A public debate in Budapest has revealed two opposing interpretations of Hungary’s economic model: one celebrates the expansion of the “middle class”, the other sees a situation of political dependency rather than real autonomy.
Publisher’s Note
We are publishing this summary of a recent debate that was open to the public, one of the sort that seldom becomes visible to the greater public in today’s Hungary. The exchange offers a rare opportunity to observe how the Government constructs and justifies its “economic success” narrative—and how this narrative can be critically examined, contextualised, and contested.
Hungary’s Middle Class as Political Narrative
At a crowded October event at the Budapest University of Technology and Economics, government commissioner László György and economist Zoltán Pogátsa confronted one another over the meaning of Hungary’s economic transformation since 2010. The discussion revolved around familiar topics – taxation, debt, strategic sectors – yet something more fundamental was at stake: Who has the authority to define what Hungary’s middle class is and what role should the state play in sustaining it?
Behind the technical arguments lay two incompatible visions of how modern nation-states should cultivate social stability: whether through targeted political interventions, or by building universal, institutional frameworks.
György offered a confident narrative. In his interpretation, Hungary deliberately abandoned a “benefits-based” model after 2010 and replaced it with a work- and knowledge-based society. He argued that nearly two million people entered the Hungarian middle class in little more than a decade and that this social group now encompasses more than half the population. He argued that tax reform, especially the flat personal income tax, should be understood not only as a fiscal shift, but also as a moral one: doing extra work is no longer “punished” by bumping earners into higher tax brackets. Family subsidies, preferential housing loans, and regulated utility prices were presented as institutional guarantees shielding hardworking, child-raising households from external shocks. György emphasised that this model strengthens financial sovereignty, since a higher share of public debt is financed domestically and strategic sectors – energy, banking, media, construction, the food industry – are increasingly returning to domestic ownership.
This interpretation treats work not only as an economic activity, but also as a moral identity. The citizen who works, pays taxes, and raises children becomes the backbone of the nation. According to György, this is not merely a national solution, but an exportable model. Hungary, in this story, is no longer catching up, but offers an alternative to others: proof that an emerging economy can resist external pressures, avoid high public debt, and still expand the middle class through targeted state interventions. For supporters of this scheme, the decisive achievement is not simply higher wages, but also the creation of a predictable life trajectory for families who would otherwise be exposed to the instability of volatile global markets.
The Systemic Critique: A “Middle Class” in Name Only?
Zoltán Pogátsa questioned the descriptive validity of this narrative. In his view, calling a social group the “middle class” does not make it one. A genuine middle class should be able to save beyond its monthly expenses, maintain its living standard without relying on political decisions, switch jobs without existential risk, and withstand unexpected shocks, such as illness or a sudden rise in interest rates. If most households cannot do so, the term “middle class” becomes not an analytical category, but a political label that encourages loyalty to the Government granting such status.
Pogátsa described the prevailing system a clientelist system: access to resources depends on state decisions, not on universal entitlements. The decisive question is not what one earns on the labour market, but whether one benefits from subsidised loans, regulated utility prices, or sector-specific tax breaks. Such an environment produces not an autonomous bourgeoisie, but a politically-conditioned clientele whose security can be withdrawn at any time by the state. Stability becomes contingent, not structural. He pointed out that a household dependent on utility price caps and preferential credit cannot be considered middle class in the classical sociological sense, even if its income formally qualifies it for that label.
From this perspective, the Government is not creating a classic middle class, but a dependent group whose economic stability is anchored in public subsidies, rather than in earning income on the market and in guarantees of institutional stability. Loyalty to the regime is shaped through citizens’ vulnerability: those who rely on political decisions for the ability to afford their housing, childcare, or utility bills cannot easily oppose the system that sustains them. Pogátsa argued that the very expansion the Government celebrates may simply reflect the redistribution of public resources to selected groups, rather than organic upward mobility.
Two Models of the State
Behind this disagreement lies the deeper contrast in how the state is imagined by each side. György sees the state as a strategic actor that protects national interests, intervenes selectively, and rewards those who contribute to national renewal. It resembles a firm steward who distributes resources responsibly and expects “discipline” in return. Policy success is measured by the country’s self-reliance, its ability to withstand external shocks, and by the defence of the social order that has already been stabilised. In this model, it is legitimate – even necessary – for the state to shape social groups, including the middle class, through targeted transfers and regulation.
Pogátsa’s perspective places the emphasis not on selected beneficiaries, but on universal conditions for everybody. A state that needs to provide constant financial protection to certain groups, he argues, has failed to build robust institutions. Instead of targeted subsidies, he calls for functioning public education, healthcare, and innovation capacity – structures which reduce citizens’ economic dependence on political decisions altogether. For him, a stable middle class cannot emerge if access to quality services depends on individuals’ political status or private spending. In this view, a strong middle class does not have to be protected by the state day-to-day; it is able to stand on its own because the institutional environment guarantees fair opportunities to all.
This disagreement, therefore, concerns not only empirical claims about income or consumption, but also opposing theories of statehood: whether social security should be delivered through discretionary support, or through non-negotiable, public infrastructure.
Public Debt as a Symbolic Fault Line
The sharpest disagreement emerged around public debt. Pogátsa argued that public borrowing is not a problem when it finances productivity-enhancing investments, such as investing in education or high-value-added industries. Public debt, in this logic, is a tool for enabling future mobility: societies without public investment cannot climb the value chain, and middle-class stability becomes impossible without the long-term returns on public investment. He pointed to other European countries in which high public debt coexists with strong institutions, high wages, and stable social mobility.
György rejected this view, describing public debt as a burden on future generations that risks the very stability of the “middle class” the Government seeks to protect. His model is risk-averse: without public fiscal discipline, he argues, there is no basis on which to guarantee long-term “middle class” security. In his reasoning, external debt increases vulnerability by handing strategic control to foreign lenders, whereas domestic public debt financing preserves national autonomy. The debate over public debt figures, therefore, conceals this moral disagreement about intergenerational justice and political sovereignty.
Two Hungaries
The one interpretation highlights higher employment rates, tax incentives for work, and the growing share of Hungarian capital owners as evidence that Hungary has developed a self-sustaining economic model. The other points to Hungary’s low wages, deteriorating public services, and limited upward mobility as proof that the supposed “middle class” is fragile, dependent, and vulnerable to political change. What one side sees as a story of national strength is seen by the other side as the control and distribution of politically-mediated resources in a systemic way.
The question, therefore, is not just which side is right about the numbers, but also whether stability should protect the existing social order, or enable individuals to move beyond it. If the “middle class” is defined by its political loyalties rather than its structural security, then the Government’s achievements may prove temporary. However, if the system succeeds to create lasting financial independence and Hungarian capital owners it may represent a viable alternative model for other semi-peripheral economies.
Conclusion
The debate ultimately juxtaposed two visions of modern Hungary. György’s narrative is one of stability, discipline, and national autonomy, portraying the Hungarian model as a perfected success that can now be exported. Pogátsa’s narrative is one of Hungary’s fragility, inequality, and institutional weakness, questioning whether the system can sustain itself without continuous political intervention. Both interpretations agree on one thing: the middle class is the decisive arena in which Hungary’s future will be decided. The unresolved question is whether a third path is possible, – one combining economic stability with genuine autonomy and turning the term “middle class” from a political designation into a lived social reality.
