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From neoliberal disembedding to authoritarian re-
embedding: The making of illiberal hegemony in Hungary
Gábor Scheiring, Kristóf Szombati
Corresponding author: Gábor Scheiring, Department of Social and Political Sciences,
Università Bocconi, via Guglielmo Rontgen 1, Milano, 20136, Italy. | Email:
gabor@gaborscheiring.com
This is the accepted manuscript version of the article, made available following SAGE’s open
access policies under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-
nc-nd/4.0/ | Copyright © The Author(s) 2020.
Cite as: Gábor Scheiring and Kristóf Szombati. 2020. “From neoliberal disembedding to
authoritarian re-embedding: The making of illiberal hegemony in Hungary”, International
Sociology, 2020, pp. 1–18, Frist published 18 August 2020.
https://doi.org/10.1177/0268580920930591
Abstract
This article presents and empirically substantiates a theoretical account explaining the
making and stabilisation of illiberal hegemony in Hungary. It combines a Polanyian
institutionalist framework with a neo-Gramscian analysis of right-wing hegemonic strategy
and a relational class analysis inspired by the political economy tradition in anthropology.
The article identifies the social actors behind the illiberal transformation, showing how
‘neoliberal disembedding’ fuelled the rightward shift of constituencies who had erstwhile
been brought into the fold of liberal hegemony: blue-collar workers, post-peasants and
sections of domestic capital. Finally, the article describes the emergence of a new regime of
accumulation and Fidesz’s strategy of ‘authoritarian re-embedding’, which relies on
‘institutional authoritarianism’ and ‘authoritarian populism’. This two-pronged approach has
so far allowed the ruling party to stabilise illiberal hegemony, even in the face of reforms that
have generated discontents and exacerbated social inequality.
Keywords
Authoritarian populism, authoritarian re-embedding, countermovement, Hungary, illiberalism
1
Introduction
New forms of authoritarian domination and exclusionary regimes are emerging around the
world. Hungary is among the most dramatic cases. Riding the waves of a multifaceted
disillusionment, Viktor Orbán’s Fidesz party swept to power in 2010 with an unprecedented
supermajority. In the next nine years, Fidesz restructured the foundations of Hungary’s
polity, society and economy. The ruling party gradually dismantled the system of checks and
balances, extending control over independent institutions. Fidesz also set a new direction in
social policy by institutionalising workfare, redistributing welfare benefits to economically
and biologically ‘productive’ families, and withdrawing support from ‘unproductive’ citizens
(Szombati, 2018b). In the economy, wealth has been redistributed to loyal capitalists and an
emergent ‘national bourgeoisie’ while maintaining the dominance of foreign capital in
manufacturing export sectors (Scheiring, 2019). The political science consensus treats
contemporary Hungary as a hybrid, competitive authoritarian regime (Bozóki and Hegedűs,
2018).
A strand in the literature on neo-nationalist populism argues that it is a cultural phenomenon
that can be captured by measuring illiberal attitudes (Norris and Inglehart, 2019). Some
contend that a nationalist political culture is responsible for illiberalism, which has eroded the
liberal foundations of democracy (e.g. Skidelsky, 2019). The chief problem with such
culturalist accounts is that they cannot explain the widespread popular support for the liberal
model in the two decades that followed the regime change in 1989. It is a mistake to think of
symbolic processes in terms of attitudes lodged in individual psyche: culture is a dynamically
changing set of relations influenced by economic structures and the lived experience of class.
Others have shown that Fidesz played an active role in elevating neo-nationalist, xenophobic
and even racist discourses into mainstream political discourse in the second half of the 2000s
(Bocskor, 2018; Buzogány and Varga, 2018; Halmai, 2011). While these agency-based
explanations offer a much needed correction to culturalist accounts, they run the risk of
overestimating the role of elites and underestimating the bottom-up demand for a break with
the pre-2010 liberal era.
Qualitative sociologists and anthropologists who studied how such popular discontents and
demands have been generated in the midst of processes of postsocialist restructuration have
offered insights into how the political right was able to benefit from the process of neoliberal
disembedding (Bartha, 2011; Hann, 2018; Kalb, 2018; Scheiring, 2020; Szombati, 2018b).
2
These scholars have documented the disintegration of a culturally and ideologically
incorporated (but never fully unified) socialist ‘working class’ along the lines of status and
ethnicity; the problems of social reproduction affecting crisis regions, along with the erosion
of communal solidarities; and the declining power of labour on both the shop floor and in
party politics. They have also called attention to processes of de-agrarianisation and de-
peasantisation, which spawned a crisis of ‘post-peasant’ hegemonies in depressed provincial
regions.
The work of the previously cited scholars has found an echo in a new critical political
economy approach, which attempts to explain authoritarianism by reference to a new stage of
neoliberal capital accumulation unfolding after the 2008 financial crisis (Fabry, 2019; Gagyi,
2016; Scheiring, 2019; Toplišek, 2020). While the emphasis on the co-constitution of
political and economic dynamics is fruitful, these analyses leave little space for the
investigation of agency and strategy, and underplay the role of ‘soft’, cultural elements of
illiberal hegemony. In sum, despite significant efforts to uncover the causes of the
authoritarian turn, the literature still lacks satisfactory explanations of the stability of illiberal
hegemony in Hungary.
This article offers theoretical insights into the rise and stabilisation of illiberal hegemony in
Hungary, relying on empirical research the authors carried out over the last five years.
Drawing inspiration from Polanyi’s notion of the ‘double movement’, the article first
examines how a process of ‘neoliberal disembedding’, set in motion by Hungary’s
reintegration into the global capitalist economy, fuelled the rightward shift of constituencies
who had erstwhile been brought into the fold of liberal hegemony: blue-collar workers, post-
peasants and the ‘national bourgeoisie’.
The article grounds this Polanyian institutionalist framework in relational class analysis
inspired by the political economy tradition in anthropology. Drawing insights from
Friedman’s (2003) and Kalb’s (2011, 2013) analysis of ‘double polarisation’, the article
extends the anthropological debates on the lived experience of class into institutionalist
international political economy. This way, the study rejects the easy separation of ‘economic’
versus ‘cultural’ explanations.
Finally, relying on Stuart Hall’s neo-Gramscian analysis of Thatcherite hegemonic strategy,
the article focuses on the unravelling of the power bloc that supported the liberal ‘competition
state’ and outlines the contours of the new regime of accumulation, which emerged after
3
2010 in conjunction with a new power bloc. The article analyses Fidesz’s strategy of
‘authoritarian re-embedding’, highlighting how a two-pronged approach, involving the
combination of ‘institutional authoritarianism’ and ‘authoritarian populism’1 has allowed the
ruling party to stabilise its rule, even in the face of reforms that have generated discontents
and exacerbated social inequality.
The political economy of authoritarian re-embedding
To grasp the linkages between global economic transformations and the rise of illiberalism,
the article starts with Karl Polanyi’s concepts of (dis)embedding, commodification and
countermovement (Polanyi, 2001 [1944]). Scholars have convincingly shown that Polanyi’s
theory can be adapted to the context of contemporary financialised capitalism on Europe’s
Eastern periphery to highlight how postsocialist dependent development strained livelihoods,
social relations and cultural imaginaries in specific locales (see Bohle and Greskovits, 2012;
Hann, 2019; Scheiring, 2016; Szombati, 2018b).
However, Polanyi’s historical institutionalist framework on the social and political
ramifications of marketisation remained tainted by functionalism. This is why, amongst other
things, he was unable to explain why countermovements take particular political directions in
specific locales. One part of the problem is that his debate with orthodox Marxism led
Polanyi to eschew class theory. This made him overlook the fact that countermovements arise
from particular tensions and experiences and that they can only be brought to life through the
articulation of a specific political project and attendant discourses. This study remedies this
limitation by injecting insights from cultural materialist anthropology into institutionalist
international political economy, and by drawing on Stuart Hall’s neo-Gramscian analysis of
hegemony.
First, the article refines Polanyi’s framework by incorporating insights from the anthropology
of globalisation, more particularly Jonathan Friedman's conceptualisation of ‘double
polarisation’ (Friedman, 2003; Kalb, 2011, 2013). This involves a ‘vertical polarisation’
along the lines of class (a growth in inequality translating into increased distance and
antagonism in intra- and inter-class relations) and a ‘horizontal polarisation’, referring both to
uneven spatial development and the emergence of new cultural divides, and resulting in the
fragmentation of the national territory and community of solidarity.
4
Friedman’s conceptualisation highlights the emergent conflict between cosmopolitan elites
and ethnically rooted workers as a critical feature of financialised globalisation. However, the
current trajectory of capitalist globalisation also increases the polarisation between domestic
and transnational sections of capital, especially in dependent market economies (Evans, 1979;
Nölke and Vliegenthart, 2009; Schrank, 2008). In addition, globalisation increases the
concentration of capital in the new metropolitan growth centres (Hall and Savage, 2016),
which suck human, physical and financial capital out of old industrial and agricultural areas,
leading to regional deindustrialisation and de-agrarianisation. This necessarily oversimplified
macro-dynamic is what we will call in this article ‘neoliberal disembedding’.
Our neo-Gramscian reading of the countermovement is inspired by Hall’s analysis of
Thatcherite neoconservatism (Hall, 1988). In addition to highlighting the role played by
illiberal political entrepreneurs, this article emphasises the role of domestic capitalists in
unmaking a political-economic consensus whose terms were increasingly unfavourable to
them. This ‘national bourgeoisie’ is an emergent class whose representatives played a crucial
role in the institutionalisation of a new regime of accumulation which reconfigured relations
between the state, transnational and domestic capital, leading to the institutionalisation of a
new regime of accumulation. The new political-economic consensus relies on the
flexibilisation of labour and diminished spending on welfare and public services. This
explains why the countermovement has taken an authoritarian form relying on the erosion of
democratic rights and strategic efforts to politically polarise and demobilise society. Below,
we outline this complex entanglement of ‘institutional authoritarianism’ and ‘authoritarian
populism’.
Neoliberal disembedding
Facing the exhaustion of the strategy of state-socialist import-substitution, policymakers in
Central and Eastern Europe implemented deep-seated economic reforms modelled on
neoliberal programmes and competed fiercely to attract foreign direct investment (FDI) as a
means of reindustrialisation (Bandelj, 2009; Bohle and Greskovits, 2012; Böröcz, 1999;
King, 2007; Nölke and Vliegenthart, 2009). 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. The resulting state structure was the liberal ‘competition state’, institutionalised by the
5
dominant power bloc formed by transnational corporations (TNCs), technocratic politicians
and the liberal intelligentsia (Drahokoupil, 2008).
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. The tax incentives and the continuously lowered corporate tax rate
positively discriminated TNCs to the detriment of domestic capitalists. The duration and
value of unemployment insurance progressively declined between 1990 and 2010. Crucially,
the left-liberal coalition presided over the most pronounced wave of neoliberalism, which
included 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
liberalise health insurance (Korkut and Buzogány, 2015).
The hope that liberalisation would help the emergence of efficient enterprises and mobilise
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 only 55% of the population employed in 2009 (Eurostat, 2018), one year before
Orbán took power. The attendant jobless growth undercut wage convergence with Western
Europe, with Hungarian wages lagging behind average wages in the region (OECD, 2020).
Quantitative research has also shown that the expansion of markets also led to higher
mortality in towns dominated by domestic capital and TNCs, compared to towns with
prolonged state ownership (Scheiring et al., 2018). The majority of workers experienced the
transition as an accumulation of injustices, with those permanently excluded from the labour
market or trapped in low-wage jobs becoming especially bitter with the new settlement.
The highly productive and profitable (technology-intensive) transnational sector and the less
productive and profitable (labour-intensive) domestic sector of the economy became
increasingly disintegrated: forward, and backward linkages between them have remained
weak. Wages in the transnational sector are higher than in the domestic one, but this is
restricted to educated people living in the growth hubs, with little 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 who steered the country through the process of neoliberal
disembedding knew that this would generate discontents, potentially destabilising their rule.
In the 1990s, unemployment benefits and pension schemes were introduced to counterbalance
6
the most corrosive effects of deindustrialisation (Bohle and Greskovits, 2012; Bruszt, 2006).
Then, in the 2000s, governments sought to offset the lack of wage growth by helping families
acquire homes and by boosting private consumption. In this, they relied on Western banks,
which offered citizens relatively cheap mortgages and consumer loans. However, these
political strategies of legitimation proved to be short-lived.
While pacification through pensions and foreign currency loans prevented the explosion of
discontent, both strategies were exhausted by the end of the 2000s. Inactivation put a brake
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 interest (which had been
borrowed in Swiss Francs and Euros) on both public debt and private mortgages to 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 of liberal
hegemony (Enyedi et al., 2014).
The spectacular rise of Fidesz is part and parcel of a by now familiar story of neoliberal
disembedding coming together with the left’s increasingly evident abandonment of its former
supporters and the latter’s recuperation by a new right. The first chapter of the story is the
disintegration of the culturally and ideologically integrated socialist working class. Working
class communities were especially severely hit in places where state-owned enterprises were
shut down, as in ‘steel’ and ‘sugar’ towns, as well as in agricultural areas (Hann, 2018;
Scheiring, 2020; Szombati, 2018b). The changes were experienced as a loss of control over
one’s life, of being at the mercy of uncontrollable forces. The other dominant feeling was an
increasing alienation from and anger towards political elites. The process of disintegration
also led to a process of racialisation: individuals of Roma ethnic descent were
overrepresented among the ‘surplus population’, which found itself excluded from the labour
market. This created fertile ground for the emergence of racism, with workers blaming
‘work-shy, lazy Gypsies’ for preying on taxpayers and calling on elites to defend ‘hard-
working’ people (Feischmidt and Szombati, 2017).
The failure of social democratic politics to maintain its embeddedness in working class
communities was critical for the rise of illiberalism. There are three main factors behind this.
First, the Hungarian Socialist Party, which came to dominate the left after 1990, lacked a
7
clear ideological commitment to social democracy. It would be an oversimplification to label
the party neoliberal, since it was committed to maintaining a modicum of redistribution,
especially through pensions. However, the legacy of ‘really existing socialism’ delegitimised
left-wing political language, and a technocratic modernisation discourse emerged as the
unifying symbolic framework, leaving much room for avant-garde neoliberal policies. The
party adopted a Blairite Third Way strategy after Ferenc Gyurcsány became its leader in
2004.
The second factor is structural. Local and transnational capital, as well as international
financial institutions and the EU put a priority on ‘market-friendly’ policies with the
possibility of introducing socially progressive policies being contingent on the
implementation of market-friendly ones. Finally, the Socialist Party inherited its
organisational structure from its communist predecessor. Initially this meant the party had the
best infrastructure, but it also led it to neglect grassroots work and organisation building. This
resulted in a gradual erosion of ties to core constituencies. In addition, the trade union
movement was also severely weakened, fragmented and lacked the intellectual and
organisational resources to incorporate workers ideologically. Left-liberal governments also
did not do much to strengthen the trade union movement, which saw its membership
gradually decrease.
These processes created favourable conditions for the mobilisation of workers against
‘deracinated, uncaring’ cosmopolitans and ‘unworthy, unruly’ surplus populations. In
Hungary, this task was first 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. Soon after Jobbik, Fidesz also sought to
mobilise working class constituencies in defence of public services under the banner of more
inclusive nationalism. Fidesz promised to reintegrate the national community by returning the
state to its rightful owners: hard-working people and entrepreneurs who could come to a new
compromise in the sharing of national wealth. Fidesz spent a great deal of effort on politically
integrating disaffected constituencies through the creation of locally rooted civic networks
(Greskovits, 2020) and the organisation of rituals of resistance and solidarity (Halmai, 2011).
It was as a result of all these factors that workers shifted to the right, choosing Fidesz over the
Socialists in 2010.2
8
There was one more factor that played an essential role in the collapse of the neoliberal
consensus: the increasing polarisation of the capitalist class. TNCs, the very few successful
technological companies owned by domestic entrepreneurs and the domestic service class,
which directly profited from the presence of foreign capital (see Drahokoupil, 2008), 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. The left-liberal coalition that
governed between 2002 and 2010 lost support among billionaires during the second half of its
reign (Scheiring, 2018, 2019). Just like many workers, the national bourgeoisie also shifted
its allegiance to Fidesz.
A new regime of accumulation
Fidesz used the strong mandate it received at the 2010 parliamentary elections to engineer a
new class compromise between the political class, 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 liberal 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 transnational
capital. The emergent state formation has been labelled the ‘accumulative state’ (Scheiring,
2019). The accumulative state is more than a corrupt captured state as it relies on the support
of a broad segment of the elite; however, it is less than a developmental state, as it lacks an
independent bureaucracy and a long-term programme of economic upgrading.
The new regime of accumulation offers a political solution to the internal contradictions of
dependent development by accelerating capital accumulation in a way that is favourable to
every faction of the new power bloc. 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 regime of accumulation focuses on the satisfaction of short-term
interests through the reduction of welfare spending, the curtailment of labour rights, and
9
enhanced direct and indirect support for various factions of the economic elite (Scheiring,
2019).
What was the impact of this new regime of accumulation? Although the overall inflow of
FDI declined significantly, 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 and highly flexible labour force. These
companies have created new jobs that offer higher wages than the companies owned by
domestic capitalists do. Both national and transnational capitalists were forced to raise
salaries after a large number of younger workers moved to Western Europe to find better-
paying jobs. The increasingly acute labour shortage led to a 13.1% increase in the average
real wage between 2010 and 2018 (OECD, 2020).
The upward economic cycle that unfolded after the sudden collapse in global demand in
2008–2009 played a crucial role in Hungarian wage dynamics. The global financial crisis
forced transnational companies to accelerate their investments into their existing assembly
platforms in Central and Eastern Europe in order to bring down prices and their Western
wage bill. The unprecedented liquidity boom after the crisis also fuelled new investments by
TNCs as well as asset price bubbles in Budapest. As a consequence, propertied middle
classes and workers of transnational assembly plants began to profit from the post-1989
insertion in global capitalism.
However, average wage growth hides enormous inequalities. The share of working poor
(those earning less than 60% of the median wage) increased by 6.8% between 2010 and 2017
in the total population, one of the most significant increases in the whole of the EU (Eurostat,
2019). Hungary’s Gini index, which measures the distribution of incomes, grew from 24.1 in
2010 to 28.7 in 2018 (Eurostat, 2020), which means that by now Hungary is the most unequal
country in the Visegrád region.
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%
was reduced by 6–12% between 2009 and 2016, while social income support for 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, the
liberalisation of the labour code highlights the ruling elite’s commitment to prioritising the
needs of capital over workers (Szombati, 2018a). Thus, the new regime of accumulation
10
creates and intensifies social tensions, while reallocating resources to the upper classes. In
this sense, the new state is an exclusionary state also.
While there have been outbursts of anger about the obscene enrichment of a new regime-
friendly nobility, such outrage has failed to fully break the cross-class popular alliance of
workers and the bourgeoisie, which brought Fidesz to power. Working class support for the
ruling party dips at certain moments (one such instance being the period of mobilisations
against the ‘slave law’), but Fidesz has exhibited a remarkable ability to claw back popular
support.
To account for the absence of anti-systemic mobilisation among the losers of the new
accumulation regime, we need to focus on the ruling party’s two-pronged strategy of
‘authoritarian re-embedding’, which prevents the mobilisation of grievances.
Authoritarian re-embedding
To protect itself against a possible political backlash from the losers of capital accumulation,
Fidesz occupied all democratic institutions, undermined the system of checks and balances
and obstructed the channels of direct democracy. This amounted to a centralisation of power
in the hands of the executive or, more precisely, a small group of people surrounding the
prime minister. The new rulers were able to implement such a profound transformation by
taking advantage of the ruling party’s parliamentary supermajority and a new constitution
that provides the regime with a mantle of legitimacy and respectability. While the democratic
facade has been preserved, the mechanisms characteristic of a functioning democracy
(transparent decision-making, oversight, deliberation, participation, fair political competition)
are 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.
This near-total takeover of the polity has been accompanied by a coordinated effort to re-
feudalise the public sphere to allow for control of the airwaves and to prevent critical voices
from reaching provincial citizens who now constitute the ruling party’s core electorate. The
government converted public broadcasting into a centralised propaganda machine. Key
representatives of the national bourgeoisie have contributed to this effort by acquisitioning
private media and subsequently handing them over to a centralised holding company (Wilkin,
11
2016). While this vast media empire allows Fidesz to control the political agenda, national
communication campaigns allow the ruling party to communicate its messages to the public
(Bocskor, 2018).
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 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. 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 initiatives that are more ad hoc. 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, trade
unions’ organisational possibilities have been severely curtailed, and human rights NGOs
face recurrent attacks. Taken together, the country’s rulers have thus managed to impose
significant obstacles to the emergence, symbolic framing and mobilisation of discontents.
There is a new consensus emerging among political scientists that Hungary is not a
democracy anymore, but a competitive authoritarian hybrid regime (Bozóki and Hegedűs,
2018).
Institutional authoritarianism is, however, only one of the strategies deployed by the regime.
The ruling party also seeks to manufacture consent through authoritarian populism, a strategy
that aims to neutralise opposing forces and disaggregate the opposition by addressing real
contradictions in a way as to represent them within a logic of discourse which pulls them
systematically into line with policies and class strategies of the new illiberal hegemony (Hall,
1988). Hall’s conceptualisation of hegemony helps us identify the role of critical policies and
attendant discourses which have contributed to the consolidation of Fidesz’s rule and
legitimised a broader move towards a more coercive and exclusionary form of state power in
the post-2010 period.
Firstly, the government’s welfare policies have increasingly become narrowly centred on
supporting the reproduction of ‘hard-working’ families. This in practice means that families
with at least two children where at least one adult is gainfully employed are rewarded with
12
tax rebates and other subsidies, while single mothers, disabled people, the unemployed and
those on workfare are prevented from taking full advantage of benefits supporting
childrearing. These reforms have been legitimised through a Social Darwinist discourse of
deservingness and the extolling of motherhood and family life (Gregor and Kováts, 2018).
The government’s other highly popular policy is the so-called ‘public works programme’
(Hann, 2016, 2018), a centrally financed but locally administered workfare scheme, which
was introduced with the dual aim of establishing greater control over surplus populations and
demonstrating the ruling party’s commitment to restoring threatened social hierarchies in
depressed provincial regions (Szombati, 2018b). More broadly, the national workfare
programme has functioned as the dominant policy instrument for alleviating long-term
unemployment since Fidesz came to power, replacing universal social and family allowances
and so-called active labour market instruments, which were the preferred tools of left-liberal
governments (Szikra, 2014).
This reconfiguration of the state–citizen nexus was couched in a broader ideology of work as
foundational value and productivity as the source of entitlements (Hann, 2018). The intention
was to signal that Fidesz is building a ‘work-based society’, which rewards those who work
hard and withholds support from surplus populations who supposedly refuse to take up
formal employment. The rhetorical and institutional separation between ‘deserving’ and
‘undeserving’ people is accompanied by the celebration of the ‘productive Magyar family’
and the castigation of ‘undeservingness’ and ‘welfare-dependency’. Following a historically
tested strategy, blaming the poor for their predicament serves to discipline them, to justify the
government’s anti-egalitarian policies and to obfuscate the fact that the state is intimately
involved in the reproduction of socio-economic exclusion and poverty. Furthermore, as
Herbert Gans (1994) has argued, the undeserving poor serve as cathartic objects on whom the
better-off can offload their problems. Punishing them offers provincial working classes a
degree of emotional satisfaction, while also reinforcing the legitimacy of mayors and
politicians who take up the task of punishing the undeserving (Mares and Young, 2019).
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 built a barrier on its border with Serbia to prevent asylum-seekers 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
civilisational crusade. This holy war, as all holy wars, requires national unity and therefore
13
incorporates calls for the centralisation of power in the hands of the executive. Besides
significantly contributing to Fidesz’s triumphant re-election in 2018, the wall and the
discourse of securitisation have also reconfigured the political field by relegating socio-
economic conflicts to the sideline of public debate (Hann, 2016).
Thus, while effectively conducting a divisive politics of class warfare from above, Fidesz
portrays itself as the guarantor of unity and security amid the looming threats of international
migration and terrorism. The move from a technocratic-liberal conception of the state to
‘political constitutionalism’ (Antal, 2017) allows Fidesz to portray itself as an active agent
using the state as a tool of national self-protection. This politics of national defence is
juxtaposed to Western liberalism, which is presented as a model in terminal decline. The
ongoing upscaling of illiberalism in the Visegrád bloc (Kalb, 2018), and attendant East–West
tensions in the EU allow Orbán to articulate his project in an agonistic mode, as a choice
between two mutually exclusive political programmes – a liberal and an ethnic-nationalist
one – making it very difficult for the political opposition to avoid being associated with
cosmopolitan-neoliberal politics.
Concluding discussion
This article presented a political-economic analysis of the rise and stabilisation of illiberal
hegemony in Hungary. Our study departed from Polanyi’s notion of the double movement
and combined his historical institutionalist framework with relational class analysis
developed by Marxian anthropology.
We drew on Jonathan Friedman’s conceptualisation of ‘double polarisation’ (Friedman,
2003; Kalb, 2011, 2013), which involves a ‘vertical polarisation’ along the lines of class and
a ‘horizontal polarisation’ along the lines of culture, and results in the fragmentation of the
national territory and community of solidarity. Friedman’s conceptualisation highlights the
emergent conflict between cosmopolitan elites and ethnically rooted workers as a critical
feature of globalisation. Moreover, the current trajectory of capitalist globalisation also
increases the polarisation between domestic and transnational sections of capital, especially
in dependent market economies. In addition, globalisation increases the concentration of
capital in the new metropolitan growth centres and accelerates the deindustrialisation and de-
agrarianisation of peripheral regions. This necessarily oversimplified macro-dynamic is what
we called ‘neoliberal disembedding’.
14
We argued that neoliberal disembedding kicked off a classic Polanyian countermovement.
Socio-economic dislocations in working class and post-peasant communities eroded the
legitimacy of the liberal competition state. This argument echoes a new strand of qualitative
research, which has emerged in the wake of the Trump and Brexit shocks and emphasises that
working class neo-nationalism in the US and UK is connected to the loss of industrial jobs
and workers’ sense of being abandoned by neoliberal politicians (Koch, 2017; McQuarrie,
2017). To be sure, such experiences are not homogeneous. However, they do share essential
traits, and it appears that these traits are connected to the structuring effects of globalisation.
The discussion in this article highlights that it is a misunderstanding to separate the analysis
of cultural and economic factors in the analysis of contemporary politics (Ausserladscheider,
2019), and an even bigger mistake to argue that cultural factors trump economic ones as
drivers of neo-nationalist populism. It is also crucial to recognise that immigrants did not
matter at all in Hungary until 2015, only well after the establishment of the illiberal state.
Thus, a reference to immigration and xenophobia is not enough to explain the success of
illiberal populism. Relational class analysis reveals the dynamic interplay between symbolic
processes, the lived experience of class and structural change. East European, West European
and American neo-nationalisms emerge out of the lived experiences of class in the context of
globalisation.
In addition to dislocations caused by neoliberal disembedding, this article highlighted the
crucial role of polarisation between transnational and domestic sections of capital (Schrank,
2008) in creating fertile ground for illiberal politics. In the first decade of the new
millennium, representatives of the national bourgeoisie forged an alliance with Fidesz,
successfully pushing the party to devise a set of policies that would shift the balance of power
between domestic and foreign capital. After coming to power, Fidesz implemented a
relatively coherent set of policies that were designed to accelerate capital accumulation to the
benefit of both capital factions, integrating both into the new power bloc. However, the new
political-economic consensus is predicated on the flexibilisation of labour and the weakening
of state protection to vulnerable populations. It, therefore, has the potential to alienate both
workers and subordinated surplus populations.
To stabilise the new illiberal hegemony Fidesz adopted a strategy of ‘authoritarian re-
embedding’ combining ‘institutional authoritarianism’ and ‘authoritarian populism’.
Institutional authoritarianism serves to limit the rise of a competitive civic and political
opposition by recourse to a kind of institutional bricolage, which preserves the facade of
15
democratic institutions but tilts the political playing field to the advantage of the ruling party.
Institutional authoritarianism has thus been instrumental in limiting the political opposition’s
ability to mobilise grievances. However, this is only one part of the story.
Intensifying the country’s embeddedness in global value chains by solidifying Hungary’s role
as a cheap and flexible assembly platform for TNCs also helped Orbán temporarily stabilise
illiberal hegemony. The post-2010 state went to great lengths to renew the Hungarian
economy’s embeddedness in global value chains by repressing wages until 2015,
disempowering trade unions, liberalising the labour code and keeping the budget deficit low
(Scheiring, 2019; Bohle and Greskovits, 2019). The economic boom driven by corporate and
financialised global investments (rooted in quantitative easing) after the 2008 financial crisis
underwrote the emergent illiberal regime in Hungary. Thus, illiberalism was not only
stabilised through institutional bricolage, but also through a process of embedding into global
capitalist structures.
Finally, workfarist and nativist discourse and policies have also played a crucial role in
legitimising Fidesz’s rule among workers and, more broadly, the lower-middle class. In this
part of our analysis we drew on the work of Stuart Hall on authoritarian populism (Hall,
1988). While Hall argued that law-and-order policies played a major role in legitimising
Thatcherism in certain segments of the British working class, we in this article highlighted
the Hungarian government’s family and workfare policies. We claim that these addressed real
problems, but in a way as to represent them within a logic of discourse (Social Darwinism)
which pulls them systematically into line with policies and class strategies of illiberal power-
holders. Just as the family policy addressed a real problem (low fertility), the national
workfare programme also responded to pressing social concerns: the lack of jobs and social
security in regions hit by economic decline. We argued that these two policies were
instrumental in drawing a separation between ‘deserving’ and ‘undeserving’ citizens and that
punishing the latter (by partially depriving them of access to welfare) offers provincial
working classes a degree of emotional satisfaction, while also reinforcing the legitimacy of
rightist mayors and politicians (Gans, 1994; Mares and Young, 2019). Finally, we also
argued that the securitisation of Hungary’s southern border also allowed the prime minister to
parade as the protector of Hungarians and Christian Europe. Orbán has successfully polarised
politics along the nationalist–cosmopolitan axis, making it very difficult for the political
opposition to avoid being associated with cosmopolitan politics.
16
These authoritarian populist initiatives have successfully reframed class-based conflicts
around welfare and redistribution as having to do with culture and morality. This, in
conjunction with the disempowering effect of institutional authoritarianism, has thus far
prevented the opposition from forging an inter-class alliance of the victims of the new
accumulation strategy. At the same time, authoritarian populism, by fostering a sense of
common interest and purpose in the face of looming external threats, has allowed Orbán to
mobilise diverse constituencies on behalf and in defence of the illiberal regime. While most
Hungarians are critical of tendencies generated by the new regime of accumulation, the
strategy of authoritarian populism has made Orbán’s politics palatable or at least tolerable to
the majority of Hungarians.
What are some of the broader theoretical lessons of the analysis? First, we ought to be wary
of conceptualisations that posit liberal and illiberal regimes as antipodes. While Fidesz prides
itself on having established a decisive break with liberalism, and in the realm of political
institutions, the break is indeed fundamental, the new regime’s socio-economic policies have
actually radicalised certain neoliberal tendencies. In the economic domain, there is an
enhanced rivalry for FDI in certain sectors of the economy, while in the area of social policy
there is a continued underfunding of health care and education, the dismantlement of
universal social protections and the curtailment of labour rights.
Second, our analysis shows that domestic varieties of the illiberal countermovement have to
be analysed against the backdrop of global economic processes. Echoing the argument of
Johnson and Barnes (2015), this article showed how the logic of dependent integration into
the global capitalist economy and accompanying neoliberal policies generated conditions that
created fertile ground for the rise of illiberal politics. However, globalisation is always
translated into local outcomes through a particular local configuration of social forces and
changing class coalitions. This article highlighted one such critical local reconfiguration. The
privileging of transnational capital in the liberal competition state alienated the
representatives of domestic capital who eventually allied themselves with Orbán’s party. This
was pivotal since the national bourgeoisie both funded and legitimised Fidesz’s effort to build
civic networks in disaffected urban and provincial communities, allowing the party to
mobilise workers and post-peasantries later.
Finally, the case of Hungary is a highly creative state formation, which combines a diverse
set of strategies to stabilise the rule of the new power bloc. Neo-utilitarian approaches
emphasising corruption (Magyar, 2016) tend to overstate the possibilities available to
17
politicians while underplaying the relevance of consent generated through enhanced capital
accumulation for the economic elite as well as through highly sophisticated authoritarian
populist strategies. Although the new regime of accumulation also serves narrow clientelistic
interests by implementing a set of neo-patrimonial policies, it fundamentally caters to the
short-term interests of all capitalist factions. Thus, the new illiberal hegemony should not be
seen as a divergence from ‘economic rationality’, but rather as a complex authoritarian state-
capitalist strategy, which emerged in response to the local contradictions of global economic
transformations.
Declaration of conflicting interests
The authors declared no potential conflicts of interest with respect to the research, authorship,
and/or publication of this article.
Funding
The authors received no financial support for the research, authorship, and/or publication of
this article.
Notes
1. The unqualified term ‘populism’ refers to a political style or strategy whereby the elites are
pitted against the people. Populist movements or parties are often led by a charismatic leader
and represent a challenge for established liberal democratic practices. This article eschews
equating populism with ‘demagogue’, ‘opportunistic’, ‘irresponsible’, or ‘anti-democratic’
politics. There are many different forms of populism from the left to the right; some might be
harmful, while others might represent a healthy political innovation. To avoid this confusing
variety of meanings, this article uses the term ‘authoritarian populism’ as a specific political
strategy identified by Hall, as defined in the section on authoritarian re-embedding.
2. For an explanation of why disaffected voters chose Fidesz over Jobbik see Szombati
(2018b).
18
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Author biographies
Gábor Scheiring (PhD, University of Cambridge) is a research fellow at Bocconi University,
Milan. His research focuses on the political economy of health, the social consequences of
economic globalisation and how the lived experience of class is related to illiberalism.
Kristóf Szombati (PhD, Central European University) is a research fellow at the Max Planck
Institute for Social Anthropology, Halle. His research focuses on illiberal statecraft, right-
wing movements and the role of race and class in authoritarian politics.
