Part II


One of the many (and unfortunate) paradoxes of Hungarian cultural and political life has to do with the legacy of the famous political philosopher, statesman and novelist: József Eötvös (1813–1871). In Hungary all schoolchildren know about Eötvös as an “important novelist” – whose novels are available in paperback or hardcover editions (although most young people read them less for pleasure than out of duty), whereas his principal and still highly relevant and topical work of political philosophy is out of print – in Hungarian, in German (part of it Eötvös had written in German) and in English.

In fact The Dominant Ideas of the Nineteenth Century and Their Impact on the State(1) was and remains one of the outstanding books of liberal political philosophy (and source of many references in his speeches and writings by the late Prime Minister Antall). Eötvös defined the dominant ideas of the 19th century under three headings: freedom, equality and nationality. How to reconcile these three concepts and objectives was for Eötvös the greatest challenge faced by the (liberal) state in his time and in the future.

The modern concepts of the nation and of nationality emerged in the wake of the American and French revolutions of the late 18th century. Ever since they have had a profound impact on the evolution of the world, both at the level of ideas and in shaping domestic and international political order. Also, as Eötvös rightly pointed out, the issues of “equality” (discrimination, inherited or other privileges, social class, etc.) and “freedom” (in particular political freedom and the freedom to claim the right to create and unite “national communities” within the borders of existing or new “national states” without the presence of members of another “nation” among them) could become important sources of tensions. For Eötvös “patriotism” was a legitimate (and to use the modern jargon “inclusive”) concept and essential for strengthening the liberal state. Aggressive nationalism, however, was not only “exclusive” (to use again contemporary jargon) but a threat to domestic and international peace and freedom.

Today’s readers (of whom there are not many or certainly not enough) can recognise the validity of his analysis and vision for understanding both the tragedies of the 20th century and the achievements of the free society since 1945. According to a late 20th century reviewer: “Although The Dominant Ideas has often been described as a classic treatise on the concept of nationality, it appears that Eötvös regarded it even more as a treatise on the concept of liberty. What will strike most readers, however, is how accurately Eötvös predicted the dangers of nationalism.(2) He concluded that nationalism was indeed the most threatening danger to European civilisation, a conclusion which has been borne out by events of the twentieth century.”(3)

In this context one should also mention the work and political philosophy of another great 19th century Hungarian scholar, Károly Keleti. Keleti in his pioneering statistical analysis of Hungarian society and economy showed the extraordinary diversity of the Hungarian people by language, ethnicity and religion.(4) His statistical survey showed that the share of “magyar-speakers” represented barely half of the country’s population. Yet, it was right to speak of a Hungarian nation that included all the minorities as part of the political community. Keleti declared his strong opposition to the concept which was then and later prevalent in Germany and defined the nation exclusively through the common language. As for Eötvös, for Keleti also the liberal challenge was how to reduce privileges and how to maintain the cohesion of the political community despite the diversity that his study showed in such detail. This, of course, remains today the key political challenge of the European Union and its member countries.


Democracy, freedom, prosperity and social progress begin at home. What is the desirable economic and social order? This is the principal political question of the last hundred years. Connected questions: how much government? How much market? How open or closed an economy? Federalism and subsidiarity, the social dimension – consensus or conflict are important elements of the debate. Today once more this is an intellectual and a pragmatic question and challenge.

The economic and social models for which theories have been developed and implemented in the last 100 years include (in random order, without this list being complete): the many varieties of the market economy, the totalitarian controlled economy, the Socialist (planned) economy, the “libertarian” model (19th century robber capitalism), the highly concentrated private sector dominated (limited competition) economy, protectionism, international integration, global finance or the original social market economy.

Much, if not most, of the economic theories are focused on an “economy” – i.e. a country, or even more a nation state where there is a sovereign government. Despite “globalisation” the national perspective tends to prevail. It is a disquieting thought that 80 per cent of the Nobel prizes in economics awarded by the Bank of Sweden (the national Swedish Central Bank) went to economists who qualify as “American economists”. Yet the American perspective (and the mathematical and econometric approach that dominates it) has narrowed rather than broadened during this period. The nature and quality of the national economic models, of course, depend also on their relations to other countries and to the world economy as a whole.

The Western model of the democratic political system and the socially conscious market economy led to unprecedented material prosperity and remarkable social progress after the Second World War. It has also shown great resilience, e.g. during and after the crises of the 1970s as well as the crisis in the wake of the near meltdown of the international financial system in the autumn of 2008.

Among the European Union’s Objectives, Article I-3/3 of the project of the Constitution of the European Union stipulated that “… the Union shall work for a Europe of sustainable development based on balanced economic growth, a social market economy, highly competitive and aiming at full employment and social progress, and with a high level of protection and improvement of the quality of the environment. It shall promote scientific and technological advance…”(5)

“What is called today globalisation has been the result of a trend of more than fifty years of liberalisation and of bolstering competition and the market economy. While globalisation represents the success of the liberal market economy, today it comes under increasing attacks not only from those who are nostalgic for the collectivist, planned economy, but also from committed liberals and supporters of the market economy. The criticism by the latter group is focused on the often dogmatic approach of the ultraliberal advocates of the market principle at all levels of society and who underestimate the need for social cohesion and solidarity at the national and the international level.

Today there is a need for a new more balanced approach to domestic and international economic and social policies. While the model of the ‘social market economy’(6) is not a set of equations that can be slavishly copied, the basic principles and spirit of the social market economy can be a useful source of ideas in the search for such a new policy model in today’s globalised international political and economic order.”

The social market economy and the free society

The original German post-war model of the “social market economy” was probably the most successful approach to combining the goal of economic growth and prosperity with social progress and monetary and financial stability: “The concept of the social market economy implied a rejection both of the ultra-liberalism of the old Manchester school and of collectivist planning and of government control and economic nationalism. The model of the social market economy aimed at reconciling the freedom and efficiency of the market economy with equity and social progress and solidarity.”(7)

The term “social market economy” was coined to describe the objectives, theories and policies related to the reconstruction of the German economy and German society after the horrors of the National Socialist regime and the destruction of the German economy during the Second World War. Wilhelm Röpke was the most systematic critique of what happened in Germany and he offered also the most complete alternative. Also, Röpke provided the international dimension and the international vision along with a systematic view of the “German problem”: in this respect he was unique among the numerous German scholars who escaped from Hitler’s regime.

Röpke’s seminal contribution was based on the clear perception that both capitalism in its extreme versions in which monopolies and cartels were combined with 19th century “laissez-faire” doctrines, and collectivism, that is state- controlled economies (under National Socialism or Communism in their most extreme versions) were among the root causes of the economic and social crises and catastrophes of the first half of the 20th century. They were both to be firmly rejected as the economic model for a new democratic Germany.

At the start, the concept of the social market economy was far from uncontested. However, in the light of the rapid recovery and the economic and social success of the policies of the Federal Republic, the “social market economy” was increasingly recognised as one of the most successful “models” of reconstruction and of economic policies in general, not only in the post-war period but in modern times as well.

The concept of the “social market economy” was rejected by both Friedrich Hayek and Ludwig von Mises from the start – as it is by their present-day followers. There is a wide difference between the original concept of “market conform” government policies and interventions developed by Wilhelm Röpke and today’s “market fundamentalists”. Today, Röpke seems to have been forgotten by the new “neoliberals” while Hayek and Mises receive widespread attention in the debate on globalisation and the market economy.

The principal conclusion of this article is that the search for a new economic and social model for the 21st century could and should be inspired by the original basic principles and experience of the social market economy. In developing the concepts and implementing a new model and approach, it is essential to take into account the economic, political, social aspects and the ethical and moral dimensions. This is not just a technical “methodological” requirement. It has to do with the goals and the chances of success of the “good society”.(8)


Social market economy and humanitarian values

For today’s neoliberals or libertarians, “solidarity” and “humanitarian values” are concepts incompatible with market efficiency and fiscal rectitude. They also argue that migration and asylum should be perceived only from a purely materialistic perspective – rejoining thereby the hard-core Marxists for whom human rights were a sign of weakness of “cosmopolitan bourgeois civilisation”.

This was certainly not the case for the founding fathers of the social market economy and of the Federal Republic. It is worth quoting here Chiara Jasson, a student of international relations and European affairs: “I believe that it is only if humanism and humanitarian values are our guiding principles that we will be able to achieve lasting peace, prosperity and justice in the world. If we fail to do so, the very future of humanity may be threatened. This is where I see the relevance of Röpke’s example today. Röpke was an economist, a political philosopher and a sociologist. In all these capacities, he was above all a fighter for a more humane society.”(9)

The three pillars of the protection of the human person

Freedom and protection of the life, dignity, economic prospects and social progress of all have been the essential features of the “free world” and one of the mainsprings of the “Western Community”.

Both the Communists and the National Socialists, as well as their imitators and their successors in oppressing and persecuting their own people and their chosen “enemies”, considered “human rights”, “humanitarian concerns” as a liberal fantasy and a sign of weakness, which was to be systematically eradicated both from the “dictatorship of the proletariat” and from the Reich and its satellites dominated by the superior race of Germans, from the “New Caliphate”, and ultimately from the face of the earth.

The end of the Cold War was supposed to end the “ideological justification” of systematic human rights violations. Yet from the beginning of the 1990s there was an explosive growth of “humanitarian crises” and massive human rights violations on four continents, including Europe. Also, new ideologies of intolerance and violence, leading to the ultimate crime of genocide, based on the misuse of religion, nationalism and ethnicity marked the quarter century since the end of the Cold War.

“The last fifty years have witnessed a remarkable deepening and broadening of universal international obligations in the field of human rights, humanitarian rules of behaviour during war and the protection of refugees… The question whether in a given political system or society, the effective organising principle is the respect of laws by all, or conversely, legal obligations are not implemented and are meaningless, is not a purely legal question, but an eminently political one. The respect or the disrespect of laws (in particular of the laws dealing with human rights) is one of the fundamental issues that distinguishes various types of political systems and regimes.”

This issue assumes particular importance in the international context. Today it is generally recognised that the implementation of, or lack of respect for human rights and humanitarian obligations, will determine to a significant extent the quality of the future international order. The fact is that, whereas the principles cover a growing range of specific rights and the obligations are becoming quasi universal either through ratification or through the mechanism of customary law, respect of obligations has been far from universal.

This led to the affirmation of the responsibility of the international community for the protection of individuals, families or groups, independently of their origin or citizenship. The three main pillars of this protection are:

(1) human rights in war and peace (including the “responsibility to protect”(10);

(2) protection and humanitarian action in times of war, as defined in international humanitarian law; and

(3) the protection of refugees(11) and other victims of forced migration including the obligation of “non-refoulement”.(12)


A unique achievement: the principle of “non-refoulement”

Article 33 of the 1951 Geneva Convention – on “non-refoulement” – is the cornerstone of the international refugee regime and represents one of the greatest achievements of the (Western) liberal tradition: “No contracting State shall expel or return (‘refouler’) a refugee in any manner whatsoever to the frontiers of territories where his life or freedom would be threatened on account of his race, religion, nationality, membership of a particular social group or political opinion.”(13)

“Non-refoulement” is binding not only on the signatories of the Convention and is enshrined in their national legislation (as for example Article 16a [Right of asylum] of the German Constitution: “1/ Persons persecuted on political grounds shall have the right of asylum”). It has universal validity and is binding on all states; it is recognised as part of customary international law.

While the definition of a refugee in the 1951 Convention focuses on individuals being persecuted by their governments, it has been increasingly recognised that people fleeing from war and massive random violence also deserve to benefit from asylum.(14)

François Bugnion, Director for International Law and Cooperation within the Movement of the International Committee of the Red Cross, wrote, quoting the High Commissioner for Refugees: “Refugees continue to flee persecution in countries at peace, but armed conflict is undeniably the greatest cause of refugee flows today. The nature of conflict has also changed, with the proliferation of internal ethnically or religiously based struggles in which displacement has become an objective, rather than merely a consequence of war.”

And Bugnion continued: “International humanitarian law and refugee law developed as two distinct branches of law, with their specific sources, beneficiaries and instruments. But both have the same ultimate objective: the protection of the life and dignity of human beings. Indeed, as the eminent lawyer and former judge at the International Court of Justice, Sir Hersch Lauterpacht, put it: ‘The protection of human personality and of its fundamental rights is the ultimate purpose of all law, national and international.’”(15)

Refugees are not migrants

One of the problems that the current crisis makes more difficult to deal with is the confusion between “migrants” and “refugees”, not only in the general public but also in the declarations of the highest decision makers in the EU and its member countries. Thus it is worth recalling an important statement made by Erika Feller, Director of the Department of International Protections, United Nations High Commissioner for Refugees, ten years ago:

“Refugees are not migrants. It is dangerous, and detrimental to refugee protection, to confuse the two groups, terminologically or otherwise. It is also not to the benefit of the broader migration debate, as some abuse of the asylum system by illegal migrants colours the public view of migration, giving it a taint of criminality, even robbing it of its positive aspects while tilting the focus towards control. Where refugees are seen as little more than a sub-group of irregular migrants, the control of their movement is likely to take precedence over meeting their protection needs. Refoulement, the return of a refugee to a territory where his or her life or freedom is threatened, is but one, potentially grave, consequence. This confusion can be particularly problematic in the current environment, where national security is high on the agendas of governments and where concerns about international crime and terrorism have made states particularly wary about unauthorised arrivals. A refugee situation may well be part of a broader migratory movement, or may even itself develop into one. To define when and where refugee protection approaches and when and where, alternatively, migration based approaches should prevail is a challenge.”(16)

This point was also stressed at an earlier Webster University Geneva conference by Volker Türk (currently Assistant High Commissioner for Protection of UNHCR). “The distinction between refugees and asylum-seekers on the one hand and ordinary migrants on the other has become increasingly blurred. A number of migratory movements are difficult to dissect into their different components. It is a fact that often population flows are not homogenous but of a mixed, composite character. A side effect of the growing complexity in this area is that refugees and asylum-seekers bear the brunt of the negativity surrounding migration today. The focus on policies of deterrence and migration control has tainted the institution of asylum. By making it virtually impossible for refugees and asylum-seekers to reach asylum countries or to effect family reunion through legal means, it has also stigmatised them as people trying to circumvent the law.”(17)

Replacement migration and the economics of migration?

According to the United Nations population projections, published under the title Replacement Migration 15 years ago, Japan and virtually all the countries of Europe are expected to decrease in population size over the next 50 years. For example, the population of Italy, currently 57 million, is projected to decline to 41 million by 2050. The Russian Federation is expected to decrease from 147 million to 121 million between 2000 and 2050. Similarly, the population of Japan, currently 127 million, is projected to decline to 105 million by 2050. The decline for Hungary was estimated at 25% of the population to a level of 7.5 million.

There is a connection between differences in demographic developments in different countries or continents and migration movements. This, however, does not mean that the problems of declining populations in many OECD countries and those of still rapidly growing populations and high unemployment rates in many poor countries can be solved one-to-one through encouraging and managing “South- North” migration. The UN study certainly did not suggest that this would be a possible or desirable outcome. This would have not been the case even in the 19th century when both refugees and economic migrants faced much fewer obstacles of entry than they did most of the time in the 20th century.(18)

The economic and social benefits and costs of migration are among the most controversial issues among economists and political leaders despite the vast amount of current and historical evidence available. One of the factors that makes these calculations so complex and the outcomes so wide-ranging, is the multiplicity of time horizons and actors involved: short-, medium- and long-term (where the long term may mean several generations), and the individual migrant, his or her family, the host community and the country of origin. Without going into the range of results going from major negatives to major positives (high costs vs. high benefits) one of the paradoxes in this highly political economic calculus should be mentioned. The defenders of absolute freedom of trade in goods and services and in financial instruments, without any consideration for job losses and other social consequences, often complain about the “high costs of immigration” and especially of refugees, and defend restrictive and selective rather than liberal and generous asylum and immigration policies in the leading market economies – including Germany.

To be continued

1 Joseph von Eötvös (1851 and 1854): Der Einfluss der herrschenden Ideen des 19. Jahrhunderts auf den Staat, Brockhaus, Leipzig, Volumes I and II.

2 On nationalism and freedom see in Hans Kohn’s classic: “This new morality expressed itself in the age of nationalism in the two concepts of nationality and liberty. They have often seemed almost inseparable. Yet they are different in origin and duration. In the word ‘liberty’ vibrates the message that pervades all human history and makes it human: the promise of the dignity of man, of his rights as an individual, of his duties to his fellow men, a message dimly perceived from the very beginning, and growing in breadth and depth, until it comes to fruition in seventeenth century England and dominates the philosophy of the eighteenth and the life of the nineteenth century in the Western world. Compared with it, nationalism is only a passing form of integration, beneficial and vitalising, yet by its own exaggeration and dynamism easily destructive of human liberty.” Hans Kohn (1944, 1961): The Idea of Nationalism, The Macmillan Company, New York.

3 Elizabeth A. Drummond: Review of Eötvös, József, The Dominant Ideas of the Nineteenth Century and Their Impact on the State. Volume I: Diagnosis, HABSBURG, H-Net Reviews. April 1997.

4 Károly Keleti (1871): Hazánk és népe a közgazdaság és társadalmi statistika szempontjából [Our country and its people seen from the point of view of economics and social statistics], Athenaum, Pest.

5 The same objective was maintained in the text of the Treaty of Lisbon.

6 Hungary was the only former communist country that attempted to conduct its “regime change” using the model of the “social market economy”. Prime Minister Antall and his government received absolutely no intellectual or moral encouragement or recognition for choosing this approach from their new Western partners, not only from countries like Britain or the USA, but from the Federal Republic of Germany either. See also Otto Hieronymi (1990): Economic Policies for the New Hungary: Proposals for a Coherent Approach, Battelle Press, Columbus.

7 Otto Hieronymi (2002): “Wilhelm Röpke, the Social Market Economy and Today’s Domestic and International Order”, in Otto Hieronymi, Chiara Jasson, Alexandra Roversi (editors): Colloque Wilhelm Röpke: The Relevance of His Teaching Today, HEI-Webster University, Geneva, 2002, pp. 8–32, and Otto Hieronymi (2005): “The ‘Social Market Economy’ and Globalisation: The Lessons from the European Model for Latin America”, in Emilio Fontela Montes and Joaquin Guzmàn Cueva (eds.): Brasil y la Economia Social de Mercado, Cuadernos del Grupo de Alcantara, Madrid.

8 Otto Hieronymi and Martino Lo Cascio (editors) 2016: A New Social Market for the 21st Century, Aracne Editrice, Roma.

9 Chiara Jasson (2002): “Wilhelm Röpke and Humanism and Humanitarian Values Today”; in Otto Hieronymi, Chiara Jasson, Alexandra Roversi (editors): Colloque Wilhelm Röpke…, p. 52

10 See Otto Hieronymi: “From the Responsibility to Protect to Perpetual Peace”, paper presented at the Webster University Conference on The Future of the Responsibility to Protect, Geneva, 9 December 2014.

11 “Political refugees – and the totalitarian regimes were the greatest producers of refugees of the last 90 years – are essentially people persecuted because of their identity (real or imaginary): political, religious, racial identity or social class. This is fully recognised by the definition of a refugee in the 1951 Convention.” Otto Hieronymi and Samar Hasan (editors): Migrants and Refugees: the Challenge of Identity and Integration, The Proceedings of the 10th Annual Humanitarian Conference of Webster University, UNHCR, Refugee Survey Quarterly, Vol. 24, No. 4, Oxford University Press, 2005.

12 Otto Hieronymi: “Implementing Humanitarian and Human Rights Obligations: the Role of the International Community”, Refugee Survey Quarterly, Vol. 18, No. 3, 1999.

13 Article 33, 1951 Geneva Convention on the Protection of Refugees.

14 (a) “… owing to well-founded fear of being persecuted for reasons of race, religion, nationality or political opinion, is outside the country of his nationality and is unable or, owing to such fear or for reasons other than personal convenience, is unwilling to avail himself of the protection of that country… who, not having a nationality and being outside the country of his former habitual residence as a result of such events, is unable or, owing to such fear, is unwilling to return to it….” (Statutes of UNHCR, 1950, Geneva Convention 1951).

(b) “… the term ‘refugee’ shall also apply to every person, who, owing to external aggression, occupation, foreign domination or events seriously disturbing public order in either part or whole of his country of origin or nationality, is compelled to leave his place of habitual residence in order to seek refuge in another place outside his country of origin or nationality…” (Organisation of African Unity Convention, 1969). “Considering that the grant of asylum may place unduly heavy burden on certain countries, and that a satisfactory solution of a problem of which the United Nations has recognised the international scope and nature cannot therefore be achieved without international cooperation…”

15 François Bugnion: “Humanitarian Law and the Protection of Refugees”, in Otto Hieronymi and Samar Hasan (editors): Migrants and Refugees…, Vol. 24, No. 4.

16 Erika Feller: “Refugees Are Not Migrants”, in Otto Hieronymi and Samar Hasan (editors): Migrants and Refugees…, Vol. 24, No. 4.

17 Volker Turk: “Current Migration Flows: the Task of Protection”, in Otto Hieronymi and Chiara Jasson (editors): Europe, Refugees and International Migration, The Proceedings of the 6th Annual Humanitarian Conference of Webster University, UNHCR, Refugee Survey Quarterly, Vol. 20, No. 2, Oxford University Press, 2001.

18 It is worth quoting Michael R. Marrus, the author of one of the most moving histories of the fate of refugees (The Unwanted: European Refugees in the Twentieth Century), on what freedom of movement meant in the 19th century: “Throughout the nineteenth century there were no serious administrative impediments to the movement of persons between states. The English author Norman Angell remembered his own youth in the 1890s, when he decided to leave the European continent for America: ‘I had no passport, no exit permit, no visa, no number on a quota, and none of those things was asked for on my arrival in the United States’. … Passports existed at that time, and a handful of states, including the tsarist and Ottoman empires required them for internal travel. In Russia, the saying went, ‘No man can exist without a passport’. But these documents had largely fallen into disuse internationally, remaining simply as diplomatic instruments to designate persons requiring or requesting special attention. Officials never asked travellers’ nationality.”

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