Commentary

“I hear your company is up for sale”

Zack Beauchamp, at vox.com wrote a long and detailed analysis about how democracy died in broad daylight in Hungary, replacing every cog in the system until it was no longer the same thing. One of his interviewees, a businessman asking for anonymity, told him a very typical story: how Orbán’s loyalists look up successful parties and buy them – whether they are up for sale or not. Listen to his podcast about his experience (mp3) here.

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“You’d think that the Buda office of a successful Hungarian corporation would radiate a sense of power: looking out over the city, confident in its wealth. But the one I visited felt less like Wall Street and more like the site of a wake. One of the company’s founders, who asked to remain anonymous out of fear of retaliation, explained why: The Orbán regime had just shaken them down, using mafia-like tactics to seize control of the corporation.”

This story wouldn’t turn a head in Hungary. At this point there is simply no one in business who wasn’t directly or indirectly affected by such takeovers. Everyone can tell you a story or ten, the only difference is that when Fidesz supported tell it, it is presented as a success story, as victory over the naysayers and those who lacked vision.

Those non-visionaries, who built up legitimately successful companies, in the meantime, are leaving the country. They understand that fighting back is futile, that the legal system is rigged as well as the entire economy. Even if they don’t depend on EU-funds in their businesses, they still depend on Fidesz to not attack them.

“The founder explained that he had recently received a phone call from a government official, one whose office had nothing to do with the business in question, who had “heard” the man’s corporation was for sale. This was news to the businessman: “We weren’t planning to sell,” he told me.

But the government wanted his company as a way to gain access to a new stream of EU funding the state coveted. Anyone familiar with the way business in Hungary worked, the business executive said, would understand that the phone call was an implicit threat. He could either sell his company, and abandon something he’d spent years building, or watch helplessly as the government choked it to death with taxes and regulations.

“Anybody who has a conflict with any of [Orbán’s] boys, they will get the tax agency within weeks — for many weeks,” he says. “We weren’t forced to sell; we just weren’t allowed to win.”

So he sold his company to a major state-run enterprise. He has since moved his family out of Hungary, elsewhere in Europe — hopefully putting them outside of Fidesz’s reach.

“This place” — meaning Hungary — “is closing down,” he says. “[My] kids will be doing great in a real, free European country.”

There was also this study by British researchers who interviewed dozens of top managers doing business in Hungary who have all also reported about the same mafia tactics from Orbán’s confident and untouchable loyalists. They come and offer to buy, money is no problem, they are not making it themselves, and it you refuse, they will either harass you with the taxman, or write new laws that push you out of the market. Or both.

None of these incidents is isolated or an unintended consequence of Orbán’s glorious illiberal feudalism. It has been his plan all along. Orbán doesn’t have a free market bone in his body, no matter what misguided or corrupt conservatives all over the world want to believe.

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