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April 5, 2011

Protecting Hungary's Freedoms

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The government of Prime Minister Viktor Orbán has voiced its belief that Hungarians need to return to a philosophy of self-reliance and personal responsibility. Yet this can only happen if the state does not take on responsibilities that belong to individuals.

So it's troubling that Hungary's proposed new constitution, in its current form, contains provisions that would empower the state beyond what is suitable for protecting economic liberties, and also provides weak institutional guarantees for the future protection of such liberties. In post-communist economies, where the proper distinction between private and public property was distorted by years of collectivist rule, it is especially crucial to provide robust guarantees for property rights and to draw a clear line between state responsibility and individual responsibility. As Hungarian leaders haggle over what will be the country's first new constitution since it gained independence in 1989, they would do well to ensure that their charter does just that.

Lawmakers are currently debating and amending the draft submitted by Mr. Orbán's governing Fidesz-Christian Democratic coalition, and are scheduled to vote on it on April 18. The drafters and Mr. Orbán have committed themselves to Hungary's future economic sustainability, having already adopted a flat personal income tax of 16% and included a government-spending cap at 50% of GDP in the proposed constitution. At a time when national economies in Europe are collapsing left and right due to years of runaway public spending, Budapest is moving in the right direction.

But the proposed constitution also includes a series of second-generation rights and state objectives that will commit future governments to providing "adequate housing," "access to work," "sports," public education and a state-run pension system to all Hungarians. Whereas natural rights (such as life, liberty and property) are rights that governments protect from infringement by others, positive rights (such as housing and leisure) are things that governments are expected to provide. This redefinition of the nature of rights necessarily and fundamentally alters the relationship between individual and the state and increases the scope of state power. The wealth redistribution necessary to provide these rights undermines the protection of private property.

America's founders, during their own constitutional drafting process, also contemplated the "different and unequal faculties of acquiring property" among citizens. But they understood that government could not be used to redistribute wealth in order to create equal outcomes. As Thomas Jefferson warned, "To take from one . . . in order to spare to others . . . is to violate arbitrarily the first principle of association, the guarantee to everyone the free exercise of his industry and the fruits acquired by it."

Economic freedom requires a sound legal system that protects private property and enforces contracts, without overburdening the economy with unnecessary mandates and excessive taxation. Fidesz and the Christian Democrats seem to understand this at least in part, judging by their legislation requiring transparent state budgets and frugal public spending. But they may be forgetting that Jefferson's principles also require protections for individual liberties, without which individual responsibility is meaningless.

Their proposed constitution also enables future state intervention into private economic activity on the basis of ill-defined "community objectives." Specifically, the current draft mandates: "Employees and employers will cooperate in the interest of maintaining the national economy, ensuring jobs and implementing other community objectives." By including such broad provisions that could justify significant intrusions into private-market exchanges, the draft risks solidifying the sluggish economic policies of Hungary's past.

The draft compounds these potential problems by providing weak and ill-defined checks on Parliament's legislative and executive power. The text grants the Constitutional Court final-review power over fiscal, economic and property matters "only if the petition refers exclusively to the right to life and human dignity, the right to the protection of personal data, the right to freedom of thought, conscience and religion or the right connected to the Hungarian citizenship." That restriction not only weakens an important check on Parliament, it also undermines institutional guarantees of individual liberty—including the right to acquire, possess and use property, as well as the right to appeal to justice if those rights are violated by citizen or state.

Mr. Orbán's government has rightly expressed its desire to introduce separation of powers into the constitution, but the current draft seems more suitable for dismissing potential obstacles to reduced government spending. Given full powers of judicial review, the Constitutional Court could indeed act as such an obstacle. But even that short-term policy objective doesn't compare to the long-term risks of concentrating future power in any one organ of government.

By reinforcing property rights, protecting economic freedom and ensuring an independent judiciary with robust powers of review, Hungary can finally complete the regime change of 1989. Anything less would be a missed opportunity.

Mr. Smith is president of the Common Sense Society in Budapest and a graduate fellow with the Heritage Foundation in Washington, D.C.

First appeared in The Wall Street Journal

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