, 2013, to his description of Orbán’s system of government as a new kind of autocratic regime. Magyar’s analysis of the current Hungarian political system elicited widespread attention in Hungary as well as hundreds of comments on Hungarian Spectrum.

A few months later (November 2013) Bálint Magyar and Júlia Vásárhelyi published an edited volume of essays written by twenty-two scholars from different disciplines who embrace the theoretical framework Bálint Magyar worked out in the first decade of the century. Its title was Hungarian Octopus: The Post-Communist Mafia State. The book became an instant bestseller. More than 11,000 copies were sold within a few months. It had to be reprinted four times. I wrote a review of it on Hungarian Spectrum. Again the review prompted a lively discussion, some people finding Magyar’s argument compelling while others disagreed with him. In any case, since the appearance of Hungarian Octopus, the concept has been widely accepted by scholars as well as by the left-leaning Hungarian public. Those who are familiar with the workings of the Orbán regime find Magyar’s description of it a perfect fit.

Book Launch of Hungarian Octopus: The Post-Communist Mafia State Source: Népszava

Book launch of volume 2 of Hungarian Octopus: The Post-Communist Mafia State
Source: Népszava

The second volume of Hungarian Octopus has just been published, and it is fascinating. In his introduction Magyar takes into consideration some of the criticisms and additional observations he received during discussions of the contents of the first volume. This introductory essay is so full of information and novel observations that I will most likely have to devote another post to it. But let’s start.

First, Magyar describes the key actors of the mafia state. He begins with the economic-political actors whom Magyar calls “poligarchs” whose ranks include several subcategories: the oligarchs, the front men (in Hungarian stróman/ok), corruption brokers, the family guard/the secret service, and the family privatization of databases. Let me go into some of the details.

Who belong to the class of poligarchs? These are people who attained illegitimate wealth by being members of the political family. Their political power is known but their economic power, their wealth is hidden. They use front men; their money is often hidden in foundations. The chief poligarch is the Godfather–in our case, the prime minister.

Beneath the poligarchs comes the class of oligarchs who began their careers with legitimate business activities and who, as a result of their economic power, acquired political might. In ordinary post-communist states their economic activities are legal, but the way in which they acquire business opportunities often is not. They acquire advantages over their competitors by illegal means. They are, however, more or less autonomous actors. But in Hungary, Magyar argues, the mafia state makes these oligarchs’ autonomy impossible or very limited. As he puts it, “it domesticates” them. They are partly or wholly dependent on the good will of the state.

Magyar distinguishes several type of oligarchs. There are the inner circle oligarchs. They have been close to Fidesz from the early 1990s on, and in part they have accumulated their wealth through their political connections. Currently, they don’t have any political roles but they belong to the small circle of people who are able to formulate policy. A good example of this sub-type is Lajos Simicska. Of course, any of these oligarchs can lose their positions if the Godfather finds their activities objectionable. A couple of the original oligarchs actually ended up in jail when they got involved in illicit activities.

Another sub-category of the oligarchic class is the adopted oligarchs. These people made their wealth during the early murky days of mass privatization, and it was only later that they were adopted by the political family. Their connection to politics now enhances their financial position. Examples of this type are Gábor Széles, owner of the extreme right-wing Magyar Hírlap and Echo TV, and László Baldauf, owner of the CBA chain of supermarkets. These people only serve the policies of the Family;  they can’t influence them.

The next category is the capitulated oligarchs who earlier were quite independent; some were even associated with the other political side. Their capitulation is due to their dependence on state orders. Since they were not considered to be affiliated with the Family in any way, they fell on hard times after 2010. In addition to the lack of orders, the state has all sorts of instruments to make them surrender: the internal revenue service, prosecutor’s office, police. A typical representative of this group is Tamás Leisztinger, who suffered economic hardship already during the first Orbán administration and who by now is the willing or unwilling financier of the prime minister’s hobby, football.

Then there are the fellow traveler oligarchs. These men were the greatest economic beneficiaries of the first twenty-year period after the change of regime. They were sought after by both the left and the right, and they kept an equal distance or equal friendship with both groups. After 2006 the equilibrium between the two political sides shifted toward Fidesz, which forced them to be fellow travelers unless they wanted to lose their preeminent economic positions. Sándor Csányi of OTP and Sandor Demján of Trigánit are perfect examples of this category.

The last two sub-categories are the autonomous and the rival oligarchs. Their numbers are rapidly decreasing. Some of these people are so afraid of the chief poligarch that they dare not support liberal causes at all.

Although I thought I would be able to describe the other key actors of the mafia state today, the story is so intriguing that I don’t want to shortchange you by not covering the details properly. We will continue tomorrow.

Mária Vásárhelyi on the “media octopus” in Hungary

Yesterday I talked about the state of the Hungarian media. In today’s Galamus, Zsófia Mihancsik, who is a very good journalist, suggested to her colleagues that it would be a good idea if they learned to read. But, as some of you suggested, the slanted reporting on certain “sensitive” topics might be the result not so much of careless reading or writing but of a willful distortion of the facts. This is definitely true about media under the direct or indirect control of the governing party.

So, I think it’s time to look around a little in the world of the Hungarian media. Here I’m relying heavily on Mária Vásárhelyi’s essay “The Workings of the Media Octopus–Brain and Money Laundering” that appeared in the Bálint Magyar-edited volume, The Hungarian Octopus.

According to Vásárhelyi, Viktor Orbán’s psyche was crushed in 1994 when he  managed to lead his party with a 40% chance of winning the election into almost total ruin with 7.7% of the votes. Before that fiasco Orbán was the darling of the press, but subsequently he became the pariah of the then still mostly liberal Hungarian media. He decided right then and there that the goal is not to be liked by the existing media; rather, a smart politician should strive for a loyal media he can easily influence. In Vásárhelyi’s estimate Fidesz had the lion’s share of responsibility for the 1996 media law that turned out to be neither liberal nor democratic.

Once Fidesz won the election in 1998 Viktor Orbán made a concerted effort to build a media empire with the use of private and public money. Billions of public money were spent on establishing Heti Válasz and on the “rescue” of the heavily indebted Magyar Nemzet. And right-wing oligarchs like Gábor Széles, Tamás Vitézy (Orbán’s uncle by marriage), Zoltán Spéder, István Töröcskei, and Lajos Simicska put large sums of their own money into media outlets that were anything but profitable. They were hopeful that their investments would serve them well one day when Viktor Orbán again returned to power.

Between 2002 and 2010 the preponderance of media outlets shifted to the right. Moreover, by 2008 the liberal media’s financial situation was dire. Companies strapped for funds cut their advertising budgets, and the liberal media outlets had no rich oligarchs who could ensure their continued existence during the hard times. Since 2010 the lopsidedness between right and left in the field of media has only become worse. According to Mária Vásárhelyi, “only those messages which the government party wants to deliver reach 80% of the country’s population.”


Studying the changes in the political orientation of radio stations is perhaps the most fruitful and most telling because it is here that the Media Council, made up entirely of Fidesz appointees, can directly influence the media. It is in charge of allocating radio frequencies. As the result, in the last five years the radio market became unrecognizable. Every time existing radio stations had to reapply for frequencies, the frequencies were given to someone else. The new stations were owned by companies or non-profits preferred by the government party, and in consequence government advertisements immediately poured in. Between 2010 and 2012 some 50 local and regional radio frequencies changed hands. Of these Mária Rádió (Catholic Church) got seven frequencies all over the country and Lánchíd Rádió (also close to the Catholic Church) got five. Európa Rádió, which is close to the Calvinist Church, by now can broadcast on three frequencies. Magyar Katolikus Rádió has two local and two regional frequencies. All these stations are considered to be non-profit and therefore they don’t pay for the use of the frequencies.

Zsolt Nyerges has built a veritable media empire: he is behind “the three most valuable radio frequencies in the country.” During the same time the liberal stations have been disappearing one by one. Radio Café, very popular among Budapest liberals, lost its frequency in 2011. So did another popular liberal station called Radio1. Of course, Klubrádió is the best known victim of Viktor Orbán’s ruthless suppression of media freedom. Klubrádió began broadcasting in 2001 and could be heard in a radius of 70-80 km around Budapest. By 2007 the station had acquired eleven frequencies and could be heard in and around 11 cities. Soon enough Klubrádió was the second most popular radio station in Budapest. Today, Klubrádió after years of litigation moved over to a free but weaker frequency that it already had won before the change of government in 2010. Out of its 11 provincial stations there is only one left, in Debrecen, and we can be pretty sure that as soon as its contract expires Klubrádió will no longer be able to broadcast there either.

As for the public radio and television stations, let’s just call them what they are: state radio and television stations as they were during socialist times. But then at least the communist leaders of Hungary didn’t pretend that these media outlets were in any way independent: the institution was called Hungarian State Television and Radio. They were at least honest. The only difference was that in those days state television and radio aired excellent programs, especially high quality theatrical productions and mini-series, all produced in-house. Now I understand the programming is terrible and only about 10% of the population even bothers to watch MTV, and most likely even fewer watch Duna TV. Their news is government propaganda: on MTV more than 70% of the news is about government politicians and the situation is even worse at Magyar Rádió.

These state radios and television stations have a budget of over 70 billion forints, a good portion of which ends up in the hands of Lajos Simicska. How? MTV and Duna TV no longer produce shows in-house but hire outside production companies. Thus, public money is being systematically siphoned through MTV and Duna TV to Fidesz oligarchs. The programs are usually of very low quality and complete flops.

Most Hungarians watch one of the two commercial stations: RTL Klub and TV2. Both are foreign owned but as Orbán said not long ago, “this will not be so for long.” And indeed, a couple of weeks ago TV2 was sold, allegedly to the director of the company. Surely, he is only a front man. An MSZP politician has been trying to find out who the real owner is. Everybody suspects the men behind the deal are Lajos Simicska and Zsolt Nyerges.

And finally, the print media is also dying, which is not surprising given the worldwide trend. But right-wing papers are doing a great deal better than liberal and socialist ones for the simple reason that public money is being funneled into them through advertisements by the government and by state-owned companies. Even free newspapers are being brought into the right-wing fold. There was a very popular free paper called Metro owned by a Swedish company. But Orbán obviously wasn’t satisfied with its content. So, the government severely limited the locations where Metro could be stacked up, free for the taking. Thus squeezed, the Swedish owner decided to sell. And who bought it? A certain Károly Fonyó, who is a business partner of Lajos Simicska. The paper is now called Metropol and, in case you’re wondering, is doing quite well financially.

Napi Gazdaság was sold to Századvég, the think tank that was established by László Kövér and Viktor Orbán when they were still students. As I mentioned earlier, Népszabadság was sold recently to somebody who might be a front man for Tamás Fellegi, former minister of national development who had financial interests in the world of the media before he embarked on a political career. The paper was owned by Ringier, a Swiss company that wanted to merge with the German Axel Springer, which owns a large number of provincial papers in Hungary. Although in many European countries the merger was approved with no strings attached, the Hungarian government set up an obstacle to the merger. The merger could be approved only if Ringier first sells its stake in Népszabadság.

Fidesz hasn’t been so active online. Most of the online newspapers are relatively independent. What keeps the party away from the Internet? Vásárhelyi suspects that it is too free a medium and that it doesn’t comport with Fidesz’s ideas of control. Surely, they don’t want to risk being attacked by hundreds and hundreds of commenters. Index, howeveris owned by Zoltán Spéder, a billionaire with Fidesz sympathies. After 2006 it was Index that led the attack on Ferenc Gyurcsány and the government. Vásárhelyi predicts that Index will turn openly right sometime before the election.

The scene is depressing. There is no way to turn things around without the departure of this government. And even then it will require very strong resolve on the part of the new government to stop the flow of public money to Fidesz media oligarchs. The task seems enormous to me.

“What shall I call you?”* The political system of Viktor Orbán

You may recall that a few days ago I published a lecture of Gábor Demszky, former mayor of Budapest, delivered in the Library of Congress. After the text of the lecture I described an exchange between Anna Stumpf, political attaché of the Hungarian Embassy in Washington, and Gábor Demszky. Stumpf, the daughter of Viktor Orbán’s right hand man during his first administration and today a member of the Constitutional Court, took exception to Demszky’s description of the dire situation of the media in Hungary today when he claimed that in some ways it is less free than it was in the Kádár regime’s last few years. She exclaimed: “You are not serious!” Gábor Demszky’s answer was, “Yes, I’m serious. I lived in it.” Within a couple of days this footnote to Hungarian Spectrum‘s coverage of the lecture made the rounds in the Hungarian media. It made a splash even in the liberal press because the Hungarian opposition doesn’t quite know what to call Viktor Orbán’s political system. Moreover, they are reluctant to describe the “System of National Cooperation” as a regime that is perhaps worse than the “soft dictatorship” of János Kádár. Bálint Magyar and his coauthors from many disciplines describe Viktor Orbán as the Godfather, the leadership of Fidesz and their friends and relatives as mafia, and the political structure as a “mafia state.” The book this group of political scientists, philosophers, economists, and sociologists published became a bestseller in Hungary since it appeared a few weeks ago, and references to the “Hungarian Octopus,” the title of the book, appear frequently in the written and electronic media. Yet some people are not entirely satisfied with the description. There are a few people, especially those who publish mostly in German, who consider Orbán’s system “fascism” pure and simple.  Magdolna Marsovszky is one of the chief proponents of this theory. Only today she commented on an article in the German-language blogPusztaranger, which dealt with a conference organized by the Heinrich Böll Foundation. One of the guests was Attila Vidnyánszky, the new director of the Hungarian National Theater. What Vidnyánszky said at the conference led Pusztaranger to call this new National Theater a “faschistiches Erlösungtheater,” that is, a fascist redemption theater.

A telling pictorial description of the political system of Viktor Orbán. A combination of old socialist and nationalistic sybols

A telling pictorial description of the political system of Viktor Orbán. A combination of old socialist and nationalistic symbols /

A few days ago Ágnes Heller described the present situation in Hungary as “Bonapartism,” which is defined as “a political movement associated chiefly with authoritarian rule usually by a military leader ostensibly supported by a popular mandate.” When pressed, she elaborated by saying that Bonapartism is at its core striving and acquiring power for its own sake. Moreover, such a system, according to her, cannot come to a resting place, a consolidated state of affairs because the very essence of Bonapartism is the continual striving toward greater and greater power and glory. Such a quest, however, must eventually fail. Society cannot be maintained in a constant state of ideological, national, and social warfare. Others, like János Kornai, agree that Orbán’s system is a dead end but, as he wittily said, one can live on a dead end street for a very long time. A society can live under such circumstances for perhaps decades. That was certainly the case with the Soviet Union. Not a pleasant prospect for those people who believe that Hungary’s future lies with the West, which entails a break with its authoritarian and communist past. It is becoming increasingly obvious that the main outline of Viktor Orbán’s devilish plans for his “revolution” were in the making most likely years before the 2010 electoral victory. László Lengyel, a political commentator and economist, thinks that Orbán and his closest collaborators had a completely defined plan for the political edifice they intended to build way before 2010 because as soon as the first session of parliament gathered, the plan for the System of National Cooperation (Nemzeti Együttműködés Rendszere or NER) was ready for immediate implementation. And commentators are starting to realize that Orbán’s regime is more than populism. The word “dictatorship” is an increasingly common description. There are just too many signs that Orbán’s world bears a suspicious resemblance to the communist times when one had to fear the authorities. Comparisons are made to the Rákosi regime instead of to the milder Kádár era. By the late Kádár period people’s property, for instance, was left alone. One didn’t have to worry that one day some official would arrive and take away one’s car or apartment. But nowadays private property is not at all safe. If the government decides to take away the livelihood of thousands of slot machine owners, it can do it from one day to the next. Or steal millions in savings. It can do it with impunity. Often the goods taken away are passed on to others who are favored by Viktor Orbán and his friends because they are on the right side, the national side. Again, the charge is that a complete change in ownership structure is being contemplated and slowly achieved. Here again the point of comparison is the Rákosi regime. But at least then the state didn’t turn around and sell the confiscated property to its own clients. Then it was done for ideological reasons. And then comes the soul searching. What did we do wrong in 1989-1990? At first, the participants were certain that their peaceful political and economic transition was ideal; it was certainly judged to be the best in the region by outside observers. A lot of people still cling to that belief. But, others argue, perhaps the introduction of a great number of cardinal laws, which need a two-thirds majority to pass, was a mistake. Ágnes Heller charges, not without reason, that the Budapest intellectuals who made up the democratic opposition really didn’t know the people of the country they lived in. Others rightly point out that the democratic education of the population, especially of the youth, was completely neglected. On the other hand, one cannot accuse Viktor Orbán of not knowing his people. He knows them only too well, and this is the key to his success. But more about this tomorrow. —— *I borrowed the title from one of the best known poems of Sándor Petőfi (1823-1849). The original and its English translation can be found here.

Hungarian Octopus: The Post-Communist Mafia State

An important new book was published the other day in Hungary by Noran Libro: Hungarian Octopus: The Post-Communist Mafia State, ed. Bálint Magyar and Júlia Vásárhelyi. The idea of the Hungarian mafia state should be familiar to readers of this blog. Back in June I gave a detailed description over three consecutive days (June 18-20) of Bálint Magyar’s conceptual framework that describes the nature and functioning of the Orbán regime.

Magyar’s contention is that Viktor Orbán’s Hungary is an entirely new political phenomenon that cannot be compared to the authoritarian Horthy regime of the interwar period or to Mussolini’s corporative state, or even to Putin’s Russia. It functions the way any mafia does, but its job is made easy since “the family” has the power of the state behind it. We cannot combat this new formation unless we fully comprehend its inner workings. Most foreign observers don’t really understand the nature of Orbán’s regime, and therefore European politicians are on the wrong track when dealing with the problems Viktor Orbán creates within the European Union.

The Hungarian Octopus: The Post-Communist Mafia State

Hungarian Octopus: The Post-Communist Mafia State

The book’s contributors naturally approach their topics from the point of view of Magyar’s theory of the post-communist mafia state. Twenty-two scholars altogether, the cream of Hungary’s intellectual elite, contributed to the volume, which looks at all aspects of the mafia state, from law to economics to culture.

Since I’m planning to write about some of the studies in this volume at a later date, I will not go into details here. I couldn’t even if I wanted to. The book is 426 pages long and Magyar’s introductory essay is about 70 pages. So, instead let me quote the opinions of some of the advance readers. Charles Gati, historian, political scientist, and professor at Johns Hopkins University, is certain that “after this book, the West can never look at Central-Eastern Europe the same way as before.” Imre Vörös, former Supreme Court justice, calls it “a masterpiece cut with the laser blade of a brain surgeon, describing Hungarian society and its conditions at large in the autumn of 2013.” Pál Závada, writer, said that “this volume names the new political predator, the post-communist Hungarian octopus, and the privatized form of the parasite state with an air of linguistic sophistication.” According to Ferenc Pataki, social psychologist, “this volume is more than gripping: it is illuminating.” György Konrád, writer, called the authors of the book “the Budapest School of intellectuals” who “can invigorate thinking in the social sciences.” Mihály Andor, sociologist, described it as “the most important sociology volume of the last two decades.”

I will most likely be unable to write about all the essays in this volume, but let me here give a brief description of its contents. After Bálint Magyar’s introductory essay, the book is divided into four parts. The first deals with the “Systemic Structure of the Mafia State and Its Historical Specificity.” In this part Iván Szelényi writes about the different “capitalisms” that developed after communism in the region. Attila Ara-Kovács in “Prefigurations and Nightmares” compares Viktor Orbán to Silvio Berlusconi, the Kazyński brothers, and Vladimir Putin. Zsolt Pétervári analyzes the network of unlimited power, and finally György Csepeli in “The Mafia State’s Second-Hand Clothes” focuses on earlier attempts at identifying the nature of Orbán’s Hungary.

The second part is devoted to the legal aspects of the mafia state under the title “Legal Government in the Grip of the Octopus.” Four legal scholars–Zoltán Fleck (“Laws of the Mafia State”), Péter Bárándy and István Bihari (“State-Organized Crime”), and Tamás Lattmann (“Europe’s Impotence to Eliminate Deviations of Post-Communist States”)–and a sociologist, Ferenc Krémer (“Private Bodyguards at the Head of Power-Enforcement Bodies”), cover the field.

In the third part eight scholars write about “The Economic and Social Policy of the Mafia State: Mihály Laki, “The Weakness of the Strong,” Károly Attila Soós, “Plundering with Super-Taxation: Revenues, Populism and the Exclusion of ‘Aliens,'” István Csillag, “Mission: Getting Rich,” András Becker, “Orbán Ltd.,” Éva Várhegyi, “Banks in the Mafia State,” Iván Major, “Utility Cost Reductions and Super-Taxation in Networked Sectors,” Pál Juhász, “Historicizing Nonsense in Hungarian Agriculture,” and Balázs Krémer, “Social Picture and Social Politics in the Mafia State.”

And finally in the fourth part we can read about “The Symbolic and Cultural Context of the Mafia State.” This part includes four essays: György Gábor’s “Appropriation of God’s Country,” András Bozóki’s “Family Nest–Culture and Symbolic Political Captivity,” Mária Vásárhelyi’s “Functioning of the Media-Octopus–Brainwashing and Money Laundering,” and finally Márton Kozák’s ” Godfather’s Football.”

Anyone who is interested in the functioning of this monstrous system will find something in which he is particularly interested. But reading the book through gives the whole frightening picture. As Charles Gati suggested, this “pioneering work” should be translated into English and also into German. It should be a reference book for everyone whose work demands a thorough knowledge of Viktor Orbán’s system. Without this knowledge officials, politicians, and scholars will flounder and will arrive at a flawed assessment of the nature of this regime.

So, let us hope that this brilliantly cohesive volume will soon be available to a wider international public. Its translation really is a must because there is the danger that the mafia state dreamed up by Viktor Orbán and his college friends may spread throughout the post-communist world. Such an outcome would be a disaster for Europe.