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Abstract

This essay examines Hungary’s Viktor Orbán, and his cultivation of a new form of authoritarian and hyper-nationalist neoliberalism, which I call ordonationalist. With particular emphasis placed on tracing resurgence of the national state, ordonationalism points to the neoliberal intensifications, but also the ruptures to neoliberalism through post-neoliberal advances, exemplified by the Hungarian state. Ordonationalism combines: (1) a newly empowered nationalist state invested in flexibilizing domestic labour and controlling access to domestic capitalist accumulation; (2) a national state captured by political actors as a means towards controlling access to domestic capital accumulation; (3) a novel regime of social reproduction, linking financialization, flexibilization of labour, steep decline in supporting social reproduction, and supporting consumption as a source of social reproduction. This project is hegemonic. However, the contradictions between radical neoliberalization and radical nationalism generate ever-more instances where an authoritarian state steps in to solve crises generated by its contradictions.

Keywords

authoritarianism hegemony Hungary neoliberalism post-neoliberalism social reproduction state power

Political leaders as diverse as the United States’ Donald Trump, Turkey’s Recep Tayyip Erdoğan, and Hungary’s Viktor Orbán are widely seen as personifying an authoritarian leadership style. Viktor Orbán has especially become a poster boy for the rise of his self-described ‘illiberal democracy’. His regime, however, is far more innovative than this characterization alone reveals.

Orbán has unquestionably taken Hungary down a path of declining democratic accountability (Krekó and Enyedi, 2018). After re-election in 2010, he and his Fidesz party significantly diminished the role of the country’s Constitutional Court, bringing a new constitution into effect in January 2012. The new constitution, among other things, decreased separation of powers, weakened oversight bodies such as several specialized ombudsman offices which had been designed to ensure government and judicial accountability, and reduced judicial independence (Bánkuti et al., 2012).

Yet Orbán has gone beyond democratic backslide. He has established a new type of post-neoliberal regime, merging authoritarianism, racist and patriarchal nationalism, clientelism, and partial neoliberalization. These elements are all fundamentally linked. Employing a Gramscian method to analyse the totality of the Orbán regime, especially as has been interpreted through Bob Jessop’s (2015) strategic-relational approach to the state, this essay places particular emphasis on tracing transformations of the Hungarian state. It analyses how the form, scale, and role of the state are fundamentally linked to the political economy in which the national state is embedded, and how the national state is a central actor despite profound changes to the global economy.

Such a framing enables identification of the overall logic of the contemporary political society Orbán has shaped, and the interlinkages between the social, political, and economic projects he has advanced. Furthermore, this method identifies the neoliberal intensifications, but also the ruptures to neoliberalism through post-neoliberal advances exemplified by the current Hungarian state.

Orbán can be seen as representing a contemporary manifestation of Bonapartism, which can be called Orbánism. This is in line with Karl Marx’s analysis of Bonapartism as a form of charismatic rule emerging from a crisis of hegemony, with historically specific articulations in the figure of a single leader who claims to represent the people and advocates rule through a strong state (Marx, 1954). Bonapartism emerges from a deadlock between social classes, and exhaustion wrought by perpetual crisis. These political forces result in emergence, and acceptance of, an authoritarian leader who harnesses the power of the state to end class conflict (Riley, 2017).

Orbánism is one such contemporary form. As elaborated below, in a classically Bonapartist fashion, Orbán emptied the Hungarian parliament and constitution of any meaningful role and has intensified his personal rule over Hungary. However, perhaps most extraordinary to Orbánism, and unlike the original Bonapartism identified by Marx in the Eighteenth Brumaire, Orbán has accomplished an intensive concentration of power through marketization, without recourse to the barrel of the gun in the way that a figure like General Augusto Pinochet had done in Chile in order to realize his revolutionary project (Clark, 2018).

Orbánism crystallizes the political logic of neoliberalism taken to its extreme. It is Bonapartism for the neoliberal age; a political solution to the crisis of hegemony produced by neoliberalism, and whose strategy for accumulation of power is to take control of the state as primary arbiter over accumulation of capital.

At the same time, were we to simply analyse Orbán as an exceptional political figure, we would fail to identify the balance of forces and social relations manifested by the contemporary Hungarian state under his leadership. ‘Orbánism’, like Bonapartism, tells us that there has been a crisis of hegemony. But it does not tell us about the kind of regime which has become a solution to the crisis in hegemony.

To this end, it is fruitful to analyse contemporary responses to crises of neoliberal hegemony by returning to 1980s scholarship which, drawing from the work of Nicos Poulantzas (1978), identified how crises in 1970s capitalism were yielding authoritarian rule in attempts to wrestle control over society and the economy. One extreme form was the military dictatorship of Augusto Pinochet in Chile. But another less overtly militaristic development of particular concern to British Marxists was that of home-grown ‘Thatcherism’.

Thatcherism, famously named first by Stuart Hall (1980), represented the resurgence of authoritarian tendencies in apparent liberal democracies. Hall’s analysis was especially strong in pointing to a crisis of hegemony, and in dialogue with the work of Nicos Poulantzas, Hall saw Thatcherism as a form of ‘authoritarian populism’ with a pearl necklace.

In a robust debate with Hall and others, Jessop et al. (1984) then moved from examining Thatcherism to a broader conception of ‘neoliberalism’. Jessop’s view of neoliberalism developed into viewing neoliberalism as having produced a regime which incorporates dimensions such as social reproduction and, crucially, is also represented by a changed role and form of the national state.

Despite some notable differences, Hall and Jessop each assessed that the economic crisis of the late 1970s, and political responses to crisis in the 1980s, had marked a new phase in the capitalist state. However, by the late 1980s, many scholars ceased emphasizing the authoritarian tendencies unleashed by neoliberalism and the neoliberal state. Appearance of a social-democratic Third Way appeared to soften the authoritarian tendencies of 1980s Thatcherism, with figures like Tony Blair in the UK, and Bill Clinton in the United States, effecting far-reaching labour and capital accumulation reforms, such as the spread of workfare policies (Peck, 2001). Foucault-inspired scholarship traced how this soft neoliberalism came in the guise of neoliberal morality through state policies aimed at ‘helping people help themselves’, and merging with conservative family values (Geva, 2011; Cooper, 2017).

Some 40 years later, neoliberalism’s softer face is hardening. The crisis in democratic institutions has been linked to the crises of capitalism since the Great Recession of 2008. Will Davies (2016) has argued that states are increasingly turning to top-down ‘sovereignty’ and constitutionalism when faced with market failure. Drawing also from Hall, Jessop, and Poulantzas’s work from the 1970s and 1980s, Ian Bruff (2014) has observed that we are witnessing the rise of ‘neoliberal authoritarianism’. Like Bob Jessop’s (2019) more recent work on late stage neoliberalisation, Bruff argues that states are struggling to achieve hegemonic consent, thereby turning to increasingly authoritarian policies to advance neoliberal projects which extend their disruptive tendencies. Orbán shows, however, that it is possible to fortify hegemonic rule through advanced neoliberalisation.

I draw from Hall’s ‘Thatcherism’ and Jessop’s regime-level neoliberalism, and his view of the state as a social relation, to identify what is old and new in Orbán and his regime. From Hall we can uncover the Bonapartist and Thatcherite core to Orbán’s regime, and its emergence from crisis. Orbán does represent a new Bonapartism, an extraordinary political figure who appropriated control of the state following the post-socialist crisis of neoliberalism in Hungary.

However, Orbán has also shaped a new post-neoliberal regime. This regime contains elements of neoliberal continuity in intensifying marketization, flexibilizing labour, and commodifying and even financialising social reproduction (see also Fabry, 2019). At the same time, it is post-neoliberal in its reconfiguration of the state. This state seeks to reassert its autonomy from the international institutions which had become the policing agents of global neoliberalism and enforces its own role as key arbiter in domestic marketization, class reproduction, and capital accumulation.

Like Thatcher’s regime had in the UK, Orbán poses as market saviour to ‘the people’. At the same time, he has also effected a deep transformation of the post-socialist state and society. Orbán has therefore not only steered the Hungarian state into a neoliberal authoritarian form but has been a pathbreaker in fostering a post-neoliberal hegemony.

Flooding Hungary with access to global commodities, and with episodic interventions into consumer market prices, Orbán seized the support of Hungary’s new middle class and its rural peasant-workers. He also created a domestic oligarchic class dependent on him. Despite a dramatic rise in inequality, a decline in redistribution, and oligarchic drift, Orbán has recalibrated the state to emphasize consumption as the basis of citizenship, has sought to seize state control over domestic capitalist accumulation, and through brute racism, misogyny, and homophobia, along with a take-over of universities, culture sectors, and the media, has intensified feelings of nationalist solidarity within Hungary’s borders. I call this regime ‘ordonationalist’. Unlike the disruptive nature of neoliberal authoritarianism, ordonationalism orders. This ordering is effected through the return of the state, which is not only the ‘national’ state but a nationalist state.

Ordonationalism, as a post-neoliberal regime of state-society relations, incorporates three dimensions:

A recomposition of the neoliberal state, which is no longer the neoliberal ‘hollowed out’ state identified by Jessop (1994), but rather a selectively powerful and authoritarian state. This includes ordoliberal-style economic policy. Here I am referencing the school of economic thought associated with the University of Freiburg during the 1930s, which emphasized protection and enhancement of national capitalist markets through a strong national state (Bonefeld, 2012, 2017). The ordonationalist state invests enormous power in making domestic labour flexible, in enforcing accumulation by dispossession (Harvey, 2003), in enabling access to consumption, and in controlling access to capitalist accumulation. It is even less committed to decommodification of social reproduction compared to the workfare state. There is also a scalar recomposition of the state. The neoliberal state Jessop had analysed was succumbing to the increased role of sub-national governance in competition over capital investment (Brenner, 2004). Yet, with the ordonationalist state we see aggressive moves to take back control of urban governance and regional cooperation, and a re-concentration of power in the national state. The national state has made a comeback.

The national state is captured by an individual, or more likely, a group or political party, as a means of controlling the state and access to capital accumulation. Pluralist parliamentary democracy is emptied of any genuine content. The strategic logic of accumulation of power is one where control over the state is intensely oriented towards controlling access to capital and domestic labour markets for strong direction of capital accumulation nationally. This also relates to its scalar recomposition. Local governance competes for political connection to the national ruling party, since the national ruling party controls the spatial distribution of capital investment.

A novel regime of social reproduction, linking financialization and middle-class pronatalism, flexibilization of labour, a steep decline in the welfare state and redistribution, near abandonment of support for the poorest, and dedicating state resources to enabling consumption as a source of social reproduction. The new middle class is cultivated as a critical beneficiary. This regime ideologically promotes neoliberal populism, which not only reduces redistribution and espouses neoliberal morality, but which goes even beyond neoliberal workfarism so that the poorest, not just ethnic others, are outside ‘the people’. It also cultivates racist, patriarchal, and nationalist ideologies, which attempt to foster internal solidarities within the nation regardless of class and growing inequality, and even deny the politics of class, and which are exclusionary through racial, gendered, and ethnic boundaries. Seizing back the state has also entailed a strategy of reviving the nation-state. The party and leader at the helm of the nation-state is the decisive and strong leader of an essentialized national body.

Through an explicitly hegemonic strategy where the state claims to represent all social classes, Orbán’s ordonationalism enriches and pauperizes through a muscular state, and a strong charismatic leader. However, the contradictions between radical neoliberalization and rabid nationalism, and attempts at controlling domestic capital accumulation, generate ever-more instances where an authoritarian state steps in to solve crises generated by its contradictions. The capacity to intervene in these moments of crisis is built upon global dependencies on more powerful actors, such as Hungary’s increasing dependence on China and Russia. The ordonationalist path is ‘post’-neoliberal to the extent that it represents neoliberalism’s latest frontier and generates a new set of contradictions.

A Reconfigured Nationalist State

Observing over a decade of Orbán’s rule in Hungary, it is now clear that when Orbán was re-elected in 2010 he intended to ruthlessly take back control of the state. Of paramount importance was a plan to position the Hungarian state as the prime authority in steering domestic capitalism.

Well before Orbán’s re-election, anti-neoliberal conservative intellectuals helped pave the way towards the Fidesz party’s worldview, combining nostalgia for a strong sovereign state with anti-welfare state ideology (Bluhm and Varga, 2019; Buzogány and Varga, 2018). Responding precisely to the loss of state autonomy which many post-socialist governments had accepted in the 1990s and 2000s as the price to pay for participation in global capitalism, Orbán re-nationalized certain sectors of the Hungarian economy. His re-election in 2010 was thanks, in part, to a campaign which promised economic self-rule, and which paved the way to further re-election in 2014 (Johnson and Barnes, 2015). This included a powerful critique of the International Monetary Fund and World Bank, and a strategy of ‘financial nationalism’, which Johnson and Barnes describe as pursuing monetary sovereignty and privileging ‘national “insider” financial institutions’ currencies, connections, and resources over those of outsiders’ (Johnson and Barnes, 2015: 538). Insiders, in Orbán’s version of financial nationalism – and in nearly all aspects of his national rule – are those who show loyalty to Orbán the person, and to his Fidesz party.

Alen Toplišek (2020) has called the Hungarian (and Polish) path one of ‘counter-neoliberalisation’, which includes re-nationalization of key sectors of the domestic economy, protectionist measures for domestic industry, and ‘decommodification’ or controls placed on basic needs like utilities. However, ‘re-nationalization’ needs to be understood as a novel form of financial nationalism which extends, in selective ways, the logic of neoliberalism – and in that sense should not entirely be viewed as ‘counter-neoliberal’. Whereas ‘nationalization’ used to mean direct state ownership of key economic sectors or service-provision, sometimes via expropriation, in the contemporary Hungarian context it also entails strategic use of legal or economic sanctions aimed at reducing foreign-owned private capital in Hungary in specific sectors, and then either direct state ownership of the vacuums created once foreign capital departs, or ensuring that loyal domestic capitalists take over those sectors.

For example, Toplišek notes that Orbán introduced the highest bank levy globally, which primarily affected large foreign-owned banks. By 2017, according to a report cited by Toplišek, foreign ownership of the banking sector decreased from 80 per cent to just below 50 per cent, and with two-thirds of banking shareholds owned by the state (European Banking Federation, 2018). Agnes Gagyi and Tamas Gerőcs (2019) note how Orbán made state interventions into ‘non-tradable’ sectors such as telecommunications, transport, or banking, mobilizing parliament to pass sometimes obscure laws designed to re-distribute these sectors away from foreign capital and away from political rivals, and concentrating ownership of those sectors into national oligarchic dependents (Szelényi, 2016).

Another example is how the Fidesz government in effect nationalized the second-pillar private pension sector (work-related pension funds) in 2010. This was not simply achieved through direct appropriation. Instead, it was accomplished by first passing a law through parliament which made it highly unfavourable for any individual to opt for private pension contributions. The penalty entailed losing eligibility for the state pension scheme, which was 75 per cent of a total pension, to which employers were regardless obliged to make contributions. Incredibly, workers had one month to make a choice, and ultimately, according to Dorottya Szikra and Diána Kiss (2017), 97 per cent ‘opted’ for the purely public scheme. Meanwhile, accumulated private pension assets were ‘transferred’ to a newly created government fund. Nationalization has also focused on the energy sector (Isaacs and Molnar, 2017), a move of significant political importance to the Fidesz government in seeking to control energy prices in Hungary.

Prior to Orbán’s re-election, Hungary’s sovereign debt had reached as much as 60 to 80 per cent of its GDP, and the Socialist Party in power enacted austerity measures and asset privatization to cut government deficit. Following the 2008 global financial crisis, the Socialist government took on more loans from the IMF and World Bank (Johnson and Barnes, 2015).¹ Orbán’s 2010 re-election campaign vowed to end Hungary’s indebtedness to the IMF, the World Bank, and the EU. Hungary’s Central Bank was reformed to reduce its autonomy, and Orbán appointed as its governor the influential figure of György Matolcsy, his former Finance Minister, who has remained in the position of Hungarian National Bank governor since 2013. Reducing debt dependency on global institutions of neoliberal finance continues to be a crucial concern for Orbán and Matolcsy. Another manifestation of trying to avoid dependency on Europe is, until very recently, eschewing the sale of Eurobonds. In 2019, Bloomberg News went so far as to pronounce that Orbán was taking ‘Eurobonds to the Brink of Extinction’ (Eder, 2019).

There are therefore important continuities and ruptures between what Jessop (1994) identified as ‘the Schumpeterian Workfare State’ (SWS) and the ordonationalist state. The objectives of the neoliberal SWS, according to Jessop, have been, ‘to strengthen as far as possible the structural competitiveness of the national economy by intervening on the supply-side; and to subordinate social policy to the needs of labour market flexibility and/or to the constraints of international competition’ (Jessop, 1994: 24). This has gone hand-in-hand with the ‘hollowing out’ of the national-level state. The SWS national state was weakened by its dependency upon the dynamics of global capitalism, a situation which Jessop diagnosed as leading to states’ loss of autonomy, and the resurgence of subnational governance in competition over innovation, labour flexibility, and attracting capital.

By reasserting the autonomy of the national state, Orbán’s ordonationalist regime has also tried to wrest back control over sub-national governance and sub-national competition, especially in controlling the city of Budapest. The city itself has become a site where the national government has taken a more authoritative role in large urban development projects (Czirfusz et al., 2015), including an ongoing battle over control of Budapest’s beloved City Park. Employing his pandemic-related emergency powers passed by parliament, Orbán is preventing the Budapest City Council from suspending major construction plans which had already been underway to transform the urban green space into a mega museum district (Beard, 2019). This process holds parallels to Erdoğan’s mega-projects in the city of Istanbul (Akçalı and Korkut, 2015). Orbán has chipped away at municipal independence throughout Hungary and has signalled his intention to fight municipal autonomy in the city of Budapest, the primary bastion of political resistance to the Orbán regime.

Another fresh manoeuvre is the use of pandemic emergency powers to create ‘special economic zones’, by virtue of which a portion of tax revenues and control are transferred to county governance. Municipalities in such zones will simply lose a portion of tax revenue. Whereas some municipalities are led by opposition mayors, all counties in Hungary are led by Fidesz-affiliated politicians. The first such declared special zone is located in Göd, a small city outside Budapest where a Samsung battery production factory is situated. Göd is led by an opposition party mayor. In a single stroke this law has been able to exact national-level economic and political control (Vass, 2020a). Samsung has since announced that it plans to expand its battery production plant in Göd, and the national government will support this expansion by improving surrounding infrastructure (Vass, 2020b).

Ordonationalist State Capture (Post-Neoliberal Prebendalism)

A study by Éva Voszka (2018) estimates that the volume of Hungarian state-owned assets increased by two-and-a-half times between 2010 and 2015. Voszka notes, however, that some of this can be considered ‘transitional nationalisation’, since in certain sectors assets have been re-privatized via sale to domestic capitalists, ostensibly to boost small business and the middle class, but de facto are sold to a group of loyalists with close connections to Orbán and the Fidesz party (see also Magyar, 2016).

Orbán has cultivated a nationalist-capitalist bourgeoisie, serving their interests above and against those of global capital when he can (Szelényi, 2016). Noémi Gonda’s (2019) fascinating study of land grabs in rural Hungary between 2010 and 2015 shows how the Orbán government orchestrated a thunderbolt sale of state-owned agricultural land to oligarchic families, culminating in 2015 when the refugee crisis was otherwise attracting domestic and world attention. Gonda importantly notes that Hungary’s first oligarchs emerged initially as rural landowners in the 1990s. Having campaigned in 2010 with the claim that the Hungarian state, which still owned a significant portion of agricultural land as a legacy of its state-socialist past, would ensure that foreigners would not buy up Hungarian land, and even promising that a sensitive rural development project supporting small farm holders and rural families would be implemented, the Orbán government rapidly sold off state-owned lands in 2015.

Gonda draws from the research and testimony of József Ángyán, a former Fidesz politician who had acted as the Fidesz government’s State Secretary in the Ministry of Rural Development between 2010 and 2012. A rare voice of conscience in the Fidesz party, Ángyán eventually resigned from the Fidesz parliamentary caucus in protest against a 2013 land reform law which had ostensibly aimed to limit foreign ownership of Hungarian agricultural land but, according to Ángyán, was a vehicle for Fidesz to enable Hungarian oligarchic families to concentrate ownership. The Fidesz government suddenly put up agricultural lands for auction in 2015, although Ángyán claims that Fidesz-connected families were told already in 2014 of the plans so that they had enough time to amass liquidity enabling quick land purchases.

According to his investigative reports, Ángyán found, for example, that in one county, 27 figures close to Fidesz purchased 70 per cent of the land put up for auction, with only 9 per cent going to existing smallholders. Furthermore, only 65 per cent of the land sold had been put up for auction at all (Ángyán cited in Gonda, 2019: 612). Many existing smallholders had little chance to purchase the land they had already been cultivating. Gonda argues that the true nature of the Fidesz regime of agricultural land has been privatization concentrated in the hands of Fidesz-related oligarchs, a decline in rural smallholding, and a national campaign promoting consuming Hungarian agricultural products.

Some have called this system prebendalist, a capture of government offices for the purposes of generating profit, and the distribution of offices to close-knit loyalists and family members for their own access to profit and power (Szelényi and Csillag, 2015; Szelényi, 2016). Viktor Orbán’s son-in-law is one such example, with his Elios company having been a frequent winner in tenders for EU funds distributed by the Hungarian state (see Oroszi, 2016, for chronology).

Orbán’s cross-class hegemonic bloc incorporates conservative organic intellectuals who might have otherwise gone in the direction of German-style Christian Democracy.² Budapest’s leafy 12th district is an epicentre of this merger. Once a geographic bastion of well-healed Hungarian conservatives, it concentrates now the merger between conservatives and the new Fidesz rich, where figures like Orbán’s son-in-law are purchasing land and building enormous new mansions (see Oroszi, 2016).

The logic of political accumulation of power thereby shifts away from the ‘political neoliberalisation’ path identified by Stephanie Mudge in her book Leftism Reinvented. Mudge (2018) shows how neoliberal economic expertise became a source of symbolic and political capital in Western leftist parties, giving birth to the ‘third way’. The path to accumulation of power outlined by Mudge is one which is still nested within the institutional matrix of the neoliberalizing state. Mudge traces the trajectory of professional politicians and experts, and the intermingling of the two. Their career paths, and paths towards political power, were paved by accruing rational-legal markers of expertise, and then accumulation of power within political parties via neoliberal economic expertise, which needed to be clearly autonomous from private capital accumulation.

But the post-neoliberal path towards accumulation of power encapsulated by the ordonationalist politician is to accumulate power by displaying unswerving loyalty to the party and state leader, to eschew the neoliberal orthodoxy represented by institutions like the IMF, the ECB, and the World Bank, and in a post-neoliberal prebendalist modus operandi, to no longer pretend that a politician is autonomous from direct access to capitalist profit via the state. Office-holding entails gatekeeping others’ access to profit, and if fully exploited, is a path to the office-holders’ own accumulation of private property and profit. Ordonationalism is distinct from oligarchy, but ordonationalism eases the path towards oligarchic drift.

From Neoliberal to Post-Neoliberal Social Reproduction

Full-scale capitalist consumption arrived relatively late to Hungary, following its post-socialist transition. Hungarian elites have long sought to create a strong middle class as a sign of successful capitalist transition (Szelényi, 2016). However, the role of today’s middle class and its consumerist orientation differs sharply from that of the post-Second World War Keynesian Welfare State (KWS), and even from the post-Thatcher Schumpeterian Workfare State (SWS).

The ordonationalist state has hollowed out its former role in de-commodification through the welfare state. Orbánism instead enables access to consumption as its regime of social reproduction. This is not the consumption model of the KWS, which promoted full employment in a relatively closed national economy (Jessop, 1994). The KWS was geared towards enabling mass consumption across social classes, with national economies manufacturing those very commodities for consumption. But it is also no longer the neoliberal SWS.

The neoliberalized welfare state, as we know well by now, ceased redistributing across class, commodified workers through workfare policies, no longer protected workers from market fluctuations, and especially disciplined labour so that it can remain flexible enough to be competitive in a global capitalist market. In this regard, Orbán’s regime has implemented some fairly classic neoliberal policy.

A signature reform implemented after Orbán’s re-election in 2010 was parliament’s major overhaul in late 2011 of the Hungarian Labour Code. Prior to the reforms, the government had published in the spring of 2011 a document called the ‘Hungarian Work Plan’. This plan proposed that ‘labour security’ needed to be given new meaning. Rather than ensuring job security, the new labour regime would rather provide ‘employment security’ so that workers could learn to adapt to the fluid needs of labour market demands (Gyulavári and Hős, 2012). Gyulavári and Hős note that the code radically transformed the Hungarian legal regime by demoting labour law to align with civil law. Hungarian labour law rests now on principles of individualized contractual relations, rather than on the former regime of collective agreements.

The Socialist Party in power during the 1990s and early 2000s had already implemented a workfarist regime in Hungary. But the Fidesz government in 2011 further tightened workfare rules, making them more punitive and more meagre. It also implemented a mandatory public works program, shifting management from municipalities to the national state (Szikra, 2014). The minimum wage for participation in the new workfarist public works program was changed to a special rate, at 70 per cent of the already very low national minimum wage (Vidra, 2018). In a stroke of rhetorical genius, Orbán articulated the seemingly state-socialist view that Hungary would be a ‘work-based society’ (cited in Vidra, 2018: 73), but emptied this concept of any guarantee of employment and an adequate social support system. The working poor, however, have been somewhat discursively and materially rewarded in comparison to the so-called ‘idle poor’, who are implicitly Roma (Melegh, 2016).

Hungary also has the lowest corporate tax rate in Europe at 9 per cent. Thanks to low corporate and employer taxes, Hungary attracts companies such as Mercedes-Benz, Opel, and BMW, which are opening new plants in Hungary, and which provide working-class and middle-class employment, but with lower salaries and benefits paid to Hungarians compared to workers in Western Europe (Gagyi and Gerőcs, 2019).

Aimed at neoliberal-style competition over global capital investment, the guarantee of low wages and low employer costs have somewhat backfired by creating deep labour shortages in Hungary. Workers have been leaving for years for higher-paying jobs elsewhere in the European Union (Reuters, 2016). At the same time, Orbán’s racist and nationalist ordonationalism limits specific migrant flows into national borders, resulting in heavy-handed top-down liberalization and forced flexibilization of ‘native’ (white) labour markets (Gagyi and Gerőcs, 2019).

In an authoritarian move to solve the contradiction of deeply flexibilizing labour to attract capital investment, resulting in Hungarian labour’s consequent out-migration into the EU, and a nationalist limitation on migration into Hungary, the so-called ‘slave law’ was passed in late 2018. Responding to labour shortages primarily in German car manufacturing plants, the Hungarian parliament passed in a matter of hours a law allowing employers to demand 250 to 400 hours of overtime work annually from employees, and with a delay of wage compensation to as long as three years after overtime work is completed.³

Of equal importance, rather than aiming towards significant national production of commodities for consumption, the national economy is presumed to be nested within a global political economy in which it is preferable to foster free trade and low tariff barriers to enable widespread consumption. Pinpoint re-industrialization is not aimed at creating commodities for national consumption, but rather as a node within global production and consumption chains.

In this ordonationalist regime, and unlike the KWS, and even unlike the SWS, labour is not the central vector of state-citizen relations. Instead, consumption is crucial. The ordonationalist state does not significantly invest in social reproduction. It supports consumption for those who can.

According to OECD reporting, poverty has increased in Hungary since 2007 (OECD, 2016). An estimated 35 per cent of Hungarians are considered ‘materially deprived’, of which 19 per cent are ‘severely deprived’. Both indicators are double the EU average. Investment in direct social reproduction is minimal. A joint EU and OECD report shows that Hungary ranks low within Europe in public health care expenditures, spending half of the average per capita spending in the EU (OECD and European Observatory on Health Systems and Policies, 2017). Two-thirds of health spending comes from public sources, with a remaining third of health spending paid out of pocket. The latter is double the EU average, and particularly disadvantages the poor. As this author knows from direct experience, even within the public health care sector, some health providers explicitly ask for informal direct cash payments for services. Health indicators show the effects of these policies. Hungarian average life expectancy remains below the EU average.

Ordonationalism goes even further than the SWS in its punishment of the poorest and most vulnerable who have not weathered the transition from state-socialist worker-citizens to neoliberal capitalist subjects. This is exemplified in the Fidesz government’s approach to homelessness. Homelessness had already been criminalized in Hungary in 2012. Yet, shortly after Orbán’s 2018 re-election, the Fidesz-controlled parliament went even further by passing a bill to amend the constitution with a provision which enshrines the criminality of living in public spaces (Fabry, 2019). This neoliberal populism not only punishes the poorest and most vulnerable but renders them as outside ‘the people’ the national constitution protects.

Even higher education, a traditional avenue for developing social capital which had remained a high priority in the immediate post-socialist years, has undergone privatization and significant increase in privately-paid tuition fees.⁴ The Orbán government’s introduction of a flat income tax, currently at 15 per cent, alongside introduction of the highest Value Added Tax (VAT) in Europe at 27 per cent, captures this shift from the state’s relationship to citizens via labour, to a relation pivoting around consumption. Citizens, in turn, are ‘rewarded’ with access to consumption, and the state extracts revenues from consumption taxes.

Just as ordonationalist policy intensified some neoliberal workfarist tendencies, it has also intensified citizens’ financialization. On the surface, Orbán ‘saved’ many Hungarian households from the consequences of financialization during a mortgage crisis in 2011. Hungarian homeownership had been financialized well before 2010 through post-socialist mass privatization of home ownership (Bohle, 2014). To help fuel home ownership, Hungarians had been encouraged under the (post-socialist) Socialist government to take on foreign and low-interest mortgages denominated in Swiss francs (Pellandini-Simányi et al., 2015). When the Hungarian forint plummeted relative to the Swiss franc in autumn 2011, Orbán decreed that foreign banks who had lent to Hungarians had to accept an artificially lowered currency exchange rate, and that the banks would have to shoulder the losses. This financial nationalism made Orbán appear like a populist hero.

However, the Orbán regime has also selectively financialized Hungarian households in policies that simultaneously financialize but also support desired populations. One example is the so-called ‘baby bonds’, which can be purchased by Hungarian citizens living in Hungary with the birth of a child, guaranteed to pay a yield that is 3 per cent higher than the average rate of inflation (Budapest Business Journal, 2020a). The sale of domestic household bonds is a remarkable innovation for a formerly state-socialist society.

Although state-socialist elites tried to develop a Hungarian urban middle class (Szelényi, 2016), Hungary has nonetheless historically had a relatively weak middle class, and since the post-socialist transition period this is still the case, even compared to the country’s post-socialist neighbours (Albert et al., 2018). Orbán has heavily invested in enlarging Hungary’s new middle class. Scholars continue to debate how to define, and measure, the ‘middle class’ and ‘new middle class’. A collective book project comparing ethnographies of the new middle class globally helpfully converges on distinguishing between the ‘traditional middle classes’, such as educated professionals or those bearing especially cultural capital, with the ‘new middle class’ of developing economies. The new middle class is employed in private sectors benefiting from neoliberalizing economies (Heiman et al., 2012). Their consumption style, compared to traditional middle classes, is ‘more Western-oriented, and more deeply integrated into global capitalism’ (Koo, 2016: 443).

The Hungarian new middle class is oriented around property ownership, where single-family houses signify one’s status hierarchy, especially as superior to rural peasant-workers and the declining working class (Fehérváry, 2013). Hungary’s new middle class appears, so far, to be satisfied with its new-fangled capacity to consume, the flat income tax, and is wooed by Orbán’s housing policies which also tie middle-class home ownership to promotion of middle-class childbirth.

Middle-class reproduction is oriented around a series of policy packages rolled out since 2017. They also re-emphasize women’s reproductive roles. One policy offers, for example, a loan to each woman under 40 who marries, and progressive debt reduction with the birth of children, and debt cancellation with the birth of the third child. Another policy from 2017 first supported home-purchasing by offering state-subsidized mortgages and deductions for married couples who commit to having at least three children, while a more recent reform reduces the commitment to two children. However, those employed through public workfare schemes are not eligible for the mortgage benefit. With skyrocketing university tuition costs, the government has offered student loans which will be forgiven after the birth of a third child. Relatively privileged citizens become financialized subjects at a young age and are de-financialized by the state if they procreate and show commitment to demographic renewal.

These schemes are not overtly racist. However, since Roma are over-represented in Hungarian public works programs and consequently cannot be eligible for these loan privileges, these policies have racialized effects (see Vidra, 2018). Similarly, only those who can shoulder debt can take on debt, i.e. citizens who already have enough economic or social capital to do so (Szikra, 2018). This is in line with a general trend towards what Hungarian sociologist Attila Melegh (2016), based at the recently privatized Corvinus University,⁵ calls ‘demographic nationalism’. Demographic nationalism discursively espouses nationalist population renewal, but selectively rewards pronatalist benefits and, in Hungary, further contributes to already-existing Roma marginalization (see also Feischmidt and Szombati, 2017).

The new middle class and peasant-workers, in turn, have been provided a flow of access to commodities within Hungary, a political economy of consuming cheap stuff in a country where citizens still remember shortages and state-socialist austerity. At the same time, the poverty of Hungary’s rural peasant-workers is crucially alleviated by Orbán’s consumer price interventions, very cheap consumption, and concealed by the smoke and mirrors of Fidesz’s strategically deployed anti-gypsy and anti-refugee hysteria (Szombati, 2018).

Hungary’s appearance of affluence is also fuelled by mass budget tourism, giving Budapest a superficial gloss of being a bustling European city of sophisticated consumption. But Budapest scarcely resembles global cities like New York City, or London, the playgrounds of the global rich and centres of finance capitalism. Budapest is the ordonationalist city par excellence. Dotted by three IKEA megastores, the city provides the appearance of prosperity to its inhabitants through a plastic sublime, and opportunities for low-cost consumption to tourists of modest means who are themselves not the real winners of global capitalism.

Orbán and his accomplices certainly aimed to disrupt the neoliberal consensus in ways that resonate with Jessop’s analysis of the later stages of neoliberalization (Jessop, 2019). But going beyond disruption, Orbán has advanced an ordonationalist hegemony. This is a form of socio-political cohesion that relies on the appearance of affluence, state-led nationalist and racist solidarities, and control over the production of knowledge, information, and culture (Kováts, 2018.)

Conclusion: Global Dependencies and the Weight of Contradiction

To sustain his ordonationalist hegemony within Hungary, and to manage the contradictions between radical neoliberalization, state centralization, and hyper-nationalism, Orbán has been forced to position Hungary as dependent on several global powers.

The first dependency is on the European Union, which enables a flow of European project money to build just enough infrastructure so that Hungary appears prosperous despite gaping inequalities, and with which Orbán can continue to nurture the dependence of domestic capitalists through prebendalist distribution of lucrative public contracts.⁶ EU membership also helps provide employment in key sectors like German car manufacturing. Where Orbán’s post-neoliberal prebendalism cannot fill a market niche, such as with the auto-manufacturing industry, he leaves those sectors to investment by global capital.

The second dependency is on Russian energy. With the support of Russian loans, Hungary has signed an agreement with Russia to build a second nuclear energy plant in Hungary, rather than turning to renewable energy via EU mechanisms. Orbán has tried to exact domestic control of energy for maintenance of his hold on power. Putin, however, occasionally likes to make Orbán squirm, and Orbán is trying to reduce dependency on Russian energy by importing more natural gas from Romania’s Black Sea to Hungary.⁷

Orbán’s third and final dependency is on China, critical for lubricating Orbán’s ordonationalist machine. The Fidesz government announced in 2014 that it had reached an agreement for construction of a new rail improvement project from Greece to Budapest, to be completed by Chinese companies for speedier freight transport from the Chinese-owned port of Piraeus in Greece, through the Balkans, to Hungary.⁸

The goal is primarily to enable quicker importation of cheap commodities from China. Though the details of the deal remain murky, Chinese bank loans to the Hungarian government are funding the project. The agreement was finally signed in April 2020 and was paired with proposed legislation to make data related to the deal classified for the next ten years (Than and Komuves, 2020). With this rail project, Orbán can easily distribute Chinese commodities into Hungary, and Hungary can become a key logistics node for Chinese imports into the European Union.

Made-in-China has become a public good in itself, and one with a heavy carbon footprint. Without the same degree of oversight and transparency formally required by the European Union, China provides Orbán with an infrastructure of commodities, and perhaps networks of corrupt profit-making, vital to survival of Orbán’s hegemonic bloc.

The material base sustaining Orbán's regime has been steel rails, dirty energy, and polymers. He has assembled this base as a means of managing the contradictions wrought by his ordonationalist regime, skilfully entangling his small post-socialist country within multiple world hegemonies (Gagyi, 2016).

These dependencies, however, are also the source of his regime’s fragility. Orbán has been able to endure liberal finger-wagging by the European Commission, so long as money from Europe continues to flow into Hungary. Adhering to Orbán’s Schmittian expectations, Europe is incapable of dealing with the outer shell of liberal democracy, which covers an inner core of corruption and authoritarianism (Batory, 2016). Orbán’s deepest vulnerability, however, lies in his indebtedness to Russia and China, the exact value of which is unknown given the secretive nature of the agreements reached, especially with China. While Orbán declared his commitment to financial autonomy and declining debt to the IMF and neoliberal lending institutions, he has nonetheless taken on sovereign debt by turning to project-specific deals with Russia and China.

Given the secrecy shrouding the railway project with China, Orbán appears to have something to hide. It might simply be that his regime prefers concealing how contracts are being distributed. Yet, perhaps Orbán has bigger troubles. A more explosive possibility is that the deal hides significant Hungarian indebtedness to China. If this is so, then Orbán’s ordonationalist regime is especially hitched now to his political and economic relationship to Xi Jinping, and to China’s own economic fortunes. The impact of the coronavirus crisis has also forced Orbán to take a surprising step. Despite his abhorrence of Eurobonds, Orbán’s government issued in spring 2020 two types of Eurobonds to fund steep pandemic-related expenditures (Budapest Business Journal, 2020b). Clouds of sovereign debt are darkening Orbán’s skies.

Finally, there is only so much capitalist alchemy one can conjure by flexibilizing labour and pushing the social reproduction of labour to the barest minimum in order to attract investment in Hungary, but within an EU labour regime where labour can be mobile. Orbán can bar entry of mobile labour from outside the EU into Hungary and has invested heavily in militarizing and politicizing the Hungarian borders as a fortress against migrants and refugees (Rajaram, 2018). But he cannot control Hungarian labour’s flight from Hungary (Waterbury, 2020).⁹

Orbán’s sympathies lie so deeply with the (white) new middle class and the nationalist bourgeoisie, and his disdain for the social reproduction of the Hungarian working class and peasants is so extreme, that he risks undoing his own ordonationalist experiment. Perhaps, as Kristof Szombati and Gábor Scheiring (2019) have argued, Orbán is simply engaged in a project of capitalist social Darwinism, harbouring a post-neoliberal dream of a capitalist future with barely an industrial working class. But we have not yet entered a phase of capitalism where value can be produced entirely absent of labour, and it is difficult to imagine how Orbán can sustain his regime so long as the movement of people is maintained as a pillar of EU (neo)liberalism.

The Thatcherite revolution lives on, still reverberating as waves of neoliberal innovation unfold while also taking on unforeseen form in new places. Countries such as Hungary, which were optimistically seen at the end of the Cold War as heralding a new liberal order, were captured by figures like Orbán at moments of deep political and economic crisis. But Orbán is far more than a late neoliberal Bonapartist figure responding to the crisis of hegemony wrought by post-socialist neoliberalization. Orbán’s ordonationalist hegemony is an advanced neoliberal answer to the crisis of neoliberalism, an auto-response which has attempted to solve its own contradictions by reinventing itself and serving up a fresh menu of contradictions.

Footnotes

ORCID iD

Dorit Geva

Notes

Dorit Geva is Associate Professor in the Department of Sociology and Social Anthropology at Central European University. She was Head of Department from 2017–19, during a period of crisis management which resulted in the university being forced to move from Budapest to Vienna. Recently, she was appointed as the founding Dean of Undergraduate Studies at CEU Vienna. She has written on marriage policies as a form of neoliberalization and published a book with Cambridge University Press on the gender and family politics of military service. She has more recently been studying and writing about the re-making of the radical right in Europe, with particular focus on the French National Front and Hungary.

This article is part of the Theory, Culture & Society special issue on ‘Post-neoliberalism?’, edited by William Davies and Nicholas Gane.

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