Populism became the buzzword across much of the world in the 2010s. Well-known ostensible expressions of the phenomenon include the election – and now re-election – of Donald Trump to the White House, the 2018 victory of Jair Bolsonaro in Brazil, the re-election of Narendra Modi in India, as well as the entry to office of so-called populist leaders of varying tropes in Egypt, Indonesia, Israel, Italy, Liberia, Mexico, the Philippines, Tanzania, and Venezuela, amongst a list of many others. Populism is truly global. But what exactly is it?
I contend the meaning of populism is in crisis. The simplicity of the term is simultaneously helpful and obsolete, which undermines its utility as a categorization of politics or political expression. Crucially, this cloaks the multifaceted roles investment relations have in supporting populism because it stimulates an overfocus on the visible political. Further, the term’s widespread application often use as an effort to capture what some established organizations simply do not like is obstructive and dangerous. It underplays the damage done by political actors who are elected or selected to govern and who subsequently enjoy the powers incumbency brings to implement their policy choices, renege on extant frameworks to tackle climate catastrophe (such as withdrawal from the Paris Climate Agreement), and often exacerbate social inequalities. Required is a deeper analytical treatment. In other words: we need to take populism more seriously.
How can this be achieved? A helpful way to proceed is twofold. First, by adding more analytical rigor to the description, and second, through augmenting understanding of the economic forces that help underpin it. This is important for several reasons, not least because it helps illuminate the trajectories of economic development under populist conditions. This is particularly the case for Hungary, perhaps the European Union’s most “advanced” expression of the phenomenon. My book – The Political Economy of Hungarian Authoritarian Populism: Capitalists without the Right Kind of Capital – aims to overcome these shortfalls in comprehension by analyzing populism as it has developed in that country and by studying some of the politically induced changes to the Hungarian political economy since the incumbent Fidesz party was re-elected in 2010.
(Hungarian) Authoritarian Populism
Building on the work of Italian Marxist theorist Antonio Gramsci, the great cultural and social theorist Stuart Hall developed the concept of authoritarian populism (AP). This term refers to how a ruling class (or dominant elite) maintains control not merely through coercion, but through cultural practices and the communication of ideologies that legitimate and justify its rule. Hall defines AP as
an exceptional form of the capitalist state, which, unlike classical fascism, has retained most (though not all) of the formal representative institution in place, and which at the same time has been able to construct around itself an active popular consent
In post-2010 Hungary, a standout result of Fidesz dominance has been the emergence of a hegemonic politics. With no viable political alternative including from the so-called center-Right, a spectral position the government seemingly represents, Fidesz – I argue in the book – has developed into a form of Gramscian hegemon, undermining many of the democratic developments of the post-1989 period. This environment has created the groundwork for the exploitation of a series of crises that continue today, which help to propel what I term “Hungarian authoritarian populism” (HAP) – a system of governance with a combination of democratic and autocratic constituents – and subsequently reproduce the regime.
But HAP is not simply a politics-only constellation. Rather, it leverages and is leveraged by specific capitalist organization characterized by internal and external investment relations, which operate to reproduce its hegemonic position. How can we understand this regarding Hungarian development?
Capitalists Without the Right Kind of Capital
The pathbreaking 1998 publication Making Capitalism without Capitalists illustrated how after the monumental systemic changes of 1989-1991, newly elected leaders in the Czech Republic, Hungary, and Poland were imbued with a Bordieuan “cultural capital”: artists, essayists, and playwrights of the later Cold War period who had often been incarcerated and/or become dissidents, were suddenly in political office, though with little or no experience on how to “make” capitalism. Today, capitalism has undeniably been made, and capitalists are ubiquitous. Further, they are experienced, globally embedded, and have concluded – I argue – that they do not have the right kind of capital. In this sense the title of the 1998 book has been inverted to a situation of capitalists without the right kind of capital. In Hungary, the right kind of capital comes in two broad yet specific formats: internal/domestic and external/international. It is these capitalist relations that support the HAP ideology.
HAP and Capital: National and International Connections
Nationally, Fidesz has created conditions for what I categorize the state-subsumption of domestic business. Via an enlarged state-business relationship, the government has made wholesale changes to domestic capitalist relations. By recalibrating the Hungarian political economy, the government has become strengthened as it is abler to proliferate its success on a nationwide level through a network of steadfast guardians of capital who are rewarded with contracts in return for political devotion. Further, such ownership readjustment to national capital is in harmony with the post-2010 importance Fidesz has placed on national sovereignty. In turn, these developments have stimulated a productive environment for a period of business capture by the governing elites and their dedicated networks.
Internationally, Fidesz has stimulated inward capital flows under the auspices of its ambitious Keleti Nyitás (Eastern Opening) policy, which has begun to deliver tangible results. In my book, I analyses two investment agreements from “the East.” First, the extension to the country’s sole nuclear power plant – the Paks II project – announced in 2014. This project is estimated to have a final cost of €12.5bn, with an agreement in place for state-owned Russian bank VEB.RF to loan the Hungarian state €10bn for a 30 year-period (until the mid-2040s), with the latter accounting for the remaining €2.5bn. Second, the Belgrade-Budapest railway upgrade (BBRU), a planned refurbishment of an extant railway line between the two capitals, financed mostly by a Chinese state loan (providing approximately 85% of a total cost of €3.2bn). Once completed, this project will form the final segment of the track from the majority Chinese-owned Greek port Piraeus. The supposed primary function of the BBRU is to transport Chinese-manufactured goods to Hungary for onward delivery to locations throughout Europe.
The book also highlights the continued importance of “Western” capital – particularly from Germany – which remains dominant in the country and helps shape and support HAP. In what I term the China-Germany-Hungary tripartite, an international state-business nexus has emerged where Hungary hosts interaction between Chinese and German capital interests, especially in the interconnected automobile and battery sectors. This is becoming more significant in light of the EU’s push to attain “climate neutrality by 2050” and has implications for inter alia the Hungarian and German political economies, German business, broader Sino-EU relations, and the EU’s so-called “de-risking” agenda. Further investigation into these relationships is therefore critical.
Zooming out: Is there a “Hungarian model?”
A “liberal minded” observer might assume “Hungary” offers a warning to its regional neighbors, with the ultimate backstop of “democracy” at severe risk. In such thinking, a “Hungarian model” is detrimental to all things dear to the Western cannon. On closer inspection, however, if a “Hungarian model” is anything at all, it would be better categorized a form of experiment on the part of the “West:” a “let us wait and see approach.” In a perhaps “darker” reading of contemporary Hungarian – and more widely – European capitalist development, one could be justified in saying there is a layering of transnational agency at work i.e., capitalists without the right kind of capital, to encourage and even propel Hungary onwards as a beacon of a populist – or illiberal – political economy.
A recent report by the Institut für Europäische Politik highlighted three principal “illiberal economic policies:” interventions in competition law; continual use of governmental decrees often targeted at specific sectors and foreign companies to capture revenue, and; public contracts awarded to cronies, particularly regarding procurement. These aspects have been at work in Hungary over the last fifteen years. What observers of the capitalist development of illiberalism and populism must do is investigate how far these policies are in effect across the world, and crucially how, and where they interconnect. While it might be a leap of imagination to consider such trajectories, even the briefest examination reveals an international politico-business nexus, which typically operates in the interests of “big capital.”
In sum, there are multiple open questions regarding the capitalist development of populism. What my book shows is that to understand populism, we must consider the political economy including the critical importance of international and transnational capital. Doing so will help us better comprehend how populism supports itself and resultingly, how and by whom it is reproduced.
Samuel Rogers is a political economist with over ten years’ experience conducting qualitative research on the dynamics and effects of infrastructure development and investment in Europe and beyond. He analyzes capitalist transformation from a cultural perspective, with a particular focus on (1) the implications of Chinese-sourced capital for (inter)national development and (2) illiberal capitalist development. Presently he is working on the ERC-funded project ‘REDEFINE’, based at The Open University. This research examines what China’s rise means for how we understand global development and specifically, Europe’s place in it. He is also Visiting Scholar at the Osteuropa-Institut, FU Berlin.
His book (Routledge 2024) entitled The Political Economy of Hungarian Authoritarian Populism: Capitalists without the Right Kind of Capital highlights the importance of state-business relations and external capital for structuring and strengthening populism in Hungary. He has also published several articles in leading peer-reviewed human geography and political science journals including Contemporary Politics, East European Politics, New Political Economy, Political Geography, and Post-Communist Economies among others.
Image made by John Chrobak using “Pazrt” by Tothma, licensed under CC BY SA-4.0.
