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Dr Gabor Scheiring

Senior Research Fellow

Dr Gabor Scheiring is a political economist and democratic activist currently working as a research associate in the department of sociology at the University of Cambridge. He is also chairman of the Progressive Hungary Foundation, a think tank dedicated to progressive policy research and civic education. An active opposition figure in his country, Dr. Scheiring served as a member of the Hungarian parliament from 2010 and 2014. As an expert on the impact of economic change on health, identity, and democracy, he has authored multiple books and articles. He is a National Endowment for Democracy Fellow in which capacity he is developing a comparative framework for examining the socioeconomic origins of the rise of illiberalism in Hungary, the Czech Republic, and Poland.

Array ( [0] => WP_Post Object ( [ID] => 5177 [post_author] => 59 [post_date] => 2020-11-16 09:30:14 [post_date_gmt] => 2020-11-16 08:30:14 [post_content] => Relying on the author's recent book, this briefing examines the foundations of Hungary's stable illiberal rule. Two seemingly contradictory tendencies are crucial for the stability of illiberalism in the country. First, Orbán capitalises on the disillusionment of the working class with the liberal transition era after the fall of Communism. Second, Orbán used the momentum presented by the collapse of working-class support for the parties of the Left to gain power and then to renegotiate the class compromise with transnational elites, emancipating the domestic bourgeoisie at the expense of domestic workers. The stability of the regime increasingly depends on authoritarian-populist fixes. However, despite the crass classism of upwards redistribution under Orbán's business-friendly regime, a significant part of workers still supports the illiberal state because it presents itself as a break with the pre-2010 liberal era. The briefing also shows that the policy logic behind the government's responses to COVID-19 corresponds to the controversial logic of Orbán's socioeconomic strategy. Finally, the briefing concludes by pointing out the broader political lessons from Hungary's descent into illiberalism. IntroductionThe corona-crisis increased the value of evidence-based policies and revealed the weakness of populists in power. This is most clearly exemplified by Donald Trump in the US. Italy's Matteo Salvini is also struggling to find his place in the opposition, with Conte's government performing better than expected. However, other populists seem to be as strong as before. Hungary's PM Viktor Orbán is a case in point. According to Politico's poll of polls, the popularity of Orbán's Fidesz party has been hovering around 50 per cent in 2020.[1] The second wave of the corona-crisis is currently hitting Hungary much harder than the first wave, and the government is currently unable to handle protesting arts students who demand the reversal of the privatisation of their university.[2] Nevertheless, illiberal hegemony is as stable as ever in Hungary. The problem with most accounts about the stability of illiberal populism in Hungary is that they neglect how well Fidesz is embedded at the bottom and society's top. Authoritarian fixes—such as gerrymandering, unfair elections, media repression—are crucial parts of the story, but there is more to Orbán's rule than this. To understand the stability of Orbán's illiberal rule, we need to understand what happened before the 2010 Fidesz power grab. In my recent book, 'The retreat of liberal democracy,' I analyse two seemingly contradictory tendencies that are crucial for understanding the stability of Orbán's illiberal regime.[3] First, Orbán capitalises on the disillusionment of the working class with the liberal transition era. Second, Orbán used the momentum presented by the collapse of working-class support for the parties of the Left to gain power and then to renegotiate the class compromise with transnational elites, emancipating the domestic bourgeoisie, often at the expense of domestic workers. Despite the crass classism of upwards redistribution under Orbán's business-friendly illiberal regime, a significant part of workers still supports the regime because it presents itself as a break with the pre-2010 liberal era. Postsocialist neoliberalism undermined itselfHungary's post-socialist transformation brought new economic and cultural opportunities and coincided with democratisation. However, the overwhelming majority of Hungarians experienced this global economic reintegration as social mayhem. Relying on fieldwork in Hungary's ‘rustbelt’, I show that de-industrialisation during the 1990s eroded working-class culture and decreased the bargaining power of labour, which in turn stunted wage growth and allowed inequalities to increase. By the end of the 2000s, masses of workers and members of the indebted and weak middle class grew disillusioned. In the lack of a progressive left-wing alternative, they drifted rightward.[4] De-industrialisation, followed by a long period of jobless growth, and a disappointingly low increase in net wages, pushed the economy towards severe social tensions. 1.5 million Hungarian jobs (out of 4.8 million) were lost during the first years of the regime change, out of which only 0.4 million have been recreated.[5] The employment rate dropped from 71 per cent in 1990 to 52.4 per cent by 1997 and only increased a couple of percentages. In 2009, it stood at 55 per cent, the lowest throughout the European Union (EU).[6] The share of wages in total national income has decreased from 57.2 per cent to 46.3 per cent during the first 20 years of the transition.[7] The standard of living of a Hungarian with average income corresponds to the bottom ten to 20 per cent of the Western pay scale. A common strategy to extend low wages was consumer credits, buying cars, and apartments financed through foreign currency loans. This strategy was backed and propagated by the Socialist-Liberal government between 2002 and 2010. Low wages and high indebtedness resulted in the financial precarity of Hungarian families. By 2009, a staggering 75 per cent of Hungarians could not face unexpected expenses, the highest level throughout the EU.[8] The experience of economic vulnerability became profoundly associated with the Socialist-Liberal government, leading to the collapse of the Hungarian Socialist Party's electoral base.[9] A similar process of working-class demobilisation and right-wing remobilisation took place in other post-socialist countries, most notably in Poland.[10] However, condemning citizens for their alleged populist or anti-democratic turn is misleading. Bringing down democracy not only requires dissatisfied voters; it also needs an active elite that thinks its interest might be best furthered by weakening the system of liberal democracy. Without the support of national capitalists and the transnational economic elites, Orbán's regime would collapse. The roots of the alliance between Fidesz and the economic elite also go back to the pre-2010 era. In the 1990-2010 period, Hungary spearheaded the competition for foreign capital in Central and Eastern Europe, offering cheap semi-skilled labour, lax labour regulations, and low taxes on capital.[11] However, the misgovernance of dependent development resulted in severe economic dualism. Transnational corporations generate the bulk of export revenue, while domestic companies lack access to high-value-added markets. Both left- and right-wing governments between 1990-2010 preferred foreign investment as the engine of the economy, at the expense of domestic capital formation. The neoliberal policy consensus favoring transnational corporations led to profound economic anger within the national bourgeoisie. Those national entrepreneurs who did not manage to become junior partners of international capitalists either as service providers or as local suppliers were increasingly pitted against the dominant bloc of liberally-minded politicians and transnational corporations. Using new data on revolving doors between the business class and the political elite, in my book, I show how this economic disintegration led to rising economic nationalism among Hungarian national capitalists. They started to support Fidesz in return for state protection. Orbán deliver on this promise, making more room for domestic businesses, while also strengthening the alliance with key transnational corporations. Orbán, a business-friendly populistOrbán's illiberal socioeconomic strategy has a lot to offer to the business class. Elsewhere, I proposed the term 'accumulative state' and mapped the regime's instruments to boost wealth and capital accumulation.[12] Domestic elites are a significant pillar of Hungary's illiberalism. A nationally representative survey found that the number of Hungarians supporting authoritarianism has slightly increased, but the number increased by far the most among upper-class respondents.[13] The share of those supporting authoritarianism grew from six per cent to 23 per cent from 2015 to 2018. Orbán also restructured some sectors of the economy—typically non-tech non-tradable sectors—making space for domestic investors. The case of the restructuring of the tobacco industry illustrates this well.[14] The tobacco industry was dominated by four companies before the transition. These companies were all privatised during the 1990s, and international investors bought the most prominent companies. A smaller, Hungarian owned company, Continental also managed to establish a foothold in the tobacco industry. The law to "curtail smoking among young and regulate tobacco retail trade" was introduced to the Parliament in December 2011. The lead architect of the law was János Lázár, at that time a close ally to Orbán. The main element of the regulation was that the tobacco trade was monopolised by the state to give out concessions at a later point. A year later, oppositional MPs noticed by checking the file properties that the Word document sent out to Brussels to the European Commission for consultation was not authored by government officials but by János Sánta—the chairman of the Hungarian Tobacco Alliance, the central lobby body of the industry—who also happens to be manager and owner of Continental Tobacco. The owners and high-level employees of Continental Tobacco are among the biggest winners of the bid for concessions, with more than 1000 new retail outlets run by someone closely connected to Continental. János Sánta was publicly encouraging the company members to take part in the tender and stated that it is a "similar historical opportunity as land redistribution in 1945." However, Orbán also maintained the alliance with transnational corporations in the tech-intensive export sectors, representing the economy's most dynamic sector. Thus, foreign investors are also a crucial pillar of the post-2010 regime, benefiting from Orbán's illiberal socioeconomic strategy. According to the editor of Budapester Zeitung, 90 per cent of German investors in Hungary would vote for Orbán.[15] The government introduced a flat nine per cent corporate tax in 2016, effectively transforming the country into a tax haven. One of the most important measures to boost the ‘embourgeoisement’ of the upper-middle class was the introduction of a flat 16 per cent personal income tax in 2011, further reduced to 15 per cent in 2015. The government also distributes direct financial subsidies to national and international business elites; these subsidies vastly exceed the pre-2010 level and are, more than before, targeted towards national capitalists.[16] Austerity is a further crucial tool to redistribute wealth towards the business class. These cuts funded the massive redistribution to the top in the form of tax cuts, subsidised loans, increased public investment, and new pro-natalist policies targeting high-income families. This socialism for the rich and capitalism for the poor allowed the government to keep the budget deficit below three per cent, bringing state debt down from 80.6 per cent of the GDP to 70.2 per cent between 2009-2019. Given its deep embeddedness in business circles, it is no surprise that neither national nor international capitalists have challenged the anti-democratic attacks on liberal institutions. From capital accumulation to authoritarian populist fixesOrbán's illiberal strategy brought some limited gains for workers. It allowed employment to rise and reduced families' vulnerability by curbing financialised consumption and wiping out dubious foreign-currency loans. However, the price of these achievements was an extreme rise in inequality and labour market precarity. The Gini coefficient of income inequality jumped from 24.1 in 2010 to 28.7 in 2018.[17] Hungary is now the most unequal country in the Visegrad region. This growth of inequality is not an accident by consciously manufactured in the name of Orbán's illiberal socioeconomic strategy. Between 2009-2017, the social component of individual incomes – e.g., benefits, pensions, allowances – declined dramatically for the bottom income deciles and increased considerably for the top income deciles.[18] The country also saw a highly unequal creation of new wealth. While the value of cash and bank deposits—the only assets that the lower 90 per cent of the population owns—increased by 14 per cent between 2010 and 2015, the value of securities—owned by the top few per cent of income earners—increased by 68 per cent.[19] Orbán's labour policy also increased precarity. The government reduced the unemployment benefit to three months, which is the lowest in Europe. In 2012, the government introduced a new neoliberal labour code, disbanded the standing tripartite body, and restricted the opportunity to strike. In 2018, the government increased overtime and allowed companies to postpone payment for overtime to three years. This amendment, labeled as the slave law, led to significant protests throughout the country, but the government did not waver.[20] Orbán’s socioeconomic strategy is politically costly. Orbán lost a large share of his working-class supporters between 2010-2014. In 2014, Fidesz received fewer votes than in 2006, when they lost the election. As I argued elsewhere, the 2019 local government elections again showed that Orbán's illiberal hegemony is vulnerable. The opposition was able to take hold of critical large cities.[21] A recent survey conducted before the coronavirus pandemic asking respondents to evaluate the ten years of the Orbán regime reported that 43 per cent of Hungarians think that the country is in a worse state than it was in 2010, and only 30 per cent saw an improvement.[22] Thus, the stability of the regime increasingly depends on authoritarian-populist fixes. On the one hand, institutional authoritarianism represents the hard, macro-strategy of illiberalism. It aims at pre-empting organised dissent by political parties, trade unions, and NGOs. On the other hand, authoritarian populism represents the soft, micro-strategy of illiberalism. It reframes distributive grievances into cultural hierarchies, thus hinders the emergence of a broad anti-government social coalition. Authoritarian capitalism meets the pandemicHow is Orbán’s socioeconomic strategy related to how the government handles the corona-crisis? The first wave of the pandemic spared the countries of East-Central Europe, including Hungary.[23] It seemed that the populist governments of the region were well-equipped to manage a significant health crisis. However, the second wave is now entirely out of control, death and infection rates exceeding the first wave by far. It is becoming evident that Orbán's government did not use the time available to prepare for the second wave. It is also apparent now that the government's measures during the first wave of the pandemic had little to do with the relative flatness of the curve at that time. Although the government introduced significant restrictions on 16 March, with a full shelter-in-place order effective from 27 March, the bulk of the government's measures included non-conventional steps with dubious efficiency. The measures that target the restructuring of hospitals are particularly controversial. On 11 March, the government decided to freeze all non-coronavirus related admissions to hospitals and treatments except for life-saving ones (¾ of hospital treatments were postponed in the only hospital that provided detailed data about the effect of this measure). If the hospital admissions remain restricted in the following months, the government could save around ten billion forints on hospitals during the pandemic. On 9 April, the minister responsible for health ordered publicly funded hospitals to free up 60 per cent of hospital beds by 19 April to treat expected new coronavirus patients.[24] Hospital directors who refused to comply fully are threatened, and two renowned hospital directors were dismissed. Economic measures have been dedicated to alleviating businesses' financial burden in sectors where national capitalists loyal to the regime happen to be the most active. The government aimed to keep the budget deficit for 2020 below 2.7 per cent for a long time, though now appears to be willing to accept a more massive deficit. This hardline macroeconomic conservativism diverges from the approach of most other governments and the recommendations of international institutions.The responses in the fields of social and employment policy are also restrictive. Even conservative governments elsewhere in Europe recognise the need to increase spending on social security in response to the coronavirus health crisis, but Viktor Orbán's government refuses to do so. The only significant policy response alleviating workers' financial burden is a limited wage guarantee scheme introduced on 8 April. The government covers up to 70 per cent (later increased to 75 per cent) of the lost salary for workers whose work time was reduced by up to 50 per cent (later increased to 75 per cent). To help companies find 'flexible solutions,' on 18 March, the government effectively suspended the labour code. This allows companies to diverge from regulations concerning work time, workplace arrangements, and the minimum wage threshold. [25] Finally, the political responses to the health crisis also include several highly controversial measures. Although the centralisation of executive power is a common approach in crisis management, the Hungarian government went further than most other democratic governments. In a widely discussed move, the National Assembly, relying on the qualified majority of Orbán's Fidesz party, passed an act that made the previously introduced state of emergency indefinite and allowed Orbán to rule by decree, postponing by-elections and national and local referendums, and curtailing public scrutiny by making the spreading of 'misleading information' about the government's pandemic response punishable by up to five years in prison. Although the special powers to rule by decree were phased out in June, some emergency regulations remain in place. A few days after introducing rule by decree, the government cut the funding of political parties by half, under the pretext of reallocating money to the coronavirus responses. The 1.2 billion forints (€3.42 million) reallocated is little compared to the budget of the crisis funds, but it effectively hinders the operation of opposition parties that overwhelmingly rely on state funding as a source of revenue. Bolstered by their oligarchs and the political use of governmental resources, this cut does not affect Fidesz. The central government also reduced the local governments' budget by centralising road tax revenues, with further selective punitive financial measurers targeting communities controlled by the opposition (e.g., Göd, Budapest District IX). How can we interpret the characteristic steps of the Hungarian government to tackle the pandemic? Although it might appear so, the government's most controversial policies in response to the coronavirus are not merely the product of irrational populist whims or the desire to exclude cultural outgroups. Except for a restrictive wage guarantee scheme and the freezing of loan payments, Orbán's government has not proposed any new benefits that would go beyond existing ‘workfarist’ social policy. The mandatory reduction of hospital beds exemplifies the illiberal state's health policy, which has already reduced health spending significantly since 2010. Public health care spending declined from 5.2 per cent of GDP in 2009, a level already low in international comparison, to 4.7 per cent in 2018. The number of hospital beds has also been reduced by 3000 after 2010. At a recent press conference, the head of the Prime Minister's Office said, 'as the coronavirus crisis also highlighted, we have to rethink the health finance … it is unnecessary to maintain hospital capacities that are not justified by the number of patients.'[26] The health crisis represents a unique opportunity to ‘free up’ further beds that will not be utilised even as the country slowly returns to normal functioning. Such a drastic cut to hospital infrastructure would be otherwise very difficult to push through under normal democratic circumstances. The policy logic behind the government's responses to COVID-19 corresponds to the logic of Orbán's socioeconomic strategy: workfare, social divestment, labour flexibilisation, and redistribution towards the upper-middle class and the national bourgeoisie. Democracy and political competition must be restricted to prevent a backlash from the victims of Viktor Orbán's illiberal populism. The introduction of ‘military leadership’ in hospitals helped to quell hospital directors' dissent against the drastic cuts to hospital beds. The curtailment of media freedom and party competition during the health crisis served to pre-empt the politicisation of diffused anger with the government's unpopular measures. ConclusionsWhat are the takeaways of Hungary's descent into illiberalism? Internationalist neoliberalism, with its focus on human rights and multilateralism, is on the decline globally. However, its alternative is not a post-WW2-type social democratic arrangement. Instead, a new, national-populist neoliberalism is on the rise. Neoliberalism is bifurcating. The rise of national-populists such as Bolsonaro, Trump, or 'Brexit-Boris' befits this new wave of national-populist neoliberalism, aptly captured by Reijer Hendrikse's term neo-illiberalism. Hungary signifies this tendency, combining neoliberalism with an authoritarian state and nationalism. The decline of democracy and Orbán's economic strategy are two sides of the same coin. Although an Orbán-style illiberal might not be their first choice, European and transnational economic elites display remarkable flexibility in coming to terms with Hungary's illiberalism. The classic internationalist-liberal strategy of naming and shaming populists will not suffice to prevent the rise of this Orbán-type neo-illiberalism. There is nothing inherently anti-illiberal in business elites – some of them support Orbán because he can pose as the sole political voice of domestic business elites while also ensuring transnational investors' loyalty. There is a role for more liberally minded investors, who have been so far mostly quiet about Hungary's regime. However, to fracture the alliance of domestic and global elites and illiberals, progressives also have to change. Instead of embracing the failed model of internationalist neoliberalism, they need to embrace the state as an economic agent. In parallel to reviving rule-based multilateralism, progressives need to embrace economic patriotism and deploy the state as a developmental agent promoting domestic value chains. However, most importantly, progressives need to earn back the trust of disgruntled workers at the same time. Breaking with internationalist neoliberalism, progressives have to embrace the state as the champion of social cohesion, convincing businesses along the way that inclusive development is their long-term interest also. Only the organised power of the masses can curtail the power of the elites. The solution for nationalist populism is not more neoliberalism. The solution is reinventing the left, a new progressive politics.  Image by under (CC).[1] Hungary – National parliament voting intention, Poll of Polls, Politico,[2] Marton Dunai, UPDATE 1 – Hungary arts university protesters defy order to end blockade, Reuters, October 2020,[3] Scheiring, G. (2020). The Retreat of Liberal Democracy: Authoritarian Capitalism and the Accumulative State in Hungary. Cham: Palgrave Macmillan.[4] Scheiring, G. (2020). Left Behind in the Hungarian Rustbelt: The Cultural Political Economy of Working-Class Neo-Nationalism. Sociology (Special Issue: Nationalism's Futures).[5] World Development Indicators, The World Bank, October 2020,[6] Employment rate by sex, age group 20-64. Eurostat, October 2020,[7] Pitti, Z. (2010). Economic Performance Contra Social Expectations [In Hungarian]. Budapest: Napvilág Kiadó.[8] Bohle, D. (2013). Post-socialist housing meets transnational finance: Foreign banks, mortgage lending, and the privatization of welfare in Hungary and Estonia. Review of International Political Economy, 21(4), 913-948.[9] Enyedi, Z., Fábián, Z., & Tardos, R. (2014). Parties and Voters, 2002-2014 [in Hungarian]. In T. Kolosi & I. G. Tóth (Eds.), Social Report 2014 (pp. 532-556). Budapest: TÁRKI.[10] Kalb, D. (2019). Post-Socialist Contradictions: The Social Question in Central and Eastern Europe and the Making of the Illiberal Right. In J. Breman, K. Harris, C. K. Lee, & M. van der Linden (Eds.), The Social Question in the Twenty-First Century: A Global View (pp. 208-226). Oakland, CA: University of California Press.[11] Bohle, D., & Greskovits, B. (2012). Capitalist diversity on Europe's periphery. New York: Cornell University Press.[12] Scheiring, G. (2019). Dependent development and authoritarian state capitalism: Democratic backsliding and the rise of the accumulative state in Hungary. Geoforum, Published online: 5 September 2019.[13] Szabó, A., & Gerő, M. (2019). Hungarian society and politics 2019: Political attitudes, integration and participation [In Hungarian]. Budapest: Centre for Social Sciences, Hungarian Academy of Sciences.[14] Scheiring, G. (2018). Lessons from the Political Economy of Authoritarian Capitalism in Hungary. Transnational Institute, Challenging Authoritarianism Series, No 1, April 2018. Amsterdam.[15] Simon Book, Deutsche Firmen in Osteuropa: Geschäfte machen beim Europafeind, WirtschaftsWoche,, January 2018,[16] Scheiring, G. (2020). Orbanomics: A polarising answer to the crisis of liberal dependent capitalism. Friedrich Ebert Stiftung. Budapest.[17] Gini coefficient of equivalised disposable income. EU-SILC survey, Eurostat, October 2020,[18] Data of total households by deciles, regions and type of settlements, Hungarian Central Statistical Office,[19] MNB. (2017). Financial assets of households based on micro-and macrostatistical data [In Hungarian]. Magyar Nemzeti Bank Statisztikai Igazgatóság. Budapest.[20] Gabor Scheiring & Kristof Szombati, The structural trap of labour politics in Hungary, Rupture Magazine, August 2019,[21] Gabor Scheiring, Hungarian opposition takes a crucial step, but still a long way to go for the left, The Foreign Policy Centre, October 2019,[22] Bíró Nagy, A., & Laki, G. (2020). Orbán 10: The last decade in the eyes of Hungarian society [In Hungarian]. Friedrich Ebert Stiftung & Policy Solutions. Budapest.[23] How central and eastern Europe contained coronavirus, Financial Times, April 2020,[24] This was reduced to 50 per cent a few days later – while reaching 60 per cent was postponed to an indefinite second phase.[25] Laszlo Bruszt, Labor Rights in the Time of Pandemic: Hungary’s return to the 19th Century in response to Covid 19, Public Seminar, March 2020,[26] Gergely Csiki, The real background of the reduction in hospital beds due to the coronavirus has been revealed, Portfolio, April 2020, [post_title] => FPC Briefing: The social foundations of stable illiberal-populist rule: lessons from Hungary [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => fpc-briefing-the-social-foundations-of-stable-illiberal-populist-rule-lessons-from-hungary [to_ping] => [pinged] => [post_modified] => 2020-11-16 12:51:41 [post_modified_gmt] => 2020-11-16 11:51:41 [post_content_filtered] => [post_parent] => 0 [guid] => [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw )[1] => WP_Post Object ( [ID] => 4163 [post_author] => 59 [post_date] => 2019-10-14 14:53:25 [post_date_gmt] => 2019-10-14 14:53:25 [post_content] =>

Gergely Karácsony defeated ruling party-backed incumbent István Tarlós in the Budapest mayoral election this Sunday. With 99% of votes counted, Karácsony gained 50.9% of the votes against the 44.1% for Tarlós. The opposition made enough of an advance in the capital to gain a majority in the Budapest Assembly as well. It now runs 14 districts out of the 23 in Budapest. Last time in 2014 Fidesz won in 14 out of the 23 districts. In addition to Budapest, there are 23 further cities – regional centres, so-called towns with county rights – in the country, here Fidesz fell back from 20 to 13 mayors and the opposition improved from 3 to 10. These are significant gains in an increasingly authoritarian hybrid regime.[1] However, outside the more populous towns, Fidesz gained even more seats than five years ago based on the county-level results. Further analysis is needed to assess the gains and losses in small towns and villages, but rural Hungary seems to be even more solidly Fidesz territory than before. Being present at the municipal level is a vital precondition for keeping alive the little political plurality that is left in Hungary, and is key for the organisational survival of the opposition. From this perspective, the local government elections brought advances for the opposition but also new challenges for the left.

The most important outcome of the election is the fall of the myth of Fidesz's invincibility. The opposition scored a critical symbolic victory that will allow it to regain momentum. After nine years of defeats, the opposition shows signs of vitality. There is a very long way to go to build a competitive alternative against Orbán’s Fidesz, but it became clearer what the crucial steps are. The strength of the opposition in cities lied in finding credible candidates, forming an electoral alliance and engaging in heavy fieldwork and grassroots outreach. This proved to be decisive even on a heavily tilted playing field, with the media and public institutions dominated by Fidesz. Gergely Karácsony, a former political scientist and campaign adviser, is a not a member of the pre-2010 left-liberal political elite, though not a total newcomer to politics either. He was the mayor of one of Budapest’s local districts for the last five years, scoring one of the few opposition victories at the 2015 municipal elections. He is chairman of a small left-green political party, Dialogue, a party formed by former LMP (Politics Can Be Different) politicians with an agenda of renewing the left and forging electoral alliances to re-democratise the country.

Karácsony was championing the idea of using primaries to elect the candidates of the divided opposition. Although often criticised for being too friendly and avoiding conflicts, during the campaign Karácsony also showed his passionate side. At the same time, his cooperative attitude proved to be essential in forging the oppositional alliance. The primary was able to mobilise not only established parties but also social movements and activists. You cannot beat Fidesz's imperial walkers with a bunch of uncoordinated rebels. This was the first time that parties agreed to this method, which proved to be a success, mobilising a large number of voters in Budapest in the summer to decide the mayoral candidate. As a result, the parties of the opposition were not preoccupied with infighting this time – a significant step ahead compared to previous elections. It took some time for politicians to learn to adapt their electoral strategy to the new regime, but it clearly paid off. Fidesz is no longer able to claim predominance over the ‘political centre’, a core tenant of Orbán’s illiberal regime that relied on competing oppositional forces to its left and right. With the electoral coalition between left-liberal parties and the deep-right Jobbik, the opposition looks competitive in size. This is important to further fracture the seemingly monolithic power bloc around Fidesz. The opposition needs enough weight to pull critical social groups out of the orbit of Fidesz.

However, finding the technically optimal form to cooperate is just a crucial first step. Regaining credibility after the disastrous years in government between 2002 and 2010 also requires new faces, new messages and a novel political style. After long years of technocratic politics, Karácsony brought a new focus on social justice, sustainability and participatory politics. His program focused on social housing, improving health care, increasing the role of public transportation and expanding green areas. His party is advocating for guaranteed basic income, and as a mayor, he introduced the first municipal-level guaranteed minimum income scheme. Crucially, so far Karácsony managed to stay clear of the murky, informal political-financial dealings that caused so much trouble for the Socialists.

At the same time, the pre-2010 elite learnt to step back. Ferenc Gyurcsány, the last prime minister of the Socialists who presided over the catastrophic collapse of the left has not yet retired, but has visibly withdrawn, leaving space for less-tainted figures to dominate the opposition. This is in sharp contrast to the last municipal elections when the opposition ended up backing Lajos Bokros as mayoral candidate in Budapest. Bokros, a former finance minister, is the most important symbolic figure of neoliberal austerity politics in Hungary, clearly connecting the opposition to the pre-2010 era much rejected by voters. Importantly, the opposition achieved these changes in political identity and style without deadly infighting this time. Cooperating and renewing the opposition in parallel seems to be thus feasible. From this Monday on, Hungary has several new mayors coming from progressive, social and environmental movements both in Budapest and outside the capital. Through Budapest, they will have a chance to show how they conceive of running a town – and a country. This is a crucial move towards disrupting Fidesz’s hegemony and building a viable political alternative against Fidesz for the 2022 national elections.

Unlike the last few elections, this election was also different because of the scandals of the previous few weeks. In the past, these scandals were targeted against the opposition by the right-wing political-media machinery. This time, dissenting members of the right-wing economic elite in a crucial town, Győr, aired a video about a drug-fuelled orgy involving the town’s mayor, Zsolt Borkai. This culminated into a nationwide scandal, revealing not only how the mayor likes to ‘spend his free time’ but also his shady business dealings. Although Borkai managed to regain his seat – Győr is a strongly right-wing town – the affair contributed to the success of oppositional candidates in other municipalities. Elsewhere, I have showed that the domestic business elite sides with Fidesz[2] in the hope of access to state funds and protection against transnational competition. I argued that this is one of the crucial pillars of the new right-wing hegemony in Hungary’s authoritarian capitalist regime. As long as the opposition does not manage to rupture this coalition, it will be tough to gain a majority. The Borkai-affair shows that disgruntled members of the economic elite might turn against Fidesz, and this can indeed improve the chances of the opposition. It remains open how far Fidesz will be able to keep up his alliance with the national business class, or whether others will follow in turning against them.

Another crucial pillar of the new right-wing hegemony is the working-class in medium sized towns, the rural middle class, small scale farmers and villages. The small-scale farmers and the rural middle classes have been historically leaning towards the right; it would be very hard to convince them to support the left. However, the collapse of the Socialist Party was in no small degree facilitated by the rightward turn of the working class disillusioned with the neoliberal agenda and the corruptness of the Socialists. Many of these towns voted solidly left until the second half of the 2000s; however, both Fidesz and the now-less-radical-right-wing Jobbik also made significant advances in the former working-class strongholds of the left. Although the few new mayors gained this Sunday in the large cities throughout the country contribute to the symbolic and organisational capital of the opposition, the disembedding of the left from small-medium sized towns has continued. This is what we have elsewhere called the ‘structural trap of labour politics’ in Hungary[3]: if the left remains confined to cities and their liberal-urban voters, it will be unable to forge a majority without the working middle classes of medium-sized towns. Due to Hungary’s electoral geography, with more than 3000 municipalities, it is unable to gain a majority without small-medium towns. Local electoral alliances led by Jobbik achieved several of the most significant victories in medium-sized municipalities. Former left-wing working-class strongholds are still solidly right-wing territories, even if Jobbik decided to ally with left-liberal forces. Such a tactical alliance seems to be crucial to re-democratise Hungary, but it also results in cementing the hegemony of the right in medium-sized towns. Furthermore, Fidesz is as strong as ever in villages and small towns. Using large towns to re-establish a foothold at least in medium-sized industrial cities is a crucial challenge ahead for the opposition. At the same time, the left will have a tough time to strengthen its networks in these territories, a vital task if it wants to be able to govern in the future without the support of the deep-right Jobbik.

This Sunday, Hungarians decided not to put another nail in the coffin of Hungary's dying democracy but to give it a chance with the defibrillator to revive it. Although Fidesz is as strong as ever in small towns and rural areas, in cities the opposition got stronger and regained control over Budapest. Similar to Turkey, this shows that competitive authoritarian regimes have their weak spots as long as they rely on elections to legitimate their rule. It is up to the opposition now to build the necessary social alliances required for a nationwide majority. At the same time, the left should not accept its role confined to the major cities, and be prepared to regain territory in industrial medium and small towns as well.

Photo by OSCE PA/Andreas Baker, under Creative Commons.

[1] Gabor Scheiring, Hungary’s regime is proof that capitalism can be deeply authoritarian, Open Democracy, April 2018,

[2] Gabor Scheiring, Lessons from the Political Economy of Authoritarian Capitalism in Hungary, tni, April 2018,

[3] Gabor Scheiring and Kristof Szombati, The structural trap of labour politics in Hungary, Rupture Magazine, August 2019,

[post_title] => Hungarian opposition takes a crucial step, but still a long way to go for the left [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => hungarian-opposition-takes-a-crucial-step-but-still-a-long-way-to-go-for-the-left [to_ping] => [pinged] => [post_modified] => 2019-10-14 15:03:52 [post_modified_gmt] => 2019-10-14 15:03:52 [post_content_filtered] => [post_parent] => 0 [guid] => [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 3 [filter] => raw )[2] => WP_Post Object ( [ID] => 3220 [post_author] => 59 [post_date] => 2019-02-18 13:12:30 [post_date_gmt] => 2019-02-18 13:12:30 [post_content] => Authoritarian leaders find it hard to tolerate independent voices, and academic freedom is no different. After Prime Minister of Hungary Viktor Orbán announced the year of the ‘culture war’, the government effectively banished Central European University from Budapest. The prestigious research institutes of the Hungarian Academy of Sciences are next in line. The pretext is the need for boosting innovation. However, the truth is that governmental policies under Hungary’s authoritarian state capitalism go against knowledge and innovation, and lock the country into an economy specialised in low value-added precarious production. After summarising recent developments on academic freedom, the article puts these into the context of Hungary’s economic model.From democratic backsliding to academic unfreedomThe recent governmental attack on the Hungarian Academy of Sciences (HAS) is part of a broader political crackdown on democracy, independent institutions, and academic freedom. In 2010, following eight years of the Socialists-Liberal coalition being in power, Viktor Orbán conquered the Parliament with a sweeping electoral success. He started off a massive restructuring of political and economic institutions. The new Parliamentary majority unilaterally passed a new constitution and has, over the years, systematically dismantled the system of checks and balances, starting with the constitutional court and most recently the judiciary in general.[1] State propaganda campaigns, with a budget ten times bigger, than the total budget of the opposition, directly underpin Fidesz-propaganda[2], state-owned companies graciously fund loyal civil society groups organised from above[3], while attacking independent NGOs.[4] Hungary is the first country in the European Union (EU) that is no longer categorised as free by Freedom House.[5]Significantly increasing political control over university affairs, the government placed all universities in the country under the supervision of so-called chancellors in 2014. In Hungary, universities are headed by the rector, elected by the senate of each university, a position similar to the vice chancellor in the UK. The chancellors are appointed directly by the Prime Minister, with the minister for education acting as their superior, not the rector. They have significant decision-making authority in strategic, organisational and financial issues. Rectors were thus left overseeing educational and research matters – as long as they do not involve financial questions. Although there is no direct control over what university staff does in terms of teaching and research, the increased political dependence has created an environment prone to soft censorship. Last summer, the government went further and banned gender studies from universities, the first time an EU member state has unilaterally barred universities from issuing degrees in a certain subject. The male-dominated Fidesz government has a deeply conservative, outdated vision about women’s role in the household and see women as living wombs tasked with reproducing the nation. Viktor Orbán’s right-hand man, László Kövér, once infamously declared “We don’t want the gender craziness. We don’t want to make Hungary a futureless society of man-hating women”.[6] Beyond the obvious culture war dimension of this attack, anti-genderism is also used to bolster support among working-class voters. There is no word for gender in Hungarian, which in itself makes the gender movement suspiciously elitist for many.In April 2017, the Hungarian Parliament passed a law which regulates the status of foreign universities operating in the country and modifies the National Higher Education law (also known as Lex CEU). The government used this regulation to stymie the functioning of Central European University (CEU), an institution that has long angered Orbán.[7] CEU was founded in 1991 by Hungarian-born investor George Soros, with the mission to promote the values of democracy and open society. Over the years, CEU has emerged as one of the best universities in the region, until it became one of the prime victims of Hungary’s authoritarian turn. The government stripped CEU of the right to issue US degrees in Hungary, thus forcing CEU to move most of its degree programmes from Budapest to Vienna.[8]Attacks on the Hungarian Academy of SciencesThe Hungarian Academy of Sciences, founded in 1825, is the dominant research organisation in the country and a major centre of cultural life. It employs 5000 people, including 3000 researchers. It consists of multiple parts, from a library through to a publishing house and a membership-based academic body. The research network of the Academy comprises 15 independent research centres, involving 44 basic-research institutes as well as more than 130 research groups at universities co-financed by the Academy, accounting for one-third of all scientific publications produced in Hungary. This network was thoroughly reformed in 2011–12 by President József Pálinkás, a scholar and former conservative minister of education, giving it its current form, also introducing a new scientific performance evaluation and increasing the role of tender-based financing. Until now, the Academy was allocated an independent budget, and strategic decisions about the direction of research were made by the researchers and the heads of research institutes.The latest attack on the Academy began with a smear campaign against researchers at the Academy. An article in conservative magazine Figyelő a pro-government mouthpiecelisted all researchers at the Centre for Social Sciences who study immigration, gay rights and gender, attempting to ridicule their work.[9] The article claimed that the research at the Centre is politically suspicious and argued for greater governmental insight into the Academy’s work. In parallel, the government created a new ministry, the so-called Ministry for Innovation and Technology, led by Minister László Palkovics. This was followed by a decree approved by the Parliament in July 2018, which ordered a complete restructuring of the organisation and funding of academic research at the Hungarian Academy of Sciences. The decree also ordered an evaluation of the Academy’s research centres to be finished by March 2019, the outcome of which will determine which institute stays open, which ones will be merged with a university or closed.However, the sincerity of this evaluation was put in doubt as the government also announced that from 2019, the Academy’s 28-billion forint (US$98-million) research budget will be transferred to the Ministry for Innovation and Technology – without waiting for the results of the evaluation. In December last year, Innovation Minister László Palkovics said that the Ministry would release funds from the academy’s budget for the salaries of the academy’s researchers for the first 3 months of 2019 until the “new structure and financing model” for research is put in place.[10] At the same time he also said that the Ministry will continue to withhold running costs for the institutes in this period and that the Academy should secure the money for overheads from other academy resources and through external (mostly EU) applications.After April, the entire funding of the Academy will be based on applications. The Ministry divided the entirety of science into four sections: (1) secure society and environment; (2) industry and digitalization; (3) health; (4) culture and family. Social scientists and humanities researchers are expected to apply for financial support under the ‘culture and family’ heading. The funding of these fields will also be slashed by about 40%. However, in addition to the cuts, the call for proposals – that will redistribute the money taken away from the Academy – will not only be open for the research institutes of the Academy, but also for other universities and state-funded research institutions. The whole system is put together in three months, and although the evaluation criteria of the 4,000-words ‘applications’ requested by the Ministry are unclear, we know that they will be judged by a body under the direct control of Palkovics’s Ministry.Understandably, this whole procedure infuriated the staff and the leadership of the Academy, who point out that the whole manoeuvre of the government is illegal, as the 2019 budget accepted by the Parliament guarantees the funding of the Academy. However, the Academy is not completely hostile to the reforms. The Presidium of the Academy declared that “Based on the results of the audit, we are ready to make the necessary structural changes”, at the same time rejecting sacrificing social sciences at the altar of fake economic innovation.[11] However, the views of scientists have not been appropriately taken into consideration. Péter Somogyi, a HAS academic who is based at the University of Oxford, UK, says that the Ministry’s actions have created an atmosphere of uncertainty and fear.[12]Facing a government unwilling to change its policy, the employees of the Academy have launched a solidarity campaign[13] and welcomed a spontaneous demonstration that formed a human chain around the Academy of Sciences building in Budapest. Despite growing international solidarity[14], the EU has done nothing to stop the process. Notwithstanding the occasional condemnations here[15] and European Parliament (EP) resolutions there[16], overall, European elites have been paralysed by Orbán’s attacks on academic freedom. Article 7, triggered last year by the EP, was never really meant to lead anywhere, and the European People’s Party (EPP) keeps Fidesz among its members. In December 2017, the European Commission referred Hungary’s higher education law to the European Court of Justice on the grounds that infringes on the rights of universities, but the court has not yet discussed the case, allowing CEU to be banned from the country. European academics, all Jean Monnet Chairs, have also previously decried the EU’s ‘inaction in the face of the Hungarian government’s attacks on CEU’ in an open letter to the President of the EU council.[17] Recently, the EP has voted to tie the new EU budget to the rule of law, but we have yet to see how this will play out in the future.Authoritarian state capitalism against the knowledge economyThe government’s pretext for the massive overhaul of the funding and organisation of science is the need to promote innovation and increase the country’s global competitiveness. But is that really the case?Through a series of overt and covert measures, the government has indeed attempted to prop up capital accumulation, also for transnational investors, but especially for national big businesses[18]. Among others, the government eliminated the second tier of the corporate tax (previously 19%) and introduced a flat 9% tax in 2016. In reality, the largest corporations pay much less tax due to various tax incentives and allowances offered by the government, so that the government calculated with an effective tax rate of 5% for the 2019 tax year.[19] The largest companies are able to reduce even this level with intra-company transfer pricing and other mechanisms. The actual corporate tax paid by 30 of the largest companies in Hungary on their income before taxes is only 3.6%.[20]The Orbán-regime has significantly increased the subsidies to large corporations. Between 2004 and 2010, the total value of subsidies was 130 billion forint ($456 million), between 2011 and 2018 this has grown to 347 billion forints ($1.22 billion). The state has also signed Strategic Partnership Agreements with the largest, mostly transnational corporations in the country, altogether 79 until the end of 2018. This helped to pacify transnational business engaged in technology-intensive production. In fact, the editor of Budapester Zeitung, a leading German-language newspaper in Hungary, said in a report by WirtschaftsWoche that 90% of German investors in Hungary would vote for Orbán.[21] As long as German big business enjoys Hungary’s authoritarian state capitalism, it is unlikely that the EPP – dominated by German conservatives – will step up against Fidesz, or the EU would enact substantial measures against the Hungarian government. Angela Merkel was rather friendly in February this year at the latest meeting of the Visegrád 4 (the political grouping comprising the Czech RepublicHungaryPoland and Slovakia), avoiding any criticism of the Hungarian government’s attacks on academic freedom.Although these measures might be able to bolster the support of the government among local and international elites, they have not been enough to improve the country’s innovation potential or its international competitiveness. In fact, many of the government’s measures were explicitly directed at reducing the knowledge intensity of the economy. The government’s most important aim is to make big money and to make Hungarian big money happy, the ignorance towards education is a direct result of that. Hungarian national capital is overwhelmingly located in low-skill, non-tech sectors of the economy: construction, agriculture, retail, as well as non-tech industry manufacturing basic materials. To increase their production, these companies need low-payed low-skilled workers.László Parragh, chair of the Organization of the Hungarian Chamber of Commerce and Industry, one of the central lobby groups of Hungarian national capital and a major figure behind the government’s educational reforms, proudly asserted, “We have been partners in crime with the government”. Although, he thinks that economic rationality would have necessitated the compulsory education age to be reduced to 15.[22] Altogether, the state slashed education spending from 5.4% of GDP to 4.9% between 2009 and 2016 (EUROSTAT, 2018b), reduced the compulsory education age from 18 to 16, and also curtailed state-funded higher education, which led to a 15% decline in tertiary school enrolment from 2010 to 2016.[23]If promoting innovation and increasing the country’s global competitiveness was really the goal of the government, it has done very poorly over the past eight years. The economy’s declining innovation-potential led to a decrease in the share of high-tech goods in the export since 2010, with a continuous decline in the country’s economic complexity index, an indicator created by researchers at the Massachusetts Institute of Technology (MIT) to measure the knowledge intensity of an economy.[24] Focusing on low-skill labour also did not help to close the productivity gap between Hungarian and transnational corporations. In fact, it has slightly grown from 2.96 in 2010 to 3.14 in 2015 (a foreign-owned company produces 3.14 times as much added value per employee as a nationally owned company) according to my estimates based on data from the EU’s FATS database.[25] The post-2010 government has thus effectively locked Hungary’s economy into a model specialised in low value-added precarious production, the exact opposite of an innovation-led knowledge economy.Instead of genuine concern for innovation, the government’s aim is more likely purely political. The reorganisation of the Hungarian Academy closely follows Putin’s attack on the Russian Academy of Sciences in 2013–14 and echoes Erdogan’s purge of dissenting intellectuals.[26] The goal is to reduce the Academy to an innocuous ‘academic club’ of mostly retired members, while the government gets a free hand in allocating scientific funding. When successful, these attempts will contribute to cementing Orbán’s power and increase the stability of Hungary’s variant of authoritarian state capitalism.Photo by Aisano, published under Creative Commons with no changes made.[1] The New York Times, 2018b. Hungary’s Judges Warn of Threats to Judicial Independence. Benjamin Novak and Patrick Kingsley, The New York Times, 2 May 2018, URL: [2], 2018. Hungarian government spent €40 million on anti-Soros propaganda in 2017. Katalin Erdélyi,, 4 February 2018, URL:[3] Hungarian Spectrum, 2017. Fidesz’s very own 'NGOs' stuffed with public money. Éva Balogh, Hungarian Spectrum, 13 May 2017, URL:[4] The New York Times, 2018. How Viktor Orban Bends Hungarian Society to His Will. Patrick Kingsley, The New York Times, 27 March 2018, URL:[5] Freedom House, 2019. Democracy in Retreat: Freedom in the World 2019. Washington DC: Freedom House. URL:[6] Zsubori, Anna, 2018. “Gender studies banned at university – the Hungarian government’s latest attack on equality”. The Conversation, 9 October 2018. URL:[7] Enyedi, Zsolt, 2018. “Democratic Backsliding and Academic Freedom in Hungary”. Perspectives on Politics, 16(4), 1067-1074. doi:10.1017/S1537592718002165[8] CEU, 2018. CEU Forced Out of Budapest: To Launch U.S. Degree Programs in Vienna in September 2019. Press release, 3 December 2018, Central European University, URL:[9] Science|Business, 2018. Orbán allies target Hungarian social scientists, in battle with Academy of Sciences. Florin Zubașcu, Science|Business, 22 June 2018. URL:[10] Science|Business, 2019. Government continues crackdown on academic freedom in Hungary. Florin Zubașcu, Science|Business, 22 January 2019. URL:[11] Science|Business, 2019. Government continues crackdown on academic freedom in Hungary. Florin Zubașcu, Science|Business, 22 January 2019. URL:[12] Nature, 2018. Hungary’s government throws science academy into turmoil. Alison Abbott, Nature, 17 December 2018. URL:[13] Hungarian Academy Staff Forum (HASF) website, URL:[14] Hungarian Free Press, 2019. Alberta’s Wirth Institute in solidarity with Hungarian Academy of Sciences. Hungarian Free Press, 12 February 2019. URL:[15] Science|Business, 2019. EU vice president decries ‘systematic pressure’ on academic freedom in Hungary. Florin Zubașcu, Science|Business, 31 January 2019. URL:[16] Inside Higher Ed, 2018. EU Acts Against Hungary, Citing Academic Freedom. Elizabeth Redden, Inside Higher Ed, 13 September 2018. URL:[17] See the whole latter at[18] Scheiring, Gábor. 2018. "Lessons from the Political Economy of Authoritarian Capitalism in Hungary", Transnational Institute, Challanging Authoritarianism Series, No 1, April 2018. Amsterdam. URL:[19] Menedzsment Fórum, 2018. Here is the proof that Hungary is a Tax Haven (In Hungarian: 'Íme a bizonyíték, hogy Magyarország adóparadicsom'). Zoltán F. Baka,, 5 July 2018, URL:[20], 2018. 30 of the largest multinational companies could siphon off 48 billion forints each year from Hungary (In Hungarian: 'Évi 48 milliárd forintnyi társasági adót trükközhet ki az országból 30 magyarországi multi'). Péter Bucsky,, 12 November 2018, URL:[21] WirtschaftsWoche, 2018. Deutsche Firmen in Osteuropa: Geschäfte machen beim Europafeind. Simon Book, WirtschaftsWoche,, 30 January 2018, URL:[22], 2017. László Parragh: I admit that we have been partners in crime with the government (In Hungarian: 'Parragh László: Tettestársak voltunk a kormánnyal'). Attila Buják, 30 November 2017, 168 óra, URL:[23] World Bank, 2018. World Development Indicators, 1960 - 2017. Available online at (last accessed on 07 December 2018), The World Bank.[24] MIT, 2018. Economic Complexity Rankings (ECI). The Observatory of Economic Complexity, MIT Media Lab, last accessed on 20 December 2018, URL:[25] EUROSTAT, 2018a. Foreign affiliate statistics (FATS). Eurostat Foreign affiliate statistics (FATS), Last update: 22 February 2018, URL:[26] Zgut, Edit, 2019. Orbán’s Next Victim: the Hungarian Science Academy. The Visegrad Insight, 11 February 2019. URL: [post_title] => Academic Freedom in Hungary’s Authoritarian State Capitalism [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => academic-freedom-in-hungarys-authoritarian-state-capitalism [to_ping] => [pinged] => [post_modified] => 2019-09-24 11:41:01 [post_modified_gmt] => 2019-09-24 11:41:01 [post_content_filtered] => [post_parent] => 0 [guid] => [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 1 [filter] => raw ))

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