Nationalism and Populism in Central and Eastern Europe

An Interview with Dr. Annamária Artner, 19 February 2021


What is the link between foreign corporations and right-wing Populism facing Central and Eastern Europe?

A: In general, right-wing populism is a means for capital to influence people so they accept its exploitative reign. Taking a closer look, the connection between foreign capital investments and right-wing populism is rooted in the competition within the capitalist class. As this competition never rests, there are always newcomer elite groups of entrepreneurs and politicians, who seek wealth and power. Due to the cyclical nature of capitalist production, crises regularly occur, and the subsequent popular anger sweeps away the current governing group of the political elite. In dependent economies, which we call the (semi)periphery of the world economy, these crises always originate from the accumulation cycles of global (“foreign”) capital. Such crises give an opportunity to the newcomers to grab the state and get access to rents. Often this follows a neo-liberal period when the given country has been exposed to the interests of foreign capital. In which case the new elite will naturally turn towards a nationalist-populist course in its rhetoric.

This, however, does not change the system: it remains capitalist. In those dependent countries, particularly tightly integrated into the value chains and institutions of global capital (I call them the “integrated periphery”) – as in the Eastern European EU-member states – the dependence remains. Hence the new elite will be just as comprador as the previous one was. The key of maintaining both the power of this new elite and its ability to accumulate wealth is to hide its true nature from the people. Furthermore, being dependent on the large foreign (trans-national) companies, the national elite addresses criticism against the remote and less tangible institutions of trans-national capital (like the IMF or the EU) than directly against the trans-national companies themselves. For the same reason, the national elite creates an investment climate that is increasingly advantageous for trans-national capital. For example, by spending huge sums to financially support their investments or modifying labor law to make exploitation easier. This is also advantageous for national capital.

For all of these reasons, the political communications of this new emerging domestic elite is inevitably demagogic and misleading. Its propaganda cannot be countered by the openly pro-foreign capital elite, as it can offer only what they did in the past. The demagogic, nationalistic populism can only be defeated by a class-based narrative. But the new and old capital elite would unite and fight shoulder-to-shoulder against such revealing explanations. .

The oppressive and aggressive demagoguery of the new elite is usually very flexible: it is adjustable to the current political situation. The right-wing demagogues always stand on two legs: creating enemies and playing with emotions. To cement its power, the new elite, grab all the important channels and institutions. Especially those related to the production and communication of information, thoughts, and ideology (such as the media, all levels of education, theaters, civil organizations, churches etc.). This results in the emergence of a new intelligentsia, which creates narratives to serve the new rulers. The new elite is then to be understood as a cluster of politicians, entrepreneurs, and intelligentsia. Their interests considerably overlap and they distribute the tasks of ruling the people between themselves. Every further explanation must be read in this complicated context. Based on this, we can analyze the elements and forms of the appearances of this right-wing populism in detail.

How do national elites replace class conflict with cultural differences?

A: Struggling for access to rents, the national indigenous elite creates and exploits the false dichotomy between indigenous capitalism and foreign capitalism in the form of trans-national or multi-national enterprises (MNEs). The indigenous elites deploy populist and nationalist rhetoric against foreign capital to convince the indigenous working class of the advantages of their own rule of socio-economic life in the country. The dichotomy thus shifts from capital and labor in general, to national employers and national employees against international capital. The exploitation is much more apparent in the large, than in the smaller companies. It is because in the large companies the laborers usually do not personally know the distant foreign owners, while they realize the huge difference between their remuneration and the enormous profits of the company. In the so-called small and medium size companies, as the usual domestic companies are, the owners frequently take part in the production. This situation helps create the image of being “in the same boat”. In this case, the boat is the nation. This image is supported by the mainstream neo-liberal and capital-apologist ideas, which aim to hide the class conflict. Instead, they speak about the role of culture in relation to conditions of employment. Elites decry exploitation that occurs in foreign-owned businesses as a question of culture. Meanwhile they embrace the “small is beautiful” model based on personal relations between management and labor which disguises the profit motive beneath a human face.

Ultimately MNEs still benefit from a relationship with the populists far more than had done with the so-called previous liberal democratic elites. That is because the anger of the population is directed elsewhere, for example at migrants. Meanwhile the new comprador adjusts the legislative framework to favor the profitability of the MNEs. This happened in Hungary, for example, when the government introduced the so-called ‘slavery law’ (allowing very long extra-working hours).

Does the false narrative fool the domestic audience?

I do not think the average person in (semi) periphery countries hates MNEs. The picture is rather mixed. Where the employment opportunities are scarce, all investors are welcome, and local governments benefit from the taxes they pay. I think the average person is aware that a good part of their employer’s profits is transferred to the headquarters country, rather than invested in the local economy.

In Hungary, there is no left wing narrative, meaning a Marxist, pro-working class one. In this vacuum, the critique of neo-liberalism was presented by the right wing movement. When the Alliance of Young Democrats, (FIDESZ) came to power, they were thus able to present themselves as the champions of the people against neo-liberalism.

In what way are right-wing populism, autocracy, and fascism a linked threat?

To answer this question, we must speak about the nature of capital and the evolution of the world system. Capitalism has entered its phase of senility, as Samir Amin, one of the great Marxist representatives of the world system theory, said. The October Revolution in 1917; the role of the Soviet Union in the victory over fascism in 1945; the collapse of the neo-colonial system; the spread of the idea of socialism and the achievements of the Eastern European socialist countries after the Second World War – all sounded the alarm over capitalism. For many reasons, that we should carefully analyze, capitalism has once again overcome these threats to its survival with its apparent triumph in 1989. However, the world order it created is in a state of chaos: a communist party-led China is becoming a world power and the center (the US, the European Union and Japan – “the imperialist Triad” as called by Samir Amin) is not able to keep its position any more, despite interventions in the countries that seem to threaten its interests.

The technological advancement, generated by capital in the course of its striving for a higher rate of profit leads to the decrease of the share of labor in the production. As a consequence, there is a tendency of the rate of profit to fall. Marx already described this in the 19th century. Now, this labor-saving technological development has accelerated. Thus capital urgently needs an increase of the rate of exploitation to stave off the fall of the rate of profit. The extension of production to the low-wage peripheries is an important part of this ambition, as is the liberalization of labor laws everywhere. This includes the center countries as shown by the growing masses of hard-working and low paid workers, whose employment and income are insecure. The crux is, that the increase of exploitation triggers the resistance of the working class in more and more countries. Although this resistance has not yet evolved into a conscious and organized international class struggle, this can change. In any case, for its very nature, capital must increase the pressure on labor and liberal democracy does not provide adequate means for that. This is the very reason for which capital turns towards the open forms of dictatorship spiced with demagoguery and xenophobia – a “preventive fascism.”

No historical ruling class has ever given up its position voluntarily. Just as it is true for other historical ruling classes, when the capitalists feel their position is shaken and are frightened by other classes, they will strengthen their power by all means at their disposal. Therefore, I think the capitalists will seek to maintain national capitalism on the periphery of Europe, first without the right wing rhetoric, but if the situation worsens, they will likely move toward a more fascist form of governance.

What is the role of history in this process?

A; History counts a lot in a country’s orientation toward populism, fascism, and national capitalism. I am sorry to say it, but Hungarian history has always had an inclination toward fascism. This is connected with the role Hungary had as a strong Central European power for centuries, and the lingering trauma over the Trianon Treaty. That treaty not only put an end to this reign, but was an unjustified imperialist treaty – as Lenin said. It mutilated Hungary much more than the territories with non-Hungarian nationalities would have demanded. This point of reference can be successfully used by political forces to awaken a feeling that Hungary is under external threat, and that others are hostile to it. This provides an excellent soil for right wing rhetoric. As a result of this historical legacy and the current state of affairs, the political situation and our integrated periphery position in the world system leaves us with a fight between the national and international capital groups. Here the former adopts nationalist and autocratic forms, and the latter liberal democratic forms. But both are equally exploiting the Hungarian working class and have no respect for a model of indigenous socio-economic and cultural development that would truly serve the population.

What is the influence of nationalism on indigenous development?

It is important to remember that nationalism was once progressive but became later a tool in the hand of the capital against the internationalism of the working class and against socialism. I’m referring to the 1848-1849 revolution, and the problematic nature of its legacy before the systemic change. As Samir Amin wrote, in the context of the third world and overcoming the imperialist system, nationalism in the form of popular movements is a progressive force, and can have a role in the emancipation of the peripheral and semi-peripheral countries. However, as Amin said, national feelings can only be a positive force if the fight for independence is led by communists. I would like to be proud of being Hungarian. You can be proud of your nation if it is doing well, but what we are doing now is deeply troubling. In 2009, I was part of a circle of left intelligentsia that formulated a left-social democratic-type program for the socio-economic movement of Hungary away from neo-liberalism. When we drafted the program, we relied on a national pride for our call to action. This is different from the nationalist rhetoric the right deploys. Our rhetoric was based on an opening of ourselves to the world, welcoming other people, having solidarity with one another. In that we could be proud of ourselves. And that is what I think is the path forward. If we stand at the tip of the moment, if we accept a leadership role in an international movement in Central and Eastern Europe to change the socio-economic system, then we can be rightly proud of our nation and ourselves. All in all, national feeling can and must be progressive. Internationalism does not mean that, for example, that I do not like my nation, my mother tongue, Budapest, or Lake Balaton. It is rather a positive feeling that I can also love other countries. Nationalism is simply a tool, which in the hands of capital becomes an ugly means of oppression and exploitation. But in the hands of a progressive movement, it can be part of the means by which we help deliver policy to the people, and with which we show that progressive policies are not alien to our national historical culture.

What is the best way forward for Central and Eastern Europe?

This is the question of my life. I have taken part in the civil movement for a long period, and as a mother I have always tried to work for a better future. I believe that the periphery must be separated from the accumulation mechanisms of the center. This is a process called de-linking, as discussed by Amin. De-linking is a process of getting rid of the exploitative mechanisms of the capitalist center. This is the first step on the long road to socialism and must be accompanied by the cooperation of other peoples that have chosen a similar road. This road takes on characteristics specific to each country and region. The end goal is of course the economic sovereignty of the country, and of the working people within it.

The goal on the long road is not to catch up with the center – in this case, the West, in the sense that we want to become similar to it. Because doing that would entail the perpetuation of a capitalist socio-economic structure. As we know, this is harmful for the workers, for the environment, and ultimately creates over-consumption and an unstable, unsatisfied elite with the tendency to regress toward fascism. The goal is not to become like England, France, or Germany. The goal is to build another system, based on the logic of fulfilling the needs of the population that entails, naturally, environment-friendly development. This is critical, because the needs of the population are secondary to the post-transition regimes because the primary concern is export capacity. The logic has always been to adjust domestic economic structures to the needs of the center, leaving the country technologically under-developed and the standard of living lower.

Catching up therefore means not following the center but constructing another society altogether. This means it is therefore important to cooperate with each other. De-linking does not mean autarky, although local production (e.g. eating what you produce) is healthier both for the environment and for our bodies, but it does mean responsible international trade. Neo-liberals argue that restrictions on international trade are harmful to the indigenous population. Of course, trade can be beneficial, but only if countries already produce enough to meet the demand of their own population. If the demands of trade cause too much suffering for the population, the trade-off is no longer beneficial. The wealth of a nation is derived from the labor of its population, not from trade. Super powers strive for self-sufficiency in strategic sectors (e.g. armaments, food supplies, energy), and if a country is highly dependent on strategic imports, there can be no real independence.

Dr. Annamária Artner is an economist, researcher, and university teacher in Hungary. Her latest article in this topic is ‘Samir Amin and Eastern Europe’ in the Review of African Political Economy. To find out more about her publications consult