Marginalization and Fragmentation: Eastern Europe Today

It is difficult to imagine how collective memory might function without the watershed dates that structure our stories about the past. Almost by definition, however, such familiar milestones fail to capture the complex dynamics of the transition from one era to the next. A case in point is the dismantling of the Iron Curtain. As the anniversary commemorations of 2009 showed, this development came to be epitomized by the tearing down of the Berlin Wall on 9 November 1989. One does not need to doubt the importance of this event to see that its sheer symbolic weight tends to obscure the intricacies of the Eastern European transition process. More often than not, accounts that foreground this turning point marginalize some sixty million Hungarians, Poles, Czechs, and Slovaks who embarked on the transition process well ahead of the citizens of East Germany.

There is, in fact, a case to be made for downgrading 9 November to a spectacular culmination of processes that were set in motion, or at least accelerated to a furious pace, about three months earlier, when the opening of the border between Austria and Hungary created the first breach in the Iron Curtain. As it happens, however, this pivotal episode in the large-scale story of imperial collapse cannot be pinned down to any one day. Although Hungarian authorities first opened the border for a few hours at the so-called “Pan-European Picnic” of 19 August 1989, it was not until early in the autumn—the date was actually September 11—that official policy caught up with this symbolic gesture and the opening of the border became final. It is perhaps understandable that such a hesitantly unfolding event should have become eclipsed by the dramatic suddenness of 9 November.

Yet even though the opening of the border between Austria and Hungary may disappoint the desire for narrative neatness, in retrospect this development appears charged with symbolic meaning. The significance of this turning point, which articulates historical time into a “before” and an “after,” depends on the spatiality of the border as a line that first separates and then joins two geopolitical domains. To that extent, the Pan-European Picnic may be seen as an instance of what Mikhail Bakhtin called “chronotope,” defined as a unit of representation in which temporal and spatial relations are inseparably entwined.Footnote ¹ Taking my point of departure from this chronotopic event, in what follows I shall revisit the Austro-Hungarian past revived in 1989 with a view to what came after and from the geographical perspective of what lies, at least for the Western reader, on the far side of that border. Instead of offering a straightforward historical narrative, I will follow a nonlinear itinerary to highlight what I take to be the most revealing connections. My hope is that attention to the chronotopic significance of the pivotal weeks between the summer and the autumn of 1989 can help us better understand recent developments in Hungary in light of global and regional dynamics. This approach requires that I move from a relatively recent past to a more distant one before addressing the latest system change in Hungary—namely, the demise of the Western-style liberal democracy inaugurated in 1989 and the construction of an authoritarian political system with no exact precedent, posing unique challenges to the international community. My argument will thus span the twenty-one years from the Pan-European Picnic to the Hungarian subplot in the crisis threatening with the breakup of the European Union.

If the events of 1989 need to be brought into sharper focus first, it is because they appear curiously blurred through the optic of the present. It is, therefore, worth calling attention to two features of our present-day vantage point that no one could have predicted in 1989: the marginalization of Eastern Europe and its fragmentation. In 1989, the world's attention was fixed on the nations of the Soviet bloc, and every precarious step in the transition process in each of the countries concerned (crises, reforms, unrests, negotiations, and elections) was followed the world over with exhilaration. This was the time when—difficult though it may be to believe now—reputable commentators actually talked of the impending end of history. This time now appears almost as distant as the Napoleonic Wars. With Eastern Europe on the periphery of global attention, media coverage of the region has become sporadic and, more often than not, superficial. Once the most important frontline of the Cold War, Eastern Europe is now just one among many squares on the chessboard of global politics, largely neglected by the rest of the world.

This marginalization has had a backward effect upon the self-perception of Eastern European nations. Whereas in the first years of the transition process it was possible for these nations to view the challenges facing them in terms of a world-historical narrative about the unstoppable spread of democracy and the free market, this perspective provided less and less orientation in the new era. Nor was this just a matter of changed perception. After the homogenizing effect of Soviet rule vanished, hitherto latent tensions and obsessions rooted in the differing pre-World War II histories of Eastern European nations resurfaced with a vengeance. Such intensely local issues resist the imposition of regional or global interpretive frameworks.

Other factors contributed as well to the fracturing of Eastern Europe's self-perception into a multiplicity of vantage points. While Eastern European nations undoubtedly opened up toward the world at large, if anything interaction among them declined in intensity and scope. Attempts at cooperation, such as the Visegrád initiative between Poland, Hungary, and the Czech Republic quickly petered out and gave way to rivalry. After decades of living at close quarters in enforced intimacy, Eastern European nations nowadays appear to be busily ignoring one another, or worse yet, they have regressed to the hostile projections of the interwar era. Few of their citizens learn the languages of neighboring nations, and there is far less in the way of news coverage or cultural exchange than was the case prior to 1989. If someone with reading knowledge of a few world languages attempted to piece together a halfway reliable picture of current developments in, say, Romania, he or she would have precious few resources to rely on, short of learning Romanian. As a result, the average Hungarian is likely to know less about everyday politics and culture in Romania than in the United States, and I suspect that similar observations could be made in other countries of the region as well. When it comes to the current state of Eastern Europe, then, the data available to both outside observers and “native informants” are even more susceptible to perspectival distortion than in most other cases of historical understanding. More than two decades after the dismantling of the Iron Curtain, in the age of the Internet, it is not obvious that Eastern European realities have become any less opaque to Western observers than they were prior to 1989.

The new marginality of Eastern Europe has very real political consequences. Above all, it makes it hard for these nations to gain an adequate perspective upon those aspects of their predicament that are due to forces operating on a regional or global level. For it should be clear that many of the difficulties besetting these countries are common to all regions of the world that struggle to weather the transition to a hyperdynamic, and highly destabilizing, form of global capitalism. It is especially hard to develop the cultural resources required for coping with such challenges when the traditions and institutions that safeguard rational public discourse are fragile. In Eastern European societies, the very logic of mediatized party politics tends to work against the emergence of a broader, transnational perspective that might transcend parochial partisan squabbles.

These remarks are meant in part as an explanation for my reluctance to sidestep the messier details of Hungarian politics in favor of boilerplate generalities about post-Communist Eastern Europe. I follow developments in Hungary from the position of a concerned native who lives abroad but regularly returns for extended stays. Even with the benefit of such a dual perspective, however, it is best not to pretend that one can enjoy a bird's-eye view of Eastern Europe without losing one's feel for the dense historical texture of local realities. I shall try to keep this proviso in mind as I proceed to recall two interrelated effects of the Pan-European Picnic: the global significance that it conferred upon the Austro-Hungarian border and the way in which it triggered a revival of analogies and fantasies dating back to the Dual Monarchy.

The Nostalgic Transfiguration of Austria-Hungary

For forty-four years, the border between Austria and Hungary was part of the single most important geopolitical dividing line in the world. Only once and very briefly did the system of defenses that sealed off Hungary from its western neighbor become permeable. During the weeks following the 1956 uprising, some 200,000 Hungarians crossed over to Austria, where they were generously welcomed, sheltered in refugee camps, and subsequently permitted to emigrate to Western countries of their choice. Restored after the crushing of the revolution, by the late 1980s the border defense system had all but lost its rationale. Fear of “imperialist infiltrators” seemed anachronistic in the Gorbachev era, and since the early 1970s, Hungarians had been allowed to travel to the West once in a year. More embarrassingly, the electronic surveillance system was in need of costly repair that the ailing economy of late-Communist Hungary could no longer afford.

Yet it was not until 2 May 1989 that the government of Miklós Németh deemed the situation appropriate for quietly beginning to dismantle border defenses.Footnote ² In a widely publicized event on 27 June, the Austrian and Hungarian secretaries of state met at one of the last remaining stretches of barbwire fence and set to work on it with wire-cutters. Though the border was to remain protected, in a textbook case of unintended consequences, this media spectacle was interpreted by thousands of East German tourists, for whom Hungary was one of the few permitted travel destination, as an invitation to escape to Austria via Hungary. During the festive “Pan-European Picnic” of 19 August, when the border was symbolically opened for three hours, the party was unexpectedly crashed by an exhausted but determined flock of six hundred East German tourists who simply ran over to the Austrian side before the eyes of hapless dignitaries, journalists, and border guards. A diplomatic crisis ensued. East Germany accused Hungary of betrayal. Caught off guard, Western powers were more eager to prevent an anti-Gorbachev backlash in the Soviet Union than to hasten developments in Eastern Europe that threatened to get out of hand.Footnote ³ Finally, the Hungarian government decided to open the border on 11 September. During the following weeks, some fifty thousand East German refugees seized the opportunity to escape to the West, laying bare the moral bankruptcy of the GDR and precipitating its collapse.

Meanwhile, in Vienna bargain-hunters from Hungary flocked to the discount stores on Mariahilfestrasse. They were buying sneakers, chocolate bars, and VCR players. Some of them were welcomed as long-lost brothers; others were met with signs in Hungarian that warned “Shoplifters Will Be Prosecuted.” Dissonant details notwithstanding, for a brief moment the border between Hungary and Austria seemed to stand for the brotherhood of all European nations, and in particular, of all Central European nations. It is hardly by chance that one of the organizers of the Pan-European Picnic was Walburga von Habsburg-Lothringen, the granddaughter of the last Austro-Hungarian monarch. Much ink was spilled in those days over Mitteleuropa, that mythic model of multiethnic life inherited from the Habsburgs, memorialized in the works of Joseph Roth, Robert Musil, Friedrich Torberg, and Italo Svevo.Footnote ⁴ The long-forgotten idea of a Danubian confederation of nations, which had earlier found expression in the utopian visions of Lajos Kossuth, Adolf Fischhof, and Oszkár Jászi, as well as in poems by Endre Ady and Attila József, suddenly appeared relevant once again, although its evocation by writers like Claudio Magris and Péter Esterházy was tinged with nostalgia and irony.Footnote ⁵ On closer examination, to be sure, the borders of Mitteleuropa seemed confusingly blurred, and the resuscitation of this mythic entity often betrayed a desire for distance from the less glamorous associations attaching to Eastern Europe and the Balkans. But few people paid attention to nuances and vested interests in those heady days.

What seems certain in the retrospect is that the Austrian-Hungarian border could not have become a crystallization point for such fantasies if its meaning had not already been overdetermined, laden with layers upon layers of sedimented meaning. Because of the imbalance in power between the two countries, these meanings were more often than not bound up with Hungarian self-conceptions. What Hungary might look like from the far side of its Western border is a question that has long intrigued Hungarians, traditionally conscious as they are of their idiosyncratic position. In a recent foray into the labyrinth of mutual projections, poet István Kemény sketched out a deep-seated Hungarian fantasy about Western perceptions of the country: According to this mythic self-image, “viewed from the West, already the existence of Vienna is a pleasant surprise, but Budapest is nothing less than an enigma: an astounding, tattered imperial capital some distance past the end of the world.”Footnote ⁶ Child-like bewilderment (“astounding”) on the one hand, condescension to the uncouth ways of the barbarians next door (“tattered”) on the other—these extremes have undoubtedly existed on the spectrum of Western perceptions of Hungary, as can be shown with the help of two emblematic quotes. Alluding to Hungary's proximity to the Austrian capital, Imperial Chancellor Metternich famously quipped “the Balkans begins in Vienna, at the Rennweg.” Adorno might have had this remark in mind when he commented on the characteristic ways in which Schubert, often considered the quintessentially “Viennese” composer, incorporated folkloristic elements into his compositions, showing a penchant for Hungarian motifs. As Adorno heard these motifs, they evoked the “transcendent distance” of a lost homeland whose very remoteness can begin to sound palpably near: “That distance lies at his doorstep, like Hungary, and is as remote as an incomprehensible language.”Footnote ⁷

So much for the glance cast from Vienna toward Budapest. Equally revealing, however, is the reverse vantage point, which is anyway the one that comes more naturally to me, being a native speaker of the language that Adorno (and not only he) found “incomprehensible.” For someone who grew up in Budapest in the last two decades of the Communist regime, it is still easy to recall what Austria meant to Hungarians in those years. To use Adorno's terms with an inverted perspective, Austria was both at our doorstep and transcendent in its unattainability. A mere two hundred kilometers from Budapest, Vienna was the capital of an idyllic alternate universe that we were permitted to visit once a year at most, provided that we could obtain Western currency and the official stamp (the so-called “window”) required for each trip to the West.

The longing provoked by these constraints was made all the more poignant by the awareness that Austrians and Hungarians had lived in the same empire up until 1918.Footnote ⁸ This knowledge acted as a powerful stimulant for counterfactual historiography. If only Hungarians had had a bit of luck, on national holidays we would not have to sing the Soviet anthem in pioneer uniforms, and grocery stores in Budapest would have the same cornucopia of goods on offer as Julius Meinl stores in Vienna, or in Budapest before the war, as older people remembered; similarly to Austria, buildings in our cities would have recovered from the ravages of war, and the yellow wall paint once ubiquitous throughout the Habsburg Empire would not be buried under a thick crust of grime. If only “the Russians” pulled out of the country, so the speculation went, it would be just a matter of time before we caught up with our Western neighbors. Such daydreams were usually cut short by the sober realization that the Red Army was here to stay. History gave plenty of warrant for such skepticism. When Hungarians took up arms in 1956 to fight for a neutrality settlement similar to the one granted to Austria only a year earlier, revolutionary fervor quickly gave way to the bloody reinstatement of Soviet rule. Austria remained the epitome of unattainable wishes.

It is worth pointing out the inconsistencies in the idyllic image of Austria as Hungary's enviable doppelgänger. This daydream had a past-minded, nostalgic character, for it almost invariably harked back to one of the very few periods of relative affluence in modern Hungarian history: namely, the five decades following the Compromise of 1867 (Ausgleich) between Habsburg Austria and Hungary. Yet this was a period in which Austria's role with respect to Hungary was not entirely different from the role of the Soviet Union after 1956; the Soviet Union was, in fact, the successor state to the same Russia that came to the aid of Austria in 1849 when the latter proved unable on its own to defeat the Hungarian bid for national sovereignty.

With the Compromise of 1867, an ailing empire that could no longer afford to have its resources depleted by the fractiousness of the Hungarians conceded to the latter a limited measure of sovereignty in exchange for loyalty in external and military affairs. In a similar way, following the brutal post-revolutionary retaliations, Moscow put away the stick and resorted to the carrot. Constraints upon private enterprise and political expression were cautiously loosened. As in the decades following 1867, the strategy of putting Hungarians on a longer leash succeeded in pacifying them. The country lapsed into a kind of collective amnesia. The same János Kádár who had betrayed and executed members of the revolutionary government of 1956 was in the 1970s and 1980s transfigured into everyone's “uncle János”—recalling the way in which Francis Joseph, initially reviled for ordering the execution of hundreds of revolutionaries, came to be seen as the nation's amiable grandfather after 1867. (In a further uncanny similarity, both statesmen were admired for their puritanical way of life.)

Nor did these parallels go unnoticed at the time. By an obvious substitution, for instance, 15 March, the anniversary of the 1848 uprising against Austrian rule, was the national holiday on which the authorities were most wary of a reawakening of the spirit of October 1956. Or take Miklós Jancsó's chilling film The Round-Up [Szegénylegények] from 1965, ostensibly recounting the Austrian gendarmerie's push to root out one of the last pockets of post-1849 resistance. To the hundreds of thousands of Hungarians who rushed to see this film upon its release, Jancsó's depiction of the mechanisms of blackmail, humiliation, and deceit used by the gendarmerie was instantly readable as an allegory for the ways in which Kádár's regime dispersed and defused opposing forces, harnessing them to its own purposes.

In view of such widely recognized analogies, there was something oddly incongruous about the transfiguration of Austria (and of Austria-Hungary) into a land flowing with milk and honey. Yet this was merely a historical variant of the deformations affecting Hungarians' collective self-understanding after 1956, which could not fail to have consequences after the transition. If yearning for liberation from Soviet rule could take the perverse form of nostalgia for an era that was in many ways quite similar, then it came as no surprise that many Hungarians responded to the hardships of post-Communist transition with nostalgia for life in the “happiest barrack” of the Soviet bloc.

In considering the persistence of Austro-Hungarian nostalgia, it is also worth noting that it often comes with a tendency to overstate cultural ties between the two countries. To be sure, affinities are plain to see in such areas as music, architecture, and cuisine. Interaction between the two literatures, by contrast, was never particularly lively.Footnote ⁹ The strong political investment of Hungarian literature throughout the nineteenth century did not exactly predispose writers to appreciation for Austrian (or for that matter German) culture, reinforcing instead Hungarian modernists' affinities for French symbolism. No doubt because of a renewed interest in the Austro-Hungarian past, the 1990s saw a belated reception of Austrian writers such as Musil and Doderer. Yet it was always the Austria that W. G. Sebald called “unheimliche Heimat” that fascinated Hungarian writers—and understandably so, since discontent with one's own country is equally central to both literatures. Even in this respect, however, a key difference leaps to the eye. Unlike their Austrian equals, authors writing in Hungarian could never hope to be understood without the aid of translation in another, less claustrophobic cultural space. The all-important fact of linguistic isolation tends to preclude hyperbolic expressions of disgust with one's own country—such as one finds in the works of Karl Kraus, Thomas Bernhard, and Elfriede Jelinek—and instead foster forms of discontent that are internally conflicted or ironically refracted.

Finally, in political and socioeconomic terms as well, the post-transition years showed that the coveted Austrian model was of limited applicability at best to the realities of contemporary Hungary. Although (as I shall argue later) certain postwar Austrian precedents and the insights of such Austrian authors as Robert Musil and Hans Kelsen can be usefully brought to bear on the Hungarian situation, few of the toughest problems facing Hungary today have a close equivalent in its affluent Western neighbor. And yet many aspects of Hungary's current predicament—so utterly different from the Austrian situation—can be traced back to the centuries of forced symbiosis with Austria that lasted from 1541 to 1918. Somewhat paradoxically, the reasons for the sharp divergence between the paths taken by the two countries only come into view when one revisits the 1867 Compromise Agreement between them.

Repercussions of the 1867 Compromise

In attempting to understand the consequences of the Compromise, we would do well to take our guidance from a seminal essay by István Bibó (1911–79), a political theorist of great acumen and moral integrity. Written around the centenary of the 1848 uprising against Habsburg rule, in the year when the brief-lived democracy of post-World War II Hungary finally caved in under Soviet pressure, the essay whose title may be somewhat clumsily rendered as “Deformations of the Hungarian Constitution and the Dead End of Hungarian History” attempts to shed light upon the root causes of the catastrophes of 1919–20 and 1944–45.Footnote ¹⁰ To designate the elusive entity in the focus of his scrutiny, Bibó chose the term “alkat,” roughly equivalent to the English word “constitution,” taken in a psychological sense. Although the Hungarian word does not exactly coincide with the one used for constitution in the political-legal sense (“alkotmány”), the blurring of the two cognate terms in English is in many ways appropriate. For unlike the mythic “national character” invoked by ideologists of the interwar era, the mental “constitution” of a nation is, according to Bibó, primarily realized in the political arena. What the term refers to is not a timeless and monolithic essence but a set of historically contingent dispositions expressed and shaped by the aggregated actions, reactions, and perceptions of a community's members, liable to change in response to new possibilities and pressures.

In attempting to pinpoint what went wrong with the Hungarian “constitution” in the above sense, Bibó zeroes in on the 1867 Compromise with Austria, which he sees as the pivotal moment at which inauspicious tendencies gained the upper hand. It is worth noting here that most contemporary historians do not share Bibó's overwhelmingly negative view of the Compromise. According to the predominant view, although the Compromise was admittedly something of a mixed bag, it nonetheless gave Hungarians everything they could realistically wish for in 1867 and ushered in an era of unprecedented prosperity and modernization in Hungary.Footnote ¹¹ Bibó does not deny this, to be sure. Concerned as it is with long-term dynamics that affected prevailing mentalities, his criticism targets the aspirations that guided the Hungarian political class as it hammered out and implemented the Compromise.

The main defect that he sees has to do with the basic orientation of Hungarian nationalism, whose ties to the antifeudal, republican agenda remained tenuous. There were of course historical reasons for this. The emergence of a Hungarian bourgeoisie was delayed by a hundred and fifty years of Turkish occupation and frontier warfare. Moreover, following the tripartition of the country in 1541, monarchic rule no longer provided an effective counterweight against the feudal estates, leaving the oppressed peasantry without a key ally. As a result, the classes that suffered most from the backwardness of the country had little reason to align themselves with central rule. Conversely, the idea of the nation-state remained for the most part disconnected from modernizing, emancipatory impulses. If the Hungarian estates did not cease to rebel against Habsburg rule throughout the eighteenth century, their striving for national sovereignty was in no small part a function of their clinging to feudal privileges threatened by the court's attempts at modernization. This feudal variant of nationalism was less strongly committed to the living linguistic-cultural community of the people than to the territory belonging to the Holy Crown of Hungary inherited from St. Stephen, the eleventh-century founder of Hungarian statehood.Footnote ¹² This explains two features of the historically dominant tradition of Hungarian nationalism: its relative lack of interest in the emancipation of the masses that did not belong to the feudal estates and its clinging to territories whose majority population was not Hungarian.

Even the republican agenda of the 1848–49 War of Independence with Austria did not have a sufficiently broad popular basis. Notably, in their bid for national sovereignty, the leaders of the revolution failed to acknowledge the equivalent rights of other nations living within the historical borders of Hungary. This failure triggered, and was in turn reinforced by, neighboring nations' suspicions vis-à-vis the Hungarian cause, leading Croats, Serbs, and Romanians in 1848 to side with Austria. After the revolution was crushed by Austria with military help from Russia, Hungarian politicians drew a two-fold lesson. First, they concluded that they must give up the aspiration for independence from Austria because the major European powers would ruthlessly enforce Habsburg sovereignty over the country. Second, they began to see separation from Austria as downright undesirable, inasmuch as it would have legitimized ethnic minorities' bid for independence, threatening Hungary with the loss of territories in which Hungarian-speakers were in the minority. Both inferences were wrong-headed according to Bibó. The defining politicians of the era failed to recognize that the loss of territories where Hungarians lacked absolute majority was inevitable in an age of European-wide nationalist awakening. Furthermore, they did not realize how much Vienna's position had weakened on the international stage and how badly it needed Hungarians to relinquish their strategy of “passive resistance.”

It was therefore misguided fears and not positively conceived goals that prompted both parties to enter into negotiations. As is often the case when judgment is skewed by fear, each side overestimated the strength of its adversary. The resultant settlement was bound to be backward looking. It was also dishonest, in that it invited divergent interpretations as it became integrated into the respective legal systems of the two countries. Whereas the Hungarian version of the law nourished the illusion that Hungarians had finally achieved sovereignty, the homologous Austrian law purported to safeguard the unity of the empire, Hungary's privileged status notwithstanding. Each of these views had some factual basis in the framework of the Compromise, which stipulated the “personal union” of the two monarchs and defined finance, military, and foreign relations as joint affairs, while allowing for separate parliaments and governments.

This fantastically intricate construct entrapped Austro-Hungarian politics in a maze of legalisms that Bibó describes as follows:

A similarly damning conclusion was reached more recently by the eminent historian R. J. W. Evans, who argues that the Compromise “sealed a gradual alienation of Austria and Hungary” and “cut off some profitable mutual perceptions, surfacing at least in the late 1840s and early 1860s.” Evans concludes that the Compromise “proved to be the last, most unconscious, and most fateful example of Habsburg divide and rule, not so much among those who suffered from it as among those whom it favoured.”Footnote ¹⁴

To maintain the fiction of Hungary's equal footing with Austria, the Hungarian political elite did everything to defeat other nations' bids for the sort of limited sovereignty that had been granted to the Hungarians. Needless to say, this strategy ensured the animosity of Czechs, Romanians, Slovaks, and Serbs for decades to come. Moreover, to keep separationist tendencies at bay, the ruling Hungarian elite had to favor constitutional monarchy, for it correctly saw that a democratic constitution would inevitably result in emancipation of the minorities. This orientation sealed the fatal divorce between the national cause and the liberal-republican agenda.

Because the Dual Monarchy was eventually undone by forces set free by World War I, rather than collapsing under the weight of its own contradictions, most Hungarians never understood the untenability of the status quo before 1914. In their eyes, the violent convulsions of 1918–19 actually vindicated the political elite that had perfected the art of maneuvering among the legalisms of the Compromise without sincere reflection on objectives. The much-lauded realism of this political class boiled down, in Bibó's view, to the shortsighted acceptance of a false framework of limiting conditions. Throughout the interwar years, it was this “false realism” that remained authoritative in Hungary, resulting in the disastrous attempt to achieve territorial restitution with the help of Hitler's Germany.Footnote ¹⁵

Although Bibó could have hardly predicted this in 1948, a similar false realism would prevail during that other era of post-revolutionary compromise, namely, the consolidation presided over by János Kádár in the years between 1960 and 1989. This loose analogy is just one particularly salient sign, however, of the far-reaching repercussions of the Austrian-Hungarian Compromise. The delusions of 1867 engendered a cascade of mistakes and compulsions that continues into the present and partly accounts for the current crisis in Hungary. Indeed, it is not possible to make sense of Hungary's anomalous post-transition development without going back to the formative decades defined by the Compromise—or so I shall argue in the following.

Interlocking Resentments and Their Historical Roots

For a decade or so following the system change, it looked as though Hungary might be able to capitalize on the positional advantage it had as the former “happiest barrack” of the Eastern bloc. Hungarian parliamentary democracy seemed stable, and the late 1990s saw a marked improvement in the standard of living. Following the country's accession to NATO in 1999 and to the EU in 2004, one would have been forgiven for thinking that Hungary was well on its way to attaining the stability and prosperity of its more fortunate Western neighbor.

At the latest in the autumn of 2006, however, when a wave of riots shook the country, even the most blithely optimistic observers became concerned about the prospects of Hungarian democracy. The upheavals of that autumn were followed by years of political deadlock, during which social and economic problems kept festering. The heightened economic vulnerability of the country became evident in 2008, when the global financial crisis forced the government to request a rescue package. Meanwhile, the formation of a Fascist paramilitary organization and gruesome anti-Roma atrocities heralded the rise of a violent and racist extreme Right. By 2009, several commentators had written the obituary of the so-called Third Republic of Hungary. To the outside world, however, the scale of the problems only became fully visible in the wake of the predictable landslide victory of the populist Fidesz party in the elections of April 2010, as the new government embarked on an unprecedented centralization of political power. A spate of news in the international media about the media law, the new constitution, and conflicts with the EU and the IMF confirmed the widespread perception that Hungary had deviated from the path shared by Western liberal democracies. How could it come to this?

To answer this question, we must uncover the historical roots of a vicious antagonism between the Left and the Right that has held Hungarian parliamentary democracy hostage since its inception. In a very first approach to the Hungarian political landscape, one might say that the Hungarian Left hews to a liberal, progressive outlook that embraces Western modernity, whereas the Right typically appeals to conservative sentiments and national traditions. This way of putting the matter is misleading, however, for it fails to explain the heterogeneous composition of the various government coalitions that have run the country since 1990. The right-wing coalitions of the post-transition era combined ideological elements whose alliance would have been unimaginable in, say, the 1930s. Specifically, the post-1989 Right (led first by the Hungarian Democratic Forum, MDF, and later by the Alliance of Young Democrats, FIDESZ) is a broad platform uniting a conservative brand of Hungarian nationalism with a radical, populist one—two traditions whose tension may be traced back to the late-seventeenth-century split between a Catholic establishment loyal to Habsburg rule and a predominantly Protestant, anti-Habsburg, insurrectionist movement. As for the three left-wing coalitions that have governed the country since 1989, they were formed, on the one hand, by the Socialist Party MSZP rooted in the former elite of the Communist Party-state, and on the other, by the Liberal Party SZDSZ that emerged from the democratic opposition of the 1970s and 1980s.

Neither the Left nor the Right can be aligned, then, with a clearly defined set of socioeconomic tenets. In fact, for much of the two decades following the system change, the sort of neo-liberal confidence in the free market that characterizes the Right in Western countries enjoyed greater support among Hungarian Liberals and Socialists than among so-called conservatives. Instead of defining itself in term of political principles, each side in Hungary has tended to draw whatever cohesion it has from historically rooted suspicions, resentments, and fears vis-à-vis the other side, sentiments that are all the more impervious to rational argumentation because they have to do with harrowing past experiences.

The 1867 Compromise is central to understanding this antagonism. It is not difficult to trace back the two positions to the two major political forces of the post-Compromise era: on the one hand, the Liberal Party advocating socioeconomic modernization within the framework established in 1867, often in alliance with Vienna, and on the other, the Independence Party, which hewed to the legacy of the 1848 revolution in placing the cause of national sovereignty ahead of the cause of social progress. More importantly perhaps, the reactive sentiments defining the two positions are rooted in traumatic experiences in Hungarian history that are causally linked to attitudes and outlooks consolidated by the Compromise—and it is no exaggeration to speak of traumas here insofar as these experiences have very much retained their power to fuel compulsions and inhibit clear thought. When approached in this way, the antagonism can be summarized as follows: Whereas the foundational traumas of the Right are the Trianon Treaty of 1920 and Soviet occupation from 1945 to 1990, the Left-liberal side sees Fascism as the paramount evil in Hungarian history.

This schematic picture, however, needs to be filled in with more detail before we can begin to see how the two narratives have perpetuated one another across decades. Let me first elaborate, then, on the role of the Trianon Treaty in Hungarian history, and especially on the nationalist narratives woven around it. If the terms of the peace treaties that ended World War I are now unanimously seen as unduly harsh and co-responsible for the revanchism resulting in World War II, none of them were harsher than the terms imposed upon Hungary, which lost two-thirds of its former territory and one-third of all Hungarian-speakers. To be sure, the post-Trianon borders reflected the regional distribution of ethnic groups more accurately than did the prewar borders, since most of the territories annexed to the neighboring countries had non-Hungarian majority populations. Not all of them did, however. Large swaths of territory contiguous with post-Trianon Hungary were awarded to Romania, Czechoslovakia, and Yugoslavia despite the fact that their majority population was Hungarian.

As geopolitical bad luck would have it, among the lost territories were the most socioeconomically and culturally advanced regions of Hungary, whose development in the sixteenth and seventeenth centuries had been less hindered by the devastating frontier wars with the Ottoman Empire. In particular, the lost territories included all of Transylvania, a region whose centrality to Hungarian statehood and national culture might be compared to that of Kosovo for the Serbs. Furthermore, Hungary lost a number of urban centers whose vibrancy provided an important counterbalance to the booming capital: Nagyvárad and Kolozsvár (Oradea and Cluj, today in Romania), Szabadka and Újvidék (now Subotica and Novi Sad in Serbia), and Kassa (now Košice in Slovakia). The Trianon Treaty thus left Hungary not only diminished in size but also divided between, on the one hand, a predominantly agrarian countryside whose underdevelopment still bore witness to 150 years of Turkish occupation, and on the other, a highly cosmopolitan capital city that was almost grotesquely outsized for such a small country.

Those who, to this day, lament Trianon rarely remember the long path that led to it. The harshness of the treaty was mainly due to resentment toward Hungary harbored by the nation-states that had just emerged on all sides, resentments attributable to Hungary's stance toward its minorities throughout the latter half of the nineteenth century. The same hegemonic aspirations that had prevailed in 1867 backfired in 1920. Unfortunately, righteous outrage over Trianon has precluded insight into the injustice of the antecedent state of affairs.Footnote ¹⁶ Interwar-era Hungarian politics became mired in self-pity, resentment, and feverish daydreams of restitution. Such sentiments, as well as concern for the Hungarian minorities in neighboring countries, continue to provide grist for the mill of the Hungarian Right. The all-too familiar feedback dynamics between radical nationalism in Hungary and in the neighboring countries ensures that this issue remains a persistent source of tension.

The second trauma at the heart of the Hungarian Right's historical self-understanding is Communist rule—a heading under which right-wing narratives typically conflate the short-lived Hungarian Soviet Republic of 1919 with the regime imposed by Moscow after 1945. The former episode is, in fact, intimately bound up with the trauma of territorial loss, for nationalists typically lay the blame for Trianon at the door of the Communist republic of 1919.Footnote ¹⁷ It was easy enough to revive this old allegation after 1989, when many resented the ease with which members of the Communist nomenklatura morphed into capitalists ideally positioned to reap the benefits of privatization.

Looking at the other side of the divide, the coalition between the Socialists and the Liberals was also forged in reaction to an ideological adversary associated with the past. For the Left, the definitive trauma of modern Hungarian history remains the country's alliance with Nazi Germany, which entailed multiple catastrophes: tens of thousands of Hungarian soldiers turned into canon fodder on the Eastern front, the senseless destruction of Budapest, and above all, the willing participation of large numbers of Hungarians in the dispossession and murder of more than 400,000 Jews in 1944–45.Footnote ¹⁸ Again, these disastrous choices were underwritten by the two defining obsessions of the Right, namely, territorial revisionism and fear of Communism. It was the imperative of territorial restitution that led Hungary's ruling elite in the 1930s to align the country with Hitler's Germany—a calculation that panned out for a few short years but eventually doomed any hope for a revision of the Trianon terms. Italy and Romania had already switched sides and the Red Army was already closing in on Hungary when the adamantly anti-Communist Horthy regime still persisted in its alliance with Hitler, harbouring daydreams of surrender to the Western Allies.

Given this inglorious past, it is understandable that the Left should be mistrustful of right-wing invocations of Trianon and the Communist threat. Such suspicions are made all the more plausible by the fact that the cause of territorial restitution, as well as the anti-Communist agenda, are frequently advanced in terms that rely on familiar anti-Semitic tropes. Commentators on the Right like to point out, for instance, that assimilated Jews played prominent roles in the 1919 Hungarian Soviet Republic that preceded the Trianon Treaty as well as in the Communist regime installed in 1948. This historical background is crucial to understanding the widely shared perception on the left-liberal side of the divide that the mainstream of the Hungarian Right was never entirely immune to the anti-Semitism of its lunatic fringe.

As one might suspect, the origins of anti-Semitism in Hungary predate the calamities that followed World War I. Anti-Semitism is, in fact, among the most baleful of the issues attributable to the direction taken by Hungarian nationalism in the second half of the nineteenth century. If Hungary was exceptionally hospitable toward Jews arriving from the East during this period, that is only partly to be explained by the rise of a generous idea of nationhood, defined in linguistic and cultural terms and possessing enormous integrative power.Footnote ¹⁹ There was, in addition, a demographic calculation at work here: the assimilation of Jews was expected to make up for the weakness of the Hungarian bourgeoisie, as well as to enhance the ratio of Hungarian-speakers in linguistically mixed areas whose secession had to be averted.Footnote ²⁰ This expectation helps explain why Hungary became home to one of the largest and most assimilated, as well as most patriotic, Jewish minorities in Europe. By a cruel logic, however, it was precisely the promotion of Jewish assimilation during the critical decades of modernization that gave rise to mounting tensions, eventually discharged in the anti-Semitic wave that began in 1919 and culminated in 1944. Following Trianon, the loss of ethnically mixed territories obviated the territorial rationale for including Jews in the nation.Footnote ²¹ As hundreds of thousands of Hungarian civil servants fled the ceded territories for “rump Hungary,” the educated and relatively well-to-do urban Jews in the ranks of the legal, administrative, and medical professions became the target of resentment. This fatal dynamic was indirectly set in motion by the manner in which the 1867 Compromise had reinforced Hungarian aspirations for regional hegemony.

The issue came to a head in the bitter dispute in the early 1930s between the so-called “populist” (“népi”) and the “urban” (“urbánus”) intellectuals, whose lasting impact on Hungarian cultural politics cannot be overestimated.Footnote ²² The principal goal of the populist movement was to stop the demographic decline of Hungarians in the Carpathian basin, a process that had by this point prompted a revival of Herder's prophecy that the Hungarians would vanish in a sea of foreign nations. To avert this catastrophe, populist writers urged that the nation must be energized through the emancipation of its disenfranchised peasantry. While the modernists among them envisioned a peculiarly Hungarian brand of Socialism which was to be achieved through the modernization of the peasantry (“a third way”), the socially conservative wing of the movement stressed the need for ethnic self-defense. The militant stance of the latter group was directed in the main against the two highly assimilated minorities whose dynamic espousal of modernity and disproportionate share in the bourgeoisie they deemed especially harmful to the integrity of Hungarian culture: Germans and Jews.Footnote ²³

Given fresh memories of the anti-Semitic pogroms in the anti-revolutionary “White Terror” of 1920 and the rise of eliminationist anti-Semitism in Germany around this time, it is hardly surprising that the populists were accused of anti-Semitism by their urban progressive counterparts.Footnote ²⁴ It must be said, however, that none of the populist writers espoused violent, let alone eliminationist, forms of ethnocentrism, and they were no less firmly opposed to Hitler's Germany (which was bent on using the country's German minority to increase its influence) than to the retrograde, feudal aspects of Horthy's Hungary. Precisely because anti-Semitism was an anathema to most populist writers of caliber, they perceived the urbans' accusation as a low blow. Stung and outraged, they complained that one could not even lament the fate of the peasantry without being branded as an anti-Semite. Gyula Illyés went so far as to turn the tables on his critics, describing their charges as a “spiritual blood libel.” In a remark that was no less insensitive to the context for being well-meaning, he warned that the urbans were “playing with fire” and their accusations might end up provoking the very offense that they sought to counter.Footnote ²⁵

In this manner, the populist versus urban dispute engendered reciprocal resentments. Of course reciprocity does not mean symmetry. The urbans' worry about anti-Semitism proved to be all-too well founded—not with respect to the particular writers they accused, to be sure, but in a more comprehensive and awful sense. By contrast, when considered against the backdrop of the European situation in 1934, the populist writers' complaints of persecution showed a failure of both empathy and judgment. Nor did the destruction of hundreds of thousands of Hungarian Jews prevent the resurfacing after 1989 of the old lament about unfair accusations from the Left.Footnote ²⁶

The Return of Polarization: The Impasse of Post-Transition Party Politics

Perhaps the greatest surprise of the years following the 1989 transition was the rapid re-emergence from latency of the ideological division just described, aggravated by the experiences of a dismal half-century. It was clear from the outset that the partisan conflicts of the newly established democracy were driven by two clashing narratives of Hungarian history, each of them centering on a trauma so awful as to make any acknowledgment of the other side's comparable experiences suspect.Footnote ²⁷ The mistrust harbored by each side toward the other's version of history was all the more persistent because it was far from being unfounded. Each side could claim with some justification that the other side had instrumentalized the trauma central to its own, self-serving version of Hungarian history to disastrous effect.

The conflict of these narratives erupted as early as 1990, in the campaign preceding the first parliamentary elections. A key role was played in this respect by the Liberal Party founded by leading intellectuals of the pre-1989 underground opposition, the liberal Alliance of Free Democrats (SZDSZ). Since leaders of the party were in the vanguard of regime change, the party's share of seats in the first freely elected parliament was comparatively large for a liberal party (24 percent). From the outset, however, they were accused of egghead elitism. In particular, well-known figures with far-right sympathies in the newly founded leading party of the Hungarian Right (MDF) insinuated, and in some cases explicitly claimed, that SZDSZ was the party of the same assimilated Jewry that had allegedly inflicted Communism on the country in 1919 and after 1945. This charge was all the more far-fetched as the liberal dissidents were firmly, even militantly, anti-Communists, while the MDF party that dominated on the Right nearly succeeded in orchestrating a compromise with the reformist wing of the Communist Party in 1989. Nonetheless the accusation stuck, no doubt because of the lingering interwar-era conflation of liberalism and Communism as foreign, Jewish doctrines. Conversely, however, the heavy-handed media politics and the heavily ideological cultural policies of the governing MDF party led many liberals to see every stirring of traditionalism and patriotic sentiment on the new Right as a portent of Fascist regression. Mutual accusations along these lines escalated with frightening speed into an ideological war fuelled by long-buried resentments, pitting the two rival narratives of twentieth-century Hungarian history against one another.Footnote ²⁸

The polarizing force of this conflict was enormous, and it was only exacerbated by the devastating side effects of Hungary's transition to a market economy, which included skyrocketing prices and the loss of 900,000 jobs. When the hardship of the first years resulted in a massive resurgence of the Socialist Party in the 1994 elections, the Free Democrats, following long debates, decided to enter into a coalition with the Socialists, the successors to the very regime they had worked so hard to undermine until 1990. They justified this step with the argument that reforms required for the stabilization of Hungary's economy called for a broad coalition; and indeed, in 1996 the left-liberal coalition managed to push through a vastly unpopular austerity measure that laid the foundations of economic growth in the late nineties. At least equally important to the genesis of the left-liberal coalition was, however, the ideological antagonism inherited from the interwar era. This recurrence led many liberals to believe that even an unsavory alliance with the Socialists was justified so long as it helped stave off the rise of a right-wing nationalism infected with the virus of Fascism. Following the circular logic of such hostilities, the left-liberal alliance scandalized the Right. Many liberals viewed the coalition as an unacceptable concession to pragmatic pressures, but right-wing critics went much farther: they condemned it as a proof of perfidious opportunism or, worse yet, as a confirmation of the old hunch that liberalism and Communism were cut from the same foreign cloth.

The misbegotten coalition of 1994 brought another telling illustration of the inescapability of the left-right dichotomy, which in retrospect one may even recognize as the first fateful step toward the undoing of Hungarian democracy: the improbable transformation of the Alliance of Young Democrats (Fidesz). Launched by university students on the margins of the democratic opposition, Fidesz started out as a radical liberal party with strong countercultural affinities. Its vehement rejection of Communism was coupled with an equally sincere critique of the conservative nationalism that had prevailed before 1945. Led by the charismatic Viktor Orbán, the Young Democrats were passionate, smart, disarmingly irreverent, and extremely astute at communication. Above all, they were young and hence relatively unburdened by the crippling compromises of the post-1956 era. They also purported to leave behind the tired old conflict between the popular and the urban camp.

Far from transcending this antagonism, however, Fidesz became living proof of its implacable logic. From the outset, Fidesz had trouble emancipating itself from SZDSZ, whose dissident founders included former mentors of the Fidesz vanguard. This problem became even greater after the party's poor performance in the 1994 elections, due in part to a party financing scandal that severely damaged the credibility of Fidesz leaders' claim to represent innocent youth. The Fidesz leadership concluded that there was only one vacant niche left in the political spectrum: on the Right, where a vacuum had opened up.Footnote ²⁹ When the Liberals formed a coalition with the resurgent ex-Communists, Fidesz quickly seized the opportunity to accentuate its difference from the Liberals and to capitalize on the backlash prompted by the ex-Communists' return to power. The party took a sharp turn in a conservative, Christian-national direction and renamed itself Fidesz-Hungarian Civic Party—“civic” being an imprecise rendering of “polgári,” whose valences in Hungarian might be better captured by the German term “bürgerlich.” Orbán and his friends had their haircut, donned dark suits, and began to attend church. They adopted the very same archconservative rhetoric of which they had been the most ardent critics during the previous four years. They embarked on a perilous path of double-talk, making barely coded appeals to radical nationalists while seeking to reassure moderate voters.

Liberal commentators had a field day juxtaposing statements made by Orbán in 1991 and 1994, but the reversal earned Fidesz electoral victory in 1998. Once in power, Orbán did not shrink from meddling with the finely calibrated relation among branches of power that had been established in 1990. The executive branch was strengthened. Playing fast and loose with bylaws, Orbán's government curbed the role of the National Assembly, where Fidesz representatives blocked opposition initiatives. Alternating between overt defamation and coded insinuation, the governing parties called into question the patriotism, and often the very legitimacy, of the opposition parties. They courted voters with extreme-right sympathies by taking a hard line on the issue of Hungarian minorities in the neighboring countries, which had the predictable effect of exposing those minorities to the backlash of Romanian and Slovakian nationalism. The tawdry trappings of nationalist historicism were dusted off and adapted to the mass media. This revival of a symbolism that had originally underpinned a world of feudal privilege did not prevent Fidesz from populist appeals to the rural regions ignored by the “cosmopolitan” capital. An aggressive offensive was launched to right the ostensible imbalance of the media, whose bias the new government decried as a sign of collusion between the old Communist media elite and the well-positioned liberal intelligentsia.

Equally radical was the metamorphosis undergone by Orbán himself. In a mere few years, this captivatingly sincere and charismatic young man had become a mask without a face, a populist intoning pseudo-Christian and pseudo-patriotic pieties. Orbán's apologists contended that his astutely choreographed maneuver had taken out the wind of the extreme Right's sail, while his critics charged that he himself had become hard to tell from a far-right leader. What would be difficult to dispute is that Orbán's reorientation only further entrenched the old ideological divide. Ruthlessly sidelining rivals within his party, he forged a highly centralized right-wing movement out of disparate elements, while the near-mythic fear he instilled on the other side reinforced the otherwise precarious left-liberal alliance.

Thus two enemy constructs emerged. Orbán's followers saw themselves as a cohort of upstanding and upwardly mobile patriots fighting on behalf of a Hungarian and Christian middle class against a deeply entrenched ex-Communist mafia aided and abetted by arrogant liberal eggheads and technocrats beholden to global capital. Those on the other side of the trench were convinced that they were fighting for the loftiest ideals of Western modernity (freedom, enlightened rationality, tolerance, expertise) and on a mission to save the country from a predatory pack driven by political adventurism and atavistic resentment. There is no doubt that the clash of these two elites was to a great extent about money and power. Yet this rivalry could not have mobilized emotions on such a wide scale if it had not been fuelled by unresolved tension between rival versions of Hungarian history.

It would be difficult to overstate how damaging this conflict was. In the war of attrition between the two elites, each side had become convinced that the country had to be saved from the other, and at any cost. This resulted in a dulling of politicians' sensibility to morally relevant nuances. Aside from the moral costs, there was an intellectual one as well, since both sides succumbed to the temptation to indulge in easy polemics with the crudest variants of the opposing viewpoint and ignore its more challenging formulations. This self-serving stance robbed both sides of valuable opportunities for learning and correction through dialogue. Their media, their vocabularies, their conflicting perceptions coalesced into parallel universes between which no communication was possible. It is almost unnecessary to point out how much this polarization degraded the ability of both political elites to address the problems facing the social, economic, and cultural problems facing the country.Footnote ³⁰ Because both sides of the partisan divide kept defining themselves in terms of an ideological conflict rooted in the past, they were ill equipped to deal with the present. Haphazard and demagogical, their responses to challenging situations lacked grounding in a clear hierarchy of normative commitments.

In acknowledging the shortcomings of both sides, as well as the kernel of truth in their respective views of things, I do not want to create the impression of neutrality. A disengaged standpoint is arguably not even available to someone who wants to make sense of this intensely polarizing conflict. My own considered view is that the Right, and Viktor Orbán in particular, bears a significantly heavier burden of responsibility for the consolidation of the old divide. When Orbán's government began in the late 1990s to circumvent parliamentary procedures and to contest the legitimacy of its opposition on the grounds of lacking national credentials, he crossed a line. These attacks on the very foundations of representative democracy were bound to instill a sense of emergency in the opposition.

This is indeed the reason why Orbán's strategy backfired at first. Opposed by a media that Orbán had not (yet) managed to tame, his heavy-handed attempts at centralization earned him a narrow defeat in the elections of 2002. It was his response to this unexpected blow, however, that sealed the fate of sane political discourse in Hungary. For Orbán's supporters, the election victory of the Socialist-liberal coalition was a nightmare beyond belief. After all, thanks to the booming global economy and the 1996 reforms implemented by the previous, Socialist-liberal, government, the years of the first Orbán government (1998–2002) had been marked by a noticeable improvement in the standard of living. How could the leader who presided over such an upbeat period suffer defeat at the hands of feckless ex-Communists and haughty liberals? Orbán's own wounded pride made it all the easier for him to tap into the denialist impulses of his shell-shocked supporters. He comforted them by questioning the validity of the elections and legitimacy of the parliament. “Perhaps our parties and representatives are in the opposition in the Parliament,” he said at a mass demonstration, “but we who stand on this square are not going to be and cannot be in the opposition, for the fatherland cannot be in opposition. Only a government that has abandoned the aims of the nation can find itself in the opposition with respect to its people.”Footnote ³¹ The myth of the stolen election was born. That it was not just a comforting fable became evident as Orbán launched a grass-roots movement of Civic Circles intended to supplant parliamentary politics, drawing in part on far-right constituencies.

Such denialism could not but exact a toll on the opposite side. Essayist Ákos Szilágyi noted the “corrupting and stultifying effect” that Orbán's strategy had on the Left: “its political fate has become so inextricably tied to that of democracy that it is increasingly prone to mistaking itself for democracy itself. Even though it is in defense of democracy that a party has turned into The Party That Cannot Be Voted Out, it is still going to act much like the party intent on getting rid of democracy.”Footnote ³² By dragging his adversary into a life-or-death battle in which rules of democratic propriety must be set aside, Orbán succeeded to some degree in transforming that adversary to his likeness. Already in the 2002 campaign, the Socialists felt compelled to make lavish promises to match the loosening of fiscal discipline begun by Orbán in the run-up to the elections. Upon taking power, Péter Medgyessy, the feckless prime minister of the new Socialist-liberal coalition, followed up on these promises. When the disastrous budgetary consequences of this spending spree forced him to resign in the summer of 2004, the Socialist-liberal coalition finally found Orbán's counterpart in the person of Ferenc Gyurcsány.

Similarly to Orbán, although by a different path, Gyurcsány had risen to prominence from the rural peripheries of Hungarian society owing to a combination of drive, talent and knack for timely transformation. As the leader of the Organization of Young Communists in the late eighties, he had fought a rear-guard battle to infuse the moribund organization with a fresher spirit. Following the collapse of the party-state, he redefined himself as a businessman and in due course became a billionaire. He returned to politics in 2002, after Orbán's coalition was defeated by the Socialist-liberal alliance. His aim was to transform the Socialist Party from a lumbering giant weighed down by a ramified network of interests into a dynamic twenty-first-century party that would combine free-market principles with social democracy à la Blair and Giddens. The old Socialist elite viewed him with suspicion as a liberal in disguise. He did in fact enjoy the Liberals' support, however, and the Socialists could not hope to stay in power without their partnership.

Almost instantly following his appointment, Gyurcsány's reformist energies were dissipated by the intensely polarized force field in which he had to operate. The Socialist Party base had little understanding for Gyurcsány's eagerness to reign in the budget deficit created by Medgyessy, and the strong men of the party resisted reforms for fear of inviting demagogical attacks by Fidesz. Faced with an increasingly alarming economic situation after his remarkable reelection in spring 2006—he was the first prime minister to be reelected since 1990—Gyurcsány gave a frantic, expletive-filled speech at a closed-door meeting of Socialist MPs held late in May 2006. “No European country has done something as boneheaded as we have. Obviously, we lied throughout the last year-and-a-half, two years. […] I almost perished because I had to pretend for eighteen months that we were governing. Instead we lied morning, evening, night.” He urged his fellow-Socialists to finally stop worrying about reelection and stand behind the required unpopular measures.

The question of how an audiotape of this speech reached multiple media outlets on 17 September 2006 remains an unsolved puzzle. What is certain is that already in July, Fidesz had launched a campaign for the upcoming nationwide municipal elections that centered on the accusation that the Gyurcsány government had been lying. Following the leaking of Gyurcsány's speech, Fidesz pounced on the admission of lies without missing a beat, demanding new parliamentary elections. In the wave of fury that instantly engulfed Hungary, the Right conveniently ignored the fact that Gyurcsány had actually called for an end to the lies. Nor was it acknowledged that unrealistic campaign promises and the manipulation of economic indicators had been a mainstay of the Fidesz campaign as well. For many people, it seems, the source of the shock was not the revelation of some hitherto unknown fact so much as the combination of secrecy and brutal candor about a truth they had known all along. Had Gyurcsány made the same revelation in a televised public address, the shock might have been more fruitful. Because he shrank back from such a courageous move, righteous indignation over the secrecy of the speech precluded attention to its potentially cathartic content.

And the indignation was tremendous. On 18 September a crowd of violent hooligans torched cars and attacked underequipped and undertrained police forces with stones and iron rods, eventually forcing its way inside the building of Hungarian Television. Events once again came to a head on 23 October, the fiftieth anniversary of the 1956 revolution, when commemorations in the capital were attended by dignitaries from dozens of foreign countries. Strained to its capacity by the security demands and confused by hooligans' diversionary attacks, the police failed to keep the peaceful protesters attending the Fidesz demonstration apart from increasingly violent far-right provocateurs. In the chaos that ensued, peaceful protesters too became injured.Footnote ³³ In all, 326 civilians and 399 policemen were injured in the course of the autumn riots. Although the government set up a committee of independent experts to investigate these events, its detailed 260-page report, released in February 2007, was instantly dismissed by Fidesz as a propagandistic attempt at whitewashing a brutal counterrevolutionary crackdown.Footnote ³⁴

If the rift dividing Hungarian society had often seemed unbridgeable, after autumn 2006 it turned into a gaping chasm that swallowed up the last remnants of consensus. Gyurcsány refused to step down and the coalition parties rallied behind him. His admirers praised him for the mettle he had shown by defying the retrograde wing of his party and deplored the opportunism of the opposition. Others in the left-liberal camp refused to sanction lies in politics but saw Orbán as the greatest threat to Hungarian democracy and hence reluctantly came to Gyurcsány's defense. Unable to oust Gyurcsány, Fidesz opted for a strategy that Ákos Szilágyi aptly described as the “simulation of interregnum,” namely, the projection of a pervasive sense of lawlessness.Footnote ³⁵ The leaked speech and the ensuing chaos were invoked as proof that the prime minister was a deranged usurper. It now became a guiding tenet of the opposition that the regime change begun in 1989 could not be completed without circumventing the institutions of representative democracy—either by quasi-revolutionary means or through the exercise of direct democracy, as in the March 2008 referendum that became the undoing of the Gyurcsány government's healthcare reform initiative. To the extent that Fidesz continued to participate at all in the procedures of representative democracy, its strategy remained relentlessly obstructionist. The resultant deadlock paralyzed the country for two and a half years.

Early in 2008, writer Rudolf Ungváry summarized the situation by invoking an analogy of Austro-Hungarian provenance. He compared the reformism of the Gyurcsány government to the enlightened absolutism of Habsburg monarch Joseph II, who was forced to retract his reforms on his deathbed in 1790. “Enlightened absolutism,” wrote Ungváry, “is always condemned to failure: The sooner this occurs the better. That way its destructive effects do not last that long. The specter of redemption from above engenders only hatred.”Footnote ³⁶ Invoking what he saw as an ineluctable necessity shown by the path travelled by such countries as Spain, Greece and Chile from backwardness through dictatorship to democracy, Ungváry argued that Hungary could not be spared the ordeal of right-wing authoritarianism. Once the Right found itself in government, he suggested, the global environment would force it to become more democratic. Until such time, however, the Left did not stand a chance and its sole remaining option, Ungváry claimed, was to hammer out an energetic agenda for the coming era of right-wing hegemony.Footnote ³⁷

Regardless of how much trust one is willing to place in such long-term projections, it is clear that the ideological warfare of the post-transition era brought the country to a dead end in the first decade of the 2000s. That warfare wrought damage mainly in two areas. The first, relatively obvious, one was the economy. To an increasing degree the two sides forced one another into unrealistic campaign promises, while well-founded fear of demagogical attacks by the opposition made successive governments reluctant to undertake economic reforms. The series of painful but necessary economic reforms that culminated in 1996 all but came to a halt in the late 1990s.

The second, and probably more lasting, form of damage was to the country's social fabric and its political discourse. Due to the resurfacing of old ideological frontlines, families, friendships, schools and public institutions were now rife with conflict. During the preceding decades, Hungarian society had not had the chance to develop the cultural mechanisms required for containing and channeling such conflicts; basic trust towards fellow citizens and habits of rational argumentation were sorely lacking. The country's social fabric simply could not sustain the strains generated by the ideological strife of the post-transition era. Its atomizing effects were all the more devastating as they exacerbated the preexisting loss of social solidarity wrought by the crassly hierarchical society of the interwar period and the incongruous “mixed economy” of the post-1968 consolidation era.Footnote ³⁸ The overpoliticization of everyday life went along with an emptying of political discourse of real substance and eventually resulted in a widespread disgust with politics—a hardened version of the apolitical mindset that prevailed during the Kádár era. Fatigue caused by constant economic insecurity was exacerbated by daily experiences of corruption, nepotism, and dysfunctional institutions. Repeatedly told after 1990 that they must make sacrifices for the sake of a better future, while that bright horizon kept forever receding, most Hungarians lost their patience with the status quo. For them, parliamentary politics, constitutionality and the rule of law had become empty words.

It is of more than symbolic significance, then, that the two major rival parties of the post-1989 years for which these principles were self-evident—the conservative MDF and the liberal SZDSZ party—succumbed almost simultaneously to the polarizing strategies of Viktor Orbán. Unable to recover from the vicissitudes of the first post-transition coalition between 1990 and 1994, MDF had long been languishing in the role of a minor player. Still, Orbán's second election defeat in 2006 led many conservatives to pin their hopes on the new generation of MDF as a moderate, no-nonsense alternative to Orbán's brand of militant populism. At just this point, however, MDF became mired in one of the murkiest scandals in recent Hungarian history, revolving around the abuse of secret service resources by agents with Fidesz ties who sought to orchestrate a coup in MDF. In the aftermath of the first revelations, it was, bizarrely enough, the victim of this abuse, MDF president Ibolya Dávid, who became the target of police investigation, confirming in the eyes of many observers the suspicion that the prosecutor's office was under Fidesz influence even during the years of the Gyurcsány government. Whatever the precise facts of the matter, the proceedings and their tendentious coverage by the right-wing media ensured the demise of MDF and the continued hegemony of Fidesz on the Right.

The other party that vanished from the scene is the liberal SZDSZ. The erstwhile precursor and later senior ally of Fidesz eventually became its most hated rival, an uncomfortable reminder of the liberal values once held by Orbán and his friends. Throughout the 1990s, the Liberals' commitment to constitutionality, pluralism, and minority rights secured them the loyalty of the intelligentsia. Equally importantly, however, SZDSZ was the only party that unambiguously espoused capitalism and fiscal discipline. In all three tension-fraught government coalitions with the Socialist Party (1994–98 and 2002–2010), it fell to the Liberals to counter the populist leanings of the chronically reform-averse Socialists. It was thus easy for Fidesz to turn the Liberal Party into the main culprit for the shortcomings of the left-liberal coalition. At a time when the very word “capitalism” had become shorthand for unprecedented inequality and uncertainty, the increasingly neoliberal cast of SZDSZ struck a growing segment of their base as a sign of callous dogmatism. Following internecine struggles, all prominent politicians of SZDSZ quit the party and support for it dropped below the critical threshold.

By the time of the 2010 elections, the demise of the two major parties of the transition era had left the political landscape divided between two forces: On the one side was Fidesz, openly contemptuous of liberal democracy, and on the other was the Socialist Party founded on the ruins of the party-state, lacking genuine commitment to left-wing values, increasingly reliant on moneyed sponsors and pensioner voters. While the processes that led to this outcome had to do with unresolved tensions in Hungarian history, they were significantly reinforced by broader tendencies. Throughout the world the increasing complexity and interconnectedness of economic systems, together with the information revolution, threaten to render classical forms of conservativism and liberalism obsolete. The global financial crisis that began in 2008 brought the bad news that parliamentary democracy and the free market cannot guarantee stability even in those parts of the world in which they have robust cultural roots. By the time this news reached Hungarian politicians, they had already been laboring for years under the burden of the recognition that the familiar dogmas of conservativism and liberalism offer little guidance as to how a society might, in the first place, become a mature democracy and a participant in the global market. The transition that caused so much upheaval in the Western world, where it was allowed to take its course over centuries, is unlikely to proceed smoothly in its forcibly accelerated form.

Postscript: The End of the Third Republic

The original version of this paper was written in the wake of the twentieth anniversary of the 1989 transition. By the time it goes to press three years later, the term “post-transition Hungary” in its title has acquired a new topicality and a new meaning that is considerably less upbeat than the one it originally had. The Third Republic inaugurated in 1989 is now a thing of the past, and Hungarians are trying to come to grips with the dire consequences of another regime change. This development seems ominous enough to warrant the addition of a postscript that outlines the defining features of the new regime, for which no obvious precedent exists. It is my hope that the historical account offered in the above and the ensuing analysis of the emergent regime will shed light on one another. Although limitations of space force me to concentrate on the central facts of the matter, I shall also note a few Austro-Hungarian themes that have a bearing on the current situation.

The elections of April 2010 ushered in a transition whose scale can only be compared to the one that led to the 1990 elections. The outcome of the elections had been a foregone conclusion since the autumn of 2006, which left the Socialist-Liberal coalition fatally compromised. The levelheaded Gordon Bajnai, who led the caretaker government set up after Ferenc Gyurcsány's resignation in March 2009, had made it clear at the outset that he had no intention of running in 2010. Realizing that an aggressive stance might alienate moderates and mobilize a listless but still-sizable Socialist base, Fidesz opted for a low-key campaign with a program consisting of empty generalities.Footnote ³⁹ The strategy paid off. The 2010 elections had the second-lowest participation rate since 1989, yet the absence of a viable rival meant that a mere 53 percent of the votes cast secured for Fidesz the coveted two-thirds supermajority in parliament.

According to the self-legitimizing myth that is now being propagated by the Fidesz-friendly media, however, the lackluster 2010 elections amounted to nothing less than a “revolution in the voting booths,” resulting in an unprecedented mandate for the ruling party. In this view, 1989 had brought no genuine change, and the outburst of police brutality in the autumn of 2006 was just another totalitarian crackdown continuous with the crushing of the 1956 revolution. This myth was enshrined in the June 2010 Declaration of the System of National Co-Operation, a bouquet of bombastic platitudes and falsehoods recalling the Stalinist era, whose text must now be displayed in all government administration buildings.

Upon taking power, Orbán set about implementing the vision that he had sketched out two months prior to the elections: Fidesz had to transcend the partisan dualism of post-transition Hungary and establish a “central force field” for decades to come. What began in the summer of 2010 is accordingly a complete remaking of Hungary that has left no area of life unchanged. In the system forged over the past two years, economic and social policies, institutional structures, and legal technicalities that are seemingly disconnected from one another work together like cogwheels in an elaborate machine. Such is the scope and the speed of the overhaul that observers struggle even just to get the facts right, let alone to grasp the overall design of the emerging system.Footnote ⁴⁰

Although disorienting opponents by going on the offensive on multiple fronts simultaneously is evidently central to the strategy of the ruling party, the overriding objective of the changes implemented by the Fidesz supermajority is clear enough. The goal is to keep Fidesz in power and to weaken or eliminate the checks and balances constraining its power. Central to this power-grab has been the wholesale refashioning of the country's legal system. As Erin K. Jenne and Cas Mudde note, whereas most authoritarian regimes bend or break rules, the Fidesz supermajority has rewritten them, posing a more fundamental challenge to liberal democracy.Footnote ⁴¹ In its first year alone, the Fidesz supermajority passed more than three hundred new laws, with hardly any dissenting votes from Fidesz MPs. Instead of being proposed by the government and then scrutinized in the expert committees of the parliament, most of these new laws were introduced as private member bills, bypassing parliamentary committees. Changes in the house rules mean that drafts could now be voted through on extremely short notice, with any number of last-minute amendments. The parliament has thus been reduced to a rubber-stamping instrument.

It was in this spirit that the Orbán government embarked on the dismantling of Hungarian constitutionality.Footnote ⁴² In effect, the Orbán regime broke with what Jan-Werner Müller calls “the post-war constitutional settlement” underpinning postwar European democracies, namely, the idea (developed by Austrian legal theorist Hans Kelsen) that, in order to avert the historically proven dangers of unchecked popular sovereignty, laws passed by the parliamentary majority must also be submitted to constitutional review by an expert body.Footnote ⁴³ Tellingly, Fidesz dismissed the 1989 Constitution as a Communist leftover constraining the will of the Hungarian people. Yet if there was reason enough to doubt Orbán's prerogative to represent the popular will pure and simple, his claim about the Communist character of the constitution was patently false. To be sure, the Constitution that was in effect in 2010 dated back to 1949. However, virtually all of it had been rewritten in a democratic spirit in the 1989 roundtable discussions involving all major political forces at the time, including Viktor Orbán himself. While in opposition, moreover, Orbán had no qualms about appealing to its authority.Footnote ⁴⁴

If the 1989 Constitution could remain immune to the partisan wrangles of the post-transition era, this was also thanks to the work of the internationally respected Constitutional Court. That pillar of Hungarian democracy, however, was among the first to come under attack after Orbán returned to power in 2010. The parliamentary supermajority first provoked a showdown with the Court by levying a 98 percent retroactive tax upon the retirement bonuses that had been handed out to state employees over the previous five years. It then used the Court's (predictable) ruling against this measure as a pretext for a constitutional amendment that excluded all matters affecting the budget from the jurisdiction of the Constitutional Court. In addition, the supermajority passed a constitutional amendment that raised the number of judges on the Constitutional Court and eliminated the need for multiparty agreement in the nomination process, thereby paving the road for the appointment of new judges whose partisan loyalties were well known. Hamstrung and packed, the Constitutional Court refrained from striking down a number of blatantly unconstitutional laws. In the few cases when the Court did issue critical rulings—widely greeted as evidence that checks and balances still existed—they usually sidestepped key questions of principle and were undermined by the dissenting opinions of recent appointees, or simply came too late to make much difference.Footnote ⁴⁵

Following a flurry of amendments to the 1989 Constitution that served the ruling party's interests, Fidesz finally took the most radical step. Having scrapped a rule that required four-fifths of parliamentary representatives to agree on the procedures for drafting a new constitution, the parliamentary supermajority began to fashion a new Basic Law. The aspiration for a break from the Communist past did not prevent Orbán from including three former members of the pre-1989 Communist party among the six senior figures entrusted with the task of outlining the notional framework for the draft constitution.Footnote ⁴⁶ Garnering criticism from the Venice Commission that advises the European Council on legal matters, the government announced an extremely tight timetable for the drafting of the new constitution. The procedure put paid to every hope that this could be anything other than an ideologically freighted, partisan legislation. Faced with the supermajority juggernaut and realizing that they were about to be used as stage props in a political spectacle, the Socialists and the new liberal-green party decided to boycott the parliamentary debate. To put a democratic veneer on the procedure, the government initiated a “national consultation” in place of a referendum. A questionnaire sent to all citizens asked them to choose among alternative answers to twelve questions, none of which had much bearing on the core provisions of the draft. Less than 12 percent of the questionnaires was returned, which the government tried to pass off as a proof of broad popular support. How the responses were evaluated remains unclear. A mere month after the draft constitution was introduced as a private member bill, on 25 April 2011 the president of the republic signed the new constitution. That day was the first anniversary of the election victory of Fidesz, which happened to coincide with Easter Monday. In keeping with the ruling party's penchant for self-aggrandizing gestures, the enactment of the legislation was hailed as a national resurrection of sorts.

The so-called “Easter Constitution” was not quite a constitution, however. Carrying the more modest-sounding title “Basic Law,” the legislation reserves the lofty status of a constitution for something else, invoked in the rambling preamble titled “National Profession of Faith.” This text solemnly lists the things Hungarians must honor, believe, and be proud of, including the grandeur of the nation and the “nation-preserving power” of Christianity. Contrary to Orbán's populist rhetoric, this preamble anchors the legitimacy of the Basic Law not in the popular will but in a nebulous entity called “the historical constitution” of the nation, ostensibly embodied in the Holy Crown. This is, then, the culmination of Viktor Orbán's long flirtation with the controversial Doctrine of the Holy Crown, a legal theory dating back to the eleventh century that was canonized in 1517 to legitimize an oppressive feudal order. The return to the Middle Ages combines in the preamble with a construal of twentieth-century history that tacitly endorses the interwar-era Horthy-regime and tendentially absolves the country from historical responsibility for the crimes perpetrated between the German occupation of the country in 1944 and the 1990 election. This revisionist view of Hungarian history is to serve as a binding guideline for future legislation and constitutional review.

In keeping with the archaic spirit of the preamble, the term “republic” is dropped from the official name of the country, which is now “Hungary” pure and simple. To be sure, the document declares that Hungary is a republic and pays lip service to basic rights and freedoms. These are no longer unconditional, however, but take second seat to the individual's obligations toward the community. The erosion of basic rights is evident from the elimination of the office of the independent data protection ombudsman, as well as from new legislation that establishes a secret service empowered to collect unlimited data and conduct secret surveillance without judicial warrant.Footnote ⁴⁷

The Basic Law maximizes the elbow room of the current Fidesz supermajority and at the same time restricts the freedom of future legislative bodies by expanding the domain of so-called cardinal laws, which cannot be changed without a two-thirds majority. It gives the current parliament a mandate to pass cardinal laws regulating such key matters as the acquisition of citizenship, party financing, the protection of families, the protection of information and privacy, mandatory public work in a state of emergency, the status of the churches, the frequency of parliamentary sessions, the operation of several key state offices, and, remarkably enough, even taxation. Although the “historical constitution” outlined in the National Confession of Faith furnishes legislators with binding, if vague, ideological guidelines for the drafting of the cardinal laws, these cardinal laws themselves are not supposed to be subject to evaluation by the Constitutional Court but are to serve as criteria for future constitutional review. As a result, a wide range of matters on which democratically elected parliaments are normally free to change policy are now regulated by laws that are extremely difficult to change.

Most worryingly, the new constitutional framework ensures the future dominance of Fidesz even in the unlikely event that the continuous tweaking of election rules will not suffice for the electoral victory of the current ruling party. The Basic Law ensures that trustworthy Fidesz cadres are appointed, with terms extending well beyond the next elections, to such key offices as that of the President of the Republic, the State Prosecutor, the State Audit Office, the National Media Authority, and the National Data Authority. Severely violating the separation of powers, the Fidesz supermajority added a last-minute constitutional amendment that forces hundreds of judges and attorneys into early retirement, allowing the ruling party to appoint its own people to those posts. A close friend of the Orbán family and the wife of a prominent Fidesz MP who drafted the Basic Law has been appointed to the head of the new National Judicial Authority and vested with the power to reassign cases from one court to another. The Basic Law gives the Budgetary Council, soon to be packed with Fidesz appointees, the right to veto the budget, and if the budget cannot be passed, the president of the country, another prominent Fidesz member, may disband parliament. Each year in March, the ruling party will thus have the option of calling for early elections, and even if it loses, its appointees will be in the position to tie the hands of the next government. For a foretaste of what this could mean, one may recall the lengths to which Fidesz was willing to go to obstruct the work of the Socialist-liberal coalition between 2002 and 2010, when their capacity to do so was still limited.

The ruling party has thus entrenched its dominance in the institutional-legal framework of the country.Footnote ⁴⁸ Not only is the resultant system at odds with the European Union's commitment to such basic principles as the separation of powers and the accountability and removability of governments; it also violates a key constitutional principle descended from the 1222 Golden Bull, also retained in the Basic Law, according to which no one may attempt to acquire exclusive possession of power and everyone must oppose such attempts.Footnote ⁴⁹ This has led some experts to go so far as to argue that the legal-constitutional overhaul undertaken by Fidesz amounts to a full-blown anti-constitutional coup.Footnote ⁵⁰ Since the Basic Law is fundamentally discontinuous with Hungary's constitutional tradition, and since the legal system that it founds is inflexible in the extreme, the restoration of democratic constitutionality will almost certainly require some severing of legal continuity with respect to the Basic Law.

In fact, a mere six months after the Basic Law came into effect, its integrity, such as it was, already began to crumble under the legislative onslaught of the ruling party itself. Whenever the Orbán government's agenda called for a law that was at odds with the Basic Law, the legal experts of Fidesz simply incorporated that provision into the Basic Law (or, what came to the same, into the so-called “temporary provisions” ostensibly regulating the transition from the 1989 Constitution to the new one). They could do so because it was the default position of the packed Constitutional Court that constitutional amendments were not subject to constitutional review. In the one notable instance when the Constitutional Court took a less lenient stance, issuing a forceful ruling against the controversial amendment about voter registration, Fidesz responded by amending its own basic law to restrict the jurisdiction of the Court even further. According to the February 2013 amendment supported unanimously by the Fidesz supermajority, the Court may only invoke procedural arguments, but not substantive ones, to strike down constitutional amendments; and it may not take its earlier rulings based on the 1989 Constitution into consideration.

Constitutional entrenchment is, however, only one of the factors, although a crucial one, that makes the changes implemented by the Fidesz supermajority exceedingly difficult to reverse. In the heated international debates over Hungarian constitutionality, little or no attention has been given to the vast project of social engineering now underway in Hungary. Without recognizing this aspect of the Orbán regime, however, it is not possible to understand how it can recruit such formidable resources in its own support and how it can contain the mounting frustration of the citizenry. Harkening back to the efforts of the interwar-era Horthy regime to strengthen the so-called “Christian middle class,” the Orbán government is intent on creating a national bourgeoisie. Privileged and loyal to Fidesz, this new elite is to ensure the dominance of the party line in the state apparatus, the media, culture, and of course in the voting booths.

The pillars of this new class are the powerful businessmen who swore fealty to Orbán in the late 1990s and early 2000s. In many sectors of the economy, the companies owned by these oligarchs now enjoy such blatant preferential treatment that other businesses no longer bother to make competitive bids in public procurement projects. Likewise, when state-owned tracts of land are distributed for long-term lease, it is not local farmers who are awarded these lands and the generous EU agricultural subsidies that go with them but businessmen with Fidesz ties, in some cases with ties to Viktor Orbán himself. While corruption was rampant under previous governments, too, under Orbán it has been taken to an altogether different level. Lack of transparency in the legislative process, political interference in control institutions, and lax party financing regulations have conspired to create what the recent country report of anti-corruption watchdog Transparency International describes as a “symbiotic relationship between the political and the business elite,” concluding that “the Hungarian state has been captured by powerful interest groups.”Footnote ⁵¹

Beside state capture, the government's other powerful tool for bringing about a massive social realignment is the elimination of progressive taxation. Causing an increase in taxes for three out of four Hungarians, the flat-rate income tax introduced on 1 January 2011 is meant to foster the emergence of a new moneyed class indebted to Fidesz. Amid the frenzied and often amateurish improvisation that has been the hallmark of the Orbán government's economic policy, the one element that survives every reversal and modification, apparently enjoying sacrosanct status, is the flat-rate income tax. It is, moreover, buttressed by an array of new policies that privilege the new elite while disenfranchising the poor. Instead of helping the destitute and marginalized masses that constitute the dismal legacy of the post-transition era, the Orbán government has effectively annulled the social contract with these segments of society. Hungarian Roma are especially hard hit. The criminalization of homelessness is enshrined in the Basic Law. A new law restricting unemployment aid has forced more than a hundred thousand unemployed people into public works projects, run by the police, that are exploitative and economically inefficient.Footnote ⁵² Cases have come to light in which workers trapped in this scheme or prison inmates were rented out at a low cost to Fidesz officials and mayors, who then worked these people on their privately owned fields.

What little social mobility existed before 2010 has been severely curtailed by the wholesale overhaul of the system of education. The school leaving age has been lowered from eighteen to sixteen years. Educational resources are being redistributed in favor of vocational training, suggesting that the government is less interested in fostering a flexible, innovative workforce than in satisfying businesses' need for cheap labor. The number of state-subsidized slots in higher education has been drastically reduced. To obtain one of these slots, students must now sign a contract that obliges them to work in Hungary for twice the amount of time spent in higher education—or repay tuition costs out of pocket.

Combined with a growing sense of hopelessness, these policies have prompted entire classes of graduating high school students to opt for studying in other EU countries, mainly Austria, Germany, and the United Kingdom. This trend is not limited to university students. According to a March 2012 study, no less than 48 percent of Hungarians under the age of thirty consider emigrating; at least half a million Hungarians, many of them highly educated professionals, already took that step.Footnote ⁵³ This exodus of enterprising young professionals is certain to aggravate the country's demographic crisis and impair its economy. Yet it often seems that the policies forcing energetic and independent-minded Hungarians into emigration are just the negative side of Orbán's anachronistic vision of a future in which most Hungarians earn their livelihood by producing tangible goods, each obediently contributing his or her share to “the central force field.”

One of the chief lessons of the past two years is, however, that the sociopolitical agenda outlined in the above cannot be reconciled with the economic necessities imposed by the world outside Hungary. Soon after Orbán's inauguration, which coincided with the intensification of the Eurozone crisis, the EU declined his ill-timed request to raise the budget deficit target for Hungary. As a result, Orbán found himself trapped by his campaign promises and his attacks on the austerity measures of the Socialist-Liberal government. Unwilling to use his strong mandate to modernize the country's wasteful public sector, he had no choice but to reduce deficit by raising revenue. Instead of increasing taxes on the well-to-do, however, the government resorted to one-off measures. The equivalent of more than ten billion euros was appropriated by the state through the forced nationalization of private pension funds—only to be frittered away on a wasteful budget. A spate of hastily introduced new taxes was introduced, whose disproportionate impact on foreign companies led to capital flight. The financial sector, in particular, has been treated as a cash cow. The government levied the highest bank tax in Europe, as well as a tax that penalizes all financial transactions, including individual account-holders' bill payments. In another controversial move, the state forced banks to allow those with foreign-denominated loans to repay their debt at a below-market exchange rate. Predictably, banks passed on the resultant costs to customers and curbed lending. As credit dried up, investment ground to a halt. The flat-rate income tax that went into effect on 1 January 2011 further deepened the crisis. Attempts at justifying this measure with long-discredited dogmas of Reaganomics were given the lie by a sharp drop in both tax revenue and overall demand. While citizens are bombarded with continuous propaganda about the bright prospects of the maverick Hungarian model, sobering figures, as well as the palpable realities of everyday life, testify all-too clearly to the derailment of the economy. Deep in recession, the country had the second-highest inflation rate in the European Union in 2012. According to 2011 data published by Eurostat, 42.2 percent of Hungarians live in “material deprivation” and 23.1 percent in “severe material deprivation,” the fourth highest figure in the EU. Even after the launching of the public works scheme, only 55.8 percent of the working-age population was actually working in 2011.

It does not help matters that the government has been unable, or rather unwilling, to obtain a stand-by credit line from the IMF to secure the country's sovereign debt against the risk of default. Talks have repeatedly foundered on the international body's objections to the Orbán government's frequent recourse to ad hoc taxes and its push to bring the National Bank under more or less direct government control. Especially after its break with austerity orthodoxy at the Tokyo meeting in autumn 2012—prompted by the failure of austerity packages in Southern Europe—the IMF has repeatedly expressed the worry that the Orbán government's policies can reduce the budget gap in the short run at best, but only at the cost of stifling economic growth and thereby perpetuating a high deficit. This objection touches on one of the centerpieces of Orbán's vision, for restarting growth would require among other things the reinstatement of progressive taxation. Since, moreover, leading EU countries have significant voting power within the IMF, it is not surprising that the conditions posed by the IMF echo the misgivings raised in Brussels about the elimination of checks and balances and the erosion of rule of law in Orbán's Hungary.

Always ready to tap into old fantasies of the Hungarian David defying a foreign Goliath, Orbán responded to the conditions of the IMF by declaring an “economic war of independence.” IMF and EU officials were likened to colonizers and Soviet soldiers. Coming from the prime minister of a country in which 97 percent of all infrastructural development between 2009 and 2012 was made possible by EU cohesion funds, this strident rhetoric was hard to justify. Nonetheless, it found considerable resonance within Hungary. What it could not change was markets' perception that lack of access to an IMF credit line meant an increased risk of default. The haphazard policies of the government undermined its credibility, sending the interest rate on Hungary's sovereign debt to unsustainable levels. With the country's economy downgraded to junk status in November 2011, the government found itself in a double bind. In order to calm markets, it had to resume negotiations with the IMF. However, in order to preserve its elbow room, and in order not to disappoint supporters who had been fed anti-IMF propaganda for an entire year, the government had to make sure that no agreement was actually reached. The result was a yearlong alternation between conciliatory gestures and sabotage, with staggering economic costs to the country.Footnote ⁵⁴

On every foreign policy front, the Orbán government has gone out of its way to flaunt its disregard for the agenda of the European Union. The decision not to join the Euro Plus Pact and the announcement that Hungary would not join the Eurozone in the foreseeable future caused relatively few ripples. More than a few eyebrows were raised, however, by Orbán's openly stated view that such autocratic regimes as Russia, China, Saudi Arabia and Azerbaijan were preferable as business partners to the EU and the IMF. Orbán has often talked about Hungary's vanguard role in opening Europe to Asia and shown a penchant for Spenglerian pronouncements about the decline of Europe. In July 2012, he stated that, unlike Scandinavians, “a people of half-Asian stock such as ourselves” was never going to work together for a common goal without a leadership that displays “force.” “Let us hope,” he said, “that the dear God will help us and we won't have to invent a new political system in place of democracy.” Declarations of allegiance to Hungarians' Asian roots and pagan past—a cherished theme of Hungarian Fascists since the 1930s—were followed up with diplomatic gestures that many find hard to stomach.Footnote ⁵⁵ There are worries, as well, about the Orbán government's meddling in the internal politics of neighboring countries. In Romania as well as Slovakia, Fidesz turned against the moderate parties representing the Hungarian minority, which have had considerable success combining advocacy of minority rights with outreach to the majority. Instead, Fidesz chose to support more confrontational ethnic Hungarian parties that can be counted on to encourage their supporters to vote for Fidesz in the next elections in Hungary (when, for the first time, ethnic Hungarian citizens of other countries will also be able to vote).

It was, however, an internal affair that brought the government's most dramatic international confrontation to date. For those who remember the period between 1998 and 2002, the new government's push to establish media hegemony came as no surprise. Having learned from his defeat in the 2002 elections, Orbán and the businessmen close to him built a media empire that gradually dwarfed the once-powerful left-liberal media. Following the 2010 elections, right-wing media groups and the state apparatus merged into an omnipresent propaganda machine.Footnote ⁵⁶ State-owned radio and TV channels have undergone thoroughgoing Gleichschaltung and are now widely seen to have become mere mouthpieces for government propaganda. The remaining privately owned outlets that present alternative viewpoints are vulnerable to government pressure, exerted through the discriminatory distribution of public advertisement spending and the use of the tax authority to bully businesses foolish enough to advertise in politically unreliable media outlets. It is thus all the more difficult to understand why Orbán saw any need to scandalize international opinion by passing a law that provides for a partisan media authority vested with the power to control media content.

The passage of the law overshadowed Hungary's assumption of the rotating EU presidency on 1 January 2011 and led to a showdown between European Parliament representatives and a characteristically defiant Orbán. However reluctant to interfere with the internal affairs of a member state, the European Union could no longer ignore the violation of its charter by the government at its helm; doing so would have been tantamount to admitting that the EU was just a glorified customs union without political principles. There were worries that any intervention would lead to a repeat of the debacle in 2000 caused by Jörg Haider's participation in the Austrian coalition government, when European outrage only strengthened Austrian support for Haider. This analogy is seriously misleading, however, for Haider could have never dreamt of the sort of unchecked power that Orbán now enjoys. In the end, the pressure exerted by the EU on the Orbán government only sufficed for a few technical alterations to the media law, allowing both parties to save face. Yet the EU did not manage to loosen Orbán's grip on the media. Although dissenting media voices continue to thrive in a small corner of the printed and the online media market, the overwhelming majority of Hungarians get their news from radio and television channels that are either purged of politics or show levels of self-censorship and pro-government bias unseen since the Communist era.

The showdown over the media law has thus laid bare the inability of the EU to enforce basic political principles in member states. The mandate of the EU is limited to raising human rights-related objections to particular legislative acts—objections that are easy to defuse by means of technical changes—but does not extend to assessing an overarching system of interlocking regulations. To be sure, the threat of suspending EU structural funds remains a potent weapon in the hands of the EU, since use of that sanction would prevent the government from going on a spending spree in the run-up to the next elections, as well as cutting off the oligarchs supporting Orbán from lucrative infrastructural development projects. However, it is only to enforce fiscal discipline that the EU may resort to this sanction.

If the European Union has had great difficulty crafting an adequate response to the changes in Hungary, it is also because Orbán has astutely taken advantage of the crisis of the EU. The debatable success of the European Union's response to the Eurozone crisis has made it all-too easy for the Orbán regime to defend its so-called “unorthodox economics.” As Jacques Rupnik noted recently, democracy in the EU is challenged on the one hand by technocratic crisis management and on the other by a populist backlash against the growing influence of unelected experts.Footnote ⁵⁷ An emblematic European figure of the latter movement, Orbán often draws a highly effective contrast between the tenuous legitimation of EU officials and his own allegedly robust popular mandate. He has also astutely used the ideological divide in the European Union to rally European conservatives behind himself, dismissing his foreign critics as representatives of an ossified post-1968 Left that feels threatened by his putative revival of Christian values. The leading politicians of the center-right European People's Party, of which Fidesz is a member and which has the largest caucus in the European Parliament, have been muted in their criticism of the Orbán regime.

Moreover, members of the diplomatic corps and public relations experts on the government's payroll have had some success spreading the message that only Fidesz can defuse the ticking bomb of the virulently racist far-right party Jobbik, which has 12 percent of seats in parliament. The fact that the very roots of Jobbik can be traced back to Orbán's 2002 failed reelection campaign is more than just an anecdotal detail, however. Instead of taking the wind out of Jobbik's sails, the concessions made by the ruling party to the extreme Right and the adoption of racist, irredentist, neo-pagan themes by some Fidesz politicians and numerous pro-Fidesz commentators have only had the effect of turning far-right discourse into a legitimate-seeming feature of the political mainstream, forcing Jobbik to take ever more militant positions.Footnote ⁵⁸

The far-right threat brings us to the crucial question of how Hungarian society is responding to worsening conditions and the emergence of an authoritarian regime. Thanks to its disciplined core base, its highly efficient apparatus, and virtually unlimited access to the media, the ruling party has had no difficulty mobilizing hundreds of thousands of people for so-called Peace Rallies held in support of the government. Polls suggest, to be sure, that Fidesz lost the backing of about half of its former voters. Yet none of the parties represented in parliament have managed to capitalize thus far on this process of erosion. Discredited by eight years of dysfunctional and corrupt governance, the Socialist Party remains vague on matters of principle, while the small liberal split-off party founded by Ferenc Gyurcsány is making little headway against unremitting stigmatization. The vague mix of political liberalism, critique of capitalism, and green values offered by the party Politics Can Be Different (LMP) has also failed to propel the party past the 5 percent threshold by a comfortable margin. As for the Neo-Nazi Jobbik party, poll figures suggest that internecine struggles have kept it from broadening its base outside areas where tensions between Roma and non-Roma populations run high.

Growing disappointment with the ruling party has thus far only added to the mass of undecided voters who are deeply skeptical about politics. Retreat into the private sphere, that pernicious legacy of the Kádár era, is once again the default position. Political participation is weakened by the ongoing erosion of trust and solidarity that began in the Kádár era, combined with abundant anecdotal evidence suggesting that an oppositional stance can actually put one's livelihood in peril. New legislation makes it easy to fire civil servants on short notice, ensuring that those working in public administration toe the party line. With the centralization of the entire public sector and the rising number of political appointees, there is a noticeable change of atmosphere in municipal administrations, schools, hospitals, and cultural institutions. A shocking observation recurs in many anecdotal reports: as was the case until the mid 1980s, many Hungarians nowadays prefer to steer clear of political topics in conversation or lower their voices to express their views.

There have been a number of impressive protest demonstrations, to be sure. However, the largest of these were organized by civilian groups with little patience for questions of policy, strategy, and tactics. In this regard, the formation of the alliance Together 2014 in October 2012 may be a turning point. For the first time civilian organizations converged around a clearly defined agenda of social reconciliation, constitutionality, and rule of law. Moreover, they gave up their blanket condemnation of the political class to join forces with a foundation for good governance led by Gordon Bajnai, the prime minister of the caretaker government that had stabilized the economy in 2009.

Yet those seeking to alter the course of things in Hungary in the 2014 elections are undoubtedly facing an uphill struggle. To be sure, the ruling party's attempt to deter undecided voters by introducing voter registration was so strongly opposed (even among Fidesz supporters) that the idea was dropped in January 2013. Fidesz could afford to yield on this point, however, because an array of other changes to the election system already ensures that it can win the 2014 elections even if it cannot significantly reach beyond its highly organized, 1.5 million-strong core base.Footnote ⁵⁹ By eliminating the second-round run-off, the new election law forces opposition parties, most of whose supporters are known to resist cross-voting, to form a unified platform to avoid fragmentation. Opposition parties are thus hamstrung by an extreme pressure to cooperate in spite of deep disagreements, continuously jeopardizing their credibility in their supporters' eyes. To make things worse, campaign regulations have been changed to minimize the media access of the opposition and maximize the ruling party's ability to get its message across in the guise of “government communication” or with the help of the media empire run by Orbán's right-hand men Lajos Simicska and Zsolt Nyerges.Footnote ⁶⁰ The redrawing of electoral districts and the granting of voting rights to ethnic Hungarians living in neighboring countries is likewise expected to increase the advantage of the ruling party. Following an amendment to the election law, Fidesz delegates now have an overwhelming majority in the Election Commission, raising questions about the reliability of election monitoring. Few doubt the willingness of Fidesz to continue tweaking election rules, or change the election date, with a view to maintaining its advantage even as the political landscape changes. Having painted himself into a corner, Orbán can scarcely risk defeat.

Speaking to a concerned audience on the eve of the passage of the Basic Law in April 2011, the liberal political philosopher János Kis drew an instructive analogy to the Austro-Hungarian Compromise of 1867 as analyzed by István Bibó. Although the Compromise was a “false construction” that obscured the most serious challenges facing the nation, it enabled Hungary to participate in a Europe-wide process of modernization and could therefore survive for five decades. By contrast, the framework grounded in the Orbán government's Basic Law cements an inward-looking system from which all forms of corrective feedback have been eliminated and which only hinders the country's integration into the EU and the world economy. Far from alleviating the crisis of Hungarian democracy, the Basic Law, unilaterally imposed as it is by one party, raises that crisis to a constitutional level. “Its lifespan will not be measured in decades,” Kis predicted. He ended with an admonition:

Kis and other commentators have warned that it will not be possible to avert a cycle of escalating constitutional crises unless the two sides of Hungary's partisan divide converge on a minimal democratic consensus. Recent Hungarian history suggests that it will not be easy to achieve this goal. The implosion of Communism left the apolitical mentality of the Kádár-era by and large intact, and the disappointments of the following two decades were not apt to foster commitment to freedom and democracy either. Perhaps these assets had to come under severe threat before people could learn to value them highly enough to mount a broad-based effort to restore them.

Considering the degree to which deeply ingrained ways of thinking are responsible for the current situation, it would be hard to exaggerate the importance of cultural factors. Since, for the first time in many centuries, Hungary is now struggling with a predicament that cannot be blamed on a foreign power, the prospects for a collective learning process are arguably less dismal than in previous times of crisis. Among the few positive legacies of the twentieth century is, moreover, a rich progressive tradition that is finely attuned to national characteristics and that has indeed become an inexpungeable part of Hungarian culture. Although the current media landscape affords dominance to an agenda that appeals to the worst impulses of a demoralized society, it is hard to imagine that such demagoguery could prevail for long over the less obtrusive but far more resonant voices of such progressives as the poet Endre Ady, the composer Béla Bartók, and the political theorist invoked in this essay, István Bibó.Footnote ⁶²

Finally, even though much of Hungary's recent history shows the continued validity of Bibó's argument about the deleterious aftermath of the Austro-Hungarian Compromise, other aspects of the Austro-Hungarian legacy may actually be enlisted to counteract fatalism about the deformations diagnosed by him. It is worth recalling here a quintessentially Austro-Hungarian virtue, best described perhaps by Robert Musil in his mocking idealization of the “k. & k.” empire:

Described in such terms, Musil's passive fantasy may seem difficult to distinguish from an inconsequential, even irresponsible, brand of irony. When given an active inflection, however, a collective openness to latent possibilities can serve as an antidote against resignation to the putative necessities of national character. Few intellectuals showed a keener sense of the need for such a stance than István Bibó. In his unsparing diagnosis of Hungarian mentalities, Bibó also outlined an activistic, future-oriented variant of what Musil famously called the “sense of possibility.” Bibó's line of thought deserves extensive citation, not only as a reminder of the essential openness of history but also because it helps to explain why for a brief hopeful period in the late 1980s the populist and the urban progressive tradition in Hungary converged around Bibó's legacy.Footnote ⁶⁴ Having noted that each of the European nations with the most clearly defined character—England, France, Russia—became what it is by collectively repudiating its former orientation at a decisive moment, Bibó has this to say about the temptations of national characterology:

As the year 2012 draws to a close, the room for unfolding unrealized possibilities in Hungary seems very limited—in the short run, that is. In the medium and long run, however, the future has never been more open to the realization of the “passive fantasies of spaces yet unfulfilled,” to quote Musil. The spectrum of possible scenarios ranges from the cathartic to the catastrophic. Which of these will be played out depends in no small part on how the changing international environment affects Hungary in the years to come.