Commentary

Prosperity Is So Last Year…

Those who can keep order will govern in the next 10-15 years in Europe – said PM Viktor Orbán last week.

On a not unrelated topic, some brutally bleak GDP numbers came out. 

Orbán said that order would be the new source of legitimacy – replacing welfare/prosperity (depending on translation). Which makes sense – although they used to be all about economic success. Until they weren’t.

But this is a false dilemma. Prosperity is not the function of the state. We are here to do that.

The dilemma is whether the state provides you with the freedom to prosper – or whether it stifles you blaming either economic or physical threats. Or both. Which is the case right now.

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Switching from promising wealth to promising threats makes complete sense in illiberal states – such as he had promised to build. (He said “illiberal state”, not “illiberal democracy”, and for a reason. Please stop misquoting.)

Feared or Loved?

The question for every ruler is the same since Machiavelli: Is his power more secure if he is feared or if he’s loved? Should he base his power on fear induced in you (from himself and/or enemies) – or on popularity?

In our case:

Can the government create prosperity? No? Then it’s time to create an enemy.

Order (also known as warfare) has been the basis of legitimacy for quite some time in human history. Not times you would enjoy to live in.

Ever since the Second World War, however, warfare has gradually ceased to be the major source of legitimacy in the Western world. It has been replaced by welfare – also known as economic legitimacy. (It entails genuine economic prosperity as well as welfare handouts.) In other words, in a democracy it is no longer enough to blame an enemy – there has to be a positive reason to keep a ruler in power. (Political elites had to work harder and don’t seem to like it – naturally.)

Communist countries followed suit after the end of the Cold War. Welfare arrived in Hungary a bit earlier though. Throughout the 80s, Hungary had “Goulash Communism”, a watered-down version of soft Communism, combined with some halfhearted economic freedoms, such as the right to make some extra after your day job, have your own garden, or buy a second home at Balaton. A limited form of entrepreneurship was also available: you could make money on the side by using your employer’s (a state-owned enterprise) infrastructure, while also enjoying all the perks of employment, free education, free healthcare, and state pensions. It was basically entrepreneurship for kindergartners: no risk, no responsibility, only a potential upside.

This phase is also known as the “premature welfare state”, a term coined by János Kornai to describe how the Communist regime took out IMF loans and financed a generous welfare state – to keep itself in power for a little longer.

To put it in context, there was a martial law in Poland at the same time. This is why Hungarians could develop a sense of dumb nostalgia for the 80s – when responsibility was nil but opportunities were opening up – while the Polish don’t.

Transition from such a hybrid (but unsustainable) system creates more fragile democracies because legitimacy of the old regime has already been based on economic performance rather than some Utopian ideology or an enemy. On prosperity, rather than fear. The resulting new democracy must face these inflated economic expectations while political rights are almost unimportant for disaffected voters.

The emergence of the welfare state has coincided with the second and indeed the third waves of democratization in the world. It is thus hard to tell whether the legitimacy of the regimes arises from political rights to the people – or economic performance in the form of welfare provision. As a consequence, the population may have greater tolerance for the limitations of their civil liberties than that of their social benefits and welfare, and the economic troubles of the welfare states can erode the credibility of democracy by association.

In other words, prosperity is so last year – order is now in.

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3 thoughts on “Prosperity Is So Last Year…

  1. Pingback: Zeman Meets Trump Before Orbán | Meanwhile in Budapest

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