“The merchant should precede the soldier.”
Otto von Bismarck
“People will remain peaceful as long as
they believe they are rich and powerful enough to
insidiously put an economic dictatorship in place.”
“Why should we remain the EU’s dupes?”
Viktor Orbán, May 2021
The Hungarian economic magazine “Új Egyenlőség”, in cooperation with the Friedrich Ebert Foundation, recently interviewed Andreas Nölke, professor in political science at the Goethe University in Frankfurt and author of a number of comparative works concerning capitalism. In 2018, he published an article analysing the different paths taken by the emerging markets with regards to dependent capitalism and state-permeated capitalism.
According to Nölke, the V4 countries are the perfect examples of dependent market economies. Let’s critically summarise his approach and to compare it with other examples:
Nölke considers market economies as being dependent when they have a high proportion of foreign direct investment (FDI) as part of their GDP. This proportion forms a consistent pattern since the start of European integration. This method of measuring economic dependency shows that, with regards to emerging markets, there are no other economies (a possible exemption being Northern Mexico) are as dependent on FDI as those of the V4 countries and, broadly speaking, Central and Eastern Europe. Indeed, other emerging economies, as well as those of so-called developed countries, rarely does FDI represent more than 1/3 of their GDP.
The Visegrád Group – Thirty years of economic dependence?
In thirty years, this region of Europe has become somewhat of a “heaven for multinationals”, a place where salaries are relatively low, people are sufficiently trained/qualified, weak banking regulations and a near-perfect openness when it comes to foreign investments. It is this path of economic openness and Western integration that the Central European countries decided to tread since the beginning of the 1990s and have never veered off it.