With Orbán’s new “demographic governance” people are once again treated as livestock or biomass. Luckily for Orbán, they are used to this. The loan-for-babies policy is nothing new to Hungarians. The last time it happened, it buried thousands of families in punitive loans, many because they couldn’t afford a third child in the first place.
Orbán didn’t invent anything new. The pre-1989 authoritarian regime has also attempted to boost the population by offering subsidized loans that turn into non-refundable subsidies upon meeting certain conditions, most notably family size, such as the birth of the third child into the same marriage. The same subsidies, however, come due in one sum or with punitive interests if the third new citizen isn’t produced within the allotted time.
The stomach-turning policy was first introduced four decades earlier by the then communist regime. In the 70s “social policy” became the buzzword for ever-so-paternalistic policies all over East and West, intending to influence the reproductive behaviour of families. Housing policy has been an integral part of social policy, linking housing assistance to dutiful reproduction and compliance with social mores (such as no divorce, even if the relationship turns out to be abusive).
The predecessor of Orbán’s CSOK was called social policy benefit (or Szocpol for short in Hungarian) and it has been part of housing and family policy for most of the life of current generations. With ever-changing and Byzantine conditions Szocpol was a good learning ground to internalize and gradually get used to paternalistic and authoritarian demographic policies.
Szocpol has thus been an integral part of family planning for Hungarian families (although with varying relevance) until its discontinuation in 2009. The reintroduction of the policy under a new name in 2015 caused much delight in certain segments of the population who have learned to anticipate such policies and making compliant family planning decisions. And when Orbán used his 2019 state of the nation speech to extend the program, these people were quick to comply, run to the bank, the authorities, the car dealers, and then back to the bank – and they were unfazed by the ever-changing, incredibly intrusive and patronizing terms of the loans. They send sensitive medical records to banks, don’t think twice about undergoing unnecessary ultrasound and attaching the image for tax and CSOK purposes, and they bark at you menacingly if you dare to question it.
They were also largely indifferent to the fact that the announcement of the CSOK has in itself caused such substantial increase in the cost of housing, that the loan itself barely covers it. And of course they don’t care. They don’t have a choice left exactly because of said price increase.
But will they be able to deliver on their rush promises to produce three new taxpayers per couple, only to avoid the loans coming due with punitive rates? If history is any guide, one in four won’t.
According to the information request by economic daily napi.hu between 2001 and the program’s discontinuation in 2009, Szocpol, the previous such fertility policy had around 41305 contracts signed, pledging at least one baby in exchange for loans. And that is just its last 8 years, the program ran for decades. Out of those contracts 9571 were not fulfilled – i.e. the applicants have failed to deliver at least 9571 new taxpayers (possibly more, this is just the number of contracts), and are now in various stages of foreclosure and repayment of the loan at worse than market conditions.
According to the government, 100 thousand CSOK contracts pledging over 45 thousand new babies had been applied for by July 2019, that is how many have jumped on the reintroduced program. With the same rate of failure of delivery, 25 thousand of those families will get into trouble. And that trouble will just deepen their dependence on state benevolence.
Pulling on the strings of Szocpol repayment has always been used against parents for non-compliance (such as school attendance or other infractions), there is no reason why CSOK strings wouldn’t be used to enforce political will in the same way.
The loan-to-subsidy model (with conditions) is not only a logical-sounding and appealing right wing policy tool because it whips entire families into having no choice but to comply, and suppress their suffering and problems. It makes spouses endure abuse, makes parents bore more children than they desire, resulting in misery and tension in all parties involved. It creates dependence both within the family and between the family and the state – an authoritarian necessity. No wonder authoritarians of both left and right salivate at the thought.
But conditional loans are also a great tool for keeping entire segments of the population dependent on government lenience later on. Those who fail to meet the reproductive conditions and whose loans will come due (with punitive terms) will have nowhere to turn but to hope that a government helps them out. As it was the case with the pre-1989 loan-for-babies victims. With decades spent in limbo and with ever-changing bureaucracy, these outstanding loans become an effective tool of control. As precedent shows, these loans will be cancelled when it fits the government – and will thus be used later as a reward/punishment mechanism to enforce loyalty. They will be cancelled for some, used as whip on others.
Not to mention the human costs – but who cares, we are all collectivist ants now.