The Fake Conservatism of Lajos Bokros

In the lead up to the 2009 elections to the European Parliament, the Hungarian Democratic Forum, or MDF, found itself in dire straits and made an unusual decision. The MDF, the center-right party of József Antall who led the first democratically elected government of Hungary from 1990, had watched its own popularity crumble and was worried about being able to cross the threshold to win seats. Party leaders turned to Lajos Bokros, a man with strong name recognition even if best known in Hungary for authoring a widely unpopular austerity package as the finance minister in the Socialist government of Gyula Horn.

Bokros, who had been attempting a return to politics following international assignments at the World Bank and IMF but was not on great terms with the new Socialist leadership, could be just the guy. His image as a supposed finance expert and crisis manager could help salvage their electoral prospects, and so the MDF asked him to lead their list.

The MDF narrowly crossed the threshold, winning one seat, and sent Lajos Bokros as a new member of the European Parliament to sit with the European Conservatives and Reformists, a sometimes colorful parliamentary group that is often characterized as far-right, including moderate and, well, less moderate Eurosceptic parties. MDF, on the other hand, has since lost nearly everything and the remaining party members, under the name Democratic Community of Welfare and Freedom (JESZ), are still trying desperately to have Bokros removed from his seat.

At first sight, Bokros’ economic arguments in the blog post may seem sound and conservative enough. But when we look at the approach of the policies he authored in Hungary, they were about taxing middle-class and high-earners, making cuts in social transfers but combining them with high taxes on income. Bokros can accuse Fidesz for not being orthodox on certain points, but the current government introduced a flat tax on income and profits while cutting back on social transfers (except pensions). Most would regard that as a center-right approach.

In fact, the Orbán Government is frequently criticized at home as heartlessly capitalist for its cuts to certain government subsidies. Socialist Party member and spin doctor Róbert Braun pointed out in the weekly Heti Válasz that the government’s taxes on banks are not the slightest bit Leftist, as these taxes are eventually paid by the clients.

“According to the government,” writes Bokros, “the regime is constructing a new society ‘based on labour’.” This is based, he says, on the Fidesz-led government’s “obsolete world view reflecting raw Marxist thinking, under which value is created only by agriculture and manufacturing.” In fact, what Bokros is referring to here, the government’s emphasis on the labor force, is really about the effort to get the long-time unemployed back to the labor market and local governments offering pay for community work instead of welfare checks. Seeing the full picture, that doesn't seem so non-conservative.

On Marxism, Bokros ought to know. He studied at the Karl Marx University of Economics in Budapest, in the Department of “People’s Economy Planning.” He won a scholarship to Panama in 1976, a country that was at the time in the throes of a transition from military regime to democracy. Back in 1980s Hungary, still under the Hungarian communist regime, he worked at the Institute of Financial Research of the Ministry of Finance. During his military service and university years, he served as a leader of a local chapter of the Young Communist League, or KISZ, and was a member of the Hungarian Socialist Worker’s Party (MSZMP). While many joined KISZ and the state party for pragmatic reasons or careerism, becoming a leader in these organizations typically meant something more.

In the late 80s, Bokros became the deputy head of a department at the Hungarian National Bank, later rising to the level of manager, and worked there until 1991. The National Bank, prior to the democratic elections of 1990, "helped the country to raise hundreds of millions of dollars in loans" to provide unfeasibly good living conditions for Hungarians and thereby propping up an increasingly wobbly socialist dictatorship. The result for Hungary was piles of debt, a burden it still lives with today.

After the change of the regime, Bokros became a member of parliament elected on the Socialist Party ticket. He later quit the party but remained close and was named minister of finance in 1995. The austerity measures of what is still known today as the “Bokros Package” made him one of the country’s most unpopular political figures. He went on to senior positions at the World Bank and the IMF before returning to Hungary in 2006 to take up a leadership role with the Socialists. He resigned from the party in 2007 over a disagreement concerning health care reform, siding instead with the Liberals. In 2008, the Liberals left the coalition. Then in 2009, we have the courtship with the MDF followed by a comfortable seat for five years in the European Parliament.

It offers a nice perch from which to critique the policies of Budapest, but the criticism is off the mark on more than a few points. What’s more, Lajos Bokros, has little credibility to offer criticism from a conservative point of view. His conservative phase may soon pass, as his Brussels mandate expires in 2014, so one should not be surprised to find him again making overtures to the leftist opposition and Socialists.