Posted on 21 July 2021 in symposia

ISRF Symposium – The Retreat of Liberal Democracy: Authoritarian Capitalism and the Accumulative State in Hungary

In April 2021, former ISRF Fellow Gábor Scheiring discussed his book The Retreat of Liberal Democracy: Authoritarian Capitalism and the Accumulative State in Hungary with Chris Hann and Sherrill Stroschein.


ISRF Academic Editor

Why is the world facing a wave of democratic backsliding? Is contemporary capitalism causing this spread of authoritarian regimes? How does neoliberalism weaken democracy in the name of expanding it?

An online ISRF event in April 2021 brought former ISRF Fellow Gábor Scheiring together with Chris Hann (Max Planck Institute for Social Anthropology) and Dr. Sherrill Stroschein (UCL) to discuss Dr. Scheiring’s important new book, The Retreat of Liberal Democracy: Authoritarian Capitalism and the Accumulative State in Hungary.

This edited symposium draws together a curated section of the book launch panel, as an aide-mémoire for those present at the event and a resource for those unable to join us. A video recording of the event is available here.

GÁBOR SCHEIRING: As Chris pointed out in his opening comments, I am sort of a recovering politician. As he said, I was a member of the Hungarian Parliament from 2010 to 2014, which means that I was elected to parliament when Viktor Orbán was also elected back to power with a two-thirds majority. My book is in part an attempt to try to make sense of this experience in politics, which goes back to the 2000s, basically, as our party (the LMP, then called Politics Can Be Different) grew out of the Hungarian green and global justice movement. Our idea was to renew progressive politics in Hungary, but I think that in many ways we failed. And our failure is related to the success of Viktor Orbán.

This political-strategic dilemma was one of the reasons I embarked on this book. The other is more related to my academic interest, in general, in the social effects of neoliberal policies and, more specifically, how policies such as privatisation, liberalisation, and deindustrialisation affect health inequalities and how, in many cases, these health inequalities caused by neoliberal policies then feed back into politics by fueling the rise of populism.

So this is the general context of my book. Let me give you a very brief overview of the narrative that I’m presenting. So, Hungary was considered, until the early 2000s, as one of the most successful transition countries, and it was praised by various international institutions such as the European Bank for Reconstruction and Development, which produced these transition reports about how well countries are doing. This praise reflects the prevailing sentiment of the 1990s and 2000s, which was based on the belief that the more you liberalise your economy, the higher your chances will be to consolidate liberal democracy. Basically the ideology of the ‘end of history’ was operationalised this way in Eastern Europe, leading to the belief that liberal capitalism and liberal democracy will necessarily go hand in hand and even if it creates some tensions, the bourgeoisie, the new economic elite that will be created through these reforms, will then propagate further democratisation. The idea here was that the new economic elite, the bourgeoisie, would be a natural supporter of democratisation.

I think that history presents a fundamental challenge to this liberal optimism of the 90s and 2000s and related social theories and political science theories. My book is an attempt to make sense of this challenge. What we have seen is how Hungary turned from the star pupil of democratisation to being a frontrunner of democratic backsliding, of illiberalism, in Eastern Europe. Another such frontrunner country is Poland, which has also been suffering severe democratic backsliding recently. So, the two lead reformers are now the two worst cases of democratic backsliding.

I really think that this poses a fundamental challenge to the prevailing theories of democratisation, which consider liberal capitalism and liberal democracy as mutually reinforcing spheres or institutions. Even if you look at the literature in 2010, when Viktor Orbán was elected, journals were full of recently published articles that were predicting that there wouldn’t be any backsliding because of the institutions that these countries had adopted and because they joined the European Union. As a result, most of these scholars saw a very low likelihood for what actually happened in the 2010s.

There are two alternative explanations for democratic backsliding out there that my book in part challenges and in part extends. One is about the political ‘rogues’ or political elites. This explanation departs from the idea that what you need is good politicians to install good institutions. But if things go wrong, and if those institutions that were believed to be good are collapsing, then the obvious explanation is that this happened because we have bad politicians. So instead of good politicians, it’s now the bad politicians, the political ‘rogues,’ that create trouble. It’s about the supply of illiberal populist ideas, corruption, bad politics. Now, of course, the supply of illiberalism is crucial, but this in itself cannot explain why ‘good’ politics, so to speak, was successful and ‘bad’ politics unsuccessful before 2010.

The other very popular alternative explanation revolves around culture and involves a simplistic way of looking at culture and at ‘illiberal’ people. These explanations tend to assume that Eastern European countries and, in general, today’s post-capitalist or late capitalist societies are classless societies, and that ongoing political conflicts are more about culture. And in the case of Eastern Europe, it’s historical legacies, such as the legacy of socialism, or ‘servant mentality,’ or anti-immigrant attitudes that are evoked as explanations of illiberalism. But empirical research that I cite in my book clearly shows that there was no demand for illiberalism before 2009.

I think that these theories don’t really try to go beyond the liberal transition framework, the democratisation paradigm that was prevalent in the 90s and 2000s. Rather, they try to offer some minor modifications while trying save the building as a whole. My position is that we need a new theoretical building, which we need to build from the bottom up and establish on new foundations. The foundations that I’m building on in the book include the theory of democracy as a class compromise, dependency theory (and the theory of dependent development in particular), sociology of power structures, sociology of internationalism, and political economy of accumulation strategies. I won’t get into the theoretical details here—there are two chapters on this in the book—as I’d rather focus on the narrative and the empirical strategy in the remainder of this overview.

I use this theoretical framework to analyse two big processes that led to illiberalism and explain the stability of illiberalism in Hungary, both of which are related to the way Hungary integrated into the global capitalist economy. This was a kind of dependent integration, driven by foreign investment and foreign capital which helped the country to develop a relatively modern export sector. But the problem was that this export sector did not spill over to the domestic part of the economy. This way it generated massive economic disintegration, in which you have these islands of transnational corporations producing for export. And these basically operate by using relatively cheap Hungarian labour to assemble things, using imported parts, and then they export it back. Think especially of cars, which are the most important industrial products Hungary produces. Production takes place in local plants owned by transnational corporations relying mostly on domestic labour and using foreign technology. This system of production doesn’t really help the local economy to develop, of course.

This system also led to a polarisation of the economic elite, creating a revolt among the elite itself, or at least the part of the economic elite, namely the national capitalists, who could not really take part so successfully in the new global capitalist markets as transnational corporations could. They were trying to lobby the left-liberal government but it was not receptive. Ultimately it was Viktor Orbán, and Fidesz, his party, that proved to be particularly sensitive to the plight of the domestic bourgeoisie and offered a new class compromise. What Obrán did, basically, was that he invited the domestic bourgeoisie to take part in the power coalition. He didn’t throw out transnational corporations, so they are still enjoying the support of the state. But he did focus on accelerating domestic capital accumulation, even while he was distributing more funds to German car exporters and other transnational corporations in the export sectors.

I trace this transformation in the book by using economic analysis on the basis of macro data. But I also assembled a new data set on revolving doors between the political and economic elites. For example, I show how much more likely one is to find bankers or managers of transnational corporations among the so-called left liberal policymakers, as opposed to the right-wing elite in Hungary, which shows you how the polarisation of the economic elite and the polarisation of the political elite played into this dynamism of the illiberal breakthrough.

And the other important part of the story is the revolt of the working class, which also starts from the same mismanaged integration into the global economy and it also led to social disintegration—jobless growth, rapidly growing income inequalities, various forms of precarity and indebtedness. Hungary also experienced a massive mortality crisis in the early 90s. And these deindustrialised towns in rural Hungary created all kinds of cascading social and economic problems that have long effects on people’s identities. This is what I show with 82 interviews with workers in Hungary’s rustbelt.

So Orbán relied on the revolt or disillusionment of the workers who previously represented the most important electoral base of the Socialist Party in Hungary, especially in rural Hungary. But their revolt against liberal capitalism meant that the Socialist Party lost its previous regional strongholds. And this allowed Orbán to conquer the whole country, so to speak.

What has emerged after 2010 is not really a kind of traditional populist regime in a Latin American sense—‘populist’ here meaning governing irresponsibly by redistributing money to the masses. Instead, Orbán created a new class alliance between domestic and transnational capital, and the way he was able to do this was accelerating capital accumulation, which creates all kinds of new tensions, social tensions, and social polarisation. As a result, by now Hungary is the most unequal country in Eastern Europe.

So I think authoritarianism in Hungary after 2010 is in part—not completely, but in part—the result of Orbán’s economic strategy to change the course of the country’s development after this liberal foreign investment-driven developmental model was exhausted. But because he’s not really able to invest in a highly skilled bureaucracy (like the ones that can be observed in East Asia) that is needed to create long-term economic development, I don’t think Hungary is now a developmental state. Instead, the bureaucracy of the state is subsumed to the interest of economic and political power holders. This is what in the book I call ‘the accumulative state,’ which is essentially a mutation of neoliberalism, a national-populist mutation of neoliberalism.

Clearly, domestic elites prefer economic nationalism, but transnational neoliberal elites are also ready to make a pact with Hungary’s nationalists. You can see the same pattern emerging in many other countries as well. Hungary is a great example of where this leads—especially the alliance between German capital and Hungarian capital and the way Orbán facilitates this kind of great new happy capitalist alliance and uses authoritarianism, populism, and nationalism to sustain a regime that is highly polarising.

CHRIS HANN: The first thing I would like to say here is that the book we’re talking about is an outstanding scholarly achievement. I find its main arguments concerning the political economy of Hungary over the last three decades entirely convincing. I would just like to expand the discussion in a few small ways, in particular by pushing Gábor’s story a little bit further back in time. And don’t get me wrong. I am not a historian. I am a social anthropologist. I do fieldwork in villages and small towns. I’m going to present a worm’s eye view of the developments that Gábor was talking about at a more macro level, where he can identify classes such as the national capitalists, and talk about abstractions like the bureaucracy. As an anthropologist, I have enormous trouble in dealing with that magnitude of social phenomena. So I’m going to offer the worm’s eye view from a particular part of provincial Hungary.

Another difference between Gábor and myself is that he is an insider to Hungary, whereas I had to learn Hungarian in the third decade of my life, and I’m still struggling with it. So please bear in mind that his interpretations, although he is more identifying as a political economist-sociologist, come out of the way he’s an insider in a way that I could never be, although I have done a lot of field work in Hungary.

But the main difference between Gábor and myself that is relevant for my purpose in this short commentary is one of generation. Gábor is far too young to remember the excited discussions of the late 1980s. They’re still very vivid in my mind, before the roundtable talks that led to the first free democratic elections. I can remember those years, the excited discussions about how best to replace a discredited, inefficient version of socialism. There were lots of idealist philosophers taking part with notions of free civil society. And there were also lots of hard-nosed economists who probably had more influence. Many of them were familiar with Western trends in economics. And you might even say some of those Hungarians in the 1980s were enthusiastic neoliberals avant la lettre, before that word really took off in the wake of Margaret Thatcher and Ronald Reagan.

Now, many of these intellectuals joined the political party they formed at the end of 1988 and which consolidated its position in 1989: the Alliance of Free Democrats. They were prominent in the elections in 1990, the first free elections, they were well represented in the new Parliament. The distinguished sociologist, Iván Szelényi, who had been living in exile for quite a long time by 1990, was astonished by what was going on in Budapest, in his native city. The cream of the oppositional intelligentsia was suddenly winning elections, well represented in Parliament. Szelényi wrote, quite wittily I think, about the benches of the Hungarian parliament looking like an academy of the social sciences, because almost every politician in the Free Democrats had a PhD at least.

Now why is this interesting and relevant for us tonight? Let me go to the small town about 120, 130 kilometers away from Budapest where I’ve been doing fieldwork recently. The Free Democrats won the election of 1990 in this small town, they provided the first democratically elected mayor. And he was reelected four years later, in 1994, but only after disassociating himself from that party of the former intellectual dissidents. Those liberals had lost all credibility within just a few years, above all in the eyes of small-town businessmen who complained why nobody in the capital city was doing anything for them. The small town experienced a lot of deindustrialisation, very high unemployment, and nobody in the big city really seemed to care. It was as if they had been abandoned by the elites. There was no politician who came to campaign for the Free Democrats in this small town, ever.

It’s a very different situation in this part of Hungary today. All the villages, all the small towns are controlled by Viktor Orbán’s party because they are not making the same mistake in organising democratic politics that the liberals made. Orbán has visited this town himself on a number of occasions. He is not an aloof academic who stays in the big city. He insinuates himself as a man of the people. That’s the key to his populism.

Now, this brings me to the first of my questions. If we are talking about the ‘retreat of liberal democracy’—that’s the title of Gábor’s book—should we not attach some of the responsibility for this retreat to the liberal politicians of that era? Are they not the first cohort of political ‘rogues’—to take up the terminology of Gábor himself? Is it surprising that this elite party collapsed altogether by the time Orbán came back to power in 2010? I am suggesting here that we shouldn’t just tell a story about post-socialist Eastern Europe, such as Hungary and Poland, that similar developments are taking place with the rise of populism pretty much everywhere in Europe, and certainly in Britain. I’ve not actually lived in my native country for many years now. But I have the impression that Jeremy Corbyn’s campaign had a London version of that Academy of Social Sciences helping to draw up the labour manifesto in 2019. But it didn’t work. In places like the deindustrialised town that I come from in South Wales there is a lot of cynicism towards those intellectuals. The social science expertise in the labour-supporting think tanks in the big city doesn’t help in situations like the one that Gábor has analysed in Hungary. So this is my first question. It’s about the responsibility of liberal intellectuals, and whether these intellectuals can play a public role at all in modern democracies, or would they be better advised to just keep quiet?

My second question concerns the nature of industrialisation in a ‘backward’ area, the agrarian periphery of Europe, where I did my fieldwork just east of the Danube. It certainly meets the criteria: no industry at all before the socialist period; socialists invest quite carefully to bring industry from the big city to the small town; they start a new industrial estate; and a new small proletariat emerges in this town; housing estates are built; jobs are created; the town is modernised; it loses its agrarian character. All of this happens quite quickly in the 1950s, 60s, and 70s. The trend has already changed by the 1980s. I was interested to find recently that the proportion of the population employed in industry fell quite dramatically in the 1980s—in other words, in the last decade of socialism. This cannot simply be attributed to the impact of market capitalism after 1990. My question to Gábor is: what does he think about the nature of that, if you like, market socialism—I know not everybody is comfortable with that label. But what the Hungarians were trying to do, in particular after the reforms in 1968, in the last decades of socialism, was to merge elements of the market with socialism (in the sense that the means of production remained in collective hands). Was this unviable economically, as well as being incompatible with democratic politics? I would be very interested in your views on that.

A final point I want to raise is that I would just like to quibble about your use of the term ‘authoritarian,’ which is there in the title of your book. And I can well understand why liberal intellectuals would see the present regime in Budapest as authoritarian. I see it as authoritarian in so many ways. But from the grassroots where I do field work, even the scheme of workfare, which for many intellectual commentators exemplifies the repressive nature of populism in contemporary Eastern Europe, is met with surprisingly sympathetic attitudes. In other words, they strike a chord that is much older than socialism in Hungarian society. People, including oppressed minorities such as the Roma, welcome the opportunity to earn wages, even if it’s less than the official minimum wage, because that is better than surviving on handouts from the state. As anthropologists know very well from a famous essay by Marcel Mauss, handouts are somehow insulting, they wound the recipient. And even the Roma, in this small town where I’m working at the moment, are quite pleased to be forced to get out of bed in the morning and do public works and earn wages compared to receiving state handouts, which was their fate for the 20 years in which the socialists and the liberals were sharing power in Hungary.

SHERRILL STROSCHEIN: I really was so honoured to read this book, and I felt like I was going back through my life, because I started going to Hungary in 1990, and the book really departs from that point. In essence, this book is a critique of what we’ve thought of as the transition paradigm. And I think it applies well beyond Hungary, it really helps us to understand what’s going on in a lot of places. There’s several of us who work on Eastern Europe, who are thinking about how what’s going on in Eastern Europe is instrumental in understanding what’s happening in Western Europe and in the United States, for example. So that’s the point I’m starting from, and I’ve three things I want to talk about. The first is this idea of generalizability, or the kind of macro causes going on. The second is about what I would call ‘micro causes’ or agency, and this will relate to how the working classes have envisioned their situation. And the third is about doing research.

I’m not going to dwell that much on the causal argument that Gábor outlined so well, but I want to just highlight in passing a tip-of-the-iceberg note on some of the ways in which the book’s argument differs from the transition paradigm and why the transition paradigm has broken down. The first part of the argument is that in the early stage of transition, the government made an alliance with transnational capital. Now, this alliance is simply assumed in the kind of Washington Consensus, that is, the approach taken during the 1990s, which didn’t think about it in sociological terms and nor did we think about the kind of revolving doors whereby people would cycle in and out of transnational companies and then into the Hungarian government. All of this is a really important part of the story.

Also important is a decrease in taxation to be competitive, which Gábor calls the ‘competition state.’ This was the idea that you simply have to starve your populations of taxes in order to attract foreign direct investment, and this, of course, led to a kind of social disintegration as you’re removing state support. This breakdown of the social contract that was perceived by the masses or citizens led to resentment. This now seems obvious, but at the time we really did forget about those working classes, in a way that’s kind of shocking to me now as we look back at the situation, just as we’ve forgotten them in Western Europe and the United States as well.

Now, a key part of this argument is that not all capitalists are the same. So transnational capitalists were not like domestic capitalists. They’re working in different sectors. And in the end, in the light of this kind of social breakdown, the government—and I’m kind of editorialising here—needed support. They could get support from domestic capitalists, whose revenue they needed as well, and so at that point an alliance was formed between domestic capital and the government. And this is where nationalism comes in, in a way I haven’t thought of before or seen before, even though I work on nationalism.

One notion that I don’t see in the book is mercantilism, the idea that economically, we need to protect and work with our own. This would be one of my questions: is mercantilism a word that we can use to describe this kind of idea, this pro-Hungarian industry stance, linked up with a kind of nationalism? And this is how we got what Gábor calls the ‘accumulative state.’ In this situation, the unskilled labour that was needed by the domestic capitalists was being wooed with nationalism and was being told that we’re restoring the social contract, as it were, through nationalism. So there are political strategies used which allow domestic capitalists to sit on top of labour and extract what they need out of it. Gábor uses a phrase that I really love to describe this: he calls it illiberalism as a new authoritarian form of neoliberalism. I think that explains very well what’s going on in Hungary.

So at the end of this first section, I have a few questions. Can this process happen anywhere? Could we work this up into a real generalisable statement on what happens when you’re trying, unsuccessfully, to navigate all of these different problems when you’re integrating into the global economy? One example that didn’t appear in the book was Pinochet’s Chile, and I was wondering if that might also tell us something about the generalizability of the model. Throughout the book I wrote in the margins: Brexit, Brexit, Brexit, because I think this is an example of what’s going on in the UK as well. What this makes me think is how I would love to see a project by Gábor on the UK, using these same ideas to think about what happened with Brexit. Why did the left abandon labour? This also speaks to what Chris Hann discussed, this notion that the left wasn’t behaving as we would expect.

Second, I want to reflect a little on the question of agency. This is a really interesting and important story about a working class that had been abandoned, and then about how it was incorporated into a control structure. This argument casts Fidesz as building a kind of control pyramid, which Gábor calls a ‘corporate state party.’ I think that’s a really good idea, a way to think about how it reaches down and how everyone is brought into the control structure, even with these workfare programmes. It changes the way we think about how a state that’s supposed to be a democracy works. In this context, Gábor talks about how Barrington Moore argued, well, ‘no bourgeoisie, no democracy’—which I teach my students. But in this model, the bourgeoisie must see that democracy is in their interests, and if it isn’t, it might align with the state to repress democracy—it all depends on what its goals might be.

Getting to the working classes, there’s a very sympathetic story being told here about how the working classes were resentful at being forgotten in the 1990s, and how that resentment becomes a resource for Orbán, who merges it with nationalism. This was actually my favourite part of the book because I work on nationalism, and Gábor develops a better understanding of nationalism than I think I’ve seen anywhere in a long time. Nationalism brings a promise of equality, it gives people the perception that the social contract is being restored, because we’re all the same as part of this nation. And in doing so—and Gábor outlines this very clearly—it removes the element of class, such that there’s nothing standing between the individual and the nation. So if I don’t want to think of myself as an individual, as in liberalism, I only have the nation to draw on, I don’t have an intermediary identity. The problem of course is that, financially, the real life situation of people is still declining. So how stable is this situation?

I have a couple questions that relate to this. First, without the immigration crisis in 2015, would this have played out in the same way? And the second question is, do these nationalist elements also apply to Hungarians abroad, who live in Romania or in Serbia? Are they being brought into that pyramid?

In closing my comments, I want to say a few things about doing research. First, this is a big project, and it’s very interdisciplinary: economics, politics, sociology—it’s all in here. In order to answer a complex question—What happened here, and why?—what is needed is very complex research that studies it from several angles, and looks at it over time. The devil is in the details. These big projects are rarely supported, and I really appreciate that the ISRF supported this.

Second, I just want to reflect briefly on a philosophical question. This kind of problem is where structure meets agency. That is to say, we wouldn’t have things happen in politics without some agency to make things change, as otherwise big structures are just all there is. And Gábor describes this kind of approach as relational, arguing that we have to think about class alliances, where there’s brokerage between different class interests. This is a really important way to start to think theoretically about what’s going on here, because it allows you to think about structural context and agents.

Finally, I think there’s an implicit sociology of knowledge going on in this book. Intellectuals are not absent or innocent in this story. They are at the vanguard of neoliberalism in the 1990s, and they want to advance their careers, they want better jobs, they want to get jobs in banks, and they are really pushing neoliberalism. And that’s a very active part of Gábor’s story. It gives me a sense of why, when you talk to people who support Orbán, this idea of ‘nem liberál’, which means not liberal, comes up. These people are explicitly drawing a distinction between liberalism, which immediately makes people think of the 1990s, and what’s happening now. And that distinction resonates very strongly, as Chris Hann also pointed out.

GÁBOR SCHEIRING: Thank you to both Sherrill and Chris for your amazing comments and for summarising some of my arguments. You raised some very good points to reflect on, and also had some friendly criticism here and there. So I have a few brief answers.

Let’s start with Chris’s comments first. I fully agree that we need to go back in time more, and also explore the way neoliberalism was rooted in socialist times in Hungary. I do some of this work in one section of the book, where I analyse the last decades of state socialism in Hungary, showing how a particular form of economic discourse emerged out of those debates during socialist times and how particular technocrats occupied dominant positions in the 80s that then led them to also occupy key policymaking positions in the in the 90s, which was crucial.

It’s in this connection that, as Sherrill pointed out, there is indeed something of a sociology of elites and sociology of knowledge dimension to the book. I didn’t go into the details, but I created this data set about the career trajectories of economists and politicians. And I was just amazed by how someone can, in year one, be a PR director for, say, a British company in Hungary and then, in year two, be a minister or secretary of state. And I found many cases of this, almost all of them involving left-wing or left-liberal politicians. While I didn’t really systematise the career trajectory angle, there is a lot competition going on, not just for foreign capital, but for recognition by foreign capital and international institutions. And not only states want to have this recognition, but also the actors themselves who make up the states and who make decisions. One way to get such recognition is to speak the dominant language of the era—and that was the neoliberal language. So this was one of the key factors that that led to this overzealousness that I describe.

I also wanted to touch on the subject of deindustrialisation. Deindustrialisation and economic liberalisation started in the 80s, but especially picked up pace during the last few years of the socialist regime. So the last socialist government was essentially a technocratic government that laid down the foundations of the market economy. That’s really when the deindustrialisation process started. And between 1988 and 1995, every second person employed in industry lost their job in Hungary. Every second person—that’s a figure of 50% deindustrialisation! I haven’t seen any other country experiencing such devastating deindustrialisation. If you compare it to the United States, we are talking about 30 or 40% of deindustrialisation over a period of 30 years. The same is true for the UK, where the figure is also around 30 to 40% of deindustrialisation over multiple decades. But in Hungary, you have the same over a period of only seven years. This is really like dropping an atomic bomb on the fabric of society, and I would say that most intellectuals and researchers really underappreciated the effect that this has had on social integration.

Sherrill, I fully agree with you that it would be amazing to explore the parallels with Brexit, but also with other countries. I briefly refer to Latin American countries and, and I rely on the literature on the political economy of democratisation and authoritarianism, which is rooted in Latin American scholarship. So there are traces of this in the book, but it’s certainly something to explore in more detail in the near future, and I hope to be able to continue along these lines. One notion I refer to in the book is that of the national populist mutation of neoliberalism. And I really think that Hungary is a sort of laboratory for this. But you can see this happening in many other countries as well—Trump was a great example, as was Brexit. In the case of Trump, you have certain kind of capitalists being fed up with globalization; but in the UK, you also had certain neoliberals and business who were fed up with the European Union. It was Margaret Thatcher herself who claimed that ‘we didn’t roll back the state to see it reinstalled at the European Union level.’ So to facilitate the continued neoliberalisation of the economy, some neoliberals thought that ‘well, we need to go back to nationalism and the nation state’ and that’s why they started to support Brexit. Something comparable is also happening in India, where you have a national capitalist class embracing deep nationalism under Modi, and promoting nationalism to promote domestic production and also to reposition India as a new global player. So there you also have a very interesting fusion of nationalism and neoliberalism.

So what I see is basically that the previous phase of global cosmopolitan, human-rights based neoliberalism has ended. And now the question is: what’s going to replace it? And one contender is the national populist mutation of neoliberalism. I don’t see Orbán as a challenger to neoliberalism, more as a new hybridization of neoliberalism. And I think the other alternative is a more progressive, more social democratic approach, and the way the Biden administration is responding to the crisis shows that they understood that if they were to go back to the same centrist politics, the same kind of liberalism as before, it will just recreate the social foundations of Trumpism in the US, so they need to invest substantially and go beyond traditional neoliberal discourse and thinking. Now, it’s still an open question whether this will stay with us. I’m a bit sceptical as to whether this will lead to long-lasting institutional change, but certainly it signals that there is a kind of understanding that to beat the national populist version of neoliberalism, you need to have a much more progressive social policy and industrial policy agenda.

This leads me to one of the points that was raised by Chris, about how Orbán maintains power in the face of these polarising economic regimes. I certainly do think that it’s not only about repression and authoritarianism in the institutional sense. So you don’t see the military or the police in Hungary, there’s been no military coup. Democratic backsliding in Hungary is much more subtle these days. And indeed, Fidesz is embedded deeply, sociologically—definitely much more so than the left. The only contender in terms of social embeddedness is the radical right, which is now trying to moderate itself. So in the book I described two strategies. One is institutional authoritarian fixes. You can imagine what these are: rewriting the electoral law, hijacking media, etc, etc. But the other is what I call ‘authoritarian populism.’ And the programme of workfare is really a great example because it’s in part a discourse and it’s in part a policy that addresses a real and existing problem, namely unemployment in rural Hungary. It portrays the state as a caring state, as opposed to the market-focused liberal state. It also serves to discipline workers who receive the Public Works scheme. And it’s also popular among those people who don’t receive the Public Works because they think, ‘well, we are better, we don’t have to do this kind of shitty Public Works programme.’ So it’s a very clever way of playing into this neo-nationalist sentiment, this neo-nationalist culture. And neo-nationalism is really about mainstreaming lower middle class or working class sensibilities towards work. This is then pitted against cultural or ethnic minorities on the one hand and, of course, a certain construction of the elites on the other hand—nasty international bankers, personified by George Soros.

About the Contributors

Gábor Scheiring is currently a Marie Curie Fellow at the Department of Social and Political Sciences, Bocconi University. He is a multidisciplinary political economist combining theoretical innovation with empirical rigour to reduce social hardships and to advance human development, health and democracy. Gábor regards social research as a tool that can help people make better sense of social dilemmas, understand the dynamics of social change and design solutions to real world problems. Gábor is a former member of the Hungarian Parliament (2010-2014).

Chris Hann is a Founding Director of the Max Planck Institute for Social Anthropology in Halle, and Fellow in Social Anthropology at Corpus Christi College, University of Cambridge. His main research interests date back to his undergraduate days and his first fieldwork projects in rural Hungary and Poland – he followed this with a comparative investigation of smallholders in a capitalist context on the Black Sea coast of Turkey. He maintains strong interests in comparative economic organization. All of this work is designed to break down disciplinary boundaries and contribute to a better understanding of Eurasia in world history.

Sherrill Stroschein is a Reader in Politics in the Department of Political Science at University College London, and Director of the Master’s Program on Democracy and Comparative Politics (since 2005). Previously she was an Academy Scholar at the Harvard Academy for International and Area Studies and an Assistant Professor at Ohio University. Her book Ethnic Struggle, Coexistence, and Democratization in Eastern Europe (Cambridge 2012) examines how contention helped forge common rules and institutions during the democratic transition in the ethnically-mixed states of Romania and Slovakia. She is currently completing a book on her ISRF project, on ethnic enclaves and the nature of state control in Eastern Europe.