7 ways Hungary’s PM Orbán rejects free market orthodoxy and keeps winning through economic populism

By John Cody
20 Min Read

Conservatives throughout the United States are increasingly looking to what Viktor Orbán has achieved for Hungary as a model to emulate, but many of these conservatives are overlooking his economic populist policies. In many ways, his Fidesz party, along with many other conservative continental European parties, defy the conventional free market ideology seen from the Anglosphere conservative parties, which has paid dividends to both Hungarians and Orbán, who is the longest currently serving political leader of any European country.

One of the top issues for conservative parties in countries like the United States and the United Kingdom is that they are hemorrhaging young voters; most do not care for Reaganism or Thatcherism when it comes to economics, even if older conservatives still glorify free market solutions in Anglo nations. In fact, for many young voters, these parties are now toxic. There are, in part, demographic reasons for this development, with minority voters who tend to support pro-immigration left-wing parties becoming an increasingly large share of the electorate. However, as the U.S. midterms showed, even a majority of young White voters favored Democrats.

Hungary and other continental European parties that are surging in popularity show that conservatives do not have to be synonymous with crony capitalism, total privatization, financialization of the economy, or an absence of support for the middle class and young people.

Below, Remix News lists seven policies Orbán’s governments have implemented since 2010 to redefine conservative ideology when it comes to the economy and social support.

Price controls

It is difficult to imagine U.S. Republicans ever putting forward a proposal for price controls on certain key food products, like dairy and meat, during a time of rising inflation. The same pundits that laud Viktor Orbán would turn against any Republican for daring to suggest such a solution to help put key food staples on American tables at reasonable prices. In many ways, the price of food is subsidized for the United States’ increasingly impoverished population, but this is done through electronic food benefits, which are often only accessible to the poor. In Hungary, the conservative government’s food price caps have benefitted all levels of society — even the middle class — in terms of lower food prices.

“You must intervene in the economy with courage. That is what we are doing, and that is why an average family today saves 181,000 forints (€478) a month through reduced prices. This is unique in the whole of Europe. The left is calling for the food price cap to be withdrawn, but it will remain until we can bring inflation down,” said Orbán in one speech.

It is, of course, a temporary intrusion on free market principles, but Hungary’s government does not operate according to orthodoxy but according to what works at that given point in time, and does not hesitate to intervene during crisis situations. The price controls proved wildly popular with Hungarians, which is why they continued for as long as they did.

Interest-rate freeze on loans

Orbán also took radical steps to curtail the power of banks to extract higher interest from citizens during the crisis. In many ways, the left in Central Europe are the parties looking to pry away social benefits and introduce more free market solutions, while the right seeks a more social economic policy. Orbán, in his speech posted above, outlines how the opposition is actually filled with parties siding with the banks.

“The left is also calling for the lifting of the retail interest rate freeze, unsurprisingly in conjunction with the banks. But the interest rate freeze protects 350,000 families from interest rate hikes, and until interest rates start to come down, the freeze should stay,” said Orbán.

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The freeze has delivered more than €3.7 billion in credit to Hungarians and saved them hundreds of millions in interest payments.

The government recently announced that they intend to keep an interest rate freeze in place in the 2024 budget for retail borrowers, such as families, and small- and medium-sized businesses. Hungary’s central bank currently has high interest rates, and as soon as this rate drops below 10 percent, the government says it will phase out the freeze.

Interest rate freeze extended to student loans

Tuition is already subsidized in Hungary, but the Orbán government has taken extra steps to reduce the cost burden on students. In contrast, in the U.S., such a plan would likely only see the light of day from Democrat politicians, with Biden notably pushing for loan forgiveness for students. Regardless of one’s views on the moral hazard of forgiving this debt, it is bringing young voters to the polls in support of Democrats, with 77 percent saying it was a motivating factor for their vote in the 2022 U.S. midterms.

That is just the political reality.

Orbán’s party has overwhelming support from older voters, but the younger voters must also feel that their interests are being represented.

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“Instead of withdrawing the (interest rate freeze), we extended it to student loans. So, today we are protecting 200,000 students from inflation. The education loan is interest-free, and the interest rate on a free-use student loan is half the market rate,” said Orbán.

The other political reality is that older voters tend to pass away faster than younger ones. The Tories in the U.K. and the Republicans in the U.S. are running on borrowed time as their core voting blocs rapidly age.

Tax the biggest companies

All Western countries are taking on substantial debts to pay for a variety of social programs, but raising taxes on big business is unthinkable to Anglosphere conservatives.

Most Americans, for instance, believe that wealthy Americans and companies do not pay their fair share. Undoubtedly, taxing wealthier Americans and companies may not translate into a boon for Americans, as much of the government spending in the U.S., even more so than in Britain, has a remarkable lack of payoff for middle-class Americans. There are no free daycares for Americans, for instance.

“About six-in-ten adults now say that the feeling that some corporations don’t pay their fair share (61 percent) bothers them a lot, while a nearly identical share say this about some wealthy people not paying their fair share (60 percent), according to a Pew Research Center survey of 5,079 U.S. adults conducted from March 27 to April 2, 2023. These percentages are essentially unchanged since 2021,” wrote Pew Research.

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Orbán has taxed the biggest companies profiting in recent years and funneled that money to Hungarians.

“Ladies and gentlemen, it is expensive and costly to forge a good (financial) shield, one that can withstand heavy blows. Therefore, the extra profit must be taken from where it is generated. We have taxed banks, energy companies and commercial multinationals. And the extra profit that is taken away is put into the ‘red tape fund,”‘ said Orbán during a speech posted above.

Reducing public transportation fares

Left-wing parties in Europe and North America have long promoted more public transportation and reduced fares — and sometimes even outright free fares. However, the right in Hungary also put forward such a proposal.

“And now we’re introducing the discounted Castle County Pass. From May 1, we will offer a monthly country pass and a county pass for both bus and rail. Those who travel to work by public transport can save a considerable amount of money,” said Orbán about the fare scheme.

Abolishing personal income tax for under 25s

This is a proposal American conservatives could potentially get behind, but its specific focus shows Hungary’s Fidesz party is serious about the youth vote. In 2022, all young people under 25 were exempted from personal income tax. This immediately meant that their gross monthly income would rise by 22 percent, a sizeable boost for this young population.

The move made international headlines, and it is helping encourage young Hungarians to remain in the country and begin establishing a family instead of emigrating abroad.

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It is true that Fidesz has the majority of its voters coming from the age 50 and over pool, just as many other Christian-conservative parties do throughout Europe. However, this is another example of Fidesz implementing a program designed to attract younger voters to the party.

Orbán is careful to not paint himself as a socialist, and at the core of his policies, is an emphasis on supporting Hungary’s export-oriented economy. That means creating an ideal environment for businesses to operate in the country, which attracted record amounts of foreign direct investment in 2022. However, he also tries to filter some of the benefits of capitalism back to citizens, tamp down the worst excesses of the biggest companies, and intervene in the economy when the potential benefits outweigh the costs.

Family support

It is beyond the scope of this piece to explore every pro-family policy put forward by the Hungarian government, but Remix News has covered the topic in a variety of pieces in the past. In short, Hungary has one of the most progressive pro-family policies in the world.

The Hungarian family policy model has even been designated a “Hungaricum,” which are “designated national treasures” ranging from foods to folk costumes.

Thanks also to expanding family support schemes and increasing budgetary spending — reaching 5 percent of GDP — the total fertility rate rose to 1.59 by 2021, an improvement of almost 30 percent compared to 2011.

The Hungarian government has pursued a string of stimulus packages, including early retirement for women with many children, tax exemption for mothers with at least four children, an expansive nursery and kindergarten building program, and various tax breaks and preferential housing loans along with direct financial grants for families raising children. The government has even subsidized larger vans for people with more children.

Orbán has also announced that his cabinet is considering expanding the personal income tax exemption for under 25s to women aged 25 to 30 who commit to having a child before they turn 30.

Due to these policies, the number of marriages in Hungary is at a 40-year high and the number of divorces is at a six-year low. The government is spending two and a half times more on family support than in 2010.

Recently, it appears that the popularity —and results — of Orbán’s “illiberal democracy” is catching on, even with younger generations.

Europe’s youth are swinging to the right while those in the UK and America head left

The youth vote across Europe is, despite pessimistic forecasts, swinging to the right in many countries. The policies put forward by Orbán are not totally unique to Hungary after all, and in many cases, his type of economic populism has been championed by conservative and right-wing parties in other continental European parties.

The TLDR News video below delves into the divide between young voters in continental Europe and Anglo countries, showing that youth are skewing more right in continental Europe. The video raises some valid points about the differences between the parties in these countries, including the reality of a two-party system in the U.S.; however, the video fails to account for the radically different economic policies of right- and left-wing parties in Europe and the Anglosphere.

In addition to the issues like migration, young voters in continental Europe are likely attracted to nationalist-conservative parties due to their focus on social spending, tax cuts, social economic policies, and other targeted actions that benefit the youth — at the very least, this keeps at least some of these voters from being completely repelled by the right.

For example, in Austria, the conservative, anti-immigration Freedom Party of Austria (FPÖ) is known for its socialist leanings and has put forward proposals such as a national three-year rent freeze to help Austrians struggling with inflation, another policy unthinkable from the U.K.’s or America’s conservative establishment. The FPÖ has hit a polling high of 32 percent just this week, is the nation’s most popular party, and very well may be leading the country following the next national elections.

In Poland, the conservative Law and Justice (PiS) party is pushing for free prescriptions for those 60 and older and those under 18. It has implemented generous social spending programs, including money for young families, and has increased the child benefit as well. In fact, PiS has historically been the party pursuing a far more progressive social benefits policy than its rivals, which has helped propel the party to power and has kept it polling in the number one spot for years.

Can Anglo conservatives implement populist policies?

Many policies promoted in Hungary have little hope of ever coming to fruition in a country like the United States or even the United Kingdom. Even in those areas where Republicans have shown some interest, there has been little in terms of action. For example, Hungary’s pro-family policies have actually already been promoted by some U.S. Republicans, many of who are interested in promoting family formation in the country and reducing mass immigration. Donald Trump even ran on a platform of providing mothers with paid maternity leave in 2016. If his administration had pushed forward with such a proposal, it would have been groundbreaking for the Republican Party, helped shore up women voters, and potentially represented a bipartisan victory for Trump, as it would have placed the Democratic Party in an untenable position if they had blocked the bill.

There were some tentative pushes to include six weeks of paid maternity leave in the budget, but most of these efforts fizzled. In 2019, Trump renewed his call for paid maternity leave in a State of the Union speech, showing his instincts on the issue were correct.

“I am also proud to be the first president to include in my budget a plan for nationwide paid family leave — so that every new parent has the chance to bond with their newborn child,” Trump said at the time.

However, his administration lacked the ability to follow through on the issue, and there is little evidence that paid maternity leave for Americans ever came close to becoming a reality.

To Trump’s credit, he eventually did approve maternity leave for federal workers, but this group is already richly rewarded in American society, and the fact that the vast majority of such Americans are still excluded from such a benefit could have theoretically been remedied during his administration.

This is just one issue, but it shows that even with Trump’s backing, there was very little traction on this particular issue, likely due to the intransigence of the business community along with the Conservative Inc. wing of the Republican party.

Populism within the Republican party has even had little chance of succeeding during the election cycle, when many parties resort to this tactic in continental Europe, both on the left and the right. For example, Kentucky Senator Mitch McConnell’s refusal to issue a Covid-19 cash bonus to Americans in the run-up to the election may have actually cost Republicans at the ballot box. Trump, in contrast, pushed for the Covid-19 payment to Americans shortly before national elections, with his populist instincts likely guiding him to that position. McConnell, the Senate minority leader, won the day on the issue, and he ensured the bonus never reached Americans.

There is, of course, a populist economic wing of the Republican Party, and it is this wing that must triumph if the party is to have any sort of future. That means marginalizing the Conservative Inc. wing of the party, which while unlikely to totally succeed, is nonetheless a necessary and urgent task.

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