On March 20, European People’s Party, the conservative bloc in the European Parliament, was to decide whether to expel Hungary’s ruling party, Fidesz. The EPP has been slow to censure Fidesz and Hungary’s autocratic prime minister, Viktor Orbán, for its assault on democracy and rule of law. Yet, Orbán’s Western critics have been equally slow to understand the social and economic policies that underpin his popularity.
Consider the bold set of family policies that Orbán announced on February 10. So far, the verdict in the West on these policies, which are aimed at addressing the country’s low fertility rate and further reducing immigration, has been thunderously negative and all but blind to their effectiveness in entrenching Orbán’s support among Hungarian voters.
Western analysts fail to recognize that authoritarian nationalists such as Orbán win support not only by attacking immigrants, but also by delivering economic policies that benefit average people. Mainstream political parties in the West need to learn this economic lesson fast if they want to compete against their own populist challengers.
Orbán is keen to connect his nationalist message to generous and popular social policies, while encouraging Hungarian women and families to have more children. Hungary’s current fertility rate of 1.45 children per female is below replacement rate. And its population has been shrinking since 1989, mirroring declines in other former communist countries that used to provide extensive social support to families.
The plan’s centerpiece is a lifetime exemption from personal income tax for women who bear and raise four or more children (Orbán and his wife have five). This and other policies in the new package will have a real impact on all families in Hungary. Women under 40 who marry for the first time and have worked for at least three years will be eligible for a $36,000 “childbearing” loan at a discounted rate, which will be forgiven as they have children. Larger families can apply for an $9,000 government grant toward the purchase of a seven-seat automobile. Grandparents taking care of children will be eligible for leave from work and benefits. And the government will create 21,000 new subsidized childcare places.
Leading Western media, analysts, and politicians have been almost universally critical of the plan, thereby falling right into Orbán’s trap. The Economist, a longtime advocate of the free-market economic policies that have impoverished many in Eastern Europe while producing great wealth for a few and higher living standards for a middle-class minority, predictably criticized Orbán’s plan for being too expensive. The new measures are “unlikely to give birth to a baby boom” and could “swell an economy that is close to overheating, and inflate house prices.”
Journalist Adam Taylor echoed these sentiments in The Washington Post, arguing that Orbán’s policies will “barely move the needle on birthrate and may represent a poor return on investment.” We have heard this same Western critique for decades: helping people is too expensive and does not work, paying for houses will only make them pricier, and it’s better to rely on markets than on public policies.
But Orbán’s critics ignore the examples of Poland and Russia, which also have implemented natalist policies in recent years. Russia’s fertility rate is up to 1.75 children per female, from a low of 1.17 in 1999, partly owing to a grant program for new parents. Poland, too, has achieved higher birth rates since 2015 after introducing the massive Family 500+ initiative, which enables parents to pay for school supplies, clothes, and vacations. Both schemes were criticized as being too expensive, but Poland’s public deficit has fallen, not risen. Rather, these policies have stimulated economic growth while dramatically reducing child poverty and increasing school enrollment.
Although free-market attacks on bold new social programs are no surprise, some of the sharpest criticism of Orbán’s policies has come from the left. Progressives strongly dislike the fact that many of his proposals target women in a way that seems to advance a conservative, pro-family agenda.
To The Guardian’s Afua Hirsch, for example, “the idea that assistance for those in poverty is conditional on obedient reproduction is verging on the dystopian.” Similarly, Princeton professor Kim Lane Scheppele, interviewed on Public Radio International, warned that, “Women are going to bear the burden of Orbán’s failed economic policies.” And Swedish Social Affairs Minister Annika Strandhäll said that, “This kind of policy will harm the autonomy for which women have struggled for decades.”
These analysts are right that Orbán’s policies are designed to encourage women to marry, buy houses, bear more children, and stay in Hungary. But their criticism misses the mark in important ways. Overall, these proposals are not coercive. Nor do they seek to keep women barefoot and homebound. Instead, Orbán’s plan is designed to help women manage their work-life balance. For that, it should be celebrated, not excoriated.
Consider the lifetime income-tax exemption for women with four or more children. The primary beneficiaries of this program will be women who work, because those with no income will gain no advantage. In two-parent families where both partners have similar or equal earning potential, it may make sense for the woman to work tax-free, or run the family business, while the man stays at home with the children.
Likewise, giving grandparents childrearing benefits helps women to enter the labor force. So does subsidized childcare. And although the new loan programs do encourage women to have children, they also may enable them to buy a home. In short, these policies provide state support for women’s unpaid labor.
Like it or not, some of Europe’s boldest new social-policy initiatives are coming from its most illiberal governments. The negative reactions of mainstream opinion leaders in the West show how unprepared they are to do battle with Orbán and others for voters’ hearts and minds. The populist right is pressing the rhetoric and policies of social democracy into the service of authoritarian nationalism. If the West cannot see or understand the appeal of this, it will be unable to fight back.
Project Syndicate
