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Backgrounder #2537 on Hungary

March 25, 2011

Four Recommendations for Hungary's Proposed Constitution

By

Abstract: Although a free and democratic state after the reforms of 1989, Hungary has never had a legitimate written constitution that unambiguously represents the consent of the governed. In September 2010, the Fidesz–KDNP government, led by Prime Minister Viktor Orbán, initiated a constitution drafting process, and on March 14, it formally submitted a draft constitution to the Hungarian Parliament, which is now debating that proposal and plans to adopt it formally by April 18. By reinforcing natural rights, protecting economic freedom, ensuring an independent judiciary, and adopting the new constitution by ratification convention, Hungary can both intellectually and symbolically complete the regime change of 1989. At this moment, Hungary has a rare opportunity to establish institutions founded on universal principles of good government, but that outcome is by no means guaranteed.

Why is it important for Hungary to have a new constitution? After all, Hungary already has a constitution, a functioning government, and legal codes. But Hungary is also the only country in the Eastern Bloc that did not formally adopt a new constitution upon gaining independence from the Soviet Union in 1989. Many Hungarians also desire to honor liberty, popular sovereignty, and the rule of law through a written constitution.

These legitimate aspirations, however, will not be satisfied merely by adopting a “new” constitution. Hungary needs a new constitution that is guided by the principles of liberty in its language, goals, and institutional structure.

The Hungarian Parliament is now debating the proposed constitutional text that was formally submitted by the Fidesz–Christian Democratic (KDNP) coalition on March 14. Parliament currently plans to adopt the text on April 18. The following four recommendations, if followed, can help to ensure that Hungary’s constitutional process is in keeping with the principles of liberty, legal equality, and popular sovereignty.

Securing Liberty: Property Rights vs. State Goals

The current draft proposal[1] potentially empowers the state beyond what is suitable for protecting individual liberties by adopting a series of second-generation rights and state goals that commit the future government to providing “adequate housing,” “access to work,” “sports,” and “public education.” These redistributive goals are in tension with a proper understanding of property rights.

Whereas natural rights (such as life, liberty, and property) are rights that government protects from infringement by others, positive rights (such as “housing” and “leisure”) are things that government is expected to provide. This redefinition of the nature of rights necessarily and fundamentally alters the responsibility of the state and naturally leads to state goals that are contrary to the protection of private property. In redistributive economies, the state intends citizens to be more equal in their end stations and naturally intervenes to tilt the balance toward equality of outcomes, but in so doing, it undermines equality of opportunity.

In Federalist 10, James Madison recognized that equality of opportunity and protecting the right to acquire and hold property would naturally lead to unequal outcomes:

[There is a] diversity in the faculties of men, from which the rights of property originate.… [T]he protection of these faculties is the first object of government. From the protection of different and unequal faculties of acquiring property, the possession of different degrees and kinds of property immediately results.[2]

Likewise, Thomas Jefferson warned:

To take from one, because it is thought his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, 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.[3]

Redefining the nature of basic rights requires the state to have unrestricted access to its citizens’ property and earnings. But this is not justice properly understood,[4] for it erodes the equality of opportunity and spirit of personal enterprise that are necessary for the prosperity and economic well-being of the community as a whole.

Economic Freedom: Securing Future Prosperity

The foundation of economic freedom and prosperity is a sound legal system that protects private property and equally enforces contracts without overburdening the economy with unnecessary mandates and excessive taxation. The provisions of Hungary’s new constitution can either facilitate or thwart its future prosperity. In the current draft, there are provisions that may enable the state to intervene too much in private economic activity on the basis of ill-defined “community objectives.”

For example, the current draft unnecessarily provides for potential state intrusion into the labor market by mandating that “Employees and employers will cooperate in the interest of maintaining the national economy, ensuring jobs and implementing other community objectives.”[5] But the employee–employer relationship is a voluntary contractual arrangement that is mutually beneficial to the parties involved without any necessary consideration for state-defined “community objectives.” By including such broad provisions that could provide future justification for significant intrusions into private-market exchanges, the draft potentially solidifies the sluggish economic policies of Hungary’s socialist past.

Instead, the constitution should rhetorically and substantively encourage future movement toward more economic freedom. Other countries in the region—most notably Bulgaria and Slovakia—have invigorated their economies through sound fiscal and taxation policies guided by a commitment to economic freedom. Economic freedom and strong protection of property rights benefit the prosperity of the nation as a whole in the long term. As economist Henry Hazlitt has noted, “The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.”[6]

Separation of Powers: The Need for an Independent Judiciary

The potentially problematic provisions regarding individual liberties, property rights, and economic freedoms are all made worse because the Fidesz draft provides for weak and ill-defined checks on the legislative and executive powers of Parliament.

The lack of institutional balances on Parliament has proven a problem most recently in November 2010, when Parliament severely restricted the jurisdiction of the Constitutional Court in response to one of its rulings. The court overturned a law passed by Parliament that retroactively imposed a 98 percent tax on severance pays over HUF 2 million (USD $5,000) that were given away right before the government transition in summer 2010. Parliament responded by removing the court’s jurisdiction over matters related to the public budget and all forms of central taxes and duties. Because there was no alternative to Parliament’s power, those who felt violated by the excessive and retroactive tax turned to the European Court of Human Rights. Parliament’s action went unchecked because of the clear institutional inferiority of the judiciary.

These powerful restrictions of the Constitutional Court’s competencies are enshrined in the proposed constitution draft, which provides that the court has final review jurisdiction over fiscal, economic, and property-related 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.”[7]

By constitutionally restricting the court’s power of judicial review from a vast domain of economic issues, the draft removes a needed institutional check on Parliament and undermines institutional guarantees of individual liberty—the right to acquire, possess, and use property as well as the right to appeal to justice if those rights are violated.

Fidesz is rightly attempting to introduce separation of powers into the constitution in order to avoid the future possibility of there being one supreme organ of government—the overarching sin of the Stalinist era in Hungary, when there was no check on the Workers Party’s exercise of absolute power through Parliament. The new constitution, in order to avoid concentrating power overwhelmingly in one organ of government, should ensure a strong and independent judiciary capable of exercising judicial review. Regulation of the courts should be left to future laws.

Ratification: The Need for a National, Extra-Parliamentary Process

There may be disagreement over the necessity of a new constitution, but adopting a new national constitution is primarily a political question, not a legal one. Nevertheless, process matters.

The current constitution is obviously a temporary document (per its preamble) and provides that a two-thirds vote in Parliament can amend the constitution. Yet it does not explicitly stipulate the method of ratification of a new constitution. That is unfortunate, because the method of ratification will establish the future legitimacy of Hungary’s constitutional order.

The possibility of a referendum has previously been ruled unconstitutional by the courts,[8] but the government’s current plan to have Parliament both finalize and ratify the new constitution is imprudent and risks the future legitimacy of the constitution. The Fidesz draft text, which was submitted to the Parliament on March 14, was signed by nearly all members of the governing coalition parties—261 out of 386 members of Parliament, or 67 percent, which is more than the number needed for parliamentary ratification.[9]

Fidesz and the drafters of the constitution have invested much energy, time, and political capital in the process, and their goal of completing the regime change of 1989 is undoubtedly correct. However, the governing coalition’s overwhelming majority in Parliament—along with the refusal of the opposition parties to attend Parliament during the debate—increases perceptions of illegitimacy for the new constitution and threatens to weaken the future of Hungary’s new constitutional order.

Aside from a referendum or parliamentary ratification, there is another option that is fully consistent with the principle of popular sovereignty and also honors Fidesz’s electoral mandate: a ratification convention. This option should be strongly considered, even at this late stage in the process. Parliament could continue its debate and drafting process and then submit its final constitution to the Hungarian people for a “yes” or “no” vote at a national, extra-parliamentary ratification convention. That convention could consist of local delegates elected without party affiliation from each of the 176 voting districts or 20 counties in Hungary. There would undoubtedly be some current members of Parliament among the delegates, but it would nevertheless be an independent body elected solely for the purpose of voting on Hungary’s new constitution.

Given Fidesz’s recent landslide election victories, it can hardly be viewed as politically risky to promptly engage the voters yet another time, especially on the question of a new constitution. The government can still meet its goal of adopting an Easter Constitution, even if it is not fully ratified by April 24. Considering all the intellectual and legal work invested in preparing the new constitution draft, Fidesz should do all in its power to move ratification closer to the people in order to provide the democratic legitimacy required for such a fundamental and important act of self-government.

A Rare Moment in History

The Federalist Papers in America were written during a similar process, and they provided the drafters of the U.S. Constitution the invaluable opportunity to argue their case before the American people. They benefited future American jurisprudence, strengthened popular civic engagement, and led to the adoption of the American Bill of Rights.

Despite the fact that the drafting process in the American constitutional convention was secretive and restricted to elected constitutional delegates only, the national debate over ratification of the proposed constitution was anything but closed. Political historians George Carey and James McClellan have noted that from 1787 to 1788, “throughout the nation there was an outpouring of pamphlets, sermons, and newspaper essays on the new plan of government. A wide variety of views was expressed, ranging from complete to conditional acceptance with amendments to flat rejection.”[10]

Of course, Hungary is not the United States, but by choosing a written constitution, Hungary has signaled its respect for the ultimate sovereignty of the Hungarian people, symbolically represented by the Holy Crown’s resting place in the rotunda of the Parliament building in Budapest. But popular sovereignty should be manifestly represented by the Hungarian people’s choice on the proposed constitution. It is a rare moment that can fundamentally shape Hungarians’ understanding of self-government and civic responsibility.

Hungary today is able to, in Alexander Hamilton’s words, “establish good government from reflection and choice.” By reinforcing natural rights, protecting economic freedom, ensuring an independent judiciary, and adopting the new constitution by ratification convention, Hungary can both intellectually and symbolically complete the regime change of 1989. This great responsibility is now solely on the shoulders of the Hungarian people and their elected representatives.

Marion Smith is a Graduate Fellow in the B. Kenneth Simon Center for American Studies at The Heritage Foundation. He is also founding president of the Common Sense Society in Budapest, Hungary.

Show references in this report

[1]The Basic Law of Hungary, Article II, at http://www.parlament.hu/irom39/02627/02627.pdf(March 14, 2011); Translations provided by János Bakó throughout.

[2]James Madison, Federalist No. 10, in The Federalist Papers, eds. George W. Carey and James McClellan (Indianapolis: Liberty Fund, 2001), p. 43.

[3]Thomas Jefferson, letter to Joseph Milligan, April 6, 1816, in The Founders’ Constitution, Vol. 1, p. 573, quoted in Thomas West, “The Economic Principles of America’s Founders: Property Rights, Free Markets, and Sound Money,” Heritage Foundation First Principles Report No. 32, August 30, 2010, p. 16, at http://heritage.org/Research/Reports/2010/08/The-Economic-Principles-of-America-s-Founders-Property-Rights-Free-Markets-and-Sound-Money.

[4]See Russell Kirk, “The Meaning of Justice,” Heritage Foundation Lecture No. 457, March 4, 1993, at http://www.heritage.org/research/lecture/the-meaning-of-justice.

[5]The Basic Law of Hungary, Article XVI (Draft of the New Constitution as of March 14, 2011).

[6]Henry Hazlitt, Economics in One Lesson (New York: Three Rivers Press, 1979), p. 17.

[7]The Basic Law of Hungary, Article 24, Section 4 (emphasis added).

[8]Hungarian Constitutional Court decisions: 2/1993. (I. 22.) AB, 25/1999. (XI. 22.) AB, 28/1999. (VII. 7.) AB, 40/1999. (XII. 21.) AB, 50/2001. (XI. 22.) AB, 48/2003. (X. 27.), at www.mkab.hu.

[9]“Már olvasható a Parlament honlapján az új alaptörvény tervezete,” InfoRádió, March 14, 2011, at http://www.inforadio.hu/hir/belfold/hir-419754.

[10]George W. Carey and James McClellan, eds., The Federalist Papers (Indianapolis: Liberty Fund, 2001), p. xli. See also Colleen A. Sheehan and Gary L McDowell, eds., Friends of the Constitution: Writings of the “Other” Federalists, 1787–1788 (Indianapolis: Liberty Fund, 1998), and Herbert J. Storing, ed., The Complete Anti-Federalist (Chicago: Chicago University Press, 1981).

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