The structural trap of labour politics in Hungary – Gábor Scheiring & Kristóf Szombati

Introduction

At the end of 2018, Hungary again made international headlines. On 12 December, amid chaotic scenes in the parliament, where opposition MPs sought to obstruct the voting procedure, representatives of the ruling Fidesz party modified the labour code. The new regulation raised the maximum amount of overtime employees can work from 300 to 400 hours per year and gave employers the right to delay payment for overtime work by up to three years. In response, trade unions organised street protests, mobilising significant numbers in the capital and a few provincial towns. The unexpectedly large turnout was due in part to union leaders’ willingness to put political differences aside and their unprecedented ability to come up with a robust frame of critique, labelling the government’s initiative as ‘slave law’. The street movement played a crucial role in uniting and emboldening the fragmented parliamentary opposition. On 16 December, 13 MPs led protesters to the building of the public news corporation, demanding that they are allowed to voice their demands. However, security guards prevented them from doing so, thereby underpinning the critique that the regime flounders fundamental democratic rights.

While the protests drew some energy from parallel yellow vest demonstrations in France, the arrival of Christmas put the protest movement on hold. Trade union leaders made an effort to revive protests in January by organising a general strike, and the parliamentary opposition attempted to broaden their demands to transform them into a general anti-systemic movement. Both efforts failed. At the same time, the coming EP election pushed public discourse in new directions, allowing Fidesz to refocus attention on its favourite theme: the threat of immigration. These dynamics lessened the pressure on the ruling party, allowing it to maintain the contentious new regulations in place. Thus, while the French movement achieved its immediate goal (forcing Macron to backtrack on the planned diesel tax), the Hungarian protests failed to force the ruling party to grant significant concessions. Moreover, while the yellow vests inflicted a significant blow on Macron’s legitimacy, Fidesz’s carefully crafted populist image only suffered a temporary blow. The movement, it appears, was not much more than a flash in the pan (for further details on the movement see Gagyi and Gerőcs 2019; Szombati 2018).

One of the most obvious indications of the movement’s lack of profound impact was the outcome of the most recent EP elections. While Fidesz’s large-scale victory was widely expected, the dismal performance of the Left-wing alliance formed by the Hungarian Socialist and Dialogue for Hungary parties (who together received 7% of votes) and the wipe-out of the alternative-green Politics Can Be Different Party (2%) came as a shock. Barely four months after the dissipation of a movement displaying apparent Left-wing features and messages, two liberal parties – former Prime Minister Gyurcsány’s social-liberal Democratic Coalition (16%) and the newly formed conservative-liberal Momentum party (10%) – took more than half of opposition votes, thus catapulting themselves to the forefront of opposition politics. Thus, while do not yet see a full repeat of the ‘Polish scenario’ (i.e. opposition forces coalescing around the old liberal establishment), neoliberal politics are definitely back, while the Left finds itself in a major impasse. So does the trade union movement, which has been dealt a symbolic blow failing to prevent the passing of the ‘slave law’, and is likely to find itself even more marginalised politically in the future.

In this article, we will seek to shed light on the decline of labour politics, which has been laid bare in a particularly stark manner by the failure of the ‘slave law’ protests and the Left’s dismal electoral performance. Since this decline was gradual, we focus on political-economic processes that played out over a longer period of time: the generation of working-class discontents under the auspices of a neoliberal Left, the gradual fragmentation of labour in a dualised dependent economy, the rearticulation of working-class solidarities in the idiom of the nation and the subsequent incorporation of some popular demands into ‘illiberal’ politics.

In our endeavour to theorise the demise of labour – and more broadly: class politics – we rely on the work of the great Hungarian political economist Karl Polanyi (2001[1944]) and more particularly his conceptualisation of the ‘double movement’ through which he sought to grasp the process whereby society reacts to the vicissitudes of marketisation. On Polanyi’s reading, the ‘disembedding’ of the economy (the erosion or dismantlement of rules and institutions designed to prevent the totalization of the market logic) triggers defensive responses on behalf of ‘society’. Such a ‘countermovement’ aims to protect people’s livelihoods and may take various forms such as fascism, socialist planning or Keynesian managed capitalism (in Polanyi’s lifetime) or Right-wing populist nationalism and social democracy (in contemporary Europe). Elsewhere, we have demonstrated that Polanyi’s theory can be adapted to the context of contemporary financialised capitalism on Europe’s Eastern periphery and its usefulness for highlighting the tensions of postsocialist capitalist democracies (see Scheiring 2016b; Szombati 2018).

In what follows, we combine Polanyi’s framework with neo-Gramscian political economy and power structure theory to describe the power blocs that compete to take control of the state and their strategies vis-à-vis capital and labour. To substantiate our theoretical narrative, we rely on empirical research we carried out over the last five years, as well as the existing literature. First, we outline the process whereby labour relations became disembedded during Hungary’s re-integration into the global capitalist economy under neoliberal governments. We then describe Fidesz’s strategy of authoritarian re-embedding, which combines pre-emptive repression with authoritarian populism, allowing the hegemonic ruling party to incorporate workers while neutralising discontents. We end by arguing that these processes have created a structural trap for labour politics.

Neoliberal disembedding

Having witnessed the exhaustion of the strategy of state-socialist import-substitution, policymakers in Central and Eastern Europe turned to economic liberalism (Amsden et al. 1994). Advocates of rapid liberalisation and privatisation were aware that this would lead to deindustrialisation but thought that by rapidly creating the conditions for private markets to function, new and more efficient enterprises would quickly emerge (Sachs 1994). Inspired by this agenda, Central and Eastern European countries competed fiercely to attract foreign direct investment (FDI) (Bandelj 2009; Bohle and Greskovits 2012; Böröcz 1999; King 2007; Nölke and Vliegenthart 2009). The resulting state structure was the ‘competition state’, institutionalised by the dominant power bloc formed by transnational corporations (TNCs), technocratic politicians and the liberal intelligentsia (Drahokoupil 2008a; Hay 2004).

Liberal-technocratic politicians dominated economic policymaking in every Hungarian government before 2010. Though their approach to privatisation differed, there was a consensus among them about the need to compete for FDI (Bandelj 2008; King and Váradi 2002; Szalai 1999). The policy instruments of the liberal competition state included generous tax incentives, direct subsidies, deregulation, flexible labour standards and low wages for a relatively well-educated labour force (Antalóczy et al. 2011). The tax incentives and the continuously lowered corporate tax rate positively discriminated TNCs at the expense of domestic capitalists. The duration and value of unemployment insurance continually declined between 1990 and 2010. At the same time, left-liberal governments did not do much to strengthen the trade union movement, which saw its membership gradually decrease. Also, the left-liberal coalition presided over the most avant-garde phases of neoliberalism, including the privatisation of pensions (Appel and Orenstein 2018), as well as energy and water utilities (Boda and Scheiring 2006). It also made – an ultimately failed – effort to privatise health care (Korkut and Buzogány 2015).

The hope that liberalisation would help the emergence of efficient enterprises and suck up inactivated segments of the labour force failed to materialise. Even though Hungary was a champion in attracting FDI, the country also had one of the lowest employment rates in Europe, with a meagre 55% of the population employed in 2009 (Eurostat 2018a). A large segment of society, the early victims of the transition, could not take part in the new growth centres of the economy, which were dominated by technology-intensive TNCs. At the same time, jobless growth also undercut wage convergence with Western Europe. The share of wages in total national income decreased from 57.2% to 46.3% in the period of the transition (Pitti 2010). Hungarian wages were also lagging behind average wages in the Central and Eastern European region throughout the 2000s and have long been among the lowest in the OECD (OECD 2018). The majority of workers experienced the transition as an accumulation of injustices, but especially those who found themselves permanently excluded from the labour market or trapped in low-wage jobs. In previous quantitative research, using a novel multilevel database covering 52 towns, more than 300 companies and the life chances of 27,694 individuals, we demonstrated that the expansion of markets led to a temporary increase in mortality during the 1990s in towns dominated by domestic capital as well as in towns dominated by TNCs (Scheiring et al. 2018).

The neoliberal disembedding of labour relations and the weakness of trade unions ensured that policymakers could repress wage growth to allow the country to attract foreign investors. At the same time, the dual structure of the economy also contributed to wage stagnation. The highly productive and profitable (technology-intensive) transnational sector and the less productive and less profitable (labour-intensive) domestic sector of the economy became increasingly disarticulated: forward and backward linkages have remained weak. This process of structural disintegration has become a well-established trope in the literature on dependent development (Amin 1982; Cardoso and Faletto 1979; Evans 1979; Hirschman 1978). Wages in the transnational sector are higher than in the domestic sector, but this was restricted to educated people living in the few growth hubs situated mostly in the northwest of the country, without much impact on wage levels in the domestic sector. Domestic capitalists have been generally hostile towards wage growth as their enterprises depend on cheap low-skilled labour.

The technocratic politicians (including the leaders of the Socialist Party) who steered the country through the process of neoliberal disembedding knew that this would generate discontents with the potential to destabilise their rule. Indeed, capitalism’s approval declined dramatically between 1991 and 2009 (Pew Research Centre 2009). To prevent the politicisation of diffuse discontentment, successive governments introduced strategic social policy initiatives to pacify losers and help citizens satisfy at least some desires. In the 1990s, unemployment benefits and pension schemes were introduced to counterbalance the most corrosive effects of deindustrialisation (Bohle and Greskovits 2012; Bruszt 2006). Then, in the 2000s, governments sought to counterbalance the lack of wage growth by helping families acquire homes and boosting private consumption. In this, they relied on Western banks, which offered citizens relatively cheap mortgage loans.

While pacification through inactivation and civic privatism prevented the explosion of discontents, both strategies were exhausted by the end of the 2000s. Inactivation put a break on growth and strained public budgets, and these problems became acute when the global economic crisis hit Hungary. The country was especially negatively affected by the drying up of credit and the depreciation of the national currency, which drove interests (which had been borrowed in Swiss Francs and Euros) on public debt and private mortgages into the ceiling, sending the state and hundreds of thousands of families into a debt spiral. These conditions triggered a political crisis, leading to the collapse of the left-liberal government in 2009. In 2010 voters abandoned the Socialists in droves, flocking to rival Fidesz, which had been out of power since 2002 and could, therefore, disassociate itself from the crisis and the neoliberal politics, which led to it (Enyedi et al. 2014).

The demise of the Left and the rise of the Right thus appear almost natural. A closer glance, however, reveals the process to be anything but straightforward. We do not have space to go into details, but nevertheless want to highlight that the spectacular rise of Fidesz is part and parcel of a by now familiar story of the structuring effects of neoliberal disembedding coming together with the Left’s increasingly evident abandonment of its former support base and the latter’s recuperation by a reinvented Right.

The first chapter of the story is the disintegration of a culturally and ideologically integrated (in fact, never fully unified) working class. In our qualitative research (Scheiring 2019b; Szombati 2018), we have begun to trace how working-class communities collapsed during the transition from socialism to capitalism. The disintegration of communities was most acute in towns where state-owned enterprises were shut down, as in ‘steal’ and ‘sugar’ towns. We found that disintegration was experienced as a loss of control over one’s life, of being at the mercy of uncontrollable forces. This rhymes with the Kalb’s (2009) experience among Polish workers in Wroclaw and his emphasis on powerlessness. The other dominant structure of feeling was an increasing alienation from and anger towards formerly trusted political elites. This theme was highlighted by Ost (2006), who focused on the increasing gap between trade union organisers and liberal politicians in Poland. A new strand of qualitative research in the wake of the Trump and Brexit shocks has also shown that working-class populism in the US and UK is connected to the loss of industrial jobs and workers’ sense of being left behind and abandoned by neoliberal politicians (Koch 2017; Mcquarrie 2017). Reading these works together, it becomes evident that East European, West European and American populisms emerge out of the lived experiences of class in the context of globalisation (Scheiring 2016a). To be sure, such experiences are not homogenous. However, they do share essential traits, and it appears that these traits are connected to the structuring effects of globalisation.

Jonathan Friedman (2003) has, in our view, usefully highlighted how the interplay of ‘vertical’ and ‘horizontal polarisation’ has led to the reconfiguration of worker solidarities. Vertical polarisation refers to new dimensions of class polarisation, which increased the distance between workers and elites in astounding proportions. Friedman highlights how the credentialled, i.e. those endowed with cultural capital (e.g. skilled technicians, lawyers, accountants, corporate managers and top politicians) have integrated into global networks of production and consumption. While previously, this cultural elite was domesticated by the working class; the global capitalist elite has gradually assimilated it. This gives rise to a global cosmopolitan class, a class in which cultural and economic elites are integrated more tightly than before. At the same time, less skilled white- and blue-collar workers remain embedded in localised modes of production and wedded to traditional lifestyles. This fragment of the working class does not get to enjoy the fruits of globalisation and feels culturally alienated from the cosmopolitan class. And vice versa, cosmopolitans, adopting a neo-colonial gesture (Buchowski 2006; for further details see Gagyi 2016) look down on the ‘ethno-national folk’ (Kalb 2018) whom they regard as civilizationally incompetent (Bretter 2014; Sztompka 1993), imbued with a serf mentality (Hvg.Hu 2018) and instinctively inclined towards illiberalism (Skidelsky 2019).

Horizontal polarisation refers to geographical decentralisation of production and the emergent cultural divides, which result in the fragmentation of the national community of solidarity. Just as workers become estranged from elites, the material and cultural rifts between workers of different backgrounds also widen dramatically. Typically, it is the relation between the working poor and surplus populations that becomes problematised. This is nothing new: after all, Marx had already problematised the relationship between the proletariat and the ‘lumpenproletariat’ – and this distinction continues to be applied by those who consider themselves more worthy of support than others, typical strategies being the moral debasement and racialization of those below. This is what Barrington Moore (1978: 35) pointed out in his book on the social bases of obedience and revolt where he notes that ‘the person who is being deprived of his or her property by impersonal social forces is often the one most eager to apply severe social sanctions against the idler, even though both of them may be suffering from the same set of impersonal social forces’.

In the case of Hungary (as in many other European countries) it has been the Roma who have historically been singled out as that part of the population, which is unworthy of support. As we have shown, an organically rooted moral panic played a vital role in delegitimating the left-liberal elite, whose representatives were accused by non-Roma workers and worker peasantries of supporting ‘lazy Gypsies’ (Scheiring 2019b; Szombati 2018). We see similar mechanisms at play in the rise of exclusionary populism in the South of the US where white workers blamed the federal government for putting the interests of less worthy racial and ethnic minorities before theirs (Hochschild 2016).

Double polarisation thus created favourable conditions for the mobilisation of workers against deracinated, uncaring cosmopolitans and unworthy, unruly populations. In Hungary, this task was taken up by the newly formed Jobbik party, which relied on paramilitary proxy organisations to mobilise workers and worker peasantries against Roma in economically deprived communities where Roma and non-Roma were competing over increasingly scarce public goods and services. At the same time, the more moderate Fidesz party sought to mobilise society in defence of public services (which the left-liberal government sought to privatise) under the banner of more inclusive nationalism. Fidesz promised to reintegrate the national community by returning the state to its rightful owners: hard-working workers and entrepreneurs who could come to a new compromise in the sharing of national wealth.

This message resonated with diverse worker constituencies and Fidesz spent a great deal of effort to integrate them through rituals of resistance and solidarity (Feischmidt 2014; Greskovits 2017; Halmai 2011). It is important to note that this political strategy did not have to compete with Left-wing rivals. The labour movement was severely weakened, fragmented and lacked the intellectual and organisational resources to incorporate workers ideologically, and the Socialist Party adopted a Third Way program and strategy after Ferenc Gyurcsány became a leader in 2004. It was as a result of all these factors that workers shifted to the right, choosing Fidesz over the Socialists in 2010 (Enyedi et al. 2014).

There was one more factor that played an essential role in the collapse of the neoliberal compromise: the increasing polarisation of the capitalist class (Scheiring 2015; 2018; 2019a). Transnational corporations, the very few successful technological companies owned by domestic entrepreneurs, and the domestic service class which directly profited from the presence of TNCs (see Drahokoupil 2008b) were mostly satisfied with the liberal competition state and continued to support the left-liberal political elite. However, the overwhelming majority of the national bourgeoisie grew dissatisfied with the ruling elite after the turn of the millennium, as the elite-interviews conducted by Kolosi and Szelényi demonstrate (Kolosi and Szelényi 2010). Elsewhere, we have also shown that the left-liberal coalition that governed between 2002 and 2010 lost support among billionaires during the second half of its rein (Scheiring 2019a). Just like the working class, the national bourgeoisie also shifted its allegiance to Fidesz.

Authoritarian re-embedding

Orbán kept his promise after scoring a historical victory, orchestrating a new class compromise between the national bourgeoisie and TNCs. The latter were allowed to maintain their dominance in technology-intensive sectors, but Fidesz actively sought to change the balance of power between foreign and domestic capital in other sectors, such as banking and energy. This necessitated a stronger fusion of economic and state power than previously under the competition state and the introduction of new policy tools to support capital accumulation. It also led to the national bourgeoisie being incorporated more tightly than before into the dominant power bloc alongside multinational capital. Elsewhere, we have called this process of state transformation the building of the ‘accumulative state’ (Scheiring 2019a). The concept of the accumulative state was first coined by Alan Wolfe (1977) who developed the term to refer to the compromise between the landed aristocracy and the nascent commercial and industrial bourgeoisie in the 18th and 19th centuries in Western Europe and North America. We adopt his concept to interpret the conflictual relations between foreign and domestic capital and political elites in semi-peripheral states. In the case of Hungary, the nascent national bourgeoisie plays the role of the landed aristocracy, while TNCs replace the commercial and industrial bourgeoisie of the early version of the accumulative state.

We posit that the accumulative state offers a political solution to the internal contradictions of dependent development by accelerating capital accumulation in a way that is favourable to both factions of capital. It does this by retaining and intensifying the policies of the competition state in relation to foreign capital, while at the same time introducing new tools to satisfy the needs of domestic capital and the political class which has coalesced around Orbán. The new class compromise involves the satisfaction of short-term capitalist needs through the reduction of welfare spending, the repression of labour unions, and enhanced direct and indirect support to both capital factions. The most critical policy instruments are the following (for a more detailed discussion see Scheiring 2019a):

  1. Public procurement clientelism: Corruption related to public procurement significantly increased after 2010, as Fidesz took control of the distribution of EU transfers, seeking to channel a greater of the latter to domestic capital (Fazekas and King 2018). The lack of European mechanisms of oversight and control has allowed Fidesz to use EU transfers to feed its clientelistic networks and keep the national bourgeoisie on its side.

  2. Property rights actions: These are measures designed to influence and realign property rights, including the acquisition of private assets by the state and their subsequent re-privatisation, which played a prominent role in the redistribution of wealth in favour of the national bourgeoisie, especially in the financial sector (Gonda 2019; Scheiring 2018).

  3. Tax reduction: This included the introduction of a flat personal income tax (16%) and a flat corporate tax (9%). While the former benefited the higher-middle class, the latter favoured domestic capital and TNCs. The government, continuing its predecessor’s policy, also offers generous tax rebates to the largest corporations. The actual corporate tax paid by the 30 largest companies is only 3.6% (G7.Hu 2018). Fidesz has quietly transformed Hungary into a new tax haven.

  4. Austerity: To balance the budget, the government offset tax reduction by curtailing expenditures and increasing the taxation of lower incomes. The new constitution adopted in 2011 incorporated a lock-in mechanism preventing deficit spending until state debt decreases below 50% of GDP (Szikra 2014). Furthermore, social welfare spending was reduced from 18.2% of the GDP in 2009 to 14.3% in 2016; public health care spending declined from 5.2% to 4.8% of GDP in the same period; and education spending from 5.4% to 4.9% (Eurostat 2018b).

  5. Increasing the supply of low-skilled labour: As part of a complete overhaul of the education system, the government reduced the compulsory education age from 18 to 16 and curtailed spending on state-funded higher education – leading to a 15% decline in tertiary school enrolment between 2010 and 2016 (World Bank 2018).

  6. Increasing the flexibility of labour: A new Labour Code in 2012 hollowed out the institutions of tripartite consultations (Szabó 2013). Fidesz also introduced a stringent strike law, which rendered strikes in public services almost impossible. Most recently, in response to an increasingly acute shortage of labour caused by a post-2010 emigration wave, the government re-amended the Labour Code in December 2018, raising the maximum of overtime hours from 300 to 400 (Gagyi and Gerőcs 2019).

What was the impact of these policies? TNCs involved in technology-intensive production, especially those active in the automotive sector, continued to relocate manufacturing capacities to Hungary to take advantage of its relatively cheap, flexible labour force. These companies have created new jobs that offer better wages than the companies owned by domestic capitalists. However, the latter has also been forced to raise salaries after more, and younger workers moved to Western Europe to find better-paying jobs. The increasingly acute labour shortage led to a moderate 4.3% increase in the average real wage between 2010 and 2017 (OECD 2018).

This average figure hides enormous discrepancies. Whereas the real income of the bottom 10% has remained virtually unchanged, the income of the top 10% skyrocketed (Hcso 2018). The share of working poor (those earning less than 60% of the median wage) has increased by 6.8% between 2010 and 2017, one of the most significant increases in the whole of the EU (Eurostat 2019). Governmental policies directly contributed to the rise in inequality. The social income (i.e. income that individuals receive from the state in addition to their wage) of the bottom 40% has been reduced by 6-12% between 2009 and 2016, while the social income support of the top 10% increased by 42% (Hcso 2018). These numbers clearly show that supporting the social reproduction of impoverished populations is not a concern for Fidesz. At the same time, initiatives such as the ‘slave law’ reveal the ruling elite’s commitment to prioritising the needs of capital over workers.

While there have been outbursts of anger about the obscene enrichment of a new regime-friendly nobility, such anger has failed to break the cross-class popular alliance of workers and the bourgeoisie, which had brought Fidesz to power. While there are indications that working-class support for the ruling party dips at certain moments (one such instance being the period of the mobilisations against the ‘slave law’), the opposition has proven incapable of taking advantage of these windows of opportunity, while Fidesz has exhibited a remarkable ability to claw back (working class) support. How can we explain this?

For one thing, the rise in real wages – which has been more pronounced in the last two years – contributed to the diffusion of widespread anger with the enrichment of the new nobility. Our personal experience with interviewing workers in rural towns makes clear that they see a difference between the economic record of the Fidesz government and the record of its left-liberal predecessors. Their lived experience confirms Fidesz’s claim to work for the benefit of the whole national community, even if it is abundantly clear to them that those at the top have been dealt a better hand than others. Historical memory also pushes towards the normalisation of elite privilege. After all, the socialist nomenklatura also benefited from exclusive privileges during socialism and then went on to convert its political capital into economic capital – that, at least, is how workers remember socialism.

This line of argumentation fails, however, to account for the absence of anti-systemic mobilisation among the poor (the clear losers of the new accumulation regime). Neither does it account for labour’s inability to mobilise broad sections of workers against the slave law. We posit that to explain these failures, we need to focus on the ruling party’s strategy of ‘authoritarian re-embedding’. This comprehensive strategy comprises legal-institutional and administrative-coercive measures that are designed to prevent the emergence and mobilisation of discontents. We call this sub-strategy ‘pre-emptive repression’. At the same time, the regime also deploys initiatives that seek to bolster its legitimacy in the ranks of workers. We call this sub-strategy authoritarian populism. In what follows we briefly outline what we mean by these in detail.

To protect itself against a possible political backlash from the losers of capital accumulation, Fidesz occupied all democratic institutions (Sargentini 2018), undermined the system of checks and balances and obstructed the channels of direct democracy (Bánkuti et al. 2012), thereby centralising power in the hands of the executive and, more precisely, a very small group of people surrounding the prime minister. It was able to achieve this legally by taking advantage of the ruling party’s parliamentary supermajority and writing a new constitution that provides the regime with a mantle of legitimacy and respectability. While the facade of a functioning democracy has been preserved, the mechanisms characteristic of a functioning democracy (transparent decision-making, oversight, deliberation) is missing. The only institutions which have retained an ability to place limits on executive power have been the courts, but even these are coming under intense pressure to stop interfering with key governmental initiatives (The New York Times 2018a).

This near-total takeover of the polity has been accompanied by a coordinated effort to re-feudalise the public sphere in a way as to allow Fidesz to control the airwaves and prevent critical voices from reaching rural citizens who now constitute the ruling party’s core constituency. The government transformed public broadcasting into a well-oiled centralised propaganda machine (Bajomi-Lázár 2012). Key representatives of the national bourgeoisie have contributed significantly to this effort by acquisitioning private media (Associated Press 2018; Wilkin 2016) and, most recently, handing more than 400 news outlets over to a centralised holding company (The New York Times 2018b). This mighty arsenal is complemented by governmental communication campaigns, which are endowed with a budget outweighing the total budget of the opposition by a factor of ten (Atlatszo.Hu 2018) and allow Fidesz to reach every citizen directly.

Finally, the ruling party has also sought to restrict the political opposition’s room of manoeuvre and tilt the political playing field in its favour to engineer massive electoral victories. These victories not only legitimise Fidesz’s rule but also contribute to the regime’s stability by demoralising opponents. The key initiative was the drafting of a new electoral law which favours Fidesz (Tóka 2014). However, recent research has also shown that the ruling party relies on local mayors to coerce poor citizens into supporting Fidesz at elections (Mares and Young 2019). Fidesz’s arsenal also includes more ad hoc initiatives. The State Audit Office has been mobilised to impose arbitrary fines on opposition parties (Freedom House 2018). The ruling party has, on one occasion, even mobilised football hooligans to physically prevent opposition MPs from initiating a referendum (Freedom House 2018: 226-227). While state-owned companies fund loyal ‘civil society groups’ organised from above (Hungarian Spectrum 2017), trade unions’ organisational possibilities have been severely curtailed (Szabó 2013) and human rights NGOs face recurrent attacks (The New York Times 2018a). Taken together, the country’s rulers have thus managed to impose significant obstacles to the emergence, signification and mobilisation of discontents. There is a new consensus emerging among political scientists that Hungary is not a democracy anymore, but a hybrid regime, a competitive authoritarian system (Bozóki and Hegedűs 2018).

Pre-emptive repression is, however, only one of the sub-strategies deployed by the regime. The ruling party also seeks to manufacture consent through a strategy of authoritarian populism (Hall 1979; 1985): by addressing people’s everyday problems and ‘represent[ing] them within a logic of discourse which pulls them systematically into line with policies and class strategies of the Right’ (Hall 1979: 20). An analysis of this strategy is clearly beyond the scope of this article (for further details see Szombati and Scheiring 2019), so we will limit ourselves to summarising the three policy instruments, which we consider crucial.

First, the government’s welfare policies have increasingly become narrowly centred on supporting the biological reproduction of ‘hard-working’ people. In February the prime minister announced a 7 point ‘family protection action plan’ to boost fertility, which Fidesz has established as a strategic priority. The new measures fall within the Social Darwinist logic of supporting people who conform to the ideal of biological-cum-economic productivity and withdrawing support from those who do not (single mothers, disabled people, the unemployed). The plan has been received with near unanimous approval in a society which extols motherhood and sees the family as the last bastion of solidarity (Gregor and Kováts 2018).

The government’s other highly popular policy is the so-called ‘public works program’ (Hann 2016a; 2018), a centrally financed but locally administered workfare scheme, which was introduced with the dual aim of establishing greater control over ‘unruly’ surplus populations and demonstrating the ruling party’s commitment to restoring social order in the countryside (Szombati 2018). Just as the family policy addressed a real problem (low fertility), the national workfare program also responded to pressing social concerns: the lack of jobs and social security in regions hit by economic decline. Moreover, it did so within a frame that resonated with workers: as an effort to build a ‘work-based society’ which rewards those (and only those) who fulfil their obligations toward the wider community and punishes idle, unproductive citizens.

The third policy that was key for manufacturing consent was the securitisation of Hungary’s southern border. In the summer of 2015, at the height of the Syrian refugee crisis, the government, claiming that the EU was too slow to act, began building a border barrier on its border with Serbia to prevent asylum-seekers (whom state officials labelled ‘economic migrants’) from ‘illegally’ entering Hungary. Hungary’s new wall symbolises the barrier between ‘civilisation’ and ‘barbarity’, thus establishing Orbán as the leader of a pan-European civilizational crusade. This holy war, as all holy wars, required national unity and therefore incorporated calls for the centralisation of power in the hands of the executive and for the opposition to support the ruling party in protecting the citizenry. Besides being hugely popular and significantly contributing to Fidesz’s triumphant re-election in 2018, the wall and the broader discourse of securitisation also had the salutary effect of relegating internal conflicts (such as the enrichment of the new nobility or the underfunding of health services) to the sideline of politics (Hann 2016b).

These three authoritarian populist policies thus played a crucial role in legitimising Fidesz’s rule in the eyes of workers and, more broadly, the lower-middle class. While most Hungarians are critical of tendencies which we have framed as the rise of the accumulative state, the policies mentioned above have made Orbán’s politics palatable or at least tolerable to broad segments of the electorate. This is especially true for workers and worker peasantries. The reconfiguration of welfare according to the ideal of productivity met the expectations of these ‘hard-working’ categories whose representatives felt encroached by ‘workshy and thievish Gypsies’ and neglected by neoliberal elites (Szombati 2018). Having successfully rearticulated working-class solidarities in strictly speaking national-socialist terms (see the previous section on neoliberal disembedding and Scheiring 2019b), the leading force of the political right returned the state to its ‘legitimate owners’ (Wimmer 1997), reaping handsome political dividends for turning the page on the neoliberal era.

Fidesz, importantly, compensated this divisive politics of class warfare from above – the pitting of ‘productive’ populations against ‘unproductive’ ones – by offering to protect the whole population from looming external threats posed by migration and especially migration from the Islamic world. This reconfiguration, which was framed in opposition to the competing Western liberal model founded on the idea of multi-culturalism, allowed Orbán to parade as the protector of the ‘national community’. Both reconfigurations constituted the state as a vehicle of social transformation and as an object of political struggle, in response to the double polarisation induced by globalisation. This represented a move from a technocratic-liberal conception of the state to a robust activist state in the spirit of political constitutionalism (Antal 2017). Moreover, both were, importantly, articulated in an agonistic mode, as a choice between two mutually exclusive political programs – a liberal and an ethnic-nationalist one – making it very difficult for the political opposition to avoid being associated with neoliberal politics.

Conclusions: the strategic trap of labour politics

The analysis we presented above is a long answer to the short question we posed at the beginning of the article: How can we explain the failure of the anti-slave law protest movement, and the collapse of labour politics? Before summing up the lessons of our analysis, we think it is necessary to highlight some factors that have less to do with deep structural tensions and more with organisations.

When the anti-slave law protests erupted, there was no lack of political will among oppositional parties to take up the issue and ride its wave. However, the organisational capacity of trade unions and Left-wing parties was insufficient to sustain the protest momentum. Trade union leaders are just now familiarising themselves with a more activist, combative style that goes beyond the bureaucratic mode of operation which they had been socialised into. The trade union movement is also highly fragmented. Most of the labour conflicts take place at the factory level, and bargaining rarely involves trade unions at the sectoral or national level. There is also a considerable difference between unionisation rates in foreign-owned manufacturing plants and enterprises owned by domestic capitalists. While trade unions operating in the former have recently organised successful strikes, their peers have not managed to take advantage of an economic environment that is favourable for labour organisation. This gap explains the lack of a unified nation-wide trade union movement and labour’s inability to influence national politics. Trade unions have also neglected the crucial symbolic dimension of class politics: they did not invest in education, research or other activities that could strengthen workers’ political identity. A single protest event cannot make up for the decades-long neglect of building a Left-wing working-class political culture. It remains to be seen if trade unions will be able to regain momentum after the quickly fading success of the protest movement against the ‘slave-law’.

If unions have failed, then the political Left has doubly failed. The Socialist Party did not invest any significant effort into organising workers or into building a political culture for the Left. As the party was the successor of the state-socialist party, it inherited an organisational culture that took the existence of the party for granted. This led to a complete neglect of political education, research and activism. The party elite, following Tony Blair’s example, gradually shifted toward a media-focused style of politics. As noted above, it also embraced neoliberalism. After 2010, the will to survive paralysed some leaders, while compelling others to strike bargains with Fidesz. All of this naturally led to the latest EP election fiasco, which was probably the last nail in the party’s coffin.

The Politics Can Be Different Party had a chance to occupy the political vacuum left behind by the Socialist Party. However, its membership did not support this, pushing the leadership to keep an equal distance from Fidesz and the Socialists. This in-between position generated the impression that the party tolerated Fidesz’s politics and proved increasingly unpopular amid Fidesz’s continuous shift towards authoritarianism and to the Right. The leaders of Dialogue Party, who broke away from Politics Can Be Different Party in 2012, steered clearly to the Left. However, they also failed to invest into building a political community, opting instead to enter deals with other parties (most lately: the Socialists) to survive, without building a functional political organisation. The party still counts some popular personalities among its ranks, such as Gergely Karácsony, who won the primary election held to choose the opposition’s joint candidate for the mayor of Budapest. If Karácsony wins the mayoral election (scheduled for October), this might allow the alliance of the Socialists and Dialogue to retain some political significance, while also handing the opposition a much needed victory and potentially energising its support base. The latest polls suggest that the opposition’s candidate has a realistic chance of defeating Fidesz. However, they also point to a process of realignment in the oppositional field, with Gyurcsány’s Democratic Coalition consolidating its leadership role. In sum, none of these parties succeeded in breathing life into the Left. The lack of mobilisational drive and grassroots activity partly explains why episodes like the slave law protests have failed to energise labour politics or to act as springboards for the building of a pro-labour narrative.

These organisational factors are crucial, but the broader environment presents an even tougher challenge, a structural trap for labour politics in Hungary. As we have shown, Orbán’s strategy of authoritarian re-embedding involves pre-emptive repression. From amongst the tools designed to make oppositional organising difficult, we highlight the hefty fines that were imposed by the State Audit Office on Jobbik and Dialogue, thereby effectively ruining both financially and harming their electoral prospects. The collapse of Jobbik at the EP elections shows that Fidesz (whose media actively promoted a new radical Right-wing party that split from Jobbik last year) has the capacity to appoint its own opposition.

Orbán’s strategy of authoritarian re-embedding also involves an element which we called authoritarian populism, that is an effort to legitimise Fidesz’s politics and attract workers to the ruling party. We highlighted the government’s family and workfare policies to show that these addressed real problems, but in a partial way and while reinforcing the logic of social Darwinism, which entices citizens to compete for diminished public goods through a micro-politics of stigmatisation. At the same time, the securitisation of the Southern border also allowed Orbán to parade as the grand protector of Hungarians and Christian Europe. These initiatives are designed to spur competition and prevent the building of inter-class alliances, while also fostering a sense of common interest and purpose in the face of looming external threat.

Orbán has thus successfully polarised politics along the nationalist–cosmopolitan axis, articulating a neo-nationalist vision that combines elements of ethnic-nationalism and a newfound ‘civilizationism’. He simultaneously purports to defend Hungarians from the dictates of big capital and illegal migrants. The story he tells is a compelling one: ‘European elites, led by George Soros, are quietly furthering big capital’s agenda, conspiring to satisfy its appetite for cheap labour by letting economic migrants into Europe. This agenda is detrimental for Hungarians: it undercuts wages, increases welfare competition and threatens their culture and security. To avoid these threats, Hungarians must unite to “stop Brussels” and defend national sovereignty until the very last breath’.

Orbán’s narrative taps into Hungarians’ sense of relative deprivation and resonates with historically sedimented suspicions about faraway cosmopolitan bureaucracies. In our analysis, we alluded to the fact that this brand of peripheral national populism draws energy from the double polarisation that is deepening fault lines separating cosmopolitan growth centres from traditional manufacturing hubs and agricultural heartlands. Although Hungary’s accumulative state does not seek to close this structural gap (through development policy) and does not even offer to help aspiring individuals jump across it (by promoting social mobility), Orbán offers a minimum of social protection and a sense of belonging to those who live on the ‘periphery’s periphery’. Although this is not much, it is more than what his liberal predecessors have done for these people.

The EU election amplified this new polarisation, with Right-wing populists continuing to cannibalise the working-class constituencies of traditional social democratic parties, and liberals and greens capturing the urban vote in most countries. Labour, admittedly, has managed to safeguard its turf in Scandinavia and claw back some lost ground in Southern Europe. While the new centrist forces may be capable of obstructing the national populist tide in the core, this is difficult to imagine in places where two-thirds of the population consider themselves the losers of neoliberal disembedding. Cosmopolitan liberalism may be back in Hungary, but it alone will not challenge Orbán’s strategy of authoritarian re-embedding.

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