A British Eye on Eastern Europe

Article excerpt

THE historic liberation of Eastern Europe in 1989 seems on shakier ground today. But British politician Shirley Williams doesn't plan to stand around and watch it fall apart.

Throughout an extraordinary political career that began at age 16, Mrs. Williams has embodied the philosophy of European Christian socialism, which as she notes, is that "the rich have a responsibility - and it isn't to get richer."

Williams left office in 1983, and recently took a position heading up Project Liberty, a privately financed East European exchange program at Harvard University's Kennedy School. (Her husband, United States presidential scholar Richard Neustadt, is a Harvard professor.)

Widely regarded as a dynamic and expansive thinker, Williams recently lived up to her reputation at a recent meeting with Monitor editors. Below, some excerpts:

Project Liberty, which you are heading up at Harvard, is aimed at younger elected East European politicians. How did it develop?

It grew out of a strong sense that while in the West, specifically in the United States, there is a perception of the importance of economic transition in East Europe - of moving toward free market - there is nothing like an adequate parallel understanding of the importance of strengthening the process of democracy.

Trying to establish a free market if you have a society which has no sense of what contract is about, no sense of what relationships within a civic society is about, no sense of what law and free organizations are - is not to introduce a free market. You haven't got any of the internal sanctions, the relationships of trust, that we in the West - although they sometimes break down - at least operate under.

What has been the effect?

First, a recreation of many of the old, dangerous microbes in Eastern Europe: nationalism, xenophobia, anti-Semitism, anti-Gypsy feelings. What you're looking at is a population that does not think that things are going to get better. Seventy-four percent of Hungarians in a recent poll said they thought things were going to get worse.

This is the most fortunate, most likely winner of all the East European countries. Hungarians tend to be rather gloomy, but still a poll saying we don't think we're going to get anywhere, in a country which has the largest private sector, the most rapidly developing banking sector - is not good news.

Second: If you try to privatize without having built up any kind of capital market locally, and without having converted the currency, which in all cases except Poland is true, what happens is that the only people who can raise indigenous money fast are the people who were the ruling managers of the old system - and they've made huge windfall profits.

That profit, in some cases, is being plowed into what is called "spontaneous privatization." This is not what Americans would regard as good news; it's rather bad news.

The managers of the old enterprise have raised enough money for a leveraged buy-out. And so you're beginning to get an intense disillusion as people see the managers of the bright, new, private free-market society look terribly like the managers of the old, control-command economy.

It sounds as though the euphoria of 1989 is over in East Europe.

In country after country, (there's) a perception that the great effort to get democracy is running into the ground. If we don't begin to create a civic society in the sense of what civic morality is about, with a sense of what accountability is about, with a sense about consensus creation, the spectrum of parties, different interests being represented through parties, I think this experiment could go badly awry. It's at the moment not doing well.

Nobody should sit back and say, "It's likely that there will be flourishing democracies in Eastern Europe. …