The Ungrateful Role of NGOs in the New Feudalism

“It is seldom that liberty of any kind is lost all at once.

Slavery has so frightful an aspect to men accustomed to freedom that it must steal in upon them by degrees and must disguise itself in a thousand shapes in order to be received.”

– David Hume

The case Hungary during the last couple of years is a cautionary tale for everyone who shrugs off the expansion of the state in the economy, the slow erosion of freedoms, and the every growing dependence on the benevolence of government.

Hungarian civil society is handled in a rather Putinist manner with NGOs accused to be foreign agents and accused of various wrongdoings, but the story started much earlier. New feudalism tends to creep up on people step by step.

It includes

1) The capture of government by the incumbent party. Obvious signs are when important decisions are made at party meeting, excluding democratic controls, and when lobbyists position themselves around the Party – rather than parliament or ministries. The old communist phrase, “Our Party and our government” jumps to mind – clearly signifying priorities.

2) Majoritism. In the name of the majority the incumbent Party stops exercising self-restraint and rewrites the constitution (quickly and often). While all the elements of democracy remain in place, the incumbent party is unlikely ever to lose elections again.

3) Clientelism and insecure livelihoods. Sticks and carrots are replaced by carrots (for cronies) and starvation (for those who don’t align). But following the party line does not guarantee a secure income either. Economic resources will be micromanaged from the highest level, and eventually no money can reach those who are blacklisted.

For such a system it is imperative that every economic resource must be concentrated at the Party – directly or indirectly. No livelihood must be secure, no job available without a nod from above. And no independent source of funding must remain.

In this system, state violence is almost unnecessary. Why create martyrs? Dissent will not be punished by prison but by non-glamorous economic starvation. Emigration serves as a political relief valve. The alternative to emigration is a slow onset of Stockholm syndrome. Its most obvious sign is when people applaud the government for showing power against annoying dissent – such as NGOs rocking the boat, demanding transparency and defending human rights.

And this is where civil society comes in. Long after even the EU stepped aside and let the government directly control the spending of the EU development fund, the NGOs still had independent funding.


I can be my own civic control, says government

Economists and political scientists are trying to locate the exact percentage of government ownership of the economy above which financial dependence on the government becomes too large for effective resistance – but the debate is largely academic.

Any government may exercise self-restraint.

It had even happened in Hungary when a previous socialist-liberal constitutional majority declared that they would not change the Constitution unless there was an all-party consensus. There wasn’t any, so they’ve left the qualified majority legislation unchanged.

This kind of self-restraint did not happen this time.

The majority was shameless in accumulating as much economic and political power as their lawyers could write into the constitution.

After some haggling, even Brussels put their concerns aside regarding the transparency and method of the distribution of EU development fund in Hungary and allowed the government direct control over it. And who else would find the best ways to innovate and develop than a government organisation with the Orwellian name of National Development Agency? After all, development funds and international aid have two things in common. Neither can do what it says on the tin, and they are neither innovative nor politically neutral. They are both distributed by governments.

After securing control over the EU Development Funds, the Hungarian government set their eyes on another source of funding not yet under their control, the EEA Norway Grants. Until late 2013 that money was distributed by the National Development Agency, too. But Norway expressed concerns after the Agency came under direct control of the government. The Hungarian government cried foreign influence and declared that they don’t even want the money in the country if the government cannot distribute it.

Read: non-governmental organisations, investigative journalism, pro-democracy and human right groups must be managed by government.

After all, a government can handle its own civic controls, too, not just development and innovation.

Claiming foreign influence is a well-used tool of authoritarian regimes to dispose of their enemies. Enough to look at Russia’s “foreign agent law”. But the Norwegian grants are no more alien than the EU funds. The difference is that, unlike the EU, Norway took the independent distribution of the funds seriously.


Too much time on their hands

The government has been harassing pro-democracy and human rights NGO’s as well as the rare remaining outlets of investigative journalism ( and the Hungarian Civil Liberties Union with various excuses. There are, of course, legal accusations but as the Hungarian joke says: Rabbit will be beaten up either for wearing a hat or for not wearing one. It is not about accessories.

There were street protests for the NGOs, just like there were protests against the previous steps of the concentration of economic and political power. But street protests won’t make a dent in the power of the Party. Neither does civil society.

This is why it is all the more alarming that the Party found the time to list the 13 NGOs they find the most bothersome and engaged in micromanagement to get them tamed.

„I have a list of 13 NGOs. I want you to go through this list and present any document in order to prove their wrong-doing.“

–Investigator during the raid of the offices of DemNet and Ökotárs in September 2014

The demonstrative raid on the offices of a few NGOs in 2014 was a symbolic act, a new precedent, a message sent. But the public reaction was underwhelming. People blamed the pesky civilians for rocking the boat. Even those who understood the depth of state capture and the need for civil society have said that “they have asked for it”.

The reason is the sheer number of people economically dependent on the oversized state, combined with the country’s undemocratic past. Apart from millennials everyone had been socialized under an oppressive regime that used the same tactics just until 25 years ago. People remember how to apply self-censorship if they want to remain employable.

The concentration of economic power in Hungary is far from complete. It is still enough to silence dissent and make people think twice before they act. It has happened gradually, like boiling a frog. In new feudalism, every step on the road to total economic control is visible and obvious[i], but they can all be dismissed individually. That is all an aspiring dictator needs. Give the people and international organisations an excuse not to interfere.

This is the logical result of the growth of government power over the economy. And once a bad precedent is created, no country is immune. Especially during a prolonged economic downturn.

The existence of the blacklist also proves that the innermost circles of government still find plenty of time for petty power games and micromanagement – despite concentrating economic decision making in their own hands. One should wonder how they find the time to innovate and develop too. That should give a hint to those who still believe in the economic competence of the state.

[i] A non-exhaustive list includes: The confiscation of the private pension funds’ wealth in 2010, the multiple rewrites of the constitution (now named Base Law) excluding the word ‘republic’ and ignoring checks and balances accordingly, the erosion of the powers of the Constitutional Court as possible balance to the willpower of the government, the ongoing nationalisation of utility providers in the name of protecting people from utility bills (calling for ‘non-profit’ public utilities), the centralisation of public education and monopoly on textbooks children learn from, the subtle changes to the election system that made elections in Hungary “free but not fair” and secured the constitutional majority for the Party for the second time in 2014, the sudden decision to invite Russia to expand the nuclear power plant in Paks in 2014 (and accepting a EUR 10 billion loan from the Russians to pay for it), tilting the playing field so that friendly oligarchs can harvest the artificially created economic opportunities.

3 thoughts on “The Ungrateful Role of NGOs in the New Feudalism

  1. Pingback: George Soros Reacts to the Hungarian State Campaign Against Him. In a Paywalled Interview to the Financial Times | Meanwhile in Budapest

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