‘Work, family, fatherland’: populist social policies in central and eastern
Europe
by Mitchell
Orenstein and Bojan Bugaric on 19th November 2020 @m_orenstein
The new east-west divide in Europe is not just about authoritarian regimes
defying the rule of law. It is also down to smartly crafted economic appeals.
Mitchell A Orenstein
The rise of authoritarian populists in Hungary and Poland has shocked the European Union, forcing it
to contemplate new procedures to ensure
compliance with the rule of law. But these regimes have an enduring electoral
appeal to many voters, including those naturally inclined to the left. Why?
Our research shows that central and east
European populists have developed a new approach to social policy, based on
past conservative models, which can be encapsulated in the old Vichy slogan,
‘work, family, fatherland’. Developed in Hungary and Poland, it is now
spreading across Europe.
Bojan Bugaric
Responding to decades of neoliberal economic policies, these populist
parties advance a nationalist programme. This seeks to build up domestic as
against foreign capital, and support indigenous versus migrant
workers, addressing native population loss through ‘pro-family’ measures. The
pitch is to protect ‘ordinary people’ from ‘liberal elites’, while growing the
economy through economic self-rule and a conservative developmental state.
Before the 2008 global financial crisis, populist governments went along
with neoliberalism. But afterwards they began to take a new approach. Hungary
led the way, after Viktor Orbán’s decisive 2010 election victory.
National capitalist class
Orbán labelled his economic policy the ‘eastern winds’ approach, looking to
the fast-growing Asian economies. He called for renationalisation of certain
companies, mostly in strategic sectors, as well as new taxes on foreign banks,
insurance companies and international supermarket chains, and domestic
labour-force activation. While he approved of foreign investors who
brought jobs to Hungary—particularly high-skilled manufacturing jobs, as with
the German car companies—in other areas he developed a national capitalist
class connected to his party, creating many ‘near-to-Fidesz compan[ies]’, often by
disenfranchising prior owners. He denounced the west as decadent and obsessed
with money and outlined a future ‘work-based society’, creating a massive jobs
programme for the unemployed, run by Fidesz mayors.
In 2019, Orbán announced social policies encouraging Hungarian women to
have more children. He sought to address Hungary’s low fertility rate,
of 1.45 children per female, rather than importing immigrant labour. The
plan offered a lifetime exemption from personal income tax for women who bore
and raised four or more children. Women under 40 who marry for the first time
and have worked for at least three years are eligible for a €31,700
‘childbearing’ loan at a discounted rate, which is forgiven as they have
children. The government also announced subsidies for larger families
purchasing larger cars and grandparents providing care, as well as more
childcare places.
Critics took aim at the expense of Orbán’s policies and the
conservative, nationalist vision implicit within them.
But while his populism has been ‘anathema to young, cosmopolitan Hungarians’,
other voters gave Orbán a comfortable plurality of votes (and a majority of
seats) in parliamentary elections in 2014 and 2018. One study by a
government-related think tank showed that net real wages
increased in Hungary by 59 per cent between 2010 and 2018,
mainly because changes in the tax structure reduced income taxation, increased
(foreign) capital taxation and broadened the tax base, causing an additional
2.5-3.0 per cent of gross domestic product to flow to households.
Economic appeals
After winning parliamentary elections in 2015, Poland’s Law and Justice
(PiS) government followed Hungary, with a conservative programme which claimed to
protect Poland from its exposure to foreign capital. Yet recent PiS election
victories show that it expanded beyond its traditional conservative base,
attracting voters using economic appeals. Some of these voters previously
supported post-communist left parties, which lost support as PiS grew.
PiS appealed to citizens in small towns and poorer regions of ‘Poland B’,
who felt left behind by neoliberalism. Under its economic plan, the government
imposed a levy on banking and insurance in 2016, expanded domestic bank
ownership from 30 to over 50 per cent and merged oil and gas companies to
create a ‘national champion’. PiS sought foreign
investment for a vast $10 billion airport outside Warsaw, including a plan to
connect it to all major Polish cities by high-speed rail, so that its benefits
would reach the entire country. PiS also sought to stem youth emigration by
exempting all workers under 26 from income tax.
The party’s objectives to foster ‘family values’ natalism and build up the
‘Polish nation’ came together in the signature PiS social programme, Family
500+, launched in 2017. This provided a generous family allowance of $144 a
month per child—equivalent to 40 per cent of the minimum wage—for a family’s
second and each subsequent child. It was later expanded to cover a family’s
first child as well. PiS funded Family 500+ through new taxes on banks and
large businesses, following the Hungarian model, as well as improved tax
collection in a growing economy. In addition, it reversed the previous
government’s increase in the retirement age and created new drug benefits for
the elderly, while establishing an affordable-housing programme. It sought to
limit employer use of short-term ‘junk contracts’ and raised the guaranteed
minimum wage.
Conservative models
The ‘liberal order’ did not deliver what it promised in 1989 and it created
a demand for change. After the global financial crisis, central- and
east-European populists turned to conversative models, adopting the idea of a ‘developmental state’ to increase the
competitiveness of the economy and pursue social justice in the interest of the
‘nation’.
Populism now poses an important challenge to the left in central and
eastern Europe and beyond. How does it respond to the increasing demand for
economic policies which provide social rights and protections to those left
behind by the neoliberalism of the last forty years?
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populist social policies in central and eastern Europe
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About Mitchell Orenstein and Bojan Bugaric
Mitchell A Orenstein is professor of Russian and east-European studies at
the University of Pennsylvania. He is author with Kristen Ghodsee of Taking
Stock of Shock: Social Consequences of the 1989 Revolutions, forthcoming
from Oxford University Press. Bojan Bugaric is a law professor at the
University of Sheffield. He is writing a book with Mark Tushnet, Power
to the People: Constitutionalism in the Age of Populism (also OUP).
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