The liberty of the people of Hungary has been threatened since the center-right Fidesz party won a two-thirds majority in parliament two years ago, and Viktor Orbán became prime minister. The election was a reaction to the corruption and fiscal failure of the former socialist governments.
However, Orbán has been making the poor situation worse through attacks on economic freedom. All three major credit rating agencies have lowered the rating of the country’s debt to junk status, and the government is seeking a bailout from the IMF. The poor economy can only encourage the strains of bigotry and extreme nationalism plaguing the country. Orbán has also acted to reduce both political and civil freedom.
The decline of freedom is a sad development for a country that should treasure and nurture liberty. Consider its history after World War II:
An uprising against Soviet domination in 1956 was crushed by Red Army forces but Hungary did later become the first Eastern European country to gain some economic freedom. It embraced aspects of the free market while still under communist rule and in 1968 the authorities allowed limited decentralisation of the economy.
Hungary played an important part in accelerating the collapse of communism across Eastern Europe when in 1989 it opened its border with Austria, allowing thousands of East Germans to escape to the West. Just a few months later the Berlin Wall was history.
While the media refer to Hungary’s government as center-right or right wing, the real distinction for any country is liberty vs. tyranny, not left vs. right. Authoritarian governments, like Hungary’s under Orbán or Venezuela’s under Pres. Hugo Chávez, act similarly to deprive people of their economic, political, and civil rights. Charles Gati, in explaining Hungary’s complex politics, notes, “What Hungary lacks … is a Western-style, pro-market party, liberal or conservative.”
Economic Freedom
The government has been reducing economic freedom through a series of unwise actions.
- It nationalized private pensions in 2010.
- It imposed a special “crisis tax” on banks, and forced them to absorb losses from a program allowing people with mortgages in foreign currencies to pay off the debt at a discount.
- It plans to substitute itself for banks, expanding the financing of businesses and setting up an agricultural bank.
- It has moved to limit the independence of the central bank.
- It raised the minimum wage by eighteen percent this year. Minimum wage laws are job-killers, and raising the mandated wage will further discourage employment.
- It has engaged in central planning, which always fails, and is a particularly poor approach in a country with a reputation for cronyism.
- The planning has including imposing a temporary ban on the construction of large shopping centers, purportedly to benefit small retailers. It has also included promoting and funding certain industries, with the claim this will boost growth and create jobs. This “national development strategy” favors firms based on “national interest and values.”
Political Freedom
Orbán also has attacked political freedom. An AP story, “Hungary’s hard-won democracy under threat?”, reports, “Orban’s Hungarian critics are alarmed by a creeping move … toward centralized one-party rule under his Fidesz party.”
Kim Lane Scheppele, in “Hungary’s Constitutional Revolution,” observes:
[Fidesz has used its] power in the most extreme way at every turn, amending the constitution ten times in their first year in office and then enacting a wholly new constitution that will take effect on January 1, 2012.
This constitutional activity has transformed the legal landscape to remove checks on the power of the government and put virtually all power into the hands of the current governing party for the foreseeable future.
Civil Freedom
Deterioration of Media Freedom Professor Scheppele, in the article noted above, describes the new media laws, enacted in 2010, that went into effect in January 2011:
A draconian set of media laws created a new media board – staffed only by Fidesz party loyalists with a chair who is appointed by the Prime Minister to a nine-year term. This board can review all public and private media for their compliance with a nebulous standard of political ‘balance’ and has the power to bankrupt any news organization with large fines. It is not surprising that the media have become self-censoring.
Freedom House has addressed the problem. Paula Schriefer, Vice President for Global Programs, wrote in “Press Freedom a Loser in Viktor Orbán’s Winner-Take-All Hungary,” “As troubling as are the legislation’s implications for press freedom is the government’s arrogance in responding to widespread international criticism.”
Hungary’s Constitutional Court struck down several provisions of the media laws, as well as certain other laws, on Dec. 19, 2011. The Parliament responded by amending the laws this month. However, the laws as they now stand still infringe on free communication. Further, the government has already demonstrated a willingness to restrict the court’s power by engaging in court-packing and circumscribing the court’s jurisdiction, meaning that the court’s role in constraining the government is at risk.
The day after the court’s decision, the government awarded the broadcasting license held by the main opposition radio station, Klub Radio, to a music station. In March 2012, an appeals court overturned this decision.
Freedom House, in its “Freedom of the Press 2012” report, downgraded Hungary from Free to Partly Free. It cited “the concerted efforts [by the government] to seize control over the legal and regulatory framework for media.”
Growing Police Powers
In “The New Hungarian Secret Police,” Professor Scheppele warns of the power of TEK, the anti-terror police force the government created in 2010:
TEK seems to be turning into … Orbán’s own secret police. In less than two years, TEK has amassed truly Orwellian powers, including virtually unlimited powers of secret surveillance and secret data collection.
She goes on to describe the powers of the new security service created by Parliament in April 2012. The commander of the unit is the speaker of the house, and the service has the power “to enter and to act in private homes.”
Professor Scheppele concludes:
Until this point, I have thought that the Fidesz government was just attempting to lock down power for itself for the foreseeable future, which was bad enough. But now, with the discovery of these new security services, it seems increasingly likely that the Hungarian government is heading toward the creation of a police state.
Orbán is facing consequences for his abuse of power. Tens of thousands of people demonstrated to protest the new constitution on January 2nd of this year. The IMF, the European Union, and the U.S. State Department have all expressed concern over the events in Hungary.
Orbán’s party is losing voter support, as reflected in the title of an analysis published this month, “The Nosedive of Fidesz.” It concludes, “The support of Fidesz has come to its lowest point in the past eleven years.” However, the fact that Hungary lacks a good alternative to Fidesz, i.e., a political party that supports liberty, including free markets, suggests the need for education.
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In Part II of this article, we explore why there is hope for Hungary.
