Viktor Orban has been the prime minister of Hungary since 2010. In those 16 years, he has become an international symbol of populist governance, including among officials in the Trump administration. But the specifics of Orban’s economic record have often escaped notice.

Has Orban changed Hungary’s economic trajectory? Does Orban’s concept of national capitalism contradict itself? And what has Orban’s courtship of Russia and China accomplished?

Viktor Orban has been the prime minister of Hungary since 2010. In those 16 years, he has become an international symbol of populist governance, including among officials in the Trump administration. But the specifics of Orban’s economic record have often escaped notice.

Has Orban changed Hungary’s economic trajectory? Does Orban’s concept of national capitalism contradict itself? And what has Orban’s courtship of Russia and China accomplished?

Those are just a few of the questions that came up in my recent conversation with FP economics columnist Adam Tooze on the podcast we co-host, Ones and Tooze. What follows is an excerpt, edited for length and clarity. For the full conversation, look for Ones and Tooze wherever you get your podcasts. And check out Adam’s Substack newsletter.

Cameron Abadi: What sort of economic manager has Viktor Orban been? Has he meaningfully changed the economic trajectory of Hungary in any significant way?

Adam Tooze: Orban’s policy has been a blend of nationalism—really, preference for local Hungarian business, which basically means 13 cronies of his; the Financial Times has done an incredible exposé on this group—and a kind of national populism.

For ordinary Hungarians, probably the most significant thing is he brought unemployment down from 10 percent to closer to 2 percent, at the absolutely lowest level, and promoted Hungary as a center for not so much service-sector investment but manufacturing investment by West European companies—above all, German car manufacturers, who established a major base for late-stage internal combustion engine manufacturing in Hungary.

All of this was going, by the standards of Eastern Europe: better than Slovakia, not as well as Poland, not as harsh as the Baltic states, above Bulgaria—kind of a viable path. Then, Hungary hit the internal combustion engines shock (the car crisis in Germany we’ve spoken about on the program), and COVID, and increasing antagonism between Hungary and the EU. Effectively, the EU began to cut off Hungarian funding, which is very large in relation to Hungarian GDP.

The reason why Orban’s grip on power is shaky now—I think by common consent—is that the COVID shock, the slowdown in economic growth, and increasing questions about public finance came together to really pose the question.

Because we talk about inflation and COVID and the 2022 energy shock, but in Hungary at times inflation went as high as 25 percent—very, very rapid inflation. Wages caught up, but nevertheless people are engaged in a frantic race to maintain their standard of living. In terms of real consumption, Hungary has the lowest consumption per capita in the EU. If anyone’s had the privilege of visiting, you’ll know it feels like a middle-income country once you’re outside the hotspots of billionaire oligarch wealth.

So, that’s really the backdrop for the election. It’s a story of big structural issues: the shock of the 2008-2009 financial crisis, the assertion of nationalism, 10 years of what looked like a fairly stable path, and then a series of mounting crises—polycrisis, if you like—since 2020, which the Orban regime has found it increasingly difficult to deal with. This is culminating now in this credible political challenge to Orban and Fidesz, his........

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