Angrynomics and Ways to Strengthen the Economic Bases of Democracies

Participants

• Júlia Király, Professor of IBS Budapest and Corvinus University Budapest, former Deputy Governor of the Hungarian Central Bank
• Mark Blyth, Author of Angrynomics, Professor, Brown University
• Martin Wolf, Associate Editor and Chief Economics Commentator, Financial Times
• Martin Sandbu, European Economics Commentator, Financial Times

Moderator: Sándor Zsíros, Euronews

Background

The discussion of this panel meeting was based on Mark Blyth’s book called ‘Angrynomics’. Participants discussed the self-contradictory phenomenon, whereas never before in human history was so good to live, yet anger and the sense of great inequalities are dominant across our societies. Panelists highlighted their views on the origins of economic frustration and come across ideas about what is needed to prevent the breakdown of democracies due to broken economic models.

Main takeaways

• Capitalist economies are like computers: national economics are diverse, but the operating system is similar and with each tweak comes another bug (= crisis).
• Capitalism and democracy are complementary opposites, one needs the other, but there is tension, as democracy is local and egalitarian, while capitalism is global and
• If the economy goes wrong, demagogy starts to erode democracies, so financial crises are inevitably damaging for democracies.
• The institutional safety that prevents people from market shocks were taken away with neoliberal policies.
• Economics are driving politics, but it is wrong to scapegoat globalisation, as economic decline predates globalisation and is rather a by-product of technical developments and is rather a by-product of technical developments and is rather a by-product of technical developments and automatization.
• Unregulated (Anglo-American) and highly regulated (Southern European) labour markets both produce precariousness.
• In wars, states spend at an unimaginable scale and COVID-19 is like a war.
• Low-interest rates and insignificant inflation makes borrowing for the US, EU and UK a way out of the current crisis, for countries with no reserve currency, it is much riskier.
• Citizens will benefit from the EU’s Recovery Plan, but there is still work do.
• The crisis in Hungary started earlier than in 2008, there was already austerity before the crisis which eventually led to the rise of the Orbán regime.
• Hungarian plutocracy, corruption and oligarchism is coming from the political elite, who build economic empires, and not from the members of the financial world.

Policy recommendations

• Do not allow the hijack of economic developments by anti-globalist voices.
• Do not send low productivity work to low-income countries as there will be more incentives for further automatization.
• Limit the amount of precarious, low-paid jobs, instead of closing borders and reversing globalisation.
• Tackle extreme wealth and inequality, and don't leave power in the hands of a relatively small amount of wealthy people.