In a globalized era, is self-determination necessarily self-destructive? Since 2010, the Hungarian government has seemed set on proving that it is. New legislation aims at further controlling academic institutions, in particular Central European University, that receive funding from outside Hungary. The bill could be voted on as early as this week. It would further harm education in a country whose school system is famously weak, and whose greatest economic need, arguably, is for more citizens who can perform complex, high-value-added jobs. Thousands marched through Budapest this weekend to protest the proposed bill. And yet, in its seventh year, the government of Viktor Orban and his Fidesz Party seems determined, in the name of nationalism, to further weaken the country.

Hungary today is characterized by youth who move abroad, capitalists who are reluctant to invest capital and political non-participation. According to the 2016 Hungary survey of the OECD, “Emigration is dominated by young and skilled workers: surveys suggest that almost half of the Hungarians under the age of 25 are willing to emigrate.” Surveys also suggest most of them won’t come back, despite official efforts like the “Come Home Youth!” program. This missing generation is certainly capable of earning. Remittances have doubled since 2006 and reached as high as 3.6 percent of GDP. They just aren’t capable of earning in Hungary.

The same is true of its businesspeople. As in most countries, capital formation in Hungary is dominated by domestic small and medium-sized enterprises. Year-on-year change in outstanding stock of SME loans in real terms has been negative since 2012. Total factor productivity in Hungary in 2014 was still significantly below its 2006 peak.

Political participation is lively at the edges — whether in the satirical energies of the Two-tailed Dog party or the black-clad nationalism of Jobbik — but elsewhere there is a strong sense of resignation. The government itself has had trouble turning out voters. It spent millions to rally support for a referendum that asked whether Hungarians wanted non-Hungarians (i.e. the European Union in faraway Brussels) to decide who would get to live in the country. It is hard to imagine many citizens of any country endorsing such a proposition, and the great majority of Hungarians who actually voted did not. But despite the government’s insisting for months that this was a matter of intense urgency for the national destiny, only 40 percent of eligible voters turned out, making the referendum’s results non-binding.

At the same time, foreign financing, which has become critical to Hungary’s economy, is not as easily found as it once was. According to the OECD, “the comparative advantages in terms of attracting inward FDI [foreign direct investment] have been eroding over time.” Among these were low taxes; the government responded by deciding to cut them again this year to 9 percent, the lowest corporate tax rate in Europe.

The other main source (along with remittances) of money from abroad is European Union transfers, which in 2004-14 ran at about 2.4 percent of GDP. But these funds are dependent on European politics that, for the moment at least, appear to be turning against Orban and Fidesz.

In March, the heads of Germany, France, Spain and Italy met at Versailles and declared their support for a “multispeed Europe” recognizing that “some countries move faster than others,” as German chancellor Angela Merkel put it. The meeting itself symbolized its conclusion: the four core members (minus Britain) of the EU were deciding on their own what the rest should do. French president Francois Hollande stressed that the new arrangement did not mean that “others would be removed,” but it did mean that others “would not be able to oppose.”

The move was seen as a slap at Hungary and Poland, a signal that they would not be allowed to depart forever from the liberal consensus, particularly on refugees. A German interviewer later asked Merkel, with regard to Hungary and Poland, whether this less forgiving, multi-speed environment would mean subsidies might be reduced or withdrawn as a way to force compliance. She replied: “I would not like to make a threat today, in this interview, but I would like to see that the rule of law, as we understand it, is respected throughout Europe.” It is easy to imagine this non-threat threat turning into the conventional kind.

So the Hungarian people, whose happiness must be the goal of Hungarian nationalism, are to a significant degree leaving the nation, refraining from investing their capital and efforts in the nation, and declining to give birth to enough new Hungarians to replenish the nation — the population peaked in 1981 and is now, at 9.8 million (2015), slightly below the 1960 level. Simultaneously, the foreign companies and governments on whom nationalist Hungary has come to depend are losing interest in it.

Creating An Enemy

These problems are not unique to Hungary. Their commonness in the former Soviet bloc is one reason why authoritarian nationalist governments have become popular there — although they are becoming popular farther west as well. Theoretically, Orban and Fidesz might have reacted to the challenges they face by switching to politics and policies that would convince Hungarian shopkeepers, bankers and students (and maybe even a different cast of foreigners) to change their view and freely place long-term bets on the prosperous future of the Hungarian nation. Instead, Orban looked for a new enemy. He settled on Muslims.

It’s worth a pause to consider how unlikely and unexpected this was. When Orban, upon reelection in 2014, gave a famous victory speech calling for “illiberal democracy,” there was one passing mention of refugee flows and nothing about Islam. They were non-issues, probably for the simple reason that there were almost no Muslims or refugees to be found in Hungary.

In January 2015, after marching in Paris as part of a demonstration meant to affirm tolerance and freedom of speech following the Charlie Hebdo attacks, Orban went his own way, voicing his opposition to “significantly sized minorities with different cultural characteristics and backgrounds among us.”

When a significant number of migrants did arrive in Hungary later that year, having made their way over land and sea from Syria, Afghanistan, Pakistan, East Africa and other conflict-ridden areas, the government made them feel most unwelcome, and the refugees moved on. Hungary built some fences. That was pretty much the end of it. But Orban had found an enemy and was not going to let it go to waste. He positioned himself as a militant of Christian civilization against Islam, a pioneer of anti-immigrant European populism and a plainspoken defender of ethno-national sovereignty against the totalizing liberal miscegenation and “political correctness” of comfortable people farther West. Other countries, he said, were welcome to try to solve their demographic problems “with young men from the Arab world who look like warriors,” young men who “look more like an army than asylum seekers.”

You have to search a bit to find Muslim immigrants in Hungary. I located several in Budapest, the proverbial young Muslim men who have become the focus of so much anxiety. One group was housed precariously in an attic room in a homeless shelter run by a Christian church. The light was out; illumination came from a TV perched on a shelf above a tiny oven and a sink. One resident was a Pakistani Shia who had wearied of being persecuted by Sunni Muslims. Another was an Iraqi Shia, there for similar reasons. There was some irony in their having escaped Islamist violence; now they were feared as sources of the very violence they had fled. The men were picking up some Hungarian and English, cobbling together a lingua franca with which to communicate with each other and navigate this peculiar new world. What came through most strikingly was their optimism that they would find a route forward in their lives, eventually.

Another group was studying and integrating themselves into Budapest life. One had started a small business. A second was interested in pursuing studies in sociology. Neither had ever thought he would end up in Hungary. They were simply headed to Europe, which the aspiring businessman called “the land you cannot be deported from.”

The future sociologist came from East Africa. “I didn’t think about it, even one day, that to be a Muslim could be a problem,” he said, “or that you would be a target as a ‘minority’. But now you see it everywhere, not just in Hungary but throughout the European Union. In Hungary, they don’t have experience with Muslims. But they are trying to create a minority.”

The businessman said: “I don’t know about elsewhere in Europe, but here in Hungary they are targeting Muslims as a political issue. It’s not a religious issue. It’s a way to get more power in this small society.”

The sociologist came from a village on the border of two countries where the basic social unit was the tribe. There were Christians and Muslims there. He had been in Hungary since 2013 and had watched his Muslimness change its social meaning and significance over time. “The problem is that in Hungary, the state before has used minorities, to target them, like with the Roma,” he said. “In 2015, they used the immigrants as a target. But I was wondering all the time, who will be the next target? Because they always need a target, to mobilize power.”

Interestingly, he found that many Hungarians were reluctant to go along with fearing Muslims. They couldn’t quite see why they should. When, in September 2015, the government allowed some 15,000 refugees, many of them Syrian, to be concentrated in Budapest’s Keleti rail station, Hungarians organized themselves to help with food and hygiene. One Hungarian told me proudly how he had helped design a portable laundry that could be towed by a car. Another said she had spent days living at the Keleti station, helping out: “The conditions were terrible. But I had never felt that happy in my life.” In a border village, a congregation opened its church to refugees, sheltering them from the weather and the state alike.

Nonetheless, the government pursued its line, and it began to have results. “I can see it with my friends,” the sociologist said. “You can see it starting to have an effect. For example, I went one time with a friend of mine to the concert. And his friend was talking about the refugees and Islamic phobia. And he was like, ‘We are afraid of the Muslims.’ And I said, ‘Why you be afraid from Muslims?’ He said, “Well, these people, they are doing this and this.’ And I say, “Who are these people?’ And he is shocked when I tell him: “But I am a Muslim.’ And he says, ‘Oh. Oh. … But not Muslim like you.’”

Viktor Orban’s position on refugees and Islam, dismissed as outrageous in early 2015, is now much closer to acceptability. As usual, Orban just got to the bad place first. European states have been extremely sluggish in settling even small numbers of refugees. The German interior ministry reported there were on average nearly ten anti-immigrant attacks in Germany per day in 2016. A leading German political party, Alternative für Deutschland, is testing its ideas about banning mosques with protests against a proposed one in the province of Thuringia. (It would be the province’s first.) Local mosque opponents erected large wooden crosses next to the proposed site. Turkey’s president, Recep Tayyip Erdogan, recently urged Turkish residents in Europe to have more children as a way of extracting a sort of demographic revenge. After the openly anti-Islam Dutch politician Geert Wilders increased his Party for Freedom’s representation in Parliament by a third (and tugged the ruling party farther to the right) in March 2017 elections, Turkey’s foreign minister said that “soon wars of religion may and will start in Europe.”

The Hungarian government’s legislative maneuvers to control foreign-financed schools are part of an ongoing political process of enemy-creation. It is consistent with other policies that frustrate Hungarian students and businesspeople, or keep migrants from being able to settle and work: the result is to keep Hungary from moving up the value chain and gaining greater control over its own national destiny. Possibly the very last thing Hungary needs is to make it even harder to educate Hungarians. Young people leave because they cannot get the education they want; businesspeople complain of being unable to find the skilled labor they need and withhold investment. The terrible irony is that the more Orban and Fidesz focus their animus on foreigners, the harder they make it to achieve the national self-determination they seek.