Orban Comes Riding Into Town

For many years Hungarian president Viktor Orban has been a thorn in the side of the EU for his, let us say, idiosyncratic insistence to ignore its diktats at every opportunity. This is not to say that we are particularly fond of Orban’s policies or political style, although the mere fact that he goes on the nerves of the bureaucrats in Brussels is of course a major plus.

In one respect Orban proved especially irksome to the ruling classes in Brussels and the rest of Europe: he interfered in the formal “independence” of Hungary’s central bank, and he actually made the banks pay up for the mortgage lending disaster. The latter move was clearly populist and has the obvious drawback of giving people the impression that they bear no personal responsibility for their actions. On the other hand, the banks did make it appear to their customers that taking out Swiss franc denominated mortgage and consumer loans was a virtually risk-free affair, and many financially not overly sophisticated people fell into the trap thus laid for them. Consider the following sub-prime mortgage loan ad Austria’s Raiffeisenbank ran in Hungary in 2007:

 

We don’t care about your income! NINJA loans, Hungarian style.

 

Orban rightly concluded that taking on the banks was going to be a vote winner for him. Not surprisingly, a vociferous campaign denouncing him as a tinpot dictator was launched almost immediately. So even though we don’t particularly like Orban and his policies – and Hungary’s extreme nationalism on the coattails of which he is riding – the fact that the Western press descended on him like a pack of vultures should trigger everybody’s Spidey-sense.

 

Viktor-OrbanViktor Orban, wearing his Brussels frown

Photo credit: AFP

 

It should be pointed out though that Orban has in fact instituted numerous more than just dubious policies (as is mentioned below, he has inter alia limited press freedom and curbed the independence of the judiciary. It seems possible that the eurocrats are actually envious). Orban went to the EU summit in Riga this week, in the process providing us with something to write about.

 

The Dictator and the Grand-Duke

EU president Jean-Claude Juncker actually seems to have a sense of humor. As the AFP reports:

 

The right-wing Orban has angered and infuriated his European Union peers for years, carrying out sweeping constitutional and institutional changes that critics say have curbed press freedom and judicial authority.

“Hello, dictator,” Juncker was overheard to say to Orban in front of the press at the EU-Eastern Partnership summit in Latvia.

Orban replied: “Hello Grand Duke,” a reference to Juncker’s native Luxembourg, known as the Grand Duchy even though it is one of the smallest countries in the world.”

[…]

Juncker also chided Greek Prime Minister Alexis Tsipras for his dress sense, with the left-winger declining to wear a tie as usual.

The dictator jibe from Juncker recalled a bitter row caused by US Republican Senator John McCain who labelled Orban a “neofascist dictator” in December last year. Orban called McCain’s remarks an “attack on national independence”.

 

(emphasis added)

If John McCain really thinks Orban is a “neo-fascist dictator”, he should actually like him. After all, he’s not shying away from supporting extremist nationalists elsewhere in the world (Ukraine comes to mind). As to Tsipras refusing to wear a tie, it seems to us that the modern-day technocrat uniforms are both boring and uncomfortable. We much prefer the gaudy get-ups of 16th century feudal rulers.

 

baroque-costumes-10216th century late medieval fashion

Image credit: Kaspar Braun &  Friedrich Schneider via world4.eu

 

renaissance-costumes-clothing-013The get-ups of 16th century nobles in Germany and Burgundy

Image credit: Kaspar Braun &  Friedrich Schneider via world4.eu

 

Instead we are getting this nowadays:

 

boring as hellModern-day eurocrats wearing their uniforms – boring as hell.

Photo credit: Mariano Rajoy Brey

 

Is there actually a point to all of this? It is true that Orban isn’t overly worried about democratic sensibilities and his policies are actually creating a potentially dangerous situation. Consider that a party well to the right of Orban’s Fidesz, the neo-Nazi Jobbik party, enjoys huge support in Hungary. It is the type of radical organization that might well end up winning an election in the next economic crisis. There can be no doubt that there will be another crisis, conceivably an even bigger one than last one, given that central banks have blown yet another huge asset and capital misallocation bubble with their policies.

The danger of adopting legislation that is restricting individual liberty under some pretext (usually it is presented as a “trade-off” intended to provide better “security”) is that even if today’s ruling establishment doesn’t abuse the legislation, there might be completely different rulers in place tomorrow, and they will then find that the road to dictatorship has already been paved by their predecessors – making it much easier to take the next steps. As we have previously pointed out, this is precisely the situation the Nazis found themselves in when they won the German parliamentary elections in 1932/1933. The democratic governments of the Weimar Republic had issued so many emergency decrees that by the time Hitler came to power, he needed just one more piece of legislation to establish his autocratic regime so firmly that it could no longer be challenged by anyone.

 

Hello dictatorThe “Dictator” and the “Grand Duke” meet in Riga

Photo credit: Janek Skarzynski / AFP

 

The Importance of Economic Freedom

However, Orban is also what one might term a strong supporter of the subsidiarity principle. In other words, he is set dead against the creeping trend toward ever more centralization the EU has set into motion. When the predecessor organization EC was established in the 1950s, its founders merely wished to recreate the free Europe that was in place prior to the world wars, before fascism and socialism destroyed it. They wanted to bring back free trade and free movement of people and capital.

They certainly didn’t intend to create a giant bureaucracy that would one day decree how many liters of water may pass through a shower-head every minute, or that would release a 1,000 pages long set of regulations on the making of a cheese that is only produced in three small villages in the French Alps, or that would one day ban incandescent light bulbs and force everybody to install the type of lighting usually found only in morgues.

Let us not forget, not too long ago, there wasn’t even such a thing as a passport. It was regarded as perfectly natural that people could travel wherever they liked to go. Incidentally, free travel strikes us a fundamental human right. As Nick Gambriuno points out here, things have obviously changed quite a bit in this area:

 

“In order to travel, you need a passport. In order to get a passport, you need a government’s blessing. Travel is treated as if it’s a privilege. You need to ask for permission. Any government can restrict or revoke your passport for whatever reason it wants. When that happens, you can’t travel internationally. It’s like being under house arrest. It’s a powerful lever of control.”

 

(emphasis added)

So much for the idea that the world is “more free today than it has ever been”. It certainly isn’t. The EU, which is so critical of Orban’s policies, is itself a case in point. It has long abandoned its founding principles and has become a bureaucratic Leviathan. Today it is well on its way to becoming what we call a “socialist superstate”. On the plus side, it does support certain fundamental individual liberties – but at the same time, it is becoming an ever greater enemy of economic freedom, in spite of the intentions of its founders. Its member state governments curtail economic freedom primarily in two ways: by adopting ever more regulations restricting free enterprise (many of which are enacted on the supra-national level in Brussels) and by imposing taxes that would have medieval feudal rulers blanching in shame.

However, as Ludwig von Mises has pointed out, there can actually be no true freedom without economic freedom:

 

Unfortunately many of our contemporaries fail to realize what a radical change in the moral conditions of man, the rise of statism, the substitution of government omnipotence for the market economy, is bound to bring about. They are deluded by the idea that there prevails a clear cut dualism in the affairs of man, that there is on the one side a sphere of economic activities and on the other side a field of activities that are considered as non-economic. Between these two fields there is, they think, no close connection. The freedom that socialism abolishes is “only” the economic freedom, while freedom in all other matters remains unimpaired. However, these two spheres are not independent of each other as this doctrine assumes. Human beings do not float in ethereal regions. Everything that a man does must necessarily in some way or other affect the economic or material sphere and requires his power to interfere with this sphere. In order to subsist, he must toil and have the opportunity to deal with some material tangible goods.

[…]

The freedom that the market economy grants to the individual is not merely “economic” as distinguished from some other kind of freedom. It implies the freedom to determine also all those issues which are considered as moral, spiritual, and intellectual.

[…]

Whoever wants freedom of conscience must abhor socialism. Of course, freedom enables a man not only to do the good things but also to do the wrong things. But no moral value can be ascribed to an action, however good, that has been performed under the pressure of an omnipotent government.”

 

(emphasis added)

 

ludwig-von-misesLudwig von Mises realized that economic freedom is an indispensable pillar of individual liberty. The differentiation that has been drawn between “economic” and “non-economic” liberty is a sham – both are interdependent.

Photo via mises.ca

 

Conclusion

Ultimately we have to be critical of both the dictator’s and the grand duke’s policies. They are oppressive in what superficially appear to be different spheres of life, but in reality these spheres of life are interdependent. Their jocular banter shouldn’t distract from the fact that these people are members of a ruling class that is continually telling us what we may or may not do and how much tribute we must pay to it, backed up by the State’s apparatus of compulsion and coercion. As George Reismann once pointed out:

 

“Under laissez-faire capitalism, the state consists essentially just of a police force, law courts, and a national defense establishment, which deter and combat those who initiate the use of physical force. And nothing more.”

 

This is just about the degree of government one should find acceptable if one believes one has to have a government at all (in view of the fact that governments historically tend to arrogate ever more power to themselves regardless of how small they start out, a stateless society is probably preferable).

Obviously, both Orban’s Hungary and Juncker’s EU are proverbial light-years removed from this ideal state of affairs.

 

 

 

Emigrate While You Can... Learn More

 


 

 
 

Dear Readers!

You may have noticed that our so-called “semiannual” funding drive, which started sometime in the summer if memory serves, has seamlessly segued into the winter. In fact, the year is almost over! We assure you this is not merely evidence of our chutzpa; rather, it is indicative of the fact that ad income still needs to be supplemented in order to support upkeep of the site. Naturally, the traditional benefits that can be spontaneously triggered by donations to this site remain operative regardless of the season - ranging from a boost to general well-being/happiness (inter alia featuring improved sleep & appetite), children including you in their songs, up to the likely allotment of privileges in the afterlife, etc., etc., but the Christmas season is probably an especially propitious time to cross our palms with silver. A special thank you to all readers who have already chipped in, your generosity is greatly appreciated. Regardless of that, we are honored by everybody's readership and hope we have managed to add a little value to your life.

   

Bitcoin address: 12vB2LeWQNjWh59tyfWw23ySqJ9kTfJifA

   
 

6 Responses to ““Hello Dictator” – Leader of Socialist Superstate Project Meets Magyar Renegade”

  • VB:

    Actually, passports (well, travel documents) have existed since at least 450 BC.

    • rodney:

      Only a cursory look at the history of passports, letters of request, or any other name for travel documents will reveal that there is much more to it than that, and the spirit of what the article is saying remains valid.

      The real point is when did this gigantic structure of enforcement (immigration officers and border patrols) come into existence.

      • jimmyjames:

        The real point is when did this gigantic structure of enforcement (immigration officers and border patrols) come into existence.

        *********

        Maybe it all started here .. they’re both ancient countries ..

  • The Treaty of Trianon of 1920 that ended the First world War dealt harshly with Hungary, which is why ever since Hungary has been in uproar (see the wikipedia article on this treaty). A very independent-minded people, who were the first to revolt against communist rule in 1956, actually the only uprising that was broadly based, creating a flood of Hungarian refugees to England when it was brutally suppressed.

    Admiral Horthy tried to preserve as much of Hungary as he could. See the wikipedia item on Goulash Communism. I might add that thanks to Horthy Budapest is the only European city that kept its Jewish Quarter, all the others became the victims of the Holocaust. It is a profound irony that perhaps this is why Jobbik has found so much support?

    Wikipedia is very pro-EU, with the CIA writing many articles.

  • Crysangle:

    In 1926, the German seaman and radical who used the pen name B. Traven observed in his novel The Death Ship that:

    ‘It seems to me the sailor’s card, and not the sun, is the center of the universe. I am positive that the great war was fought, not for democracy and justice, but for no other reason than that a cop, or an immigration officer, may have the legal right to ask you, and be well paid for asking you, to show him your sailor’s card, or what have you. Before the war nobody asked you for a passport.’

    http://www.gresham.ac.uk/lectures-and-events/identity-and-identification

    Some more costumes :

    http://gibraltar-intro.blogspot.com.es/2012/11/1807-robert-semple-invidious.html

  • Kreditanstalt:

    Haha…LOL!

    That YouTube ad resembles nothing more the US stock market: “…we don’t care whether you have any real cash flow; the only thing that counts is the ‘value’ of the stock!”

Your comment:

You must be logged in to post a comment.

Most read in the last 20 days:

  • How to Buy Low When Everyone Else is Buying High
      When to Sell? The common thread running through the collective minds of present U.S. stock market investors goes something like this: A great crash is coming.  But first there will be an epic run-up climaxing with a massive parabolic blow off top.  Hence, to capitalize on the final blow off, investors must let their stock market holdings ride until the precise moment the market peaks – and not a moment more.  That’s when investors should sell their stocks and go to...
  • What Kind of Stock Market Purge Is This?
      Actions and Reactions Down markets, like up markets, are both dazzling and delightful. The shock and awe of near back-to-back 1,000 point Dow Jones Industrial Average (DJIA) free-falls is indeed spectacular. There are many reasons to revel in it.  Today we shall share a few. To begin, losing money in a multi-day stock market dump is no fun at all.  We'd rather get our teeth drilled by a dentist.  Still, a rapid selloff has many positive qualities.   Memorable moments from...
  • US Stocks - Minor Dip With Potential, Much Consternation
      It's Just a Flesh Wound – But a Sad Day for Vol Sellers On January 31 we wrote about the unprecedented levels - for a stock market index that is - the weekly and monthly RSI of the DJIA had reached (see: “Too Much Bubble Love, Likely to Bring Regret” for the astonishing details – provided you still have some capacity for stock market-related astonishment). We will take the opportunity to toot our horn by reminding readers that we highlighted VIX calls of all things as a worthwhile...
  • When Budget Deficits Will Really Go Vertical
      Mnuchin Gets It United States Secretary of Treasury Steven Mnuchin has a sweet gig.  He writes rubber checks to pay the nation’s bills.  Yet, somehow, the rubber checks don’t bounce.  Instead, like magic, they clear. How this all works, considering the nation’s technically insolvent, we don’t quite understand.  But Mnuchin gets it.  He knows exactly how full faith and credit works – and he knows plenty more.   Master of the Mint and economy wizard Steven Mnuchin and...
  • Why I Own Gold and Gold Mining Companies – An Interview With Jayant Bandari
      Opportunities in the Junior Mining Sector Maurice Jackson of Proven and Probable has recently interviewed Jayant Bandari, the publisher of Capitalism and Morality and a frequent contributor to this site. The topics discussed include currencies, bitcoin, gold and above all junior gold stocks (i.e., small producers and explorers). Jayant shares some of his best ideas in the segment, including arbitrage opportunities currently offered by pending takeovers – which is an area that generally...
  • “Strong Dollar”, “Weak Dollar” - What About a Gold-Backed Dollar?
      Contradictory Palaver The recent hullabaloo among President Trump’s top monetary officials about the Administration’s “dollar policy” is just the start of what will likely be the first of many contradictory pronouncements and reversals which will take place in the coming months and years as the world’s reserve currency continues to be compromised.  So far, the Greenback has had its worst start since 1987, the year of a major stock market reset.   A modern-day...
  • The Future of Copper – Incrementum Advisory Board Meeting Q1 2018
      Copper vs. Oil The Q1 2018 meeting of the Incrementum Fund's Advisory Board took place on January 24, about one week before the recent market turmoil began. In a way it is funny that this group of contrarians who are well known for their skeptical stance on the risk asset bubble, didn't really discuss the stock market much on this occasion. Of course there was little to add to what was already talked about extensively at previous meetings. Moreover, the main focus was on the topic...
  • Seasonality of Individual Stocks – an Update
      Well Known Seasonal Trends Readers are very likely aware of the “Halloween effect” or the Santa Claus rally. The former term refers to the fact that stocks on average tend to perform significantly worse in the summer months than in the winter months, the latter term describes the typically very strong advance in stocks just before the turn of the year. Both phenomena apply to the broad stock market, this is to say, to benchmark indexes such as the S&P 500 or the...
  • Strange Economic Data
      Economic Activity Seems Brisk, But... Contrary to the situation in 2014-2015, economic indicators are currently far from signaling an imminent recession. We frequently discussed growing weakness in the manufacturing sector in 2015 (which is the largest sector of the economy in terms of gross output) - but even then, we always stressed that no clear recession signal was in sight yet.   US gross output (GO) growth year-on-year, and industrial production (IP) – note that GO...
  • US Equities – Retracement Levels and Market Psychology
      Fibonacci Retracements   Following the recent market swoon, we were interested to see how far the rebound would go. Fibonacci retracement levels are a tried and true technical tool for estimating likely targets – and they can actually provide information beyond that as well. Here is the S&P 500 Index with the most important Fibonacci retracement levels of the recent decline shown:   So far, the SPX has made it back to the 61.8% retracement level intraday, and has weakened...
  • Update on the Modified Davis Method
      Whipsawed Frank Roellinger has updated us with respect to the signals given by his Modified Ned Davis Method (MDM) in the course of the recent market correction. The MDM is a purely technical trading system designed for position-trading the Russell 2000 index, both long and short (for details and additional color see The Modified Davis Method and Reader Question on the Modified Ned Davis Method).   The Nasdaq pillar...   As it turns out, the system was whipsawed,...
  • Market Efficiency? The Euro is Looking Forward to the Weekend!
      Peculiar Behavior As I have shown in previous issues of Seasonal Insights, various financial instruments are demonstrating peculiar behavior in the course of the week: the S&P 500 Index is typically strong on Tuesdays, Gold on Fridays and Bitcoin on Tuesdays (similar to the S&P 500 Index).   The quest for profitable foresight...[PT]   Several readers have inquired whether currencies exhibit such patterns as well. Are these extremely large markets also home to...

Support Acting Man

Item Guides

Top10BestPro
j9TJzzN

Austrian Theory and Investment

Archive

350x200

THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

Realtime Charts

 

Gold in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Gold in EUR:

[Most Recent Quotes from www.kitco.com]

 


 

Silver in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Platinum in USD:

[Most Recent Quotes from www.kitco.com]

 


 

USD - Index:

[Most Recent USD from www.kitco.com]

 

 
Buy Silver Now!
 
Buy Gold Now!
 

Oilprice.com

Diary of a Rogue Economist