Understanding Hungary: The social prerequisites of political democracy

Outside observers are bewildered by the fact that Hungarian premier Viktor Orbán’s much criticised government has gained a second term, once again with a two thirds majority in parliament. This article argues that the key to understanding Orbán’s success is the failure of the Hungarian Left.

Foto: CreativeCommons/Habeebee

Although Orbán’s conservative Fidesz party has lost votes since their election in 2010, the opposition had lost far more by 2009, and has been unable to regain them. They are fragmented and characterised by internal rivalries of leaders who were already unpopular and discredited five years ago. According to polls, Ferenc Gyurcsány handed over power at a 15% popularity rating, Gordon Bajnai at 25%. 58% felt Bajnai had governed irresponsibly, 62% though his period can be characterised by haphazardness. The „expert” image of Bajnai prevalent in the Liberal camp is not shared by society at large. Given their feeble leadership record and lack of willingness to come clean about past mistakes, and change direction, their criticism of Orbán’s governance leaves the majority of Hungarian voters cold. Even the far right Jobbik party, collecting more and more protest votes, has challenged their position as the main opposition party. This is a clear case of Walter Benjamin’s old adage that the rise of the Right is a failure of the Left.

Liberal versus Social Democratic

In fact it is even questionable that they deserve the label of “Left” at all. They are actually a confusing mixture of political forces who have accepted Fidesz’s externally ascribed label as “Left liberal” forces. The title is an oxymoron. Liberalism, as represented by the German FDP or the British LibDems, connects cultural liberalism with a pro market economic vision. ‘Left’ liberalism makes no sense. The political current that connects liberal cultural politics with a social economic orientation, a welfare state centred approach is Social Democracy. Tertium non datur. However, in post state socialist countries even urban intellectuals with clear pro social values still shy away from calling themselves social democrats. At the same time liberals, who never gain a majority even in more advanced countries not to speak of less affluent once like Hungary, actually have an interest in perpetuating this linguistic confusion. They have taken advantage of the Third Way shift in Western European politics to justify their neoliberalisation of Eastern European Socialist parties who were left without a clear ideological profile after the fall of communism. (At least Western Europe had developed the welfare state before the Social Democrats there became neoliberals. Not so in the East of the continent.)

This is precisely what happened in Hungary, causing the opaque fog in the camp opposing Fidesz until today. After transition, in 1990, the Socialist Party, the successor to the former single ruling party of the dictatorship, was left without a clear policy orientation, save for extreme pragmatism and opportunism. Since then, they have ruled Hungary in three coalition governments with their minority partner, the Liberals, who continuously decreased in popularity and eventually fell out of parliament.

The Liberals dominated these coalitions with a neoliberal agenda. They still do in today’s opposition. The Hungarian state has had no policies for job creation, economic development, social policy and a host of other areas, other than the attraction of foreign direct investment. They were closed to any debate about Hungary adopting a German (Rheinland) or Scandinavian model of negotiated welfare states, or even a French or far Eastern style of development state. Their insistence on textbook models of ‘market based’ capitalism, which in reality exist nowhere, resulted in a low wage, low employment economy at the low value added end of multinational production chains, and in turn in social devastation.

Like most of the CEE region, Hungary’s employment rate has remained far below EU average. The productivity difference from Western Europe has grown since EU accession, as had the wage difference. In these aspects, Hungary again resembles almost all of the CEE region. Hungarian average wages, at around 30% of EU average, provide a standard of living that is comparable on purchasing power parity to the lowest fifth of Western European society. Yet some two thirds of Hungarians live below this average income level! Some four million of them have incomes that do not meet the subsistence minimum of basic physical needs according to the Central Statistical Office. Roughly another three million of them survive from one month to the next. Food and energy prices are at 83% of EU average, cloths 85%, shoes 95%, transport 71%, communication at 109%…

By 2009, the last year of Socialist rule, Hungary (along with the rest of the Visegrad region) was one of the lowest spenders in terms of social expenditure in the European Union. In that year Hungary spent just 23.5% of its GDP on social issues, and other countries of the region even less (CZ 20.4%, PL 19.7%, SK 18.8), compared to a European Union average of 30.3%. Mediterranean countries, traditionally believed to operate only a reticent welfare regime, were also already ahead (ESP 25%, Portugal26.9%, Italy 29.8%), not to speak of fully fledged Scandinavian welfare states (SW 32.1%, DK 33.4%). The comparison is all the more surprising given that Hungary has a very aged population, one of the lowest employment rates in the EU, as well as one of the worst general social health statuses. Social expenditure per person amounted to €3,478 on purchasing power parity, whereas it was twice or three times as much in Western Europe.

If this was not enough, the ‘Left Liberals’ left behind a legacy of ‘perverted redistribution’ in the welfare state, as leading social policy professor Zsuzsa Ferge calls it. In 2009, at the end of their rule, some the social policy regime was actually redistributing resources from the bottom of society to the top! Thus Hungary (once again, like other states in the region) might have a very Gini coefficient (a measure of income inequality) in international comparison but this hides the fact that Hungary competes in the global economy with a low value added -low wages mix, and it is the flat income distribution that causes the low inequality.

It perhaps worth adding briefly one more dimension of the Hungarian welfare state, that of education. According to research carried out by leading education expert Péter Radó on internationally comparable PISA data, 72% of the educational attainment of Hungarian students is determined by where their school is located. The respective figure for Finland is 8%. Thus even educational mobility has become all but closed.

Liberals imagined twenty-five years ago, during transition, that citizens socialised in a Soviet society would turn into citizens of a free and open, competitive society. In reality only a very narrow top layer of Hungarian society is able to compete, develop a bourgeois business and civic ethos, engage in mobility, and remain independent of clientalistic networks and populism. And this narrow layer is already at the top. The rest do not have the necessary private resources. As a consequence their market based rise, as imagined by neoliberals, is a wishful fantasy.

The Social Prerequisites of Political Democracy

This is not only an economic issue. It impacts democracy as well. As Gosta Esping Andersen (like Barrington Moore) reminds us, democracy is only possible with a wide middle class. He defines a middle class as those who possess material independence and a level of education that enables them to follow and take part in public debates. In a post communist society like Hungary both are missing. We have demonstrated how impoverished society is. Only a very thin top layer of society has the financial independence to stay clear of the clientalistic networks of patronage that weave through Hungarian society. The rest prefer concrete populist buy offs to long term promises: they have had enough of the latter. As for education, according to the data of the 2005 micro census more than half of society had a level of education lower than a secondary school final exam. Only 25.2 per cent had such a degree and 11.7 university degree. Of course it would be foolish to think that formal levels of education deterministically correspond to understanding of public affairs, but in a world where voters are expected to decide about nuclear power and European monetary union, there is likely to be a stochastic correspondence. Given the quality of CEE higher education, even university graduates are suspect of being ignorant sometimes. Can we be surprised about the superficial narratives people employ when they make political choices? Why is there so little discussion about the social prerequisites of a political democracy?

Ethnocisation instead of Class 

One would expect that in such an impoverished society the political Left would capture the imagination of voters through an economic rhetoric of class. Astoundingly, however, such a narrative in Hungary is completely absent. The Socialists have shied away from such a language because they think of it as an embarrassing reminder of their dictatorial past. The Liberals, who have superimposed their ideology on the Socialists, naturally do not think in terms of class. As Antonio Gramsci pointed out, they create a hegemonic discourse in which middle class interests are represented in public discourse as universalistic. The Hungarian so called Left uses a Liberal language when it comes to economics.

Having demonstrated extreme levels of corruption and poor leadership, Socialist politicians have needed a legitimation to keep their voters. They found it in the mutual game of demonization often played by cartel parties, in which Viktor Orban’s Fidesz is also a willing participant. The political Right calls the Socialists anti-national, the Socialists call Fidesz antidemocratic. They project the idea that Orbán and Fidesz is somehow non-European, out of the expectable bounds of democracy. This rhetoric has been greatly weakened by the strong support that the European People’s Party has lent Orbán. They institutionally endorsed him in the debate in the European Parliament about the critical Tavares Report on Hungarian democracy. EPP President Joseph Daul called Orbán the best leader Hungary at a Budapest rally during the 2014 election campaign. Also, voters have failed to follow why the Socialists and their Liberal allies have taken part in Orbán’s Parliament and elections, having called the first hollow and the second unfair. The weakened rhetoric of the Socialist-Liberal camp has resulted in a lack of capacity to attract voters.

The party that did attract the protest votes of those who have turned away from Fidesz has been the far right Jobbik party. Their ethnocised world view has resonated well with voters who had been socialised into ethnocised narratives by a Hungarian educational system and public discourse that lacks the alternative class dimension. Jews are seen by these voters as being the incumbent elite, Roma as the annoying underclass.

The lack of class based language has a long tradition in 20th century Hungary. The bloody 1919 Hungarian Republic of Councils completely discredited the radical left. Afterwards, in a pact between the Social Democrats and the Horthy regime even the moderate Left accepted an extreme level of self curtailment in exchange for exemption from persecution. They accepted being banned from organising with trade unions. By being present in Parliament with a fraction whose size was capped, they even legitimised the Horthy regime as a formal democracy. prior to the 2nd World War, the class based social democratic narrative was almost absent in Hungary.

What replaced it was an ethnocised narrative. As historian Krisztián Ungváry demonstrates, the development in capitalism was more of a Jewish phenomenon in Hungary than anywhere else in Europe. The typical capitalist professions (entrepreneurs, journalists, lawyers, doctors, etc.) were half to two thirds dominated by Hungarians of Jewish descent, who were portrayed by the Hungarian Right as ‘foreign’. Budapest, the fortress of Hungarian capitalism, was more than twenty per cent Jewish. At the same time social inequalities of the Horthy regime were shocking. The top 80% of society only owned 40% of wealth. 65-80% lived below the subsistence minimum. In spite of the massive inflow of ethnic Hungarians from neighbouring states, Hungary had a huge outward migration. Social policy was nonexistent.

Due to the dominant rhetoric of the Right, social inequalities were interpreted as ethnic differences. A ‘change of guard’, replacing Jews with Hungarians in important positions, was continuously on the agenda. The dramatic outcome of the intensifying hysteria that followed was the death of 600 000 Hungarians of Jewish descent in the Holocaust.

After WW2 the state socialist regime persecuted the best Social Democratic leaders and further discredited the Hungarian Left. By 1989 any ideas that reminded people of Communist rhetoric were seen as foolish and laughable. Hayek and the Austrian school criticism of planned economies were the popular in an age dominated by Thatcher and Reagan.

As we have described, the Hungarian Socialists allowed themselves to be dominated by the neoliberal ideology of their Liberal partners. The resulting social deprivation has already been described. Many deprived Hungarians, schooled in ethnocised narratives, once again began to interpret the world in the only way available to them. More moderate ones were attracted by Viktor Orbán’s rhetoric of a Hungarian ‘freedom fight’ against the EU and the IMF. More radical ones once again mobilised against a ‘Jewish elite’ and a ‘lazy, parasitic Gipsy underclass’. The fate of the Roma is especially crucial here. Surveys suggest that around 80 percent of Roma belong to the lowest fifth of Hungarian society (which of course does not mean that they form the majority even in these poor cohorts.) The Roma almost only have other Roma as their peers which severely limits social capital, and inhibits both mobility and distancing from the culture of poverty. Almost no Roma earn a university degree, and they are massively underrepresented even at the intermediary educational levels. The indignant mainstream only sees Roma who live on welfare or are forced to engage in sublegal activities, thus reinforcing the stereotype. The Hungarian Court of Auditors has published a report on post-transition Roma policies, and has assessed them as fractured, incoherent, unmonitored, and ineffective as public policy. The notion that society provides all the help one could need and yet Roma just keep on taking is not true, in fact, the reverse is true!

A substantive policy for the improvement of the social condition of the Roma has not yet been put forward in post-transition Central and Eastern Europe. The Hungarian Socialist-Liberal coalitions never created, financed or monitored any public policy that would have mobilized the ethnicized Gipsy underclass out of the backwardness created as a consequence of so many centuries. There is nothing really Roma specific in assisting the impoverished and incapacitated Roma, nor could we measure the effectiveness of such a policy without forcefully ascribing Roma identity externally, and thus defining the size of our target population. This is no way to proceed. What we need are functioning ‘colour blind’ systems of education, employment and social policy, public transport and healthcare that create equality of output rather than the wholly inadequate equality of opportunity that is talked about but not achieved today. At the moment ordinary people have the ethnicized underclass constantly in sight. Their ‘parasitical lifestyle’ is scapegoated for the low living standards of the masses, even though total social spending on the lowest tenth of society, including support to the non-Roma, takes up no more than 1.6 percent of GDP. A fraction of even that nominal amount leaks out of state budgets in the form of corruption and clientalism, or is spent on an inefficient state and its poor economic policy. That, of course, is much less visible, and citizens feel powerless to change it. It feels less futile and psychologically more relieving to target one’s indignation not at the abstract, the unknown and the far away, but against those present, familiar, troubling and in direct conflict.

Human rights are doubtless important. Anti-racist campaigns are vital. Beyond issues of discrimination, however, the Gipsy issue is a socio-economic challenge. The sustainable elevation of the poverty trapped Roma populations of Eastern Europe requires a proactive welfare state.

It is often remarked that in Hungary the most popular party amongt the youth is in fact Jobbik. One only begins to understand the resentment of this group when expressed in hard data: youth unemployment is 30 per cent, 47 per cent of 18-35 year olds are forced to live with their parents, 75 per cent of them are unable to save, and those who can save, save about €32 per month…

The 2022 Elections are Still Open

On election night, after the catastrophic defeat, “Left Liberal” leaders, rather than taking responsibility for defeat, have pledged to stay on. They will form the “Left Liberal” opposition in Parliament. Thus with their presence they will perpetuate Fidesz’s 2/3 majority until 2018. The 2022 elections are still open…


Zoltán Pogátsa

Zoltán Pogátsa

is an international political economist. His home institution is the Faculty of Economics at the University of Western Hungary.