After 16 years, illiberalism fell in Hungary. The markets predicted it while Fidesz pollsters and politicians were blindsided, proving yet again that free markets are better than government control.
On the election night, April 12, ashen faced Fidesz politicians stood behind Viktor Orbán, when he admitted defeat. Governing politicians were confidently communicating they are going to win, a sentiment which was supported by pollsters close to Fidesz. They predicted a Fidesz victory, going against the prediction of independent polls, and markets.
It is usual even for parties projected to lose to communicate they are going to win to keep up support and to motivate voters. However Fidesz politicians not only did not consider a possible defeat projected by all independent data, but even after the election they seem to be baffled by what has happened.
The general understanding is that pollsters close to Fidesz lie deliberately to boost support for the party through the bandwagon effect. This does not explain however why leading Fidesz politicians seem not to have expected a defeat. At least a close circle around Orbán should have known, and maybe they did, but if they did know that their campaign was not working, why did they not change it?
Independent pollsters projected a Tisza victory to varying decrees, some projected the supermajority. It was not just the polls however that pointed to a landslide. The Hungarian forint strengthened against the euro as it became clearer the election will result in an opposition victory, on the basis that a new government would normalize relations with the EU, improve the economy and bring back the frozen EU funds.
Prediction markets, such as Polymarket and Kalshi also showed an increasing chance that the opposition Tisza party will win, and Orbán will be out as prime minister. In fact various markets at Polymarket predicted that a supermajority for Tisza was a real possibility, a projection not mirrored by the majority of political analysts in Hungary.
Other openly available data, such as Google Trends was also an effective prediction tool, which showed that Tisza will win, though it did not project a landslide. With all the available data is it surprising why Fidesz politicians were so cocksure of their victory.
One possible explanation is that politicians were detached from reality, and their experts did not dare share bad news with them. The Fidesz campaign was a textbook example of what not to do. Not seeing this means people responsible for assigning the campaign team or the chief of campaign were not interested in actual results just in promises and good news. So many people got leadership positions in Fidesz not for what they knew but who they knew that it created the perfect recipe for disaster for the party. This is the inherent problem in authoritarian leaning regimes, and the same thing happened during communism. People benefitted from lying more than from actual results. In the meantime leaders got rich and comfortable, and they deigned not to look around and learn about reality.
The markets, the aggregation of many different systems, people, and opinions were a better predictor of results, and the situation in Hungary than the internal and public projections of Fidesz. At least which was communication to most of its own politicians and supporters.
It is apparent Fidesz never liked free markets. For Orbán the market was something to exploit through taxpayers money to get rich and retain power. Forceful price caps, price reductions and nationalisation defined the Hungarian market as well as public procurements tailored for cronies and friendly businesses stuffed with money taken from taxpayers. This gradually created high inflation, a struggling economy and ultimately a cost of living crisis, all contributing greatly to the fall of illiberalism.
Fidesz was so used to manipulating the markets it failed to pay attention to it. Let us hope the next government takes this as a warning. You ignore free markets at your own peril.