The House of Terror in Budapest is one of the most carefully contrived museums I have visited. It uses music, props and video—all the modern curatorial tricks—to recreate the rule of the Nazis and Communists. In a final stunt, a lift inches tourists down to the gallows in the basement, as if guards were pushing our resisting bodies towards the hangman. The House of Terror is manipulative. But ignorant foreigners can console themselves with the thought that it is manipulating in a good cause.

The museum is in the old secret police headquarters on Andrássy, a grand fin de siècle boulevard that runs from the centre of Budapest to the magnificent Szechenyi baths. The Arrow Cross, the Hungarian Nazis, used it from October 1944 until March 1945, as it organised mass murder on an extraordinary scale. (Just under half of the Jews killed at Auschwitz were Hungarians.) Stalin’s armies invaded, and 60 Andrássy became the headquarters of the Hungarian Communist Party’s secret police—the place where opponents real and imagined came to suffer and die. The notion that what unites far-left and far-right is more important than what divides them, remains controversial. The record in Hungary shows they shared the same taste in torture chambers.

In the 1990s, after the fall of the Soviet Union, a cheerful consensus prevailed. After experiencing Fascism and Communism, Hungary and Europe had one option left. They could, indeed they must, embrace human rights, a free press, the protection of minorities, and the rule of law, and become “normal countries.” For that was a time when liberal democracy was thought to be “normal,” and dictatorships were condemned to live in museums.

That world is now upside down. The House of Terror shows how dictatorial movements can manipulate the horrors of the past to justify the oppression of the present—and not just in Hungary. The prime minister and de facto dictator, Viktor Orbán, prospers by rigging and corrupting the political system, media and business. Russia, Turkey and Venezuela follow suit. Meanwhile the conspiracy theories Orbán deploys thrive just as vigorously in Trump’s America and Brexit Britain as in crooked eastern European republics.

In February 2017, Mária Schmidt, the Director of the House of Terror, proved herself an exemplary 21st-century bureaucrat when word reached her that Orbán was preparing to move against Budapest’s Central European University. The threat to close one of the best universities in the region tells you all you need to know about the theory and practice of Orbánism. His party, Fidesz—which has secured unchallenged power by travelling from post-communist liberalism to nationalist chauvinism—is prepared to drive qualified graduates away from its country for the sake of creating a folk devil, who will scare the electorate into obedience.

The bogeyman it had in mind was the financier turned philanthropist, George Soros. Instead of imitating the plutocrats who have bribed Hungary’s state-capitalist regime, one of the richest men in the world has poured his fortune into the promotion of human rights, education, public health and, in the case of Budapest, the Central European University. Soros’s father had a reputation as a bon viveur rather than a serious thinker. But he had a sharper sense of what was coming than the intellectuals around him. He bought forged documents that said his family were Christians, and they survived the Nazis. “Never again,” was the slogan George Soros adopted when he moved to the west. I carry no brief for him, but there are worse maxims to live by.

The House of Terror offers testament to what happens when the freedom to learn in independent institutions vanishes. Faced with a threat to free speech and learning, Schmidt raised her indomitable voice and roared that Orbán was absolutely right.

The campaigns Soros funded in Hungary were fronts, she said as she repackaged the 20th-century justifications for tyranny and sold them on in the 21st. They looked as if they were fighting for admirable causes—the prevention of corruption, the protection of human rights. Yet in truth the Hungarian NGOs Soros supported were “outpost garrisons of the US Foreign Ministry” when Barack Obama was president. The men and women who worked in their offices may look like altruists, she continued, but don’t be fooled. They were “mercenaries” in Soros’s “army with salaries many times those of Hungarians.” Like the Jewish financiers of the Nazi imagination, Soros had grown rich by “speculating against millions, bankrupting and plundering them.” As for the university, its president, Michael Ignatieff, was such an “extreme” liberal, he had led the Canadian Liberal Party. “Ignatieff and Soros concealed” their real intentions. They wanted to expel Trump and Orbán from power. Hungarians should see them for what they really were: conspirators plotting against democratically elected leaders.

Schmidt was telling a story echoed in the Protocols of the Elders of Zion, every Communist polemic against “bourgeois freedoms,” and the pronouncements of today’s alt-right and alt-left. Liberal institutions are a façade that hide from the honest, if remarkably stupid, people the machinations of the real rulers of the world.

The once natural progression from Nazism to Communism to liberalism has been turned on its head. Liberalism is not the antidote to totalitarianism, but its continuation. First, the Nazis oppressed Hungary, then the communists, and now the liberals. A direct line links Hitler, Stalin and Soros.

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Hungary has its peculiar passions handed down by its history. The Magyar tribes who invaded the Carpathian basin in 900AD were always isolated. They spoke a language that bore no relation to the German of the tribes to the north and Slavic languages of the tribes to the south. The Mongols occupied Hungary in the 13th century. The Turks defeated the Hungarians in 1526 and stayed until the late 17th century to be replaced by Austrian Hapsburg control. The Hungarian national revolution of 1848 failed, but the Hungarians subsequent collaboration with the Austrians in the First World War ensured that the Treaty of Trianon in 1921 imposed a brutal partition. Then came the Nazis; then the communists. Any country with as many wounds would be wide open to demagogues who could play on its people’s victimhood.

Orbán has private peculiarities of his own. In his quietly devastating Orbán: Europe’s New Strongman, just published in English and highly recommended, the Hungarian journalist Paul Lendvai describes how the small-town boy began as a liberal but was repelled by the snobbishness of Budapest intellectuals with their fancy foreign languages and book learning. When he arrived in the Hungarian parliament, an urbane politician humiliated him in public (to Orbán’s mind anyway) by marching over and adjusting his tie.

Orbán has had his revenge. But then so has Recep Tayyip Erdoğan in Turkey, Vladimir Putin in Russia, Jarosław Kaczyński in Poland and Hugo Chávez and Nicolás Maduro in Venezuela. Countries do not form their policies in isolation, however greatly their histories diverge. Ideas swirl round the globe, and prosper when ambitious men see how they can help them gain and retain power. Orbán himself acknowledged that he is a member of an international movement of authoritarian governments. In 2014, he said he looked to China, Russia, Turkey and Singapore for inspiration rather than the “money-based” west, with its decadent emphasis on individualism.

Yet, unlike the dictatorships of the 20th century, the classic authoritarian regimes of the 21st do not feel like tyrannies. Budapest is a modern European capital. Environmentally conscious citizens can cycle, walk and run far easier than in London or Edinburgh. The tourist traps are full. Cruise boats sail the Danube. As for the oppressive state, I barely saw a police officer in two weeks.

I asked Ignatieff if, like Soros’s father, he had caught a whiff of danger on the breeze. “They may read my emails,” he said, with a smile and a shrug, but he could not imagine troops marching into the university. Far from being cowed, Ignatieff relished the battle with Orbán. He fought the 2011 Canadian general election against the Conservative leader Stephen Harper. He lost badly, but learned that you never concede ground to vicious politicians. When Orbán came for his university, he hit back hard and mobilised local and international opinion against the regime.

His Hungarian wife and friends found little pleasure in the fight. They are ashamed that their country, which moved the world when it revolted against the Soviet occupation in 1956, and which produced the thinkers whose economic ideas undermined the apparently indestructible monoliths of Soviet Communism and Maoism, was now a bastion of authoritarian nationalism.

However ashamed they may be, they can still fight back. Seventy thousand demonstrators took to the streets of Budapest in April to protect the university. Orbán retreated, though few doubt he will return to the attack. In January, young protesters collected 266,000 signatures against Budapest’s bid to stage the 2024 Olympics. Their irrefutable argument that the political elite would steal money assigned to the games forced the government to withdraw.

Real tyrannies do not allow protests, let alone successful protests. Then again, today’s dictators don’t need to be tyrants. They just need to dominate.

For instance, you can run a business in Hungary that does not pay bribes. No one will arrest or torture you. But your chances of boosting your profits will be slim. You can work as an independent reporter, if you have the determination and talent. But you will be writing for a niche audience. The regime controls the state television channels, and keeps supposedly independent newspapers and television stations in line by rewarding sycophancy with advertising revenue and straight bribes. A corruption scandal at the central bank—and Hungary is a country where even the central bank has scandals—revealed how backhanders went to editors who ran pro-government propaganda. Media organisations that don’t comply, by contrast, face the threat of “special” advertising taxes tailored to hurt their finances.

And, of course, you can still vote. But what’s the point when Orbán has gerrymandered the system? In 2014, Fidesz won 44.5 per cent of the vote but took 66 per cent of the seats. Orbán has packed the constitutional court, army and the civil service with party loyalists. Schmidt is hardly an exception. Hungary is a land full of Schmidts. So entrenched is Fidesz in every level of Hungarian life that commentators wonder if it can be removed from power even if it loses an election. Orbán himself boasts that his changes to the constitution will “tie the hands not only of the next government… but the next 10 governments.”

Not that he intends to lose. The next vote must be held by the spring of 2018, and you can wonder why Orbán is bothering to campaign. The left is divided. Its factions appear to hate each other more than they hate Orbán, and in any case have their own history of corruption and incompetence to live down. The Catholic Church and the tame media support him. The far-right Jobbik Party once looked like a potential challenger. But Orbán has outflanked it. As well as helping push the British to vote to leave the European Union, Angela Merkel’s decision to invite hundreds of thousands of refugees into Europe has consolidated Orbán’s power. He stopped virtually all refugees reaching Budapest by sealing Hungary’s border with Serbia and Croatia with a network of razor-wire fences and ordering the riot police to turn water cannons and tear gas on migrants. Knowing when it is beaten, Jobbik is trying, somewhat unconvincingly, to rebrand itself as a “party of the centre.”

When their enemies win, liberals ought to examine their faults, the better to avoid future defeats. During the attacks on the Central European University, Fidesz propagandists insisted that intellectual freedom was a mirage in a west where safe spaces, trigger warnings and the banning of speakers suppressed free speech and free inquiry. If western liberals censor universities, why can’t the Hungarian state? The question libelled Ignatieff, who has a principled and consistent commitment to intellectual freedom. Yet who can deny that the worst of the Anglo-American academic left is providing ammunition to, and justifications for, the far right? Now, as always, the similarities are as striking as the differences.

Meanwhile, the EU ought to look to its crisis in legitimacy. Just because Boris Johnson and Orbán make an argument does not mean it is wholly wrong. There are real democratic concerns about EU impositions on nation states. In the case of Hungary, the EU’s legitimacy crisis goes deeper. The EU generates 6.3 per cent of the country’s gross national income. Member states could withhold funds until Orbán respects the checks and balances of liberal democracy. When Eastern European states applied to join, the EU insisted that they reshaped their governments and committed to basic standards. Now they are in, the EU does nothing beyond issuing the occasional reprimand.

I am all for liberal guilt and learning from defeats. In the case of Hungary, however, soul searching may not be enough. The real reason for Orbán’s success, and the success of so many other degraded leaders, is more primal.

Orbán seems secure. There is no credible opposition from rival parties, a free press or the EU. When politicians and oligarchs in the Fidesz camp get strong enough to threaten him, Orbán strips them of their power. Yet Orbán still fights a permanent hate campaign because he has learned a lesson that has spread far beyond authoritarian states. A demagogue can only survive by mobilising the population against enemies, however obscure or fictitious they may be.

Orbán is a living embodiment of the Nazi theorist Carl Schmitt’s view that political movements must have an opponent that is “existentially something different and alien.” Any enemy will do. In its time, Fidesz has been anti-clerical and pro-Catholic, liberal and conservative. Ideology matters less than the urgent need for an enemy, any enemy. Last year Fidesz organised a pointless referendum asking the public to support Orbán’s plan to keep out refugees. The turnout was pitiful and the result had no effect on policy. But Fidesz had whipped up its base into a politically profitable state of fury, so in propaganda terms it was well worthwhile.

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Márta Pardavi of the Hungarian Helsinki Committee, a human rights organisation based in Budapest, told me how the game is played. She is rarely allowed to speak in the state-controlled media, yet her organisation is everywhere denounced for its campaigns on human rights and the handful of asylum seekers that somehow make it to Budapest. Pardavi is at once invisible but ubiquitous. If she did not exist, the state would need to invent her. Indeed, they have invented her, by transforming a small and over-worked civil liberties organisation into a threat to the Hungarian people.

With no opposition to run against at the time of writing, Orbán has started the 2018 election campaign by reviving the campaign against Soros and expanding its scope and viciousness. This autumn every home in Hungary will receive a slanted survey. “George Soros would like to see migrants receive lighter sentences for the crimes they commit,” runs one fabrication. “Do you support this point of the Soros plan? ‘YES’ / ‘NO.’” The state does not mention that the 87-year-old has no candidates on the ballot paper, and no power to direct either the Hungarian government or the EU. He simply finances charities. It is as if a British prime minister was running against the ever-present menace of Oxfam. No matter. Soros is the ideal political enemy, and not just because he can’t hit back. Soros allows Orbán to combine anti-Muslim bigotry with anti-Semitic conspiracy theory.

British Jews living in Hungary told me they have experienced more anti-Semitism in London than Budapest. They thought Hungarian prejudice against the Roma people was more blatant. Then one day they saw Fidesz posters showing Soros as a smiling, sinister Jew plotting to import Muslims into Christian Hungary, and thought again.

“The sobering reality [is] that, after seven years in office, wide sections of society are not alienated by the Orbán regime,” Paul Lendvai concludes. Neither he nor any other scholar can predict how Orbán will fall, just as none can predict Putin’s end. Turkey and Venezuela’s descent into violent oppression suggests that, when the opposition grows too strong and the state of society too miserable, 21st-century authoritarians turn tyrannical and prefer civil war to resignation.

Until that moment comes, Orbán appears able to maintain his position by conjuring ever-darker spirits from the pit of his imagination. In effect, Fidesz admits to the Hungarians: we know we are so corrupt we can’t be trusted to hold the Olympic Games. We know we have rigged the country’s politics and economy and left millions of Hungarians in poverty. We know you can’t even see a doctor without paying a bribe. But Fidesz and only Fidesz can save you from enemies, who are not just corrupt but diabolical. You have no choice. You must keep us in power.

The darkening of the skies in Eastern Europe shows that the optimism of 1989 is long gone. When the former communist states joined the EU, the advance of liberalism seemed unstoppable. Now… well look at Hungary. You should feel a shock of recognition as you watch paranoid fantasies prosper, and not confine yourself to the parallels with Trump’s America. The Brexit right triumphed after saying that forecasts of national decline were lies from corrupt economists bribed with EU money. The far left has so successfully persuaded its supporters that honest reporting is a Tory conspiracy, the political editor of the BBC arrived at the Labour Party conference with bodyguards. Hungary may be a small country. But its leaders’ tricks are being pulled everywhere.