Abstract
In an article published in 2016, János Kornai proposes to add a third form of governance between democracy and dictatorship to his binary model of system paradigm. It is an autocratic capitalist system, marked by the dilution of the principle of the separation of powers in favor of a strongman and an institutionalized clientelism. This paper proposes to analyze Kornai’s third modality of economic and political organization in the context of national authoritarian capitalism (NACa), a variety of capitalism with more or less severe forms of authoritarian social control and mobilization of a nationalist culture. The main characteristics of NACa, of which Victor Orban's Hungary is a significant example, are outlined and the question of the stability of that form of government is raised.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Notes
“The interventions of dictators restrain the spread of inventions, innovations and business news, which curbs participation in the global business network. Sooner or later, technical revolution induced by computers will pressure countries … to lift their barriers to freedom of speech and freedom of association, and thus to encourage democracy, or to fall behind inexorably in the global economic competition” (Kornai 2000b, p. 37).
Although they have some similarities with the fascisms of the twentieth century, the populist regimes and NACas of the first quarter of the twenty-first century do not use the same modalities of social mobilization or the same forms of violence and domination (Stanley, 2018). Enzo Traverso uses the term post-fascism for these regimes (Traverso, 2019).
Prior to our suggestion, similar expressions have been adopted incidentally in the literature. Peter Bloom alludes to “a new fantasy of national authoritarian capitalism” (Bloom 2016, p. 52). Aaron Friedberg also mentions briefly “a regime type that can best be described as nationalist authoritarian capitalism” (Friedberg 2017, p. 12).
As a consequence, for Jenny Andersson, “Perhaps the greatest paradox of all is that neoliberalism has spawned authoritarianism” (Andersson 2018). For a longer-term perspective and a different view, see Vahabi et al. (2020).
According to Homi Kharas and Harinder Kohli (2011, p. 282), “Many middle-income countries do not follow the [Republic of Korea] pattern. Instead, they have bursts of growth followed by periods of stagnation or even decline, or are stuck at low growth rates. They are caught in the Middle Income Trap—unable to compete with low-income, low-wage economies in manufactured exports and unable to compete with advanced economies in high-skill innovations.”
“Henri IV ne fut pas un des moins despotes des rois de France et cependant la France prospéra sous son règne, parce qu’on n’y tracassait pas les gens.” in Jean-Baptiste Say, Cours complet d’économie politique, quoted by Chavagneux (2015).
References
Andersson, J. (2018), Introduction, In: Anderrson, J. & Godechot, O. (eds.) Destabilizing Orders. Understanding the Consequences of Neoliberalism, Paris: MaxPo Discussion Papers, 18/1.
Becker, U., & Vasileva, A. (2017). Russia’s political economy reconceptualized: A changing hybrid of liberalism, statism and patrimonialism. Journal of Eurasian Studies, 1(1), 83–96.
Bloom, P. (2016). Authoritarian capitalism in the age of globalization. Northampton, Mass.: Edward Elgar Publishing.
Bruneau, T., & Faucher, P. (Eds.). (1981). Authoritarian capitalism: Brazil’s contemporary economic and political development. Boulder, Colo.: Westview Press.
Carothers, C. (2018). The surprising instability of competitive authoritarianism. Journal of Democracy, 29(4), 129–135.
Chavagneux, Ch. (2015). Du capitalisme autoritaire, Alternatives Economiques, April, Paris. Online https://www.alternatives-economiques.fr/chronique/christian-chavagneux/du-capitalisme-autoritaire-201503270952-00001090.html
Csillag, T., & Szelényi, I. (2015). Drifting from liberal democracy: traditionalist/neo-conservative ideology of managed illiberal capitalism in post-communist Europe. Intersections. East European Journal of Society and Politics, 1(1), 18–48.
Fisun, O. (2012). Rethinking post-Soviet politics from a neopatrimonial perspective. Demokratizatsiya. The Journal of Post-Soviet Democratization, 20(2), 87–96.
Friedberg, A. (2017). The authoritarian challenge. China, Russia, and the threat to the liberal international order, Tokyo: The Sasakawa Peace Foundation.
Kharas, H., & Kohli, H. (2011). What is the middle income trap, why do countries fall into it, and how can it be avoided? Global Journal of Emerging Market Economies, 3(3), 281–289.
Kornai, J. (2000a). The System Paradigm. In: Schekle, W., Krauth, W., Kohli, M., & Elwert, G. (eds). Paradigms of social change, pp. 111–133. Frankfurt and New York: Campus Verlag – St. Martin’s Press.
Kornai, J. (2000). What the change of system from socialism to capitalism does and does not mean. Journal of Economic Perspectives, 14(1), 27–42.
Kornai, J. (2001). Ten years after the road to a free economy: The author’s self-evaluation, in: Pleskovic, B., & Stern, N. (eds.). Annual World Bank conference on development economics 2000, Washington, D.C: World Bank.
Kornai, J. (2015). Hungary’s U-Turn: Retreating from Democracy. Journal of Democracy, 26(3), 34–48.
Kornai, J. (2016). The system paradigm revisited. Clarification and additions in the light of experiences in the post-socialist region, Acta Oeconomica, 66(4), 547–596.
Krastev, I. (2018). Eastern Europe’s illiberal revolution (pp. 49–56). May/June: Foreign Affairs.
Lee, C. K., & Zhang, Y. (2013). The power of instability: Unraveling the microfoundations of bargained authoritarianism in China. American Journal of Sociology, 118(6), 1475–1508.
Lingle, Ch. (1996). Singapore’s authoritarian capitalism. Asian values, free market illusions and political dependency, Barcelona: Edicions Sirocco; Fairfax, VA: Locke Institute.
Mohamed, M., & Ishihara, S. (1996). The voice of Asia: Two leaders discuss the coming century. Tokyo: Kodansha International.
Raiklin, E. (1989). After Gorbatchev? A mechanism for the transformation of totalitarian state capitalism into authoritarian mixed capitalism. Washington, DC: The Council for Social and Economic Studies.
Schering, G. (2018a). “Hungary’s regime is proof that capitalism can be deeply authoritarian”, openDemocracy, on-line document, April. https://www.opendemocracy.net/en/can-europe-make-it/hungary-s-regime-is-proof-that-capitalism-can-be-deeply-authorita/
Schering, G. (2018b). Lessons from the political economy of authoritarian capitalism in Hungary, Transnational Institute, Challenging Authoritarianism Series, 1, April.
Stanley, J. (2018). How fascism works: the politics of us and them. New York: Random House.
Thompson, M. P. (2004). Pacific Asia after ‘Asian Values’: authoritarianism, democracy, and ‘good governance.’ Third World Quarterly, 25(6), 1079–1095.
Traverso, E. (2019). The new faces of fascism: populism and the far right. London and New York: Verso.
Vahabi, M. (2018). Janos Kornai and general equilibrium theory, Acta Oeconomica, 68 (S), 27–52.
Vahabi, M., Batifoulier, Ph., & Da Silva, N. (2020). A theory of predatory welfare state and citizen welfare: the French case. Public Choice, 182(3/4), 243–271.
Witt, M. A. & Redding, G. (2014). Introduction, In: Witt, M.A & Redding, G. (eds.) Oxford handbook of Asian business systems, New York: Oxford University Press.
Author information
Authors and Affiliations
Corresponding author
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
About this article
Cite this article
Hénin, PY., Insel, A. Hungary's U-turn in Kornai's system paradigm perspective: a case for national authoritarian capitalism. Public Choice 187, 235–245 (2021). https://doi.org/10.1007/s11127-021-00882-1
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11127-021-00882-1