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20 Hungarian Lessons the West Is Still Missing

Hungarian politics is usually much less ideological than you think.

· 11 min read
20 Hungarian Lessons the West Is Still Missing
Photo by Jure Tufekcic on Unsplash.

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.

George Faludy: Hungarian Poet and Hero for Our Times
Faludy’s greatest weapon—what really allows him to swat away the mosquitoes of passing ideologies—is his delight in sensual pleasures.

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.

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