It is easy to describe developments in the countries of the old Eastern Bloc. You don't even need to be very well-informed about what's going on: an acquaintanceship with the past will serve you much better than a knowledge of recent events. Indeed, in this part of the world, to know the past - especially the distant past - is to understand the present.
That, or something very like it, is the major premise of many of the better-known books to have appeared over the last few years, purporting to offer Western readers a guide through the tangled terrain of Central and Eastern Europe. The very titles of works like The Rebirth of History, Balkan Ghosts, Exit into History, and The Haunted Land reflect that premise.(1) According to what we may term the Myth of the Past, this region is imprisoned by/impaled on/possessed by (pick your metaphor) its own history, and nothing short of collective exorcism or some more modern form of psychotherapy will set it free.
Most of the time, this curse is said to manifest itself as nationalism, a sub-set of the myth so misleading and so widespread that it deserves a separate label - The Myth of Nationalism - and separate handling. Fortunately, however, the familiar refrain goes, the majority of these countries have - after an initial outbreak of the nationalist malady - done the sensible thing by committing themselves to the hands of experienced and expert practitioners (mostly reformed communists, now champions of the free market and democracy) who, after all, know the patient better than anyone. As a result, their condition and prospects are said to be improving by the minute. So to the Myth of the Past and the Myth of Nationalism a third misjudgment may be added, completing the West's distorted perspective of this area: the Myth of a Bright Future.
The Myth of the Past
The surge of interest in the history of Central and Eastern Europe that occurred after 1989 is not difficult to explain. During the Cold War, the countries behind the "iron curtain" were treated by academics as a more or less homogeneous area. Indeed, the communist system was quite effective in imposing a superficial uniformity on places as far apart as Brno in the Czech Republic and Bishkek in Kyrgyzstan. After its collapse, it was natural that Western intellectuals and journalists should seek to make up for lost time and to rediscover their differences - especially now that so many former republics and regions were being reborn as independent states.
It wasn't long, though, before earnest attempts to distinguish Slovenia, Slavonia, and Slovakia gave way to an impatient feeling that the area once marked out by the Warsaw Pact had more history than it could handle. In truth, this area only has more history than can be handled comfortably by those who have no serious interest in it, and who are concerned to use it for some extraneous purpose. Chief among these is the instrumentalization of ethnic disputes, by which is meant the use of often fabricated or exaggerated histories of past conflict to justify political or other kinds of careers - of this, more below.
There are also more innocent misuses of the Myth of the Past. I well remember, for example, British Prime Minister John Major telling a Conservative Party conference how proud he had been to have attended events in Poland commemorating the fiftieth anniversary of the Warsaw Ghetto uprising - when what he meant to refer to was the 1944 Warsaw uprising (in which tens of thousands of non-Jewish Poles perished). Or the look on the faces of some Slovak politicians on being informed by an assistant chief-of-staff at Allied Command Europe that their country had always been on the wrong side of the religious fault-line (another common metaphor, this) dividing Western Catholicism from Eastern Orthodoxy.
From this impatience and ignorance have followed policy prescriptions. Since the collapse of communism, no senior Western policymaker has engaged himself more with this region than Richard Holbrooke. Yet the speech he delivered at the first-ever session of the North Atlantic Assembly held in a former member-state of the Warsaw Pact pushed this cliche of all-determining history to its limits.
"The people of Central and Eastern Europe now have a real opportunity to create a lasting peace", he intoned. "But to do so, they must be prepared for one final act of liberation, this time from the unresolved legacies of their own tragic, violent and angry past. . . . History as our guide and teacher, history as a cautionary tale that informs us, is indispensable to our self-awareness. But can this region free itself from history's ghosts and myths?"(2)
The principal ghosts he had in mind, predictably enough, were unresolved territorial disputes. But there were also the demons of political extremism, intolerance, xenophobia, backwardness, and anti-semitism, to which this region is supposed to be peculiarly susceptible. Certainly these are the characteristics dwelt upon at length by such authors as Misha Glenny and Robert Kaplan. Writers of this type seem to derive a perverse pleasure from lurid descriptions of, for example, the fascist Iron Guard movement in pre-war Romania or the right-wing Endecja (National Democratic Party) in Poland. For its richness in such phenomena, the period entre les deux guerres is undoubtedly their favorite. Initially having to find their feet as independent states, and later caught between a resurgent Nazi Germany on one side and the Bolshevik Soviet Union on the other, the fragile states called into being at Versailles would find the era a difficult one. But then Western Europe was not exactly a model of stability and prosperity during these years either, and it might well be asked whether the politics of interwar Italy, or even France, were significantly more orderly or enlightened than those of Hungary or Bulgaria.
The point, though, is not to put the peoples of what later became known as "the other Europe" into some kind of beauty contest with their Western counterparts. Defenders of the former are always quick to counter the disparaging approach of historians like Eric Hobsbawm by noting that medieval Hungary's commitment to constitutionalism took the form of a set of written prerogatives promulgated just seven years after England's Magna Carta, or that Renaissance Poland saw performances of Shakespeare in the playwright's own lifetime. And it is indeed important to know that the political, cultural, and intellectual traditions on which the peoples of this region can draw are the match of those available to the West. But at the same time it is hard to see why these earlier Golden Ages should be any more relevant to the current prospects of the countries of Central and Eastern Europe than the interwar lapses so roundly condemned by the Hobsbawms of the world.
If one is going to turn to the past at all to help explain present events in this part of the world, then surely the most relevant years are the most recent ones. It is the immediate past - the period since 1945-together with the way in which the communist era has been subsequently handled, that holds the key to an understanding of current developments. For comparison's sake, consider the earlier but parallel experience of Germany. In 1945, this was a country that might well have been said to have been broken under the weight of its own history. Within a decade, however, the principal part of that country, the Federal Republic, was sailing along as an unburdened flagship of the West's postwar order. Absolutely crucial to this unburdening were the trials and investigations that took place after 1945. In the Western zones, some 5,025 Nazis were sentenced on the main charge of genocide, of whom 406 were executed. In addition, some thirteen million questionnaires were completed by party members, which led by 1947 to over two hundred thousand arrests.(3) This thorough process not only gave Germans a strong sense of expiation, but eliminated the Nazi Party at every level to such an extent that there could be no question of it continuing to function as a social network or economic entity.
Nothing of this kind happened after the collapse of communism. The acquittal earlier this year of Bulgarian party leader Todor Zhivkov (who had, in any case, only been sentenced for corruption) means that there is now no former communist ruler from any country of the old Eastern Bloc behind bars (with the arguable exception of Albania, where Enver Hoxha's wife is still in prison, again on grounds of embezzlement). Nor was it only those on the level of Honecker or Husak who slipped through the net. In Poland, the murderer of Father Popieluszko was set free in 1994 for good behavior. In Romania, the last officials imprisoned for involvement in the massacres of December 1989 were released as early as 1993. And Hungary now boasts a prime minister who makes no secret of having served in the vigilante squads that helped the Russians mop up after the 1956 uprising.
It is important to distinguish between the two different types of "de-communization" that existed after 1989. The more useful and controversial was essentially forward-looking: to prevent those who had worked for or with the secret police, or in the higher reaches of the party, from henceforth occupying a prominent role in public life. Only the Czechs succeeded in passing a illustration law to that effect, and to this day the Czech Republic is the only country in the region where the former Communist Party, sporting whatever new name or ideology, does not constitute a significant political force. The other kind of de-communization, usually given the pejorative label "historical justice", would have sought simply to bring to book those who had perpetrated the worst abuses of the communist system, and thereby pass some kind of moral judgment on the preceding forty-five years of terror, spoliation, and tyranny. It wasn't asking much, one might have thought, to hold accountable those who had enforced martial law in Poland or crushed the uprising in Hungary. One would have been wrong. But for a handful of bit-play-ers, no one has been sentenced for these crimes, and in both countries the burden of proof in the wider sense increasingly rests on those who regard these actions as treasonable, or even merely condemnable.
The devastating consequences for these countries of failing to de-communize will be examined later. Here it is necessary to see how this failure came about. Returning to the precedent of postwar Germany, it is true that a "victors' justice" was imposed on that country. True and hardly surprising, given that few societies in such a debauched and devastated state possess the moral reserves or legal instruments to impose this type of process on themselves. The point is underlined by the fact that, several decades later, the opening of the Stasi files and mass dismissals of East German teachers would probably not have happened but for West German pressure. The rest of the region, unfortunately, received no such outside leverage to help those individuals and parties who urged the need to confront the past head-on.
What they did receive instead was a barrage of criticism from Western jurists and commentators who warned against the dangers of "McCarthyism" and "witch-hunts." For a couple of years after 1989, no newspaper article about Central and Eastern Europe was complete without some example of an alleged miscarriage of justice used to discredit the idea of de-communization as a whole. Even lustration in the Czech Republic only went ahead in the teeth of furious opposition from Helsinki Watch, the International Labor Organization, the New York Review of Books, The New Yorker, and other self-appointed custodians of tolerance and forgiveness.
Such Western views, of course, chimed with those held by many leading liberal intellectuals and politicians in these countries themselves. Indeed, due to their perfect English and ear for a quotable soundbite, individuals such as Bronislaw Geremek in Poland, Jiri Dienstbier in the Czech Republic, and Janos Kis in Hungary were among those whose opinions were most often cited by Western journalists. Though many of them had been dissidents with a long track-record in the underground opposition, such figures were also very often the children of leading communists who had been purged in the show-trials of the late 1940s and early 1950s. Naturally this made them squeamish about the prospect of new trials - however different in need and nature. Their attitude toward former top-ranking party officials was further complicated by the fact that in many cases they had negotiated with those officials during the roundtable talks leading up to the dismantling of the communist system, and in doing so had lost perspective of their faults. In any case, these intellectuals were the people who fed the Western press with ready parallels to the world of Kafka or the arbitrary authoritarianism of the interwar years. Their main message was that politics and justice must not be mixed, and that only by a period of self-denial in this respect could these societies exorcise those ghosts of the past that so many Westerners found troubling.(4)
Despite being couched in the neutral language of the "rule of law", this message concealed a clear political agenda of its own - as its proponents well knew. Yet in his address in Budapest, Holbrooke cited approvingly from the utterances of Gyorgy Konrad and Adam Michnik: two former dissidents who through numerous articles, speeches, and interviews after 1989 made substantial contributions to the prevention of lustration and to the rehabilitation of ex-communists in Hungary and Poland respectively. The day before this speech, Holbrooke celebrated his recent marriage to the Hungarian-born writer, Kati Marton, with a reception at the home of the U.S. ambassador in Budapest. Among the guests were President Arpad Goncz - whose refusal to sign some pieces of legislation passed by the previous parliament had derailed attempts to come to terms with the communist era - along with several members of the new government who had been the direct beneficiaries of his magnanimity in this respect. Conspicuously absent were members of the 1990-94 government who had initiated these attempts. In what was no doubt held to be a triumph of American policy toward the region, the pardoned mingled with their pardoner - and the ghosts of history were last seen drifting off into the Buda hills.
The Myth of Nationalism
"NATIONALISM", we are told, "is back." Indeed, "there is no political or social force that can match the power of nationalism in Eastern Europe." And, as a result, "this vast region, including its neighbors in the Transcaucasus and Syria, Iraq and Iran, has become the most explosive region on earth."(5) While even those who see it writ large in contemporary developments may be prepared to admit that history's presence in the former communist countries is a rather spectral affair, nationalism is different. It is real, it is omnipresent, and it is known to be lethal.
In these pages and elsewhere, Noel Malcolm has dispatched the view that "ancient ethnic hatreds" are to blame for the war in the former-Yugoslavia.(6) He does not claim, of course, that there are no such things as nations in southeastern Europe, or that national aspirations and grievances have played no role at all in the worst conflict on this continent since the Second World War. What he does say is that it took an immense amount of political agitation, and meticulous military planning by certain individuals, before the feelings of Serbs, Croats, and Bosnian Muslims were mutually inflamed to the extent that they could contribute to the conflict. And even then they did not cause it.
The main individual in question, Slobodan Milosevic, is not even from Serbia, and in recent years has evinced precious little interest in the crusade of Serbian nationalism - as befits a craven opportunist whose career until not long ago was divided between the Communist Party bureaucracy and banking. The same holds true for his principal proxy for much of the time in Bosnia-Herzegovina, Radovan Karadzic, who like Milosevic, is from Montenegro. Furthermore, the person who did more than any other before the outbreak of fighting to ensure that rural Serbs living in the Croatian Krajina would be surprisingly well-armed is an ethnic Hungarian, Mihalj Kertes, whose attachment to Milosevic - like that of so many of his most dependable cohorts - is based on a background in the old Yugoslav secret service. One could go on. How was it, for example, that Dubrovnik became an early target of Belgrade's annexationist designs, when the Serbian proportion of its pre-war population was less than 10 percent (and indeed, when, on her famous travels, Rebecca West found the Dalmatian port so lacking in Orthodox mystique that she moved hurriedly on)? In Sarajevo, by contrast, there lived a relatively high number of Serbs - many of whom joined the supposedly jibad-bent Bosnian army, to face being shelled by their ethnic brothers in the surrounding hills.
The real challenge, though, for those who perceive the entire post-communist world as one vast powder keg of competing nationalisms, is to explain why some inflammable trouble spots spontaneously combust while others do not. In the Balkans, the ethnic odds (so to speak) were stacked as much against Macedonia as Bosnia, yet the former did not explode. Why? Again, the very existence of sizable Hungarian minorities in Slovakia and Romania, or sometimes even of a couple of hundred thousand Poles in Lithuania, is taken to be potentially explosive, and a reason for legitimate concern among those Western organizations (like the EU and NATO) that these countries aspire to join. Over the last couple of years there seem to have been signs - in Central Europe, at least - of serious efforts to defuse this problem. The pace of high-level cross-border visits has quickened. Bilateral basic treaties (usually of "good neighborly relations and friendly cooperation") have been agreed, and in some cases - most notably between Hungary and Slovakia - ratified. Palpably relieved, the Western organizations that had even begun hinting that such treaties might be one of the conditions of their eastward expansion have taken these moves too much at face value. What these positive-seeming steps justify is not relief - rather, they are grounds for suspecting just how "post-communist" those who contrived the fake fraternal bonhomie of yesteryear really are.
It is, however, the source of that internationalism that today offers the best lessons in the instrumentalization of ethnic disputes. Though many Sovietologists have become overnight authorities on such subjects as Russian regionalism and Muslim fundamentalism in Central Asia - subjects that had always escaped their earlier attention - their overall approach to the study of the Commonwealth of Independent States (CIS) shows a high degree of earlier short-sightedness. To this day, for example, the fighting that broke out in 1992 in Moldova, when Russian-speaking separatists succeeded in detaching a strip of the country along the left bank of the river Dniester and turned it into an independent republic, is presented as a textbook study of how civil wars can start when the dominant nation in a new state fails to take into consideration the anxieties of the minority. Never mind that in this case there were actually far more Russian speakers living in the rest of the republic, and that these, while anxious about the elevation of Romanian to the state's official language, showed no inclination to take up arms against it. But then, neither would the Russians (not to mention the Ukrainians, who outnumbered them) in Transnistria have done so had it not been for the presence of the Russian Fourteenth Army, which was glad to find any excuse for maintaining its strategically situated base around Tiraspol ("the gateway to the Balkans", as its then-commander, General Aleksandr Lebed, used to observe).
As if this were not sufficiently destabilizing, the Moldovan authorities then had to face similar claims for autonomy in another part of the country from the Gagauz, a Turkic people of Christian religion, who protested the right to a language hardly any of them had spoken for two hundred years. The outcome of this well-choreographed mayhem was predictable: loss of power for the parties that had championed Moldovan statehood in the first place; their replacement by ex-communists, reborn as men of moderation and stability; and closer links with the CIS. Today, Moldova's ethnic problems seem to have been miraculously solved. The Russian Fourteenth Army, on the other hand, is (under a new name) still there.
If anything, Moldova is a case study in straightforward power politics. Similar sequences of events - sudden flare-ups of tensions and occasional hostilities between ethnic groups only a few specialists have heard of, followed by equally sudden de-escalation and disappearance of the crisis - have happened all across the old Soviet Union. Were these genuinely rooted in nationalism, such episodes would have led to the hardening of stances, and to bringing increasingly radical patriots to power. The reality has been the opposite: from Crimea in Ukraine to the Fergana Valley in Kyrgyzstan, leading figures from the old communist establishment have played the card of ethnic conciliation and offered a "mature" relationship with Moscow.
Nowhere has this been truer, and more tragic for the local populations, than in the three Transcaucasian republics - Georgia, Armenia, and Azerbaijan - specifically mentioned by Holbrooke. With the exception of the Baltic region, no area of the Soviet Union saw a greater cultural awakening in the perestroika period. This was followed in the cases of Georgia and Azerbaijan by the direct election, with massive popular support, of presidents whose persecution in the Soviet era appeared to be the best guarantee of the geopolitical re-orientation of these newly-independent states. Today this is all a distant memory. Zviad Gamsakhurdia in Georgia and Abulfaz Elchibey in Azerbaijan were overthrown in coups, the background to which was provided by strange "ethnic conflicts" in which small, poorly armed peoples - in Georgia the Ossetians and Abkhaz; in the Nagorno-Karabakh region of Azerbaijan the Armenians - consistently got the better of much larger forces. They did so, of course, with Russian backing. Given what was (and is) at stake in the region, namely the Caspian Sea oil reserves, perhaps one cannot be surprised or even shocked by the crudeness of the divide et impera tactics used to restore two old Soviet trusties - Eduard Shevardnadze and Gaidar Aliev - whose obsequiousness even Brezhnev found excessive. What may have been harder to stomach for those in the countries of the "near abroad" who found their independence undermined was hearing Russian Foreign Minister Andrei Kozyrev's familiar lecture from this period about the perils of "aggressive nationalism."(7)
Kozyrev was not alone in identifying nationalism as the most virulent plague threatening the region. In 1994, George Soros told a congressional subcommittee: "All in all, I see hardly any chance of a return to communism. Communism as a dogma is well and truly dead. The real danger is the emergence of would-be nationalist dictatorships - I call them 'NADIS' for short."(8)
In the area once referred to sweepingly as "the Eastern Bloc", there were just nine states at the start of the annus mirabilis of 1989. Now there are twenty-seven separate states in that same area. Among these there are a good many dictatorships - but hardly any deserving the label "nationalist" or even "national." And while the proliferation of flags and seats around the tables of international organizations may be irritating to those convinced of worldwide trends toward the "pooling of sovereignty", looked at more closely, this eruption of new Olympic teams - which is about all the phenomenon amounts to - should give them few grounds for discomfort.
On the territory of the former Soviet Union, for example, there is now not one country where the Popular Fronts that mushroomed in the late 1980s, to channel nationally-based opposition against both Russian hegemony and the one-party system, are still in power. Fragmented, divided, unfunded, and in a number of cases harassed, intimidated, and simply banned, they have all to a greater or lesser extent been marginalized by the "partyocracies" (to borrow a useful old Sovietological term) whom they challenged and briefly overthrew. Indeed, visit the usually decrepit office of such an organization today - where some learned and courageous academic may often be found holding forth about the hopeless cause of "unifying the opposition" - and you will see immediately how they have come full circle. Further west, something similar applies to, say, Poland's Solidarity, Bulgaria's Union of Democratic Forces, and the Hungarian Democratic Forum, all of which tasted power but are today shadows of their former selves.
Soros is right that communism as a dogma is dead. But, then, so it has been from at least the mid-1960s. The problem facing supposedly "post-communist" societies is not a revival of that ideology, but the survival of power structures that escaped the "revolutions" of 1989 more or less unscathed. Again, the consequences for the "emerging democracies" of the successful self-entrenchment of the nomenklatura will be examined later. What needs to be understood here - especially when conventional wisdom holds that the eclipse of the Popular Fronts is actually a positive sign of political normalcy and maturity - is how a consensus arose that Soros' "NADIs" were indeed the real danger for the region. One explanation is that through his network of "Open Society" foundations - whose conspicuously well-appointed offices rapidly established themselves as one of the region's new common denominators - Soros himself made an immense contribution to setting the terms of debate in these countries.(9)
Philosophically speaking, there is much to be said for the "open society" as defined by Soros' intellectual mentor, Karl Popper. The question is whether in this particular context such a society has been a viable or desirable goal. Regarded from one perspective (the liberal one, usually), communism in Central and Eastern Europe represented a "closed system" that needed to be pried open through introducing new patterns of thought (critical, pluralistic) and behavior (unchecked, tolerant). While true up to a point, this misses the principal feature of what used to be called "real existing socialism" - namely, the sheer devastation it left in its wake. For forty-five years (seventy in the case of the Soviet Union) all traditional moral and religious beliefs were deliberately crushed, and all associations and institutions embodying them systematically uprooted, leaving behind a blasted landscape marked by cynicism, nihilism, and alienation. What these countries desperately needed after 1989 - and still need - was breathing space in which traditional values and practices could be carefully nurtured and, where necessary, grafted from without. What they got was a crash course in liberalism that did nothing for their sense of cultural or political disorientation - but which created ideal conditions for a comeback by the communists.(10)
How often after 1989 were we warned, for example, about the dangers of religious fundamentalism (whether Catholic in Poland, or Muslim in Central Asia)? How often did Western journalists or self-appointed "watchdogs" take some trivial episode like the reburial of Admiral Horthy (and even Cardinal Mindszenty) in Hungary, or the reintroduction of the kun as Croatia's currency, and inflate it into a crass provocation typical of a tendency toward extremism and authoritarianism? Yet as anybody who knows these all too secular and politically passive societies will confirm, "ayatollah-ism", "right-wing radicalism", "irredentism", "anti-semitism", "neo-fascism" even, are practically non-existent. These are slogans (straw men, perhaps) created and popularized by a combined effort on the part of bien pensant opinion in both Western and former Eastern Bloc countries, and used by former communist parties in the latter to lift themselves out of political quarantine. Who now remembers Pamyat in Russia, for example, or those strange paramilitary groupings that were supposed to come to power in Ukraine? Certainly the Western press was right to seize on the passing positive remark made by Belorussian President Alyaksandr Lukashenka about Hitler - though almost no one commented on the gushing tribute paid earlier in 1995 by Georgian President Eduard Shevardnadze to Stalin. In any case, and as Belarus' recent virtual reunification with Russia shows, the real problem there - as in so much of Central and Eastern Europe - is not nationalism but rather its absence.
The Myth of a Bright Future
No industry in any post-communist country has taken off quite like the business of outsiders commenting and advising on the progress these countries are making. The "transition" (as it is known) has opened up vast new areas of opportunity for academics and consultants alike. Would that some of this boom had trickled down to the economies of the countries in question. Seven years after the "velvet revolutions" of 1989, most people in Central and Eastern Europe are apt to feel that "building capitalism" is proving hardly less arduous or unrewarding than "building communism" once was. For them, the "transition" (which hints at an intermediate phase between the "plan" and the "market") has turned into a seemingly everlasting state of affairs analogous to the "real existing socialism" that was supposed to precede the blissful arrival of communism proper but which was constantly extended.
Are these pessimistic subjective perceptions accurate? What do the statistics say? With output everywhere shown to have plummeted and with the entire area still stuck in recession, even such ebullient reformers as Jeffrey Sachs and Anders Aslund (both of whom straddle the divide between academic and consultant, and might therefore be suspected of having a vested interest in "talking up" the triumph of their policies' consequences) are at a loss for words, beyond pointing out that some worst-case predictions such as famine in Russia have not come true, or that the relative rate of decline in production in Ukraine has started to slow.(11) Speaking in absolute terms, however, the IMF's own calculations are that not even in Poland (the region's much-vaunted "tiger economy") will living standards return to their 1989 levels before 2010 at the earliest. Similarly, the current annual report of the European Bank for Reconstruction and Development contains a page of graphs dramatically illustrating the post-1989 deterioration throughout the region through key social indicators such as birth and mortality rates. Not quite sure how to put a cheery reading on such trends, the text contorts itself into self-contradiction: "Thus, rapid and successful transition toward a market economy may not in itself be sufficient to prevent a decline in the standard of living."(12)
Visitors to the region unversed in macro-economics, but with vivid memories of the queues and empty shelves of the communist era, may be tempted to trust their immediate impressions and return home with tales of the vibrancy of street-trading or the mushrooming of new outlets of Benetton and McDonald's, as though this constituted some kind of transformation. On one level it does. No one can deny the breakthrough in terms of private ownership or trade liberalization. Indeed, where these fights and policies exist (which is by no means everywhere in the old Eastern Bloc), it is even possible to speak of the emergence of a market economy in the most literal sense, one consisting predominantly of stallholders and self-employed service providers. That said, it is easy to exaggerate the importance of this "kiosk capitalism." The bulk of goods bought and sold tends to be imported consumer products, and the activity as a whole is very often unlicensed, untaxed, and not infrequently takes the form of barter.(13)
Contrast with this early nineteenth-century Britain, that famed nation of shopkeepers. In the British case, behind those shopkeepers stood manufacturers like Boultons, Wedgwoods, and Cadburys. And behind these manufacturers stood an emerging framework of credit institutions and capital markets, all underpinned by the rule of law and by a judicial and political system winning increasing respect for and adherence to the "rules of the game." One can readily agree with Sachs on the core practices and institutions of modern capitalism, and even on the way that in certain historical circumstances these have been transplanted and made to function successfully.(14) The problem is that we are speaking neither about textbook theory nor Meiji Japan, but about a large chunk of the Eurasian continent that for the greater part of this century has had no experience of the rule of law or even of the simple human trust that makes commercial transactions viable - and that is now coming out of this black hole with the very same people in charge (or their children, at least) who created it in the first place.
Take the case of Hungary. The first thorough research on this subject shows that one-fifth of the 1988 nomenklatura (that is, party officials, state bureaucrats, large enterprise managers, and prominent members of the intelligentsia) owned private businesses by 1993. Typically these were not the "mom & pop" stores noticed by visitors, but substantial concerns whose sales figures were ten times the national average.(15) It is hard to agree with those who maintain that such companies are a tribute to the business acumen of those who run and own them, when often they are sprawling trading conglomerates maintained by indulgent cross-ownership on the part of similar empires run by friends and soft loans from banks. Indeed, though these companies may be nominally private, it is difficult to say who does own them. The accommodating banks themselves often still belong to the state, and appointments to their boards (or discreet injections of cash to their balance-books) are decided by the party in power - to whose campaign fund the company in question did not forget to contribute. It is doubly difficult to determine ownership when these same companies buy up much of the media - and not simply because owning newspapers is intrinsically profitable, either (though naive Western voices can always be found to assure onlookers that such monopolies are the result of "market forces").
This is a circle of a very vicious kind, as those who attempt to break, or break into, it discover. The historical opportunity for disrupting the networks that compose it has been missed. In one sense, the soidisant progressives both inside and outside these societies who persuaded themselves to draw a "thick line" under the communist past are right when they defend their "pragmatic" approach by arguing that the former communist parties, now again in power, have no intention of bringing back the command economy. Such an attempt would certainly be disastrous for those at the forefront of these organizations who hope to get rich quick through asset-stripping and arbitrage on a grand scale. The main restraint imposed on them is a prudential concern to leave enough to pacify the genuinely left-wing and unionized grass-roots of their parties, with whom they cohabit purely because social tranquillity makes their larceny easier. It is risible, though, to extol the moneymaking abilities of this peculiar breed of "bizniz-man", familiar to anyone who has worked in these countries, when all the time they are effectively cutting off the branch on which they are sitting. The sharper ones are not oblivious to this, which is why they have been quick to establish bank accounts and second homes abroad.
Such options, naturally, do not exist for most people. Ask a Latvian or Lithuanian who lost his savings when a slowdown in the Russian metals export boom precipitated a banking collapse; or a Romanian who couldn't get his money out of the infamous Caritas pyramid-scheme in time; or a Bulgarian forced to pay higher food prices due to the agricultural crisis caused by the export of almost all the country's grain; or even an aspiring Czech entrepreneur who can't afford an office in the center of Prague because of the way rents have been driven up by phantom companies registered to launder money. Ask them what they think of the "transition" - and the answer is likely to disappoint the boundless optimism that is an article of faith among "transitologists."(16)
Still, even the above have it good compared with the average Russian, living in a country that now has a higher homicide rate than Mexico or Brazil (but without the compensation of a warm climate). With such massive supplies of natural resources and minerals, not to mention weapons, the opportunities and temptations in a proto-capitalist Russia were always going to rule out the conditions economists hold necessary for "perfect competition." But even the possibility of imperfect competition was jeopardized by Russia's failure - more glaring than in any other "post-communist" country - to confront the legacy of the preceding decades on either a symbolic or practical level. How "restructured" a society can it be, after all, in which the organization Memorial is still struggling ten years after it was founded to put up a permanent monument to the victims of the Gulag? In the words of one acerbic commentator, "Not one of the anti-communist ideologues repented of his or her communist past. The changing of ideological signs again allowed people to write everything off. And when people were not ashamed of their past, they had no reason to feel ashamed of their present either."(17)
For all that the term "Russian mafia" is bandied about, the latest promises by the Russian government to crack down on crime - as though this problem were separable from the activity of the authorities themselves - are taken seriously by many in the West. Ordinary Russians know better. Many remain impressively defiant in the face of their country's virtually complete criminalization. Thus, in spite of their everyday need for krysha (literally "roof", but used to mean "protection"), less than one in ten voters allowed themselves to be taken in by the reassurances offered by the "party of power", Our Home is Russia, in the last parliamentary elections. These took the form of Prime Minister Victor Chernomyrdin's appearance on billboards around the country with his fingertips pushed together in the shape of the party's logo: a roof. A Western parallel might be, say, a poster of Giulio Andreotti holding a finger to his lips over the slogan "Omerta."(18)
Also misunderstood is the way these rackets spill across national boundaries, threatening to create networks of dependence based on energy supplies and arms sales that may turn out far more binding than a few choruses of "The Internationale." Russia's recent offer to Bulgaria to join the CIS, for example, was practically a formality after the setting up last year of a joint-stock gas company, in the wake of a visit from Chernomyrdin. Its Bulgarian co-chairman, Andrei Lukanov, possesses a curriculum vitae typical of the "red barons" who have survived and flourished in the transition: old enough to be known and trusted in Moscow (he is believed to have Russian citizenship); young enough to be able to pose as a reformer (he was prime minister for most of the critical year 1990, during which both the party's files and two billion dollars of foreign reserves went missing); and sophisticated enough to be accepted by the West (he was one of Robert Maxwell's early finds). The arrest earlier this year in France of a Bulgarian-American citizen, Biszer Dimitrov, whose business empire was "capitalized" by the Bulgarian and Hungarian nomenklatura, and which now includes interests in New York, London, Frankfurt, Vienna, and Limassol, is only the latest example of how such networks can spread in ways that may have serious commercial consequences in the West.(19)
It is, indeed, the reaction of those Western organizations and institutions that possessed the capacity to help anchor the countries of Central and Eastern Europe in political, economic, and strategic terms that has been most puzzling and disappointing to those in the region who desired genuine reform. No doubt some of the Western caution and hesitation was well-meant. NATO did not want to "create new dividing-lines" in Europe - and thereby failed to remove those that already existed. The EU proffered "technical assistance" - and watched numerous Western consulting firms grow rich on grants obtained through the PHARE and TACIS programs (the European technical assistance schemes offered to East/Central Europe and the CIS, respectively), while the West's own overall balance of trade with the emerging democracies actually improved. In the former Yugoslavia, UNPROFOR sought to be "impartial" - and thus became an accomplice to crimes committed by the aggressor. Everywhere, the Organization on Security and Cooperation in Europe (OSCE) spelled out the criteria for "free and fair" elections - but in practice turned a blind eye to count-rigging and other forms of fraud. And myriad NGOS, QUANGOs (quasi-NGOs), and private and public foundations have flooded the region with the intention of "building civil society" - an honorable enough goal, but a distraction in terms of attention and resources from the higher-level battles that still have to be fought and won.(20)
A Fourth Myth?
In 1989, it could be said that Central and Eastern Europe also clung to its own myth: a myth of a golden West, and of its own imminent entry into that fold. No longer. The huge reservoirs of good will toward the West that then existed, not only among intellectuals discoursing on Mitteleuropa but also in the hearts and minds of ordinary citizens, have been drained. And with hundreds of thousands of corpses piling up in Bosnia, Tajikistan, Chechnya, and elsewhere, while the West congratulates itself on "containing" these crises, who can blame them? What is left is a cynicism that some would say mirrors the West's own attitude toward the region. At best, this expresses itself as black humor, as when Georgians use the name "Genschers" for the German shepherd-dogs let loose on demonstrators during a visit to Tbilisi by the former German foreign minister, and "Bakers" for the type of bullets fired on protesters, even as the former secretary of state was delivering an address nearby.
Then again, it seems unreasonable to expect the eastern half of the continent to believe in the West, when the western half is showing itself increasingly incapable of doing so. It is one thing for Western politicians to overlook unsavory goings-on in, say, Pontevedro (the archetypal East European principality in Lehar's The Merry Widow) on grounds of "age-old cultural traditions", or even simply for the sake of trade. It is another when they extol the virtues of such a country as comparable - if not actually superior - to their own. Yet this was precisely the bizarre argument forwarded by a British Conservative Member of Parliament during the Council of Europe's recent debate on Russia's accession to that body. "Russia has come close enough to our standards of membership, closer even than countries which are already members", the Council's Parliamentary Assembly was informed. "It has held not only one parliamentary election that we have judged free and fair, but two. It has developed a market economy and 60 percent of its industry has been privatized. Would that we could say the same of some of our existing member states."(21)
Fifty years ago, the wishful thinking that characterized much policymaking toward the Soviet Union could be put down to the ideological leanings of genuine sympathizers. Slightly more than one hundred years ago, Disraeli's opposition to intervention in the Balkans to halt the atrocities there could be explained as realpolitik. Today, by contrast, many of these misjudgments - whether on the part of academics, bureaucrats, businessmen, politicians, soldiers - are being made for purely mercenary motives. The above-mentioned MP, addressing a group of international observers in Moscow in the aftermath of the last December's elections, expressed similar sentiments about Russia's democratic development to approving nods from the EU's ambassador. A few weeks later, this same ambassador was recalled and sacked by the European Commission for attempting to benefit from aid programs for which he was responsible, to the tune of $1.6 million.
In the final analysis, the failure to make good the gains made possible by the events of 1989 says as much about Western as Eastern Europe. Perhaps it is even a comment on our civilization as a whole. For, might this not be the way the world ends: not with a bang, but a back-hander?
1 Misha Glenny, The Rebirth of History: Eastern Europe in the Age of Democracy (New York: Penguin, 1990); Robert D. Kaplan, Balkan Ghosts: A Journey Through History (New York: St. Martin's Press, 1993); Eva Hoffman, Exit Into History: A Journey Through the New Eastern Europe (London: William Heinemann, 1993); Tina Rosenberg, The Haunted Land: Facing Europe's Ghosts after Communism (New York: Vintage, 1995).
2 Address by Richard C. Holbrooke, assistant secretary of state for European and Canadian affairs, to the spring session of the North Atlantic Assembly, Budapest, May 1995.
3 Figures from David Pryce-Jones, The Strange Death of the Soviet Empire (New York: Henry Holt & Co., 1995), p. 13.
4 Of the books mentioned at the beginning of this essay, Rosenberg's The Haunted Land differs from the others in focusing on the legacy of the communist rather than pre-communist past. Her fashionable conclusion, however, is that lustration mimics the thinking and methods of the ideology it seeks to uproot, that is, Leninism.
5 Quotations are from, respectively, Charles A. Kupchan, "Nationalism Resurgent" in Kupchan, ed. Nationalism and Nationalities in the New Europe (Ithaca, NY: Cornell University Press, 1995); Glenny, The Rebirth of History, p. 204; Richard C. Holbrooke, address to the North Atlantic Assembly.
6 Noel Malcolm, "Bosnia and the West: A Study in Failure", The National Interest (Spring 1995).
7 For a well-documented account of the re-imposition of dictatorial regimes loyal to Moscow in this region, see the British Helsinki Human Rights Group's The Caucasus Reports (1996). This suggests that what might be called the "mother of all ethnic conflicts", that is, the war for Nagorno-Karabakh, which began as long ago as 1988, may not have been all that it seemed to Western observers even then. On how the "near abroad" as a whole came even nearer, see Mark Almond, Russia's Outer Rim (Institute for European Defense and Strategic Studies, 1995).
8 George Soros, The Dangers of Post-Communism (New York: Soros Foundations, 1994), p.7.
9 For some idea of the size of that contribution, consider that in 1993 his foundations were operating in twenty-three different countries with a total budget of $300 million. In addition, Soros has promised an additional $200 million of support over the next two decades to the Central European University. Current GDP per capita in Hungary (home to the CEU) is less than $4,000, and in a mid-level country like Moldova it is barely one-tenth of that. For a perceptive understanding of the political and commercial leverage generated by philanthropy on this level, see Connie Bruck, "The World According to Soros", The New Yorker, January 23, 1995.
10 The Council of Europe distinguished itself on this front. In 1994, as part of its overall goal of "cultural cohesion", it launched a "European Youth Campaign against Racism, Xenophobia, anti-Semitism and Intolerance." This took such forms as "Trains of Tolerance" shuttling across the continent to promote the slogan, "All different, all equal." In Hungary, this resulted in a series of video clips shown at metro stops featuring a black person, a Native American, homosexuals, a yuppie, a punk, a prostitute, and a Hungarian peasant all traveling together in harmony in the same compartment. Passers-by were bewildered.
11 Aslund, at least, has started to shift his position-or at any rate the goal posts. For example, his remarkably confident article in the September/October 1994 issue of Foreign Affairs entitled "Russia's Success Story" makes almost no mention of the phenomenon of rent-seeking, which, in a more recent contribution to Transition (January 26, 1996), he says not long ago amounted to 80 percent of the country's GDP. Such inconsistency does not increase the credibility of his claim in the latter that this problem is now under control.
12 Transition Report 1995 (London: European Bank for Reconstruction and Development, 1996), pp. 23-24.
13 The distinction between a market economy and capitalism is well made in Alice H. Amsden, Jacek Kochanowicz, and Lance Taylor, The Market Meets Its Match: Restructuring the Economies of Eastern Europe (Cambridge: Harvard University Press, 1994). This also makes the point that the emphasis on small and medium-sized enterprises, which accounts for a good deal of Western advice, may be misplaced when one considers that even in the United States large firms (those with over five hundred employees) account for nearly 75 percent of total manufacturing sales.
14 Jeffrey Sachs, Understanding Shock Therapy (London: Social Market Foundation, 1994).
15 Figures from Akos Rona-Tas, The Small Transformation: The Private Sector in Hungary, 1945-94 (unpublished manuscript, 1995).
16 The same Panglossian approach is also characteristic of authoritative Western papers like the Financial Times and The Economist. The former, for example, reacted to the resignation of Polish Prime Minister Jozef Oleksy, who had been accused of spying, with the astonishing headline: "Anti-Communism May Hit Economy" - as though communism had been conducive to economic performance! (The Warsaw stock exchange in fact rose several points.) Both journals loathe Vladimir Meciar, the one non-communist leader in the region who has rejected neo-liberal remedies and yet still achieved a fair degree of economic success. For such impudence, The Economist recently likened the Slovak premier to Milosevic.
17 Boris Kagarlitsky, Restoration in Russia: Why Capitalism Failed (New York: Verso, 1995), p. 62.
18 On the usage and implications of the term krysha, see Vladimir Shlapentokh, Russia: Privatization and Illegalization of Social and Political Life (Sandhurst, UK: Conflict Studies Research Center, 1995).
19 For sobering reading on this subject, see Claire Sterling, Crime Without Frontiers (Boston: Little, Brown & Co., 1994). Also James Sherr, Russia, Geopolitics and Crime (Sandhurst: Conflict Studies Research Center, 1995).
20 On the West's failure to apply adequate standards to the conduct of post-communist elections, see Christine Stone, A Democratic Deficit? (London: Institute for European Defense and Strategic Studies, 1995). On the misguided naivete of the non-profit sector, see David Samuels, "At Play in the Fields of Oppression", Harper's (May 1995).
21 Official Report of the Council of Europe Parliamentary Assembly, January 25, 1996.
Johnathan Sunley is director of the Budapest branch of the Windsor Group, a pro-reform lobby active throughout Central Europe. He has lived in Hungary since 1991.…