Hungary – the new weak link

“In the space of twenty years, in a throwback to eighty years ago, millions believe the racist, chauvinist ‘ideas’ of the 1930’s.” writes Attila Csernok in Népszava, a Hungarian liberal daily. Is the situation in present day Hungary that critical? Does the election of the Fidesz government in April 2010 by a two thirds majority mean a return to the horrors of 1930’s Hungary?

Quite uncharacteristically Hungary has been in the news a lot lately. Not since the opening of the Western borders in 1989 or perhaps the revolution of 1956 has this small Eastern European country been so much in the limelight as in the last few months. The nature and provisions of the new Constitution, the curbing of press freedom, the threat to the independence of the judiciary and of the central bank, the falling forint, the chance of a default and first and foremost the arrogance and unpredictability of its rulers have given rise to concern by the EU, IMF, World Bank and capitalist governments the world over.

To gauge the depth and causes of this crisis one has to go back in history, at least to the fall of Stalinism, but perhaps even a bit further. The Hungarian Stalinist regime handled its own internal contradictions in a way considered quite unique at the time. Instead of the stock Stalinist reaction of clamping down and tightening its hold over society Kadar’s government chose to go “liberal”, allow some expression of dissent and first and foremost started taking part in the world market from the mid 1960’s onwards. Western banks were only too happy to lend substantial sums to this unique little country, not out of some charitable sentiment, but in order to extend the influence of the market over what in those days was still a planned economy. Hungary’s bureaucrats enjoyed the prosperity this gave them; travelling abroad was possible, studying abroad became fashionable, learning languages and mixing with the ruling class of the West was much to their liking. These were heady days when growth figures were impressive, foreign trade, both imports and exports boomed and living standards were climbing. Inevitably, when you let capitalist banks and their money in, the rules of the capitalist market start asserting their influence. The national debt started to grow and keeping up with repayments had become a headache for Hungary’s bureaucrats by the 1980’s. In today’s economic arguments many an article prints the ill-tempered accusation thrown at the inheritors of those days for having started the indebtedness of the country that far back and they are not far off the mark.

The 1980’s also produced many of today’s Hungarian politicians of all colours, who held to the good old traditions of the bureaucrat – to quote Trotsky – to eat first and eat best, and they brought that mentality with them into the brave new world of capitalism. The first government after 1989 was that of the right-wing conservative MDF, which presided over the wholesale, almost Thatcherite destruction of what industry Hungary did have. Thousands of factories were closed and the rest were sold off for a song to Western interests, some say out of ideological fervour, others believe for the billions of bribes most politicians and technocrats held their hands out for.

Many commentators currently believe that the much heralded “regime change” never really happened, as the personnel remained very much the same, just the method of robbing the country changed from one of Stalinist bureaucratic mismanagement to capitalist robbery by both native and mostly foreign owners. Considering the current populist tone the Orbán government uses, this argument grabbed the imagination of millions in the last election campaign and who can blame them for it? Watching the old bureaucratic layer turn itself into the new owners of industry, commerce, land and all the wealth over the last twenty years must have been painful and the lack of a proper socialist alternative, which the very weak and puny Hungarian left was and still is unable and unwilling to offer, made the masses prone to all sorts of voodoo theories and crackpot ideas.

Successive governments: a socialist one in 1994-98, the first Fidesz government of 1998-2002, followed by two socialist governments from 2002 to 2010 made very little difference to living standards, other than in the downward direction. None of these governments, least of all the “socialist” ones, were prepared to break with capitalism. It was in fact exactly the opposite. It was the so called socialist governments that cut the most and served their foreign masters most faithfully. None of them tried to put the interests of Hungarian workers first. Therefore the early illusions in capitalism which were characteristic in all ex-Stalinist states, disappeared quickly, but there was a vacuum, nothing replaced it. One corruption scandal after another, culminating in the infamous Gyurcsány scandal of 2006, when it was leaked that he admitted to having lied about the economic state of the country, predestined Hungary to turbulent times. The disturbances in the autumn of 2006, which were engineered by Fidesz using the newly formed, extreme right-wing and quasi-paramilitary force of the Hungarian Guard, gave a foretaste of what was to come.

It was precisely the demagogic, populist and simplistic rhetoric of Orbán and his 2010 campaign that found an echo in a population thrashing around for a hope of recouping lost benefits, lost positions, lost pride and a hope for the future that drove the voters into the voting booths for Fidesz, also known as Orbán’s “voting booth revolution”. With a pact with the KDNP, the Smallholders’ Party, they achieved their 2/3^rd majority to extend their “revolution”, to put into effect their dream of a greater, royalist, catholic, patriotic, chauvinistic Hungary. Many a commentator offered the psychiatric view of this dream, much to the anger of those in power; and while psychiatry has many an interesting view to offer on Orbán’s state of mind and the quality of “thought” around him, we need a sober political and scientific analysis, which only Marxism can offer.

World capitalism is in the throes of its death agony which tends to be characterised by a period of convulsions, U-turns and all the crackpot ideology that goes with that. The old ideas, old systems and old certainties are gone, but no capitalist will give up his power willingly, so it often produces regimes, like the one in Hungary, especially aided by the interests of international capital and built on the confusion prevalent in a population that lost the link with its own working class traditions during the long years of Stalinism and the lack of structures around which they could build these back up again. It is often the whip of the counterrevolution that is the harbinger of the shift to the left, the push towards revolutionary movements and Orbán’s current government can and should be considered as one of those reactionary and counterrevolutionary movements.

From their first day in power the Fidesz government waged war against their enemies as they saw them. In the classic manner of the populist demagogue, showing aspects of early Nazi methods they offered a dream of the greater Hungary of the past. They were going to give Hungarian citizenship to all Hungarians beyond Hungary’s borders, thus creating a viper’s nest of trouble with practically every neighbouring country. They then slapped large punitive taxes on large multinationals, pandering to the anti-multinational sentiment in the country but angering their own cronies all over the capitalist world. The next step was to nationalise, without ever having mentioned this in their manifesto, the billions of forints private pension savings of hundreds of thousands of Hungarians, thus alienating their own middle class base, which has repaid them since with a wholesale removal of their savings into foreign banks for fear of having that nationalised as well. Finally, they moved onto attacking the working class with reducing trade union rights, sacking trade union leaders from their jobs, lengthening the working day, reducing benefits, introducing workfare schemes, etc. There were other, less likely objects in the firing line as well, like churches. They produced a list of churches that can be considered as such, the rest were outlawed. Such organisations as the Methodist Church and the Hare Krishna sect were amongst those outlawed, much to the international outrage of those organisations’ foreign contacts. A lot of these measures have not made the headlines as the attitude was probably one of waiting to see if they carried on in this vein.

The international outrage only really started when what was considered as a direct attack on democratic institutions was begun. Not that international capital cares a hoot for democracy in Hungary, but they are bright enough to understand that by going too far, the Orbán government might provoke a truly revolutionary movement in Hungary. The government was very cocky to start with about foreign loans. The new, greater, independent Hungary was going to do without the IMF, only to quickly realise that economic meltdown was staring them in the face. So, after a year of splendid isolation they had to call them back. Still, the IMF and the EU found an intransigent, arrogant and to a great extent ignorant government which was not listening and making no concessions, but just wanted a few billions to tide them over. Not even the collapse of the forint made any difference to their attitude.

There were other measures introduced in the previous year that came to the attention of the world’s press and some governments. The creation of a new press law, which since its introduction has resulted in practically every opposition paper, periodical, radio and television station’s closure. These were achieved by awarding their licences to others, fining them for telling the truth thus bankrupting them or sacking any journalist that is not toeing the government line and/or prepared to falsify the news to favour the government. In 2010 laws were enacted that were aimed at cementing the rule of Fidesz for many years to come by rewriting the Constitution and including in it provisions and regulations which are normally in the domain of any new government to change, i.e. the size of the national debt, the requirement of a two thirds majority for changing the tax laws and other measures bordering on insanity according to some commentators. The word “republic” has disappeared from the name of the country, giving rise to rumours that Orbán wants to be king! This might be rather funny, had it not been combined with measures that declared the years between 1948 and 1989 null and void. They did not happen; they are now officially not part of Hungarian history. Some of us have been wondering if the house we live in is really ours or are we really married if all contracts from those years are null and void!

There is also a new law which makes it possible to combine the government’s bank regulatory office with the National Bank. The current head of the National Bank still has three and a half years of his contract to run and he is vehemently against combining the two organisations, so it probably will not happen for a while, but the independence of the National Bank is under attack; everybody knows that. The most prominent rumour in the country about this is that Orbán is planning to plunder the reserves to get him out of his budget deficit crisis.

There has also been a swathe of measures attacking the independence of the judiciary. Many judges have to retire way ahead of their time to make space for government appointees and early retirement tends to happen mostly to well prepared, well respected judges with a reputation for independence and an ability to withstand government interference in their judging and sentencing habits. Recently they sacked the Chief of the highest court in Hungary, who has a long standing, much respected practice in The Hague with the excuse that he has not got five years’ experience in Hungarian courts. The fact that he has international standing and is therefore difficult to subdue to the government’s agenda is not apparently a consideration.

All these and the inconsistent and unpredictable nature of the Orbán government resulted in a severe downgrading of Hungary’s credit standing by Moody’s, S&P’s and Fitch’s. This, in the current economic climate and coupled with the Eurozone crisis, should not be exceptional, other than Hungary was downgraded long before most European countries and one of them put Hungary into double junk status. The most telling of the reasons given for this was the unpredictability of the Hungarian government. If you analyse all their new laws and regulations, there is no doubt this is a through and through capitalist government which is working on safeguarding the interests of capital and is reducing wages and benefits to keep profits high. However, there are peculiarities in their practice, which gives them a particularly unstable character that even representatives of international capital find unsettling.

History tells us that the capitalists have burned their fingers with using the fascists as their auxiliaries in the past. They are like a genie in the bottle that can never be kept in the bottle long enough to deal with the working class and like a snake might one day not only slither out of the bottle but turn round and bite the ruling class on their high and mighty rear end. This is roughly the attitude currently of the international ruling class and its representatives to Orbán. They have their own problems and this jumped up upstart then starts having ideas above his station. The trouble is they can’t really teach him a lesson, because they do not want this particular weak link to break, just in case the whole chain goes down with it.

The IMF is due back in Hungary in a few days’ time. Their representatives are desperately trying to find a way to get Orbán to play ball, so that nobody has to have too public a climb down and they can save the economy of Hungary while in their pronouncements carrying on “worrying” about democracy in Hungary. Whether Orbán will oblige them is anybody’s guess. That will depend on how much pressure is on him and to what extent he might be forced to listen to wiser counsel than until now.

The pressure is also coming from the streets. Hungarian politics, whether inside or outside parliament, is notoriously heterogeneous. Splintered groups infighting for positions, money or just fame is characteristic of Hungarian political life. The working class and to some extent the middle class are also tired and lack perspective and until recently most demonstrations were small, either leaderless, without goals or sometimes just paid rebel creating trouble. Not any more! Most television stations covered the demonstration outside the Hungarian Opera House on 2^nd January 2012, which numbered a hundred thousand, which was still somewhat chaotic, but showed a unity that has been lacking for some time. The organisation of this demonstration was brought under an umbrella body led by a recently sacked trade union leader. The crowd was outraged and demonstrating against the government’s 13 million forint junket inside the Opera House celebrating their new Catholic, great Hungarian Constitution, while the crowd outside had to suffer the effects of public expenditure cuts of1400 billion forints (3,5 billion pounds at current exchange rates). It is a characteristic of all early protest movements and the beginning of revolutionary movements that there is no common plan or ideology. It needs a catalyst that galvanises the crowd and its representatives around an idea, a program before their struggle can produce results. That is still lacking, but there are early signs that it will not be long before it will happen.

Such is the disillusionment with parties, politicians and all previous governments of the last twenty years that even politics is a dirty word in Hungary today, not just politicians. Interviewee after interviewee on the television demonstrating outside the Opera House stressed that he/she had never before come out onto the streets as he/she hates politics, but felt so outraged that they had to do so this time. This is how revolutions start. The direction this coming revolution in Hungary will take is still uncertain. The weakness of the left, or the weakness of socialist ideas at present, will be a factor and the process is likely to be prolonged, but it has begun.

There is already a wide ranging protest movement on the internet and after all, hasn’t it been said that the Egyptian revolution was organised on Facebook? There are many pages on Facebook where debate rages about the politics, economics, ethics and morals of the protest movements and the contributors are far and wide. You can read contributions from old socialists, young hotheads, workers and intellectuals. The tone is not always tolerant or polite or even constructive. It shows the confusion, frustration and anger that are very close to spilling over into the streets. What it needs is a group, no matter how small that can steer all this justifiable fury towards the ideas of socialism, that creed that has been much degraded by the experience of Stalinism and which some of the cynics would like to keep away from the masses with lies and propaganda. We have heard that even in the United States more than 50% of people think that socialism is a good idea. Hungary is not that different. The crowds are thirsty for solutions and only Marxism can give it to them. There is plenty in Hungarian history that shows how that is true. The sign of self-organisation, a healthy mistrust of international capital as well as of the bosses within the country already exists. One successful strike, one positive example of self-determination is all that’s needed to show the Hungarian people how to move forward. There is no doubt they will find it and get rid of not only the insanity of the Orbán government, but the insane, inhumane and criminal system they and all their international cronies represent.