Eastern Europe and How to Avoid Neoliberalism

Compared to the Neoliberal Capitalists, the Socialists were the good guys
Empowering Weak & Oppressed

Eric Walberg

Shawwal 17, 1439 2018-07-01

Book Review

by Eric Walberg (Book Review, Crescent International Vol. 47, No. 5, Shawwal, 1439)

Aftershock: A Journey into Eastern Europe’s Broken Dreams by John Feffer;  Pub: Zed Books, London, United Kingdom, 2017, 352 pages. Price: $16.73 Pbk.

Aftershock: A Journey into Eastern Europe’s Broken Dreams by John Feffer; Pub: Zed Books, London, United Kingdom, 2017, 352 pages. Price: $16.73 Pbk.

John Feffer’s Aftershock: A Journey into Eastern Europe’s Broken Dreams is an epic tour through the remains of the Warsaw Pact countries, history through the eyes of those both making and enduring it. It is full of surprising twists, with chameleons changing colours, marauding Western bullies, lots of nostalgia for “real existing socialism,” and hints of new political seeds pushing through what is now a bleak wasteland with nodes of renewal.

Feffer is one of the new breeds of journalist-historians, postmodern in his goal of seeing history through the eyes of those living it. His inspiration is surely the Belarussian Svetlana Alexievich, awarded the 2015 Nobel Prize in Literature “for her polyphonic writings, a monument to suffering and courage in our time.” Her equally epic Second-hand Time follows hundreds of Russian and other (ex)Soviet interviewees from the 1980s to the 2010s.

This way of writing history is hard work, more reminiscent of Ibn Batutah, who traveled the civilized world in the 14th century (Europe he regarded as uncivilized), recording his meetings with hundreds of locals. Aftershock is messy and sprawling, covering economic shock therapy, collapse and rebuilding of institutions, and lots of rape and pillage, as befits the plight of a defeated “enemy,” for whom no remorse or pity is in store.

It cries out for some focus to juggle the main themes of socialism versus capitalism versus nationalism, political chicanery versus the struggle to re-establish some kind of morality and ethics. There is so much history (five nations plus five Yugoslav republics) packed into its pages that the head spins.

We in the West bemoan those greedy locals who took advantage of the collapse of socialism to enrich themselves, but as I read Aftershock, I pictured the biggest bad guys as Western briefcase warriors marching triumphantly into Budapest or Ljubljana with magic potions and play money, making deals, using flimsy new “banks” to spirit out proceeds, working with would-be local robber-barons as frontmen, bankrupting and stripping old factories, with sexy vamps clinging to their arms, even taking orphan children for adoption. In truth, it is nothing but a sophisticated version of Roman or Mongol “liberations” of the past: slaughter the men, or take them, the women, and children as slaves.

Feffer’s stark conclusion at each of his stops: the Liberal project — Thatcher’s “There Is No Alternative” — failed. Eastern Europe was to be the poster child for the thesis that history had ended. Communism would be replaced by McDonalds and the voting booth. Accountable government, protection of civil liberties, tolerance, rule of law, blah, blah.

But it turns out it was wrong to throw the communist baby out with the bathwater in 1991. There was hidden social-justice treasure there. And change had been fermenting since the Prague Spring in the 1960s. Hungary, Czechoslovakia, Poland, Yugoslavia had lots of unofficial life, but it was done discreetly, best without Western governments and NGOs loudly pushing their own agendas.

In 1979 Hungarian dissidents and party intellectuals — really the same “class” — wanted to collaborate to change the system from within. Reform-oriented technocrats and dissidents would quietly take power. Technocrats were gingerly allying with intellectuals in opposition.

This was no longer the revolution eating its children, as happened in the Stalinist 1950s, even with the explosion of Solidarnost in 1980. Yes, dissidents worked as gardeners and wrote their screed for samizdat or tamizdat (self-publishing or publishing abroad). The socialist world was slowly transforming. If the West was sincere about helping out, it didn’t need to destroy the system to save it.

The liberal strategy sought to sell off state properties, use cheap labor, resources and tax breaks to attract foreign investment — that is, capitalist democracy. No Marshall Plan would be necessary (except a harshly imposed one for East Germany to obliterate all evidence of the past), no Western altruism.

The reality, however, saw cynical local officials siding with dissident intellectuals (what do they know about economics anyway?), but with no pretense of socialism anymore. They merely used this unholy alliance to “privatize” (more precisely, seize) state property and give a few crumbs to the dissidents, who had the choice to climb on board the gravy train or take the moral high ground and remain marginalized.

Yugoslavia should have been the success story — already lots of market relations, used to dealing with the EU, culturally open, a federation. But the EU and US supported nationalists (just as the US cavalierly used Muslim extremists to undermine socialism in Afghanistan) pushing for state elections before federal elections could be held. This of course undermined desperate attempts to keep the federation in tact. The result was a nightmare, but convenient for the EU, which no longer faced the “spectre of communism” from within. The five states limped toward a pyrrhic victory (for whom?), meekly joining the EU, with Serbia still in the cold.

After Yugoslavia, Hungary stands out as the saddest case. After the 1956 explosion, the Communists were following a Yugoslav model, though the moderate Kadar kept the collective farm structure. Hungarian culture flowered — the best (probably) in all Europe. Borders were open enough to let off intellectual steam, but so as not to subvert socialism, which its collapse in 1989 showed is a fragile political and economic system, easily undermined (unlike capitalism).

The living standard was at least as high as the European average, food was almost all locally grown (no Monsanto), life was kinda lazy, no stress as there was no unemployment, and health, education, books, and entertainment virtually free. The opposition turned the light state control into a positive spur for resistance and critical films, by now, the leading form of cultural expression. The Istvans didn’t need much to satisfy their basic needs. No consumer madness. People were judged by who they were and their deeds.

And “after the fall”? Socialism was discredited, shock therapy thrust on the nation, the breaking-up of the modern farms into a maze of unprofitable small holdings, privatizing healthy firms that were promptly “bankrupted” and stripped by foreigners, ending subsidies on basic goods.

Western governments amassed more interest on debt from old communist loans than they gave in loans and grants to the struggling “democracies” from 1993–1996. Suddenly there was no state funding for the economy. Foreign loans and investment filled the gap. Hungary and Bulgaria tried to resist and were blackmailed, cut off from Western markets, financial institutions, the fickle corporations. All this eerily reminiscent of the rapacious treatment of defeated Germany after 1918.

By 1993, the Hungarian living standard dropped by 20%, unemployment skyrocketed to 30%, poverty and income inequality increased sharply, the promises of Western bubblegum proved empty. In 1995, 54% of Hungarians said the old system was better (in Romania it was 60% in a 2014 poll). While unemployment has since fallen to an “acceptable” 5%, poverty and inequality haven’t (44% of Hungarians still can’t afford basic necessities versus 20% in the EU).

Anger against capitalism, democracy, the EU, urban intellectuals, minorities, foreigners… This new illiberalism also came to Russia (Putin), Turkey (Erdogan), Philippines (Duterte), and the US (Trump). The communists returned briefly to power in east Europe (except East Germany and Czechoslovakia) but were no longer communists, with the damage unfixable, and the cynical ones just used their old strings to pad their pockets, the true believers fading into the background, bitter at seeing the betrayal of their dreams.

Actual change benefited those who orchestrated the changes (party insiders, mafia, technocrats, former dissidents in new government ministries), creating new elites. People had to use what new opportunities there were (join parties to get jobs, join in the theft and black market). The transition was a zero-sum game, the transfer of resources from one ruling elite to another with much overlap and far greater social inequality. You had to seize things while you could.

Unions collapsed as factories closed and unemployment skyrocketed. This produced a lost generation, with millions fleeing west in search of work in the EU or North America. Only the young, individualist-minded succeeded. The moral fabric of society was torn apart. Poland’s legendary Solidarnost collapsed, as it was never really labour-focused. Its leaders and advisers just used the union idea as a cover to overthrow the system. Only 10% of Poles were unionized by 2013. If it was a genuine force for labour, it would not have sold out to neoliberalism. It could have stood by socialist principles and fought shock therapy.

Now all of Eastern Europe (indeed all the “West” too) has a new “class,” the precariat, living from temp job to temp job, with no benefits — what Poles call “junk contracts,” offered by private job centres. Local cafeterias with subsidized lunches have been replaced by “Kentucky” et al. (that is, junk food). Homelessness, once unknown, became the neolib gift. Between 2006 and 2010, an estimated 131 homeless died of exposure in Budapest, where 10,000 of the country’s 15,000 homeless live, according to the Homeless World Cup support group.

Feffer contrasts all this with China, which didn’t borrow in the 1970s, so had no debt and kept its autonomy from the US. It did not create mass unemployment, rather picking economic winners like sustainable energy. It did bow to the forces of globalization, restructuring state-owned enterprises, stripping social benefits, allowing insider privatization, creating a new economic elite. Firms were not sold to worker-owners or mass shareholders, but to the highest bidder, though foreigners could only be junior partners. This at least ensured that Chinese exports would be boosted, and avoided the asset stripping scams that wholesale foreign access to the economy allowed in Eastern Europe. Again, Hungary: six sugar firms once were important exporters; now there is one and Hungary imports sugar at twice the price.

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