FionaK |
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| Many people seem to be buying into a cause/effect story for Hungary which suggests that the country's economic woes are due to the current government's "unorthodox" financial decisions, and as noted above this is being tied to alleged authoritarianism and a new constitution said to herald the rise of right wing nationalism at best: totalitarianism at worst. People like Krugman imply that the protests on the streets in Hungary are in response to that, and so different in kind and character from those seen in Greece. Obviously I do not know what the people are protesting about: I have seen some Hungarians deny it is about the poltiics but on the boards I have been on where that has happened they have been suspected of being themselves right wingers who are trying to deny the real situation. Since they are so accused by people in the UK and America I have no reason to believe they know much more than I do. Even if they do the conflation of issues I outline above is not addressed: and that is significant to my way of thinking.
Most recently the ratings agency Fitch followed the other two big ones and downgraded Hungarian bonds to "junk status". Hungary badly needs money and I gather that their leader, Mr Orban, is now making appeasing noises, saying he will be prepared to modify any law which breaches the terms of EU membership. What appears to me to be happening is that the power of the financial orthodoxy is being demonstrated very clearly: the elected politician can no longer govern unless he toes the financial party line. That is profoundly undemocratic but it is no surprise.
It is important to separate out the two main issues. The slide to totalitarianism is being presented as the problem by such as Krugman and Scheppele. That may or may not be happening: as the laws which purport to demonstrate it have been relayed in their papers I do not see the case has been made. As I noted, much of the legilsation is abhorrent to me: but it is not obviously fascist in character, unless you also characterise at least some of the provisions (in place or actively being promoted) in the US and UK as similarly totalitarian. I am not averse to that: but it is a hard case to sustain. We have already discussed the problems of recognising incipient totalitarianism on another thread. It is not easy, and I do not believe we have an analysis which allows of it. What I am absolutely certain of is that the real issue here is nothing to do with that. That is not to say that I have no fear of a growth of totalitarianism in face of yet another great depression: as I have made clear elsewhere I am very fearful indeed of that. But the cause and effect runs the opposite way to what is being asserted here, so far as I can tell: neoclassical economics produces totalitarianism: it is not the cure for such a trend.
Whether you accept that or not the fact remains that what the EU and the IMF and the economic press cheer leaders are actually concerned with is not the social legislation at all: you can tell because they make a lot of that in the background part of their explanations: and nothing at all of it when it comes to stating what they want
As an example, in one paper I read today Hungary is blamed for walking out of the talks with the IMF: and so they did. But they did so because the IMF demands control of what are properly political decisions. By what right can the IMF justify such interference? It might be ok if they had a good track record, but as we see time and again, they don't. Their theories don't work and their intervention leads to poverty. Them's the facts. It is possible to argue that a lender can demand certain things in return for their help: but few of us would accept that they can demand anything at all, whether relevant to repayment prospects or not; whether likelyt to enhance the ability to repay, or hurt it. . But that is what the IMF and EU go for: and they undermine democracy while they do, both directly and, I would argue, indirectly.
It is telling what the discussions with Hungary are about. According to a report I saw today there is a summary of a document prepared by the IMF outlining conditions for assistance. It says that it will insist on re-establishing the independence of the Hungarian central bank: reduction of "crisis" taxes which have been imposed (on foreign businesses at least in part as noted in the previous post); "restructuring of the social welfare system"; and "restructuring" of public transport. So far so much the same as they demand for every country: with generally bad results. There is nothing here which addresses those aspects of Hungarian government policy which are said to represent authoritarianism: it is just the familiar litany of prescriptions and completely divorced from that kind of concern.
I also read that the stability law is a cause for concern such that the president of the EU wrote to the Hungarian government demanding it be withdrawn: that is the measure which imposes flat rate tax as I noted in an earlier post: what I did not know till today is that it also ties the pace of debt repayment to economic growth: that is what they are worried about, I suspect. I don't think it is the regressive nature of the tax which bothers the EU.
This seems to me what this is all about: Hungary challenged the financial hegemony: and Hungary will be forced into line for that sin. Concern for democracy is nowhere in sight: it is a fig leaf to cover the real democratic deficit which arises because of the transfer of sovereignt from governments to banks
Edited by FionaK - 8/1/2012, 22:15
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