20 Hungarian Lessons the West Is Still Missing
Photo by Jure Tufekcic on Unsplash.

20 Hungarian Lessons the West Is Still Missing

Erik D'Amato
Erik D'Amato

I lived in Budapest from 1999 to 2014, and for 10 of those years I ran a nonpartisan daily news service focused on Hungarian politics. For me, and for the small number of foreign journalists and analysts based in Hungary in the years before Prime Minister Viktor Orbán’s 2010 return to power, the West’s recent interest in that small, long-overlooked Central European nation and its pugnacious nationalist leader provides its own source of fascination.

While most recent interest has tended to focus on the behavior of the Orbán government or its opponents in the EU, Hungary’s current moment in the spotlight seems to be mostly due to outsiders arguing over whether and how it might serve as either a model or cautionary tale. Unsurprisingly, this argument has mostly used Hungary as a proxy for domestic dramas. And unfortunately, it is likely that the spotlight will move on, with relatively little attention paid to many of the lessons the country actually can offer to Right, Left, and center.

1. Hungary was once the West’s darling, and that’s why it’s not anymore.

When I first visited Hungary in 1990, I was amazed by how advanced the country was compared to other parts of the former Soviet bloc. This advancement was largely a result of the market activity tolerated for decades by the relatively liberal communist regime of János Kádár. I shared the then-conventional wisdom that Hungary’s head-start would make it a star of the transition away from communism. Instead, the country’s sense that it was lapping the post-communist field dulled any effort to modernize its economy or put its public sector on a sustainable path, which led to widespread dissatisfaction with what came after 1990. This paved the way for a populist Right that is paradoxically both stridently anti-communist and at times openly nostalgic about the good times of the Kádár era.

2. The lingering presence of Western-fêted ex-Communist elites was tragically corrosive.

The other big mistake that I and other Westerners made during the transition was not foreseeing how much bitterness and cynicism would be produced by allowing communist apparatchiks to escape punishment. They then reinvented themselves overnight as “socialist” millionaire business figures—often on the basis of egregious self-dealing—while continuing to proclaim their leadership of the country’s Left. Indeed, many longtime Orbán-watchers believe his uncompromising style and hostility to the West partly flows from his unexpected electoral loss to a Socialist-led coalition in 2002 and 2006. The first of these defeats was at the hands of a communist finance minister-turned banker (Péter Medgyessy) and the second was to a communist-youth-league-organizer-turned-private-equity-honcho (Ferenc Gyurcsány), both of whom positioned themselves as favorites of the West. Today, there are Hungarians who intensely dislike Orbán but cannot bring themselves to pull the lever for an opposition still tied to servants of a genuine dictatorship who were never brought to justice.

3. Hungarian politics is usually much less ideological than you think.

The current elite hubbub over Hungary treats Orbán and his government as a dedicated vanguard in a grand ideological contest between globalist liberalism and national conservatism. The reality is much more prosaic. As its name suggests, Orbán’s Fidesz party (Fiatal Demokraták Szövetsége, or “Alliance of Young Democrats”) started its life as a youth party. It was also a party of classical liberalism. But with another liberal party on the scene in the mid-1990s, and growing signs that nationalist conservatism represented a large unaddressed market, Orbán and his party pivoted rightwards. It shouldn’t be underestimated how much class and other personal issues impacted his story. Unlike most of Hungary’s new liberals, Orbán came not from worldly Budapest but from a frumpy village in the countryside, and was apparently never allowed to forget it. Now he has made sure none of those who scorned him back then will ever forget it, leaning into his folksy image as a global political figure who can’t be bothered to buy a tailored suit.

4. An overweening state fuels corruption and toxic politics.

Over the past few years, a better understanding has emerged of how the EU subsidies and foreign aid that pour into Hungary (and countries like it) can fuel a culture of graft, and make the competition for political power an existential struggle. But the sheer size and reach and overcomplexity of the Hungarian state itself—the biggest spender as a percentage of GDP in post-communist Europe, with the highest standard VAT rate (27 percent!) in the world—is also to blame for the country’s toxic politics and corruption. When businesses and regular people are unable to get by without breaking the law or angling for government approval or subsidy, civic life and politics inevitably start to get ugly. And if businesses relying on government contracts to thrive leads to corruption and winner-take-all politics, having cultural institutions depend on state support only fans the flames. In recent years, one flashpoint in Hungary has been a fight over the appointment of theater directors by the government; just imagine how much worse American politics would be if Broadway producers were picked in Washington.

5. Fears of demographic decline and “population replacement” should not be scoffed at.

In the mid-2000s, there was a big digital counter on the side of a building a few doors down from me in Budapest, which tracked Hungary’s population as it dropped toward the key milestone of 10 million. I didn’t give it much thought at the time, but I should have, since the fear of demographic decline has clearly fed many Hungarians’ sense of becoming a vanishing people. So, while even many conservatives in the West tend to dismiss fears of a “great replacement” as a crude racist conspiracy theory, average people in societies with stagnating or declining populations are likely to think and vote differently. This is especially true if, as in Central and Eastern Europe, history is full of nearby examples of populations actually being replaced. Fidesz capitalized on this with an effective rhetorical campaign against mass immigration into Europe, and a lesser-known set of popular pro-natal incentives such as lifetime exemption from income taxes for women who have a certain number of children. These have helped increase the fertility rate by almost a quarter in the last decade, while nearly doubling the number of marriages. Knocking or mocking this concern won’t make it go away.

6. The populist Right will co-opt the welfare state.

Orbán spent much of his wilderness years in the 2000s demagoging Socialist-led governments over social services from the Left. He even went so far as to launch a (successful) national referendum against co-payments of a few dollars for doctors’ visits and prescriptions. Back in power, Fidesz has in practice been much more responsive to the needs of upper-income voters—not least its own. But its ability to paint its opponents as callous neoliberal budget-cutters has been a consistent part of its successful electoral formula, and it continues to position itself as a champion of expanded social services.

7. It will also co-opt minority groups.

While routinely trafficking in forms of white nationalism, Fidesz has for years forged unlikely alliances with institutions and politicians representing various ethnic minorities, including Jewish and Roma (Gypsy) groups, having discovered that they (or their leaderships) often aren’t particularly liberal, either.

8. …and speech curbs initially cheered by the Left.

In the months before Orbán returned to power in 2010, Hungary’s lame-duck center-Left government passed a law criminalizing denial or trivialization of the Holocaust. It ought to have been obvious that Fidesz would use this new form of criminalizing speech for its own devices (until then Hungary was unusual in Europe for having no official curbs on speech). Sure enough, within weeks of its return to power, Fidesz broadened the law to include denial of communist crimes. It isn’t difficult to see how the initial law helped the government’s later moves to degrade free expression.

9. Markets will shrug off really kooky populist economic policies.

As a market-friendly economic journalist, I watched in horror as Orbán enacted a series of populist economic policies seemingly designed to trigger an economic crisis. These included levying brutal taxes on banks and large foreign retailers, nationalizing the equivalent of peoples’ 401(k) accounts, and putting György Matolcsy in charge of Hungary’s version of the Federal Reserve—a man gleefully scornful of every best practice in central banking. The result? Barely a blip. In the long run, what can’t go on forever won’t, but it can go on much longer than expected.

10. The West’s own example hasn’t always been exemplary.

Orbán was introduced to many in the West in 2015 when he tried to halt a wave of Syrian refugees traveling to Germany and other points in Western and Northern Europe via Hungary. While the move was widely denounced as lawless, it was actually German Chancellor Angela Merkel’s sudden decision to admit more than a million such migrants that was in stark contravention of EU law. This and similar cases in which Western governments or bodies have twisted their own statutes or regulations have made protests against Hungary’s real rule-of-law abuses all too easy for Orbán and his supporters to brush off. Likewise, there’s more than a little truth to Orbán’s claims that multinational companies have gotten the better of Hungary, and even that the billions of euros in EU subsidies was just Brussels sending some money “back” to Budapest. As Thomas Piketty has pointed out, between 2010 and 2016, the flow of profits leaving Hungary to Western European companies as a percentage of GDP was more than 50 percent higher than the amount the country received in EU transfers. Meanwhile, some “multis” have operated in Hungary in ways that they never would have done in their own markets. Banks, in particular, have been doing things—such as pushing high risk residential mortgages denominated in foreign currencies—that left no one feeling sorry for them when Orbán dropped the boom on them.

11. It takes good lawyers to really mess with the rule of law.

Contrary to the image of populist movements being staffed by provincials unconcerned with legal niceties, Fidesz is actually manned by a vast cadre of skilled and creative lawyers, who pay great attention to making sure everything Orbán’s government does is technically legal. They are adept at finding ingenious ways of flatfooting their opponents.

12. The efforts of Western NGOs and media can backfire spectacularly.

The promotion by Western governments and NGOs of certain aspects of cultural liberalism—notably on gender identity—has had mixed results in post-communist and developing countries. An illiberal backlash was inevitable. Meanwhile, a crusading international media—the New York Times has gone so far as to print an exposé on EU subsidy fraud in Hungary in Hungarian—has left some centrists nodding along when Orbán claims their country is under attack from a biased foreign press.

13. Internationalists flee, nationalists fight.

For decades, most members of the Hungarian diaspora—especially ethnic Hungarians in surrounding countries, and Hungarian Americans who escaped communism—were strongly nationalist in orientation. But one of the unintended consequences of granting EU membership to countries like Hungary is that it encouraged the most “Western-minded” people to pick up and head West. By contrast, nationalists tend to want to stick around in the nation in which they were born and raised, and as a result tend to fight harder to gain and retain power.

14. There is always a further right far-Right.

Since Fidesz’s return to power in 2010, it has been routinely described as a “far-Right” party by Western media. But for decades it has been flanked on its Right by parties or movements that loudly denounce it as being insufficiently nationalist. Part of this is a legacy of Hungary’s dismemberment after World War I, which created a permanent slot for irredentists who could never possibly gain power with a platform including annexation of Slovakia and bits of a half-dozen other neighbors. But for Americans, especially, it bears remembering that parliamentary systems tend to produce governing parties that aren’t the most extreme option available to voters.

15. Desperate liberals will make illiberal allies (and vice-versa).

One of the nationalist parties that has long outflanked Fidesz on its right was Jobbik. Jobbik rose to international notoriety before Orbán’s return due to its unveiled anti-Semitism and links to the Magyar Gárda (“Hungarian Guard”) paramilitary group. But just as Fidesz, in its early years, moved right, Jobbik has repositioned itself as a more moderate far-Right alternative, and was eventually welcomed into the liberal-led alliance that hopes to unseat Fidesz. As American politics, in particular, becomes more focused on litmus tests and concerns of moral “contamination,” the liberal mainstreaming of Jobbik is a good reminder of how strange bedfellows can get when politics gets serious.

16. The Left and Right long had a cozy graft-splitting arrangement.

Another well-kept secret of recent Hungarian political history is that Fidesz and its largest opponents on the Left long cooperated in dividing the monetary spoils derived from holding a parliamentary majority. Roughly speaking, the rule was that the parties in power would get 70 percent of the loot, while those on the outs would get the remainder—that is, until Orbán tore up the deal after his return to office in 2010. (I had a source who knew someone in the room when the treasurer of the Socialist Party came back to party headquarters and broke the shocking news, saying that his Fidesz counterparts were apologetic about the sad conclusion to their long and profitable partnership.) Whether the end of this Cosa Nostra-style understanding is good or bad, it’s a useful reminder that politics in places like Hungary isn’t what it sometimes seems.

17. Borderlands gonna borderland.

One of the biggest areas of Western hand-wringing over Hungary is the Orbán government’s drive to create an independent foreign policy, including cordial ties with Russia, China, Turkey, and other countries with which the West is at loggerheads. But instead of this being some strange, irrational new development, in reality it is a historically commonplace (and commonsensical) default foreign policy posture for small nations geographically pinned between the Scylla and Charbydis of different empires or military-political blocs. No one ever ostracized Austria for largely sitting out the Cold War (and still refusing to join NATO), so people shouldn’t be scandalized if Hungary and other borderland countries like it sit on the fence and flirt with both West and East equally.

18. On the ground nationalist conservatism looks more liberal than you might think.

The Hungarian capital has changed a lot since it became a Mecca for global right-wingers—it’s more international and lively than ever. Most striking is the flourishing of the former Jewish quarter, home to Europe’s largest synagogue and now one of its most hopping bar scenes. Just as populist economics do not immediately cause market mayhem, rule by Christian nationalists doesn’t necessarily make everything drab and provincial.

19. Successful populists eventually become the establishment.

While walking around Budapest on a return visit and marveling at how much it felt like any liberal global city, I had to keep reminding myself that many of the chic-looking young professionals crowded into the Brooklyn-standard restaurants and bars were members of the Fidesz elite, or their children. Indeed, one of the ironies of Hungary’s current situation is that it is liberal urbanites who are the victims of a “great replacement,” as the Right moves to fully capture not just the country’s government but its businesses and cultural institutions, all the way down to hipster bars and experimental theaters.

20. Change itself is the only constant.

Given Fidesz’s grip on power and its many reasons to hang on—not least among which is fear of criminal prosecutions—it’s hard to see the party or its leader gracefully giving way after the general election scheduled for next spring, or ever. But the same was no doubt said about the communist regime, and every other government and system of government Hungarians have had since they swept into Europe from the Eurasian Steppe 1,100 years ago. And there have been so many of them that even those of us who have spent years immersed in Hungarian politics and history struggle to keep track. So, if there’s one political lesson that Hungary can offer the world, it’s that even the most sturdy-seeming of regimes will eventually be swept away, even if no one anywhere else cares anymore.

Top StoriesWorld AffairsPolitics

Erik D'Amato

Erik D’Amato is a New York-based writer and corporate intelligence operative, and the author of The Little Book of Left-Right Equivalence.