Abstract
Neoliberalism and authoritarianism are intimately connected, as is demonstrated by the existence of a growing body of literature on ‘authoritarian neoliberalism’. This article provides a taxonomy of authoritarian neoliberalism and claims that it appears in three varieties – technocracy, populist nationalism, and traditional authoritarianism. Also, it proposes both an overview of the varieties and an analysis of three states as case studies. States are investigated as actors which strongly contribute to the neoliberal project amidst a more complex process of multilocalized and variegated neoliberalizations, which have to be incorporated into the comparative research. First, Italy is studied as a consolidated Western democracy which has been often governed by technocrats, independent, non-party professionals who have recurrently been in power since the 1990s, and within the frame of an increasingly technocratic European Union. Second, the paper concentrates on Hungary, a semi-peripheral Central European country which has become an epitome of a populist nationalism with increasingly authoritarian traits. Third, the paper focuses on Kazakhstan, a former Soviet Union republic with no significant experience of liberal democracy before independence, and a key example of the ‘traditional authoritarian’ variety. The three varieties, however, are sometimes combined and coexisting, and their evolution will be decisive for the future of capitalism and liberal democracy.
Introduction
The connections between neoliberalism and authoritarianism have attracted growing scholarly attention. Bruff (2012, 2014; Bruff and Tansel, 2019) has developed the concept of ‘authoritarian neoliberalism’ and re-assessed the legacy of Poulantzas and Hall, who studied authoritarian tendencies in 1970s and 1980s Western capitalism. Jessop (2019) has explored such tendencies in the West; others have researched the neoliberal/authoritarian nexus in Southeast Asia (Springer, 2017), Turkey (Tansel, 2017), China (Sum, 2019) and developing countries (Fabry and Sandbeck, 2019). Giroux (2017) has then documented authoritarian neoliberalism’s rise in US culture and education.
An ‘authoritarian–neoliberal’ state is not a new phenomenon (Ryan, 2019). Chicago-style economics was first adopted by Pinochet’s Chile and the neoliberalism–authoritarianism nexus has been exposed by Harvey (2007) with reference to Russia, East Asia, Africa, Mexico in the 1990s. However, especially since the ‘post-2008 Great Recession’, ‘authoritarian–neoliberal’ political forms have more substantially penetrated the capitalist ‘core’, including Britain, Trump’s USA and the European Union of the ‘Maastricht criteria’. Together with Xi’s China, Putin’s Russia, Modi’s India, Erdoğan’s Turkey and other countries, they embody combinations of authoritarian politics and neoliberal economics. Why is this the case? What has happened?
Authoritarian politics’ rise usually follows capitalist decline – or ‘crisis’. According to Gramsci (1971, Q13§18), a crisis becomes broader and ‘organic’ when ‘social groups become detached from their traditional parties’. Parties and traditional governing classes decline, and ‘the immediate situation becomes delicate and dangerous, because the field is open for violent solutions, for the activities of unknown forces, represented by charismatic “men of destiny”’. The way is paved for the emergence of single-party regimes, charismatic leaders or conservative bureaucracies (Gramsci, 1971). In the liberal-capitalist core, new right-wing forces and projects emerged as early as the 1980s and were soon identified as ‘far-right’, ‘populist’ or ‘radical right’ (Kiely and Saull, 2017; Mudde, 2007; Saull et al., 2014).
However, this paper claims that the ‘populist right’, of which nationalism (or ‘nativism’; Mudde, 2007) is the key element, is only one of three varieties with which authoritarian neoliberalism manifests itself. All three have distinctive and clearly authoritarian contours. On the one hand, we find the sometimes-reassuring icon of ‘technocracy’, which is often a thinly disguised veil covering neoliberal austerity policies – in South America, Russia, Europe. On the other, we have traditional authoritarian regimes (Linz, 1964), which are often bordering with the hybrid (and somewhat oxymoric) category of ‘illiberal democracy’. In the middle stands ‘nationalism’, which in its more xenophobic aspects is at the heart of the ‘populist/radical/far right’. How did this triptych emerge? Which are the relations between the three phenomena, and between each of them and neoliberalism?
The paper focuses on the three varieties by studying three cases. Each has specific political and economic features coexisting both as processes and agencies. First, Italy is studied as a core European democracy with an advanced market economy; more than any other Western country, it has been often governed by technocrats (independent, non-party professionals), sometimes in combination with populist and nationalist forces. Second, the paper focuses on Hungary, a ‘semi-peripheral’, former socialist country with some historical experience of democracy and capitalism; it is currently almost a symbol of an increasingly authoritarian nationalist populism. Third, the paper sheds light on Kazakhstan, a large, ‘peripheral’, former Soviet country without significant experience of capitalism and democracy before 1989, and a clearly authoritarian regime since independence in 1991.
Each variety incorporates aspects of the other two; one, however, is in turn more typical than the others. While it could be possible to detect an underlying pattern (full-scale authoritarianism seems to flourish in semi-peripheral or peripheral countries where democracy and the market have limited traditions), this paper’s purpose is not to assess the likelihood of seeing each variety in each country. After all, nationalism and authoritarian features have emerged in the USA, which can be arguably considered a highly consolidated democracy. The paper’s purpose is to highlight how the three varieties often co-exist and combine, and since the early Chilean experience under Pinochet.
The next section focuses on the neoliberal state, especially in its authoritarian forms, and its role in a globalizing world. The following section explains the use of comparative methodology with reference to the three varieties. The paper’s remainder concentrates on the case studies and their significance.
Neoliberalism and the state
‘Neoliberalism’ has become such a disputed and controversial term as to be labelled a ‘rascal concept’ (Springer, 2010: 1029). This paper understands neoliberalism as a ‘class project’, an ideology which enjoys strong transnational support and is used by states and international organizations to re-organize societies in a pro-market, capitalist way. This view is embraced by Marxists (Harvey, 2007) and sees neoliberalism as a project, in which states play important roles in building and running economies. According to Harvey, ‘[the neoliberal state] is supposed to be activist in creating a good business climate and to behave as a competitive entity in global politics’ (2007: 79).
The relevance to neoliberalism of traditional political institutions has been recognized by several paradigms: Foucauldians emphasize the ‘rule of experts’ as an expression of power/knowledge (Springer, 2010); institutionalists highlight neoliberalism’s importance as a project; Jessop and regulationists stress the role of the state and its regulations (Birch, 2015: 578).
However, neoliberalism is not only a project, but also a process; it is not only state-led, but also traversing (and originating from) a multiplicity of sites and localities; in this sense, the concept of ‘neoliberalization(s)’ (Brenner et al., 2010) would better grasp neoliberalism’s dynamic and multifaceted reality as a (plural) ‘process-cum-project’ (Peck, 2004: 400). We cannot locate neoliberalism in specific places like Washington, Wall Street or Brussels. There are ‘multiple neoliberalisms’ (Larner, 2003), which cannot be reduced to the spatiality of states and international organizations; there is a ‘big N Neoliberalism’ (Ong, 2007: 3), but also a ‘small n’ type, which is diverse, variegated, multifaceted, multilocalized and visible in everyday society.
How is it possible to reconcile this diversity with the idea of neoliberalism as a state project?
This paper maintains that the state is a central, crucial force; yet it is not the sole actor. States are not and have never been containers: neoliberalizing forces originate ‘externally’ as well as ‘internally’; they are unleashed by companies, cities, regions (for instance, the City of London or Chinese provinces) as well as transnational or intergovernmental institutions. States are porous and constantly interact with internal and external pressures.
That said, the state is here understood as an actor, one among many, but arguably the most important; the catalyser of neoliberalizing forces. It is the key player, at a meso-level, in promoting, shaping and enforcing a neoliberal economy, and it is becoming neoliberal itself, as an apparatus in which market principles are increasingly pervasive.
In the latest decades, neoliberal states have also become more authoritarian. Connections between neoliberalism and authoritarianism could already be envisaged in the writings of Mises and Hayek since the 1930s as well as in the later Chicago School (Kiely, 2017). Neoliberalism is inherently elitist and suspicious of collectivism, even in democratic forms. In Hayek’s words, ‘I have not been able to find a single person even in much maligned Chile who did not agree that personal freedom was much greater under Pinochet than it had been under Allende’ (Kiely, 2017: 378). The very latest decades, characterized by global uncertainties and economic crisis, have accelerated what was already latent. In some cases, reforms have been carried out by unelected experts, in the name of their supposedly super partes knowledge. In other cases, politicians have deployed nationalism (and even racism) to hold countries together vis-à-vis fragmenting tendencies. In yet other cases, dictatorships have seized power in the name of order and stability. While these varieties have common roots and often overlap, it is important to analytically separate them and compare relevant cases.
Comparing technocracy, nationalism and traditional authoritarianism
Due to the emergence of transnational globalizing processes, doubts have risen on the usefulness of comparative methodology. However, comparisons remain fully beneficial when they relate to contemporary events, to ‘how’ questions (Yin, 2018: 43–44), and when they do not engage with separate, self-contained geographic and political spaces. In this paper, states are compared as actors, which interact with a wide range of forces and processes above, below and across them. To understand the full nature of neoliberal politics, these forces have to be ‘incorporated’ as well.
Any comparison across space and time in fact cannot but be ‘incorporated’ (McMichael, 1990). However, while McMichael was referring to incorporation as a ‘historically singular process’ (1990: 392) broadly related to the idea of ‘world system’, here the emphasis is on a plurality of processes, which interpenetrate and combine with states in a variety of ways, from the planet to the local, from capital to ‘social struggles’ (Weber, 2007), and must thus be included.
In this sense, a comparative approach helps better focus on the state as a key actor. For example, Britain or the USA in the 1980s adopted neoliberal change with the support of the core transnational capitalist class and by shaping rather classical market economies. Germany has used its own ‘ordoliberal’ legacy to erect a system with a stronger state component and to influence European integration. In Italy, a part of the ruling class has used European integration to push reforms targeting branches of the state apparatus and localized resistances. In other words, different states interpret neoliberalism in different ways, a fact which confirms its variegated facets, but also the centrality of state agency itself.
It is acknowledged that the actors correspond to abstract ideal types of varieties; at the same time, it is recognized that each variety contains elements of the others and it therefore partakes of the general, less formal processes of ‘neoliberalization’. It is to an analysis of these varieties that the paper now turns.
Technocracy
The first variety to be introduced, technocracy, is not new. It is rooted in the New Deal, the early European Communities, and the experience of developing countries since the 1970s. However, full-scale technocratic governments, led by independent ‘experts’, have become more common in the neoliberal age and because of it, especially in the EU. In fact, 21 out of the 24 EU technocratic governments studied by McDonnell and Valbruzzi (2014: 659) appeared in the neoliberal age and are linked to cases of economic/financial restructuring. Numbers would be higher if we considered ‘mixed’ governments (with both party and non-party ministers) and not just fully ‘technocratic’ ones, composed of unelected officers only; let alone the emergence of technocrats at a subnational, municipal and local level (Bian, 2020).
When, why and how does authoritarian neoliberalism take on technocratic forms? What are technocrats’ aims? How is technocracy linked to the other varieties?
Technocrats are often transnational agents and act where there is a perceived necessity to stabilize and open new markets, or support economic integration, especially in Europe. They act as ‘organic intellectuals’ of neoliberal capital and its international agencies; they penetrate states from ‘without’. The Eurozone has developed a kind of ‘transnational authoritarian statism’ (Schneider and Sandbeck, 2019). Poland’s austerity Balcerowicz Plan (1989–1991), in contrast, was prepared by a commission supported by the International Monetary Fund. Argentina’s neoliberal reforms in the 1990s, adopted by the then Economy Secretary, Harvard-educated Domingo Cavallo, had US endorsement. Italy’s premier Mario Monti (2011–2013), an economist and former EU Commissioner, was ‘catapulted’ into the role without a no-confidence vote on his controversial predecessor, Silvio Berlusconi. Assessing the role played by international actors and capital in technocrats’ appointments remains difficult though, and it seems fair to say that technocrats and their ideas have to some degree not been ‘imported’ (Fabry, 2014) and have acted as connectors between global, national and local forces, within the frame of multilocalized neoliberalization processes.
In general, technocrats have used their scholarly and professional reputation to enact fully fledged neoliberal programmes. Expertise is deployed as an instrument of depoliticization (Jessop, 2014), that is, a rejection of parties and democratic processes: a choice which clearly remains political. Parties are marginalized, and democracies give way to new, unaccountable bodies and agencies. Experts and officers implement political agendas, which usually consist of expenditure cuts, liberalizations, privatizations and other pro-market measures. Depoliticization is a continuation of (neoliberal) politics by other means.
Which are then technocrats’ aims? Despite a range of professional backgrounds and proveniences, most technocrats espouse ideas of fiscal austerity, stabilization and support to privatizations. Choices have been framed in the name of adapting to European rigour, joining the EU or the Euro, preparing for global competition, or simply modernization; overall, the main aim has been to expand and deepen the space of markets. Global competitiveness among states and companies has then become an increasingly important narrative, also outside the traditional economic sphere (education, health, the media, transport, etc.).
Neoliberalism’s technocratic variety has translated differently in different socio-historical contexts, which testifies to its local rootedness. Ban (2016) illustrates the differences between Spain, a case of ‘embedded neoliberalism’, and Romania, one of ‘disembedded neoliberalism’, which was in part the outcome of hard-line technocratic governments in the 1990s. In other cases (for example, Italy), technocratic governments did not have the will or ability to fully challenge the public sector’s vested interests. Privatizations have hardly enhanced ‘efficiency’ in the British economy, as is visible through the management of the current pandemic, and have contributed to clientelism in Russia, where the role of experts has been significant.
Nationalism
Despite their sometimes adversarial rhetoric (Caramani, 2017), technocracy and populist nationalism are inherently intertwined. Both claim to know and strive to enact what is ‘good’ for the country, which is defined as ‘the elite’ in one case and ‘the people’ in the other. In some cases, they even join forces. There are examples of ‘technocratic populism’ in Latin America (De La Torre, 2013) and ‘techno-pop’ combinations in Europe (in Italy’s Berlusconi governments and in the Five Star-League cabinet in 2018–2019; Bickerton and Accetti, 2018). The ‘expert’ can help the ‘people’ find the direction – in a compromise which so far has never diverted from a neoliberal direction.
But how are ‘the people’ (or ‘the nation’) connected with neoliberalism, in theory and practice? How does right-wing populism hold them together? Nationalism is right-wing populists’ defining characteristic, and there is evidence of the rise of a Western European ‘neo-nationalism’ (Eger and Valdez, 2015). How does market orthodoxy combine with strong national allegiances into the second variety?
The two in fact often support each other. This applies to core countries (the USA and Britain) since the 1970s but also to ‘semi-peripheries’ which are striving to catch-up with the core (Central European countries, Turkey, Brazil, etc.). The neoliberalism–nationalism nexus, with all its intrinsic contradictions (Hall, 2011: 713), is particularly rooted in the ideas and practices of the conservative ‘New Right’ in the USA and Britain. Thatcherism exemplified a full-scale ‘response to the crisis’ (Hall, 1979: 15) from the Right. Hall’s concept of ‘authoritarian populism’ refers to a well-defined Thatcherite discourse celebrating the ‘people’ and the ‘nation’ in opposition to the statist ‘elite’ of post-1945 social democratic governments, and based on a narrative of individualism, law, order and anti-immigration sentiment. A similar nationalist turn has later occurred in many former socialist and developing countries since the 2007–2008 crisis. Nationalism is also a facet of those East Asian countries which, while maintaining democratic institutions, have hardly overcome the crises generated by global neoliberalism and moved towards what Poulantzas had called ‘authoritarian statism’ (Jayasuriya, 2018; Poulantzas, 1978), an intensification of authoritarian practices, especially through the executive branch, within the limits of formal democracy. Poulantzas early observed the crisis of the ‘petty bourgeoisie’, the middle classes, a crisis which then became typical of the global age. Economic globalization is eroding traditional parties and their modes of political incorporation also in countries like Japan and South Korea, which are using the nationalist card (for example, in re-writing history books) to legitimize the adoption of coercive social policies in neoliberal contexts. A similar direction is illustrated by ‘paleoconservative’ ideas, promoted by the traditional (‘Old’) American Right, which are often associated with Trump’s political rise. Popular commentators like Pat Buchanan and the ‘paleo-con’ Rockford Institute have for decades promoted free enterprise, tax cuts, small government together with economic protectionism and anti-immigration policies. In this view, pro-market policies at home combine with a strong and coercive form of nationalism, according to a competitive ethics in the relations among both citizens and countries. Conservative traditions have also ushered into the politics of the Tea Party and isolationists like Ross Perot, who obtained almost 20 million votes in the 1992 elections (Konings, 2018). The rapprochement between neoliberalism and nationalism is also strategic: while social-democratic forces since the 1990s have embraced internationalism and globalization, if in a somewhat tamed way, neoliberals have become more nationalist, also within the EU (Harmes, 2012).
Furthermore, both neoliberalism and nationalism have reactionary intellectual origins. Neoliberal thinking was born as a reaction to totalitarianism and socialism in the 1930s and consolidated with the Mont Pélerin Society’s foundation in 1947 (Mirowski and Plehwe, 2009). Its nature was reactionary since the start, against socialist, collectivist, or socially oriented policies and ideas. Such a disciplined, order-loving nature fully came to light when neoliberalism entered the political stage with the capitalist counter-revolution of Reaganism and Thatcherism. Reagan’s and Thatcher’s nationalism expressed a competitive, hierarchical, conservative vision of society which neoliberalism and nationalism share; it expressed the aspiration to build stronger countries, more assertive internationally (in the context of the Cold War and the European Communities) and more competitive domestically. The affinity between market competition and international competition is becoming increasingly visible in a global economy in which the costs of the ‘Great Recession’ are shifted onto migrant labour, international organizations, the marginalized or any form of diversity. The ‘anti-global’ rhetoric of populist–nationalist movements does not imply a rejection of neoliberalism: the latter’s negative effects mostly impact migrants and marginalized, in a kind of ‘welfare chauvinism’ (Kitschelt, 1997).
Traditional authoritarianism
While nationalist-neoliberal experiences are often characterized by authoritarian traits (for instance on social rights and immigration), in some cases neoliberalism has combined with traditional authoritarian regimes, giving way to the third and more autocratic variety, of which key examples are Russia and China (Harvey, 2007).
In general, the main explanation of authoritarianism’s rise is the inability of democracy to resolve problems engendered by neoliberalism. Structural insecurity has paved the way for the rise of political entrepreneurs promising to protect countries from the dangerous winds of world markets (Inglehart and Norris, 2017). Not everywhere, however, has fully fledged authoritarianism taken roots. Different types of countries are facing different phenomena.
In core countries, where capitalism and liberal democracy have deeper roots, the forms of democracy have been maintained and authoritarianism has manifested itself mainly in some practices. Rising inequalities, high job insecurity, growing global competition have fuelled a ‘backlash’ against ‘postmaterialist’ values (Inglehart and Norris, 2017) and facilitated the rise of protectionism, cultural nationalism, xenophobia, racism, hostility towards international institutions, without challenging the fundamental dictates of neoliberalism. Trump’s hegemonic experience represents a ‘neoliberalism in one country’ where the upper bourgeoisie (embodied by Trump himself; Fuchs, 2017) looks for allies in the lower middle classes and among ‘less educated white Americans [who] feel that they have become “strangers in their own land”’ (Inglehart and Norris, 2017: 452). While in core countries these factors have so far not led to fully authoritarian transitions, in other regions outcomes have been different.
The former Soviet bloc, for instance, was hit particularly hard by the ‘shock therapies’ of the 1990s. Countries where democracy and capitalism had deeper roots (e.g. Czechia, Hungary and Poland) managed to better handle neoliberalization, even if they later faced a nationalist (and partly authoritarian) backlash. More peripheral countries where neoliberal reforms hit harder faced an almost immediate return to authoritarian forms. In Russia, male life expectancy bottomed at less than 60 years in 1994. The role played in this by mass privatizations has been confirmed by medical research (Stuckler et al., 2009). Authoritarianism, which also relies on the Soviet legacy (especially in the security apparatuses), became the most viable response to imploding societies.
Together with Russia, other ‘emerging economies’ have recently moved in an authoritarian direction. Modi’s India and Bolsonaro’s Brazil have at least embraced some authoritarian practices (Glasius, 2018). In both cases, neoliberalism was previously adopted in a more consensual way, while since the global crisis it has been pushed by force. Persistent or growing inequalities have favoured an alliance between capital and far-right forces that commands support among the poor and dispossessed. Modi’s liberalizations and trade union curbing leave little doubt about the neoliberal core of his right-wing government (Lerche and Shah, 2018).
In short, neoliberalism has combined with full authoritarianism mostly in peripheral countries of the former Soviet bloc; yet also in emerging economies, authoritarian practices (and sometimes fully authoritarian regimes) have emerged mainly as a capitalistic response to growing uncertainty and inequalities.
To summarize, authoritarian neoliberalism has appeared in the three varieties analysed above; let us now further discuss them in the three related case studies of Italy’s technocracy, Hungary’s nationalist neoliberalism and Kazakhstan’s traditional authoritarianism.
Italy’s technocracy
Post-unification Italy was a fragile state with a weak bourgeoisie (Gramsci, 1971); these longue durée characteristics, combined with persistent cleavages (North/South, cities/countryside, fascism/anti-fascism, pro-Western parties/Communists), would last well into the 1980s (Gallo, 2009; Ginsborg, 2003). Despite rapid growth post-1945 (in 1990 its economy was the world’s sixth biggest), Italy had to catch up with Northern European countries and recurrently deployed technocrats to remain in the liberal-capitalist core.
Italian technocrats have intervened in politics as agents of capital’s liberal and internationalized fraction (van der Pijl, 1998), traditionally centred in the Northern cities and transnational groups such as FIAT and Pirelli. Some technocrats, however, have been co-opted by the opposing, nationally oriented and more conservative bourgeois fraction, mostly based in state-controlled firms and smaller companies; this fraction’s interests and norms have more often been represented by populist nationalist forces like the League and Berlusconi.
This dialectic is illustrated by three periods in Italy’s neoliberal age: (a) the 1990s, characterized by technocratic governments; (b) the 2000s, dominated by Berlusconi; (c) the 2010s, with new technocratic governments and the concomitant rise of populist nationalism.
Either way, technocratic or nationalist, Italy’s neoliberalism has mostly been a top-down, state-driven experience. The central bank (Banca d’Italia) has played a major role as a connector between national politics and international ideas and became the crucial vector of neoliberalization. Its experts have often been educated internationally and act as ‘cosmopolitan intellectuals’, whom Gramsci (1971) saw as typical of a lately unified country like Italy. In fact, they interpret their autonomous agency as that of representatives of pro-European ideas and values.
The Banca d’Italia’s ascendancy started with its separation from the Treasury (1981) and continued when its former Governor Carli became Treasury Minister (1989–1992) in the run-up to the Maastricht Treaty. In 1992, Italy’s party system collapsed under the blows of judicial investigations (Ginsborg, 2003), and ‘technocrats’ took over, in the guise of both centre-left academic economists, especially Amato (Prime Minister, 1992–1993 and 2000–2001) and Prodi (1996–1998), and Bank of Italy top executives, former Governor Ciampi and former Director-General Dini (premiers in 1993–1996). All governments between 1992 and 2001 included independent and unelected ministers; the Dini cabinet was composed only of independent officers, including Susanna Agnelli from the FIAT-owning dynasty.
The bank’s experts became a ‘core executive’ (Sbragia, 2001) and brought competence and other ‘intangible assets’ (Quaglia, 2004). While promoting a neoliberal agenda, they demonstrated cultural and political agency (Quaglia, 2004). Overall, they shared the ‘cosmopolitan’ view that only a sustained ‘Europeanization’ and an opening to market forces could bring the country to full modernity. In this sense, they were following an agenda, which was well expressed by the ambitious leader of the main centre-left party, Massimo D’Alema, in his vision of a ‘normal country’: A country with an efficient state that is the citizens' friend and that might not be a producer of milk or steel, but that does know how to provide European levels of education, scientific research and essential services. A country that guarantees a social safety net able to offer support, hope and opportunity to society's weakest members and which does not leak away resources in the thousand different channels provided by clientelism. (Gilbert, 1998: 310)
Elite entrenchment, cronyism and austerity led many Italians to turn their backs on the Left and elect Berlusconi in 2001 (Fella and Ruzza, 2013). Aside from his loud rhetoric, Berlusconi’s politics did not represent a radical rupture; it was rather a combination of populist nationalism and technocracy; not only did Berlusconi appoint to important positions well-known neoliberal economists; he also won elections because of his supposed ability in managing a commercial empire.
Berlusconi captured Italians’ disappointment from the 1990s and transformed it into a political project, well rooted in the brash individualism of a part of the country, especially among smaller firms in Italy’s North, but also in a broader ‘ethical fracture’ between traditional Left and Right (Ricolfi, 2001).
While Berlusconi’s rhetoric often focused on efficiency and entrepreneurship, his politics has been more opportunistic than liberal (Mascitelli and Zucchi, 2007); it has rather acted to protect the interests of the more national and nationalist fraction of Italian capital, which included Berlusconi’s media empire, Mediaset, and mostly Italian-based companies. Despite promises of substantial tax cuts, Berlusconi never delivered on them. His status quo defence clashed with the more genuinely liberal ideas of some of his collaborators such as the independent economist, Domenico Siniscalco (Economy Secretary 2004–2005), who resigned ‘scandalized’ (The Economist, 2005) in September 2005. Neoliberalizing practices were though at work in the job market, where the ‘Biagi laws’ (2003) introduced further insecurity and precariousness. Youth unemployment in the South rose to 40%; temporary jobs affected mainly younger generations (The Economist, 2011). Neoliberalization penetrated the job market as well as cities’ administrations and local welfare. After the sovereign debt crisis and EU/IMF pressing in late 2011, Berlusconi was swiftly pushed aside and replaced by the economist and former EU Commissioner, Mario Monti, who became the epitome of ‘technocracy’.
None of Monti’s (2011–2013) officers was a party member. Monti adopted strong austerity measures, especially in the social security system, under financial markets’ pressure. Italy faced a severe recession, partly caused by the policies of a technocracy which was not mediated by parties (Culpepper, 2014). Monti accepted the rigid requests of the European Central Bank and the European Commission: in 2012, Italy had to adapt to the European Fiscal Compact and introduce in the Constitution the obligation to balance the state budget. Monti’s government was a key example of Europe’s transnational authoritarian statism (Schneider and Sandbeck, 2019).
After 2013, technocracy and populist nationalism continued playing a role, often together. Monti’s successor, Enrico Letta, had collaborated with Andreatta and Prodi, once economists of the Christian Democracy and center-left coalitions. The Ministry of the Economy remained in the hands of technocrats such as the former Director-General of the Bank of Italy, Fabrizio Saccomanni, and the veteran IMF economist, Piercarlo Padoan. At the same time, Matteo Renzi, who became premier in 2014, embodied a centre-left attempt to establish a more direct relationship between leader and voters, without significant party mediations or ideologies; a kind of centre-left populism, rich in slogans but vague and impressionistic on ideas and policies. Meanwhile, neoliberalism continued making its way outside politics: in 2017, Italy had one of the world’s biggest shadow economies (McCarthy, 2017); large companies (such as FIAT) moved headquarters overseas; wages kept declining (Traverso, 2021).
This creeping, subterranean neoliberalization led to the anti-elitist sentiments and the anti-migrant, Eurosceptic attitudes which in 2018 caused the victory of the Five Star Movement and the League (until 2018 a regional party in favour of Northern Italian independence), which formed an unusual ‘left-right’ coalition with strong nationalist connotations. Yet technocrats maintained privileged positions in the state and cabinet such as the leadership of the Economy and Foreign Affairs Ministries, assigned to independent experts.
Simultaneously, the popularity of the League’s leader, Matteo Salvini, Home Secretary (2018–2019), testified to the resurgence of Italy’s populist nationalism. In many ways, it was a return to Berlusconi’s politics, albeit with a more aggressive and xenophobic edge, and a stronger anti-European and anti-immigration spirit. Salvini’s party fared well especially among autonomous and factory workers, who are the League’s traditional source of support (Poletti, 2018). A nationalist, anti-immigration appeal succeeded where economic insecurity and global fears were bigger, including in Southern Italy, which once was the League’s blame target. There are echoes of the lower middle class support for Bonapartism or fascism as analysed by Marx and Trotsky, respectively.
Since August 2019, there have been two further turnarounds. First, the League was forced into opposition by the rise of an unexpected coalition between the Democrats and the Five Star Movement, still led by Giuseppe Conte, an academic jurist with strong roots in Rome’s Catholic institutions. Second, in the pandemic’s middle, technocracy regained full power, with the appointment to the premiership of the former European central banker, Mario Draghi, on 13 February 2021. Draghi leads a large coalition and a government with 9 technocrats and 13 party members. His task sounds less neoliberal, since he will have to spend the large sum granted to Italy by the European Recovery Fund (Garzia and Karremans, 2021). Yet again, Draghi’s non-elected cabinet has to rescue Italian and European capitalism’s competitiveness (this time vis-à-vis the USA and China): is this a real departure from neoliberalism?
Hungary’s nationalist neoliberalism
Usually associated with the liberal-capitalist semi-periphery (Vliegenthart, 2010), Hungary has emerged from harsh neoliberal policies with a peculiar combination of neoliberalism and an illiberal, ethnocentric, form of nationalism. While this has not translated into fully fledged authoritarianism, since 2010 Prime Minister Viktor Orbán has adopted increasingly ethnicist and authoritarian policies (Bozóki, 2011; Fabry, 2019; Szikra, 2014).
Historically, Hungary strongly contributed to neoliberal thinking. The roots of Hungary’s neoliberal ideas can be traced to the 1950s and an early East-West dialogue among economists who were using the Austrian school’s language to propose reforms both West and East and criticize planning’s inefficiencies (Bockman and Eyal, 2002).
Like in Italy, Hungary’s neoliberal age can be split into different periods: (a) a first neoliberal wave, from the transition until Orbán’s first government (1998); (b) Orbán’s first term (1998–2002), characterized by conservative and nationalist policies; (c) a second neoliberal wave, until financial collapse and IMF intervention (2002–2010); (d) Orbán’s return to government, with a nationalist and more authoritarian programme (2010–date).
Technocrats played an important role in the 1990s, during the transition to capitalism and the EU accession negotiations. Like Bank of Italy’s experts, a group of renowned economists from the Financial Research Institute (FRI, within the Ministry of Finance) since the late 1970s has been a key vector of neoliberalization (Fabry, 2014). During the late socialist republic, their contribution was chiefly intellectual, yet some recommendations in the FRI document ‘Turnabout and Reform’ (1987) were soon adopted by both opposition and government, and some FRI economists would become leading architects of the transition to the market (Fabry, 2014, 2018; Gagyi, 2015).
The first post-transition Prime Minister, Jozsef Antall (Hungarian Democratic Forum, MDF), led a conservative coalition (1990–1993) which enacted neoliberal reforms but avoided a shock therapy, also because it aimed at creating opportunities for Hungarian companies. Nevertheless, austerity appeared with the adoption of the Kupa plan, named after the neoliberal Minister of Finance, Mihaly Kupa, an independent economist (Fabry, 2014). Following more closely IMF’s neoliberalizing policies brought about poverty, unemployment and a split among the conservatives: a part of the MDF formed a new ultranationalist party, the Hungarian Justice and Life Party (MIEP), which strongly attacked the sales of state-owned assets to multinational corporations.
The 1994 elections rewarded the reformed Communist Party, which had renamed itself ‘Socialist’ (MSZP) and formed a government with the Liberals (SZDSZ). Committed to European integration and globalization, the Socialists imposed a draconian austerity plan, the Bokros package, aimed at attracting Foreign Direct Investment by mainly depressing salaries, cutting social expenditure and promoting export-led growth; in other words, by institutionalizing Hungary’s status as a semi-periphery. The plan was also functional to EU and NATO accession; austerity had been promoted by US and German authorities and the IMF (Phillips et al., 2006: 597–598). Many companies were privatized and sold to investors from Germany, the USA and other Western countries. Like Italy, Hungary gave voice (and government offices) to several technocrats. Yet the absence of a strong national bourgeoisie and the ambition to create one very early led to a further rise of populist nationalism.
A centre-right coalition in fact won the 1998 elections. Orbán, the young and ambitious leader of conservative Fidesz, became Prime Minister. Having to reassure the EU, he formed a government in which 50% of the ministers were independents and appointed a liberal, Zsigmond Járai, as Minister of Finance (Fabry, 2014). Again, such moves highlight the ambiguous complementarity of technocracy and nationalism, especially in transition times.
A nationalist and populist discourse gained prominence in combination with neoliberal policies. Orbán introduced tax cuts and austerity measures to join the EU and simultaneously promoted the emergence of a national bourgeoisie; he found his own Berlusconi in the person of Lajos Simicska, a media mogul who contributed to Fidesz’s fortunes in controversial ways (Magyar, 2016). After 2001, the ambitious Széchenyi Plan promoted public works and infrastructures, which aimed at boosting the opportunities of an autonomous national economic elite, which would become another driver of neoliberalization (Meyer-Sahling, 2006).
Nationalism and neoliberalism share a competitive ideological edge, be it fierce competition among companies or among nations. In its first appearance in Budapest, nevertheless, nationalism remained within boundaries, also due to the importance for Hungary of the EU accession.
In fact, the Socialists regained power by winning (by a slight margin) the 2002 elections, after which they re-formed a government with the Liberals. Worsening public accounts and the drying up of FDI led to another phase of austerity, again under a Socialist Prime Minister, the flamboyant, Ferenc Gyurcsány, elected in 2004.
Gyurcsány’s term paved the way for nationalism’s return. The new leader had to face the consequences of the global financial crisis and the publication of his own (and secret) Őszöd speech (26 May 2006), an infamous closed-door intervention in which he admitted to lying (‘day and night’) on Hungary’s economic conditions, which he described in a crude, vulgar, foul-mouthed way. Growth stagnated amidst decline in public budgets and problems in foreign accounts; let alone the growing perception of collusion between national elites (mainly socialist and liberal) and their European/global counterparts. Hungary could not hide its condition as a semi-peripheral and dependent economy any longer (Drahokoupil, 2009; Myant and Drahokoupil, 2012). Neoliberalism also took on a more regional, decentralized, dimension, within a spatial reorganization in which the state was not the only neoliberalizing player (Varró, 2010).
Western Europe’s economic collapse in 2008 hit Hungary hard. Unsustainable deficit levels, the forint’s weakness, and foreign indebtedness led Gyurcsány to ask for IMF support in October 2008 (Pogátsa, 2009), a fact that combined with the coalition’s corruption scandals, and eventually led to Gyurcsány’s resignation (March 2009).
The nationalist right triumphed in the 2010 elections. Fidesz obtained 52.73% of the votes and 2/3 of the seats; a new radical-right party, Jobbik, entered parliament with 47 seats; Orbán returned prime minister, a position he has maintained since.
Despite Orbán’s intense and repetitive rhetoric of national unity and ‘revolution’, no revolution has taken place. Despite Orbán’s anti-liberal (or ‘illiberal’) rhetoric, his emerging ‘regime’ can possibly be described as ‘neoliberalism in one country’. Pro-market policies in fact intertwine with nationalism and an exclusionist ‘ethnicism’ (Fabry, 2019), in a combination of (extremely limited) welfarism for ‘ethnic’ Hungarians and (repressive) neoliberalism for the others, especially the Roma community, migrants and refugees. In a context of variegated welfare policies, Orban’s Hungary, also because of increasing welfare decentralization, is in fact witnessing growing rates of poverty and deprivation (Lendvai and Stubbs, 2015).
Hungary’s nationalist turn has also been embodied by allegedly unorthodox economic policies. After re-paying the previous loan, the government decided to turn its back on the IMF (Fabry, 2019: 173) and enhanced its anti-globalization and anti-EU rhetoric. Also, it re-nationalized strategic sectors such as energy, banking and pensions. These nationalist and protectionist policies combined with praise of ethnic homogeneity, mobilization of Hungarians in neighbouring countries and truly authoritarian moves such as the adoption of a much-debated electoral law, growing executive control over the media, the judiciary, the police, and a brand-new Constitution (2011), which makes strong references to Christianity and the ‘fatherland’ (Fabry, 2019: 173–176).
Yet Orbán’s Hungary has not diverted from a neoliberal model, of which it rather embodies a ‘variety’ (Fabry, 2019: 169). Consistently with his aim of building a ‘national bourgeoisie’ with the leverage of a ‘strong state’, Orbán has adopted typical neoliberal measures such as a 16% flat tax (Fabry, 2019: 173) and the expansion of a controversial workfare programme, by which the unemployed are mandated to work for local authorities under a compulsory programme of public works (Fabry, 2019). The latter ties in with significant cuts in social benefits and institutionalizes marginalization without providing real possibilities to enter the job market. To further highlight the neoliberal connotations of Orbán’s cabinets, key ministries have been handed to independent experts, including the top police officer, Sándor Pintér, in charge of the Interior since 2010. FDI has continued flowing, as is shown by the involvement of numerous companies in many sectors, including most big German carmakers.
Hungary’s potential as an FDI recipient explains why, after all, European reactions to its nationalist and illiberal policies have been limited. Hungary and European big businesses share key interests and Orbán’s hard immigration policy is not new in the EU (Fabry, 2019). Within Hungary, the socialist and liberal opposition keeps fragmenting, and radical-right Jobbik has become the second biggest party. ‘Ethnicism’ has thus consolidated as the hallmark of this ambiguous, potentially destabilizing form of nationalist neoliberalism.
Kazakhstan’s traditional authoritarianism
The wealthiest of Central Asian Soviet Republics, with an area almost the size of India’s (2,724,900 km2) and a population of just 19 million, Kazakhstan has never fully abandoned an authoritarian path since independence from the USSR (16 December 1991). It thus represents a textbook case of the third variety of authoritarian neoliberalism Authoritarian Neoliberalism.
Home to nomadic Kazakh populations, Kazakhstan was gradually settled by Russians in the 19th century and intensely industrialized in the Soviet age, often to the detriment of the environment and its own native people’s survival.
Since the early 1990s, Kazakhstan’s political economy has undergone three periods: (a) the 1990s, when the new state, centred in the President, Nursultan Nazarbayev, struggled to weather global neoliberal storms, and authoritarianism gradually consolidated; (b) the early 2000s, a time of resource-led growth and political status quo; (c) the 2010s, characterized by the effects of the ‘Great Recession’, the opening to new players (mainly China) and entrenchment of presidential authoritarianism.
Kazakhstan’s independence brought about multiple problems. A ruling class had never formed. Nor was there an idea of ‘nation-state’ and a dominant nationality: in the 1989 Census, the Kazakhs were 39.7% of the population; the Russians, 37.8%, in addition to many other groups. State-building was a tremendous challenge, also because of proximity to Russia, which shares with Kazakhstan a 7000 km-long border; the challenge fell onto the shoulders of Nazarbayev, the last First Secretary of Kazakhstan’s Communist Party and President of the new republic until resignation (March 2019).
Given Kazakhstan’s connections with Russia, Nazarbayev had to accommodate Moscow’s policies; however, he also espoused an internationalist and ‘Eurasianist’ direction, looking West, East and South for economic and strategic opportunities (Pomfret, 2006). Yet the first measures of liberalization, deregulation and privatization brought disaster: in 1991–1995, Kazakhstan’s GDP fell by approximately 40% (Pomfret, 2006: 860). The public sector collapsed, with tremendous consequences on welfare, employment, health and education. Poverty contributed to informality and crime, especially among the dispossessed youth (Nazpary, 2002). Despite some success in attracting FDI, early privatizations brought cronyism, corruption and the enrichment of just few members of a patronal system led by the president (Hale, 2014). Neoliberalization, promoted by the government, brought about a wild, unregulated form of capitalism.
The economic woes and the risks of disgregation rapidly led to authoritarian entrenchment. The 1995 Constitution strongly limited parliament’s powers. Nazarbayev obtained a mandate extension by referendum (29 April 1995) and, after new economic turbulences in 1998 (linked to Russia’s default), he called for presidential elections after banning his only potential opponent, Akezhan Kazhegeldin. Nazarbayev’s neoliberal choice was clearly expressed in his 1997 Address to the Nation: today the role of the state doesn't consist in taking decisions which should be taken by people themselves. On the contrary, it must consist primarily in shaping up conditions in which free citizens and the private sector will be able to take effective measures in support of their families and themselves. (Nazarbayev, 1997)
Between 2000 and 2007, Kazakhstan’s growth averaged a stunning 10.2% (The World Bank, 2019). Yet the boom was inflated by commodities’ and resources’ prices and translated into the rise of ‘industrial-financial groups’ (Junisbai, 2010) and conglomerates, often linked to the presidential family, the country’s elite, and the powerful intelligence services. Nazarbayev’s two sons-in-law, Timur Kulibayev and Rakhat Aliyev, became billionaires and heads of business empires stretching from the oil industry to the media and security. Combined with the Soviet statist legacy (Gallo, 2020) and Kazakhstan’s clan traditions, neoliberalism gave birth to an unbridled economic oligarchy and a variegated neoliberal patchwork.
Authoritarianism grew as a pyramidal extension of oligarchic rivalries. Democratic Choice of Kazakhstan, an opposition party supported by the millionaire, Mukhtar Ablyazov, accused of fraud, was disbanded in 2005 (Junisbai and Junisbai, 2005). Rakhat Aliyev, accused of murder, died in prison in Austria after falling with Nazarbayev and being involved in international crimes and scandals. Since 2007 exempt from a two-term presidency’s limits, Nazarbayev obtained further privileges in 2010, short of becoming ‘President for Life’.
At the same time, rapid growth based on high commodity prices undermined the limited signs of democratization. While there are different views on rentierism and ‘resource curse’ (Franke et al., 2009; Jones Luong and Weinthal, 2010), the oil-fuelled sustained growth in the 2000s clearly did not create incentives to play against authoritarianism.
Moreover, the Western-led ‘colour revolutions’ and the overthrow of long-time leaders in Georgia (2003), Ukraine (2004) and Kyrgyzstan (2005) led to further entrenchment in Astana. At the same time, economic growth and links with world capital markets provided Kazakhstan’s leadership the opportunity to survive and even thrive in the global economy (Cooley and Heathershaw, 2017). A stunning case of global integration was that of Eurasian Natural Resources Corporation, a mining giant owned by an international trio of oligarchs, based in London and controlling the extraction of cobalt, copper and other minerals in Africa, South America and Russia. Meanwhile, Vladimir Kim, a billionaire of Korean-Kazakh origin, founded and led Kazakhmys, a colossus in the copper industry listed in London and Hong Kong. In sum, Kazakhstani corporations rapidly learnt how to navigate the global age, often by exploiting connections and opportunities also beyond the former Soviet space.
Kazakhstan became also characterized by a technocratic dimension, if subservient to the President. The government released ambitious modernizing plans (‘Kazakhstan 2030’; ‘Kazakhstan 2050 Strategy’; the ‘Bright Path’ or Nurly Zhol), aimed at constructing a brand of efficiency and managerialism, and appointed technocrats to key roles in support of Nazarbayev’s system (Peyrouse, 2012). The emphasis on expertise, knowledge and professionalism is also linked to Kazakhstan’s effort to learn from successful East Asian ‘developmental’ experiences, Singapore and South Korea in particular, which clearly combined neoliberal and authoritarian elements.
Since the ‘Great Recession’, Kazakhstan has increasingly looked East (Contessi, 2015) – especially to China – and returned to look north (Russia), while at the same time maintaining key connections with the West. China–Kazakhstan trade has grown exponentially; Chinese state-driven investments have been massive, especially in the energy industry; China and Kazakhstan became Strategic Partners in 2011 and the Silk Road Economic Belt was launched by President Xi in Astana (September 2013). As early as 2009, Kazakhstan connected to China thanks to the first two Central Asian pipelines not directed to Russia: the Central Asia–China gas pipeline and the Kazakhstan–China oil pipeline. Furthermore, China and Kazakhstan are members of the Shanghai Cooperation Organisation and share the aims of fighting terrorism, separatism and extremism. What is China’s impact on Kazakhstan’s authoritarianism? There is no conclusive evidence on China’s role in supporting authoritarianism abroad (Bader, 2015). However, Beijing is endorsing and promoting international norms – in particular, a ‘hard’ concept of sovereignty (Contessi, 2015) and non-interference in other states’ politics – which better fit with an authoritarian political frame. It seems fair to say that Beijing’s influence is certainly not playing in favour of democracy.
At the same time, Kazakhstani elites have maintained their Western connections by becoming increasingly linked to the offshore world and tax havens. The Netherlands and the British Virgin Islands have become leading investors in Central Asia. As in China’s case, Kazakhstani companies are also investing in tax havens to lower transaction and governance costs (Cooley and Sharman, 2015). Brokers and major law firms are emerging as key contacts between Central Asian elites and Western jurisdictions (Cooley and Sharman, 2015: 22).
Kazakhstan’s engagement with the offshore world is also confirmed by the new Astana International Financial Centre. It is poised to become a major financial centre in the country’s new capital, based on English law and supported by the capital of NASDAQ and Shanghai Stock Exchange. While one of its dimensions is mainly ‘performative’ (Gallo, 2020), it can also be seen as a vehicle to channel transactions between Eurasia and the rest of the world and to financialize Kazakhstan’s economy in a more market-driven way. A fintech group, Kaspi, in fact made the headlines with a giant IPO in London in 2020 (Dawkins, 2020).
Authoritarianism had started in Kazakhstan mainly as a response to problems caused by neoliberalism. Over time, however, the two have become more and more interconnected. Kazakhstan’s patronal, nationalist, paternalistic and technocratic authoritarianism has become a way to connect to the global financialized economy by bringing advantages to its elites, and a modicum of prosperity to the country. Will this system survive the recent political departure of its founder and ‘master’, President Nazarbayev?
Conclusions
Neoliberalism and authoritarianism enjoy strong theoretical links, as is clear from the neoliberal narrative about the necessity of a strong state, capable of re-shaping society along market-driven lines. Neoliberals (especially German ordoliberals) cannot fully reconcile democracy’s uncertainties and passions with market rationality. Market purity requires guardians, and guardians cannot always be selected democratically; this is a scenario we have seen unfolding in European technocracies, but also in developing countries, beginning with Latin American and Asian experiences in the 1970s. The Great Recession has not been a clear watershed, yet it triggered an intensification of the authoritarian–neoliberal nexus. The guardians have become more Leviathanic and have often drawn a line between ‘ethnic nationals’, deemed to be ‘better fit’ for the global competition, and ‘foreigners’, usually migrants. Capitalism has in part been rolled back into national boundaries. Even in countries with significant democratic traditions, neoliberal capitalism’s survival has required nationalist and authoritarian politics, which has reshaped it in a more conservative, nationalist, protectionist way.
This paper has illustrated the emergence of three varieties of Authoritarian Neoliberalism. The first is technocracy, which has become embedded in the more advanced economies and the architecture itself of the EU, especially since the 1990s. The second is the form of nationalism, often ‘ethnicized’ in the contents and populist in tones, which has taken roots in numerous countries (including in the USA), but is more recognizable in the semi-peripheries of Central and Eastern Europe. The third variety is the traditional authoritarianism of several ex-Soviet republics, where non-developed market economies combined with a global position of dependency and rapidly triggered a move to non-democratic politics in the 1990s.
Each variety broadly corresponds to a type of economic structure and its insertion into the global economy. Yet the correspondence is not clear-cut. Further research will have to deal with cases in South and East Asia, Africa, South America, and the peculiar reality of the USA, before, under and after Trump. Moreover, each variety refers to a dominant political form, but all of them at some points overlap, as the proposed case studies demonstrate. In addition, neoliberalism has penetrated societies in more localized ways, as all three countries, despite their state-led nature, demonstrate. Neoliberalism’s latent authoritarian nature can emerge in many forms, which are often hard to predict. What they share is a distance from democratic politics, which renders their study both important and relevant in a world which in the 1990s looked predestined to a future of well-functioning markets and democracy.
Footnotes
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) received no financial support for the research, authorship, and/or publication of this article.
