Magazines: The Post-Soviet Sphere

Until 1989, the conventional wisdom about the Soviet Union and the nations it had conquered could be summarized in three sentences: The Soviet Union was an inflexible totalitarian regime incapable of change. The Soviet economy, half as large as America's, was capable of producing a minimal amount of goods but would never be transformed into a capitalist system. And what opposition to communist regimes existed largely consisted of intellectuals whose critiques were noble, inspiring, and ultimately futile.

Why did the think tankers turn out to be so wrong in their predictions? A major reason is the enduring power of nationalism. The Soviet empire has split into a thousand states (or statelets); each emerging nation has its own epic, a romance of glorious conquest over its perfidious neighbors. The Romanians compose diatribes about the wickedness of the Hungarians; the Hungarians counter with ballads about the vileness of the Serbs; and the Serbs decide to hate everybody they can think of.

Each nation also plots for expansion; the Poles dream of "Greater Poland," the Hungarians scheme for "Greater Hungary," and a neo-fascist crank named Vladimir Zhirinovsky acquires several million votes in the Russian elections by telling that nation's electorate of the sunny future that would result from the reconquest of Alaska.

Such petty feuds would be of little interest were it not for the Serbs, who, in their lunatic quest for a "Greater Serbia," have sent their legions into the newly independent Bosnia-Herzegovina. Because the Serbs crossed an international frontier (albeit one that had only been established a few months before), the think tanks thundered that Mighty Superpower America should do something.

On the campaign trail, Bill Clinton decided to show that he liked force by calling for the bombing of Sarajevo. And seven of the nine pundits queried by Policy Review for their fall issue thought some show of American force was in order. (Only Amy Moritz of the National Center for Public Policy Research and The National Interest's Michael Lind opposed U.S. involvement.)

But the saber-rattling pundits failed to answer several pertinent questions. What, exactly, were "Bosnians"? How did they differ from Serbs and Croats? And why should America go bombing Europe when the European nations decided to react to the conflict by sending token forces and expelling most Bosnian refugees?

As Aleksa Djilas of Harvard's Russian Research Center observes in the September 21 New Republic, "Bosnians" are equally divided among Serbs, Croats, and Muslims; most of the region's history consists of two of the three groups ganging up on a third. Because no ethnic group was large enough to dominate, both the Turkish and the Austro-Hungarian empires kept the region as a separate province unattached to either Serbia or Croatia. The only empire that gave the Muslims power were the Nazis; they promptly formed an Islamic S.S. division that spent World War II slaughtering the Serbs.

Were Western armies able to establish an independent, Muslim-dominated Bosnia, Djilas contends, the result would be an artificial state that could only survive if "a foreign power sent several thousand soldiers to police every valley in perpetuity."

In the August 1 Spectator, G. M. Támas, leader of Hungary's Free Democrats, a conservative opposition party, notes that the frontiers between central and eastern European nations may well become more artificial in the future, as ethnic members living in a particular nation gain the right to vote in their homeland's elections. If the Hungarians in Serbia, Romania, and Slovakia can vote in Hungarian elections and the Romanians in Moldova can vote in Romanian elections, Támas asks, what effect will this have on Hungarian or Romanian frontiers?

Támas contends that the ethnic squabbles will continue indefinitely, and that these age-old conflicts have very little to do with such Western notions as democracy or the rule of law. "Modern armies and modern politicians cannot prevent village neighbors shooting each other in their back gardens, short of stationing a tank in each of the millions of back gardens of eastern Europe over the next thirty years," Támas writes. "So please keep out, stand aside and do not imagine in that tiresome rationalistic way that there is a solution to every problem. There is not."

The problems of the post-communist world's economies seem as insoluble as their politics. Some parts of the former Soviet empire—the Czech lands, Hungary—are doing well in their journey toward privatization. But most of these countries face a dilemma. Most noncommunist governments seeking to sell state-owned businesses have spent years ensuring that these businesses were both viable and profitable. But what do you do when the whole economy is made up of antiquated, state-owned firms that can't be made profitable?

In the August/September The World Today, Roland Schönfeld reports the problems that the Germans have had in selling off state-owned businesses in the eastern part of Germany. Most service-based companies—hotels, stores, restaurants—have been sold. West German electrical power companies have bought their eastern counterparts, and west German construction companies have found that buying an east German firm ensures lucrative government contracts. But most of the firms the German government owns in that nation's eastern part have a hard time finding buyers.

In many cases, the Treuhandanstalt, the German quasi-governmental agency that owns thousands of eastern German businesses, has allowed Communist managers of these firms to keep their jobs, even though these managers couldn't compete in a free market. West German unions, backed by corporate heads fearing the entry of lower-cost east German rivals, have called for equal pay for their eastern counterparts. And some east German states have subsidized failing firms as a way of keeping voter loyalty.

The result, says Schönfeld, is that the Treuhandanstalt is ensuring that thousands of inefficient businesses are allowed to continue. "Scarce capital is being wasted," Schönfeld writes. "Workers are being kept in the wrong jobs and deceived about their chances to remain there. Private enterprises are pushed out of the market by heavily subsidized competitors underselling them."

In the July/August International Economy Gabriel Schoenfeld of the Center for Strategic and International Studies observes that something similar appears to be happening with Russian agriculture. While the number of private farms in Russia has increased from 231 in April 1990 to about 95,000 in April 1992, these farms are still dwarfed by huge collective farms and an inefficient state-run distribution system that ensures that private farmers have a hard time getting fertilizer and other supplies. (The efforts of the Yeltsin administration to stop hyperinflation by restricting credit also hurt private farmers, who need access to money to expand.) Moreover, polls say that only about 10 percent of the people who work in collective farms want to leave them for private ventures.

Schoenfeld reports that food production in Russia will tumble by 18 percent in 1992 and that a third of Russian cities don't have meat in their stores. And many collective farms, under pressure to privatize, decided to stop describing themselves as collectives; instead they call themselves "joint-stock companies," "people's enterprises," and "cooperatives" while resisting substantive change. (For more of Schoenfeld's reports, I recommend Post-Soviet Prospects, an excellent newsletter that Schoenfeld edits.)

Does this inertia and stagnation mean that the nations of central and eastern Europe are doomed to economic misery and tribal warfare? Not necessarily. Tina Rosenberg highlights one promising development in a hard-hitting article in the September Harper's Magazine.

Rosenberg describes the Hungarian Federation of Young Democrats (FIDESZ). The only political party in the world with an age limit (no one over 35 can join), FIDESZ parliamentarians do things that the older generation finds shocking. The women wear miniskirts! The men wear earrings! FIDESZ members read F.A. Hayek—for fun!

For the older Hungarian dissidents, who spent their days lying in their garrets and dreaming of Sweden, such tactics and principles were quite shocking. For FIDESZ leaders saw the idea of a "third way" or "socialism with a human face" as tired old rhetoric. In the 1990 Hungarian elections, the former Communists ran advertisements with photos of Spanish socialist Prime Minister Felipe González and French socialist Prime Minister François Mitterand. Other parties ran ads "stylistically reminiscent of the agriculture ministry's announcements on potato production."

FIDESZ ran rock videos and a poster showing two couples kissing. The top half showed Communist tyrants Leonid Brezhnev and Erich Honecker bussing each other in fraternal passion; the bottom half showing a young couple kissing in a park. The two photos were separated by a slogan—"TESSEK VALSZTANI"—Make Your Choice. The voters did, giving FIDESZ 22 out of 386 seats and several mayoral positions.

Once in power, FIDESZ continued to produce an uncompromising libertarian message. Their message and their youth, says Rosenberg, ensured that the party became more popular than ever—and may well win Hungary's 1994 elections. While Rosenberg doesn't agree with FIDESZ's devotion to the market, she argues that FIDESZ's tactics and programs may well be the only ideas that "lure people away from a far more dangerous path" of socialism and nationalism.

"The continent of the Prague Spring has vanished," Rosenberg writes. "Today the most important ideological figure in Eastern Europe is Margaret Thatcher."

Rosenberg illustrates her point with a Czech joke comparing that nation's onetime president, social democrat Václáv Havel, with his more market-oriented prime minister, Václáv Klaus. Havel sees a beggar who tells him that he is so poor that he lives on grass. Havel gives him a wad of bills. The beggar than goes to Klaus and repeats his story. Klaus gives him a subway ticket, saying "the grass is better downtown."

The joke is harsh, but it makes an important point. Eastern and central Europe are going through a hard time. Many people there will have little to eat, and many more will suffer because of fratricidal wars. But in the long run, the parties of the future, led by FIDESZ and Václáv Klaus, will ultimately triumph over the parties that promise only nostalgia and inertia. The best way to help the entrepreneurs of the East is by buying their goods. The nations of eastern and central Europe need customers. They don't need any more rhetoric, guns, or bombs.

Contributing Editor Martin Morse Wooster is a writer, editor, and researcher living in Silver Spring. Maryland.