The Backslide of Liberal Democracy
Liberal democracy has been in retreat for the best part of the last decade in some parts of Eastern Europe. Gabor Scheiring, a Postdoc Researcher at Bocconi and former opposition MP in Hungary, thinks that the foundations of this shift have often been misunderstood and that this confusion makes it harder to fight populism. Hungary's Viktor Orbán, in particular, is not the unpredictable anti-business populist depicted by international media; on the contrary, domestic and transnational business elites are crucial pillars of Orbán's authoritarian-populist regime. In his new book (The Retreat of Liberal Democracy. Authoritarian Capitalism and the Accumulative State in the 21st Century, Palgrave Macmillan, 2020), Scheiring leverages three years of empirical research and four years in politics to describe and conceptualize how Viktor Orbán's Fidesz exploited the rising nationalism among the working-class casualties of deindustrialisation and the national bourgeoisie to consolidate illiberal hegemony. "My fieldwork in Hungary's rust belt has shown that de-industrialisation and privatisation during the 1990s eroded working-class culture," Scheiring says about the transition period, "and decreased the bargaining power of labor, which retarded wage growth, increased inequalities, and even led to increased death rates." Although Orbán relied on the support of disgruntled workers in 2010 to gain power, "the real beneficiaries of his regime," Scheiring continues, "are the upper-middle class and the economic elites. However, the majority of voters still associates the current opposition with the pre-2010 neoliberal era, so the opposition remains unable to earn back the trust of workers." Courtesy of the author and of Palgrave Macmillan, Bocconi Knowledge publishes an excerpt of the book on the experience of class dislocation in the '90s.
Hungary's mixed-economy socialism could not compete technologically with advanced market economies and ended up in severe indebtedness as resource prices rose and international credit markets dried up in the 1980s. As reforms emancipated the market from its secondary role and Hungary integrated into the global capitalist economy, social relations were profoundly commodified. The assessment of the market transition and related cognitive evaluations are not unanimous. Workers with different labour market positions and family backgrounds experienced the process differently. Some respondents recalled new opportunities. Political democratisation, getting closer to the West and joining the EU raised hopes. Many expected improvements in the situation of their companies in the wake of the market transition. Many had positive expectations for foreign investors:
When Nestlé arrived in 1990, to buy the local chocolate factory, everyone was celebrating. Everyone believed they would earn 300 thousand forints [1000 euros] a month. There was this street festival welcoming the company with bouncing castle and whatever. There was a massive march, Mayday, everything you can imagine. (Secretary, Szerencs, OTP)
Despite this, the market transition was a negative experience for the vast majority of respondents. About 82% of respondents lost their jobs during the market transition in the 1990s, either because they were made redundant, or because the company where they had worked was closed. Only relatively few, altogether, six respondents changed jobs during the transition voluntarily. Of the 58 respondents still working at the time of the interview, 39 had been unemployed at some stage. Insecurity at the workplace and the fear of losing their jobs affected even those who could keep their jobs. This increased vulnerability is a significant source of stress for the individual and has become the cause of mental and physical diseases. In addition to labour market stress, further hardships were presented by material impoverishment, which was only partly due to the loss of jobs. Even those who did not lose their jobs talked about a decline in their living standard. Many people complained about increasing inflation at the beginning of the 1990s, which caused problems in paying off loans taken out earlier (although I did not find signs of a large-scale debt crisis in the 1990s comparable to the one in the second half of the 2000s).
The loss of jobs and the fear thereof were not the only problems mentioned by the respondents. Not only impoverished families experienced a decline in their quality of life. Negative experiences related to the market transition go beyond material deprivation. People complained about working more under increasing insecurity, and about losing access to subsidised services, such as service flats, company holidays or a company doctor. A small business owner running a small shop, who belongs among the financially more successful interviewees, also reported a significant deterioration of his family's living standards during the transition:
Before the regime change, life was better (laughs). You knew you had a safe job, secure income, a way to make a living. You knew you could go on holiday.You were not stressed. You had no debt. Do you understand? You lived normally. I have not been on holiday for a long time; before the transition, we went on holiday each year from the Alumina Factory. To Balatonalmádi, or Balatonfüred. Yes, they had a holiday home, and we went on holiday twice each year, for two weeks. Since I became an entrepreneur, I have not even been on holiday. Nowadays, we are under tremendous stress.... I can hardly get any sleep these days. My hands, my feet are often numb. (Small business owner, one-time skilled manual worker, Ajka, Alumina Factory)
The effects of market transition on the quality of life cannot be measured with income trends of labour market status. Insecurity, vulnerability to market processes and increased workload were characteristic even in the most prosperous settlements and among the luckiest communities during the market transition. Keeping one's job or becoming a small business owner did not ensure a getaway from the problems of market transition.
However, the most severely deindustrialised towns fared the worst. The market transition had a disastrous effect on Salgótarján; factories closed down one after another until the beginning of the 2000s. There was an interviewee who explained that after the telecommunications division of the Hungarian Post Office was closed down, at his new workplace he got cancer of the intestines because his life turned upside down, his earlier routines dissolved, he worked a lot and had no time to eat normally:
Then I was placed at another department, the network department. I had a good time there, we enjoyed working on the telephone poles, and then on the towers. We went on fieldwork often, and we had a system for everything, for instance, eating. Eating, almost everybody ate at the same time, together. Then Invitel closed down this department, and I was placed to another team as a technician. There we had no regular meals, at least I didn't. In the morning I had a yoghurt with two croissants and did not eat until the evening. I usually drove and worked hundreds of kilometres like this. I had an apple or a glass of water. I missed the community, having a hot meal together, or a good breakfast... When I was dismissed, I received severance pay. However, I did not feel healthy; so I went to the doctor. It turned out I had this problem, cancer. (Skilled worker, Salgótarján, Posta Telecommunications Firm)
Job market insecurity and decreasing real wages also had a significant impact on families, as many interviewees revealed that financial problems directly led to animosity within the family:
We had a very good marriage, indeed. And when one tries to give the same as they were used to give, and cannot manage, people start having disagreements.And then one only sees from the inside that this has to be ended because it will not end well. (Skilled worker, Ajka, Coal Mine)
As companies were privatised or shut down, competition for scarce resources intensified, leading to the disintegration of communities:
Redundancies started from the '90s. They called it redundancies. And sincerely, I can say this led to workers not trusting each other. People started fighting for better positions. Why me, why not him or her? And there were some, who also ratted on the others to keep their jobs. In other words, people, workers were turned against each other. (Skilled worker, Szerencs, Szerencs Sugar Factory)