In 1991, leading
political
figures and economists from the soon-to-be abolished USSR attended a seminar on Chilean econom- ics in Santiago and enjoyed a cordial meeting with mass murderer General Pinochet.
Blackshirts-and-Reds-by-Michael-Parenti
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LACKS?
JRTS AND REDS
communism endured chronic shortages, long lines, poor quality goods and services, and many other problems. They wanted a better life, and who could blame them? Without capitalist encirclement, they would have had a better chance of solving more of their inter- nal problems.
All this is not to deny the very real deficiencies of the communist systems. Here I want to point out that much of the credit for the deformation and overthrow of communism should go to the Western forces that tirelessly dedicated themselves to that task, using every possible means of political, economic, military, and diplomatic aggression to achieve a success that will continue to cost the people of the world dearly.
? CHAPTER 6
THE FREE-MARKET PARADISE GOES EAST (I)
Capitalist restoration in the former communist countries has taken different forms. In Eastern Europe and the Soviet Union, it involved the overthrow of communist governments. In China, it pro- ceeded within the framework of a communist system--as seems to be happening in Vietnam, and perhaps will happen eventually in North Korea and Cuba. While the Chinese government continues under a nominally communist leadership, the process of private cap- ital penetration goes on more or less unhindered.
Suppression of the Left
The anticommunists who took power in Eastern Europe and the Soviet Union in 1989-91 set about to impose bourgeois dominance over political and cultural life, purging communists from govern- ment, the media, universities, professions, and courts. While pre- senting themselves as democratic reformers, they soon grew impatient with the way democratic forms of popular resistance lim-
87
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ited their efforts to install an unrestrained free-market capitalism. In Russia, associates of President Boris Yeltsin talked of the "dan- gers of democracy" and complained that "most representative bod- ies have become a hindrance to our [market] reforms. " (Nation, 12/2/91 and 5/4/92). Apparently, the free market, said by "reformers" to be the very foundation of political democracy, could not be intro- duced through democratic means. In 1992, the presidents of Poland, Czechoslovakia, and Russia demanded that their parliaments be sus- pended and they be allowed to rule by presidential decree, with repressive measures against "hardliners" and "holdovers" who resisted the free-market "reforms. " Their goal was not power to the
people but profits to the privileged.
This process of democratization-via-suppression began even before the actual overthrow of communism. In 1991, Soviet presi- dent Mikhail Gorbachev, prodded by Russian president Yeltsin, announced that the Communist party of the USSR no longer had legal status. The partys membership funds and buildings were con- fiscated. Workers were prohibited from engaging in any kind of political activities in the workplace. Six leftist newspapers were sup- pressed, while all other publications, many of them openly reac- tionary, enjoyed uninterrupted distribution. The U. S. media, and even many on the U. S. Left, hailed these acts of suppression as "mov- ing ahead with democratic reforms. "
Gorbachev then demanded that the Soviet Congress abolish itself. It had remained too resistant to change. Actually the Congress was not opposed to democratic debate and multi-party elections; these were already in practice. It resisted an unbridled free-market capital- ism, and for that reason would have to go. Gorbachev repeatedly cut off the microphones during debate and threatened singlehandedly to abolish the Congress by emergency decree. He forced a vote three times until he got the desired abolition. These strong-arm methods
were reported in the U. S. press without critical comment.
What gave Yeltsin and Gorbachev the excuse to pursue this repres-
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sive course was the curious incident of August 1991, when a nervous group of leaders, mouthing vague phrases about the deterioration of life in the Soviet Union, attempted an oddly orchestrated "coup" against the Gorbachev government, one that flopped before it ever got off the ground. Weeks later, the Washington Post (9/26/91) noted happily that the defeat of the coup was a triumph for the Soviet mon- eyed class. Among the coup s militant opponents were private entre- preneurs and thousands of members of the Russian stock exchange, who routinely made twenty times the average wage of ordinary Soviets. They headed onto "the streets of Moscow to defend their right to wheel and deal. The coup collapsed, democracy tri- umphed. . . . Private businessmen contributed more than 15 million rubles to buy food and equipment for the defenders. " One broker was struck by how few workers responded to Yeltsin s call to defend democracy.
The boldness of this investor class in the face of an armed coup might have another explanation. A socialist critic of communism, Boris Kagarlitsky argued, "In fact, there was no coup at all. " The sol- diers were unarmed and confused, the tanks called out were undi- rected, "and the leaders of the so-called coup never even seriously tried to take power. " The real coup, says Kagarlitsky, came in the aftermath when Boris Yeltsin used the incident to exceed his consti- tutional powers and dismantle the Soviet Union itself, absorbing all its powers into his own Russian Republic. While claiming to be undoing the "old regime," Yeltsin overthrew the new democratic Soviet government of 1989-1991.
In late 1993, facing strong popular resistance to his harsh free- market policies, Yeltsin went further. He forcibly disbanded the Russian parliament and every other elected representative body in the country, including municipal and regional councils. He abol- ished Russia's Constitutional Court and launched an armed attack upon the parliamentary building, killing an estimated two thousand resisters and demonstrators. Thousands more were jailed without
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charges or a trial, and hundreds of elected officials were placed under investigation.
Yeltsin banned labor unions from all political activities, sup- pressed dozens of publications, exercised monopoly control over all broadcast media, and permanently outlawed fifteen political parties. He unilaterally scrapped the constitution and presented the public with a new one that gave the president nearly absolute power over policy while reducing the democratically elected parliament to vir- tual impotence. 1 For these crimes he was hailed as a defender of democracy by U. S. leaders and media. What they most liked about Yeltsin was that he "never wavered in his support for privatization" (San Franicsco Chronicle, 7/6/94). 2
Yeltsin, the "democrat," twice suspended publication of the Communist party newspaper Pravda. He charged it exorbitant rent for the use of its own facilities. Then in March 1992, he confiscated the paper s twelve-story building and its press and turned full own- ership over to Russiskaye Gazetay a government (pro-Yeltsin) news- paper.
Yeltsins "elite" Omon troops repeatedly attacked leftist demon- strators and pickets in Moscow and other Russian cities. Parliamentary deputy Andrei Aidzerdzis, an Independent, and deputy Valentin Martemyanov, a Communist, who both vigorously opposed the Yeltsin government, were victims of political assassina- tion. In 1994, journalist Dmitri Kholodov, who was probing corrup- tion in high places, also was assassinated.
In 1996, Yeltsin won reelection as president, beating out a serious challenge from a communist rival. His campaign was assisted by
1 The new constitution was seemingly approved in a December 1993 referendum. However, a commission appointed by Yeltsin himself found that only 46 percent of eligible voters had participated, rather than the 50 percent required to ratify a constitution (Los Angeles Times, 6/3/94). Little note has been taken of the fact that Yeltsin was ruling under an illegal constitution.
2 For a more detailed account of the Yeltsin repression and the whitewash it received in the U. S. media, see "Yeltsin's Coup and the Media's Alchemy," in Michael Parenti, Dirty Truths (San Francisco: City Lights Books, 1996).
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teams of U. S. electoral advisors, who used sophisticated polling tech- niques and focus groups. 3 Yeltsin also benefited from multi-million dollar donations from U. S. sources and a $10 billion aid package from the International Monetary Fund and World Bank. Equally important for victory was the crooked counting of ballots (as curso- rily reported in one ABC late evening news story in July 1996).
Yeltsin exercised monopoly control over Russia's television net- works, enjoying campaign coverage that amounted to nonstop pro- motionals. In contrast, opposition candidates were reduced to nonpersons, given only fleeting exposure, if that. Yeltsins reelection was hailed in the West as a victory for democracy; in fact, it was a vic- tory for private capital and monopoly media, which is not synony- mous with democracy, though often treated as such by U. S. leaders and opinion makers.
Yeltsins commitment is to captialism not democracy. In March 1996, several months before the election, when polls showed him trailing the Communist candidate, Gennadi Zyuganov, Yeltsin
ordered decrees drawn up "that would have canceled the election, closed down parliament and banned the Communist Party" (New York Times, 7/2/96). But he was disuaded by advisors who feared the measures might incite too much resistance. Though he decided not to call off the election, "Yeltsin was never committed to turning over the government to a Communist if he lost" (San Francisco Chronicle, 7/26/96).
3 These U. S. political consultants operated in strict secrecy lest they be seen as interfering in Russian affairs--which indeed they were. They advised Yeltsin against making extended speeches and urged more sound bites and photo opportunities. They pointed to issues and images he could exploit and ones he should avoid. Political scientist Larry Sabato, who long opposed the involvement of U. S. consultants in foreign elections, observed that Americans can be stripped of their citizenship for voting in a foreign election. "Why then should it be acceptable to influence millions of votes in a foreign election? " I would add that no foreigner is allowed to contribute money to U. S. candidates or work on their campaign staffs. But U. S. leaders can send large sums and secret teams of consul- tants to manipulate and sway foreign elections. Just another example of the double standard under which U. S. policy operates.
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During the 1996 campaign, Yeltsin and his associates repeatedly announced that a communist victory would bring "civil war. " In effect, they were voicing their willingness to discard democracy and resort to force and violence if the election did not go their way. Nor was it taken as an idle threat. At one point surveys showed that "about half the population believed that civil war would result if the Communists won" (Sacramento Bee, 7/9/96).
Through all of this Yeltsin received vigorous support from the White House and the U. S. media. An editorial in the Nation (6/17/96) asked: What if a popularly elected communist president in Russia had pursued Yeltsins harsh policies of privatization, plunging his country into poverty, turning over most of its richest assets to a small segment of previous communist officials, suppressing dissi- dent elements, using tanks to disband a popularly elected parliament that opposed his policies, re-writing the constitution to give himself almost dictatorial power, and doing all the other things Yeltsin has done? Would U. S. leaders enthusiastically devote themselves to the re-election of this "communist" president and remain all but silent about his transgressions?
The question is posed rhetorically; the Nation editorial presumes that the answer is no. In fact, I would respond: Yes, of course. U. S. leaders would have no trouble supporting this "communist" presi- dent, for he would be communist in name only. In actual deed he would be a devoted agent of capitalist restoration. One need only look at how successive administrations in Washington have cultivated friendly relations with the present communist leaders in China, over- looking and even explaining away their transgressions. As Chinas leaders open their country to private investment and growing eco- nomic inequality, they offer up a dispossessed labor force ready to work double-digit hours for subsistence pay--at enormous profit for the multinationals. U. S. politico-economic leaders know what they are doing, even if some editorial writers in this country do not. Their eye is on the money, not the color of the vessel it comes in.
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Since the overthrow of communism, free-market right-wing forces in the various Eastern European countries enjoyed significant financial and organizational assistance from U. S. -financed agencies, such as the National Endowment for Democracy, the AFL-CIO s Free Trade Union Institute (a group intimately linked to the CIA), and the Free Congress Foundation, an organization with an anticommunist and conservative religious ideology. 4
Communists and other Marxists endured political repression throughout Eastern Europe. In East Germany, the Party of Demo- cratic Socialism had its property and offices, paid for by party mem- bers, seized in an attempt to bankrupt it. In Latvia, the communist activist Alfreds Rubies, who protested the inequities of free-market "reform," has been kept in prison for years without benefit of trial In Lithuania, communist leaders were tortured and then imprisoned for long durations. Georgia's anticommunist president, Zviad Gamsakhurdia, incarcerated opponents from some seventy political groups without granting them a trial (San Francisco Chronicle, 4/17/91).
Estonia held "free elections" in which 42 percent of the popula- tion was prohibited from voting because of their Russian, Ukranian, or Belorussian antecedents. Russians and other minorities were excluded from many jobs and faced discrimination in housing and schools. Latvia also disfranchised Russians and other non-Latvian nationals, many of whom had lived in the country for almost a half century. So much for the flowering of democracy. 5
4 The reader might want to consult the late Sean Gervasi's two in-depth studies on Western destabilization of the Soviet Union: CovertAction Quarterly; Fall 1990 and Winter 1991-92.
5 The focus here is mostly on the former communist countries of Eastern Europe and Russia, but similar and more bloody repressions against deposed left revolu- tionaries have been conducted in Afghanistan and South Yemen. In 1995, in Ethiopia, three thousand former members of Mengitsu Haile Mariarns socialist government were put on trial for executing Emperor Haile Selassie, the feudal despot who once ruled that country.
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One-Way Democracy
More important than democratic rule was free-market "reform," a code word for capitalist restoration. As long as democracy could be used to destabilize one-party communist rule, it was championed by the forces of reaction. But when democracy worked against free- market restoration, the outcome was less tolerated.
In 1990, in Bulgaria, capitalist restoration did not go according to plan. Despite generous financial and organizational assistance from U. S. sources, including the Free Congress Foundation, the Bulgarian conservatives ended up a poor second to the communists, in what Western European observers judged to be a fair and open election. What followed was a coordinated series of strikes, demonstrations, economic pressure, acts of sabotage, and other disruptions reminis- cent of CIA-orchestrated campaigns against left governments in Chile, Jamaica, Nicaragua, and British Guyana. Within five months, the free-market oppositionists forced the democratically elected communist government to resign. Bulgarian communists "com- plained that the U. S. had violated democratic principles in working against freely elected officials. "6
The same pattern emerged in Albania where the democratically elected communist government won an overwhelming victory at the polls, only to face demonstrations, a general strike, economic pressure from abroad, and campaigns of disruption financed by the National Endowment for Democracy and other U. S. sources. After two months the communist government collapsed. Once the Right took power, a new law was passed denying Albanian communists and other oppo- nents of capitalist restoration the right to vote or otherwise partici- pate in political activities. As a reward for having extended democratic rights to all citizens, the Albanian communists and all for- mer state employees and judges were stripped of their civil rights.
6 For information on Bulgaria, see William Blum's report in CovertAction Quarterly; Winter 1994-95.
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In the 1996 Albanian elections, the Socialists and other opposi- tion parties--who had been predicted to do well--withdrew from the election hours before the polls closed in protest of the "blatantly rigged" vote. Election monitors from the European Union and the United States said they witnessed numerous instances of police intimidation and the stuffing of ballot boxes. The Socialist party had its final campaign rally banned and a number of prominent leaders barred from running for office because of their past communist affil- iations (New York Times, 5/28/96). When the Socialists and their allies tried to hold protest rallies, they were attacked by Albanian security forces who beat and severely injured dozens of demonstra- tors (Peoples Weekly World, 5/11/96 and 6/1/96).
Openly anti-Semitic groups, cryptofascist parties, and hate cam- paigns surfaced in Russia, Poland, Hungary, Ukraine, Belarus, Czechoslovakia, and Rumania. Museums that commemorated the heroic antifascist resistance were closed down and monuments to the struggle against Nazism were dismantled. In countries like Lithuania, former Nazi war criminals were exonerated, some even compensated for the years they had spent in jail. Jewish cemeteries were desecrated and xenophobic attacks against foreigners of darker hue increased. With the communists no longer around, Jews and foreigners were blamed for low crop prices, inflation, crime, and other social ills.
On June 11, 1995, Lech Walesa's personal pastor, Father Henryk Jankowski, declared during a mass in Warsaw that the "Star of David is implicated in the swastika as well as in the hammer and sickle" and that the "diabolic aggressiveness of the Jews was responsible for the emergence of communism" and for World War II. The priest added that Poles should not tolerate governments made up of people who are tied to Jewish money. Walesa, who was present during the ser- mon, declared that his friend Jankowski was not an anti-Semite but simply "misinterpreted. " Rather than retracting his comments, Jankowski spewed forth the same bile in a subsequent television interview. At about that time, placards that read "Jews to the Gas"
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and "Down with the Jewish-Communist conspiracy" were visible at a Polish Solidarity demonstration of 10,000 in Warsaw--earning not a censorious word from church or state authorities (Nation, 8/7/95).
The economic policies of the fascist Pinochet regime in Chile were openly admired by the newly installed capitalist government in Hungary.
In 1991, leading political figures and economists from the soon-to-be abolished USSR attended a seminar on Chilean econom- ics in Santiago and enjoyed a cordial meeting with mass murderer General Pinochet. The Chilean dictator also was accorded a friendly interview in Literaturnaya Gazeta, a major Russian publication. Yeltsin s former security chief, Aleksandr Lebed, is a Pinochet admirer.
Instead of being transformed into capitalist states, some commu- nist nations were entirely obliterated as political entities. Besides the obvious example of the Soviet Union, there is the German Democratic Republic, or East Germany, which was absorbed into the Federal Republic of Germany. South Yemen was militarily attacked and crushed by North Yemen. Ethiopia was occupied by Tigrean and Eritrean forces that imprisoned large numbers of Ethiopians without trial; expropriated Ethiopian property; suppressed Ethiopian educa- tion, business, and news media; and imposed a "systematic enforce- ment of tribalism in political organization and education" (Tilahun Yilma, correspondence, New York Times, 4/24/96).
A systematic enforcement of tribalist political organization might well describe Yugoslavia's fate, a nation that was fragmented by force of arms into a number of small, conservative republics under the suzerainty of the Western powers. With that dismemberment came a series of wars, repressions, and atrocities committed by all contend- ing sides.
One of Yugoslavia's first breakaway republics was Croatia, which in 1990 was taken over by a rightist coterie, including some former Nazi collaborators, backed by the armed might of the proto-fascist National Guard Corps, under a constitution that relegated Serbs, Jews, Gypsies, and Muslims to second-class status. Serbs were driven
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from the civil service and police, evicted from their homes, had their businesses taken from them, and were subjected to special property taxes. Serbian newspapers in Croatia were suppressed. Many Serbs were forced from the land they had inhabited for three centuries. Still Croatia was hailed by its Western backers as a new-born democracy.
In 1996, Belarus president Alexander Lukashenko, a self-professed admirer of Adolph Hitler s organizational skills, shut down the inde- pendent newspapers and radio stations and decreed the opposition parliament defunct. Lukashenko was awarded absolute power in a referendum that claimed an inflated turnout, with no one knowing how many ballots were printed or how they were counted. Some opposition leaders fled for their lives. "Once a rich Soviet republic that produced tractors and TVs, Belarus is now [a] basket case" with a third of the population living "in deep poverty" (San Francisco Bay Guardian, 12/4/96).
Must We Adore Vaclav Havel?
No figure among the capitalist restorationists in the East has won more adulation from U. S. officials, media pundits, and academics than Vaclav Havel, a playwright who became the first president of post-communist Czechoslovakia and later president of the Czech Republic. The many left-leaning people who also admire Havel seem to have overlooked some things about him: his reactionary religious obscurantism, his undemocratic suppression of leftist opponents, and his profound dedication to economic inequality and an unre- strained free-market capitalism.
Raised by governesses and chauffeurs in a wealthy and fervently anticommunist family, Havel denounced democracy's "cult of objec- tivity and statistical average" and the idea that rational, collective social efforts should be applied to solving the environmental crisis. He called for a new breed of political leader who would rely less on "rational, cognitive thinking," show "humility in the face of the mys-
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terious order of Being" and "trust in his own subjectivity as his prin- cipal link with the subjectivity of the world" Apparently, this new breed of leader would be a superior elitist cogitator, not unlike Plato's philosopher king, endowed with a "sense of transcendental respon- sibility" and "archetypal wisdom. "7 Havel never explained how this transcendent archetypal wisdom would translate into actual policy decisions, and for whose benefit at whose expense.
Havel called for efforts to preserve the Christian family in the Christian nation. Presenting himself as a man of peace and stating that he would never sell arms to oppressive regimes, he sold weapons to the Philippines and the fascist regime in Thailand. In June 1994, General Pinochet, the man who butchered Chilean democracy, was reported to be arms shopping in Czechoslovakia--with no audible objections from Havel.
Havel joined wholeheartedly in George Bush's Gulf War, an enter- prise that killed over 100,000 Iraqi civilians. In 1991, along with other Eastern European pro-capitalist leaders, Havel voted with the United States to condemn human rights violations in Cuba. But he has never uttered a word of condemnation of rights violations in El Salvador, Colombia, Indonesia, or any other U. S. client state.
In 1992, while president of Czechoslovakia, Havel, the great democrat, demanded that parliament be suspended and he be allowed to rule by edict, the better to ram through free-market "reforms " That same year, he signed a law that made the advocacy of communism a felony with a penalty of up to eight years imprison- ment. He claimed the Czech constitution required him to sign it. In fact, as he knew, the law violated the Charter of Human Rights which is incorporated into the Czech constitution. In any case, it did not require his signature to become law. In 1995, he supported and signed another undemocratic law barring communists and former communists from employment in public agencies.
7 See Havel's goofy op-ed in the New York Times (3/1/92); it caused an embarrassed silence among his U. S. admirers.
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The propagation of anticommunism has remained a top priority for Havel. He led "a frantic international campaign" (San Francisco Chronicle, 2/17/95) to keep in operation two U. S. -financed, cold war radio stations, Radio Free Europe and Radio Liberty, so they could continue saturating Eastern Europe with their anticommunist pro- paganda.
Under Havels government, a law was passed making it a crime to propagate national, religious, and class hatred. In effect, criticisms of big moneyed interests were now illegal, being unjustifiably lumped with ethnic and religious bigotry. Havels government warned labor unions not to involve themselves in politics. Some militant unions had their property taken from them and handed over to compliant company unions.
In 1995, Havel announced that the "revolution" against commu- nism would not be complete until everything was privatized. Havel's government liquidated the properties of the Socialist Union of Youth--which included camp sites, recreation halls, and cultural and scientific facilities for children--putting the properties under the management of five joint stock companies, at the expense of the youth who were left to roam the streets.
Under Czech privatization and "restitution" programs, factories, shops, estates, homes, and much of the public land was sold at bar- gain prices to foreign and domestic capitalists. In the Czech and Slovak republics, former aristocrats or their heirs were being given back all the lands their families had held before 1918 under the Austro-Hungarian empire, dispossessing the previous occupants and sending many of them into destitution. Havel himself took personal ownership of public properties that had belonged to his family forty years before. While presenting himself as a man dedicated to doing good for others, he did well for himself. For these reasons some of us do not have warm fuzzy feelings toward Vaclav Havel.
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Colonizing the East
Once the capitalist restorationists in Eastern Europe and the for- mer Soviet Union took state power, they worked hard to make sure that the new order of corporate plunder, individual greed, low wages, mindless pop culture, and limited electoral democracy would take hold. They set about dismantling public ownership of production and the entire network of social programs that once served the pub- lic. They integrated the erstwhile communist countries into the global capitalist system by expropriating their land, labor, natural resources, and markets, swiftly transforming them into impover- ished Third World nations. All this was hailed in the U. S. corporate- owned press as a great advance for humanity.
The former communist nations are being recolonized by Western capital. Most of their foreign trade is now controlled by multinational corporations. Like Third World countries, they are increasingly deprived of each other s markets. The once heavy and mutually ben- eficial commerce between them has been reduced to a trickle, as their economies get tied into the investment and extractive needs of global capitalism. Instead of mutual development, they are now experienc- ing the maldevelopment imposed by global monopoly capital.
Multinational corporations are moving into Russia to exploit vast oil and natural gas reserves and rich mineral deposits at great profit to themselves and with little benefit to the Russian people. Over the protests of U. S. and Russian environmentalists, U. S. timber interests, with financial support from a venture fund sponsored by the Pentagon, are preparing to clear-cut the Siberian wilderness, a region that holds one-fifth of the planets forests and is the habitat of many rare species (New York Timesy 1/30/96).
All aid to the former communist countries is fiinneled into the private sector. As noted in the Guardian (11/19/94), "The hundreds of millions of dollars spawned by Western aid programs have mainly benefited the Western companies which headed east to board the aid
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gravy train'' When Rumania inaugurated an over the lop mar- ket for trading privatization shares, the $20 million in "start-up costs were largely covered by the U. S. Agency for International Development0 (Wall St Journal 9/17/96).
In lyyfj, the International Monetary Fund extended a $10. 2 bil- lion loan to Russia, with terms calling for the privatization of agri- culture and other slate-owned assets, and the elimination of human service and fuel subsidies, U. S. aid is used to help private investors buy public ? roper Lies and extract publicly owned raw materials from Eastern European countries under the most favorable investment conditions.
With the advent of private investmeni in the East, production did not grow as promised but dropped drasticalh Hundreds of the more attractive and solvent state enterprises have been privatized, often given away at token prices to foreign investors, while other state firms are decapitated or driven into bankruptcy. Between 1989 and 1995, in what is now the Czech Republic, nearly 80 percent of all enterprises were privatized -- and industrial production shrank by two thirds, Privatization in Poland caused production to shrink one- third between 1989 and 1992, Vast electrmu^c and high-recti com- plexes in V. ii`sx Germany, employing tens of thousands of workers, have been taken over by giant West German firms and then closed down, Under privatization, much of the former Soviel Unions sci- entific and technical infrastructure is disintegrating, along with its physical plants.
Since going private, ZiL, llie huge Moscow plant, saw its produc- tion of trucks slump from 150000 to 13000 a year, with almost 40 percent of the workforce laid off. In April 1996, the remaining work- ers petitioned the Russian government to lake back control of ZiL, In the past, ZiL workers and their relatives "had unshakeably saie jobs" at the factory. They lived in apartments and attended schools pro- vided by ZiL As babies they spent their days at the ZiL day care cen- ter, and when ill they were attented to by ZiL doctors, "I was raised
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in a country that cared about its workers" said one machinist, who now was sorry he had opposed that system (New York Times, 5/8/94).
In Macedonia, one of the breakaway republics of Yugoslavia, a labor representative noted, "Privatization seems to mean the destruction of our companies. " Macedonians seemed more troubled by free-market economic hardships than by the much publicized ethnic rivalries. They complained about how work has taken over their lives: "One has no time to care about others; there's no time even for oneself--only time for making money" (PBS-TV report, 1/16/95).
Agricultural output of grain, corn, livestock, and other products plummeted in the former communist countries, as thousands of cooperative farms were forcibly broken up. The new private farmers have small plots, often cannot get loans, seeds, fertilizer, or machin- ery, and are rapidly losing their holdings or reverting to subsistence farming. Hungary's agricultural cooperatives had been one sector of the socialist economy that performed well. But with privatization, farm output tumbled 40 percent in 1993 (Los Angeles Times, 1/29/94).
A drastic deterioration in agricultural production occurred in Bulgaria, once considered the breadbasket of Eastern Europe, caus- ing severe bread shortages by 1996. Bulgaria was also suffering from a 20 percent monthly inflation and was sinking into that familiar cycle of foreign debt: cutting back on services to qualify for IMF loans, borrowing to pay off past borrowing. "The [Bulgarian] gov- ernment must impose more free market austerity measures to get vital international loans to repay portions of the $9. 4 billion foreign debt" (San Francisco Chronicle, 7/18/96).
In 1992, the Lithuanian government decreed that former owners and their descendants could reclaim property confiscated during the socialist era. As a result, tens of thousands of farming families, about 70 percent of the rural population, were evicted from land they had worked for over a half century, destroying the country's agricultural base in the process.
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Much production in East Germany was dismantled to prevent competition with West German firms. This was especially evident when collective agriculture was broken up to protect the heavily sub- sidized and less productive private farms of West Germany. 8 Without making compensation, West German capitalists grabbed almost all the socialized property in the GDR, including factories, mills, farms, apartments and other real estate, and the medical care system-- assets worth about $2 trillion--in what has amounted to the largest expropriation of public wealth by private capital in European history.
The end result of all this free-market privatization in East Germany is that rents, once 5 percent of one's income, have climbed to as much as two-thirds; likewise the costs of transportation, child care, health care, and higher education have soared beyond the reach of many.
East Germans of various political stripes have a number of com- plaints: (a) The net money flow has been East to West, in what amounts to a colonization of the East, (b) The free market is a myth; the West German economy is heavily subsidized and fully regulated but against the interests of the East, (c) West German police are much more brutal than were the East German police, (d) If West Germany had denazified anywhere near as thoroughly as it forced the East to desocialize, it would be a totally different country (Z Magazine, 7/92).
On that last point it should be noted that German officials are bringing criminal charges against those who "collaborated" with the GDR of East Germany in any official capacity, including even teach- ers and minor administrators. 9
Emigre? s from Communist states are astonished by the amount of bureaucracy they find in the West. Two Soviet immigrants to Canada complained, independently of each other, that "bureaucracy here
8 See Robert Mclntyre s report in Monthly Review; 12/93.
9 Several thousand former GDR officials, judges, and others have been imprisoned
or are facing prison terms for "treason. " See the discussion in chapter five.
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was even worse than at home" {Monthly Review, 5/88). East Germans living in the West were staggered by the flood of complicated forms they had to fill out for taxes, health insurance, life insurance, unem- ployment compensation, job retraining, rent subsidies, and bank accounts. Furthermore, "because of the kind of personal informa- tion they had to give, they felt more observed and spied on than they were by the Stasi [the GDR security police]" (Z Magazine, 7/92).
Soviet Jews who emigrated to Israel during the cold war era expe- rienced a similar disillusionment with the difficulties of life and lack of idealism. The discouraging letters they sent home were considered an important factor in the drop in immigration from the USSR to Israel.
With the capitalist restoration in full swing, the peoples of the for- mer communist nations had ample opportunity to learn what life was like in the free-market paradise. Their experiences are detailed in the next chapter.
? CHAPTER 7
THE FREE-MARKET PARADISE GOES EAST (II)
Free-market propagandists in the former communist countries claimed that, as capital was privatized and accumulated in a few hands, production would be stimulated and prosperity would be at hand. But first, there would be a "difficult period" to go through. The difficult period is proving to be far more severe and protracted than predicted, and may well be the permanent condition of capital- ist restoration.
For Vipers and Bloodsuckers
In 1990, as the Soviet Union was preparing for its fatal plunge into the free-market paradise, Bruce Gelb, head of the United States Information Agency, told a reporter that the Soviets would benefit economically from U. S. business education because "the vipers, the bloodsuckers, the middlemen--that's what needs to be rehabilitated in the Soviet Union. That's what makes our kind of country click! " ( Washington Post, 6/11/90)
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Today the former communist countries and China are clicking away with vipers and bloodsuckers. Thousands of luxury cars have appeared on the streets of Moscow and Prague. Rents and real estate prices have skyrocketed. Numerous stock exchanges have sprung up in China and Eastern Europe, sixteen in the former USSR alone. And a new class of investors, speculators, and racketeers are wallowing in wealth. The professed goal is no longer to provide a better life for all citizens but to maximize the opportunities for individuals to accu- mulate personal fortunes.
More opulence for the few creates more poverty for the many. As one young female journalist in Russia put it: "Everytime someone gets richer, I get poorer" (New York Times, 10/15/95). In Russia, the living standard of the average family has fallen almost by half since the market "reforms" took hold (New York Times, 6/16/96). A report from Hungary makes the same point: "While the 'new rich5 live in villas with a Mercedes parked in a garage, the number of poor peo- ple has been growing" (New York Times, 2/27/90)?
As socialist Vietnam opens itself to foreign investment and the free market, "gaps between rich and poor . . . have widened rapidly" and "the quality of education and health care for the poor has dete- riorated" (New York Times, 4/8/96). Prosperity has come "only to a privileged few in Vietnam" leading to "an emerging class structure that is at odds with the country's professed egalitarian ideals" (AP report, 10/28/96).
In the emerging free-market paradise of Russia and Eastern Europe, price deregulation produced not competitive prices but prices set by private monopolies, adding to the galloping inflation. Beggars, pimps, dope pushers, and other hustlers ply their trades as never before. And there has been a dramatic rise in unemployment, homelessness, air and water pollution, prostitution, spousal abuse, child abuse, and just about every other social ill. 1
1 Vladimir Bilenkin, "Russian Workers Under the Yeltsin Regime: Notes on a Class in Defeat," Monthly Review, 11/96, 1-12.
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In countries like Russia and Hungary, as widely reported in the U. S. press, the suicide rate has climbed by 50 percent in a few years. Reductions in fuel service, brought about by rising prices and unpaid bills, have led to a growing number of deaths or serious illnesses among the poor and the elderly during the long winters.
In Russia, doctors and nurses in public clinics are now grossly underpaid. Free health clinics are closing. More than ever, hospitals suffer from unsanitary conditions and shortages of disposable syringes, needles, vaccines, and modern equipment. Many hospitals now have no hot water, some no water at all. 2 The deterioration of immunization programs and health standards has allowed polio to make a serious comeback, along with tuberculosis, cholera, dipthe- ria, dysentery, and sexually transmitted diseases. Drug addiction has risen sharply. "Russia's hospitals are struggling to treat increasing numbers of addicts with decreasing levels of funding" (CNN news report, 2/2/92).
There has been a decline in nutritional levels and a sharp increase in stress and illness. Yet the number of visits to doctors has dropped by half because fees are so costly in the newly privatized health care systems. As a result, many illnesses go undetected and untreated until they become critical. Russian military officials describe the health of conscripts as "catastrophic. " Within the armed forces suicides have risen dramatically and deaths from drug overdoses have climbed 80 percent in recent years. ( Toronto Stary 11/5/95).
The overthrow of communism brought a rising infant mortality and soaring death rates in Russia, Bulgaria, Hungary, Latvia, Moldavia, Rumania, Ukraine, Mongolia, and East Germany. One- third of Russian men never live to sixty years of age. In 1992, Russia's birth rate fell below its death rate for the first time since World War II. In 1992 and 1993, East Germans buried two people for every baby
2 See Eleanor Randolph, Waking the Tempests: Ordinary Life in the New Russia (New York: Simon & Schuster, 1996).
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born. The death rate rose nearly 20 percent for East German women in their late thirties, and nearly 30 percent for men of the same age (New York Times, 4/6/94).
With the end of subsidized rents, estimates of homelessness in Moscow alone run as high as 300,000. The loss of resident permits deprives the homeless of medical care and other state benefits, such as they are. Dressed in rags and victimized by both mobsters and government militia, thousands of indigents die of cold and hunger on the streets of various cities. In Rumania, thousands of homeless children live in sewers and train stations, sniffing glue to numb their hunger, begging and falling prey to various predators (National Public Radio news, 7/21/96).
In Mongolia, hundreds of homeless children live in the sewers of Ulaanbaatar. Before 1990, Mongolia was a prosperous nation that had benefited from Soviet and East European financial assis- tance and technical aid. Its new industrial centers produced leather goods, woolen products, textiles, cement, meat, grain, and timber. "The communist era dramatically improved the quality of life of the people.
communism endured chronic shortages, long lines, poor quality goods and services, and many other problems. They wanted a better life, and who could blame them? Without capitalist encirclement, they would have had a better chance of solving more of their inter- nal problems.
All this is not to deny the very real deficiencies of the communist systems. Here I want to point out that much of the credit for the deformation and overthrow of communism should go to the Western forces that tirelessly dedicated themselves to that task, using every possible means of political, economic, military, and diplomatic aggression to achieve a success that will continue to cost the people of the world dearly.
? CHAPTER 6
THE FREE-MARKET PARADISE GOES EAST (I)
Capitalist restoration in the former communist countries has taken different forms. In Eastern Europe and the Soviet Union, it involved the overthrow of communist governments. In China, it pro- ceeded within the framework of a communist system--as seems to be happening in Vietnam, and perhaps will happen eventually in North Korea and Cuba. While the Chinese government continues under a nominally communist leadership, the process of private cap- ital penetration goes on more or less unhindered.
Suppression of the Left
The anticommunists who took power in Eastern Europe and the Soviet Union in 1989-91 set about to impose bourgeois dominance over political and cultural life, purging communists from govern- ment, the media, universities, professions, and courts. While pre- senting themselves as democratic reformers, they soon grew impatient with the way democratic forms of popular resistance lim-
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ited their efforts to install an unrestrained free-market capitalism. In Russia, associates of President Boris Yeltsin talked of the "dan- gers of democracy" and complained that "most representative bod- ies have become a hindrance to our [market] reforms. " (Nation, 12/2/91 and 5/4/92). Apparently, the free market, said by "reformers" to be the very foundation of political democracy, could not be intro- duced through democratic means. In 1992, the presidents of Poland, Czechoslovakia, and Russia demanded that their parliaments be sus- pended and they be allowed to rule by presidential decree, with repressive measures against "hardliners" and "holdovers" who resisted the free-market "reforms. " Their goal was not power to the
people but profits to the privileged.
This process of democratization-via-suppression began even before the actual overthrow of communism. In 1991, Soviet presi- dent Mikhail Gorbachev, prodded by Russian president Yeltsin, announced that the Communist party of the USSR no longer had legal status. The partys membership funds and buildings were con- fiscated. Workers were prohibited from engaging in any kind of political activities in the workplace. Six leftist newspapers were sup- pressed, while all other publications, many of them openly reac- tionary, enjoyed uninterrupted distribution. The U. S. media, and even many on the U. S. Left, hailed these acts of suppression as "mov- ing ahead with democratic reforms. "
Gorbachev then demanded that the Soviet Congress abolish itself. It had remained too resistant to change. Actually the Congress was not opposed to democratic debate and multi-party elections; these were already in practice. It resisted an unbridled free-market capital- ism, and for that reason would have to go. Gorbachev repeatedly cut off the microphones during debate and threatened singlehandedly to abolish the Congress by emergency decree. He forced a vote three times until he got the desired abolition. These strong-arm methods
were reported in the U. S. press without critical comment.
What gave Yeltsin and Gorbachev the excuse to pursue this repres-
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sive course was the curious incident of August 1991, when a nervous group of leaders, mouthing vague phrases about the deterioration of life in the Soviet Union, attempted an oddly orchestrated "coup" against the Gorbachev government, one that flopped before it ever got off the ground. Weeks later, the Washington Post (9/26/91) noted happily that the defeat of the coup was a triumph for the Soviet mon- eyed class. Among the coup s militant opponents were private entre- preneurs and thousands of members of the Russian stock exchange, who routinely made twenty times the average wage of ordinary Soviets. They headed onto "the streets of Moscow to defend their right to wheel and deal. The coup collapsed, democracy tri- umphed. . . . Private businessmen contributed more than 15 million rubles to buy food and equipment for the defenders. " One broker was struck by how few workers responded to Yeltsin s call to defend democracy.
The boldness of this investor class in the face of an armed coup might have another explanation. A socialist critic of communism, Boris Kagarlitsky argued, "In fact, there was no coup at all. " The sol- diers were unarmed and confused, the tanks called out were undi- rected, "and the leaders of the so-called coup never even seriously tried to take power. " The real coup, says Kagarlitsky, came in the aftermath when Boris Yeltsin used the incident to exceed his consti- tutional powers and dismantle the Soviet Union itself, absorbing all its powers into his own Russian Republic. While claiming to be undoing the "old regime," Yeltsin overthrew the new democratic Soviet government of 1989-1991.
In late 1993, facing strong popular resistance to his harsh free- market policies, Yeltsin went further. He forcibly disbanded the Russian parliament and every other elected representative body in the country, including municipal and regional councils. He abol- ished Russia's Constitutional Court and launched an armed attack upon the parliamentary building, killing an estimated two thousand resisters and demonstrators. Thousands more were jailed without
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charges or a trial, and hundreds of elected officials were placed under investigation.
Yeltsin banned labor unions from all political activities, sup- pressed dozens of publications, exercised monopoly control over all broadcast media, and permanently outlawed fifteen political parties. He unilaterally scrapped the constitution and presented the public with a new one that gave the president nearly absolute power over policy while reducing the democratically elected parliament to vir- tual impotence. 1 For these crimes he was hailed as a defender of democracy by U. S. leaders and media. What they most liked about Yeltsin was that he "never wavered in his support for privatization" (San Franicsco Chronicle, 7/6/94). 2
Yeltsin, the "democrat," twice suspended publication of the Communist party newspaper Pravda. He charged it exorbitant rent for the use of its own facilities. Then in March 1992, he confiscated the paper s twelve-story building and its press and turned full own- ership over to Russiskaye Gazetay a government (pro-Yeltsin) news- paper.
Yeltsins "elite" Omon troops repeatedly attacked leftist demon- strators and pickets in Moscow and other Russian cities. Parliamentary deputy Andrei Aidzerdzis, an Independent, and deputy Valentin Martemyanov, a Communist, who both vigorously opposed the Yeltsin government, were victims of political assassina- tion. In 1994, journalist Dmitri Kholodov, who was probing corrup- tion in high places, also was assassinated.
In 1996, Yeltsin won reelection as president, beating out a serious challenge from a communist rival. His campaign was assisted by
1 The new constitution was seemingly approved in a December 1993 referendum. However, a commission appointed by Yeltsin himself found that only 46 percent of eligible voters had participated, rather than the 50 percent required to ratify a constitution (Los Angeles Times, 6/3/94). Little note has been taken of the fact that Yeltsin was ruling under an illegal constitution.
2 For a more detailed account of the Yeltsin repression and the whitewash it received in the U. S. media, see "Yeltsin's Coup and the Media's Alchemy," in Michael Parenti, Dirty Truths (San Francisco: City Lights Books, 1996).
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teams of U. S. electoral advisors, who used sophisticated polling tech- niques and focus groups. 3 Yeltsin also benefited from multi-million dollar donations from U. S. sources and a $10 billion aid package from the International Monetary Fund and World Bank. Equally important for victory was the crooked counting of ballots (as curso- rily reported in one ABC late evening news story in July 1996).
Yeltsin exercised monopoly control over Russia's television net- works, enjoying campaign coverage that amounted to nonstop pro- motionals. In contrast, opposition candidates were reduced to nonpersons, given only fleeting exposure, if that. Yeltsins reelection was hailed in the West as a victory for democracy; in fact, it was a vic- tory for private capital and monopoly media, which is not synony- mous with democracy, though often treated as such by U. S. leaders and opinion makers.
Yeltsins commitment is to captialism not democracy. In March 1996, several months before the election, when polls showed him trailing the Communist candidate, Gennadi Zyuganov, Yeltsin
ordered decrees drawn up "that would have canceled the election, closed down parliament and banned the Communist Party" (New York Times, 7/2/96). But he was disuaded by advisors who feared the measures might incite too much resistance. Though he decided not to call off the election, "Yeltsin was never committed to turning over the government to a Communist if he lost" (San Francisco Chronicle, 7/26/96).
3 These U. S. political consultants operated in strict secrecy lest they be seen as interfering in Russian affairs--which indeed they were. They advised Yeltsin against making extended speeches and urged more sound bites and photo opportunities. They pointed to issues and images he could exploit and ones he should avoid. Political scientist Larry Sabato, who long opposed the involvement of U. S. consultants in foreign elections, observed that Americans can be stripped of their citizenship for voting in a foreign election. "Why then should it be acceptable to influence millions of votes in a foreign election? " I would add that no foreigner is allowed to contribute money to U. S. candidates or work on their campaign staffs. But U. S. leaders can send large sums and secret teams of consul- tants to manipulate and sway foreign elections. Just another example of the double standard under which U. S. policy operates.
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During the 1996 campaign, Yeltsin and his associates repeatedly announced that a communist victory would bring "civil war. " In effect, they were voicing their willingness to discard democracy and resort to force and violence if the election did not go their way. Nor was it taken as an idle threat. At one point surveys showed that "about half the population believed that civil war would result if the Communists won" (Sacramento Bee, 7/9/96).
Through all of this Yeltsin received vigorous support from the White House and the U. S. media. An editorial in the Nation (6/17/96) asked: What if a popularly elected communist president in Russia had pursued Yeltsins harsh policies of privatization, plunging his country into poverty, turning over most of its richest assets to a small segment of previous communist officials, suppressing dissi- dent elements, using tanks to disband a popularly elected parliament that opposed his policies, re-writing the constitution to give himself almost dictatorial power, and doing all the other things Yeltsin has done? Would U. S. leaders enthusiastically devote themselves to the re-election of this "communist" president and remain all but silent about his transgressions?
The question is posed rhetorically; the Nation editorial presumes that the answer is no. In fact, I would respond: Yes, of course. U. S. leaders would have no trouble supporting this "communist" presi- dent, for he would be communist in name only. In actual deed he would be a devoted agent of capitalist restoration. One need only look at how successive administrations in Washington have cultivated friendly relations with the present communist leaders in China, over- looking and even explaining away their transgressions. As Chinas leaders open their country to private investment and growing eco- nomic inequality, they offer up a dispossessed labor force ready to work double-digit hours for subsistence pay--at enormous profit for the multinationals. U. S. politico-economic leaders know what they are doing, even if some editorial writers in this country do not. Their eye is on the money, not the color of the vessel it comes in.
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Since the overthrow of communism, free-market right-wing forces in the various Eastern European countries enjoyed significant financial and organizational assistance from U. S. -financed agencies, such as the National Endowment for Democracy, the AFL-CIO s Free Trade Union Institute (a group intimately linked to the CIA), and the Free Congress Foundation, an organization with an anticommunist and conservative religious ideology. 4
Communists and other Marxists endured political repression throughout Eastern Europe. In East Germany, the Party of Demo- cratic Socialism had its property and offices, paid for by party mem- bers, seized in an attempt to bankrupt it. In Latvia, the communist activist Alfreds Rubies, who protested the inequities of free-market "reform," has been kept in prison for years without benefit of trial In Lithuania, communist leaders were tortured and then imprisoned for long durations. Georgia's anticommunist president, Zviad Gamsakhurdia, incarcerated opponents from some seventy political groups without granting them a trial (San Francisco Chronicle, 4/17/91).
Estonia held "free elections" in which 42 percent of the popula- tion was prohibited from voting because of their Russian, Ukranian, or Belorussian antecedents. Russians and other minorities were excluded from many jobs and faced discrimination in housing and schools. Latvia also disfranchised Russians and other non-Latvian nationals, many of whom had lived in the country for almost a half century. So much for the flowering of democracy. 5
4 The reader might want to consult the late Sean Gervasi's two in-depth studies on Western destabilization of the Soviet Union: CovertAction Quarterly; Fall 1990 and Winter 1991-92.
5 The focus here is mostly on the former communist countries of Eastern Europe and Russia, but similar and more bloody repressions against deposed left revolu- tionaries have been conducted in Afghanistan and South Yemen. In 1995, in Ethiopia, three thousand former members of Mengitsu Haile Mariarns socialist government were put on trial for executing Emperor Haile Selassie, the feudal despot who once ruled that country.
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One-Way Democracy
More important than democratic rule was free-market "reform," a code word for capitalist restoration. As long as democracy could be used to destabilize one-party communist rule, it was championed by the forces of reaction. But when democracy worked against free- market restoration, the outcome was less tolerated.
In 1990, in Bulgaria, capitalist restoration did not go according to plan. Despite generous financial and organizational assistance from U. S. sources, including the Free Congress Foundation, the Bulgarian conservatives ended up a poor second to the communists, in what Western European observers judged to be a fair and open election. What followed was a coordinated series of strikes, demonstrations, economic pressure, acts of sabotage, and other disruptions reminis- cent of CIA-orchestrated campaigns against left governments in Chile, Jamaica, Nicaragua, and British Guyana. Within five months, the free-market oppositionists forced the democratically elected communist government to resign. Bulgarian communists "com- plained that the U. S. had violated democratic principles in working against freely elected officials. "6
The same pattern emerged in Albania where the democratically elected communist government won an overwhelming victory at the polls, only to face demonstrations, a general strike, economic pressure from abroad, and campaigns of disruption financed by the National Endowment for Democracy and other U. S. sources. After two months the communist government collapsed. Once the Right took power, a new law was passed denying Albanian communists and other oppo- nents of capitalist restoration the right to vote or otherwise partici- pate in political activities. As a reward for having extended democratic rights to all citizens, the Albanian communists and all for- mer state employees and judges were stripped of their civil rights.
6 For information on Bulgaria, see William Blum's report in CovertAction Quarterly; Winter 1994-95.
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In the 1996 Albanian elections, the Socialists and other opposi- tion parties--who had been predicted to do well--withdrew from the election hours before the polls closed in protest of the "blatantly rigged" vote. Election monitors from the European Union and the United States said they witnessed numerous instances of police intimidation and the stuffing of ballot boxes. The Socialist party had its final campaign rally banned and a number of prominent leaders barred from running for office because of their past communist affil- iations (New York Times, 5/28/96). When the Socialists and their allies tried to hold protest rallies, they were attacked by Albanian security forces who beat and severely injured dozens of demonstra- tors (Peoples Weekly World, 5/11/96 and 6/1/96).
Openly anti-Semitic groups, cryptofascist parties, and hate cam- paigns surfaced in Russia, Poland, Hungary, Ukraine, Belarus, Czechoslovakia, and Rumania. Museums that commemorated the heroic antifascist resistance were closed down and monuments to the struggle against Nazism were dismantled. In countries like Lithuania, former Nazi war criminals were exonerated, some even compensated for the years they had spent in jail. Jewish cemeteries were desecrated and xenophobic attacks against foreigners of darker hue increased. With the communists no longer around, Jews and foreigners were blamed for low crop prices, inflation, crime, and other social ills.
On June 11, 1995, Lech Walesa's personal pastor, Father Henryk Jankowski, declared during a mass in Warsaw that the "Star of David is implicated in the swastika as well as in the hammer and sickle" and that the "diabolic aggressiveness of the Jews was responsible for the emergence of communism" and for World War II. The priest added that Poles should not tolerate governments made up of people who are tied to Jewish money. Walesa, who was present during the ser- mon, declared that his friend Jankowski was not an anti-Semite but simply "misinterpreted. " Rather than retracting his comments, Jankowski spewed forth the same bile in a subsequent television interview. At about that time, placards that read "Jews to the Gas"
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and "Down with the Jewish-Communist conspiracy" were visible at a Polish Solidarity demonstration of 10,000 in Warsaw--earning not a censorious word from church or state authorities (Nation, 8/7/95).
The economic policies of the fascist Pinochet regime in Chile were openly admired by the newly installed capitalist government in Hungary.
In 1991, leading political figures and economists from the soon-to-be abolished USSR attended a seminar on Chilean econom- ics in Santiago and enjoyed a cordial meeting with mass murderer General Pinochet. The Chilean dictator also was accorded a friendly interview in Literaturnaya Gazeta, a major Russian publication. Yeltsin s former security chief, Aleksandr Lebed, is a Pinochet admirer.
Instead of being transformed into capitalist states, some commu- nist nations were entirely obliterated as political entities. Besides the obvious example of the Soviet Union, there is the German Democratic Republic, or East Germany, which was absorbed into the Federal Republic of Germany. South Yemen was militarily attacked and crushed by North Yemen. Ethiopia was occupied by Tigrean and Eritrean forces that imprisoned large numbers of Ethiopians without trial; expropriated Ethiopian property; suppressed Ethiopian educa- tion, business, and news media; and imposed a "systematic enforce- ment of tribalism in political organization and education" (Tilahun Yilma, correspondence, New York Times, 4/24/96).
A systematic enforcement of tribalist political organization might well describe Yugoslavia's fate, a nation that was fragmented by force of arms into a number of small, conservative republics under the suzerainty of the Western powers. With that dismemberment came a series of wars, repressions, and atrocities committed by all contend- ing sides.
One of Yugoslavia's first breakaway republics was Croatia, which in 1990 was taken over by a rightist coterie, including some former Nazi collaborators, backed by the armed might of the proto-fascist National Guard Corps, under a constitution that relegated Serbs, Jews, Gypsies, and Muslims to second-class status. Serbs were driven
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from the civil service and police, evicted from their homes, had their businesses taken from them, and were subjected to special property taxes. Serbian newspapers in Croatia were suppressed. Many Serbs were forced from the land they had inhabited for three centuries. Still Croatia was hailed by its Western backers as a new-born democracy.
In 1996, Belarus president Alexander Lukashenko, a self-professed admirer of Adolph Hitler s organizational skills, shut down the inde- pendent newspapers and radio stations and decreed the opposition parliament defunct. Lukashenko was awarded absolute power in a referendum that claimed an inflated turnout, with no one knowing how many ballots were printed or how they were counted. Some opposition leaders fled for their lives. "Once a rich Soviet republic that produced tractors and TVs, Belarus is now [a] basket case" with a third of the population living "in deep poverty" (San Francisco Bay Guardian, 12/4/96).
Must We Adore Vaclav Havel?
No figure among the capitalist restorationists in the East has won more adulation from U. S. officials, media pundits, and academics than Vaclav Havel, a playwright who became the first president of post-communist Czechoslovakia and later president of the Czech Republic. The many left-leaning people who also admire Havel seem to have overlooked some things about him: his reactionary religious obscurantism, his undemocratic suppression of leftist opponents, and his profound dedication to economic inequality and an unre- strained free-market capitalism.
Raised by governesses and chauffeurs in a wealthy and fervently anticommunist family, Havel denounced democracy's "cult of objec- tivity and statistical average" and the idea that rational, collective social efforts should be applied to solving the environmental crisis. He called for a new breed of political leader who would rely less on "rational, cognitive thinking," show "humility in the face of the mys-
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terious order of Being" and "trust in his own subjectivity as his prin- cipal link with the subjectivity of the world" Apparently, this new breed of leader would be a superior elitist cogitator, not unlike Plato's philosopher king, endowed with a "sense of transcendental respon- sibility" and "archetypal wisdom. "7 Havel never explained how this transcendent archetypal wisdom would translate into actual policy decisions, and for whose benefit at whose expense.
Havel called for efforts to preserve the Christian family in the Christian nation. Presenting himself as a man of peace and stating that he would never sell arms to oppressive regimes, he sold weapons to the Philippines and the fascist regime in Thailand. In June 1994, General Pinochet, the man who butchered Chilean democracy, was reported to be arms shopping in Czechoslovakia--with no audible objections from Havel.
Havel joined wholeheartedly in George Bush's Gulf War, an enter- prise that killed over 100,000 Iraqi civilians. In 1991, along with other Eastern European pro-capitalist leaders, Havel voted with the United States to condemn human rights violations in Cuba. But he has never uttered a word of condemnation of rights violations in El Salvador, Colombia, Indonesia, or any other U. S. client state.
In 1992, while president of Czechoslovakia, Havel, the great democrat, demanded that parliament be suspended and he be allowed to rule by edict, the better to ram through free-market "reforms " That same year, he signed a law that made the advocacy of communism a felony with a penalty of up to eight years imprison- ment. He claimed the Czech constitution required him to sign it. In fact, as he knew, the law violated the Charter of Human Rights which is incorporated into the Czech constitution. In any case, it did not require his signature to become law. In 1995, he supported and signed another undemocratic law barring communists and former communists from employment in public agencies.
7 See Havel's goofy op-ed in the New York Times (3/1/92); it caused an embarrassed silence among his U. S. admirers.
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The propagation of anticommunism has remained a top priority for Havel. He led "a frantic international campaign" (San Francisco Chronicle, 2/17/95) to keep in operation two U. S. -financed, cold war radio stations, Radio Free Europe and Radio Liberty, so they could continue saturating Eastern Europe with their anticommunist pro- paganda.
Under Havels government, a law was passed making it a crime to propagate national, religious, and class hatred. In effect, criticisms of big moneyed interests were now illegal, being unjustifiably lumped with ethnic and religious bigotry. Havels government warned labor unions not to involve themselves in politics. Some militant unions had their property taken from them and handed over to compliant company unions.
In 1995, Havel announced that the "revolution" against commu- nism would not be complete until everything was privatized. Havel's government liquidated the properties of the Socialist Union of Youth--which included camp sites, recreation halls, and cultural and scientific facilities for children--putting the properties under the management of five joint stock companies, at the expense of the youth who were left to roam the streets.
Under Czech privatization and "restitution" programs, factories, shops, estates, homes, and much of the public land was sold at bar- gain prices to foreign and domestic capitalists. In the Czech and Slovak republics, former aristocrats or their heirs were being given back all the lands their families had held before 1918 under the Austro-Hungarian empire, dispossessing the previous occupants and sending many of them into destitution. Havel himself took personal ownership of public properties that had belonged to his family forty years before. While presenting himself as a man dedicated to doing good for others, he did well for himself. For these reasons some of us do not have warm fuzzy feelings toward Vaclav Havel.
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Colonizing the East
Once the capitalist restorationists in Eastern Europe and the for- mer Soviet Union took state power, they worked hard to make sure that the new order of corporate plunder, individual greed, low wages, mindless pop culture, and limited electoral democracy would take hold. They set about dismantling public ownership of production and the entire network of social programs that once served the pub- lic. They integrated the erstwhile communist countries into the global capitalist system by expropriating their land, labor, natural resources, and markets, swiftly transforming them into impover- ished Third World nations. All this was hailed in the U. S. corporate- owned press as a great advance for humanity.
The former communist nations are being recolonized by Western capital. Most of their foreign trade is now controlled by multinational corporations. Like Third World countries, they are increasingly deprived of each other s markets. The once heavy and mutually ben- eficial commerce between them has been reduced to a trickle, as their economies get tied into the investment and extractive needs of global capitalism. Instead of mutual development, they are now experienc- ing the maldevelopment imposed by global monopoly capital.
Multinational corporations are moving into Russia to exploit vast oil and natural gas reserves and rich mineral deposits at great profit to themselves and with little benefit to the Russian people. Over the protests of U. S. and Russian environmentalists, U. S. timber interests, with financial support from a venture fund sponsored by the Pentagon, are preparing to clear-cut the Siberian wilderness, a region that holds one-fifth of the planets forests and is the habitat of many rare species (New York Timesy 1/30/96).
All aid to the former communist countries is fiinneled into the private sector. As noted in the Guardian (11/19/94), "The hundreds of millions of dollars spawned by Western aid programs have mainly benefited the Western companies which headed east to board the aid
? THE FREE-MARKET P ARADISE GOES EAST (II) 101
gravy train'' When Rumania inaugurated an over the lop mar- ket for trading privatization shares, the $20 million in "start-up costs were largely covered by the U. S. Agency for International Development0 (Wall St Journal 9/17/96).
In lyyfj, the International Monetary Fund extended a $10. 2 bil- lion loan to Russia, with terms calling for the privatization of agri- culture and other slate-owned assets, and the elimination of human service and fuel subsidies, U. S. aid is used to help private investors buy public ? roper Lies and extract publicly owned raw materials from Eastern European countries under the most favorable investment conditions.
With the advent of private investmeni in the East, production did not grow as promised but dropped drasticalh Hundreds of the more attractive and solvent state enterprises have been privatized, often given away at token prices to foreign investors, while other state firms are decapitated or driven into bankruptcy. Between 1989 and 1995, in what is now the Czech Republic, nearly 80 percent of all enterprises were privatized -- and industrial production shrank by two thirds, Privatization in Poland caused production to shrink one- third between 1989 and 1992, Vast electrmu^c and high-recti com- plexes in V. ii`sx Germany, employing tens of thousands of workers, have been taken over by giant West German firms and then closed down, Under privatization, much of the former Soviel Unions sci- entific and technical infrastructure is disintegrating, along with its physical plants.
Since going private, ZiL, llie huge Moscow plant, saw its produc- tion of trucks slump from 150000 to 13000 a year, with almost 40 percent of the workforce laid off. In April 1996, the remaining work- ers petitioned the Russian government to lake back control of ZiL, In the past, ZiL workers and their relatives "had unshakeably saie jobs" at the factory. They lived in apartments and attended schools pro- vided by ZiL As babies they spent their days at the ZiL day care cen- ter, and when ill they were attented to by ZiL doctors, "I was raised
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in a country that cared about its workers" said one machinist, who now was sorry he had opposed that system (New York Times, 5/8/94).
In Macedonia, one of the breakaway republics of Yugoslavia, a labor representative noted, "Privatization seems to mean the destruction of our companies. " Macedonians seemed more troubled by free-market economic hardships than by the much publicized ethnic rivalries. They complained about how work has taken over their lives: "One has no time to care about others; there's no time even for oneself--only time for making money" (PBS-TV report, 1/16/95).
Agricultural output of grain, corn, livestock, and other products plummeted in the former communist countries, as thousands of cooperative farms were forcibly broken up. The new private farmers have small plots, often cannot get loans, seeds, fertilizer, or machin- ery, and are rapidly losing their holdings or reverting to subsistence farming. Hungary's agricultural cooperatives had been one sector of the socialist economy that performed well. But with privatization, farm output tumbled 40 percent in 1993 (Los Angeles Times, 1/29/94).
A drastic deterioration in agricultural production occurred in Bulgaria, once considered the breadbasket of Eastern Europe, caus- ing severe bread shortages by 1996. Bulgaria was also suffering from a 20 percent monthly inflation and was sinking into that familiar cycle of foreign debt: cutting back on services to qualify for IMF loans, borrowing to pay off past borrowing. "The [Bulgarian] gov- ernment must impose more free market austerity measures to get vital international loans to repay portions of the $9. 4 billion foreign debt" (San Francisco Chronicle, 7/18/96).
In 1992, the Lithuanian government decreed that former owners and their descendants could reclaim property confiscated during the socialist era. As a result, tens of thousands of farming families, about 70 percent of the rural population, were evicted from land they had worked for over a half century, destroying the country's agricultural base in the process.
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103
Much production in East Germany was dismantled to prevent competition with West German firms. This was especially evident when collective agriculture was broken up to protect the heavily sub- sidized and less productive private farms of West Germany. 8 Without making compensation, West German capitalists grabbed almost all the socialized property in the GDR, including factories, mills, farms, apartments and other real estate, and the medical care system-- assets worth about $2 trillion--in what has amounted to the largest expropriation of public wealth by private capital in European history.
The end result of all this free-market privatization in East Germany is that rents, once 5 percent of one's income, have climbed to as much as two-thirds; likewise the costs of transportation, child care, health care, and higher education have soared beyond the reach of many.
East Germans of various political stripes have a number of com- plaints: (a) The net money flow has been East to West, in what amounts to a colonization of the East, (b) The free market is a myth; the West German economy is heavily subsidized and fully regulated but against the interests of the East, (c) West German police are much more brutal than were the East German police, (d) If West Germany had denazified anywhere near as thoroughly as it forced the East to desocialize, it would be a totally different country (Z Magazine, 7/92).
On that last point it should be noted that German officials are bringing criminal charges against those who "collaborated" with the GDR of East Germany in any official capacity, including even teach- ers and minor administrators. 9
Emigre? s from Communist states are astonished by the amount of bureaucracy they find in the West. Two Soviet immigrants to Canada complained, independently of each other, that "bureaucracy here
8 See Robert Mclntyre s report in Monthly Review; 12/93.
9 Several thousand former GDR officials, judges, and others have been imprisoned
or are facing prison terms for "treason. " See the discussion in chapter five.
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was even worse than at home" {Monthly Review, 5/88). East Germans living in the West were staggered by the flood of complicated forms they had to fill out for taxes, health insurance, life insurance, unem- ployment compensation, job retraining, rent subsidies, and bank accounts. Furthermore, "because of the kind of personal informa- tion they had to give, they felt more observed and spied on than they were by the Stasi [the GDR security police]" (Z Magazine, 7/92).
Soviet Jews who emigrated to Israel during the cold war era expe- rienced a similar disillusionment with the difficulties of life and lack of idealism. The discouraging letters they sent home were considered an important factor in the drop in immigration from the USSR to Israel.
With the capitalist restoration in full swing, the peoples of the for- mer communist nations had ample opportunity to learn what life was like in the free-market paradise. Their experiences are detailed in the next chapter.
? CHAPTER 7
THE FREE-MARKET PARADISE GOES EAST (II)
Free-market propagandists in the former communist countries claimed that, as capital was privatized and accumulated in a few hands, production would be stimulated and prosperity would be at hand. But first, there would be a "difficult period" to go through. The difficult period is proving to be far more severe and protracted than predicted, and may well be the permanent condition of capital- ist restoration.
For Vipers and Bloodsuckers
In 1990, as the Soviet Union was preparing for its fatal plunge into the free-market paradise, Bruce Gelb, head of the United States Information Agency, told a reporter that the Soviets would benefit economically from U. S. business education because "the vipers, the bloodsuckers, the middlemen--that's what needs to be rehabilitated in the Soviet Union. That's what makes our kind of country click! " ( Washington Post, 6/11/90)
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Today the former communist countries and China are clicking away with vipers and bloodsuckers. Thousands of luxury cars have appeared on the streets of Moscow and Prague. Rents and real estate prices have skyrocketed. Numerous stock exchanges have sprung up in China and Eastern Europe, sixteen in the former USSR alone. And a new class of investors, speculators, and racketeers are wallowing in wealth. The professed goal is no longer to provide a better life for all citizens but to maximize the opportunities for individuals to accu- mulate personal fortunes.
More opulence for the few creates more poverty for the many. As one young female journalist in Russia put it: "Everytime someone gets richer, I get poorer" (New York Times, 10/15/95). In Russia, the living standard of the average family has fallen almost by half since the market "reforms" took hold (New York Times, 6/16/96). A report from Hungary makes the same point: "While the 'new rich5 live in villas with a Mercedes parked in a garage, the number of poor peo- ple has been growing" (New York Times, 2/27/90)?
As socialist Vietnam opens itself to foreign investment and the free market, "gaps between rich and poor . . . have widened rapidly" and "the quality of education and health care for the poor has dete- riorated" (New York Times, 4/8/96). Prosperity has come "only to a privileged few in Vietnam" leading to "an emerging class structure that is at odds with the country's professed egalitarian ideals" (AP report, 10/28/96).
In the emerging free-market paradise of Russia and Eastern Europe, price deregulation produced not competitive prices but prices set by private monopolies, adding to the galloping inflation. Beggars, pimps, dope pushers, and other hustlers ply their trades as never before. And there has been a dramatic rise in unemployment, homelessness, air and water pollution, prostitution, spousal abuse, child abuse, and just about every other social ill. 1
1 Vladimir Bilenkin, "Russian Workers Under the Yeltsin Regime: Notes on a Class in Defeat," Monthly Review, 11/96, 1-12.
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In countries like Russia and Hungary, as widely reported in the U. S. press, the suicide rate has climbed by 50 percent in a few years. Reductions in fuel service, brought about by rising prices and unpaid bills, have led to a growing number of deaths or serious illnesses among the poor and the elderly during the long winters.
In Russia, doctors and nurses in public clinics are now grossly underpaid. Free health clinics are closing. More than ever, hospitals suffer from unsanitary conditions and shortages of disposable syringes, needles, vaccines, and modern equipment. Many hospitals now have no hot water, some no water at all. 2 The deterioration of immunization programs and health standards has allowed polio to make a serious comeback, along with tuberculosis, cholera, dipthe- ria, dysentery, and sexually transmitted diseases. Drug addiction has risen sharply. "Russia's hospitals are struggling to treat increasing numbers of addicts with decreasing levels of funding" (CNN news report, 2/2/92).
There has been a decline in nutritional levels and a sharp increase in stress and illness. Yet the number of visits to doctors has dropped by half because fees are so costly in the newly privatized health care systems. As a result, many illnesses go undetected and untreated until they become critical. Russian military officials describe the health of conscripts as "catastrophic. " Within the armed forces suicides have risen dramatically and deaths from drug overdoses have climbed 80 percent in recent years. ( Toronto Stary 11/5/95).
The overthrow of communism brought a rising infant mortality and soaring death rates in Russia, Bulgaria, Hungary, Latvia, Moldavia, Rumania, Ukraine, Mongolia, and East Germany. One- third of Russian men never live to sixty years of age. In 1992, Russia's birth rate fell below its death rate for the first time since World War II. In 1992 and 1993, East Germans buried two people for every baby
2 See Eleanor Randolph, Waking the Tempests: Ordinary Life in the New Russia (New York: Simon & Schuster, 1996).
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born. The death rate rose nearly 20 percent for East German women in their late thirties, and nearly 30 percent for men of the same age (New York Times, 4/6/94).
With the end of subsidized rents, estimates of homelessness in Moscow alone run as high as 300,000. The loss of resident permits deprives the homeless of medical care and other state benefits, such as they are. Dressed in rags and victimized by both mobsters and government militia, thousands of indigents die of cold and hunger on the streets of various cities. In Rumania, thousands of homeless children live in sewers and train stations, sniffing glue to numb their hunger, begging and falling prey to various predators (National Public Radio news, 7/21/96).
In Mongolia, hundreds of homeless children live in the sewers of Ulaanbaatar. Before 1990, Mongolia was a prosperous nation that had benefited from Soviet and East European financial assis- tance and technical aid. Its new industrial centers produced leather goods, woolen products, textiles, cement, meat, grain, and timber. "The communist era dramatically improved the quality of life of the people.
