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Tamas Dezso Ziegler

This article provides an introduction to the historical context of nationalism versus free market in Hungary, exploring concepts of protectionism, economic nationalism, and patriotism. It delves into the evolution of economic policies, the impact on local interests, and the debate between liberalism and state intervention. The text examines key figures such as King Matthias and modern discussions on free trade areas, foreign investment protection, and the challenges of global tribalism and far-right movements. Additionally, it touches on the implications of economic nationalism on governance, democracy, societal reforms, and the rule of law in Hungary.

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Tamas Dezso Ziegler

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  1. TamasDezsoZiegler Nationalism vs. free market in Hungary An introduction 11/05/2016

  2. Protectionism, economicnationalism, patriotism Protectionism: „protectionism is the economic policy of restraining trade between countries through methods such as tariffs on imported goods, restrictive quotas, and a variety of other government regulations designed to allow (according to proponents) fair competition between imports and goods and services produced domestically” Wikipedia Economicnationalism „Economic nationalism is a body of policies that emphasize domestic control of the economy, labor, and capital formation, even if this requires the imposition of tariffs and other restrictions on the movement of labor, goods and capital. In many cases, economic nationalists oppose globalization or at least question the benefits of unrestricted free trade. „ Wikipedia Economicpatriotism „…economic choices should be linked with concerns for one’s homeland.” (Clift, Woll)

  3. Traditionalthinking of protectionism, economicnationalism, partiotism For a longtime, itwasacommonlyusedtooltoprotect local interests: kings: tax & customs (in Hungary: King Matthias: „chimneytax”, „garden-gatetax”) Protectionism: Johann GottliebFichte: Der GeschlosseneHendelsstaat (The ClosedCommercialState -1800) Friedrich Liszt (beginning of the 20th century) Liberalism, neoliberalism vs. stateintroduction: Hayek, Friedmann vs. Keynes: shouldwedefendpeople and local businesses againstcompanies? Starbucks: yousupported US industrybybuyingthist-shirt (yougavejobsfor 3 Americans) Matthias Corvinus (1443-1490)

  4. 20th century: we must cooperateto be successfull General agreement of tariffs and trade (GATT, 1947) +WTO: World Trade Organization (1995): liberalizingmarketsworldwide: less customs, quantitativerestrictions (Hungary joinedin 1973) Nafta, EEC, EFTA, EU, ASEAN, Mercosur: Free trade areas: no customsamongthesecountries: idea: free trade is goodtoeveryone (Paretoeffectiveness)

  5. 20th century: we must cooperateto be successfull Council for Mutual Economic Assistance (Comecon): triedtobalance EEC intheSovietblock Defence of foreigninvestors: bilateralagreements: no discriminationallowed: maynotamendrulesin a discriminatorymanner (thousands of agreementsworldwide) TTIP: Trans-Atlantic Trade and InvestmentPartnership

  6. Problems - Taxevasionsystems: Stiglitz (UN plantoblockit): realseatvsincorporationtheory - Rich getsricher: USA 20% owns 80% of allfinancialassets - Protectionism and overtlynationalism: may lead tocorruption: statecapture

  7. Global tribalism, far right movements – a nationalisticanswertointernationalisation - JOBBIK

  8. Companies vs. persons: aretheyequal?

  9. Companies vs. persons: should we handle companies as persons? Theoreticaly: foreign and local companies: similarhandling US: Hobby-lobby decision: religiousfreedomforcompanies? Shallcompaniesreceivethesameprotectionashumans? (Apart of consumerlaw, labourlaw, etc.)Wheredowe stop?

  10. The European legalbackground Main points: Discriminationbetween EU companies (EUcitizens is excluded: domestic/local vs. foreigninvestors: equaltreatment EU nationalsmayestablish a companyanywherein Europe Stateaidfordomesticcompanies: banned Additionalprotection: Foreigngoods, services, freedom of establishment: equaltreatment

  11. Hungary: governmentalchangesafter 2010 – a system of exclusion? Illiberaldemocracy/illiberalstate FareedZakaria (US scholar): formalaspect of democracy (elections) substantiveaspect of democracy (liberalconstitutionalism, including human rughts, checks and balances, etc.) Inilliberaldemocarciesonytheformalaspectexistsproperly, inilliberalstatesnone of them. Autocraticregimes: authoritarianregimes

  12. Horthy systemin Hungary Governor Miklós Horthy, 1868-1957, Governor (Regent) of Hungary between 1920-1944 - Kingdomwithout a king

  13. Horthy-system 1920-44 Opinions: 1) limited democracy (Horthy asconservative), vs. the2)authoritarianright-wingstatesman (personalcult, hundreds of anti-semiticlaws, personofgovernorcould be changed, post-feudalismremained, millions of poorpeoplelivedlikeslaves) vs. 3) fascist(helpstokill 600.000 citizensduring WWII) Aristocracymaintainedpower and assets Peoplewerepoor and oppressed, especiallyinagriculturalsector Religion backed thegovernance Bourgeoisewasweak Moderatesocialreformsduringthethirties: workingtime, minimalwage Several far right streamsexisted (arrowcross, nazis, etc.) Notbraveenoughtochange

  14. Governmentalchangesafter 2010 – a system of exclusion? Elections: governmentamendedrules (43% of votes - 67% of seatsinParliament) Constitutionalprinciples: newconstitution + checks and balancesabolished (virtualConstitutionalCourt, publicprosecutorsactionsaredubious) Nationalism Rule of lawissues Roma seggregation Migration: officialracismEconomicnationalism (chauvinism): Hungariangoodsarebetterthanforeignones, Hungarians must by local goodsinordertosupportlocalindustry – a seeminglyvalidclaim.

  15. Then and nowHorthy - Orbán patterns Stateintroductionwas a must (see Roosevelt) – stateintroductionintocommerce Aristocraticcontrol - oligarchs Limiting export, allowingittocertainbusinessman (jewswereexcluded): Nemzeti Önállósodási Alap (National IndependenceFund - statesupport of governmentfriendly businesses Incomeinequalitieswerehigh (feudalismlivedon) - incomeinequalitiesgetshigher Public communalwork (Oslay Oszvald, 1937) – publicwork (210-260 000 people) Hangya (Ent) communities: shops made bylocals – CBA, Coop, Reál – domesticsupermarkets

  16. Hangya

  17. CBA

  18. A casestudy: thesupermarket market: a complexapproach Foreignaffiliated companies pay extra taxes while concerns likeCBA – groups of companies organised in a franchise system – did not have to pay any extra tax: Herviscase + (foodchaininspectionfee – EU infringementprocedure). Tesco paid 600 million forints in 2014, while in 2015 it probablyhad to pay 12 billion forints Spar, having paid 325 million forints and having to pay 9 billion CBA: sametaxasbefore

  19. A casestudy: thesupermarket market: a complexapproach Ban of supermarketchainsnotprofitable: this could include Tesco (with a yearly loss of 43.1 billion forints in 2014) and Spar (with losses of 11 billion) – is againsttheinflow of foreigncapital Ban of building supermarketsabove 300 sq. meters: 2011 Ban of Sunday trading: local, smallsupermarketsformed an exception?

  20. A casestudy: thesupermarket market: extras Changesonthevouchersystem (Sodexcho) Vouchersforemployees of theHungarianstate (Erzsébet utalvány, Szép card) Firstly: taxon local vouchers: 5%, taxon „foreign” vouchers: 51% Firstly: statevoucherscanonly be usedinHungariansupermarketchains: billionsfor local chains

  21. Erzsébet utalvány

  22. A casestudy: thesupermarket market: extras Otherdiscriminativemeasureswerealsointroduced Foreignvouchercompaniesgotpushed out of the market NowsuetheHungarianstate (ICSID)

  23. Othermeasures Foreignbanksshouldleavethe country: statebuysbanks (MKB, Budapest Bank, Erste) Billions of EU money flow togovernment-loyalbusinessman – and flow back aswell: GONGOs (GovernmentOrgnised non governmentalorganisation) Assets of credit unionsnationalised (most assets of privatepensionfundsaswell) Open corruption and system of oligarchs: thelargescale is new, theinstitutionnot (existedbefore 2010 aswell) Russianinterests: atomicplantdevelopment Allowcartelsinagriculture

  24. Effects FDI (foreigndirectinvestment) inflowstops 75% of GDP and 80% of export is made byforeigncompanies: dangeroustoaskthemtoleave market forgetscompetition

  25. Literature Craig-de Burca: EU Law – Texts, Cases, materials Ben Clift & CorneliaWoll (2012) Economicpatriotism: reinventingcontrol over openmarkets, Journal of European Public Policy, 19:3, 307-323, DOI: 10.1080/13501763.2011.638117 TamasDezsoZiegler: The Links Between Human Rights and the Single European Market: Discrimination and Systemic Infringement (draftattached), inHungarianavailableat: http://jog.tk.mta.hu/uploads/files/Allam-%20es%20Jogtudomany/2015_4/2015-4-ziegler.pdf

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