Comparative Politics

Hungary’s Democratic Crisis: Comments from David Stark and János Kornai

Feb 13 '12

Columbia University Professor David Stark sends along the following comments on both the evolving situation in Hungary and a recent article of note by the eminent Hungarian scholar János Kornai which appeared in the Hungarian newspaper Népszabadság on January 28, 2012, and is available in English on The Monkey Cage here. Stark’s comments:

As many readers of this blog are likely aware, democracy is in crisis in Hungary.  With a commanding super majority in Parliament, the Fidesz government, led by Prime Minister Viktor Orban, has enacted a new Constitution and a series of related crucial laws. Some of their clauses have provoked uproar in the European Parliament in a hotly contentious debate just this past week. Soon after taking office, the Orban government had moved quickly to seize control of the mass media; more recently it has taken measures that would greatly reduce the autonomy of the Central Bank.

One can point to adminstrative actions taken against its critics (e.g., closing research institutions that were not towing the party line). But beyond these specific attacks, one can also sense a darker and even more dispiriting tone. For, in addition to the fear that the disobedient will be dismissed, the government’s propaganda organs seem to exclaim, “You must applaud.” That is, it is not enough that university administrators, museum directors, local government officials, and ordinary citizens silence their dissonance; they are also expected to overtly approve.

It is in this context that the distinguished Hungarian economist, János Kornai, has published an unprecedented five-page article in the January 28, 2012 issue of Népszabadság, the country’s leading daily newspaper.  Almost exactly a year ago (also in Népszabadság, January 6, 2011) Kornai had made an earlier public statement, “Taking Stock,” in which he pointed to damage to civil liberties and human rights, arguing that Hungary had moved from a democracy to an autocracy.  The most recent essay, “Centralization and the Capitalist Market Economy,” examines the Orban government’s centralizing tendency. (A complete version of the English translation is available here.)

Kornai’s essay is wide-ranging and includes many examples of such a centralizing tendency. In finance: the ability to demote the president of the Central Bank. In human services: county hospitals as well as disaster protection would pass from control of the county self-governance authorities to the central government. In primary and secondary education (including Budapest’s prized system of Gymnasia): actions to similarly deprive these institutions of de-centralized local control. In university’s and research institutes: actions leading to the centralization of research networks and the crushing faculty governance in the selection of rectors. And in the field of public foundations: most of these abolished and their assets and decision-making functions transferred to state authorities.

Looking to the economy, Kornai points to how “crisis taxation” is a tool for discrimination against firms that are not in the government’s circle – just as government tenders are a tool to reward companies that are “close to Fidesz.”  (Balazs Vedres and I provide an account of how partisanship migrated from the sphere of politics to create politicized business groups in the contemporary Hungarian economy. Our “Political Holes in the Economy” will appear in the American Sociological Review and is available here.)  Kornai can be expected to extol the virtues of market de-centralization.  But the essay is most eloquent in voicing the importance of diversity within the sphere of civil society. Yes, mergers and centralization might seem to eliminate waste and promote efficiency. But the resulting destruction of diversity creates greater lasting damage.  Speaking of the institutions of civil society, he argues: “horizontally coordinated decentralization is much more efficient in the long term than centralized, vertical coordination.”

János Kornai needs no introduction to scholars who studied state socialism and its aftermath.  Economists will know him from his sharp criticisms of centralized planning in Overcentralization (1953), The Economics of Shortage (1980), and The Socialist Economy (1988) as well as for his equally trenchant criticism of neoclassical economics in Anti-Equilibrium (1971).  Sociologists of my generation were exposed to his ideas: in the mid-1990s he was the economist most frequently cited in the major journals of the discipline.  For a personal and intellectual journey of his extraordinay life (escaping from an Arrow Cross labor gang as a teenager in Budapest, becoming a young communist, repudiating that dogma, later refusing all dogmas as an economist outside any camp, never attending a university yet ending up as a Full Professor at Harvard after never being allowed to teach in Hungary) see his memoirs, By Force of Thought (2007). “Opportunities of Constraints,” my review essay of that book, could serve as a brief introduction to the work of this still very active public intellectual.  It is available here.

[Note: This version of the post reflects some very minor updates to the 4th paragraph of Stark’s comments from the originally posted version.]