Bálint Magyar: Viktor Orbán’s post-communist mafia state, Part II

We left off yesterday at the point that the concentration of political power and organized corruption cannot be divided because they are both part of the very essence of the system. The mafia state has a distinct advantage over traditional mafias. Whereas the latter must reach their goals either by blackmail or by intimidation, a mafia state by definition has the power of the state behind it. Therefore it can “adjust” laws according to its needs. In brief, the “organized upperworld” makes its own illegal activities quasi-legal. Acquiring ill-gotten riches no longer must be hidden.

The new mafia state is different in this respect from both the Horthy regime and the Soviet system. The Hungarian ruling elite between the two world wars didn’t want to change the “economic elite”–with the notable exception of the expropriation of Jewish property in its last phase; it only wanted to enrich the already existing Christian middle class. In the Soviet Union the communists nationalized all private property. Both decisions were merely political decisions fairly uniformly applied. The situation is different in a mafia state. Instead of a uniform political will, decisions are individual and random. “What they like they take.”

An old picture of the Fidesz family, 1999 / cover page of HVG

An old picture of the Fidesz family, 1999 / cover of HVG

As for the comparisons between Hungary’s mafia state and that of the former Soviet Union and its successor states, although the final result is the same, the road to it is different. In Russia and elsewhere east of Hungary the members of the former party elite managed to “privatize” state property. In Hungary economic power ended up for the most part in the hands of technocrats. In Russia the few non-apparatchiks who managed to get into the select circle of economic moguls were eventually sent packing or ended up in jail.

In Hungary, when Fidesz appeared, “the field” was already taken. In order to change the current state of affairs Fidesz either has to get rid of members of the economic elite or make them part of the “family”  or “service nobility”.  Fidesz’s misfortune is that in Hungary, as opposed to Russia and its satellites, a true democratic process had already begun. In order for Viktor Orbán to reach his final goal, the very institutions of Hungary’s fragile democracy must be eliminated. We are not at this point yet and it depends on the Hungarian voters whether Orbán can succeed or not. In Poland there was a similar attempt by the Kaczynski brothers but their attempt failed.

How is Hungary’s current political elite handling this takeover of economic power? The ideology behind the process is a “national war of independence.”  The first step is trying to achieve a certain percentage of Hungarian ownership in the various business sectors. Next, the government begins to force out legitimate owners of enterprises by levying extra taxes, forbidding the construction of new malls, imposing impossible requirements to obtain a building permit, or as in the case of the French firm Suez in Pécs, by simply taking over the company by force. Often the state itself buys the foreign-owned company and after a short while the company is sold to a friend of “the family.” There have been cases (notably MOL and E.ON) where the elite at public expense purchased large blocks of stock  or buy entire companies at prices way above their market value.

One of the most brazen takeovers of a business sector is the tobacconist shop tenders. This time the mafia elite decided to change the law in order to create a state monopoly by which it impoverished forty or fifty thousand small businessmen. Why did they have to deprive relatively poor mom and pop store owners of their livelihood? Because the “the family” must be continually extended outward, giving gifts to the small fry in the organized “upperworld.” By making tobacco products a monopoly, additional revenues will reach the treasury while those relatively few shops that can sell cigarettes will be owned by “clients” who will have a guaranteed income. Killing two birds with one stone.

Although it is becoming crystal clear that the selection of the future tobacconists was fraudulent, there will be no legal consequences. By now both the police and the prosecutor’s office are part of the organized “upperworld.” We already know that these cases will never reach the courts because the prosecutors announced that there is nothing to investigate.

Analysts often talk about certain Fidesz moves as irrational and self-defeating. The tobacconist shop scandal is one of the examples. Magyar thinks that, according to Fidesz logic, the creation of a monopoly and its distribution to clients is a perfectly rational move. “I can do what I want and therefore I go ahead.” Of course, not all Fidesz moves work out, and we will see whether the tobacco affair does or doesn’t hurt the party and Viktor Orbán personally. For the time being it has not. According to the latest polls Fidesz’s lead is assured. What helps the Orbán government survive these scandals are the limits the central power puts on information flow through its stranglehold on public television and radio and other media outlets.

According to Magyar, the mafia state is waging a national war of independence against its own citizens by taking away their wealth and freedom. It is eliminating the sanctity of private property. It is introducing the right to collect taxes before anyone else. It talks about Christianity but takes care of only its “adopted family”; it is cruel to those outside the charmed circle. It preaches about family but what it actually means is the family adopted by the organized “upperworld.” It heralds a society based on work when it receives its income from “protection money” taken from others. “The mafia state is a privatized form of a parasite polity which preaches work but ‘drinks’ dues. But it is no speculator. It goes for the sure thing.”

To be continued

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Minusio
Guest

This is absolutely brilliant. If only a majority of Hungarians could get hold of this analysis! Perhaps some could be persuaded to look at “godfather” Orbán and his organisation differently.

oneill
Guest

“I can do what I want and therefore I go ahead.”

Problem for Fidesz/Jobbik is that a Fuhrer leading from the centre mey well lose touch with what *might* happen at the micro level. I have no idea what might be happening at the countryside level but I do know the level of resentment felt in the several Budapest 24/7s that I do pop in occasionally to buy my cans and kenyer.

Orban needed to keep his corrupt scum on the ground financially connected, hence the tobacco tender,but he runs the risk of pushing the apathetic average voter one step beyond.
The shepherd needs not to push the sheep too far off their pasture.

Minusio
Guest

@ oneill. Orbán “runs the risk of pushing the apathetic average voter one step beyond.”

I see a contradiction there. Precisely because the average Hungarians are apathetic (never mind the few thousand vocal opposition manifestations in Budapest) they can be pushed around.

And then, what voters? Orbán believers behave like those sects in America which were willing to kill their children and themselves at their spiritual leader’s behest. The others just don’t vote. So basically, there are no voters as we know them in a democracy. I have never heard of free and fair elections within any mafia. Have you?

Minusio
Guest

@ oneill. I meant the Jonestown “revolutionary suicide” in 1978. But you can also take the Goebbels Family, May 1945.

An
Guest

@Minusio: I posted somewhere here previously that Orban is like Jim Jones and his followers are like a sect. So that’s an addition to the mafia-state… a mafia-state run by a sect leader, to get the full picture. And he’d rather sacrifice the whole country than give up power.

Minusio
Guest

@ An. I couldn’t put it better.

Petofi1
Guest

An acute analysis of what many of us ‘felt’ was happening.

But with the full power of government, the police and secret services behind them, it’s hard
to see how this can be turned out of office, let alone stopped.

Any Hungarian Ataturks around?

Minusio
Guest

Éva, it’s good that your computer arrives sooner. If you had an “image” of your C: drive on some storage media you could be up and running in 30 minutes. [I hope your Dell doesn’t come with Windows 8…]

Yes, I do believe that Bálint’s analysis is very much to the point and much more useful than many others because he characterises the whole “organisation” instead of just picking out a disagreeable point here or there.

But you also put your finger on another issue: How to spread the word – both domestically and internationally. Hungarian being an isolated language means that the East and Central European media correspondents who are all located in Vienna don’t have the foggiest of what is going on in Hungary until they read Pusztaranger or Pester Lloyd. But somehow they don’t. Hungary doesn’t happen in our media for most of the year.

Another factor may be that no one in the EU is used to be faced with such a blatant liar as Orbán.

Ivan
Guest
oneill: “I have no idea what might be happening at the countryside level” I can assure you that in my rural location, Fidesz enjoy overwhelming support. Even the ‘tobacco’ scandal is just seen as an evening-up of old scores. They DO recognise that there is much less money in their pockets. This, of course, is “because of the EU” or “because of Gyurcsany” or “because of foreigners”. I’m sometimes blamed as one of this latter group, and sometimes I’m an honorary exception – I don’t know which is more offensive, actually. And, as a professional, I have much less income than Fidesz’s latest “figures” release and much less money in my bank – than the average Magyar – though I can hardly believe those figures. Anyway, the drip feed of nonsense from the state-controlled media continues. And in 12 years in Hungary I am yet to see someone publicly reading Nepszava (there were instances in Budapest of people actually being assaulted when this purchased this reasonable and well-written left-of-centre newspaper). Imagine a UK, where Guardian (a comparable paper) readers were too scared to read their paper in public. So most posts here have to end up at the same juncture:… Read more »
Minusio
Guest

@ Ivan. In my mind, billboards look too commercial and are as such not convincing. They also ruin the land- or cityscape. Their information is not in-depth and not “fluid”.

I presume that most Hungarian citizens outside of Budapest get their information throug TV and a newspaper subscription to their liking. They could get all the information in Hungarian by ATV and Klubrádió – via Internet. Apparently they don’t do this. Whether they have no Internet or are not inclined to find those channels, I don’t know.

A year or so ago the idea of a new Radio Free Europe turned up again. Nowadays it should be a “TV Free Europe” in Hungarian that can be received terrestrially across Hungary and neighbouring regions with Hungarian minorities.

It would be meaningful to find a private operator and financing, also from the EU – perhaps even on a larger scale, including all the other countries. The EU sells its convincingly good aspects very poorly. To me this is the main source of euroskepticism: sheer ignorance.

cheshire cat
Guest

Eva, I think I found the article you referred to in English:

http://www.portfolio.hu/en/economy/eus_rehn_urges_hungary_to_focus_more_on_structural_measures_instead_of_tax_hikes.26204.html

Olli Rehn says if Hungary gets out of the EDP, it will get into the preventive arm of the stability and growth pact, and more focus will be put on medium-term sustainability of the economy. Hungary is not great in that area, and yes, he did sound quite threatening about possible sanctions.

Another commissioner, Nellie Kroes is also unhappy, she about the new (higher?) telephone tax.
La-di-da…

Ivan
Guest

The reason I suggested billboard (without party taint) is that people simply refuse to watch, read or listen to anything outside their own beliefs … in Hungary. This is the biggest secret of Orban’s success. I don’t know any Fidesz man or woman who watches ATV. My father-in-law meanwhile, described our Magyar Narancs as “traitorous filth”. So how to get through?

An
Guest

@Ivan, billboard advertising is owned by Simicska’s company (Orban’s right hand man). It’s not possible to advertise on billboards in Hungary without going through him. That’s why you can see all the Fidesz ads on billboards, but none of the opposition’s. Did you seriously think that Fidesz would leave such a loophole open?

big-lawyer
Guest

If maffia is the case, the European Union can start an audit, and send out an interpol warrant for the crime bosses of Hungary.

andy
Guest

I am delighted with the overall clear vision evident in this editorial piece.

BUENDIA BEE
Guest

Dear Miss Balogh
Thanks a lot for you constant flow of information and opinion. Since it’s not easy to get information from inside Hungary in foreign languages, your blog is very valuable source.
Best wishes and success
Buendia Bee

tappanch
Guest

The Continental group, connected to Orban’s chief of staff Lazar might have received as much as 1/3 [1800/5376] of the tobacco retail market.

http://hvg.hu/gazdasag/20130620_500_trafik_egyetlen_kezben_trafikmutyi

petofi
Guest

A Gift For Trolls:

(From L.Bitton-Jackson’s, “I Have Lived A Thousand Years”)

“One Hundred to a wagon!” the Kapo snarls.

We are shoved and pushed into the wagons.

More and more people are shoved into the wagon. The heat and stench keep increasing. Air is steadily drained from the wagon. Breathing is becoming difficult.

The train stands for hours. More trucks arrive. Dogs bark. Shouts. And more shouts. Then we hear a Kapo, “Thirty more in every wagon!”
Thirty more? That’s impossible. We are on the verge of passing out. The crowding, the heat, and the lack of air are beyond endurance. Thirty more and we will suffocate.” (page 117)
* * * * * * * * * * * * * * * *
And, if you listen carefully, you may detect the voice of one L. Csatary…

andysomos
Guest

>________________________________ > From: Hungarian Spectrum >To: andysomos@yahoo.com >Sent: Thursday, June 20, 2013 10:31 AM >Subject: [New comment] Bálint Magyar: Viktor Orbán’s post-communist mafia state, Part II > > > > WordPress.com >petofi commented: “A Gift For Trolls: (From L.Bitton-Jackson’s, “I Have Lived A Thousand Years”) “One Hundred to a wagon!” the Kapo snarls. … We are shoved and pushed into the wagons. … More and more people are shoved into the wagon. The heat and stench keep ” >

LwiiH
Guest

An :
@Ivan, billboard advertising is owned by Simicska’s company (Orban’s right hand man). It’s not possible to advertise on billboards in Hungary without going through him. That’s why you can see all the Fidesz ads on billboards, but none of the opposition’s. Did you seriously think that Fidesz would leave such a loophole open?

Maybe this has changed in recent times but I believe there were 3 or 4 companies running billboards out east. I occasionally run into opposition billboards so I don’t think Fidesz has blanket coverage.

LwiiH
Guest

big-lawyer :
If maffia is the case, the European Union can start an audit, and send out an interpol warrant for the crime bosses of Hungary.

Well, it’s all done legally so there isn’t anything to prosecute. For example, I bid on building a highway. The bid is high but no matter no one else will be able to bid and I can substitute substandard materials.

tappanch
Guest

A new Unterfuehrer position.

Premier Orban appointed Fidesz MP Dorkuta to head be the Energy Tsar [my term]
for seven years. His apparent task is to compel the foreign-owned utilities to sell out to the Hungarian State or/then to Fidesz oligarchs.

http://index.hu/gazdasag/2013/06/20/fideszes_kepviselo_vezetheti_az_energiahivatalt/

tappanch
Guest

Correction: grammar + the name is Dorkota.

oneill
Guest

” I occasionally run into opposition billboards so I don’t think Fidesz has blanket coverage.”

Bajnai recently had some up round the Varosliget area- soon defaced with obscene and racist slogans by local Fidesz/Jobbik zealots.

An
Guest

LwiiH :
<
Maybe this has changed in recent times but I believe there were 3 or 4 companies running billboards out east. I occasionally run into opposition billboards so I don’t think Fidesz has blanket coverage.

That’s good news.

Ivan
Guest
For a brief while earlier this year Hungary was awash with big orange billboards – pictures of Orban, a few mild criticisms and the MSZP logo. They won’t have achieved anything (due to the logo and the weakness of the attack). What is necessary is to fight fire with fire. Fidesz have condemned themselves so often in their own words – these words should be up there, as part of an independent campaign, so that they can condemn themselves and at least make SOME people think. There are many people who vote for Fidesz out of patriotic duty – this idea was introduced in March 2002, entirely successfully. Forget about them. But there are others – particularly the 90% who “will not definitely vote” at present, who should be targeted in a campaign aimed squarely at their pockets. It seems that the evidence of their own dwindling income is not enough – it needs to be pointed out, as does the hypocrisy. It might not work. But it’s entirely mysterious that such a campaign has not been even TRIED yet. The information needs to get out there. Now. Perhaps there should also be a riposte to the “Csak Magyarorszag” campaign… Read more »
tappanch
Guest

The free weekly Helyi Tema, financed by one of the Fidesz oligarchs and tucked into every mailbox, features a huge anti-Bajnai attack on its front page.

Aintitcool
Guest

Perhaps Mr. Magyar should have been a better or at least more successful politician.

Olli Rehn is joking. They will never use any financial punishment againt Orbán and he knows it.

Wait, I know, if any new government will try to dismantle the Orbán-systen then will Olli Rehn and his friends force such government to act “in line with the rule of law” and thus effectively force such government to actually do nothing and keep the Orbán-system.

Orbán won and he won big time, thanks to peopel like Magyar, Rehn and their firends.

Member

Talking about the Fidesz Gang. Coincidentally a company (Continental) from Hodmezovasarhely (mayor Janos Lazar who is also the Minister of State, a close friend of Orban) got very lucky with the tobacco contracts. THey scored 500 stores! OK maybe not all stores are in the company’s name, but every single one is connected to it. Even a retired cleaning lady who worked for one one of the millionaire relatives of the said company’s owner was able to get a store, with no previous experience. Hundreds of stores ended up in the hands of Continental. No, there is no mafia in Hungary!
http://hvg.hu/gazdasag/20130620_500_trafik_egyetlen_kezben_trafikmutyi

Ivan
Guest

And this “patriotic duty” to be Fidesz is the reason that most people are utterly concerned about the whole “tobacco scandal” (a scandal only here and in those few Budapest cafes). Most see no problem in rewarding good Magyars, no problem at all. We’re getting worked up. Nobody else is. Hopeless, again.

NWO
Guest

I agree that this was an excellent summary of the current situation. In light of what has happened in Hungary, it is depressing to see the Turks and Brazilians stand up for their rights (in Brazil, this more about economics, but in Turkey it is about liberty), while Hungarians accept the situation. This is a truly fatalistic society. Those who have really had it have left or are planning to leave.
Anyway, the response of many to the Trafik scandal is that everyone cheats in Hungary, but the amount you benefit is how close you are to people who can do you favors.

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