Zoltán Pogátsa's blog on economics in English

Zoltán Pogátsa's blog on economics in English

Tuesday, 13 April 2010

Hungarian elections: How a landslide to the right is actually a move to the left

Most international news about the results of the Hungarian elections are superficial and concentrate on the issue of the far right and the 2/3 majority of Viktor Orbán. If you just fly in and out of the country and look at the names of political parties, you get the impression that there has been a massive shift from the left to the right.
But in Hungary everything is the other way around.
The Socialists, who have been governing in the last eight years, and between 1994 and 1998, have in fact traditionally been a very right wing, neoliberal party - a complete break with their past of being the Communist party of Hungary until 1989. Their pendulum swang to the opposite exteme. From believers in the omnipotent state they went on to being believers in the free market. Socialist Prime Minister Gyula Horn carried out mass scale privatisation to foreing investors, making trade unions weak and Hungary one of the most open economies in the world. Socialist governance between 2002 and 2008 was characterised by an attempt to privatise healthcare, constant talk (albeit little action) about decreasing taxes, inflation targeting in monetary policy, and massive capital flight from amongst the Socialist political-economic elite to de facto tax havens such as Cyprus.
These Socalists have now suffered the biggest defeat in their history, and their auxilliary parties, the neoliberal Alliance of Free Democrats and the Hungarian Democratic Forum (also neoliberal lately) have not even made it into parliament. So neoliberalism maintains a 19% presence in the Hungarian Parliament.

All of the other political forces in the new parliament are to the left of the Socialists economically.

The nominally conservative Fidesz are likely to get a 2/3 majority in Parliament, perhaps even more. Although at the centre of their election campaign were also tax cuts, which would make them neoliberal and Lafferist, they are already backtracking on this issue, and it is difficult to see how they lower taxes without blowing an enormous hole hole in the national budget that is already in strongly negative territory. All other areas of their agenda are very vague, essentially populist, but past policies of Fidesz were rather social democratic in character: a stronger state, state aid to enterprises, free and state owned healthcare and education, etc.

Much has been made of the exremist party, Jobbik, which has received 17% of popular vote. While strongly nationalistic, antisemitic and racist (anti-Gipsy) in their politics, their economic policies are in fact very similar to Fidesz's except they advocate no tax cuts and would instead default on Hungary's huge debt burden - a very unrealistic idea.

The last party that got into parliament is called LMP (a Hungarian acronym for Politics Can be Different). It is a Green party of the Scandinavian type, with a root in the left wing global alterglobalisation movement. Their ideology is the New Left / Naomi Klein / Chomsky type, which realises that environmental sustainability is dependent on a radical shift of the economic system from assymetrical deregulated capitalism to societal-economic-environmental sustainability. That in fact green is red. What policies they will actually advocate in parliament is somewhat difficult to tell at the moment, as their election manifesto was a little vague on detail, not unlike the mainstream parties that they criticised.

Since all three parties are left of the Socialists economically, a landslide towards the right in fact means a decisive move towards the left in Hungary.


  1. Catchy but, IMHO, wrong. socialists may have pursued a pro-market agenda in 2006-9, but they spent government revenue on social transfers before, and their manifesto argues for a surtax on the rich. On the other hand, LMP is more mainstream than you suggest on a number of issues of economic policy: e.g. they advocate further cutting the tax on labor. Jobbik wants to reschedule the national debt - that is not the same as what Fidesz will do, at least I hope it is not.

  2. @Anonymous: Socialist spending on social transfers was not a form of ideologically motivated social policy really, basically Medgyessy was buying voters without having any idea about, or caring about what the money will change structurally.
    I have never heard about MSzP calling for a surcharge on the rich...
    On LMP your are right: their manifesto is more mainstream than their ideology. We shall see how they turn out in Parliament.
    Jobbik talks about default, not rescheduling. Fidesz talks about rescheduling. I made this clear in the blog entry.

  3. Thanks for this post. Yes, international coverage of the Hungarian elections has been pretty poor. The New York Times, for instance, failed to mention what stand Fidesz had taken on cooperating with Jobbik.

    The terms "left" and "right" are just too misleading to be used in this context - which I guess is part of your point.

    It's very strange to see Hungarian voters' traditional options simply disappear or become unviable. I wonder where the open-society, Western-oriented intellectuals migrated to - the ones who used to support SzDSz. They can't all have gone Green (LMP)... but what's their alternative?

    In previous elections it often felt like anti-incumbent sentiment held sway - regardless of who the incumbent party was. So it's not surprising to see new, untested parties emerging. What's surprising (to an outsider, anyway) is that Fidesz, which has governed before, and about which no one can have any illusions, has managed to generate such overwhelming support.

  4. I enjoyed reading that, good analysis :)