Hungary leapfrogs to authoritarianism

Hungary has long been known as one of the countries that openly defied the Stalinist brutality and inhumanity that was imposed on it by Moscow after WW2, and having one of the first set of gutless mice who scurried off when Mikhail Gorbachev told the Soviet satellite countries that it wouldn't intervene if their regimes faced overthrow by popular acclaim.

Since then it has reformed, opened up its economy, joined the European Union and NATO, and made huge strides towards being an independent relatively liberal open country, with a vibrant civil society, embracing freedom. The old cliche that the price of liberty is eternal vigilance is only too true, as the coalition government of Fidesz-KDNP is proving too well.

The 2010 Hungarian election saw a collapse in popularity for the Hungarian Socialist Party, which despite its name (and being the partial inheritor of the old communist Socialist Workers Party), has helped lead many free market reforms in Hungary for some years.  The communist element left very early to form a tiny hardline party that has never done well.  The socialists had been in government in coalition since 2002.  However, the biggest blow to the socialists was in 2006, not long after the last elections, when a recording was released of the socialist Prime Minister, Ferenc Gyurcsány, openly saying his party had lied to win the election.  Mass protests erupted.  The government remained tainted and stank for the next four years, voters never forgave the socialists.  The 2010 election saw the socialist vote collapse from 42% to just under 17% of the vote.  Those votes had to go somewhere.

As a result, two opposition parties did comparatively well, Fidesz and Jobbik.

Fidesz has had a laudable history as one of Hungary's first independent political parties, being pro-freedom, anti-communist and youth oriented.  However, its electoral success was more limited as parties flourished after the end of one-party rule, so that it had a respectable 7% of the vote in 1994.  Then the party transformed into a conservative party, adding the name Hungarian Civic Party to its name.  It adopted an approach of social conservatism and greater nationalism, and grew to 28% support in 1998.   In 2010 it won the greatest plurality with nearly 53% of the vote, up from 43% (the socialists had been governing in coalition with the Alliance of Free Democrats, a liberal free market party).

Whilst Fidesz could govern in its own right with 262 out of 386 seats, it had campaigned jointly with the Jobbik party.

Jobbik (or Movement for a Better Hungary) was originally set up as Christian oriented conservative party, with strong nationalist credentials (although distinctly non-racial, rather culturally nationalist).  It was sceptical of EU accession.  The 2006 protests gave it a perfect platform to campaign on, as it simply said the communists are still in charge (given the socialists lied).  Jobbik claimed the electronic media was on the side of the government, so that it was ostracised unfairly.  It claimed crime was on the rise and needed to be addressed.  It developed a manifesto opposing free market capitalism, social liberalism and multiculturalism.  It promoted granting citizenship to Hungarians who live outside Hungary.  It was "very nearly" fascist, in that it avoided anti-semitism, anti-Roma and other such language, but was strongly pro-Hungarian.  It got just under 17% of the vote.

So Hungary elected a conservative government, with an ultra-conservative coalition partner.  It has sought to radically change the Hungarian state, and one of the early controversial moves has been the creation of a new media law.  This law creates a media regulator which judges whether TV and radio stations, and newspapers have provided "balanced coverage", and can fine or shut down those deemed to have failed.   The Prime Minister has evasively said this is "just like" other European countries.  It's not.  It is state control of the dissemination of debate and opinion, and it is unacceptable.

If that wasn't enough, the government has found a new way to address Hungary's public debt.  It is confiscating the private pensions of citizens (or rather saying "hand them over to the state or get no pension at all").   The current Hungarian system has some parallels to Roger Douglas's compulsory retirement savings account idea, although it retains a significant public sector component.

All Hungarians are required to put 8% of their salary into a private pension fund of their choice, another 1.5% is effectively taxed to pay for current state pensions.  Employers were also expected to make a contribution, with pensions received being a combination of private and state funded pensions.  Now it is being confiscated, and mixed messages are being given as to whether receipts will reflect contributions or not, the strong suspicion is that this is easy money.  The government has said it is about dealing with the budget deficit, a deficit not caused by people saving, but by overspending.  However, the same government is increasing state pensions and increasing maternity leave.

"Though the accounts are not linked to any underlying assets, an individual’s pension entitlement is tied to the sum recorded in that account, giving earners an incentive to contribute more. But the government’s most recent statements suggest the individual accounts will be no more than a regular statement of the value of the pensions contributors can expect to receive, with no relationship to contributions made."

In other words, a money grab. Unadulterated theft on behalf of the state. 

The EU has lodged protests about the media law, but not the state theft (which is unsurprising).  Given Bulgaria, Poland and Ireland have all embarked on related confiscations of pension funds to cover short term overspending, and the EU strongly supports state confiscation of private property, why be surprised?

The media law should be scrapped, and private pensions should be sacrosanct.  Indeed the only safe policy is to keep it completely out of state hands altogether.

Bear in mind that in New Zealand, the equivalent is a pay as you go pension, that promises you absolutely nothing, that pays nothing if you die before you retire, and bears absolutely no relationship to what you pay the state.  So no need to worry about state theft of your pension in New Zealand, it is simply par for the course as it is exactly what happens to anyone paying above the average amount in tax or dying before age 65!

Berlin Wall Series: Hungary

Of the countries in the former Eastern bloc, Hungary was the first which unshackled itself progressively from Stalinist dictatorship, but was also one of the first to rise up against it in the 1950s. Hungarians didn’t want the imperialist dictatorship foisted upon them by Moscow, so it took little sign from Moscow that it would not intervene for Hungarians to organise, to challenge the Party, and for the Party to know that, in the hearts and minds of so many, it had already lost.

Stalin punished Hungary for being on the side of the Axis in World War 2. Hungary had been granted territory under the Munich Agreement and supported Nazi Germany, until serious setbacks in 1943 caused the Hungarian government to seek peace with the Allies. As a result, Germany staged a coup planting the particularly nasty fascist nationalist Ferenc Szalasi in power, who with great aplomb shipped hundreds of thousands of Hungarian Jews to extermination camps, whilst ruthlessly persecuting opposition. However, the Red Army swept into the east of Hungary in the following year, equally ruthlessly taking land, murdering and raping civilians in their way. By this time Hungary was effectively a satellite of Berlin, so surrender by Germany was surrender by Hungary. Hungary lost all territory acquired under the Munich agreement, and some more to the USSR (now Ukraine), and half of the German minority living in Hungary were deported to Germany.

Initially Hungary was left to hold free elections, as Stalin believed Hungarian peasants would embrace communism. However, with only 17% of the vote, it became clear that “people power” would need to be imposed, so by 1948 the Red Army had coerced the government to accept more communist influence, set up the ruthless AVH (secret police) to occupy the former headquarters of Szalasi’s fascist Arrow Cross Party, with no hint of irony.

Stalin’s strongman was Matyas Rakosi, who terrorised the Social Democratic Party into merging with the Communist Party, to create a façade of “national unity” government with the so called Hungarian Workers’ Party. However, Rakosi was a loyal follower of Stalin, equally as ruthless and lives on as the man who invented the term “salami tactics” to describe how to deal with the opposition.

Rakosi executed 2000 and imprisoned over 100,000 over his time of rule, establishing primitive concentration camps and a cult of personality. The economy was bankrupted in part due to Soviet enforced reparation payments and also the forced collectivisation of the economy, with reports that by 1952 the average disposable income had dropped by one-third in three years.


However, the death of Stalin saw a power struggle between Rakosi and the reformist Prime Minister Imre Nagy, who sought more openness and less state control of the media and the economy. He advocated freedom of speech, more private sector involvement in the economy, and after the Treaty of Austria advocated a similar position for Hungary. Austria had been granted neutrality, and he sought the same for Hungary, meaning withdrawal from the Warsaw Pact. Moscow promptly arranged for his comrades to put him out of his job.

Yet sparks had lit flames in the minds of some Hungarians, prompting the 1956 Revolution. For a brief period, Nagy led a reformist government, introducing a multi-party system, with freedom of speech, assembly and association, and declared withdrawal from the Warsaw Pact. That was, until the USSR crushed it with tanks and guns. Thousands were killed and afterwards tens of thousands imprisoned for “crimes” of counter revolutionary behaviour. Imre Nagy was secretly tried and executed.

However, Hungarians would not forget. For over many years they could tune secretly to Radio Free Europe, BBC World Service and Voice of America. The new leader, Janos Kadar would reimpose authoritarian order, but not on the scale of Rakosi. Indeed, Hungarian communism would long be seen as more moderate than that of others with the view of Kadar that “those who are not against us are for us”, so the assumption was being that citizens were supportive of the government, unless the demonstrated otherwise. There was no longer Stalinist control of the arts and culture, and no personality cult surrounded Kadar. Collective economic units had more freedom to operate in different fields, and collective farms were permitted to have substantial privately owned plots. As a result, Hungary was better off economically than most other eastern bloc states. There is little doubt that this (relative) moderation, helped stem tension, but similarly when Mikhail Gorbachev’s reforms in the USSR went further, moderates in the Hungarian Workers’ Party saw their chance at reform.

By 1988, Kadar had aged, and was succeeded by Karoly Grosz who sought to undertake moderate reforms, but he himself was overshadowed as protests emerged, foreign travel restrictions lifted and the iron curtain was first removed, as barbed wire was taken down between Austria and Hungary. There were open calls for multi party elections, withdrawal of Soviet troops and in October 1989 the Hungarian Workers’ Party finally agreed to abolish its monopoly on political power. Most notably in June 1989, Imre Nagy was reburied and the 1956 Revolution was finally seen for what it was – Hungarians standing up against tyranny, and then murdered by the USSR with the complicity of their own.

Since then, Hungary has joined NATO and the European Union, and has not looked back. Today in Budapest you can visit the former headquarters of the AVH and Arrow Cross Party. It is the House of Terror, where the story of Hungary under both fascist and communist tyranny is told. At the outskirts in the hills, is Memento Park, where you can see the grotesque statues that used to populate parks and corners in Budapest, extolling communism.

Hungary has clearly not looked back from being one of the laboratories of socialism.

Hungary 1989 - the iron curtain was cut

Today is the 20th anniversary of the day the Iron Curtain was cut. It followed Hungary's own movement towards freedom that paralleled that of the Soviet Union under Gorbachev. Karoly Grosz had become General Secretary of the Hungarian Socialist Workers Party in May 1988, and began a process of liberalisation.

Widespread protests in 1988 calling for democracy saw multi-party elections announced in February 1989. Along with that came freedom of the press, freedom of assembly, freedom of association and the right to form competitive trade unions. In April 1989, the USSR agreed to withdraw all Soviet troops from Hungary by 1991.

However it was the removal of barbed wire between Hungary and Austria, and the "shoot to kill" policy of border guards on 6 May 1989, that saw the Iron Curtain pulled to one corner, and the light of the West draw thousands.

You see passport holders in the Warsaw Pact countries had freedom of movement between those countries. East Germans notably could travel freely to (then) Czechoslovakia and onto Hungary, and now onto the West. 30,000 did so between May and September 1989, before the geriatric thugs in the dying German Democratic Republic (GDR) put up their own restrictions on travel to Hungary. East Germans kept fleeing to Czechoslovakia, which had its own border closed in October before protests by hundreds of thousands in the streets saw Erich Honecker himself deposed by his own party.

Then the Wall came down.

Today I am in Budapest, by pure coincidence. It is a thriving city of free people, as it always should have been, and a city that remembers what it went through from the terror of a brief period of fascist rule in 1940, to Soviet imperialism, the 1956 uprising and its crushing and the sheer terror of never knowing from one day to the next whether the state would turn on you next.

Budapest has a Museum of Terror, dedicated not to terrorism as we know it, but the terror of the period of Hungary under dictatorship - from its own fascism to Nazi occupation. to the Soviet occupation and its socialist stooges. It includes pointedly, a long list of those who were the foot soldiers in this police state, the prison guards, the "judges" who proclaimed death sentences and the secret police men and women who bullied their own people. It was designed to name and shame those who "were only following orders" and so did what most would think was unthinkable - murdering, imprisoning and torturing in the name of "the people" and "the party" and "the revolution".

Today is a day worthy of celebrating, for it is remarkable to think that this once Marxist Leninist dictatorship is today a free member of NATO and the European Union. It is also worthy remembering that most of the former Soviet Union itself, at best has only just started really having some of that freedom, at worst is under a similar level of tyranny, with a different name. The philosophical and political battle for freedom in the former Soviet bloc is far from over.