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.

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?

The article was originally published by Visegrad Revue. Continue reading here.
Fotocredit: Eduardo Fonseca Arraes CC BY-ND 2.0


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