In two episodes, 444.hu eloquently summarizes the past and present state of Hungarian politics and beyond. Scroll for English translation the box under the video.
—The governing West and Development Association fell because of the bitcoin crisis. Tens of thousands of protesters turn to the streets, the Strong Mustache Party stated that after emerging into power, they will end the corruption and bring order to the country. Young people have had enough of the past eighty years, they don’t believe in any of the political parties. Meanwhile, the government entered into a strategic agreement for tax advantage with a German producer of dream simulators.
When we look at the promises and the objectives of the government, we can debate about whether these were successful or not. There is, however, one issue they definitely managed to follow up on. This:
Today, we think a lot about other forms of state. Systems that are not necessarily western, not necessarily liberal democracies, probably not even democracies, but even so successful in achieving the goals of the population. So the new state we are building in Hungary, is a il-liberal state, not-liberal state.Some people start worrying hearing this, others applaud, what is certain, is that Hungary is not pursuing the western model of development any more.
– It is estimated that the wealth of Lőrinc Mészáros increased by 200 million forint per day during the previous year.
– I think it was just about time the Népszabadság (critical newspaper) ceased existing unsuspectingly.
– What was the topic for the public referendum initiative that you just filed?
– I don’t know what you are talking about.
– Németh Szilárd about civil organizations:
– These organizations should be pushed back by all means and, if you ask me, eradicated.
– Origo goes to Matolcsy Ádám:
– Overnight, the son of National Bank chief Matolcsy became an influential media mogul
But why? A lot of people ask themselves the question how did it get so far. Of course, we can blame Orbán, and Gyurcsány, or even, for that matter, Kádár the party leader in the previous socialist system, – all justified, but not enough. It is simply not true, that by changing the political elite, the puppets, we immediately and magically solve the problems. In the first part, we will talk about the reasons the present situation came into existence, in the second part, we will discuss the question whether it is true what the system says about itself. In the end, we will see why it appears a necessary thing that over and over again the same type of situation evolves.
Part 1 – The Cult of the West
The elections of 2010 were called revolutionary by Viktor Orbán, but at that time it was not entirely certain what kind of system it was that changed.
– today, a revolution took place in the voting booth
– and this is how it happened, the armed revolution of 1956, the constitutional revolution of 1990 and the two-thirds majority revolution of 2010
– which opened the possibility for a new political, a new economical, a new cultural, in general a new set up to be achieved
Now we know, that the ideology that got demolished, was the ideology of the post-socialist period since 1990.
What was that ideology again?
During the 15 – 20 years that passed after the 1990’s system change, the politicians and intellectuals talking about the future of the country had one main message. Hungary should be more like the West. The people here need higher wages too, more possibilities to spend that money on consumer goods, better participation in politics and relief from the eternal lies of the state apparatus they were hearing all the time. This desire actually materialized, partly.
– Do you know how you can tell whether a piece of equipment is Elektra? It is written on it! Here, and here, of course! Elektra VCR’s and television sets, Elektra for superior quality and affordable price!
– I like it!
OK, but how can we be just like the West?
– The speed of privatization or dismantling of state companies is too slow, also according to the government, even when taking in consideration that the size and type of the Hungarian transition is entirely different from a functioning western economy.
In that times, the dominant recipe to do it was clear. To achieve this, follow the directions of western advisers unconditionally: quickly dismantle the socialist state and hurriedly privatize the state enterprises, open the gates for western companies and ready is capitalism!
– The task is still the same, from the approximately 2200 Hungarian state enterprises, only about 100 should remain in state ownership.
But not just that they wanted to speed up privatization. It was necessary as well, since the country was highly indebted due to the loan burden accumulated under the socialist Kádár regime.
– The prime minister declared that, during the 70’s and the 80’s, the official figures presented to describe the Hungarian debt situation were inaccurate. The explanation for this was, that the leadership was afraid further loans would be withheld and the country would collapse financially. In the mean time, we lived as if nothing threatened our existence, leading to the doubling of the country’s debt in 1987.
And how to make money quickly? By selling the state companies. Politicians of that era talked about that as if it were the natural good thing to do, because only then the super fast capitalist development would start.
– Work is calling, load is stressing
machine is running, production growing
turn your back to the world
for a fight will be a fight
However, this didn’t happen. More so. Almost the opposite happened.
– Good evening, I am Gábor Kapuvári. I can’t remember this kind of bad situation. The price increases immediately forecast the type of season we can await. People claiming to see the light at the end of tunnel, are definitely too optimistic.
– I am from Mogyoród. A widow with pension for my own account. 11160 forint. I want to ask you. I have 2455 forint from which to eat. How can I live from that?
Following the western example brought the expected increase of life standards only for the elite and the upper middle-class Hungarians, approximately 8-10% of the population. The size of the Hungarian economy decreased by 20% between 1990 and 1993 – implying a crisis more than two times the size of the 2008 economical crisis. After 1989, an enormous amount of people, nearly 1.5 million, lost their jobs.
This figure was incredibly high even in comparison to the other Eastern European countries. The governments of the time subtly pushed the losses of the system change into the social sphere, for instance by means of lowering the retiring age. Towards the increasingly disgruntled state citizens, the uncritical followers of western approximation just continued to explain that these are only temporary teething problems, after which all will be well.
It is easy to be a liberal in ideological respect. Especially when taking into account the victorious path of liberalism during the past 15 years. During these past 15 years almost all of the large left wing and right wing parties adhered to the liberal principles.
To gain a better understanding of this logical train of thoughts, it may help to distance ourselves from Hungary in the 90’s both in time and space, to Melanesia in the 1940’s.
– Sorry? Where to?
To Melanesia in the Pacific Ocean. During WW II the Americans built temporary airbases. The local people got acquainted with a lot of new things. The arrivals supplied them with clothing, medicines, food and similar. Thus, the concept of airbase became similar to these goodies. Towards the end of the war the Americans moved away and the flow of goods dried up. The Melanesians were disappointed. To lure the goodies back, they started to imitate the circumstances needed for supplies to arrive. They made landing strips with stones and wood, raised a flight tower and even built a life size model of a plane. And waited for new supplies to arrive. This became known as the supply-cult.
Something like that represented the ideology of the Hungarian elite after the system change: we produced the decors and props for capitalism – we have private ownership, free market, even exchange market – and all we have to do is wait for the arrival of welfare like the Austrian or Dutch already have. But they are only props.
But why? To understand that, we need to comprehend what the basic difference is between rich and poor countries: rich countries are rich basically because they produce products and services that can be sold expensively throughout the world. In our case only a few successful companies exist, which is not surprising since after the transition there were hardly any private Hungarian people left with enough capital to re-start large companies. Thus these went over to foreign ownership.
– Prime minister Antall József declared: thanks to the Opel factory we receive America’s and German’s most modern technology and become further part of the global economic system.
Towards the second half of the nineties, Hungary became one of the world’s most open economies.
In itself this doesn’t have to be a problem, we will not start shouting against multinational companies, now. Without a doubt, multinationals created many job opportunities in Hungary. Still, when the majority of production is in foreign ownership, this will have an important effect on the long-term economic development of a country. And that effect is not necessarily positive.
Suzuki production line
working in the Suzuki factory
polishing the cars until i am free
For starters, Austrian or French companies pay little taxes, while the profits flow back to the motherland. Later more about that.
Furthermore: if the expensive consumer goods are produced by foreign companies, what remains there for the Hungarian companies?
Simplified: we try to sell cheap things while we buy expensive goods from abroad.
Thirdly: foreign companies predominantly outplace the simple, lower added value type of production abroad. Not hard to imagine that with production that can be done almost in every neighboring country, it is hard to be booming.
While the Hungarian economical policy aimed at being attractive for foreign capital, Hungarian companies were neglected. On stage, the impression was projected that Hungary is moving towards the West unstoppably, in reality, the foundations for the country to become successful were entirely absent.
– I did not have a choice. I did not become entrepreneur because I wanted to leave the Videoton company were I worked. I was forced, please understand. I did not want to be entrepreneur from the beginning on, or something like that. No. I needed two years to find out that I am an entrepreneur. Only during the past few months I finally understood what it really means, to be an entrepreneur.
For historical reasons, Hungary stayed out of the loop when it came to technological development and there never was enough capital to substitute the lack of development overnight. This means that we can not develop ourselves sustainably, we require foreign technology for that. In itself, this would not have to be a problem. However, previously, we saw that the uncontrolled inflow of foreign companies hampers the development of Hungarian companies. Foreign loans, for that matter, have the tendency to crash unexpectedly.
Let’s hear what Antall József, prime minister of that time, had to say about it in 1990.
– Real democracy can only work in situations where the parliamentary democracy can build on a wide central layer and a prosperous, broad middle class. Where substantial parts of the population are embittered and impoverished, parliamentary democracy can not prosper.
We already talked about it that the western living standards were reached by only few Hungarians. And then the problems really started. In the beginning the wages grew a little, but not as much as in similar countries. And what do people in this kind of situation do? They take out loans! Between 1999 and 2006 the debt levels increased tenfold, with not much later the valuta-crisis as a result. The state also became indebted dangerously, so in 2008, the country and part of the population almost went bankrupt together.
The global economic crisis came to Hungary and met the political crisis.
Around that time, the majority of the people finally lost their remaining faith in the ideology of free market and unrestricted openness. It was clear that western living standards were not to be expected anywhere soon – so much so, that in 2009 the Hungarians’ opinion about capitalism was the worst in the region.
In the same period Orbán Viktor started deliberately addressing the responsibility of the left-liberal economical policy, while a little later he pronounced the voting ballot revolution.
– Everywhere I come, whomever I talk to, the message is clear: this has to stop. The people decided this can not go on.
– The person of the prime minister is secondary. What is important, is in what direction the country’s economy will develop further.
– By removing the economical self-defense rules, the foxes were allowed into the henhouse, in order to have free competition. Nobody seems to be able to help that the foxes are winning every time.
What this revolution did was wiping out the notion that for obtaining western living standards, nothing should be done at all. Instead, features like the unorthodox economical politics followed suit, aiming at the banks
– With clear heads, it is unacceptable that the banks are considered holy cows, even while at the same time we experience a global crisis, caused by the banks themselves.
And no longer is it unheard of for the government to assist homegrown companies
– If Hungarian companies want to achieve a competitive position in the European and world economical sphere, the state should not act as a restrictive force on development – as was the case during the past two decades – but in terms of a resource.
And indeed, speaking out about issues that weren’t really part of the political palette until now:
– We were the first to start the revolution when we sent the IMF home, we started to charge the banks, tax the multinational companies and consolidate the loans in foreign currencies.
This is all very important, because these issues are one of the cornerstones of the present political system, as much as Orbán Viktor charisma or the political games of Fidesz. And because that system is right in acting out against the uncritical western consensus that brought disappointment for the majority of Hungarians.
Now what, so Fidesz was right all the time? Not exactly. Because at the same time other benefits of the transition got thrown out with the bath water: free press, the constitutional state and solidarity, to be replaced by illiberalism. This is not necessary. Bank tax was introduced in Austria as well, but without undermining the constitutional state. Furthermore, the real root causes for the Hungarian state of dependence were not addressed; under the flag of freedom fighting, they started something entirely different. The next episode will be looking into that deeper.
SECOND EPISODE – The War-of-Independence Cult
The Colony of the Galactic Hungarian Order guided the country poorly. After the Solar System loan crisis reached us, their support crumbled, the presumed winner of the coming elections being the Comet Society, promising closer ties to the Sun and more open politics. Young people are fed up with the past 1200 years, lost faith in politics entirely. In the mean time, the leaders of the Colony negotiate tax breaks with the intergalactic consortium of Brainwave Hyperdrive producers.
In the previous part we mentioned that the System of National Co-operation was an answer to a real problem. Orbán Viktor often stated he intended to counter the economical dependence of Hungary.
– After 2002, the people were not aware that they were given easy loans, used to cook us slowly.
– The primary goals of our economical policy is regaining our independence, or, freeing ourselves from the debt trap the Hungarian government is in at the moment.
So that was why Orbán proclaimed the economical war of independence in 2010: first against government debt, second against the influence of multinational companies, at the same time stimulating certain Hungarians companies.
Part 2: the cult of the Independence War
Let’s start with the national debt. Indeed, since 2010, the state debt decreased by approximately 6%, large part of which was the debt in strong currencies. In itself this is a nice result, but not the entire picture.
– For starters, a strong nation, a strong country doesn’t live to the expense of others.
But still we will be needing foreign money. The difference is, that nowadays this amount is primarily EU money. This year a profound study, ordered by the office of the prime minister, noted that without EU support there would not have been economical growth between 2006 and 2015, moreover, the Hungarian economy would have shrunk.
Another issue: it seems that the money from the EU will become considerably less in the close future. The government started to look around for other financing opportunities, with one of the best examples being the incredibly large loans requested in connection with the Paks nuclear power plant.
– Without doubt, the international economical situation of Hungary improved considerably during the past period, but we have an agreement with Russia, a good agreement, and we don’t want to risk that agreement but we intend to follow up on that and execute the agreement. We can’t wait for the work to begin, what kind of nuclear plant is that what we are only talking about without having seen it at all.
So, regardless the claims of Orbán Viktor, Hungary is still living on the expense of others, even though these others are not the same as the previous others.
But let’s look at the ‘War of Independence’ other main front. The System of National Co-operation promised to counter the grip of multinationals.
– The case is, ladies and gentlemen, that this money will be taken from the multinationals. I might as well say that I will take it from them, because apart from me, in the beginning, there were not many people believing in this promising possibility.
– Communication is an important feature of politics, but it cannot overrule the truth. The truth is always on the first place.
The truth is, that the present government treats the multinationals often kinder than previous governments. Sounds strange? Let’s take a look at some statistics. Part of the EU money should be spend on economical development. How much support went to Hungarian companies? 34%. The remaining 66% is divided among multinationals. This rate is quite low even when compared to Poland or the Czech Republic. This concerns the EU resources. Apart from that, the Hungarian government provides immense financial support to large companies to persuade them to open factories in the country. Of these sums, 25% is reserved for Hungarian companies. The Fidesz governments gave, in the war against the multinationals, almost two times as much non-refundable money as the previous socialist governments.
– You are the light, in the night,
come and work, in the lamp factory
After all these serious setbacks, the multinational companies must be praying for their lives. But only then Fidesz finishes them off entirely: next to the free money, tax exemptions are offered as well. Last year, the government lowered the tax on profits – from 19% to 9% – making Hungary the country with the lowest tax in the EU.
Summarizing: the result of the Independence War has been that the multinationals received more money and pay less tax than before.
– We will not be colony!
The international economic dependence of Hungary, in the sense that Hungary functions as a cheap assembly factory of foreign companies, is not decreased but has grown under the War of Independence. Even the government seems to realize this is contradictory.
– For me, when somebody says ‘look how much profit this company is making in Hungary’, for me this is not bad news, but I am happy about it, because this company will invest more, this company will bring work, will pay decent wages, and the Hungarian people will be able to support their own families. So, all the critics of the opposition, all the things they say about how much money we give foreign companies, I will say them: ‘should we not be giving money to make them stay here and invest money? Should they be going to Slovakia? – That happens! – Yes, it happens. The politician of the opposition should be going to Győr to the Audi factory and say to the people over there: ‘it is not good that Audi is here, they should not be supported, the factory should not be here!’
And now, let’s hear what the most honest Fidesz member of parliament said:
– Freedom, freedom. There is no freedom. There never was. If somebody uses that word, it is theater. That’s not serious politics.
– I like girls, I laugh crying, what would Brussels say? / I make crosses, I fire arrows backwards, what would Brussels say?
All of this has serious consequences.
We can understand why the European Union did not go beyond a few scratches when Hungary’s illiberal politics openly denounced some major basic principles considered to be holy. Worries about the constitution and free press? The companies of the core EU countries keep profiting from the Hungarian economy. Western companies drown in advantages and Western companies receive the bigger part of the EU money for construction projects.
– I ask you, respect here well / old Europe, beautiful woman
Leading politicians in Europe are not interested in getting tough on Hungary, because that would harm the interests of their own companies and economy. Basically, the German commissioner Günther Oettinger acknowledged that.
OK, but what is the situation on the other front in the War of Independence, raising large Hungarian companies? This would be even more important than the previous theme, because the problem is not the multinational companies, but the lack of Hungarian companies. Orbán Viktor has often said that a main goal is the creation of a national capitalist class.
– We need successful entrepreneurs with large amounts of money, if not, everything in this country will be taken by the foreigners. In my opinion, when you speak out against the Hungarian rich class, you are guilty of collaborator policy.
The War of Independence has a demarcation line. It is possible to divide the economical sectors in two areas: one in which independence is to be achieved, and one which is to be left alone.
In sectors producing for the Hungarian market and thus unable to go abroad – for example media, advertising, retail or road construction – the government is brave enough to challenge the foreign companies. We can see the companies enriching themselves.
– I did not add up everything, how much it is. I have wealth, of course, but I can’t judge how much that is.
– Last year Mészáros Lőrinc did even better: his worth of 8.4 billion almost tripled last year, reaching 23.8 billion forint according to estimations, making him the 31st richest Hungarian.
– Mészáros Lőrinc and family increased their wealth 5-fold last year. He appeared in the hotel business, in the media, increased his real estate worth number of construction companies, his wife and children bought over 1500 hectares, what’s more, the worth of the gas fitter and mayor of Felcsút will reach 120 billion forint.
Automobile industry, chemicals or electronics are different. These plants can leave the country anytime to set up shop in Romania or China. They are not primarily producing for the Hungarian market, which is why the government will not touch these sectors at all. Instead, like we saw earlier, they are treated very well.
So this is a war of independence that does not deal with the real roots of the dependence, but instead uses the war ideology to help a small circle prosper enormously.
Not surprisingly, the new system required the demolition of the constitutional state, because the redivision of wealth would probably fall short on first inspection. Without public prosecution, there are no limits anymore.
Bechtel scandal, Vizoviczki scandal, the Roma self government financial scandals and the MNB foundations. No word about these issues by public prosecutor Polt Péter, who stated to only talk about the proceedings of the 2015 report.
– I state that the public prosecution fully fulfilled the expectations as held in the constitutional state.
Familiar? A Hungarian system builds the props of something but happens to forget to introduce the main part? Let’s return to Melanisa!
This was the topic of the previous part. The western concensus built the requirements for capitalist growth and waited for the results. The next system – denouncing the previous one – built a set of new props – the War of independence – and waits. But every system has losers, and both systems need an ideology to explain the masses to hold on and wait for better times. After the transition, the ideology was as follows: liberalization is the only way to freedom and democracy. Accordingly, the situation was explained to the people by the elite. This narrative finally lost persuasive power during 2008, the frustration and anger of that period proved to be fertile ground for the 2010 overhaul. Although it is true that even in the of Orbán Viktor system things take place without consent of everybody, still the new ideology successfully pushes the view forward that this political system is the only collateral for retaining the Hungarian way of life.
– We don’t need fences, let people come in as they please. Later, they will take away everything, anyway. That isn’t a problem either, if only the power would remain, the country, our beautiful Hungarian country, our faith, our houses, wives, everything, it doesn’t matter to them, only power, but
we have our opinion and that is: don’t be afraid, don’t be afraid, look each other bravely in the eyes
So that is the situation repeating itself over and over.
– Of course, there will always be people who don’t like it. But what can we do about it? A system that everybody likes, is impossible to make. What is liked by Weis Manfred, is disliked by the working camerad in the Csepel factory.
– We came from a society where they told us for years that capitalism, and socialism and everything, we believed that, and now here is the end and we don’t know what is happening and who we are. You think you are in a swamp and we have to go somewhere, but where do we go? What direction? Who lied to us? When did they lie to us and why? How could they lie to us? Let them give an answer!
– After four years, we can now clearly see that in 2010 a real system change took place. The second in 20 years. We changed the political and economical system that was build after communism. Moreover, let’s be honest: we replaced the system that we ourselves have helped to build.
These ever changing new systems bring along new props that, in the beginning at least, always look essential. They counter real disappointments and truly felt frustrations, building on the total denial of all of the previous systems. Every one of them promises the Hungarian society that things now really are going to change for the better. And this will take until the circumstances change again and the next collapse will follow.
This doesn’t mean that all of these systems are equal in value and worth. Neither does it mean that the respective politicians have to be excused.
And most importantly, mentioning outside circumstances does not imply that there is a world wide conspiracy against Hungary formed and enacted. It does not mean that an external power is responsible for the problems of Hungary, but instead it means that Hungary in the global economy is like a boat in open see. The storm doesn’t crush the boat because the storm is evil, but simply because that is what happens to boats that are not strong enough – regardless what the actual commanding captain is just screaming.
There is a huge chance that the next system will have the same basic fault. If we can not break out of this loop, future generations of people will be having the same problem, asking themselves the same question we asks ourselves now: how did we end up like this?
5376: Support for the Apocalypse Survivors’ Tribe collapsed, after the prolongation of the drinking water plasma crisis. The Alliance for Order after World’s End prepares to take over control. Young people have enough after 3000 years, rejecting every political party. The Tribe leaders offer the transtribal hunting society tax exemption on certain inner organs of the community.