A Neoliberal Mess

A very happy May Day to all readers of this blog.

This article of mine, on neoliberal extremism in Hungary, appears in today's Morning Star.

Back in 1994, after four years of economic hardship, the Hungarian Socialist Party won a convincing election victory on a programme of retaining the best features of the ‘goulash communist’ system of the Janos Kadar years.

Western capital was horrified. Enormous pressure, through organisations such as the IMF and the World Bank, was exerted on Hungary to change course.

Prime Minister Gyula Horn, faced with a choice between defending the interests of the ordinary working class Hungarians who had voted for him, or siding with global capital, chose the latter. He sacked socialist ministers and appointed a wealthy banker named Lajos Bokros (pictured above) to devise a programme of cuts in public spending and welfare provision which the likes of John Redwood would have drooled over.

While western capital was delighted, Bokros became a hate figure in Hungary for his lack of concern with those at the receiving end of his austerity programme. Bokros made no attempt to sugar the pill: the man who introduced tuition fees famously remarked that if students had a problem making ends meet, they should give up smoking.

I was living in Hungary at the time and saw at first hand the devastating impact that ‘the Bokros Package’ had on the lives of ordinary Hungarians. I’ve disliked the man heartily ever since.

Thirteen years on, Bokros is now ‘Chief Operating Officer’ and Professor at the Central European University, a Budapest educational institution established by the Hungarian emigree currency speculator and multi-billionaire George Soros.

And, after the results of the March referendum, in which the Hungarian people massively rejected the ruling neoliberal coalition’s imposition of tuition fees and doctor’s and hospital visit fees, Bokros is not a happy man.

“It is not solidarity when pensioners vote that university students should not pay tuition fee and university students vote that pensioners should not pay fee on doctor's visits. It is highly regrettable that Hungary slumped into this state in the interpretation of social solidarity," he declared.

I suspect most Morning Star readers- and indeed most decent human beings, would agree that university students thinking of pensioners and pensioners thinking of university students is an admirable "interpretation of social solidarity".

In fact, it wasn’t just pensioners, but the vast majority of those voting (82.22%), who showed solidarity with university students. By the same measure, over 84.08% of voters voted to scrap hospital visit fees and 82.2% voted to scrap doctor’s visit fees.

It would be interesting to ask Bokros what his interpretation of ‘social solidarity’ is: I suspect he would have no answer. For the truth is that neoliberals like Bokros hate social solidarity- the idea that we’re all in this together and that the common good should come before private gain.

Instead, they prefer a selfish, dog-eat-dog, devil takes the hindmost society, where students only think of the interests of students, pensioners only think of the interests of pensioners- and of course, business only thinks about making even more money.

Bokros rejects not only the relatively benign ‘goulash communism’ of Janos Kadar, but also the mixed-economy Keynesian model which brought unprecedented levels of prosperity to ordinary working people across western Europe in the post-war era.

For fanatical neoliberals like the former Hungarian Finance Minister, no elements of the collectivist post-war consensus are safe.

In the same speech in which he decried Hungarian pensioners and students, Bokros also argued against “the subjective right to receive a pension“. With regard to the Hungarian government's plans to reform the health care system, he said that the quality of health care could be improved only if private insurance funds competed for the money of patients.

He also called for every citizen older than 18 (including pensioners) to pay a fixed 10,000 forint monthly contribution, (about £30) to pay for the services to be provided by insurance funds that would, of course, be established with majority private capital.

Bokros said nothing about the health care of those Hungarians, who in his ideal world, would be denied a pension. Nor did he say how Hungarian pensioners, who currently receive 50,000 forint a month, and faced with spiralling food and utility bills could afford to foot the 10,000-forint bill.

Bokros’s speech is worth studying as it provides us with a chilling insight into the neoliberal mindset. Nothing matters more to the Lajos Bokroses of this world than increasing corporate profits: be it by selling off state health care provision, forcing people to take out private pensions, or trapping university students into a lifetime of debt. The fact that such reforms will further impoverish vast swathes of the population, already suffering after years of ‘economic reform’, doesn’t even enter the equation.

For far too long, neoliberal fundamentalists like Bokros have set the agenda.

And it’s not just Hungarians who have had enough of their prognosis, it’s people here in Britain, in America and across the world.

Of course, those with a vested interest in ‘economic reform’ will continue to beat the drum for further privatisation and cutbacks in state welfare provision.

But the rest of us should treat their extremist ideology with the contempt it deserves.