A one-day conference organised by the Patriotism and Progress Public Policy Foundation set up by former prime minister Gordon Bajnai focused on eliminating deep poverty, social disintegration and the low level of employment in the country. http://www.hazaeshaladas.hu/ftp/research.pdf

Closing the event, Bajnai said Hungary’s welfare system needs transparency and efficiency while being equitable and demonstrating solidarity. He said these qualities were represented less and less in Hungary’s social policy.

A transcript of the speech held by Mr Gordon Bajnai on 29 March 2012, at the conference of the Patriotism and Progress Public Policy Foundation

Ladies and Gentlemen, dear former and current Colleagues,

Ladies and Gentlemen, dear Friends,

North, or South Korea? East, or West Germany? Or, moving closer in time and space: Greece, or Ireland? The difference in the outcome of good and bad governance is worlds apart, heaven and hell, or – to be more low-key – success or failure, in the course of just a few decades. If twenty years from now we were to look back at these few decades of Hungarian history, which side would Hungary be on: success or failure? And where will those countries, which started on this path together with us, end up? Slovakia, the Czech Republic, Poland, or even Romania? What does it take for Hungary to emerge as a successful, prosperous and acclaimed nation within the European Union in a few decades’ time? What does it take for Hungary to become strong? What form of social policy would a strong Hungary be founded upon?

A country is strong if its citizens are also strong. Because only strong citizens can uphold a strong state. And a citizen is strong if his livelihood is ensured. If he understands what, and why, something is happening. If he is able to come to terms with life’s changes, both mentally as well as emotionally. If he is granted the opportunity to fulfill his inner potential, and to exercise rights. This leads to another issue, particularly current today: that a state’s strength should manifest itself not against its own citizens, but in the representation of their common interests. The strength of a community of citizens is founded on a shared identity and common goals. If they have jointly articulated values and interests. If they have faith in shared institutions, as well as in one another. The underlying principles in social policy of such trust are solidarity, fairness, transparency and efficacy. By solidarity I mean that the community cares for those who for some apparent objective, or acknowledgeable subjective reason, are unable to provide for themselves. Fairness refers to taking other people’s points of view, rights and needs into account compassionately. Transparency means that citizens’ money and taxes should be spent for the purpose originally intended. Efficacy refers to the notion that the money spent on solidarity must be put to use to achieve the most optimal social consequences. These four elements serve as the pillars for public trust in social policy.

Today in Hungary, all four of these pillars seem to be collapsing. This process did not begin just recently. The past twenty yeas lacked transparency and failed to deliver in terms of efficacy. Over the last two years, partly – but not exclusively – as a result of the economic crisis, both the morality and the rationality of solidarity was questioned, and the concept of fairness cracked. These developments have unforeseeable and dangerous consequences for us all.

The twenty-year-old vicious circle of poverty and unemployment was further accelerated by the crisis. The first wave of the crisis hit the lower middle class, which had slowly risen in the past few decades. It was this lower middle class who – thanks to cheap credit and gradually improving work conditions – were able to climb the social ladder and cling on to their status as lower middle class. And it was precisely these elements (cheap credit, improving work conditions) that disappeared, and continue to evaporate nowadays, with the threat of falling behind looming over the heads of hundreds of thousands of people. However, in the second wave of the crisis, the series of austerity measures in effect from 2006 onwards hit the most impoverished groups of Hungarian society as well. This can only partly be blamed on the crisis. The mistakes, delusions or often conscious choices between social values of both the past and present, often not a direct result of the crisis, are also at fault. All these led to much avoidable and pointless suffering for hundreds of thousands of families, and – if no change occurs in current trends and policies – this figure will substantially increase over the next period.

Why? Because the small-scale entrepreneur cannot finance his business through credit today, and is forced to shut down his enterprise because he lost his current credit. What does he think? What about the unskilled worker, who loses his job nowadays because of the costs of the unreasonably high minimum wage? Or what does the unemployed person think, who cannot find a job because investment is either lacking or fleeing the country, while the period of eligibility for unemployment benefits has decreased to one of the lowest levels in Europe? What does the holder of a mortgage feel, when he has to pay 4-5% more each month, on a worsening exchange rate, because of a discredited economic policy? And what about the student, who wants to enter the labor market, but finds the channels of mobility, of education, closing? There are innumerable potential losers of current social policies, and the danger of massive backsliding threatens the stability of our society more than ever before. To quote a famous historian, it is not the poor who start revolutions, but the disillusioned.

Societal policy, including social policy in its stricter sense, must simultaneously serve two purposes: stability and mobility. Stability – implying the keeping of poverty levels at a still acceptable level, and the prevention of the backsliding of the lower middle class – is the token of social peace. Nevertheless, today it is ever more current to draw attention to the role of social mobility: without the upholding, or opening of such channels, every society becomes rigid, intellectually debilitated, its efficacy and competitiveness decreases, which will sooner or later lead to either some form of decline or unrest. Therefore, the situation of those in danger must be stabilized, and the prospects for rising higher up the social ladder must be opened for those currently at the bottom. This serves public interest, this is one of the key tasks of good governance.

Still, one of the greatest obstacles to political action in this regard is the general view propagated over the past few years by political debate, which presents two extreme views of poverty. On the one hand, many claim the poor are simply victims of circumstance. This opinion is in minority at the moment, but there was a time when it was a widely-held belief. This view suggests that the impoverished are the innocent, and in some ways helpless, losers of social development, with regards to whom the only possible responsibility lies in maintaining an endurable existence through aid, either by the re-allocation of income, or at the expense of society’s growth potential. We have heard this example many times, as one of the most prevalent opinions. It is articulated in the study as well.

The other extreme sees the poor as unworthy. They are the ones to blame, since they are unwilling to fight for any improvement. They are the ones to be forced to work, to take on any kind of job, through financial incentives, legal threats, or even tougher means if necessary. I don’t know if there is such a thing as being beyond the end of the spectrum? I think not. But this physical wonder did appear in Hungary over the past period. An even more radical view came to light compared to this other extreme. Those political grave-robbers emerged who associate the stigma of unworthiness with crime, and – for the purposes of easier consumption – wrap the issue of poverty in a layer of racism. Therefore, before trying to build bridges between the half-truths of both ends of the spectrum, we must all first come to terms with this false and cynical view, or distance ourselves from it. Because so long as we do not distance ourselves from it, we are unable to engage in meaningful dialogue.

If we return to the statements at the two ends of the spectrum: the victims or the undeserving, I ask you to consider where the boundaries lie between the two categories? Is the three-year-old child born into poverty, who is not sent to day-care, undeserving? Or the same child, when at, say, eight years of age, is put in a so-called “special class” because his development is behind that of his peers? Or, a bit later, is he undeserving, if we hadn’t yet thought so, when he leaves school around fifteen without having learned how to functionally read. As we know from the study by Gábor Kertesi and his colleagues, this is how 20-25% of Hungarian students complete primary education. Is he unworthy, or is he a victim? Is the same young man a victim when he leaves the school system at eighteen, without any work skills, and decides to choose welfare benefits over looking for work? Is he a victim, if he doesn’t send his own child to day-care at twenty-five? He didn’t need it either, his experience tells him. Where is the line, at which point in life does one change from being a victim to being undeserving? To what degree can determination, the nurturing environment be blamed? Where does the responsibility of parents end? Where does the absence of the state, or its inefficiency, come into play? When can we state that something is solely the responsibility of the individual?

The reason I elaborated this long chain of thought is because I wished for you to understand that the half-truths on the extreme ends of the spectrum, of victims and the unworthy, does nothing else but shift blame. In actual fact, both half-truths concern the past: who is responsible for the current situation? But it is precisely this viewpoint that leads to nowhere with regards to the future. It does not solve the problem. Whereas for us, it is exactly the future that matters. That is why we believe, and this is the subject of the study, of today’s conference, and perhaps it also became apparent from the political debate as well: that the solution of to this problem can only be found in, and based upon, the intelligent compatibility of the two half-truths. That is why we must say, even if it goes against current political trends, that any decent society has a moral obligation, and enlightened self-interest, in solidarity and caring for those who are for some apparent objective, or acknowledgeable subjective, reason are unable to provide for themselves. An unconditional duty.

But it should also be mentioned that in exchange for this solidarity, two things must be expected from those who accept support. The first is that the individual receiving aid, the beneficiary of such solidarity, must take the opportunity presented – if any, and do his best to break free from this hopelessness within his own lifetime. As we also heard today, there are situations where this is already impossible. But in such cases, if one cannot escape during his lifetime, than the least the individual can do is ensure that the same misfortune is not passed on to his children. Do not let the trap close on them, and help them break free!

It is on these underlying principles that the pact between the majority of society and those in need of solidarity can be struck. I could put it differently: only in this way, through the rewriting of this pact, through discussing and making it understandable to others, can the faith of the middle and upper class, the financers of such solidarity be regained. Which – as was mentioned several times previously today – is the political precondition for a functioning system of social solidarity in Hungary.

We must accept that the middle class, fearing their own backsliding, views this system of solidarity as a competitor, a potential threat to themselves. Not everyone, but a large proportion. This substantial proportion significantly influences politics nowadays; in fact, there are many who step up to this political plate, who abuse it to their own political ends. It is therefore no coincidence, as we already mentioned, that we dedicated much time and effort in this study to examine public opinion on this topic thoroughly, from multiple perspectives. In our suggestions, we tried to find the boundaries of acceptable reforms, since such reforms only serve their long-term purpose if they survive political cycles. If they are not wiped out by society’s resistance. We have experienced this countless times over the past ten years.

As for our proposals, there are two things I would like to make clear and set forth in advance. The first is that we do not believe that every type of welfare benefit can be made conditional. There are a number of issues that cannot solved through conditional aid, but must nevertheless be dealt with by society. The second is that we do not think that the difficulties of Hungarian society, of poverty and of social polarization can be overcome by social policy alone. We are convinced that such a program is only viable if it is simultaneously, consciously incorporates education, employment, social policy, health care, and – on the other hand, as will be discussed in our next, economy-focused study – from the side of labor market demand. Because it seems that this has been forgotten in the most recent period. Although it has already been mentioned, attention must be drawn to the fact that this is not an action plan for the Roma minority. It could not reasonably be so, because – as the study itself points out – only approximately a third or a half (around 35-40% according to more exact statistics) of those living in deep poverty belongs to the Roma minority. This is an incredibly high proportion compared to the ratio of the Roma minority within Hungary’s total population, which is around 5-6%. Nevertheless, this figure is a warning sign to those who attempt to explain poverty from a racial ideology, to show that their logic fails even within their own false pretenses, as roughly 60% of the deeply impoverished are not of Roma origin.

A third point to be made regarding the study is that we believe that the execution of a successful program requires a long time. A period much longer than electoral cycles. Some of the experimental programs detailed in the study have pilot phases lasting up to four years in six regions. Only after the successful outcome of these pilot phases can the program be expanded to the national level, so as to avoid wasting large sums of money or “experimenting” on the whole country. Early development, or the proposals on financial support for day-care, are all interventions at such a young age that their social benefits will only materialize on the long-term. Just consider: we are talking about two- or three-year-olds, perhaps even one-year-olds in the case of early development or premature births, who will only become tax-paying citizens in, say, twenty years’ time, whereas the program must immediately be implemented. That is precisely why, because it is so far away in time, that we cannot delay any further. This brings me to my next point: if anybody cannot be convinced through the heart, then he should be convinced by the mind, or by his own personal livelihood, that without the resolution of these issues of Hungarian society, upholding the stability of Hungary becomes impossible on the medium-term. Who is going to pay taxes, pensions here? Who will maintain the system of pensions, the expected funds of which were recently decreased by 25%? On whose skilled labor will high added-value production, and the subsequent economic and social prosperity, be founded upon? If these questions are not dealt with, if we are unable to integrate an ever greater number of children born into unskilled, impoverished families in an ageing population… This is what I meant when I referred to enlightened self-interest. It was precisely what I thought of when I said that if one cannot be convinced through the heart, then he should try to understand the problem in terms of utility, from the viewpoint of his own self-interest and monetary gain. Because leaving the situation as it is now will within a few decades imply stellar costs, and lead to an unbearable existence, even for those fortunate enough to stand on the other side of this social chasm.

Ladies and Gentlemen,

These programs cannot endure U-turns every four years. South Korea, West Germany, Ireland and Finland – these countries were able to emerge among the most successful developed nations within the time frame of a few generations or a couple of decades. But in each nation, this was founded on the social insight that without a general consensus on fundamental social goals, without limiting political competition within these limits, catching up is impossible; there would be no successful society, no strong Hungary. It won’t work without this precondition.

Ladies and Gentlemen,

The Patriotism and Progress Public Policy Foundation was established to promote the classic cause of good governance in Hungary. To present an action plan for both our country and for progress, looking past the risks and side-effects of political competition (which are nevertheless vital for a democracy). We have now presented our first program.

Thank you for your kind attention.

Last Updated on Tuesday, 10 April 2012 08:39