Tag Archives: Tamás Mellár

Conservative economists on Hungary’s prospects

It was exactly a year ago that I wrote about the “József Eötvös Group,” organized by a number of conservative economists and legal scholars. In the choice of its name, the group honors József Eötvös (1813-1871), who was minister of education in 1848 and again between 1867 and 1871. Eötvös, along with Ferenc Deák and István Széchenyi, is one of the few admirable nineteenth-century Hungarian politicians whose moderating influence was eventually overshadowed by nationalist politicians with little wisdom.

Eötvös was a writer of some renown who joined the turbulent political life of the 1840s. One of his political aims was the reform of the inhuman conditions of Hungarian prisons. He also worked on the theoretical foundations of a future Hungarian parliamentary system and made sure that it became part of the program of the opposition. He served briefly as minister of education in the Batthyány government (March-October 1848). When, after the Compromise of 1867, he became minister of education again, he was at last able to put his ideas into practice. In the first few months parliament passed his bill for the emancipation of the Jews. A short while later, he completed a reform of the Hungarian school system. Finally, the Nationality Law of 1868 became the law of the land, which was a liberal document at the time.

Robert A. Kann in his monumental book A History of the Habsburg Empire, 1526-1918, called Eötvös an enlightened man and added that “had Eötvös’s and Deák’s spirit prevailed, the Hungarian treatment of national groups might not have been inferior to that administered by the Austrian authorities.” Today we would call him a liberal conservative. He is a perfect fit for those liberal-conservative intellectuals who want to offer an alternative to Viktor Orbán’s populism. Interestingly, liberal members of MSZP turned to Ferenc Deák as their idol and established the Ferenc Deák Circle. The two groups are not that far apart ideologically.

The Eötvös Group holds regular open meetings on defined topics. A year ago, when I reported on one of the group’s meetings, the theme was the nature of Viktor Orbán’s system. The key speaker was András Körösényi, a political scientist, who described Fidesz’s world as a political system based on Viktor Orbán’s “oligarchic interests.” It doesn’t really matter where Orbán’s critics come from: their ideas are quite similar. For instance, the liberal Bálint Magyar describes the same phenomenon as a mafia state.

Source: index.hu

This time the topic was the sorry state of the Hungarian economy. While the government is in the midst of a campaign to sell the idea that the economy is booming, the two economists who delivered lectures at the meeting, Tamás Mellár and László Csaba, painted a different, quite grim picture.

It is perhaps telling that while a year ago only a handful of people were interested in the group’s lectures and discussions, this time the place was packed. In fact, extra chairs had to be added, and even then some people had to stand.

Tamás Mellár told his audience that ever since the 1970s for every 1% in economic growth 2.5% of funding has been needed. Thus, between 2001 and 2010, a 17% economic growth required 34% in additional funding. The situation became worse between 2010 and 2015 when, to achieve 10% economic growth, the country needed 35% in additional resources. Most of this came from the European Union, but some of the money came from the nationalization of the private pension plans, loans, and depletion of some of the foreign currency reserves of the Hungarian National Bank. That cannot go on, Mellár declared.

What does Mellár suggest after the removal of the Orbán government? As far as economic measures are concerned, a new government will have to abolish the flat tax introduced by the Orbán government and replace it with a progressive income tax. He would also introduce a wealth or equity tax on the total value of personal assets over a certain limit, which would be one possible way of recapturing some of the public wealth stolen by Orbán’s oligarchs. Instead of forced industrialization, the government should pay attention to new technologies, new business solutions, education, and research. But in order to see any change, Hungarians must break out of the apathy that currently exists in the country. “Now there is no Russian pressure anymore. This time we ourselves caused all this trouble, and we must be the ones who get us out of it.”

Although the government’s predictions for next year are optimistic, László Csaba sees little hope for the expected great economic growth. Interest rates in the United States will most likely rise, and who knows what Donald Trump will be up to. Meanwhile, there is the refugee crisis, populism, low economic growth in Europe, the Russian-Ukrainian conflict, slowing emerging markets, and unpredictable oil prices. One cannot count on European Union subsidies forever. Hungary must rely on itself.

He is convinced that “without comprehensive reform of the education system there is no hope.” The government should leave higher education alone. Instead of constantly reorganizing colleges and universities, the government should concentrate on kindergartens and elementary schools because these are the crucial years where students’ futures are decided. As far as the government’s economic predictions promising high growth are concerned, “they are completely unfounded.” Hungarian GDP at the moment, calculated in U.S. dollars, still hasn’t reached its 2008 level. This is worrisome even if it includes the fact that the forint is now weaker against the dollar. “We don’t have enough capital, we don’t have enough manpower, we spend too little on research and development, and the external environment is not favorable. In fact, the only increase we can expect is an increase in debt.” As for the government propaganda regarding recent tax reductions, it is a sham because for each tax cut there are many new increases elsewhere. “There is a feeling of hopelessness in the country.” He concluded his talk with a Seneca quotation: “If one does not know to which port one is sailing, no wind is favorable.”

Still, there are some hopeful signs. The Momentum Movement’s introductory meeting was filled with interested people. The young organizers urged the audience to ask them questions about their political plans. On the very first day the activists gathered 10,000 signatures of the mandatory 138,000 and by now they reached almost 40,000. People have been standing in line to add their names to the list. The government seems to be taken aback; they didn’t expect such an enthusiastic reception to an anti-Olympics drive. Therefore, attacks on the group began in earnest in the many government-financed newspapers and internet news sites. Since the topic of the Eötvös Group’s next gathering will be “Do we need an Olympics?” pestisrácok naturally discovered a close connection between the learned economists and the young political hopefuls, which apparently does exist. All in all, one can see some early signs of a societal awakening.

January 22, 2017

Conservative critics of the Orbán regime: The József Eötvös Group

I’m convinced that “something is in the air.” There is a growing dissatisfaction in all strata of Hungarian society, which may signal the beginning of more active political participation on the part of those who find the current government’s policies injurious to the interests of the country and devastating for the majority of the Hungarian people.

I already covered the demands of teachers and physicians, which are professional in nature but may at any time morph into political opposition. After all, when students and teachers complain about outdated teaching methods and demand fewer restrictions and more time for independent thinking, they are expressing views incompatible with the undemocratic worldview of the Orbán regime. As we discussed in the comments, most likely the majority of the teachers and doctors who today are challenging the government were Fidesz voters. And if Jenő Rácz of the Veszprém hospital thinks that Hungarian healthcare is on the brink of collapse—something that the lowly nurse Mária Sándor also says but no one listens to—then, believe me, the problem is serious.

As we know very well, there are problems in other fields as well. The economy, of which Viktor Orbán and György Matolcsy are so proud, is struggling if one looks beneath the surface. The spectacular 3.6% economic growth in 2014 was due solely to the unusually large size of subsidies that arrived from Brussels. The state of democracy and the rule of law are also in deep trouble.

Until now only so-called liberal economists and legal scholars criticized the Orbán government’s policies and its trajectory. But now so-called conservative economic and legal thinkers have also felt the need to sit down and exchange thoughts on the sorry state of the Hungarian economy and legal system. I want to emphasize up front that the opinions of these conservative thinkers are practically indistinguishable from those of the liberals. Looking at the situation from the outside, I simply can’t understand why these two groups cannot get together.

The idea of organizing a group of conservative economists and legal scholars came from Tamás Mellár, professor of economics at the University of Pécs, and András Jakab, director of the Institute of Jurisprudence of the Hungarian Academy of Sciences. Mellár was the director of the Central Statistical Office (Központi Statisztikai Hivatal / KSH) between 1998 and 2003. Jakab’s curriculum vitae is most impressive. He taught at the University of Liverpool, the University of Nottingham, and the William and Mary Law School and was research fellow at the Max Planck Institute.

Their idea was to organize small gatherings to discuss topics of importance. Jakab, the moderator, normally invites two speakers who approach the given topic from different perspectives. Their last meeting took place a few days ago. Although they advertised their meetings on Facebook, this is the first time that the public learned of the József Eötvös Csoport (Group).  The group was named for the minister of education between April and September 1848 and again between 1867 and 1871. Eötvös was a moderate, a centrist, and a devoted follower of Ferenc Deák. Today we would call him a liberal conservative.

The group was established in March 2015 by Péter Ákos Bod, Attila Chikán, László Csaba, András Jakab, András Jóri, Béla Kádár, Tamás Mellár, László Sólyom, Péter Tölgyessy, and László Urbán. It would take up too much space to identify each of these people, but all of them were involved in some capacity with the governments of either József Antall or Viktor Orbán. Bod was even the candidate for prime minister for a few days in 2006 when Viktor Orbán felt that without him Fidesz had a better chance of winning the election.

In the front row László Sólyom and Béla Kádár

In the front row László Sólyom and Béla Kádár

I’m not sure how many meetings the group has held since March 2015, but I know that they had one on “corruption and economic decline” where the two speakers were Miklós Ligeti, director of Transparency International Magyarország, and Balázs Szepesi, strategic director of the Hétfa Kutatóintézet (Hétfa Research Institute). Szepesi at one point described those responsible for the Hungarian economy today as blind people trying to fix a watch with a hammer. There was also a discussion on “national independence and European integration.”

The last meeting was about the nature of Viktor Orbán’s system. Is it populism or something else? One of the speakers was András Körösényi, about whose ideas I wrote already in a post titled “Orbán system or Orbán regime: Debate on the nature of the Hungarian government.” This time Körösényi, a political scientist, came to the conclusion that although there are certain identifiable populist elements in Orbán’s political system, his government most of the time ignores the popular will. It is better to describe Orbán’s decisions as based on “oligarchic interests.” This description of the Orbán regime is not too different from Bálint Magyar’s mafia state. Yet they come from different sides of the Hungarian political spectrum.

Although the organizers insist that this is not an opposition group, the speakers and discussants express views critical of the present regime. Sooner or later these conservative thinkers must face the fact that their discussions are more than “offering a good example of civilized discourse.” I very much doubt that any of the founders of the József Eötvös Group believe that Orbán’s political system can be “reformed.”

This became evident to me when I listened to Antónia Mészáros’s interview with Péter Ákos Bod on ATV. Bod, the former Fidesz prime minister delegate, talked about his worries over the rule of law and economic progress that has been halted. He criticized the economy, in which corruption is widespread. He described the existing economic system as a far cry from a true market economy. He criticized the ad hoc nature of economic decisions and the lack of professional expertise. The economy is slowing, he said, and the government is not prepared for the difficulties that will ensue when the flow of money from Brussels slows or even stops. Every time policy makers sense an economic slowdown they come up with some new idea that is supposed to remedy the situation. One such remedy is the idea of giving 10 million forints to families willing to have three children who want to buy a new home. The idea is fraught with hidden pitfalls which are not yet evident. Such fiddling with the economy usually has adverse consequences in the future.

How often did we hear all these criticisms not from “conservative” economists but from “radical liberals,” as Fidesz politicians like to call them? But the message is the same, regardless of whether it comes from the left or the right. The whole system is flawed, and sooner or later it will come to a sorry end. And then the country will need all these people to try to fix the problems.

January 23, 2016