Gordon Bajnai

Gordon Bajnai

Gordon Bajnai was the prime minister of Hungary from 2009 to 2010.

Banjai took charge of Hungary in the aftermath of the Global Financial Crisis and lead the country through an incredibly difficult period in its history.

As prime minister, Gordon was the last socially democratic leader of Hungary before the country took a turn towards a more right-wing, populist and now largely autocratic regime. Gordon is now the chair of global investment firm Campbell Lutyens.

Gordon joined Misha Zelinsky for a fascinating discussion about, Brexit and the rise of populism, the role economics plays in politics, the march of nationalism in Europe and just how fragile democracy really is.

To my fellow Diplomates out there – if you’re enjoying the show, please be sure to subscribe, rate and review. It really helps! 

 

Misha Zelinsky:                  Welcome, Gordon Bajnai to Diplomates. Thank you for joining us.

Gordon Banjai:                   Thank you for your time.

Misha Zelinsky:                  No, thank you, but I was just seeking before as I was walking here there were just a couple Eastern Europeans in London, so you’re we’re really living the European-London cliché right now, but given that we are in London, and I’ll say it for the recording. We’re in London right now that obviously Brexit is top of the mind here. Where to from here? From Australia, it all seems quite mad. The clock’s ticking. Where do you think this is actually heading now as we head towards the cliff with the potential hard Brexit?

Gordon Banjai:                   Well, every country have their own special kind of populism. I think the special tailor-made populism of the United Kingdom is the hatred towards Europe, and that’s probably a result and it’s a lesson for other countries that if for 40 years politicians try to blame everything on Europe and take all the credit to themselves, that’s then sometimes people start to believe them. Brexit, but it’s been a very clumsy two years since the vote.

Misha Zelinsky:                  Yeah, and it has been two. It’s gone quick.

Gordon Banjai:                   Quick, but two years after it’s still unclear what’s going to happen as we speak. We are just a couple of days from the first vote in the House of Commons about the deal that was negotiated by the British government, and they are not very likely to win that vote. The uncertainty will remain and be honest, in 80 days to go out to Brexit.

For people in business, or people with investments, or people with jobs in the UK, it’s a huge uncertainty with a very short time to react. It is clearly hurting the economy longterm. Whatever happens, it’s going to be negative for the economy, and then even in the best scenario, but there are further down downside scenarios that can hurt the UK better. But instead of, just let me give you two very interesting polls that I’ve read recently.

Within the voters, the committed voters of the Conservative Party, 54% would support no-deal Brexit, hard Brexit, and only 18% of last week, 18% was supporting the deal proposed by the Prime Minister. On the other hand, if you look at the whole country, the latest poll I have seen was 54% against Brexit, only 46% for Brexit. At the national level, it’s a turnaround-

Misha Zelinsky:                  From 52-48.

Gordon Banjai:                   52-48 yeah, the other way.

Misha Zelinsky:                  In 2016, yeah.

Gordon Banjai:                   Just still not the huge shift even [crosstalk 00:03:01], but it is a shift. It shows how far committed hardcore politics can go from the national mood if we believe both [parties 00:03:14].

Misha Zelinsky:                  Just going back to the original value, sort of touch on populars and then anti-European sentiment in the UK, but was that what drove the Brexit vote? Were there other factors? It’s been sort of debated to death, but what’s in your mind drove that vote, the leave vote?

Gordon Banjai:                   Every such political upsets or surprise votes combine many factors, but I think that the specific nature of these referendums, direct democracy, is that they give a chance for many different groups in society to express their protest by a single vote against something.

Misha Zelinsky:                  So something’s annoying you and you just vote, leave.

Gordon Banjai:                   So many people, I think, have felt disenfranchised, sort of inequality in the UK has grown significantly. It has always been one of the most unequal countries within the European Union. Inequality has grown significantly after the global crisis. That’s one factor. But that seems like a social problem, and still it transferred somehow into an identity crisis. That’s very similar to the US, where many of the disenfranchised Midwest voters who lost their jobs have turned into a kind of identity politics, who are supporting ‘America first.’

Misha Zelinsky:                  That’s right. Similarly, we see the Northern England vote to leave, which is where you’ve seen a lot of deindustrializations. It’s similar to Trump, the industrialization in the Midwest.

Gordon Banjai:                   That’s a global phenomenon, that populism, which is collecting the vote of those who are losing on the social economic agenda. Populism is often able, at least right wing populism, because this is just one form of populism. But right wing populism is able to collect that vote with an identity message. That’s very varying, and that’s very similar to what happened in the 1930s.

Misha Zelinsky:                  It’s interesting on the 1930s. Sometimes it’s seen as a very basic analysis, but do you think it’s similar? Is it 1929-1939 all over again, where you have a major economic event? The Depression is somewhere, the global financial crisis. Then the rise of communism and fascism, et cetera, across Europe. Is this the same thing again, or is it something different?

Gordon Banjai:                   Well, I think there are similarities. We are living in a different age and with different history experiences. But, yes. There are similar trends and rules applied here. First, there is a time lag between the economic crisis and the rise of populism. Second is the interesting switch from the social problem to the identity politics. Then the problem with identity politics is that it’s often cynical politicians use identity, be it the national or religious identity, or regional identity against a national identity. They use this to get into power, and to stay in power, they need to continuously escalate the feelings. They need to pump more steam into the steam room until it blows up.

The permanent escalation is an inherent feature of this kind of politics, and it usually doesn’t end well. That’s probably a commonality.

Misha Zelinsky:                  To put it mildly, yeah.

Gordon Banjai:                   If you look at the whole global politics today, the system is breaking down. One consequence of the global financial crisis, technological change, the inequality in the developed societies all ending up is that the status quo, as we have known, as you and I have grown up, you probably less than I, but we have both grown up in the Pax Americana, the system which was guaranteed or supplied by the United States. This system is breaking apart because the US is pulling up, creating a vacuum. Then some actors, often maligned actors, are occupying that vacuum, taking it over.

That’s also a result of this kind of populism. Also of the fact, if you take one step back and look deeper into what’s behind populism, is that following the great financial crisis, the legitimacy of the status quo in most developed countries and the global status quo has disappeared, that the political reserve that was keeping the system together was used as a result of not just the crisis, but the way the crisis was managed in that. The real issue is, if there is a next crisis, which is going to come soon, that political reserve will not be there to back up the system.

So, we are going into the next crisis with much less political reserves, much less legitimacy behind the status quo, and less tools in the policy makers, especially economic tools. [crosstalk 00:08:52]-

Misha Zelinsky:                  Yeah, [military 00:08:52] policy being so exhausted and fiscal policy being restricted.

Gordon Banjai:                   And in that context, Australia is doing quite well actually, compared to other countries.

Misha Zelinsky:                  Well, yeah. You wouldn’t know it though, looking at our politics, which is a little bit just as crazy as well. We’ve had multiples prime ministers in recent years.

Gordon Banjai:                   One experience that I can share, speaking from Hungary, from Europe, from this part of the world, is that there is a process of deterioration, gradual moral deterioration, but seems to be radically different today, will become the new norm tomorrow. Other things will appear radical, which the day after tomorrow will become the new normal. It’s a kind of amortization of centrist politics, ethics, and morale, play by the rules, checks and balances. Those countries which can stop this amortization early on are more fortunate than the ones who go through this long process, because it can always get worse.

Misha Zelinsky:                  Indeed. But before we get to the democratic question, I was to unpack a little bit about the drivers of populism. You talked about populism and inequality, the GFC as a trigger point, though inequality was probably on the rise before that, but middle class people really got wiped out during the global financial crisis. You became prime minister in Hungary during the GFC, so you understood this crisis very well. In retrospect, did governments do enough to protect ordinary people during the global financial crisis? Is economic equality the antidote to this sort of ethno right wing nationalism? Is more equality the answer to this? How do you see that?

Gordon Banjai:                   Fortunate countries who have enough room to maneuver, i.e., take on more, to survive the crisis, the deepest point of the crisis could, or are able to protect their middle class. But unfortunate countries like my own country, Hungary, was very indebted and not trusted by the markets with new credit. So we have to take a much bigger change and shift, more radical reform that my government was running. We just have to make sure that we survive, but there was not much room to maneuver in the social arena at the time.

But you know, crisis doesn’t have an ideology. There is no left wing crisis and right wing crisis. Crisis wants solutions quickly. Like military surgeon versus the plastic surgeon, you can’t measure by the millimeter. You have to cut 10 centimeters away from the wound to make sure that it doesn’t kill the patient. You have to act quickly and decisively and focus on the core areas to stop bleeding, so that’s what you do in crisis management, because that doesn’t have a philosophy.

To put it differently, in life you can’t choose what situations you get into. What you can choose is how you behave. If you are coming from a progressive center-left approach, you can try to manage the crisis, to stave it off, and still try to keep the texture of society together. One thing that we could learn, for example, from the Thatcher era in the United Kingdom is: if you let, in certain regions or geographies, the system of labor collapse, the social inept to collapse, then it can decades to recover. If you can hold together the middle classes, the systems of employment lower in the classes. If you kept people in jobs, or if you can keep them able to get back to jobs as soon as there is some rebounds, then after the crisis, there’s a chance to recover quickly. However, if you let it collapse under the weight of the crisis, then it maybe decays.

Misha Zelinsky:                  What is it then, do you think? We’ve had this crisis. and inequality is rising. Why do you think that the ring wing populism has taken hold much stronger, seemingly, than left wing populism of, say, redistribution, high taxes, more social safety? You’ve seen a lot more similarly nationalism style populism rise up, be it the UK, the United States, other countries in Europe. Why do you think social democrats are struggling to articulate a populism message on economics?

Gordon Banjai:                   I wish I had known the perfect answer.

Misha Zelinsky:                  Probably a lot of money to be made if you knew the answer!

Gordon Banjai:                   Interestingly in some countries, the progressive forces have done pretty well. If you think about, President Obama managed the economy pretty well in the crisis, and the US bounced back very, very quickly and very decisively. It’s one of the longest period of recovery, post-crisis recovery in economic history. There are some other good examples. Portugal has a progressive left government, and they are doing reasonably well, very well.

Misha Zelinsky:                  But Obama, of course, led to Trump, which is the question.

Gordon Banjai:                   But there are some other factors in that, because if you look at when Obama left, he was very popular. Maybe it’s also the campaign and the candidate explains part of that.

Misha Zelinsky:                  Absolutely, yeah.

Gordon Banjai:                   But clearly there is a phenomenon of identity politics, and typically progressive and left parties are much weaker identity politics than right wing parties.

Misha Zelinsky:                  Which is ironic, because it’s the ring wing that often accuses progressives of wanting to play identity politics, because they’re-

Gordon Banjai:                   [crosstalk 00:15:29].

Misha Zelinsky:                  Yes, but also through the promotion of women’s rights, or the promotion of minorities groups, is that somehow that is identity politics, whereas nationalist politics is identity politics as well. It’s quite ironic in that sense. We’ve talked a little bit about economics. One issue we haven’t really talked about here, and it’s probably that when you look at the Brexit vote as well, is this question of immigration. Because when you look at some of the countries that have become more populism right wing … Poland, it’s done quite well economically, really.

Gordon Banjai:                   That’s a perfect example of how contrary to what Bill Clinton said in 1991 or 1992 in the campaign, you remember is

Misha Zelinsky:                  “It’s the economy, stupid.”

Gordon Banjai:                   “It’s the economy, stupid.”

Misha Zelinsky:                  Yeah.

Gordon Banjai:                   And everybody thought he had found the stone of wisdom. There are times when it’s the economy, stupid, and 25 years later, his wife long the election despite the fact that the US was booming economically. In Poland, there was a regime change despite the fact that Poland was the only country in Central Europe, or probably the only country in Europe, which was growing in the middle of the crisis as well.

Misha Zelinsky:                  Correct.

Gordon Banjai:                   It’s not just the economy, stupid. Sometimes it’s identity. If I need to find an explanation, the one that is closest to my heart and brain probably is that every democracy is built on middle classes, broad and stable middle classes. If the middle classes start to fear of losing their status, their stability, if they lose their perspective, their horizon looking into the future … If you think about, this is the first time in 70 years in the western part of the world, developed world, is that the middle classes fear that their kids will do worse off than themselves.

Misha Zelinsky:                  Interesting. There’s an interesting statistic on this where in the United States in the 40s, 90% of Americans believed their kids would do better than them, where today, it’s more like 40%. That’s kind of indicative.

Gordon Banjai:                   In some countries, it’s even less. If you think about youth unemployment in Italy [crosstalk 00:17:47]-

Misha Zelinsky:                  50% in some places, yeah.

Gordon Banjai:                   France as well. Youth unemployment and the general perspective is the horizon is looking down, not up. That’s a factor that explains the volatility, the anxiety of the middle classes. If the middle classes are trembling, then populism is on the growth. Just to quote you one famous English historian, “Revolutions are not made by the poor.”

Misha Zelinsky:                  [crosstalk 00:18:18].

Gordon Banjai:                   “It’s made by those who get disappointed.”

Misha Zelinsky:                  Hm, interesting. This anxiety around immigration, you’re seeing it Trump, you’re seeing it in Brexit, you’re seeing it in Europe. Merkel’s intake of Syrian refugees … Does immigration come up as an issue when the economy is doing badly? Or is it more of a cultural problem? Some people say, “It’s inequality and that’s what’s driving everything.” Others say, “Well, it’s the cultural changes that make people anxious.” Do you have a take on that?

Gordon Banjai:                   What right wing populists do is they transform the economic problem into an identity problem. They say, “Immigrants take your jobs,” although in fact, very often it’s automation or other forms of technology that take your jobs. Protectionism is the economic policy of nationalism. If you think about the trade wars that are revived in the world, and they are threatening, probably the single biggest geopolitical threat at the moment, is the US-China conflict, which goes well beyond a trade war. If you think about that, there is direct translation of identity politics into economic policy.

It’s interesting. I’m spending a lot of time in the UK. Since Brexit, there is a sharp downturn in immigration here. There is a shortage of labor in certain segments of the economy. But still, many people are opposed to immigration because they don’t see the cause of the problem and the problem together. Coming from the progressive side, we have this tendency of trying to explain all these technocratic policy different questions. In the era of populism, policy is not really a question. Policy is not the main topic of politics, it’s identity. It’s security. If you want to win elections from the progressive side, you need to develop your vocabulary, your politics, and catch up on those arguments.

Misha Zelinsky:                  And make people feel, rather than explain to them how something is going to work. Right?

Gordon Banjai:                   You have to find an answer to the issue of identity emotions, as well. Technocratic explanations make people feel … Let me take a step back to explain what I want to say. I think there was a consensus for a long time that these egg-headed technocrats are running these countries based on policies and complication explanations, which nobody understands, but they make the world run smooth, so it’s okay. The GFC just blew that up. Many people say, “Look, you egg-headed technocrats! You are corrupt. You played only for yourself. You messed up, so you were not that smart as you pretended to be. So why should we listen to you? Why shouldn’t we listen to ourselves or our own instincts? Or people who deliver, who cater for those instincts?”

That’s what populism is. You have to regain that trust, and it’s very, very, difficult. You have to find the language, and you have to find the right messages and as well as underlying policies.

Misha Zelinsky:                  Coming back to this question of democracy in Europe, after the fall of the Berlin wall, there was a kind of a democratic bloom. Everyone thought, “Well, these democracies are going to just be on the march inevitably.” Now we’re starting to see, you’ve got Poland, and Hungary, and Turkey, and Russia that are more or less autocratic. Then you’ve got Italy now that’s elected a pro-Russian government. How concerning do you think it is for the future of democracy in Europe right now? Is there any positives there to draw on?

Gordon Banjai:                   Don’t forget that democracy is a tool, not a means. It’s a means, not an end, to put it in proper image. It’s a means, not an end. I’m convinced that that’s the best means to the right end.

Misha Zelinsky:                  Sure.

Gordon Banjai:                   But for most people, they want a solution.

Misha Zelinsky:                  Yeah, they want the outcome.

Gordon Banjai:                   The outcome, and democracy doesn’t deliver. Compared to that, they believe rightly or wrongly, I think wrongly, that other types of systems deliver better results. Then democracy can go out of fashion.

Misha Zelinsky:                  Yeah. I think that’s a really good point. I say this to the people. In ’89, people didn’t sit there and read Jefferson, and then read Marx, and then say, “Well, what Jefferson’s argument is a lot more compelling, because I believe in liberal democracy.” They looked at the results, right? Middle class growth in wester countries was much better than the equality of everyone being poor in the Eastern Bloc.

Then how do democracies deliver for people? What should the focus be? Should the focus then be on economic inequality?

Gordon Banjai:                   I think it should be. Irrespective of whether it’s a democracy or autocracy or dictatorship, the leading elite tend to get corrupted unless they are very well checked and controlled. Democracy is the best way to control that, but even then, there can be a kind of self interest of people being … If the elite in any society don’t realize that they need to [keep 00:24:48] integrating people at the bottom of society, and keep broadening, stabilizing the middle class, and keep letting people into the middle class from the up, then they can destabilize themselves. It’s not a new idea. There was this Italian sociologist and philosophist, Pareto, who developed his ideas in the 1920s, 1930s. He said, “Societies, where the elite stops integrating, the best people from the bottom are breaking down sooner or later, and the elite will lose power because people are rebel against them.”

Misha Zelinsky:                  Now, that’s interesting. We’ve talked a little bit about countries, maybe, that people say, “Okay, Hungary and Poland. Then there’s autocracy in these countries, and Russians have always been a bit different.” You bring it a little bit closer to the main game, and England’s, the UK’s going through its things. But France, we’ve seen these really quite scary demonstrations in Paris with these yellow vest demonstrations against what Macron’s doing there. Democracy … He’s attempting a reform agenda, but it doesn’t seem that people are going along with him, and there’s been a violent backlash to that.

Gordon Banjai:                   First of all, France has great traditions in going out to the street, and sometimes being very violent.

Misha Zelinsky:                  That’s true.

Gordon Banjai:                   It’s not long ago. I remember in 2005 or 2006 in the outskirts of Paris. People were burning shops and cars similarly, so it’s not new. That’s part of the French political culture, which would not be part of other country’s culture. On the other hand, clearly Macron has a very difficult job to do, because he needs to reform a country which hasn’t really decided whether it belongs to the south or the north of Europe. France has this identity issue. It loves its southern identity, but it’s hard, but its brain knows that it’s better to be in the north.

So France, which is one of the biggest economies in the world, and is quite a good economy, I have to say, but it is need of some of these reforms. The problem is because of they’re relatively high in debt, it means there is little room to manoeuvre. If you want to introduce reforms, if you want to be more labour-friendly, if you want to reduce taxes to mobilize entrepreneurship, then you have to take away from somewhere else. While Macron was delivering much more than any of his recent predecessors on economic reforms, he hasn’t or couldn’t deliver on the social part to keep people happy, because he didn’t have the room to manoeuvre. So, I’m kind of understanding of his problems, but I think he realized he needs to change also style. The art of politics, it’s not just policies and facts and figures, but it’s style and explanation, and explaining people why you do things.

Misha Zelinsky:                  But the French are very important to the European project, because for a long time, Merkel was really the central figure in Europe maybe holding the show together through the crisis, but she’s now exiting and has gone out, taken a lot of damage on the immigration issue with the million refugees. But Macron was meant to be the man to lead a European renaissance. But with him under pressure, you can start to see the beginnings of what holds Europe together, what are the things that hold Europe together. Because you’ve got … We haven’t really talked about it yet, but I think we probably need to, which is the interest of Putin to very much break up Europe. There’s very much those links between Le Pen and the other nationalists in the European countries, linked to the Russian destabilization of those countries. What is the future of Europe in terms of holding itself together where Macron’s under pressure, Merkel’s gone, and the Russians are meddling?

Gordon Banjai:                   Well, there are two ways to assess this context: one is the internal, then the other is the external, naturally. The external dimension that Europe is under multiple pressure, at least three different directions: Russia, which is interested in weakening and sort of breaking up and negotiating directly in each country. And also the US recently, under the Trump administration, is interested to have a bilateral relationships. Then China, thirdly, which is interesting in maintaining the rules-based global trading system and access to the European market, but it is also trying to access countries one by one, because with many of the countries individually, each of these countries can have a much bigger, much weightier, much more sizeable player than as if Europe kept itself together.

Europe together is a 500 million market. Even after Brexit, it’s 460 million [crosstalk 00:30:34].

Misha Zelinsky:                  It’s a big-

Gordon Banjai:                   Still very big.

Misha Zelinsky:                  Yeah.

Gordon Banjai:                   And it’s one of the first world’s, probably the world’s most valuable market if you look at number of people times GDP per capita. It’s the most exciting marketplace in the world. It has actually delivered on much of the promises of a single market. It is quite a single market in many aspect. But on the other hand, if Europe starts to utilize its weight of 500 million market, and starts to negotiate in a more assertive way with other powers … Says, “All right. You want access to my market? I want access to your market as well. You have to play by the rules.”

If Europe starts to develop as a military union … If Europe starts to behave as a financial union, which it hasn’t delivered greatly on … And if Europe starts to deploy united policy on migration, and starts to protect its external border, then Europe could be a much more heavyweight player in the global order.

Europe’s natural self interest is to organize itself as Europe and not as individual states. If you think about Germany, the largest country is Europe is 82 million people. What is it compared to China, US, or Russia? But if you look at Europe with 450 or 500 million people, that’s a size in which you can remain a player at the table. Because Europe’s real question, looking ahead 20-30 years, whether it remains part of the rule setting table or will become the rule taker. It will be quite a shift compared to its last 500 years.

You could look at Europe as a kind of Noah’s ark in the flood of globalization for the nations of Europe to survive. It’s quite [balancing 00:32:54] to jump off Noah’s ark. It’s reasonable to discuss about the direction, but to quarrel at the wheel is not very good, because the ark can capsize. [crosstalk 00:33:14]. You want to keep it together. You want to discuss what is the right direction to go, but you also want to act in an orderly and coordinated way on the ark, so as that you can land in the good course.

Misha Zelinsky:                  How concerned should European countries then be, as they go through their election seasons, about Russian interference? There’s suggestions there was interference in Brexit. There’s suggestions you’ve seen it with Le Pen and the yellow shirts. How concerned should European countries be about that?

Gordon Banjai:                   I think Europeans should be concerned about external influence. There’s a asymmetric situation, because maligned powers are looking at democracies and saying, “Where is the [oculus 00:34:11] here of democracies?” And that’s elections and the daily operation of democracy. Through social media and other means, and corrupting occasionally certain parties in these countries, promoting radical parties, they can destabilize democracy.

Those countries which don’t have this nitty gritty problem of democracy and free voting, they can exploit other’s weakness this way. That’s an asymmetric war. Europe and even the United States, in that sense, should react to this by protecting themselves, protecting their democracy, but not allowing any interference.

Misha Zelinsky:                  It’s a challenge, isn’t it, though? The thing that won the Cold War was the openness of the west versus the closed systems of the Communist Bloc, and the other countries. It seems almost that openness is being used against the west in a way that we’ve never seen before. With social media, through economic means, and others. And as a result, democracy lost a bit of the swagger, so to speak. So how do you make openness a virtue again, is the question. I’m not sure about-

Gordon Banjai:                   First of all, openness is inside a country or a region, externally, you have to assert your powers much more strongly. First of all, you have to create the community of democracies and coordinate against those who don’t follow those principles. Second, you have to punish bad behavior. Thirdly, people will tend to exploit the rules-based system unless you very stiff, very firm in protecting that system. What I see today, because many of these [maligned 00:36:28] actors are exploiting these internal divisions, and that can be lethally dangerous unless re-protected. The Australian election system so far has proved to one of the most successful in the world. I don’t know if you feel that way in [crosstalk 00:36:46], but look from the outside … For example, the mandatory voting system cuts out certain things like the fight for mobilizing. Because you don’t need to fight to mobilize voters, there’s a natural gravity to work for the can tre.

Misha Zelinsky:                  That’s right.

Gordon Banjai:                   That’s a big benefit of the Australian electoral system, which others could learn from. Because in many countries, think of the US. Many politicians are working on trying to keep voters from voting.

Misha Zelinsky:                  Yeah, that’s right. Yep.

Gordon Banjai:                   Or asymmetrically, trying to mobilize their voters and keep others away. If you think about Cambridge Analytica and what they have done in the US elections, that was tactics about that. How do you keep the voters of Hillary Clinton away from voting while mobilizing the Trump voters? Those are nasty games. If you don’t have that problem, that’s already a better place.

Misha Zelinsky:                  The last thing I want to ask you about is: I’ve been thinking a lot about democracy recently. Over the summer I was doing some reading. It’s relatively new thing in human history, democracy. I take it for granted as something that’s always been in my life, but it’s really a blip in human history. What are the warning signs, do you think, that a democracy is headed down to the wrong path into an anocracy  or an autocracy? What are the things that we should be watchful for?

Gordon Banjai:                   Right. Great question. I love it. First, endangered middle classes, the destabilization of middle classes. Second, polarization of politics, political language, which you mentioned. Behavior. Third and most important probably is media. If the mass media, and that includes social media, is losing its standards, ethical standards, or it gets under the influence of malign actors … If mass media cannot be held to ethics, or it loses its balance, the balance coverage, then if private or public forces get control of a significant part of the media, then media turns into propaganda.

Misha Zelinsky:                  Yeah.

Gordon Banjai:                   And the propaganda, you can brainwash people into very stupid things. Think about the 1930s Germany. Adolf Hitler couldn’t have done in 1934 what he was doing in 1939, simply because of the Goebbelsian propaganda and brainwash. Then after media come the other institutions, independent institutions. The independence of courts, prosecutors, police, the control over political parties, checks and balances. These are very important things. Democracy is not simply the will of the majority. It’s also the ability for power to change hands if the majority changes its mind. It’s the right to change your mind and change your leaders.

It’s not only about the will of the majority. It’s also the protection of minority. Even when there is a strong majority, democracy’s about probably three years from now, the other side will have a majority. You have to maintain the probability. That’s what will keep power in control, in check.

Misha Zelinsky:                  Yeah, J. S. Mill talked about the tyranny of the majority, right? So you need to make sure that the majority is not necessarily-

Gordon Banjai:                   [crosstalk 00:40:36] countries, in many countries in central eastern Europe, in other countries, developed countries. That’s a phenomenon that’s only possible if there is a strong control of media and propaganda, because that facilitates, that’s the anteroom for dictatorship.

Misha Zelinsky:                  Well, thank you so much. One final question that I ask all my guests is if they’re in Australia, I ask them about international people. I know you’re a huge fan of Australia, regularly attend, but if you’re having a barbecue at your place, what three Australians, alive or dead, would you invite along?

Gordon Banjai:                   My childhood hero, Angus Young from AC/DC.

Misha Zelinsky:                  Very good!

Gordon Banjai:                   In his shorts.

Misha Zelinsky:                  Playing the music, yeah?

Gordon Banjai:                   Yes. Prime Minister Keating. I’ve heard a lot of good things. I’ve never met him, but he seems to be a very smart and-

Misha Zelinsky:                  He’s more of an opera man than an AC/DC man, but he’ll-

Gordon Banjai:                   It will be an interesting group around the barbecue. Thirdly, I have a good friend who I think very highly of as an investor from my close profession. Mark Delaney from Australia, super.

Misha Zelinsky:                  Very good.

Gordon Banjai:                   He is a guru of investing, and I look up to him for his investments.

Misha Zelinsky:                  Well, you’ve got investing, politics, and AC/DC. It’d be a good combination at your barbecue. I’d like to be a fly on the wall at that. But anyway, look. Thank you for joining Diplomates. It’s a punny name, and it also implies that you’re my mate. I don’t often get to claim former prime ministers as a mate, but just so you know I am.

Gordon Banjai:                   [You’re welcome 00:42:19].

Misha Zelinsky:                  But also, Hungary’s not a country that gets a lot of discussion in Australia, but my assistant Google, I did some research. There are 100,000 Hungarians in Australia, so I’m hoping that at least some of them listen and I can build an audience off the back of you as well. Thank you so much for your time. Look forward to having you back someday in the future.

Gordon Banjai:                   Thank you very much, and greetings to all of those Hungarians in Australia.

Misha Zelinsky:                  Thank you. Including our current treasurer, who is a Hungarian and a Jew. His family fled after the … Josh Frydenberg is, but shout out to Josh from Diplomates. I doubt he is someone who listens to my podcast, but hopefully he listens sometime. Thanks, Gordon.

Gordon Banjai:                   Thank you very much.