Tag Archives: welfare state

Ferenc Gyurcsány: “Disintegration or something else?”

As always, Hungarian Spectrum welcomes democratic voices from and about Hungary. Today Ferenc Gyurcsány, prime minister of Hungary between 2004 and 2009, offers his solutions to the ills of western democracies. Mr. Gyurcsány is currently the chairman of Demokratikus Koalíció, which he established in 2011.

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Something has gone wrong. Quietly, but ever more noticeably, more and more people in more and more places are in revolt. In the American presidential primaries the anti-establishment Trump and Sanders have attracted millions of voters. The British are holding a referendum on leaving the European Union. In Germany, support for the centrist Christian Democrats and Social Democrats combined barely reaches 50%. In the first round of the Austrian presidential elections a radical right-wing candidate received the largest share of the votes. On Europe’s southern periphery, from Greece to Spain, new political parties and movements critical of the status quo are rising and, in some cases, achieving significant success.

In Central Europe the situation is even more adversarial. From Poland to Slovakia to Hungary, the political parties enjoying the highest support are those that have turned against the values of a common Europe, the achievements of the post-Communist years, and the vision of an open and free society.

The Western democracies are facing previously unknown challenges. The political order that worked well for decades in America and Europe is in trouble. We do not yet know whether this is just a temporary crisis or a total implosion or whether it is just the first signs of a chaotic transition to a totally new order.

Although the problems are obviously complex, certain root causes are very much evident. The first is the reversing trend in social democratization over the past 20 years. Numerous studies have shown that wealth and income disparities in the Western world are increasing at an ever faster pace. Current generations are faced with the fact that it is increasingly difficult to find decent, well-paying jobs and to support a standard of living similar to that of their parents and grandparents. Meanwhile, the wealth and income of a very few are growing substantially. Thomas Piketty writes in his bestselling work, Capital in the Twenty-First Century, that in the countries of Western Europe the top 1% controls 25% of the total wealth, while the bottom half of society controls merely 5%. This represents an average difference of 750-fold! And now those at the bottom and even those in the middle whose status is under threat are starting to revolt.

However, the protesters also come from another segment of society. Highly educated young people who are not protesting because of economic insecurity, but because they feel that certain values are missing. They are the people rallying to Sanders in the U.S., to Podemos in Spain, Syriza in Greece and to other strongly leftist political movements elsewhere.

Another reason for the dissatisfaction is the hollowing out of democracy itself. More and more people believe that “one man, one vote” has been replaced by a system of “one dollar, one vote.” Is there truth to this? There certainly is to the extent that money, corporations and lobbyists have a greater influence on democratic decisions than the will of the nameless millions of voters.

There are also two additional, interlinked phenomena. Traditional class-based societies began to disintegrate about 30 years ago. They were replaced by fractured societies comprised of citizens with multiple identities and beliefs whom traditional ideology-based parties are having difficulty organizing into uniform political communities. Furthermore, the social media revolution of the last decade has resulted in a change from hierarchical, closed political parties into open, network-based, virtual social communities.

In our region this is exacerbated by the belief of many that the change in regime did not bring a better, but rather a more uncertain life. The belief that Brussels forced us to open our markets to Western companies which brought vulnerability, subservience and eventually increased poverty.

So here are the disappointed millions who, as their opportunities continue to shrink, are slowly turning against the decades-old order of Western democracies. They have started to revolt and are becoming more and more effective at organizing themselves over the Internet. They are currently still in the denial phase and are willing to support almost anything that stands in contrast to the established economic and political order.

The proposed solutions by leaders of these movements are murky. Bernie Sanders wants socialism in America. Donald Trump does not want to allow any more Muslim immigrants to enter the United States. London’s former mayor, Boris Johnson, is campaigning for Great Britain to leave the European Union. Viktor Orbán and Jarosław Kaczyński are replacing the rule of law with a Putin-inspired “directed democracy.” These responses are confusing even after taking into consideration that the political actors mentioned do not in any way comprise a uniform group.

The debate can no longer be about whether Western democracy is in trouble, but rather about the potential solutions. Trump and Orbán favor isolation and the protection of the elites as solutions, arguing that this will restore order. In the words of Polonius: “Though this be madness, yet there is method in’t.” However, we want peace and security for entire societies, not just for the privileged few.

By the end of the 1980s I slowly started to understand that nothing can override the order created by freedom. As such, I became and have remained an enthusiastic supporter of the change in regime in Central Europe. However, the freedom unleashed by the change in regime cannot mean that the strong can get away with anything while the weak must put up with it. If freedom does not bring hope and opportunity to the masses then it creates a worse, not a better life for them. Such one-sided freedom results in the masses turning against freedom itself. People disappointed by freedom and seeking new paths are ready to back almost anyone who stands against the democratic order of recent decades. This is fertile ground for populists, nationalists and anyone who promises to break with the past and usher in a different future.

In this way, the freedom of the few against the interests of the many brings upheaval, not stability and order. However, it is evident that this cannot be in the interests of the privileged few either because sooner or later the fear brought on by the anger of the masses will result in them locking themselves in private prisons, surrounded by bodyguards behind the fences of their luxury villas. It is time to change. Otherwise, a catastrophe is inevitable for both the rich and the poor. Everything that is beautiful and uplifting in our Western world will be lost. Or the West will simply become the East. The Wild East…

The only solution is to democratize democracy. If the people believe that democracy is not democratic enough, then the solution is not to take away what little remains of democracy but instead to infuse it with new life. We have to understand that if the current disparities in wealth and income persist then the resulting discontent will sooner or later destroy our world. We cannot continue on a path which provides little or nothing to the working millions, despite economic growth and stable corporate profits. It is not enough to democratize rights and freedoms. Hope, opportunity and upward mobility must be democratized also. It is not right to make people work for a few hundred euros a month. The legal minimum wage should not be below the poverty line. We need a decent European social charter which recognizes the right of workers to stable real wages and their right to a reasonable share of corporate profits. In the age of self-employment and micro & small enterprises, collective contracts no longer have the effectiveness that they did in the era of large corporations. Start-ups which power technological and business innovation are spreading like wild mushrooms, in many cases only to implode in short order. In a world such as this we cannot talk about traditional protections. A new type of income and social safety net is needed. We need to design version 2.0 of the welfare state. The political security and economic European Union must be complemented by the Europe of social security. Corporations, be they small or large, cannot be stronger than the interests of their workers. This must be institutionalized and guaranteed.

New rules are needed to ensure the transparency of political decisions, to control the power of the business lobby and to involve the electorate in decisions to a greater extent. We must expand the use of direct referendums, allow more decisions to be made at the local level, and regain the trust that has been lost in the political system. This is true even in our disintegrating world in which many people want to leave decision-making to a small group of elites, believing that the issues are too complex and that the general electorate does not have the knowledge to deal with them wisely. We must create wide-ranging forums for institutionalized social dialogue. There should be legally-guaranteed forums in schools for students, teachers and parents, in hospitals for patients and doctors, within social welfare institutions and between government and the representatives of the professions. Dialogue-based democracy can make millions a part of the decision-making process, turning common decision making into common practice. We should strive to make as many elements as possible of argument-based and consensus-based decision making–“deliberative democracy”– a part of our political discourse.

As a final thought, if we accept the fact that political parties with roots in the 19th century are increasingly less capable of organizing effective political communities, we must reflect on this as well. Without parties there can be no parliamentary democracy, while without social communities there is no effective discourse and without Internet communities there is no free and wide-ranging airing of opinions. Instead of simply conflicts between political parties, we must organize competitive social networks in which parties, advocacy groups and virtual communities work together based on their own beliefs and their own solutions. Put more simply, a political system based on rivalry between parties should be replaced by a system based on both co-operation and rivalry between social networks.

Everything I have discussed can only be partly realized within national boundaries. Since if, for example, we Hungarians provide increased protections to workers then we run the risk that investors and corporations will seek opportunities elsewhere. A socially democratic world can only be created together at the European level. If the business world organizes itself globally, then we must at least think in terms of Europe.

There are those who would curtail our freedoms because they believe this is the way to create a more orderly and perhaps better world. I recommend the opposite. To protect freedom, we need more freedom. But instead of selfishness, we need social responsibility and the freedom and opportunity for all to participate. Freedom and opportunity. We must not allow the order of freedom to be disrupted by the absence of freedom for all. Otherwise, there is nothing except maybe revolution, which in the end would destroy everything we have lived for and believed in and what we call Europe.

June 22, 2016

When Viktor Orbán is honest: The Hungarian constitution is not a liberal document

It was only today that I managed to find more than an hour to listen to Viktor Orbán’s speech to the honorary consuls who gather every five years in Budapest to reinforce their ties to the country they serve. An honorary consul doesn’t have to be a Hungarian national. For example, I learned that an American professor who teaches in a nearby college in Connecticut just became an honorary consul. Apparently Hungary has honorary consuls in 100 countries, only 54 of which have official Hungarian consular service. In the United States there are 18-19 honorary consuls strategically placed in different parts of the country.

The event took place on September 18 in the chamber that was the home of the Hungarian Upper House before World War II. By all descriptions the consuls found the prime minister’s speech elevating and, although his speech was not interrupted by periodic applause, at the end the audience gave Orbán a standing ovation.

The speech in some ways was quite remarkable. It was a curious combination of surprising honesty and unsurprising falsehood. I doubt that too many people in attendance comprehended the full significance of what they heard.

What did Orbán want to accomplish with this speech? To provide the honorary consuls with ammunition to defend Hungary against foreign criticism. Or at least to explain away Hungary’s bad press in the international media as based on misconceptions. He admitted that these consuls most likely had a hard time in the last three years. Hungarian nationals see their own country differently from those who look at Hungary from the outside. But he offered a few fundamental facts that might make the consuls’ work easier.

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First, Orbán tried to explain his government’s position vis-à-vis the European Union. Ignoring the fact that in the last years his anti-European Union speeches have multiplied and become increasingly antagonistic, he tried to convince his audience that he and his government are not euro-skeptics. They are only euro-realists. During the course of the speech it became crystal clear that Hungary has no intention of joining the eurozone and thus adopting the euro as Hungary’s currency. Of course, Hungary is required to join the eurozone eventually, despite the fact that the new constitution includes the statement that “Hungary’s currency is the forint.” Since Hungary is obligated to join the eurozone, avoiding this obligation can be accomplished only by leaving the European Union.

There was another issue about which he was brutally honest. He told his audience that the new Hungarian constitution is not a liberal document because, in his opinion, “a liberal constitution cannot be the basis of the economic renewal of the country.” He admitted that this is “a strong statement, perhaps even debatable,” but this new Hungary he is building cannot be founded on a constitution that emphasizes “the interests of the individuals.” This is a fact that he will not hide from all those countries whose constitutions are based on liberal concepts. One day other countries will come to realize that indeed a “new economic system” cannot be built on a liberal basis. He categorically stated that economic competition and liberalism are incompatible.

He admitted that questioning the validity of individual rights might have given rise to harsh international criticism and huge debates, but Orbán proudly announced that he managed to prevent such adverse reactions by “a political novum” called “national consultation.” I assume you all remember those 13-14 meaningless questionnaires sent out to 8 million Hungarian citizens. One of these inquired about the relationship between the rights of individuals and the rights of the community; 85% of those who answered agreed that both should be included in the new constitution. With that he avoided possible controversy over the new illiberal constitution, or at least so he said.

What can we learn from this speech about Hungary’s breakthrough economic system? Nothing new. Hungary will not be a welfare state but a workfare state. Hungary will handle the economic crisis differently from the rest of the world. Common wisdom holds that after an economic crisis there will be a slow recovery and that as an economy starts to recover investment will grow and with it job opportunities. The Hungarian solution will be the opposite of this sequence of events. They will start with work which will eventually solve the economic crisis. I don’t think that I have tell you how fallacious this argument is. If there is no private investment and the state doesn’t have money, as Orbán admitted in this speech, then only useless public work can be provided. And digging roadside drains financed by public money will never amount to anything. Orbán invoked the example of Roosevelt, but anyone familiar with economic history knows that the end of the Great Depression in the United States wasn’t brought about by FDR’s public work projects.

As I said at the beginning, the speech was a combination of brutal honesty and outright lies. Here are a few lies. In 2010 Hungary was in a worse economic state than Greece. Since then Hungary’s economic policy has been most successful. In the European Union only five countries managed to lower their national debt and Hungary is one of them. This, of course, is not true. In fact, the national debt has grown. It is true that the excessive deficit procedure was lifted by Brussels against Hungary, but the budget is so tight that there is a good possibility that Hungary will not be able to hold the 2.9% deficit currently projected. He repeated the lie that before 2010 only 1.8 million people paid taxes and now there are 4 million. And, not a lie but a conveniently undated forecast, Hungary will be the leading economic force in the region just as it was ten years ago.

And finally, a few interesting comments from the Q&A session. This is always the time that Orbán improvises and comes up with some interesting “facts.” All cities east of Strasbourg are “German cities.” Like, for example, Vienna, Prague, and and even St. Petersburg. There is only one exception: Budapest. The same Budapest where the majority of the population as late as the second half of the nineteenth century was largely German-speaking? Where first there was a German theater and only afterwards a Hungarian theater?

His thoughts on networking were also amusing. For Hungarians networking is a strange idea because what is networking really? Hungarians are friendly and hospitable, but networking is based on “calculation.” One does something for somebody in order to get something in return. This is really alien to the Hungarian psyche. But the world went a different way and, although it is nice to be old-fashioned occasionally, yes, Hungarians must learn the art of networking.

One final word on Orbán’s illiberal constitution. Yesterday, Károly Herényi, the second man in the Ibolya Dávid-led MDF, wrote an article in Galamus. Here is a man who is not considered to be a far-left liberal. On the contrary. He was a member of a moderate right-of-center party. And what does he say? There is no way that Orbán’s constitution can stay after a (possible) victory by the democratic forces. It must go. He considers any attempt by Gordon Bajnai to make a deal with Viktor Orbán a mistake. He suggests holding a referendum on the constitution right after the election to decide its fate.  I agree with him.