Political Deja Vu?
The bursting of the housing bubble and the resulting credit crisis put the economies of the United States and Europe into a severe recession. Unemployment rates are dangerously high, budget deficits are soaring, and the euro zone may fracture. Naturally, political leaders have become targets of blame for their lack of leadership in stimulating a recovery, and citizens have voted current leaders out of office. Political party turnover is expected in democracies; however, the global economic crisis has had more significant consequences for national politics. It has given rise to political extremism, has threatened democracy, and could lead to authoritarian rule.
History teaches us that depressed economies have a major effect on national politics. In February 2012, Alan de Bromhead, Barry Eichengreen, and Kevin H. O’Rourke published a study called “Right Wing Political Extremism in the Great Depression.” This study examined the share of votes for right-wing, anti-system parties in the elections during the Great Depression. It showed that there was, in fact, a correlation between political extremism and hard economic times (Bromhead et al 2012). The most notable example is the German depression in the 1930s that brought Hitler to power. While conventional wisdom often blames Weimar hyperinflation, it was the deflationary policies of Chancellor Heinrich Bruning that allowed Hitler to take power (Krugman 2012a).
It is hard to believe something so drastic could happen today. While our economies remain depressed, living conditions are not as bad as the Great Depression. Even with the recent cuts to social welfare programs, the unemployed and poor receive much better benefits today than in the 1930s. So there is less public pressure today for a populist uprising against the government (Eichengreen 2012). Nevertheless, the global economic crisis has had serious effects for national politics, particularly in Eastern Europe, which has struggled throughout recent history to achieve democracy.
Hungary is the best example of the recent rise in right-wing extremism. Hungary has had a history of communist rule and struggled against the Soviet Union for its freedom. Though an anti-Soviet uprising failed in 1956, Hungary eventually played an important part of the downfall of communism in Europe, which led to democratic self-government (BBCa.). Yet problems remained. Hungary had the largest per capita communist-era debt of any former Soviet satellite state. But the housing bubble made things much worse. Hungary’s national currency, the forint, suffered a huge drop. This caused Hungarians’ mortgage payments to double because they were taken out in euros or Swiss francs. The economy was in terrible shape, and the Hungarian voters were unhappy. The Socialist government elected in 2002 and 2006 lost support. In 2010, Hungarians voted for the center-right political party, Fidesz, with hopes of restoring the Hungarian economy. Fidesz received 53% of the votes, which allotted them 68% of the seats in parliament. This supermajority gave them the power to change the constitution. As Kim Lane Schepple says, “They have used this power in the most extreme way at every turn, amending the constitution ten times in their first year in office and then enacting a wholly new constitution…” (Schepple 2011b).
This new constitution has changed the legal landscape by undermining the checks and balances on the government (Schepple 2011a). The judicial system has suffered the most. The Constitutional Court, which reviewed all laws for constitutionality and was the main check of government power, lost its independence as the government expanded the number of judges and put its political allies in the new positions. The government also made it very difficult to review laws for their compliance with the constitution and prohibited the court from reviewing any law that impacts the budget unless it goes against particular listed rights. Therefore, the Constitutional Court cannot rule on laws concerning taxes or austerity (Schepple 2011a). The new constitution has also changed the way elections are administered. New districts were drawn to make it harder for the Fidesz party to lose. Finally, the new constitution has limited the power of the press by creating new media laws and a media board that is run by Fidesz party loyalists. They review the media for compliance with the laws and can administer fines large enough to bankrupt noncompliant organizations (Schepple 2011a).
The Fidesz came to power through a fair democratic election, but after changing the constitution, Hungary is becoming less of a democracy and more of an authoritarian state (Schepple 2011a).
Critics say democracy in Hungary is “dying not with a single giant blow but with many small cuts” (Kulish 2011). What is happening in Hungary could also happen in other European countries that have been greatly affected by the global crisis. We are already seeing extremist parties gaining popularity and entering parliament for the first time. Finland’s anti-immigrant party, True Finns, won almost 20% of the votes in the 2011 election (BBC 2011). In the 2010 election, the far-right party in Sweden, the Sweden Democrats, won seats in parliament for the first time (BBC 2010). In the Greek election in May of 2012, the neo-Nazi party, Golden Dawn, received nearly seven percent of the vote and will enter Parliament for the first time with 21 seats. In 2009, they received less than one percent of the vote (Donadio 2012).
Why is it a significant consequence if Hungary becomes an authoritarian state, or other European countries see a rise in right-wing extremist political parties? Not only is it a threat to freedom for the citizens of the countries, it is a threat to peace and democracy throughout Europe. Along with the United States, the European Union is the greatest democratic power in the world. It was created after World War II to promote economic cooperation among the member countries, and one of the EU’s main goals is to advance freedom and democracy throughout Europe and the rest of the world. A democratic Europe has been an important reason for peace and stability throughout the region for the last half century (Europa). And now we are seeing democracy endangered in EU member states (Krugman 2012b). This is a significant consequence, brought on by the global economic crisis, for the future of peace and the European Union.
The global economic crisis has rendered significant consequences on national politics, giving rise to right wing extremism and threatening democracy. It is normal to have a shift in power among political parties after elections. However, these are not normal times, and this shift in power is a serious threat to peace and democracy. Much like the Great Depression leading to a rise in right wing extremist governments, we are seeing the same thing today across Europe, and the threat will worsen and spread if the economies continue to remain depressed.
- BBCa. BBC News. “Hungary Country Profile.” http://news.bbc.co.uk/2/hi/europe/country_profiles/1049641.stm.
- BBC. 2010. BBC News Europe. “Swedish Far-right Wins First Seats in Parliament.” September 20, 2010. http://www.bbc.co.uk/news/world-europe-11367622?print=true.
- BBC. 2011. BBC News Europe. “Nationalist True Finns Make gains in Finland Vote.” April 18, 2011. http://www.bbc.co.uk/news/world-europe-13107620?print=true.
- Bromhead, Alan de, Barry Eichengreen and Kevin O’Rourke, Right Wing Political Extremism in the Great Depression February 2012. http://emlab.berkeley.edu/~eichengr/right_wing_2-17-12.pdf
- Donadio, Rachel and Niki Kitsantonis. 2012. “Greek Voters Punish 2 Main Parties for Collapse.” Nytimes.com May 6, 2012.
- Eichengreen, Barry. 2012. “Is Europe on a Cross of Gold.” Project Syndicate. May 21, 2012.
- Europa. “Basic Information on the European Union.” http://europa.eu/about-eu/basic-information/index_en.htm
- Krugman, Paul. 2011. “Depression and Democracy.” Nytimes.com. December 11, 2011.
- Krugman, Paul. 2012a. End This Depression Now! W.W. Norton & Company, Inc. 2012. Page 19.
- Krugman, Paul. 2012b. “Why Hungary Matters.” Conscience of a Liberal. Nytimes.com. March 15, 2012.
- Kulish, Nicholas. 2011. “Foes of Hungary’s Government Fear ‘Demolition of Democracy.’” Nytimes.com. December 21, 2011.
- Scheppele, Kim Lane. 2011a.“Hungary’s Constitutional Revolution.” Conscience of a Liberal. Nytimes.com. December 19, 2011
- Scheppele, Kim Lane. 2011b. “More Hungary.” Conscience of a Liberal. Nytimes.com. December 20, 2011.