The governing West and Development Alliance fell because of the bitcoin crisis.
Tens of thousands of protesters have taken to the streets.
The Strong Moustache Party stated that after coming to 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 trust any of the political parties.
Meanwhile, the government granted tax benefits to a German producer of dream simulators as part of a strategic agreement.
When we look at the promises and the objectives of Hungary's current government,
we can argue whether these were successful or not.
There is, however, one issue they definitely put through.
This:
Nowadays, bright minds try to analyze and understand systems that are not necessarily Western,
not necessarily liberal,
probably not even democracies,
but even so, they can make nations successful.
So the new state we are building in Hungary, is an il-liberal state,
a not-liberal st ate.
Some people start worrying hearing this, others applaud,
but it is certain that Hungary has been diverging from the Western democratic model...
It is estimated that the wealth of Lőrinc Mészáros has increased by 240 million forint (cca 770 000 EUR) per day during the previous year.
I think it was just about time for Népszabadság (critical newspaper) to close suddenly.
What was the topic for the public referendum initiative that you've just filed?
I don't know what you are talking about, sir. I can't comment.
These organizations should be pushed back by all means and - if you ask me - eradicated.
Overnight, the son of National Bank chief György Matolcsy became an influential media mogul.
But why?
A lot of people ask themselves the question: how did we get so far?
Of course, we can blame prime minister Orbán,
and ex-prime minister Gyurcsány, or even Kádár for that matter (the party leader in the previous socialist system)
but this is not enough.
It is simply not true, that by changing the political elite we could immediately
and magically solve all of Hungary's problems.
In the first part of this series, we will investigate the roots of Orbán's regime.
In the second part, we will discuss the main lines of the government's politics.
hen in the end, we will see why does the country's structural position in world economics lead to similar situations over and over again.
Part 1 – The Cult of the West
Viktor Orbán called the elections of 2010 a revolution,
but at that time it was not entirely clear what kind of system was being brushed aside by this "revolution".
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 us to build a new political, a new economical and a new cultural system.
Now we know, that the previous system that got demolished, was the dominant ideology of the post-socialist period.
But what was that ideology exactly about?
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.
Meaning: people should get higher wages and more possibilities to spend that money on consumer goods,
they should be able to participate in politics
and access reliable news after long years of listening to state propaganda.
Some of this has actually materialized, but only partially.
Do you know how you can tell whether a piece of equipment is Elekta?
It is written on it!
Here, and here.
Elekta VCR's and television sets, Elekta 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 according to the government,
even when taking into consideration that the size and type of the Hungarian transition is entirely different from a functioning market economy.
According to the dominant ideas of the time,
there was a clear recipe to achieve this: namely, following the directions of Western advisers unconditionally:
we should quickly dismantle the socialist state
and privatize the state enterprises,
open the gates for Western companies
and this will instantly lead to capitalism.
The task is still the same:
from the approximately 2200 Hungarian state enterprises, only about 100 should remain in state ownership.
It's important to highlight that quick privatization was not only the result of the elites' will, but of necessity as well.
It was necessary, 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,
that further loans would be withheld and the country would collapse financially.
In the meantime, we lived as if nothing threatened our existence,.
leading to the doubling of the country's debt in 1987
The idea was to get money quickly by selling the state companies.
Politicians of the era talked about this process as something that will benefit everyone,
since this is the key to the spectacular capitalist development everyone's craving for.
There's a lot of work and we're under stress,
The machine is running, production growing,
turn your back to the world
for a fight that'll be a fight.
However,
this didn't happen.
In fact,
almost the opposite happened.
Good evening. I can't remember a new year starting as depressingly as the current one.
The price increases immediately forecast the type of season we can expect.
People claiming to see the light at the end of tunnel are definitely too optimistic.
I am a widow from Mogyoród.
My pension is 11 160 forint.
After paying the bills I have 2455 forints.
I'm asking you: how can I live from that?
Following the Western example brought the expected increase of life standards only for the elites
and the upper middle-class Hungarians, approximately 8-10% of the population.
In the meanwhile, the size of the Hungarian economy decreased by 20% between 1990 and 1993
for comparison: this crisis was more than two times the size of the 2008 economic crisis.
After 1989, nearly 1.5 million people 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 losers of the system change into the social sphere,
for instance by sending people to early retirement.
But these facts could not distract the uncritical followers of the Western recipe.
They continued to explain that these are only temporary teething problems, after which all will be well.
It is easy to be a liberal nowadays.
Especially when taking into account the victorious path of liberalism during the past 15 years.
During this time almost all of the large left wing and right wing parties adhered to the liberal principles.
In order to understand this logic a bit better,
it might help to distance ourselves both in time
and space from Hungary in the 90's to Melanesia in the 1940's.
"Sorry, Mela-what?"
To Melanesia in the Pacific Ocean,
where during WW2 the American army built temporary airbases.
The planes brought cargo to the islands and local tribes got supplied with some clothing,
medicines and food.
However, towards the end of the war the Americans moved away and the flow of goods dried up.
The locals were disappointed.
To lure the goods back, they started to imitate the circumstances needed for cargo to arrive.
They made landing strips out of 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 cargo-cult.
This is quite similar to the ideology of the Hungarian elites after the system change:
we produced the decors and props of capitalism
– we have private ownership, a relatively free market and even a stock market –
so all we have to do is wait for the arrival of welfare like Austrians or the Dutch already enjoy.
To understand why this expectation was unrealistic,
we need to comprehend the basic difference between rich and poor countries:
rich countries are rich mainly because they produce products and services that can be sold expensively throughout the whole world.
In our case though, only a few successful,
export oriented companies exist, which is not surprising of course,
since after the transition the state was indebted and tried to sell most of its assets
and at the same time there were hardly any Hungarians with enough capital to buy and then manage large companies.
Because of this, most corporations were bought by foreign investors.
Prime minister József Antall declared:
thanks to the Opel factory we receive the US' and Germany's most modern technology
and become a more organic part of the global economic system.
Towards the second half of the 90's,
Hungary became one of the world's most open economies.
This has had many consequences ever since.
Without a doubt, multinationals have created many job opportunities in Hungary.
Still, when the majority of production is in foreign ownership,
this will have a significant effect on the long-term economic development of a country.
And that effect is not necessarily positive.
"I got hired to the Suzuki factory,
I'm working on the cars like a dog."
First, Austrian or French companies barely pay taxes in Hungary,
while their profits flow back to the motherland.
We'll discuss this in detail a bit later.
Second, if the expensive consumer goods are produced by foreign companies,
what remains for the Hungarian companies?
Put it in another way:
we produce and sell cheap things,
while we buy expensive goods from abroad.
And finally: foreign companies predominantly outsource the more simple processes with lower added value.
It's not hard to see that with work that could be done almost in any neighboring country will not grant us outstanding
and sustainable growth.
"I got hired to the Suzuki factory,
I'm working like a dog every day."
While the Hungarian economic strategy's sole aim was to become attractive for foreign capital,
Hungarian companies were neglected.
To sum it up:
on the stage, the impression was projected that Hungary is moving towards the West unstoppably,
but in reality, the foundations for the country to become successful were entirely absent.
I did not have a choice.
I did not become an entrepreneur because I wanted to leave the Videoton company were I worked.
Please understand that I was forced to do this.
It was not my dream to become an entrepreneur, or something like that.
No.
Only during the past few months have I finally understood what it really means, to be an entrepreneur.
For various historical reasons,
Hungary was not among the first countries to enjoy the technological development after the the industrial revolution
and there never was enough capital in the country to make up this leeway overnight with quick modernization.
This means that if we want to keep up with more developed countries,
we need to get modern technology from abroad.
We can either borrow it through foreign direct investment
but previously we saw that the uncontrolled inflow of FDI hampers the development of Hungarian companies.
Or we can buy new technology
- but since Hungary doesn't have enough capital, we need to borrow money first and loans have the tendency to crash unexpectedly.
Let's hear what József Antall, prime minister of that time, had to say about this in 1990.
Real democracy can only work in situations where the parliamentary democracy is rooted in a broad
and prosperous middle class.
Where substantial parts of the population are embittered and impoverished,
parliamentary democracy can not prosper.
We've already mentioned that Western living standards were reached by a few Hungarians only.
By the end of the 90's, matters consolidated to some extent, but then things went wrong again.
In the beginning of the 2000s wages grew a little,
but in the European context Hungarian wages were still too modest.
And what do people in this kind of situation do?
They get a mortgage.
Between 1999 and 2006 household debt increased tenfold and as we know,
this ended up in the financial crisis a couple years later.
The state also became indebted dangerously,
so in 2008 the Hungarian state and part of the population almost went bankrupt together.
The economic crisis got combined with the political crisis.
Around this time, the majority of the population finally lost their remaining faith in the ideology of open markets
and liberal democracy.
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.
"Nowadays all rascals went from Party members to stockbrokers,
And we're all sons of the financial dictatorship."
In the same period, Viktor Orbán started deliberately addressing the responsibility of the liberal economic policy.
Everywhere I go, whomever I talk to, the message is clear: this has to stop.
The people decided that things cannot go on like this.
The person of the prime minister is secondary.
What is important, is in what direction the country's economy will develop further.
By giving up economical self-defense, the foxes were allowed into the henhouse,
in order to have "free competition".
Of course it's no one's fault that the foxes are winning every time.
"He's showing you a new way,
While searching your pockets."
Orbán's so-called revolution has wiped out the notion that for obtaining Western living standards all we have to do is follow the Western liberal economic recipe.
Instead, unorthodox economic policies were introduced, that didn't pamper banks...
It is unacceptable that the banks are still considered holy cows,
even while we experience a global crisis caused by the banks themselves.
Was ready to use state power to help homegrown corporations...
If Hungarians want to have a competitive edge in the European and world economic sphere,
then the state shouldn't be considered as a disadvantage
- as was the case during the past two decades -
but as a useful resource.
Overall, the unorthodox economic policy broke several political-economic taboos of the time.
We were the first to start the revolution when instead of asking for help from the IMF we sent them home.
We started to charge the banks, tax the multinational companies and consolidate the household loans taken out in foreign currencies.
This is all very important, because these are just as important parts of the present political system,
as Viktor Orbán's charisma or the political tricks of his Fidesz party.
And this is also interesting, because Orbán's regime was mainly right in acting out against
the uncritical Western consensus that brought disappointment for the majority of Hungarians.
What does this mean?
Was Fidesz right all the time?
Not quite.
While making relatively bold moves in the economic sphere,
some benefits of the system change got thrown out too: free press,
the constitutional state and the idea of solidarity was replaced by illiberalism.
Contrary to Mr Orbán's notions, there's no direct connection between liberal economic policy and liberal political achievements.
Bank tax was introduced in Austria as well, but this didn't go hand in hand with the demolition of press freedom.
But what's even more important is that the real root causes of Hungary's dependent economic position were not addressed.
Under the flag of national independence, Orbán and co. have started to do something completely different.
The next episode will investigate that part of the story.
The Colony of the Galactic Hungarian Order has governed the country poorly.
fter the Solar System loan crisis reached us, their support crumbled,
the presumed winner of the coming elections being the Comet Alliance,
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 meantime, the leaders of the Colony negotiate tax breaks with the intergalactic consortium of Brainwave Hyperdrive producers.
In the previous part we mentioned that Orbán's politics was a reaction to a real problem.
Viktor Orbán often stated that he intended to counter the economic dependence of Hungary.
After 2002, Hungarian people didn't even realize that they were cooked slowly with the help of cheap loans.
The primary goal of our economic policy is regaining our country's independence, or putting it another way: freeing ourselves from the debt trap.
So Mr Orbán declared an "economic war of independence" in 2010 to fight against government debt
and against the excessive influence of multinational companies,
while his government started to favor some Hungarians companies.
Part 2: the cult of the Independence War
Let's start with the question of state debt.
Indeed, since 2010 state debt decreased by approximately 6%, large part of which was the debt in foreign currencies.
In itself this is a nice result, but it doesn't show the entire picture.
A strong nation, a strong country doesn't run its affairs with money borrowed from someone else.
Despite of this, Orbán's regime is still badly in need of capital from abroad.
he difference is, that nowadays the primary source of this money are EU funds and not foreign loans.
This year a profound study - ordered by the office of the prime minister by the way - noted that without EU support there wouldn't have been economic growth between 2006 and 2015,
moreover, the Hungarian economy would have shrank by some extent.
There are certain signs though that from 2020 the EU funds will provide considerably less capital for the countries in the region.
So the government started to look for alternatives
and a good example for this is the huge loan the government got from Russia for the expansion of Hungary's only nuclear power plant.
Without doubt, the international economic situation of Hungary has improved considerably during the past period,
but we have an agreement with Russia, a good agreement, and we don't want to risk that.
We can't wait for the work to begin
- what kind of nuclear plant is that what we're only talking about without having seen it at all.
So, regardless the claims of Viktor Orbán, Hungary is still living on the expense of others,
even though these others are not the same as the previous ones.
But let's look at the so-called War of Independence's other main front.
Orbán's regime promised to counter the grip of multinational corporations.
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 in the beginning I was the only one believing in this policy.
Communication is an important feature of politics,
but it cannot overrule the truth.
Truth is always on the first place.
The truth is, that the present government is even more generous with multinationals than the previous governments had been.
Sounds strange?
Let's take a look at some numbers.
Part of the money coming from EU funds should be directly spent on economic 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 other countries in region, like Poland or the Czech Republic.
But there are other examples as well.
Apart from the EU funds, the Hungarian government provides immense financial support to large companies to persuade them to open factories in the country.
Of these sums, about 25% was reserved for Hungarian companies during Mr Orbán's rule.
Overall, during the "war against the multinationals" the Fidesz government provided almost two times as much non-refundable financial assistance to foreign corporations as the previous socialist governments.
You are the light, in the night,
come and work, in the lamp factory.
After all these slaps and punches, the multinational companies must be praying for their lives.
And then Fidesz finishes them off entirely:
next to the free money, significant tax relief is offered to them as well.
Last year, corporate taxes were lowered from 19% to 9%
- making Hungary the country with the lowest corporate tax in the EU.
To sum it up:
the result of Mr Orbán's "War of Independence" has been that the multinationals receive more money
and pay less taxes than before.
We will never become a colony!
The economic dependence of Hungary
- in the sense that the country functions as a cheap assembly factory for foreign companies -
hasn't been decreased but has grown under this so-called "War of Independence".
Even the government seems to realize this contradiction.
For me, when somebody says
"look how much profit this multinational 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 create new jobs,
will pay decent wages, and the Hungarian people will be able to support their families.
So, all the critics from the opposition, all the things they say about how much money we give foreign companies,
I will say to them: 'should we not give money to make these corporations stay here and invest their capital?
Should they go to Slovakia?
- Because that happens! -
Yes, it happens. The politicians in opposition should go to Győr to the Audi factory and say to the workers there:
"it is not right that Audi is here, they should not be supported by the government, the factory should not be here etc."
And now let's hear what the most honest Fidesz MP once said:
War of Indepence?
There's no War of Indepence, there hasn't been one.
The fact that some politicians use this word is just theater.
This is not serious politics.
I like girls and cry and laugh at the same time
what would Brussels say?
I cross myself, I fire arrows backwards
what would Brussels say?
All this has serious consequences of course.
From this perspective we can see now, why the EU did not punish Hungary,
when the government's illiberal politics openly denounced some basic liberal principles.
Attacks on the constitution and the free press?
Under Orbán's regime the companies from the core EU countries keep profiting from the Hungarian economy.
Western companies cannot complain since they get a lot favors and are still involved in huge construction projects funded by the EU.
I'm asking you, respect her well
old Europe, the 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 this in a recent interview.
OK, but what is the situation on the third front in the "War of Economic Independence"?
Namely: the effort to help a few Hungarian companies to become successful on a global level?
This should've been even more important than the previous topic,
because the main reason behind the country's economic dependence is the lack of export oriented Hungarian companies.
Mr Viktor has often said that the main goal is to create a national capitalist class.
We need successful Hungarian entrepreneurs owning a lot of money.
Without them, everything in this country will be taken by foreigners.
In my opinion, when you speak out against the Hungarian capitalist class,
you are basically a traitor.
There's an interesting aspect here though:
we can see a clear demarcation line on this front of the "War for Economic Independence".
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.
In these sectors we can see the companies close to the government getting bigger and bigger every year.
I don't exactly how much money I own.
I have some wealth, of course, but I can't know for sure how much it is.
Last year Lőrinc Mészáros did even better:
his net worth of 8.4 billion forints almost tripled last year,,
reaching 23.8 billion forints according to estimates,
making him the 31st richest person in Hungary.
Lőrinc Mészáros and his family has increased their wealth by five times last year.
He got involved in the hotel business and in the media, bought a few more real estate and construction companies,
plus his wife and children bought over 1500 hectares of land.
The net worth of the gas fitter and mayor of Felcsút will reach 120 billion forint.
The automobile industry, chemicals or electronics are a different story.
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 to prosper enormously.
It's not surprising that the new system demolished the constitutional state,
because this new primitive accumulation of wealth would probably fall short on first inspection.
Without public prosecution, there are no limits anymore.
Questor scandal, Vizoviczki scandal and MNB foundations.
No word about these issues by public prosecutor Polt Péter,
who talked about the proceedings of the 2015 report only.
I state that public prosecution fully fulfilled the constitutional expectations towards it.
Familiar? A Hungarian system builds the decor and props of something but happens to forget to introduce the main part?
Let's return to Melanesia!
This is what we've covered in the previous episode.
The Western consensus built the decors of capitalism and waited for the results.
The next system – renouncing the previous one – built a set of new props – the so-called "War of independence".
But every system has its losers,
and both post-socialist systems needed an ideology that convinces people to hold on
and wait for better times.
After 1989, the dominant ideology said that liberalization is the only way to freedom and democracy.
This narrative finally lost its power during 2008
and the frustration and anger of that period proved to be fertile ground for the 2010 overhaul.
Although it's true that even Mr Orbán does things that even his supporters don't agree with,
still the new ideology assures people that this is the only politics that can save Hungary
and the Hungarian way of life.
We don't need fences, let people come in as they please.
Later, they will take away everything of course, but who cares?
They will take away the country, our beautiful Hungary,
our faith, and then our houses,
wives, everything - but it doesn't matter to "them",
they only care about 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 this is the situation that is repeating over and over again.
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 build.
What is liked by the factory owners,
is disliked by the working comrade in the Csepel factory.
We grew up in a society where they told us for years that
"capitalism this and socialism that"
and we believed in it,
and now here is the end and we don't know what is happening and who we are anymore.
I feel like we're in a swamp.
And of course we have to go somewhere, but where should we go?
To what direction?
Who lied to us?
Why did the lie to us? How could they?
Let me have an answer at least!
After four years, we can now clearly see that in 2010 a real system change took place.
The second one in 20 years.
We changed the political and economical system that was built after communism.
And let's be honest:
we overthrew a system that we ourselves have built as well.
These ever changing new systems bring along new decors and props that in the beginning always look necessary.
They react to real disappointments and 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 these systems will stand firm until the global economic circumstances change again and the next collapse follows.
This doesn't mean of course that all of these systems are equally good or bad.
Neither does it mean that politicians have to be excused.
And most importantly,
mentioning global economic circumstances does not imply that there is a world wide conspiracy against Hungary.
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 out of mischief,
but simply because that is what happens to boats that are not strong enough
– regardless what the actual commanding captain is screaming to his men.
There is a big chance that the next system will have to face these same basic problems.
If we can not break out of this loop,
future generations will struggle with the same issues,
asking themselves the same question we ask ourselves now:
how did we end up here?
Support for the Apocalypse Survivors' Tribe collapsed,
after the prolongation of the drinking water plasma crisis.
The Order after World's End Alliance is preparing to take over control.
Young people are fed up with the past 3000 years,
rejecting every political party.
The Tribe leaders offer the transtribal hunting society tax relief on certain inner organs of the community.
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