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 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.

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.

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.