Part 1. Events

On 25 October, tens of thousands in Budapest marched against the government’s new proposal to introduce a 0,5 EUR/1GB tax on internet data traffic. After organizers officially closed the event, protesters moved on to the headquarters of the ruling party, Fidesz, brought down part of the fence, threw old computer parts at the building breaking windows, and put an EU flag on the balcony. Protestors announced another demonstration in 48 hours in case the internet tax was not revoked. Fidesz reacted immediately, passing a bill to cap the internet tax at 2,5 EUR for citizens and 16,5 EUR for companies. This time, its technique of announcing harsh measures that can be reduced later, did not work. On Tuesday, October 28 even greater numbers went to the streets in Budapest, and smaller demonstrations were held in 13 Hungarian cities.

Speeches and interviews of organizers framed the case of the internet tax in terms of democracy, freedom of information, and the importance of civil activism in face of the government’s antidemocratic measures and curtailing of civil rights. Another strong frame was that of corruption, and the unsatisfactory economic policies of the government. Contrasted to the background of the United States’ recent blacklisting of top Hungarian officials (according to some sources, including the head of the National Tax Office), the internet tax was featured as symbolic for citizens being made to pay excessive amounts which get lost in the labyrinth of corruption. The bridge between the two frames is constituted by the idea of civil society reclaiming its democratic power and protecting its economic interest. As one organizer put it during the Tuesday Budapest demonstration, “Corruption, lack of principle and irrationality pushes this country into decay. If we can believe in our own strength, we will be able to stop the internet tax, and the politics that disregard Hungarian society.”

Among demonstrators, interpretations were more varied. Similar to recent Bulgarian and Romanian protests, the bulk of demonstrators came from a relatively well-to-do middle class, experiencing a squeeze on its economic as well as moral well-being. The big numbers of protestors are most probably due to higher turn-out among members of this group who so far did not mobilize in response to invitations from politically active opposition groups. Typical answers given by such participants to journalists state a distance from politics and parties, and an outrage on the internet tax, as well as other taxes, cuts, and corruption.

One of the politically active smaller groups in the events is a loose network coalesced through the various civic mobilizations since Fidesz came to power in 2010. In student demonstrations, groups against the transformation of the cultural infrastructure, and numerous actions in the support of constitutional rights and civil liberties, this network pushed a critique of Hungary’s “democracy problem” under the Orbán government. A significant difference that set this network apart from older members of the disintegrating Social-Liberal coalition is that they spoke in the name of civil society, and did not support the former party coalition.

Other politically active groups present in the demonstrations include a small fraction of ultras, who gathered on October 25 for a previously announced demonstration against new regulations at football games, but later joined the events at Fidesz headquarters. An anarchist group and neo-nationalist voices were also present at the October 25 event. At that moment, the promotion of the EU flag was criticized by requests for Hungarian flags to be used too. However, by October 28, the European flag ran the show, as protesters tried to impose one on Parliament, chanted ‘Europe! Europe!’, and saw three Socialist representatives hang another EU flag out from a Parliament window.

Anecdotic experience and random mini-interviews by the press convey a broader range of frames and motivations. Beyond freedom, human rights, indignation over taxes, and European values, protesters speak of rage over elite consumption, poverty, lack of economic opportunities, and migration. In mainstream “democracy” framing, these topics are less prevalent, and appear as illustrations of “unfreedom”.

On the government’s side, a so far unprecedented silence and rigid reaction followed the events. While head of government Viktor Orbán was vacationing in Switzerland, Fidesz politician Szilárd Németh claimed that the bill on internet tax will be passed, providers will be prevented from passing the burden on to consumers, and demonstrators will go home, as they had previously done. Government controlled state media kept almost complete silence in relation to the demonstrations, while government media attributed the protests to a coalition of opposition parties and foreign powers, with allusions to a possible Maidan scenario.

US and European press gave strong visibility to the demonstrations, featuring them as a case of conflict over democracy and civil rights. The European Commission reacted with unusual promptness to the idea of a data traffic tax, and condemned it as part of a larger pattern of Viktor Orban’s government rolling back freedoms. This treatment of the demonstrations did not come as a surprise. In the last couple of weeks, Washington and Brussels went beyond earlier expressions of concerns over Hungarian democracy. President Obama condemned Hungary’s curtailing of civic freedoms, and bracketed it together with non-NATO countries Azerbaijan, Russia, Venezuela and Egypt. Assistant secretary of state for European affairs Victoria Nuland made it clear that there is a tension between NATO membership and Orbán’s politics. In mid-October, top Hungarian officials were blacklisted by the US on grounds of corruption, an evocative gesture towards the government. Calls to exclude Hungary from the EU made it from US to EU headlines. The news on new demonstrations fell into that framework.

One of Viktor Orbán’s main policy lines was to broaden the space of maneuver for his national bourgeois power bloc trading unilateral (Western) for multiple (Western and Eastern) dependence. What he described to voters as a broad opportunity for Hungarian business in a changing world order, however, turned out rather to be the eye of the needle. His efforts to gain a bargaining position as a “bridge” for Eurasian and Chinese economic interests to the heart of the EU happened to hit a nerve at a time of US concer ns over Euro-Atlantic unity in the face of Putin’s Eurasian Economic Union and Europe’s continuing energy dependence on Russia. In the midst of new geopolitical tensions, increasingly framed in the terminology of a new Cold War in the context of ongoing war in the Ukraine, Orbán’s nuclear plant contract with Russia, support for the Southern Stream gas pipeline despite EU prohibition, refusal of gas supplies to the Ukraine, criticism of EU economic sanctions on Russia, and a recent scandal of Russian espionage among Hungarian politicians put Hungary in the role of a possible crack in the Euro-Atlantic shield. The new wave of attention to Hungary’s “democracy problem” is undoubtedly linked to that broader constellation.

Internal and external thematization of the Hungarian demonstrations broadly fed into the logic of the new Cold War discourse. In Western coverage, the internet tax is featured as representative of Orbán’s authoritarianism, as opposed to the Western values of civil liberties and the free market. Hungarian opposition media follow that track. In the formulation of one major liberal news outlet’s analysis, people went on the streets because the internet tax is the embodiment of the illiberal state. The analysis finds the internet tax representative of the Orbán regime for four reasons: 1. the rejection of the basic workings of the market and capitalism; 2. the rejection of the rule of law, contractual discipline, and the value of the given word; 3. the questioning of European values; and 4. a basic misunderstanding of youth, the generation of the future. The government’s reaction gives further fuel to the debate in the same terms, as it treats the internet tax demonstrations in terms of an anti-government political movement, supported by internal opposition helped by the Western powers. Protestors themselves accept and propagate the new Cold War framework – to give one well intended, but evocative example, in the New York Times front page article on the Hungarian demonstrations, the main organizer defines the internet tax as “an attempt to create a digital iron curtain around Hungary”.

By today, Viktor Orbán withdrew the plan for the internet tax in its planned form. Some of the protestors announced a victory gathering for tonight, while another Facebook group is organizing another demonstration for Sunday against the internet tax, state corruption, unreasonable taxes, and the present direction of foreign policy, and for Europe, freedom, transparency and responsible govenment.

Part II. Context

The relationship between democratic representation and people’s sovereignty/political participation is classically defined as a relationship within a nation-state. That premise obscures the global relationships of power that define power struggles and rooms of maneuver for actors within a nation-state. Once those global relationships are taken into consideration, to speak of democracy within a country, one needs to situate that country within the history and hierarchy of the interconnected system of world capitalism. Sovereignty, citizenship and democracy will refer to different objective circumstances and opportunities in various moments and positions within that history. In most cases, with the deepening and expansion of the integration of world capitalism, citizens of one country will hardly have the power to govern their own lives through democratic means within their own states, and such chances will vary enormously according to the hierarchical position of their countries within the present cycle of the world system. Typically, elites of semi-peripheral and peripheral countries will find their decision-making power curtailed by their country’s economic and political dependence from the center. The employment and working conditions of the labor force in the periphery and semi-periphery will depend not only on their own bargaining power within local politics, but also on the priorities of the economies they depend on. Class dynamics within states will take shape not only relative to each other, but relative to transnational alignments of coalitions within the space of the world system.

The history of Hungarian class and elite formation is embedded in changing relationships of dependence. In a semi-peripheral position in the world economy, Hungary’s history has been also shaped by the influence of neighboring empires, increasing or decreasing according to their own positions vis-a-vis cyclical shifts of global historical capitalism. The modern idea of democracy within Hungarian politics was shaped within local struggles wrought in that context. The symbolic opposition of East and West, born in geopolitical struggles of its own, was embodied and manifested internally throughout Hungarian history by various groups who strove for influence on local politics within the power field of multiple dependence. Needless to say, the historical form of those struggles, and the consequent meaning of historical forms of the idea of democracy, did not equal the textbook form.

Hungary’s postsocialist transition to “democracy” happened in a position of dependence on the Euro-Atlantic center through high state debt, loss of Comecon markets, and the need for credit and FDI. Hungary’s unequal development traditionally featured a struggle with technological backwardness and foreign debt. Soviet-type industrialization led to a search for Western loans as soon as 1952. On the eve of the financialization of the postwar world-system under US hegemony, and resulting zigzags of adjustment efforts in global financial flows, Hungary, similar to other East European and Latin American countries, first took up a series of cheap loans in the 1970‘s, and then found itself in a debt trap by the 1980‘s. During the 1990‘s, the depreciation and privatization of state companies, and the partial reintegration into global production chains fed into another mechanism of the financialization period of the US hegemony: the depreciation and movement of productive assets from the core to the peripheries. Hungary’s main resource, its working population, was first pushed out of the full employment positions of the socialist economy, then reintegrated in global production in a new position, as relatively skilled, but cheap labor.

Through the privatization of state socialist economy, capital was concentrated in the hands of national and western capitalists. Simultaneously, the population, previously proletarianized by state socialism, was deprived from the means of production and the political guarantees of work and welfare. For them, post-socialist transition to capitalism and democracy brought an economic crisis comparable to the 1930’s Great Depression, and the prospect of decades-long austerity measures. In the transition to political democracy, the economic interests of this proletarianized population did not come to be represented.

New postsocialist elites soon stabilized into two competing blocs of political-economic networks. In the relation of the national economy to the global economy, both blocs played the role of connecting the Hungarian economy to the capitalist world system in a dependent position, and drawing some profit from it for themselves. Their profiles, however, in fulfilling this function, were different: while one bloc worked as the local technocratic mediator of the interests of international capital, the other focused on the interests of national capital, and the use of the state both in its necessary connections, but also in its antagonisms with international markets. The dominant political ideologies produced by this power structure contained, consequently: in the first bloc, the uncritical embracement of Euro-Atlantic integration, and in the second bloc, a nationalist critique of Euro-Atlantic power, connected to the requirement of a strong state to resist international capital and make space for national bourgeois interests.

In terms of “democracy”, the process of post-socialist transition contained an irremediable contradiction. The transitional package of democracy-cum-capitalism, accepted and served by new elites in the objective situation of Western dependence, contained the requirement that in capitalist integration, the economic interests of social groups proletarianized under Socialism will be harmed. To bridge that contradiction between democratization and interest exclusion, post-socialist elite blocs developed two mutually reinforcing constellations of discursive bridging techniques.

The post-socialist right wing claimed to defend the “national” interest against the coalition of old socialist power and foreign capital, invoking sentiments of national identity to symbolically bridge the gap between the interests of national capital and proletarianized groups. The Socialist-Liberal coalition took over that right wing definition of “national interest”, and built its legitimacy on defending democracy from the nationalist, populist (and often antisemitic) claims. Based on that technique, they came to call themselves “the democratic side”. They identified democracy with a necessary introduction of Western-type institutions of market and democracy, if necessary, against local resistance, with the help of Western powers. Local discontent, defined in terms borrowed from the national bourgeois bloc’s bridging technique, that is, in terms of national self-defense, served as yet another proof of the regressive (nationalist) quality of local society, in itself a threat to the democratic progress. The bridging efforts of the national bourgeoisie, in their turn, could rely on the Socialist-Liberal coalition’s denial of the significance of economic grievances and the symbolic downgrading of the local population. To the “democratic side”’s ascetic, formal and Western-looking democratism they contrasted the compensatory recognition of the Hungarian “people”’s values, where the lack of focus on representation of interests could be bridged by national sentiments and attack on the “democratic side” as agents of foreign powers.

For two decades after the regime change, an inflow of foreign capital in forms of FDI (1990‘s privatization) and transfers (credits in the 2000‘s) helped the Social-Liberal coalition to maintain its power position as mediator of those flows. However, neither new credits or EU transfers, nor partial reindustrialization on a lower position of the industrial value chain based on FDI could finance a budget burdened by mounting debt service. Already by 2006, before the global financial crisis, Hungary’s weak ability to service its debt invited scrutiny by international financial capital. Due to the constant debt service pressure on the state budget, consequent governments were in need to push for a centralization of domestic income. High taxes tended to push private consumption and investment into stagnation, and threatened to turn politically active higher-income groups against the political leadership. To compensate higher-income groups for the high degree of income centralization, fiscal policies were designed to channel wealth from the bottom up. Lower-income groups were compensated through private Keynesian tools, including monetary and fiscal support for household borrowing.

The financial crisis of 2008 hit Hungary in a state of mounting private and public debt, recession since 2006, and the complete delegitimation of Western-looking Social-Liberal leadership, following on from decades of austerity and social polarization, the depletion of the sources of their economic strategy built on Western capital inflow, and a political scandal following a leaked speech of Prime Minister Ferenc Gyurcsány, in which he admitted lying to the people on budget prospects. It was on this basis that, in 2010, the 2/3 parliamentary majority of Fidesz emerged.

Fidesz announced a national “freedom fight” against dependence on Western capital, and a “centralization of the power field” in domestic politics in order to rule out its internal agents. In both symbolic programs, it could rely on strong discontent with Social-Liberal governments and their decades-long devaluation of local society in face of “Western values”. In the years following 2010, it performed the centralization of the power field through multiple changes of the constitution, rewriting electoral law, and bringing state media and cultural infrastructure under its control. Its actual economic policies were aimed at broadening the space of maneuver of national capital, through centralizing non-tradable markets (such as telecommunications), reducing state debt, and substituting dependence on Western capital with multiple dependence. Moves to benefit national capital, at the same time, tightened the opportunities of working people. Consumption taxes were raised, and consequent savings of higher-income groups were channeled into the financing of state debt. Taxes on consumption, on the other side, meant a pressure on the living standards of those on the lower end of the income spectrum. Steps to promote reindustrialization in lower positions of the value chain, also advertised as a policy to create new jobs, included an even harsher reconfiguration of the labor code, and a reorganization of the education system to channel labor in low skill jobs. Fidesz’s quest to substitute Western dependence with multiple dependence led to contracts and concessions hardly any more favorable for Hungarian working people than previous Western requirements. Alongside further marginalization of social costs, new measures of discipline and penalization were introduced.

In 2014, Fidesz was able to keep its 2/3 majority in the parliamentary elections, and won a sweeping majority of local governments on the local elections. Both results were partly due to the lack of a legitimate opposition, and Fidesz’s new election rules. They were also due to its existing broad legitimacy. That legitimacy, however, is threatened by its own aggressive centralization of wealth. To keep its political camp together in spite of those tensions, it presses for further ideological battles against Western domination, and tries to sustain the idea of fighting for general wealth through measures of symbolic redistribution (such as the reduction of the price of energy bills at election time, and the nationalization and political redistribution of licences for tobacco shops). After the 2014 election victory, however, an ever greater austerity package is on the way. The idea of the internet tax itself was born in ongoing bargains between data traffic providers and the government over the distribution of burdens of new telecommunication taxes.

Fidesz’s efforts to frame its own power bloc’s accumulation strategy as the freedom fight of the nation against Western neoliberalism finds its mirror image in the interpretation of Fidesz politics by its opposition (and supporting Western press) as coming from some irrational drive towards authoritarianism and nationalism, which hinders Hungary from becoming a Western country. On the ideological level, that battle is wrought for the well-being of the Hungarian people, based on the bifurcated ideological truths of Western-type liberal modernization, and community-based national development in a multipolar world. On the level of concrete accumulation projects, however, that battle is fought by capitalist fractions over the labor of the Hungarian people. That collision of interests is silenced by decades-long hegemonic constructs of the two fractions’ mutually supporting bridging techniques.

In the 2010-2014 cycle, movements which spoke against the government were successfully reintegrated in the coalition of old opposition parties. However, the actual constituency did not follow the movements’ brands in that incorporation, as illustrated by the parties’ poor performance at the elections. With that additional blow on their low legitimacy, new demonstrations would be harder to incorporate. New opposition parties are, with the exception of the extreme right Jobbik, very small, and their criticisms against the bifurcated system of political legitimation are still silenced by the dual media system of the old parties. But among the Westward-looking educated strata, the main constituency of the present protests, the old Social-Liberal bloc is considered a corrupt and as illegitimate as Fidesz. Can that distance mean a possibility for the new demonstrations to break out of the old dual bridging techniques of dependent accumulation projects, and formulate a new agenda that looks at the interests of working Hungarians? Unfortunately, so far, this is seems improbable.

The most important factor going against that opportunity is the objective circumstance of a geopolitical situation which makes the idea of choosing between dependencies inevitable – since the great powers put the question that way. When Orbán’s efforts push the country in the grip of a new geopolitical tension, the traditional duet of local political ideologies gains new power. The well-being of the people is ever more easily translated into a choice between directions of dependence – and a choice between ruling elites mediating it.

Second, the sphere of political publicity in which the voices of the protests resonate is one formed by interconnected local and external power projects, and their ideologies. Local opposition media as well as Western media eagerly translate the fact of the protests to their own diagnosis: the conflict between Orbán’s nationalist authoritarianism and Western democracy. Mirroring government framings add fuel to the fire.

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Third, protestors themselves speak a political language close to that of the former Socialist-Liberal bloc, and through that, their words are easily fed back into opposition discourse as well as the new Cold War discourse. The most evocative symbol of the events, in that respect, is undoubtedly the use of the EU flag. The historical irony of the case is that while in the regime change, the civil society discourse of an intellectual minority came to legitimate an exclusionary practice of Western-oriented accumulation in the name of democracy, now a broad mobilization of civil society is being channeled into the re-legitimation of that same project.

Some political activists connect the case of the internet to the idea of an active civil society as the way towards a socially just democracy, similar to dissident ideas before 1989, and the democracy-as-participation ideal of many of today’s mobilizations. As much anecdotic evidence suggests, the politically less active constituency relies less on complex political ideologies than on assessments of practical interests, and a sense of indignation in face of Fidesz’s aggressive accumulation project. Europe, in the sense it appeared in various comments after the demonstrations, means a better life than Russia.

To conclude, the Hungarian demonstrations feed into geopolitical struggles and the local political binaries formed in power fields shaped by those struggles. As demonstrators refuse to ally with the opposition side of the old political divide, there seems to be an opening towards a formulation of claims critical of the previous bridging techniques. So far, powerful framing by international and local opposition media, as well as protestors’ own use of the EU flag and of the democracy-autocracy framework, make that unlikely. In either case, the contradiction between the new promises of existing accumulation projects and the actual effect of those projects is not likely to be solved in the near future, and portends future tensions. Looking forwards, critical attention to the vicious circle of internalizing competing accumulation projects would be much needed.

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