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.
Blackshirts-and-Reds-by-Michael-Parenti
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.
? THE FREE-MARKET PARADISE GOES EAST (II) 93
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.
? THE FREE-MARKET PARADISE GOES EAST (II) 95
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.
? THE FREE-MARKET PARADISE GOES EAST (II) 99
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)
105
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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.
? THE FREE-MARKET PARADISE GOES EAST (II) 107
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. . . achieving commendable levels of social devel- opment through state-sponsored social welfare measures," but free-market privatization and deindustrialization has brought unemployment, mass poverty, and widespread malnutrition to Mongolia. 3
Shock Therapy for the Many
Unemployment rates have risen as high as 30 percent in countries that once knew full employment under communism. One Polish worker claims that the jobless are pretty much unemployable after age 40. Polish women say economic demise comes earlier for them, since to get a job, as one puts it, "you must be young, childless and
3 K. L. Abeywickrama, "The Marketization of Mongolia," Monthly Review, 3/96, 25- 33, and reports cited therein.
? THE FREE-MARKET PARADISE GOES EAST (II) 109
have a big bosom" (Nation, 12/7/92). Occupational safety is now almost nonexistent and workplace injuries and deaths have drasti- cally increased.
Workers now toil harder and longer for less, often in sweatshop conditions. Teachers, scientists, factory workers, and countless oth- ers struggle for months without pay as their employers run out of funds (Los Angeles Times, 1/17/96). The waves of strikes and work stoppages in Russia and Eastern Europe are accorded unsympathetic press treatment in those countries.
Even in the few remaining countries in which communist govern- ments retain control, such as China, Vietnam, and Cuba, the open- ing to private investment has contributed to a growing inequality. In Cuba, the dollar economy has brought with it a growth in prostitu- tion (including girls as young as eleven and twelve), street beggers, and black-market dealings with tourists (Avi Chomsky, Cuba
Update, 9/96).
In China, there are workers who now put in twelve- to sixteen-
hour days for subsistence pay, without regularly getting a day off. Those who protest against poor safety and health conditions risk being fired or jailed. The market reforms in China have also brought a return of child labor (San Francisco Chronicle, 8/14/90). "I think this is what happens when you have private companies," says Ms. Peng, a young migrant who has doubts about the new China. "In pri- vate companies, you know, the workers don't have rights" ( Wall St. Journal 5/19/94).
Throughout Eastern Europe, unions have been greatly weakened or broken. Sick leave, maternity leave, paid vacations, and other job benefits once taken for granted under communism have been cut or abolished. Worker sanitariums, vacation resorts, health clinics, sports and cultural centers, children's nurseries, day-care centers, and other features that made communist enterprises more than just workplaces, have nearly vanished. Rest homes formerly reserved for workers have been privatized and turned into casinos, night clubs,
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and restaurants for the nouveau riche. 4
Real income has shrunk by as much as 30 to 40 percent in the ex-
communist countries. In 1992 alone, Russia saw its consumer spend- ing drop by 38 percent. (By comparison, during the Great Depression, consumer spending in the United States fell 21 percent over four years. ) In both Poland and Bulgaria, an estimated 70 per- cent now live below or just above the poverty line. In Russia, it is 75 to 85 percent, with a third of the population barely subsisting in absolute economic desperation. In Hungary, which has received most of the West s investment in Eastern Europe, over one-third of its citizens live in abject poverty, and 70 percent of the men hold two or more jobs, working up to 14 hours a day, according to the Ministry of Labor.
After months of not getting paid, coal miners in far eastern Russia were beginning to starve. By August 1996, 10,000 of them had stopped working simply because they were too weak from hunger. With no coal being extracted, the regions power plants began to shut down, threatening an electrical blackout that would further harm the nations Pacific coastal industry and trade (Los Angeles Times, 8/3/96).
Eastern Europeans are witnessing scenes "that are commonplace enough in the West, but are still wrenching here: the old man rum- maging through trash barrels for castaway items, the old woman picking through a box of bones at a meat market in search of one with enough gristle to make a thin soup" (Los Angeles Times, 3/10/90). With their savings and pensions swallowed up by inflation, elderly pensioners crowd the sidewalks of Moscow selling articles of their
4 One booming employment area is the business security forces and private armies, which in the Soviet Union alone muster some 800,000 men. "Another employer of choicc for working class youth is the immense state apparatus of repression which is now more formidable than that of the Soviet period. Today, this apparatus is numerically superior to the Armed Forces, better paid and better equipped. The regimes real enemy is inside, after all": Bilenkin, uRussian Workers Under the Yeltsin Regime," Monthly Review, 11/96, 7.
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clothing and other pathetic wares, while enduring harassment by police and thugs {Washington Post, 1/1/96). A Russian senior citizen refers to "this poverty, which only a few have escaped" while some "have become wildly rich. " (Modern Maturityy September/October
1994).
Crime and Corruption
With the socialist ethic giving way to private greed, corruption assumed virulent new forms in the post-Communist nations. Officials high and low are on the take, including the police. The Russian security minister calculated that one-third of Russian oil and one-half of Russian nickel shipped out of the country was stolen. Among those enjoying "staggering profits" from this plunder were Shell Oil and British Petroleum (Washington Post, 2/2/93). In April 1992, the chairman of Russia's central bank admitted that at least $20 billion had been illegally taken out of the country and deposited in Western banks (Nation, 4/19/93).
Choice chunks of public real estate are quietly sold off at a frac- tion of their value in exchange for payoffs to the officials who preside over the sales. Government officials buy goods from private contrac- tors at twice the normal price in exchange for kickbacks. Factory directors sell state-made commodities at low state prices to their own private firms, which those firms then resell at market prices for a vast profit. One member of the Moscow City Council estimated that cor- ruption amounted to hundreds of billions of dollars. If these funds went into state coffers instead of private pockets "we could meet our budget three or four times over" (Los Angeles Times, 7/10/92).
Along with corruption, there is an upsurge in organized crime. Over one hundred racket syndicates in Russia now extort tribute from 80 percent of all enterprises. From 1992 to 1995, as competi- tion for the spoils of "reform" intensified, forty-six of Russia's more prominent businessmen were slain in gangland-style murders. In
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1994, there were more than 2500 contract murders, almost all of them unsolved. "Contract murders occur regularly now in Russia, and most go without much notice" (San Francisco Chronicle, 11/17/95). Police say they lack the funds, personnel, and crime detec- tion equipment for any real campaign against the mobs.
Street crime also has increased sharply (New York Times, 5/7/96). In the former Soviet Union, women and elderly who once felt free to sit in parks late at night now dare not venture out after dark. Since the overthrow of communism in Hungary, thefts and other felonies have nearly tripled and there has been a 50 percent increase in homi- cides (NPR, 2/24/92). The police force in Prague today is many times greater than it was under communism, when "relatively few police were needed" (New York Times, 12/18/91). How odd that fewer police were needed in the communist police state than in the free- market paradise.
In the Republic of Georgia, life has been reduced to a level of vio- lent chaos never imagined under communism. Criminal rings con- trol much of the commerce, and paramilitary groups control most of the criminal rings. No longer able to sell its goods on the Soviet mar- ket but unable to compete on the international market, Georgian industry has experienced a massive decline and, as in most Eastern countries, the public debt has leaped upward while real wages have shrunk painfully (San Francisco Chronicle, 7/20/93).
Cultural Decay
Cultural life has drastically declined in the former communist countries. Theaters are sparsely attended because tickets are now prohibitively expensive. Publicly owned movie industries in coun- tries like Russia, Poland, Czechoslovakia, and the German Democratic Republic, which produced a number of worthwhile films, have been defunded or bought out by Western business inter- ests and now make cartoons, commercials, and music videos. Movie
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houses have been taken over by corporate chains and offer many of the same Hollywood junk films that we have the freedom to see.
Subsidies for the arts and literature have been severely cut. Symphony orchestras have disbanded or taken to playing at block parties and other minor occasions. The communist countries used to produce inexpensive but quality editions of classical and contempo- rary authors and poets, including ones from Latin America, Asia, and Africa. These have been replaced by second-rate, mass-market publications from the West. During the communist era, three of every five books in the world were produced in the Soviet Union. Today, as the cost of books, periodicals, and newspapers has sky- rocketed and education has declined, readership has shrunk almost to Third World levels.
Books of a Marxist or otherwise critical left perspective have been removed from bookstores and libraries. In East Germany, the writ- ers' association reported one instance in which 50,000 tons of books, some brand new, were buried in a dump. The German authorities who disposed of the books apparently did not feel quite free enough to burn them.
Education, once free, is now accessible only to those who can afford the costly tuition rates. The curricula have been "depoliti- cized," meaning that a left perspective critical of imperialism and capitalism has been replaced by a conservative one that is supportive or at least uncritical of these forces.
Descending upon the unhappy societies of Eastern Europe and Russia are the Hare Krishnas, Mormans, Moonies, Jehovah's Witnesses, Bahais, rightist Christian evangelicals, self-improvement hucksters, instant-success peddlers, and other materialistic spiritual- ist scavengers who prey upon the deprived and the desperate, offer- ing solace in the next world or the promise of wealth and success in this one.
The president of one of Russia's largest construction companies summed it up: "All the material well-being that people had, they lost
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in one hour. There is practically no more free medical care, accessi- ble higher education, no right to a job or rest. The houses of culture, libraries, stadiums, kindergartens and nurseries, pioneer camps, schools, hospitals and stores are closing. The cost of housing, com- munal services and transport are no longer affordable for the major- ity of families" (Peoples Weekly World, 4/6/96).
Facing forced privatization, news and entertainment media have had to find rich owners, corporate advertisers, conservative founda- tions, or agencies within the newly installed capitalist governments to finance them. Television and radio programs that had a left per- spective, including some popular youth shows, have been removed from the air. All media have been purged of leftists and restaffed by people with acceptable ideological orientations. This process of moving toward a procapitalist communication monopoly has been described in the Western media as "democratization. " Billboards and television commercials promoting U. S. cigarettes, automobiles, and other consumer items--many of them beyond the average pocket- book-- now can be seen everywhere.
Women and Children Last
The overthrow of communism has brought a sharp increase in gender inequality. The new constitution adopted in Russia eliminates provisions that guaranteed women the right to paid maternity leave, job security during pregnancy, prenatal care, and affordable day-care centers. 5 Without the former communist stipulation that women get at least one third of the seats in any legislature, female political rep- resentation has dropped to as low as 5 percent in some countries.
In all communist countries about 90 percent of women had jobs in what was a full-employment economy. Today, women compose
s Under Soviet law, women had been granted four months off with full pay for childbirth, and a year of partial pay if they elected to stay home with the child. In addition, they were allowed up to three years leave with a guarantee that their jobs would be held for them.
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over two-thirds of the unemployed. Those who do work are being channeled into low-pay unskilled positions. Women are being driven from the professions in disproportionate numbers and are advised against getting professional training. More than 30 percent of unem- ployed females are skilled workers and professionals who previously earned higher salaries than the national norm. The loss of maternity benefits and child care services has created still greater obstacles to female employment.
Throughout the Eastern European nations, the legal, financial, and psychological independence that women enjoyed under socialism has been undermined. Divorce, abortion, and birth control are more dif- ficult to obtain. Released from the "Soviet yoke," the autonomous region of Ingushetia decriminalized polygamy and made it legal for women to be sold into marriage. Instances of sexual harassment and violence against women have increased sharply. In Russia, the num- ber of women murdered annually--primarily by husbands and boyfriends--skyrocketed from 5,300 to 15,000 in the first three years of the free-market paradise. In 1994, an additional 57,000 women were seriously injured in such assaults. These official figures under- state the level of violence. The Communist party committees that used to intervene in cases of domestic abuse no longer exist.
Women also are being recruited in unprecedented numbers for the booming sex industry that caters to foreign and domestic busi- nessmen. Unable to find employment in the professions for which they originally were trained, many highly educated Russian and Eastern European women go abroad to work as prostitutes. Women are not the only ones being channeled into the sex market. As reported in Newsweek (9/2/96):
Prague and Budapest now rival Bangkok and Manila as hubs for the collection of children to serve visiting pedophiles. Last year one investigator was stunned to find stacks of child pornography in the reception rooms of Estonia'a Parliament and its social welfare depart- ment. "Free love is regarded as one of the new 'freedoms' which the
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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. . . achieving commendable levels of social devel- opment through state-sponsored social welfare measures," but free-market privatization and deindustrialization has brought unemployment, mass poverty, and widespread malnutrition to Mongolia. 3
Shock Therapy for the Many
Unemployment rates have risen as high as 30 percent in countries that once knew full employment under communism. One Polish worker claims that the jobless are pretty much unemployable after age 40. Polish women say economic demise comes earlier for them, since to get a job, as one puts it, "you must be young, childless and
3 K. L. Abeywickrama, "The Marketization of Mongolia," Monthly Review, 3/96, 25- 33, and reports cited therein.
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have a big bosom" (Nation, 12/7/92). Occupational safety is now almost nonexistent and workplace injuries and deaths have drasti- cally increased.
Workers now toil harder and longer for less, often in sweatshop conditions. Teachers, scientists, factory workers, and countless oth- ers struggle for months without pay as their employers run out of funds (Los Angeles Times, 1/17/96). The waves of strikes and work stoppages in Russia and Eastern Europe are accorded unsympathetic press treatment in those countries.
Even in the few remaining countries in which communist govern- ments retain control, such as China, Vietnam, and Cuba, the open- ing to private investment has contributed to a growing inequality. In Cuba, the dollar economy has brought with it a growth in prostitu- tion (including girls as young as eleven and twelve), street beggers, and black-market dealings with tourists (Avi Chomsky, Cuba
Update, 9/96).
In China, there are workers who now put in twelve- to sixteen-
hour days for subsistence pay, without regularly getting a day off. Those who protest against poor safety and health conditions risk being fired or jailed. The market reforms in China have also brought a return of child labor (San Francisco Chronicle, 8/14/90). "I think this is what happens when you have private companies," says Ms. Peng, a young migrant who has doubts about the new China. "In pri- vate companies, you know, the workers don't have rights" ( Wall St. Journal 5/19/94).
Throughout Eastern Europe, unions have been greatly weakened or broken. Sick leave, maternity leave, paid vacations, and other job benefits once taken for granted under communism have been cut or abolished. Worker sanitariums, vacation resorts, health clinics, sports and cultural centers, children's nurseries, day-care centers, and other features that made communist enterprises more than just workplaces, have nearly vanished. Rest homes formerly reserved for workers have been privatized and turned into casinos, night clubs,
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and restaurants for the nouveau riche. 4
Real income has shrunk by as much as 30 to 40 percent in the ex-
communist countries. In 1992 alone, Russia saw its consumer spend- ing drop by 38 percent. (By comparison, during the Great Depression, consumer spending in the United States fell 21 percent over four years. ) In both Poland and Bulgaria, an estimated 70 per- cent now live below or just above the poverty line. In Russia, it is 75 to 85 percent, with a third of the population barely subsisting in absolute economic desperation. In Hungary, which has received most of the West s investment in Eastern Europe, over one-third of its citizens live in abject poverty, and 70 percent of the men hold two or more jobs, working up to 14 hours a day, according to the Ministry of Labor.
After months of not getting paid, coal miners in far eastern Russia were beginning to starve. By August 1996, 10,000 of them had stopped working simply because they were too weak from hunger. With no coal being extracted, the regions power plants began to shut down, threatening an electrical blackout that would further harm the nations Pacific coastal industry and trade (Los Angeles Times, 8/3/96).
Eastern Europeans are witnessing scenes "that are commonplace enough in the West, but are still wrenching here: the old man rum- maging through trash barrels for castaway items, the old woman picking through a box of bones at a meat market in search of one with enough gristle to make a thin soup" (Los Angeles Times, 3/10/90). With their savings and pensions swallowed up by inflation, elderly pensioners crowd the sidewalks of Moscow selling articles of their
4 One booming employment area is the business security forces and private armies, which in the Soviet Union alone muster some 800,000 men. "Another employer of choicc for working class youth is the immense state apparatus of repression which is now more formidable than that of the Soviet period. Today, this apparatus is numerically superior to the Armed Forces, better paid and better equipped. The regimes real enemy is inside, after all": Bilenkin, uRussian Workers Under the Yeltsin Regime," Monthly Review, 11/96, 7.
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clothing and other pathetic wares, while enduring harassment by police and thugs {Washington Post, 1/1/96). A Russian senior citizen refers to "this poverty, which only a few have escaped" while some "have become wildly rich. " (Modern Maturityy September/October
1994).
Crime and Corruption
With the socialist ethic giving way to private greed, corruption assumed virulent new forms in the post-Communist nations. Officials high and low are on the take, including the police. The Russian security minister calculated that one-third of Russian oil and one-half of Russian nickel shipped out of the country was stolen. Among those enjoying "staggering profits" from this plunder were Shell Oil and British Petroleum (Washington Post, 2/2/93). In April 1992, the chairman of Russia's central bank admitted that at least $20 billion had been illegally taken out of the country and deposited in Western banks (Nation, 4/19/93).
Choice chunks of public real estate are quietly sold off at a frac- tion of their value in exchange for payoffs to the officials who preside over the sales. Government officials buy goods from private contrac- tors at twice the normal price in exchange for kickbacks. Factory directors sell state-made commodities at low state prices to their own private firms, which those firms then resell at market prices for a vast profit. One member of the Moscow City Council estimated that cor- ruption amounted to hundreds of billions of dollars. If these funds went into state coffers instead of private pockets "we could meet our budget three or four times over" (Los Angeles Times, 7/10/92).
Along with corruption, there is an upsurge in organized crime. Over one hundred racket syndicates in Russia now extort tribute from 80 percent of all enterprises. From 1992 to 1995, as competi- tion for the spoils of "reform" intensified, forty-six of Russia's more prominent businessmen were slain in gangland-style murders. In
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1994, there were more than 2500 contract murders, almost all of them unsolved. "Contract murders occur regularly now in Russia, and most go without much notice" (San Francisco Chronicle, 11/17/95). Police say they lack the funds, personnel, and crime detec- tion equipment for any real campaign against the mobs.
Street crime also has increased sharply (New York Times, 5/7/96). In the former Soviet Union, women and elderly who once felt free to sit in parks late at night now dare not venture out after dark. Since the overthrow of communism in Hungary, thefts and other felonies have nearly tripled and there has been a 50 percent increase in homi- cides (NPR, 2/24/92). The police force in Prague today is many times greater than it was under communism, when "relatively few police were needed" (New York Times, 12/18/91). How odd that fewer police were needed in the communist police state than in the free- market paradise.
In the Republic of Georgia, life has been reduced to a level of vio- lent chaos never imagined under communism. Criminal rings con- trol much of the commerce, and paramilitary groups control most of the criminal rings. No longer able to sell its goods on the Soviet mar- ket but unable to compete on the international market, Georgian industry has experienced a massive decline and, as in most Eastern countries, the public debt has leaped upward while real wages have shrunk painfully (San Francisco Chronicle, 7/20/93).
Cultural Decay
Cultural life has drastically declined in the former communist countries. Theaters are sparsely attended because tickets are now prohibitively expensive. Publicly owned movie industries in coun- tries like Russia, Poland, Czechoslovakia, and the German Democratic Republic, which produced a number of worthwhile films, have been defunded or bought out by Western business inter- ests and now make cartoons, commercials, and music videos. Movie
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houses have been taken over by corporate chains and offer many of the same Hollywood junk films that we have the freedom to see.
Subsidies for the arts and literature have been severely cut. Symphony orchestras have disbanded or taken to playing at block parties and other minor occasions. The communist countries used to produce inexpensive but quality editions of classical and contempo- rary authors and poets, including ones from Latin America, Asia, and Africa. These have been replaced by second-rate, mass-market publications from the West. During the communist era, three of every five books in the world were produced in the Soviet Union. Today, as the cost of books, periodicals, and newspapers has sky- rocketed and education has declined, readership has shrunk almost to Third World levels.
Books of a Marxist or otherwise critical left perspective have been removed from bookstores and libraries. In East Germany, the writ- ers' association reported one instance in which 50,000 tons of books, some brand new, were buried in a dump. The German authorities who disposed of the books apparently did not feel quite free enough to burn them.
Education, once free, is now accessible only to those who can afford the costly tuition rates. The curricula have been "depoliti- cized," meaning that a left perspective critical of imperialism and capitalism has been replaced by a conservative one that is supportive or at least uncritical of these forces.
Descending upon the unhappy societies of Eastern Europe and Russia are the Hare Krishnas, Mormans, Moonies, Jehovah's Witnesses, Bahais, rightist Christian evangelicals, self-improvement hucksters, instant-success peddlers, and other materialistic spiritual- ist scavengers who prey upon the deprived and the desperate, offer- ing solace in the next world or the promise of wealth and success in this one.
The president of one of Russia's largest construction companies summed it up: "All the material well-being that people had, they lost
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in one hour. There is practically no more free medical care, accessi- ble higher education, no right to a job or rest. The houses of culture, libraries, stadiums, kindergartens and nurseries, pioneer camps, schools, hospitals and stores are closing. The cost of housing, com- munal services and transport are no longer affordable for the major- ity of families" (Peoples Weekly World, 4/6/96).
Facing forced privatization, news and entertainment media have had to find rich owners, corporate advertisers, conservative founda- tions, or agencies within the newly installed capitalist governments to finance them. Television and radio programs that had a left per- spective, including some popular youth shows, have been removed from the air. All media have been purged of leftists and restaffed by people with acceptable ideological orientations. This process of moving toward a procapitalist communication monopoly has been described in the Western media as "democratization. " Billboards and television commercials promoting U. S. cigarettes, automobiles, and other consumer items--many of them beyond the average pocket- book-- now can be seen everywhere.
Women and Children Last
The overthrow of communism has brought a sharp increase in gender inequality. The new constitution adopted in Russia eliminates provisions that guaranteed women the right to paid maternity leave, job security during pregnancy, prenatal care, and affordable day-care centers. 5 Without the former communist stipulation that women get at least one third of the seats in any legislature, female political rep- resentation has dropped to as low as 5 percent in some countries.
In all communist countries about 90 percent of women had jobs in what was a full-employment economy. Today, women compose
s Under Soviet law, women had been granted four months off with full pay for childbirth, and a year of partial pay if they elected to stay home with the child. In addition, they were allowed up to three years leave with a guarantee that their jobs would be held for them.
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over two-thirds of the unemployed. Those who do work are being channeled into low-pay unskilled positions. Women are being driven from the professions in disproportionate numbers and are advised against getting professional training. More than 30 percent of unem- ployed females are skilled workers and professionals who previously earned higher salaries than the national norm. The loss of maternity benefits and child care services has created still greater obstacles to female employment.
Throughout the Eastern European nations, the legal, financial, and psychological independence that women enjoyed under socialism has been undermined. Divorce, abortion, and birth control are more dif- ficult to obtain. Released from the "Soviet yoke," the autonomous region of Ingushetia decriminalized polygamy and made it legal for women to be sold into marriage. Instances of sexual harassment and violence against women have increased sharply. In Russia, the num- ber of women murdered annually--primarily by husbands and boyfriends--skyrocketed from 5,300 to 15,000 in the first three years of the free-market paradise. In 1994, an additional 57,000 women were seriously injured in such assaults. These official figures under- state the level of violence. The Communist party committees that used to intervene in cases of domestic abuse no longer exist.
Women also are being recruited in unprecedented numbers for the booming sex industry that caters to foreign and domestic busi- nessmen. Unable to find employment in the professions for which they originally were trained, many highly educated Russian and Eastern European women go abroad to work as prostitutes. Women are not the only ones being channeled into the sex market. As reported in Newsweek (9/2/96):
Prague and Budapest now rival Bangkok and Manila as hubs for the collection of children to serve visiting pedophiles. Last year one investigator was stunned to find stacks of child pornography in the reception rooms of Estonia'a Parliament and its social welfare depart- ment. "Free love is regarded as one of the new 'freedoms' which the
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