Understanding the Rise of Illiberal Populism in Central and Eastern Europe. Insights from Scholarship Influenced by Karl Polanyi

Abstract

The illiberal turn marked by the rejection of the main tenets of political, cultural, and (to some extent) economic liberalism poses a serious threat to the liberal status quo which emerged in CEE after 1989. We maintain that embracing the concept of countermovement derived from the thought of Karl Polanyi provides valuable insights into comprehending the dynamics of this socio-political phenomenon. In this introduction, we sketch the general background for the papers included in the symposium. We start by outlining the core features of market transitions and discussing briefly the leading research strands inspired by Polanyi’s ideas. Then we try to demonstrate how the legacy of Polanyi’s thought could be useful in understanding the contemporary ascent of illiberal populism. In our view, the chief advantage of Polanyian scholarship lies in its ability to account for the interdependence of economic (or global) and cultural (or local) causes of populist reaction.

KEYWORDS : :

• Countermovement
• transition economies
• illiberalism

The turn to illiberal politics in Hungary, Poland, and other Eastern European countries provoked varied responses from the scholarly community¹. In this essay, we want to focus on a particular stream of literature that took its clues from Karl Polanyi’s social theory. In particular, the account of the rise and fall of market society offered in Polanyi’s Great Transformation (2001[1944]) provided researchers with the general heuristic framework as well as an array of theoretical concepts such as embeddedness, commodification, and countermovement. Polanyi’s ideas were readily adopted by scholars from different social disciplines ranging from heterodox economics, sociology, political science, and cultural anthropology. In the following essay, we want to examine the main insights from Polanyian scholarship for the understanding of illiberalism in the Eastern European context.

We argue that Polanyi-inspired scholarship is distinctive in combining critical analysis of market society’s political dynamics with close attention paid to social and cultural dimensions of economic change. Polanyi believed that the attempt to realize the ideals of economic liberalism was a ‘stark utopia’, which was bound to provoke social resistance (Polanyi 1944, 3). More specifically, Polanyi sought to interpret the political dynamic of market society in terms of a double movement. On the one hand, there is a pro-market tendency ideologically expressed by neoliberalism and supported by international capital and some sections of the middle class. On the other hand, there is a counter tendency for social protectionism that aims at shielding society from the vagaries of the market. This countermovement, as Polanyi named it, is ideologically more diverse and typically enjoys support from farmers, workers, and some national capitalists. At the same time, Polanyi also maintained that a social calamity caused by market reforms ‘is primarily a cultural not an economic phenomenon that can be measured by income figures or population statistics’ (Polanyi 1944, 164). Even if the contrast between economic and cultural factors is exaggerated, there is an important kernel of truth in this statement. Rapid economic change is likely to cause significant disruptions in people’s everyday lives. Hence, the rise of countermovements against market reforms and the processes of cultural disintegration are two central phenomena associated with post-socialist transformation. Taking account of both of them is essential for understanding the recent rise of illiberal populism in Eastern Europe and beyond.

To substantiate this thesis we offer a survey of various attempts to interpret political and economic developments in the region through the lenses of Polanyi’s social theory, focusing primarily on the question of the rise of illiberalism. In the final section, we discuss briefly the contributions of this symposium to Polanyian scholarship.

1. Karl Polanyi and the Rise of Illiberalism in Central and Eastern Europe

Karl Polanyi was born in Vienna and spent his formative years in Austria and Hungary. Although Polanyi’s thought originates from Eastern European experience with the capitalist periphery, his theory today is mostly discussed within the context of the United States, Western Europe, and Latin America (Blyth, 2002, Streeck, 2009, Munck, 2013). Hence, there is an urgent need to repatriate Polanyi (Hann, 2019) and apply his insights to the countries of Central and Eastern Europe. After the fall of communism in the early 1990s, all countries of the region underwent a process analogous to Polanyi’s great transformation and were integrated into the global capitalist economy. As Ivan Szelényi has argued, market transformation can be conceptualized in Polanyian terms as the replacement of redistribution by market exchange as the main institutional form of economic integration (Polanyi, 1957, Szelényi, 1991)². A crucial change occurred when the factors of production, i.e. land, labor, and money were introduced into the orbit of the market system. As a result, ‘all, over thirty countries, stretching from the Elbe River to the Pacific Ocean, the territory of which is currently inhabited by over one billion eight hundred million people, which is more than one fourth of the world’s population, entered the path to a more or less liberal market and democratic transition’ (Kołodko, 2009, 176).

Market transformation in Central and Eastern Europe occurred at the height of neoliberalism’s intellectual and political hegemony. However, in one crucial respect, it proved to be very different from Polanyi’s narrative. In the nineteenth century, the growth of market society was accompanied by the process of industrialization, whereas the opening of Eastern European economies to international trade led to the massive bankruptcies of domestic firms, the closing of the old factories, and premature deindustrialization (Potrykowska, 1995, cf. Rodrik, 2016). While it is not our intention to revisit old debates about shock therapy and its alternatives, we have to point out several features of market transformation that are relevant to understanding recent illiberal upheavals. First, the process was ideologically driven. As Karl Polanyi noted concerning the market transformation in nineteenth-century England, ‘economic liberalism was the organizing principle of society engaged in creating a market system’ (2001[1944], 141). Neoliberalism played a similar role in more recent efforts to implement the market model in post-socialist countries. Economists from Central and Eastern Europe speedily forgot old models of market socialism associated with the likes of Oskar Lange, Włodzimierz Brus, and Ota Šik. Even more surprisingly, they seemed to abandon any faith in demand management in the manner of Michał Kalecki and John Maynard Keynes (Gabrisch, 2020). Second, the market transformation was imitative. The goal was to ‘catch up with the West’ by implementing Western political and economic institutions (Krastev & Holmes, 2018). As in the market transformation described by Polanyi, economic liberalism offered a readymade institutional blueprint for the countries engaged in building a market society. Third, the process of transformation was top-down and elite-driven (Zeniewski, 2011). As a result, many postulates put forward to shield workers and the lower class from newly established market competition, like those articulated by the Polish labour movement Solidarity, were largely ignored by decision-makers committed to neoliberal ideas. Fourth, the distribution of costs and benefits of market transformation was largely unequal and the losers of the market transition started to rapidly grow in numbers. Only state policies were able to mitigate the negative effects of reforms on populations (Mitra & Yemtsov, 2006). Fifth, the result of market reform was the emergence of semi-peripheral economies dependent on capital imports, in which transnational corporations played the dominant role (Nölke & Vliegenthart, 2009).

Several scholars used Polanyi’s concepts to elucidate various aspects of market transformation (Bryant & Mokrzycki, 1994, Glasman 1996, Kregel, 2006, Bohle & Greskovits, 2012). More recent efforts concentrate on explaining the phenomenon of the rise of illiberal populism. We use the term illiberal populism to designate movements that claim to be the only legitimate representatives of the people (Laclau, 2005, Müller, 2017) and at the same time undermine the key tenets of economic, political, and cultural liberalism. In this review, we concentrate on the Visegrad Countries (Poland, Hungary, Slovakia, and the Czech Republic). In this region paradigm cases of illiberal upheavals are the electoral victories of Fidesz in Hungary in 2010 and Law and Justice (Prawo i sprawiedliwość, henceforth PiS) in Poland in 2015³. Both parties were able to form governments and win all subsequent elections. While in power, illiberal parties in both countries dismantled many liberal and democratic institutions, undermined the integrity of the electoral process, criticized independent judiciary, viciously attacked migrants and minorities, and entered into open conflict with the European Union. Such policies were accompanied by vocal criticism of neoliberal economic ideology. Similar developments, although less pronounced, were also observed in the Czech Republic and Slovakia (Scheiring 2021). In the former, populist tendencies were represented by Andrej Babiš and his party ANO. Illiberal rhetoric is also employed by president Miloš Zeman. As far as Slovakia is concerned, Vladimir Mečiar and Robert Fico are sometimes classified as illiberal and populist leaders (Scheiring, 2021). However, in these countries, populists failed to establish a monopoly over political power and were unable or unwilling to undo liberal political institutions.

2. Institutional Political Economy and Anthropology of Post-Socialism

Polanyi’s ideas proved inspiring for scholars coming from diverse disciplinary backgrounds. While several studies deploy different methods and research designs, two types of approaches seem to prevail. Firstly, some scholars take the mantle of institutional political economy. Such an approach is based on the recognition that mainstream economics has very little to offer in terms of explaining large-scale systemic change (Kornai, 2008). Institutional political economy (or system paradigm in Kornai’s terms) is characterized, among other things, by primary attention given to the socio-economic regime treated as a more or less coherent entity, interdisciplinary bent, a focus on systemic contradictions and institutional change, a longer historical perspective, and a comparative method (Kornai, 2008, 192-193). Scholars working in this tradition typically concentrate on demonstrating and explaining changes in the institutional setup of the economy by using macroeconomic data and various social indicators. Karl Polanyi’s social theory is by no means the only source of inspiration for political economists. Ideas borrowed from Polanyi are often complemented with concepts derived from historical institutionalism (Czech & Kassner, 2021), the varieties of capitalism approach (Bohle & Greskovits, 2012), or a weak version of dependency theory (Scheiring, 2020). The focus of much of the research is on examining the social costs of market reforms and their political consequences.

Anthropological studies of post-socialism form a second line of scholarship inspired by Polanyi’s writings. One of the key features of The Great Transformation was an attempt to tell the story of the rise of market society from the point of view of those who benefited the least from this process. These concerns are shared by many scholars who take a more bottom-up approach and study the effects of market transformation with the use of qualitative research methods such as in-depth interviews, discourse analysis, and especially participant observation. The idea of combining Karl Polanyi’s social theory with fieldwork in post-socialist contexts was pioneered by such scholars as Michael Burawoy (2009), Elizabeth Dunn (2004), and David Ost (2006). In the words of Michael Burawoy, ‘the market transition called forth a shift in theoretical perspective from Marx to Polanyi, from production to exchange, from exploitation to commodification’ (Burawoy, 2009, 235). According to many anthropologists and sociologists, the term post-socialism designates distinctive geographical and cultural space, which can be made an object of fruitful study (see Ringel, 2022, Kojanić, 2020). By using the method of participant observation scholars can enter into the lifeworlds of particular sections of the population. This is important since it allows researchers to investigate the effect of market transformation on people’s everyday experiences. Such an approach can be contrasted with the reliance on opinion surveys as the main source of knowledge about social attitudes. As Anna Malewska-Szałygin puts it, ‘surveys are generally formulated using the language of researchers and their mode of discourse, which does not leave interviewees any space for independent formulation of their thoughts’ (Malewska-Szałygin, 2021, 1644). Limitations of the survey method are particularly important for the study of illiberalism since one of the prevailing interpretations of illiberal populism as an attempt to defend traditional values threatened by modernization processes is based almost exclusively on survey data (Norris & Inglehart, 2019).

3. Roots of Illiberalism: Economic, Cultural, or Both?

Polanyian analysts maintain that the rise of the illiberal populist movement needs to be understood in the context of the disembedding of contemporary capitalism. After WWII Western capitalism was socially embedded in a broad social compromise. On the domestic front, capitalists had to put up with various regulations and welfare state programs aimed at securing social stability and industrial peace. Labour unions were recognized as an important player in domestic politics and economic inequalities were mitigated by means of progressive taxation. On the international front, the Bretton Woods regime placed significant constraints on the international mobility of capital making it more difficult for capitalists to shift their assets to regions with lower taxes or more relaxed regulations. Moreover, the policy of limited trade liberalization allowed countries to protect key sectors of the economy and created few obstacles to engaging in active industrial policy. However, the neoliberal revolution of the 1980s and 1990s undermined post-war social consensus. Welfare programs were reduced and labour unions lost much of their power. Capital used newly gained freedom to move freely across borders to push for further deregulation and lower corporate taxes. Much of policy-making was transferred to independent central banks and other non-democratic bodies. Wealth and income disparities between individuals and regions increased (Blyth, 2002). All the changes mentioned above were experienced as threatening by significant sections of the electorate. At the same time, traditional parties of left and right were tied to the project of neoliberal globalization and therefore did not offer any real alternative. In such a context, populist movements of both left and right were seen as an expression of popular dissatisfaction with disembedded capitalism.

Countries of Central and Eastern Europe joined the global economy at the height of neoliberalism. However, participation in global markets proved to be a mixed blessing. As Gabor Scheiring puts it, integration with the international economy was accompanied by domestic disintegration (Scheiring, 2020, 61-66). The early opening of post-socialist economies to international trade led to the destruction of the old industrial base but was not accompanied by technological upgrading. As a result, the economies of Eastern European countries display a dual structure. On the one hand, there are technologically advanced transnational corporations. On the other hand, domestic firms concentrate mainly in the sector of low-value-added manufacturing and subassembly. Another aspect of domestic disintegration mentioned by Scheiring is related to the dual structure of labour markets. There are significant disparities in terms of wages and conditions of work between those who work for domestic companies and those who work for international corporations. Moreover, the corporate sector itself is strongly polarized between a small number of highly paid managerial jobs and a much larger chunk of junk jobs in call centers or corporate warehouses. Post-socialist countries are also highly polarized geographically with the growing disparity between poor and rich regions. Finally, mobile international capital is more difficult to tax, which leads to the dwindling of fiscal resources at the disposal of post-socialist states.

While economic causes of illiberalism are more or less present in all the countries of Central and Eastern Europe, the cultural aspects of illiberalism seem to vary considerably across countries and regions. In the notes on ‘Disraeli’s ‘Two Nations’ and the Problem of Colored Races’ Polanyi observed that affluent classes used the same semi-racist language to describe the poor and the ‘uncivilized nations’ in the colonies (Polanyi, 2001, pp. 300–303). Similar developments, even if not that drastic, occurred during capitalist transformation in Central and Eastern Europe. Polish anthropologist Michał Buchowski interprets the phenomenon of illiberalism as a reaction to the discourse of contempt toward victims of market transition (Buchowski, 2006, Buchowski, 2021). As many observed, with the advent of market transformation, the strange figure of homo sovieticus appeared on the stage (Tyszka, 2009, Buchowski, 2006). This term was used to designate those whose way of thinking has been shaped by socialist conditions and who cannot adapt mentally to the challenges posed by liberal democracy and market economy. While the discourse of homo sovieticus lost prominence over time, its place has been taken by other expressions of class contempt. One of them was mohair berets. This concept refers to a hat made from knitted mohair used by old and devout women. In this case, the scorn is directed against followers of Radio Maryja, a radio station known for promoting religious fanaticism. Buchowski mentions also widespread talk about Janusze and Grażyny, literally Januses and Graces, metaphorically Bills and Suzys (Buchowski, 2021, p. 82). These new terms are intended to satirize the provincial middle class, quite successful in material terms but less culturally sophisticated than highbrow urban city dwellers. However, as Buchowski observed, ‘discriminatory practices inevitably generate resistance on the part of social classes made inferior’ (Buchowski, 2021, p. 83). With the rise of illiberal populism to power, the tables were turned. Now the cosmopolitan elites are subject to scorn for being supposedly estranged from the true ethical substance of national life.

Another interesting insight emerges from Chris Hann’s ethnographic work in Tázlár and Halas (Hann, 2021) According to Hann, the temperature of political argument in the Hungarian province is much lower than in big cities where liberal politicians, professors, and NGO activists tend to live. From the point of view of the provincial Hungarian town of Halas, the rise of Fidesz to power does not change too much in the everyday life of its inhabitants. Hence, widespread support for the Orbán government seems to be predicated on political passivity. Populists are often successful because they can appeal to sentiments and imaginaries prevalent in a given region. For instance, Anna Malewska-Szałygin argues that PiS popularity in the Podhale region owes much to the fact that leaders of the party managed to associate their government with the traditional image of a male head of the household whose rule is strong but benevolent (Malewska-Szałygin, 2021). Similarly, Juraj Buzalka argues that post-peasant background remains crucial for understanding the electoral appeal of ‘village fascists’ and ‘progressive populists’ which, according to him, are two main forms of countermovement in contemporary Slovakia (Buzalka, 2021).

To sum up, illiberal populism has both economic and cultural causes. While the former are universal and related to a global crisis of neoliberal utopia, the latter are invariably more particular and specific to a country and region. They are rooted in the cultural disintegration of a distinct lifeworld and manifest themselves in the narratives people tell about their experience with market transition.

4. A New Countermovement?

The notion of countermovement is probably the most popular concept derived from The Great Transformation. Karl Polanyi believed that the attempt to realize a free market utopia is bound to produce the reaction of social protest aimed at protecting labour, land, and organization of production. For Polanyi, the emergence of a countermovement is initially a relatively spontaneous and non-ideological phenomenon. There is no need for an overarching ideology or collectivist conspiracy of any sort. In fact, some neoliberals were genuinely surprised by the occurrence of spontaneous opposition to market reforms. As Václav Klaus, neoliberal prime minister of the Czech Republic, admitted:

We are—all of us—confronted with the excesses of welfare state paternalism, with overregulation, with overly ambitious programs to subsidize producers as well as consumers, with corporatist and syndicalist tendencies. (…). They are not part of a coherent ideology. They ‘just happened,’ and it is difficult to get rid of them. The transforming countries have a historic opportunity not to let them dominate the lives of their citizens. (Bohle & Greskovits, 2012, p. 140)

What seemed to puzzle Klaus was not the backlash against neoliberalism as such but rather its relatively unorganized character. Neoliberals often assume that anti-market resistance is driven by socialist or nationalist ideologues who conspire against freedom. However, no widespread anti-market ideology existed in the early 90-ties. Backlash against neoliberalism and push towards intervention came from the bottom up. As Polanyi was keen to point out, occurrence of bottom up resistance revealed a serious flaw in the neoliberal concept of market as a form of spontaneous social order capable of self-regulation (Polanyi, 2001, pp. 141–157). Overall, Polanyi’s famous dictum that ‘laissez-faire was planned; planning was not’ applies rather well to the early stages of market transformation (Polanyi, 1944, p. 147).

At a closer look, early social protests against market transformation were rooted in the structure of interests and values ingrained in the previous economic regime. They can be conceptualized as the clash between the neoliberal ideological drive to create a free market economy and the practical interests of various sections of the population. According to Polish sociologist Edmund Mokrzycki, ‘the liberal reform, aiming at the dismantling of the distributive state, strikes directly at the entire existing system of group interests’ (Mokrzycki, 1993, p. 114). Those group interests date back to the system of benefits and privileges that existed under a socialist command economy. By ‘socialist privilege’ Mokrzycki understands ‘the advantage gained by the individual from a centrally controlled distribution of goods as compared with what market mechanisms would give him’ (Mokrzycki, 1991, p. 212). Mokrzycki believed that such a situation was common to various occupational groups such as peasants and miners but also a large part of the intelligentsia. Hence, the emergence of market order, far from being a spontaneous process from the neoliberal playbook, required overcoming opposition from various quarters of society. Not only an organizational form but also an ideological expression of anti-market protest owed much to the values officially proclaimed by state socialist countries such as that of equality and the dignity of the working class. As Chris Hann observed, the market transformation was experienced by a vast section of the population as a moral disposition, a shattering of ethical expectations rooted in socialist Weltanschauung (Hann 2011). Raised in a nominally egalitarian social order, people felt that there is something morally wrong with the new economic regime based on unbridled egoism and tolerance for growing inequalities.

The seeming spontaneity of countermovement held only at the early stage of market transformation. Soon parties and leaders emerged that aspired to give a coherent ideological and organizational form to the movement for social protection. Historically, that role was performed by socialism and fascism. In Great Transformation, Polanyi observed that ‘fascism, like socialism, was rooted in a market society that refused to function’ (Polanyi, 2001, p. 248). Nevertheless, there was a crucial difference between them. Social democrats preserved political freedom and liberal institutions designed to protect it, while fascists dismantled the framework of liberal rights and introduced the system of authoritarian rule. What divided countermovements described by Polanyi was their relation to various aspects of liberal ideology. While all rejected economic liberalism and market fundamentalism, they took different stances toward political and cultural liberalism. Democratic socialists accepted parliamentary institutions and individual rights, while fascists had no use for either of them. Moreover, fascists believed that collectives such as nations are of higher value than individuals. Finally, they maintained that human beings are not necessarily equal and some races are inferior. This facet of the fascist creed was in stark contrast with the belief in the value and dignity of human individuality, which was common to Christians, liberals, and socialists alike (Polanyi 1935, Millet, 2021).

Karl Polanyi’s The Great Transformation is an attempt to explain the phenomenon of German fascism. In the context of the present inquiry, we need to ask whether any lessons can be drawn from this story to understand the contemporary popularity of illiberalism. The answer to this question is far from straightforward and Polanyian scholars differ in their willingness to ascribe various qualities of fascism to contemporary countermovements. It seems best to tackle several dimensions of this problem separately. In the following discussion we will try to answer four related sets of questions regarding the nature of illiberal populism: (1) Do we have good reason to think that illiberal populism is a reaction to the failure of market utopia? Has it managed to unify various social interests opposed to neoliberalism? (2) To what extent does illiberal populism pose a threat to democracy? Did it manage to dismantle democracy or has it only gotten rid of its liberal form? (3) How far can the analogy between fascism and illiberal populism be pushed? Is there any resemblance between illiberal populists and fascism in terms of political philosophy, rhetoric, or the practice of government? (4) Did illiberal populists manage to break with market fundamentalism? If so, what kind of economic regime have they created? If not, can we claim that the difference between the neoliberal and populist phases is merely rhetorical?

The first set of questions seems to be the easiest to answer. There is widespread agreement among Polanyian scholars that the rise of illiberal populism represents a social reaction to the shortcomings of market reform. The emergence of illiberal populism surely represents the ‘upscaling’ of countermovement (Kalb, 2018). Parties such as Fidesz in Hungary or PiS in Poland managed to unify different segments of a countermovement and provide them with more or less coherent ideological expression. Importantly, they also managed to find an external enemy in the form of the European Union and its liberal elites. At the same time, the triumph of illiberal populism was made possible by the failure of social democracy to represent the interests of the working class and other groups dissatisfied with the market transition. Gabor Scheiring (2021) believes that populist countermovement in Hungary expresses the aspirations of national capitalists whose interests were frustrated during the early stage of market transformation. Also, Anna Malewska-Szałygin stresses the importance of the rural population as a social background of illiberal countermovement in Poland (Malewska-Szałygin 2022). In her research in the Podhale region of Poland, Malewska-Szałygin showed that while traditional agriculture is no longer the main occupation of highlanders, they still stick to many traditional family values and use various economic strategies aimed to protect semi-autarkic households from the vagaries of the markets. Hence, as Polanyi would have predicted, illiberal populism draws on discontent caused by the marketization of land, labour, and money (or organization of production).

Contrastingly, the Czech Republic and Slovakia underwent periods of populism, but largely resisted illiberal turns. According to Scheiring (2021) these two countries experienced much less social and economic disintegration than Poland and Hungary. The political message of Andrej Babiš, the leader of Czech party ANO, was predicated on the disillusionment with the post-transition period and liberal elites. He claimed to represent ‘the hard-working people’ and self-made entrepreneurs against the established parties and politicians, who mismanaged state policies. Babiš’ ascent to power backed by populist narrative can be interpreted as a reaction against neo-liberal transition with its attempt to construct ‘market economy without adjectives’ as Vaclav Klaus had proudly claimed (Potucek, 1999, p. 165). Slovakia underwent a period of populist rule immediately after the fall of communism, but it had more to do with the longing for state socialism than with reaction to radical market reforms (Carpenter, 1997). However, neoliberal reforms introduced in 2002-2006 by Mikuláš Dzurinda’s government had eventually led to economic tensions and social discontent. The wave of bankruptcies, rising dependency on foreign capital, increased workers’ vulnerability combined with marginalization of labour unions created favorable conditions for the ‘resurgence of national populism’ (Scheiring, 2021, p. 1584).

Scholars working in the Polanyian tradition differ considerably in their assessment of the extent to which democracy in several countries was weakened by the rise of illiberal populism. Putin’s Russia represents the only uncontested case of reversal to authoritarian rule after the period of market reforms (Gill, 2006)⁴. Some believe that a similar case can be made about Hungary and Poland. For instance, Gabor Scheiring maintains that present-day Hungary cannot be called democratic (Scheiring 2020). On the other hand, Chris Hann stresses the fact that illiberal populism managed to obtain a popular mandate. Moreover, his uses of the terms such as ‘denunciatory consensus’ seem to imply that critics of Orbán’s government exaggerate the degree of the country’s illiberalism (Hann 2021, p. 1617). Similar disagreements exist when it comes to the PiS regime in Poland. Some observers believe that Poland after 2015 can be described as electoral authoritarianism, which implies that the country is no longer democratic (Sadurski, 2019). We preferred to refer to Poland as illiberal democracy since the country still enjoys free and relatively fair elections. There is a significant amount of media pluralism in covering political events and no serious evidence of widespread voter fraud. Nevertheless, concerns were voiced about the integrity of the electoral process.

While the current status of democratic institutions in Poland and Hungary is under debate, no serious issues were raised about the fate of liberal democracy in the Czech Republic and Slovakia. As far as the former is concerned, Hanley and Vachudova (2018) believe that during the recent decade illiberal tendencies indeed were on the rise. In particular, they mention various attempts to aggrandize executive power, limit government accountability, blur the equality of electoral competition, increase control over media, and undermine judicial independence. In the meantime, the migrant crisis in 2014-2015 fueled ethnic tensions in the Czech Republic (Dvořák, 2022) and gave boost to anti-immigrant rhetoric as a strategy to win votes and take control over polity in the Czech Republic as much as it did in Poland and Hungary (Vachudova, 2020). Nevertheless, parliamentary opposition and civil society in general managed to withstand the populist pressure as well as prevented the drift toward illiberal rule. It should be noted though, that the Czech variant of populism, although not illiberal in its core, was characterized by anti-pluralism, resistance to constitutionalism and disdain for minority rights (Havlík, 2019).

The case of Slovakia is not so straightforward in comparison. On the one hand, Slovakian leaders are committed to avoid conflict with the EU remembering the international isolation of the country in 1990s. On the other hand, it seems difficult to overlook rising popularity of right-wing movements and general radicalization of public opinion. Refugee crisis of 2014-2015 was successfully exploited by ruling populists. Growing support for the nationalistic party L’SNS with fascist roots should be noted as well, even though it still remains rather marginal within domestic political arena (Kazharski, 2021). However, observers believe that the illiberal turn in Slovakia is highly unlikely since at this moment there is no political power able to implement such policy (Szomolányi & Gál, 2016, p. 80).

The question of how far political practices of illiberal populism resemble fascism is a controversial one. There are clear differences between the two movements. To start with, populist rule is based on passive acceptance by the electorate, not on the enthusiasm of the marching crowds. Illiberal populists do not retort to such measures as political associations or mobilizing entire populations for the war of conquest. In The Great Transformation, Polanyi observed that ‘fascist tactics were invariably those of sham rebellion arranged with the tacit approval of the authorities who pretended to have been overwhelmed by force’ (Polanyi 1944, p. 246). On the contrary, the turn to autocratic methods by Fidesz and PiS came as about-face after the elections. Theirs was the attempt to dismantle democracy, not overthrow it. As Levitsky and Ziblat observed, under populist rule ‘democracies erode slowly, in barely visible steps’ (Levitsky & Zibalt, 2018, p. 3). Still, at least one important similarity between fascist and illiberal populism exists. We refer here to the widespread use of hate speech directed against ethnic and sexual minorities as well as against migrants. In Hungary and Slovakia, this is evident in the smear campaign directed against the Roma population. In Poland, the main targets of hatred campaigns were migrants, Muslims, LGBTQ activists, and people accused of being in favor of German interests. In their use of dehumanizing rhetoric, illiberal populists proved to be able disciples of their fascist ancestors. In our view, the question of similarities and dissimilarities between illiberal populism and historical fascism merits more systematic investigation.

Perhaps the most controversial issue among Polanyian scholars is to what extent illiberal countermovements managed to undo neoliberalism and create a new economic regime. Some scholars question the legitimacy of the term countermovement because illiberal populists failed to alter neoliberal economic policies (Shields, 2021). Ivan Szelényi and Tamás Csillag argue that illiberal populists in Central and Eastern Europe model their policies on those of Vladimir Putin (Csillag & Szelényi, 2015). In the realm of the economy this strategy amounts to subjugating the domestic capitalists to political control of the authoritarian state. In particular, Russian oligarchs had to prove their loyalty to Putin’s regime or otherwise be prepared to face charges related to corruption and other criminal offenses. Such policy created a class of capitalists faithful to the Kremlin. According to Csillag and Szelényi, a similar attempt to foster political capitalism is taking place in Hungary, and to a smaller extent, in other Eastern European countries. From the perspective of Csillag and Szelényi, the rise of illiberal right represents the trend toward the putinization of Eastern Europe. However, some observers would challenge this diagnosis. Gabor Scheiring maintains that Fidesz managed to create a new economic regime, which he labels an accumulative state (Scheiring, 2020). The key novelty lies in taking into account the needs of domestic capital alongside previously acknowledged interests of transitional corporations. According to Scheiring national capital is not subjected to authoritarian political rule but accepted as a junior partner in the process of economic governance. At the same time, Scheiring believes that the neoliberal character of the Hungarian economy was preserved and no significant gains were earned by the working class. Other scholars point out that the social policies of Orbán’s government, albeit limited in scope and opportunistic, had some beneficial effects on the population. Similar controversy exist also concerning the social character of the PiS government (Czech & Kassner, 2021). In Czech Republic and Slovakia both neoliberalism and populist response to it were significantly weaker. The continuity of Czech political economy was never really questioned by populist movements (Kim, 2020). In Slovakia, Robert Fico’s utmost pragmatism combined with the intention to integrate with the core of European integration made him incapable to follow anti-neoliberal postulates, which had led him to power in 2006.

On the whole, it seems that there is more continuity than discontinuity in the political economy of the region. Illiberal populists criticized neoliberal transformation, dependence on foreign capital, and lack of active state policies. However, this disapproval of neoliberalism was mostly rhetorical. In most cases the neoliberal framework of economic policies remained substantially untouched, although populist attempts to remedy its adverse effects might deserve some attention. Central European countermovements have treated critique of neoliberalism as an instrument useful for seizing and consolidating power rather than as prelude to deep systemic reforms. Still, in our judgment, the change of economic rhetoric, which took place in Poland, Hungary and to some extent in Slovakia, might signalize that a return to full-fledged neoliberalism is somewhat unrealistic.

5. Contributions of This Symposium

In this essay we have concentrated on political developments in Hungary, Poland, Slovakia, and the Czech Republic. While we are skeptical about grand claim about the cultural uniqueness of Central Europe, there are at least three features that are distinctive to populist developments in this region. First, all countries of Central Europe underwent the process of market transition that led to the creation of dependent economies dominated by foreign capital investment. Hence, criticism of market transformation is important theme in populists rhetoric. Semi-peripheral status of countries such as Poland and Hungary provided fertile ground for the rise of nationalistic sentiments, which were skillfully exploited by populist leaders. Secondly, relative weakness of labour unions and social democratic parties created political opportunities for the radical right. Existing ethnic tensions and growing fear of mass immigration made it easier for populists to create images of benevolent leaders showing concerns about national welfare and traditional values. For this reason, illiberal populism in Central and Eastern Europe is predominantly a right-wing phenomenon, with Robert Fico being a possible exception. Thirdly, in contrast with such movements as fascism or socialism described by Karl Polanyi, illiberal populist were unwilling or unable to create a full-fledged alternative to liberal capitalism. Virtually in all the discussed countries popular anger and frustrations were used as vehicles for reaching the highest offices. Alas, once the power had been won, it was rarely used to address legitimate grievances caused by neoliberal economic policies of the previous era.

We do not wish to suggest that similar problems are not present elsewhere. However, we believe that the experience of real socialism and subsequent market transformation continues to distinguish politics in Central and Eastern Europe. Ideology and rhetoric of illiberal populists were influenced both by the communist and rural past as well as by the experience of industrial demise in the first years of transition period with all its social and economic consequences. At the same time, there are significant differences between countries under discussion. Most importantly, the delayed market transformation combined with political pragmatism in the case of Slovakia and the existence of relatively robust welfare policies with solid civil society in the case of Czech Republic seemed to have weakened the illiberal impulse. A more detailed discussion on the difference between those two countries and developments in Poland and Hungary would be well welcomed in the literature. On the conceptual level, more care is advisable in dealing with key Polanyi’s notions such as countermovement, commodification, and embeddedness. In particular, we believe that it is fruitful to distinguish between two separate meanings of the term countermovement. On the one hand, it refers to the reaction of protest in response to market utopia, while on the other hand it signifies the attempt to create institutional alternative to liberal capitalism. As Polanyi has demonstrated in The Great Transformation, fascism and socialism in the early twentieth century unified both meanings of the term. On the other hand, while contemporary illiberal populists certainly represent a critical reaction to neoliberal ideology, it is debatable whether and to what extent they managed to challenge liberal capitalism. In our view, this constitutes one of the key differences between Karl Polanyi’s times and ours.

Polanyian scholars regard the occurrence of illiberal populism in Central and Eastern Europe as a part of wider process of contesting neoliberal ideas and polices. There is broad agreement about causes and nature of populist upsurge. However, we have also pointed out some unresolved issues in Polanyian scholarship. Perhaps the most important controversy pertains to the nature of political and economic orders created in Poland and Hungary. Scholars differ in their assessment of how far those regimes divert from neoliberal orthodoxy and whether they form a new model of capitalism. The articles collected in this symposium illustrate some of the points indicated in the above introduction. All authors acknowledge the formative influence of neoliberal transition on the popular reception of pro-market reforms and the following social and cultural disintegration. They notice the intertwinement of economic, cultural, and political factors, which has led to the creation of illiberal regimes in the countries, where the success of economic transition and membership in the European Union were expected to guarantee the permanence of liberal democracy. However, the most prominent part of their contributions concern instruments of power utilized by illiberal leaders in both countries. They try to show how the dissatisfaction against neoliberal policies was exploited by leaders claiming to be peoples’ heralds, how a countermovement can evolve in the direction of authoritarianism, and how instrumentally populists treat popular worries and resentments.

In the first paper of our collection, Milan Kurucz and Jakub Szabó attempt to scrutinize the relationship between the nature of illiberal regimes in Hungary and Poland and their attitude toward neoliberal economic policies. Having reviewed the fundamentals of neoliberal thinking, they argue that this pattern of development provoked social discontent in both countries, which later translated into countermovements embodied in Victor Orbán’s Fidesz and Jarosław Kaczyński’s PiS. The disembedding of markets from society offered momentum for anti-liberal parties to accumulate political capital on de-industrialization, dispossession, and retrenchment. However, as the authors argue, it seems that there is a substantial difference between Orbán’s and Kaczyński’s anti-neoliberal stances. In the case of the former, we should only speak of anti-neoliberal rhetoric, which has little reference to actual policies, considering measures taken to modify the tax system, labor market regulations, and welfare policies. Thus, the authors decided to dub the Hungarian regime as camouflaged neoliberalism. In the case of the latter, one can observe a reversal of some disembedding tendencies introduced during the transition phase. Kaczyński’s regime managed to rectify the results of neoliberal orthodoxy in such areas as pensions, social allowances, and labor markets.

The nature of Orbán’s regime is studied in more detail in the article authored by Larry Liu. According to Liu Orbán took advantage of the socially destabilizing market transition by offering a widely accepted narrative of re-embedding. However, the analysis of the components of Orbán’s policies reveals tensions between rather limited and non-economic forms of re-embedding and continuous disembedding taking place under the hood. Liu demonstrates that embedding elements can be found in providing basic economic stability for the population as well as in the ideological sphere, which creates a sense of belonging. The disembedding features include buoyant accumulation of capital among favored oligarchs combined with tax cuts, limited spending on social welfare, health care, and education, as well as creating punitive labor relations. The tensions generated by such contradictory arrangements by and large require the construction of political authoritarianism capable of controlling society and protecting the regime against organized social discontent, which seems to be the essence of Orbánism.

The last work included in the symposium digs deep into the commodification of social relations disguised as state’s assistance to those left behind and marginalized during the heyday of the neoliberal transition. Mariusz Baranowski argues that the extension of Polish welfare benefits, which assisted in boosting and later cementing the popular support for PiS, was deeply instrumental and had little to do with the systemic alleviation of poverty. Family 500+ program, PiS’ flagship of welfare system reforms reflecting the party’s anti-neoliberal leanings, is essentially a ‘withdrawal of the state from the development of de-commodified social services’. Similarly to many other new social programs, it constitutes passive monetary benefit which translates into the deepening of social divisions by reinforcing the logic of market competition. Thus PiS showed no interest in building a new system of integrated social services but preyed upon the ‘pseudo-welfare’ measures to dismantle democratic legal institutions and take revenge on the post-1989 liberal consensus.

Notes

1 Our discussion is concerned with political and economic developments in Eastern Europe between 1989 and 2022. We pay special attention to the illiberal turn marked by the electoral victory of FIDES in 2010 and PiS in 2015. However, each country has its specific chronology of populism. In particular, the political history of Slovakia and the Czech Republic cannot be divided neatly into liberal and populist phases.

2 We focus our discussion on market and redistribution, neglecting reciprocity, which was a third basic form of exchange distinguished by Polanyi. A word of explanation is in order. Under a socialist economy of shortage, a corrupted form of gift exchange was widely practiced as a means of access to rare goods (ie. imported from the West) or services (ie consultation with a doctor). This rather elaborated network for the exchange of favors largely disappeared with the introduction of the market economy since most wanted commodities were now open to purchase for those who could afford them. Hence, the transition to market society also meant restricting the sphere of reciprocal exchanges (Baranowski et al., 2022).

3 PiS had formed a short lived government between 2005 and 2007. However, in our opinion many key components of an illiberal policy package were not present there. Most importantly, no attempt was made to use social policy to bolster illiberal rule.

4 We regard Russia as uncontested case of undemocratic rule because of its dismal record of imprisoning political opponents of Putin’s regime, open censorship, and abuses of citizens’ rights. Hence, there is scholarly consensus that present day Russia cannot be regarded as democracy, liberal or otherwise. On the contrary, there are heated debates whether Poland or Hungary can still be called democratic states.