Lessons from the Political Economy of Authoritarian Capitalism in Hungary
Hungary was once praised as an example of successful democratisation and EU integration, but now has joined the ranks of ‘liberal’ nations backsliding into authoritarianism. Many commentators blame Orbán and his anti-migrant, anti-EU populist rhetoric, but ignore the underlying causes in particular the failings of market reforms in the country, high unemployment, low wages, spiraling household debts, and a nationalist capitalist class resentful of the advantages given to their transnational capitalist competitors.
The future of capitalism is not necessarily democratic. Authoritarian capitalism is gaining foothold not only in non-democratic states, such as China, but even in countries with strong liberal institutions. From Greece to the US, an increasing number of countries show its symptoms. We need to look beyond the façade of the most visible political manoeuvres in order to understand how economic and political disciplining of citizens to create decent capitalist subjects can be combined into a political economic model that ensures accelerated capital accumulation through increased political repression.
Hungary is one of the most striking cases. Hungarian elites followed the good governance blueprints of international institutions, implementing liberal political and economic reforms between 1990 and 2010. For long, the country was considered to be a frontrunner of the third wave of democratisation, yet now is considered to be a frontrunner of democratic backsliding. Orbán’s political economic model has been stable for eight years now - Fidesz gained the same amount of seats at the parliamentary election on 8 April 2018 as four years before, and thus Viktor Orbán’s party remains the dominant political force in the country. There are obvious direct political reasons for this, such as the heavily gerrymandered electoral map, the biased media landscape as well as the divisions paralysing the fractured opposition, among others.
Yet, to understand the emergence of authoritarian capitalism in Hungary, we have to dig deeper into the contradictions of post-socialist liberal policies and institutions to unearth its social and economic roots.