1. An Oversize "Rotten Apple"
2. "Logical Illogicality"
3. Return to Normalcy
4. Some Free Market Successes
5. After the Cold War
6. The Soft Line
1. An Oversize "Rotten Apple"
In the broader framework just reviewed, the Cold War can be understood, in large measure, as an interlude in the North-South conflict of the Columbian era, unique in scale but similar to other episodes in significant respects.
Even in the pre-Columbian era, Eastern and Western Europe were diverging, with a fault line dividing Germany, East and West. "From the middle of the fifteenth century," Robert Brenner writes, "in much of western Europe, the conditions for crisis finally receded, and there was a new period of economic upturn." The "long-established and better-organized" peasant communities of Western Europe, "with established traditions of (often successful) struggle for their rights" and "an impressive network of village institutions for economic regulation and political self-government," were able to "break feudal controls over their mobility and to win full freedom," while in the East, "serfdom rose with a vengeance," opening the way to the "development of underdevelopment." In Poland, for example, national output appears to have reached a mid-16th century peak that was not attained again for 200 years. "The relative absence of village solidarity in the east...appears to have been connected with the entire evolution of the region as a colonial society," under "the leadership of the landlords."
The Third World, Leften Stavrianos observes, "made its first appearance in Eastern Europe," which began to provide raw materials for the growing textile and metal industries of England and Holland as far back as the 14th century, and then followed the (now familiar) path towards underdevelopment as trade and investment patterns took their natural course, superimposed on the divergent social patterns. The process soon left "the East as perhaps Europe's first colonial territories, a Third World of the 16th century providing raw materials for the industrialists back west, a testing ground for bankers and financiers to practice what they would later perfect in more distant lands" (John Feffer). Russia itself was so vast and militarily powerful that its subordination to the economy of the West was delayed, but by the 19th century it was well on the way towards the fate of the South, with deep and widespread impoverishment and foreign control of key sectors of the economy.
A late 19th century Czech traveller to Russia described the fading of Europe as one travels East, narrowing finally down to the railway and a few hotels: "The aristocratic landowner would furnish his country house in the European way; similarly, the continuously multiplying factories in the countryside are European oases. All technical and practical equipment is European: railways, factories, and banks...; the army, the navy and partly the bureaucracy as well." Foreign capital participation in Russian railways reached 93 percent by 1907, capital for development was mostly foreign, largely French, and debt was rising rapidly, as Russia settled into the typical Third World pattern. By 1914, Russia was "becoming a semi-colonial possession of European capital" (Teodor Shanin).
"Many Russians, whatever their political beliefs, resented the semi-colonial status accorded to their country in the West," Z.A.B. Zeman writes: "The Bolshevik revolution was, in a critical sense, the reaction of a developing, essentially agrarian society against the West: against its political self-absorption, economic selfishness and military wastefulness. The present North-South divide between the rich and the poor countries, and the tensions it has created in the twentieth century, had its European, East-West antecedents." Beyond Russia itself, "contrasts between the East and the West of Europe...became sharper than they had ever been" in the 19th and early 20th centuries, he adds, remaining so for much of Eastern Europe through the interwar period.1
The Bolshevik takeover in October 1917, which quickly aborted incipient socialist tendencies and destroyed any semblance of working-class or other popular organization, extricated the USSR from the Western-dominated periphery, setting off the inevitable reaction, beginning with immediate military intervention by Britain, France, Japan, and the US. These were, from the outset, basic elements of the Cold War.
The logic was not fundamentally different from the case of Grenada or Guatemala, though the scale of the problem surely was. Bolshevik Russia was "radical nationalist." It was "Communist" in the technical sense, unwilling "to complement the industrial economies of the West"; in contrast, it was not in the least "Communist" or "socialist" in the literal sense of these terms, socialist elements of the pre-revolutionary period having been quickly demolished. Furthermore, though no conceivable military threat, the Bolshevik example had undeniable appeal elsewhere in the Third World. Its "very existence...constituted a nightmare" to US policymakers, Melvyn Leffler observes: "Here was a totalitarian country with a revolutionary ideology that had great appeal to Third World peoples bent on throwing off Western rule and making rapid economic progress." US and British officials feared that the appeal extended to the core industrial countries, as discussed earlier.
The Soviet Union was, in short, a gigantic "rotten apple." Adopting the basic logic and rhetoric of the North-South conflict, one may therefore justify the Western invasion after the revolution as a defensive action "in response to a profound and potentially far-reaching intervention by the new Soviet government in the internal affairs, not just of the West, but of virtually every country in the world," namely, "the Revolution's challenge...to the very survival of the capitalist order." "The security of the United States" was "in danger" already in 1917, not just in 1950, and intervention was therefore entirely warranted in defense against the change of the social order in Russia and the announcement of revolutionary intentions (diplomatic historian John Lewis Gaddis; my emphasis).2
The "rapid economic growth" aroused particular attention in the South -- and corresponding concerns among Western policymakers. In his 1952 study of late development, Alexander Gerschenkron describes the "approximate sixfold increase in the volume of industrial output" as "the greatest and the longest [spurt of industrialization] in the history of the country's industrial development," though this "great industrial transformation engineered by the Soviet government" had "a remote, if any" relation to "Marxian ideology, or any socialist ideology for that matter"; and was, of course, carried out at extraordinary human cost. In his studies 10 years later of long-term trends in economic development, Simon Kuznets listed Russia among the countries with the highest rate of growth of per capita product, along with Japan and Sweden, with the US -- having started from a far higher peak -- in the middle range over a century, slightly above England.3
The ultranationalist threat was greatly enhanced after Russia's leading role in defeating Hitler left it in control of Eastern and parts of Central Europe, separating these regions too from the domains of Western control. The rotten apple was so huge -- and after World War II, so militarily powerful as well -- and the virus it was spreading so dangerous, that this particular facet of the North-South conflict took on a life of its own from the outset. Long before Lenin and Trotsky took power, the threat of "Communism" and "anarchism" had regularly been invoked by the business-government-press complex to justify the violent suppression of attempts by working people to organize and to gain elementary rights. The Wilson Administration was able to extend these techniques, exploiting the Bolshevik takeover as an opportunity to crush the labor movement and independent thought, with the backing of the press and business community; the pattern has been standard since. The October revolution also provided the framework for Third World intervention, which became "defense against Communist aggression," whatever the facts might be. Avid US support for Mussolini from his 1922 March on Rome, later support for Hitler, was based on the doctrine that Fascism and Nazism were understandable, if sometimes extreme, reactions to the far more deadly Bolshevik threat -- a threat that was internal, of course; no one thought the Red Army was on the march. Similarly, the US had to invade Nicaragua to protect it from Bolshevik Mexico, and 50 years later, to attack Nicaragua to protect Mexico from Nicaraguan Bolshevism. The supple character of ideology is a wonder to behold.
Facts are commonly reshaped to establish that some intended target of attack is an outpost of the Kremlin (later, Peiping). On deciding in 1950 to support France's effort to quell the threat of independent nationalism in Vietnam, Washington assigned to the intelligence services the task of demonstrating that Ho Chi Minh was a puppet of Moscow or Peiping (either would do). Despite diligent efforts, evidence of "Kremlin-directed conspiracy" could be found "in virtually all countries except Vietnam," which appeared to be "an anomaly." Nor could links with China be detected. The natural conclusion was that Moscow considers the Viet Minh "sufficiently loyal to be trusted to determine their day-to-day policy without supervision." Lack of contact therefore proves the enormity of the designs of the Evil Empire. There are numerous other examples.
A variant is illustrated by the case of Guatemala. As the US prepared to overthrow its government, an Embassy officer advised that a planned OAS resolution to bar arms and Communist agents would "enable us to stop ships including our own to such an extent that it will disrupt Guatemala's economy," thus leading to a pro-US coup or increased Communist influence, which would in turn "justify...the U.S. to take strong measures," unilaterally if necessary. In accord with such reasoning, a routine foreign policy procedure is to use embargo, terror, and the threat of greater violence to compel the target to turn to the Russians for support, thus revealing itself to be a tentacle of the Soviet conspiracy, reaching out to strangle us. The technique was used against Guatemala and Nicaragua with extreme clumsiness, but great success in a highly conformist intellectual culture.4
As Russia absorbed the major blows of Nazi force, Stalin became an ally, the admired "Uncle Joe"; but with ambivalence. Roosevelt's wartime strategy, he confided to his son in private, was for the US to be the "reserves," waiting for the Russians to exhaust themselves in the combat against the Nazis, after which the Americans would move in for the kill. One of the preeminent Roosevelt scholars, Warren Kimball, concludes that "aid to the Soviet Union became a presidential priority" on the assumption that Red Army victories would allow the President to keep US soldiers out of a land war in Europe. Truman went much further. When Germany attacked the Soviet Union in June 1941, he commented that "If we see that Germany is winning we ought to help Russia and if Russia is winning we ought to help Germany and that way let them kill as many as possible." By 1943, the US began to reinstate Fascist collaborators and sympathizers in Italy, a pattern that extended through the world as territories were liberated, reinstating the tolerance for fascism as a barrier to radical social change. Recall that Soviet aggression was not an issue prewar, nor anticipated postwar.5
The problem of the enormous rotten apple led to some odd contortions in policymaking. In an important study of July 1945, transmitted by Secretary of War Stimson to the Secretary of State, military planners tried to put a satisfactory gloss on the US intention to take control of the world and surround Russia with military force, while denying the adversary any rights beyond its borders. "To argue that it is necessary to preserve a unilateral military control by the U.S. or Britain over Panama or Gibraltar and yet deny a similar control to Russia at the Dardanelles may seem open to the criticism of being illogical," they worried, particularly since the Dardanelles provided Russia with its only warm water access and was, in fact, to be kept firmly under unilateral US-British control. But the criticism is only superficially plausible, the planners concluded: the US design is "a logical illogicality." By no "stretch of the imagination" could the US and Britain be thought to have "expansionist or aggressive ambition." But Russia
has not as yet proven that she is entirely without expansionist ambitions... She is inextricably, almost mystically, related to the ideology of Communism which superficially at least can be associated with a rising tide all over the world wherein the common man aspires to higher and wider horizons. Russia must be sorely tempted to combine her strength with her ideology to expand her influence over the earth. Her actions in the past few years give us no assured bases for supposing she has not flirted with the thought.
In short, the burden is upon the Russians to prove that they have no intention of associating with the rascal multitude who "aspire to higher and wider horizons," with the "poor who have always wanted to plunder the rich" (Dulles). Until they do so convincingly, it is only logical for responsible men who do not consort with criminal elements bent on plunder, and flirt with no such subversive thoughts as higher aspirations, to establish their unilateral control over the world. Russia must demonstrate that it is not a potential threat to "the very survival of the capitalist order" (Gaddis). Once it has clearly accepted the principle that Churchill's rich men must have their way everywhere, it may be allowed to enter the servants' quarters.
The notion of "logical illogicality" is another useful tool in the ideological kit, which merits wider use.
The severity of the danger had been underscored a month earlier by William Donovan, director of the OSS (the precursor of the CIA). In a Europe "racked by war and suffering widespread misery," he warned, the Soviets have "a strong drawing card in the proletarian philosophy of Communism." The US and its allies have "no political or social philosophy equally dynamic or alluring." As noted, the same problem was deplored by Eisenhower and Dulles ten years later, and regularly by the US in Indochina.6
The reasoning outlined in 1945 prevailed throughout the Cold War period, and follows naturally from the general logic of the North-South conflict. The same reasoning has often been applied at home, for example, after World War I, when "there could be no nice distinctions drawn between the theoretical ideals of the radicals and their actual violations of our national laws" and "no time to waste on hairsplitting over infringement of liberty" (Attorney-General Palmer and the Washington Post, during Wilson's Red Scare). The same doctrine was invoked to justify the bombing of Libyan cities in 1986 in "self-defense against future attack," as the government announced to much acclaim among devoted advocates of international law.7
"Clear and present dangers" cannot be tolerated, however clouded the clarity and remote the present.
The logic is simple: the rich men rule by right the world they own, and cannot be expected to tolerate potential criminal action that might interfere with "stability." The threat has to be cut off at the pass. And if it takes form, we are entitled to do what we must to set things right.
It was not Stalin's crimes that troubled Western leaders. Truman noted in his diary, "I can deal with Stalin," who is "honest -- but smart as hell." Others agreed, among them Eisenhower, Leahy, Harriman, and Byrnes. What went on in Russia was not his concern, Truman declared. Stalin's death would be a "real catastrophe," he felt. But cooperation was contingent on the US getting its way 85 percent of the time, Truman made clear. Melvyn Leffler -- who has examined the record in close detail and has much respect for the achievements and foresight of the early postwar leadership -- remarks that "Truman liked" Stalin. He comments on the lack of any "sense of real compassion and/or moral fervor" in the documentary record. "These men were concerned primarily with power and self-interest, not with real people facing real problems in the world that had just gone through fifteen years of economic strife, Stalinist terror, and Nazi genocide."8
The animating concern was not Stalin's awesome crimes, but the apparent successes in development with their broad appeal, and the possibility that the Russians might be "flirting with the thought" of lending support to "aspirations of the common man" in the West, and subjugated and oppressed people everywhere. The failure of East Europe to resume its traditional role as a supplier of food and raw materials to the West compounded these concerns. The problem is not crimes, but insubordination, a fact illustrated by a host of gangsters from Mussolini, Hitler, and Stalin to Saddam Hussein.
Though US planners did not expect a Soviet attack on the West, they were concerned about Soviet military power, for two fundamental reasons. First, they feared that the USSR might respond to the US takeover of the world, not recognizing the "logic" in our "illogicality." Particularly ominous from the Soviet point of view was the reconstruction and rearmament of Germany and Japan, two powerful traditional enemies, and their incorporation within the US system of power, which was intent on exterminating the Soviet virus. That these developments posed a major threat to Soviet security was well-understood by US planners, who therefore feared a possible reaction.
Second, Soviet power served to deter US violence, impeding US actions to ensure that the "periphery" fulfills its service function. What is more, for its own cynical reasons the Kremlin often lent support to targets of US attack and subversion, and sought to gain advantage where it could. The very existence of Soviet power provided a certain space for maneuver in the South. As a counterweight to US power, it opened the way toward nonalignment, which, US planners feared, would deprive the West of control over the domains required to maintain traditional privilege and power. Exploiting these openings, Third World leaders sought to carve out an independent role in world affairs. By the 1960s, the UN, previously a docile instrument and hence much admired, fell under "the tyranny of the majority." The growing influence of undeserving elements set off intensive US efforts to destroy the errant organization, which continue under a different guise with the UN, at last, safely back under control.9
In short, the USSR was not only guilty of ultranationalism and undermining "stability" through the rotten apple effect. It was committing yet another crime: interfering with US designs and helping the victims resist, an intolerable affront that few in the South could match, though Cuba did as it blocked US-backed South African aggression in Angola. Accordingly, there could be no accommodation, no détente. Even as the Soviet Union collapsed through the 1980s, the test of Gorbachev's "New Thinking" put forth in the liberal press was his willingness to allow US violence to proceed without impediment; failing that criterion, his gestures are meaningless, more Communist aggressiveness.10
For such reasons, the US had no serious interest in resolving the Cold War conflict except on terms of Soviet submission. Though we lack Soviet records, and therefore can only speculate on what internal thinking may have been, what is available suggests that Stalin and his successors would have been willing to accept the role of junior managers in the US-dominated world system, running their own dungeon without external interference, and cooperating in joint efforts to maintain global "stability," much as they did in the 1930s, when Communist armies spearheaded the onslaught against the popular social revolution in Spain.
The view from Washington was spelled out clearly by Secretary of State Dean Acheson to an executive session of the Senate Foreign Relations Committee, where he explained the US negotiating position on Germany for the forthcoming May 1949 meeting of foreign ministers. Acheson's stance was "so uncompromising," Leffler writes, that members of the Committee "were stunned." In response to Arthur Vandenberg's concern that the US position would institutionalize a permanent Cold War, Acheson responded that the goal was not to avoid Cold War but to consolidate Western power, under US control of course. "When Senator Claude Pepper urged Acheson to consider the possibility of treating the Soviets fairly," Acheson "scorned the idea," informing the Committee that "he aimed to integrate west German strength into Western Europe and establish a flourishing Western community that would serve as a magnet to the Kremlin's eastern satellites": the result would be not only to undermine Soviet power but also to restore quasi-colonial relations with the East. When the foreign ministers meeting broke down in a predictable stalemate, "Acheson was elated," Leffler continues. The Soviets "are back on the defensive," Acheson declared: "They are visibly concerned and afraid of the fact that they have lost Germany."11
As discussed, apparent Soviet interest in a peaceful European settlement in 1949 was regarded not as an opportunity but as a threat to "national security," overcome by the establishment of NATO. On similar grounds, the US never even considered Stalin's proposals for a unified and demilitarized Germany with free elections in 1952, and did not pursue Khrushchev's call for reciprocal moves after his radical cutbacks in Soviet military forces and armaments in 1961-1963 (well-known to the Kennedy Administration, but dismissed). On the eve of his election, Kennedy had written that Russia was attempting to conquer Europe "by the indirect route of winning the vast outlying raw materials region," the conventional reference to Soviet support for nonalignment and neutralism. Gorbachev's efforts to reduce Cold War confrontation in the mid-1980s (including unilateral force reductions and proposals to ban nuclear weapons tests, abolish the military pacts, and remove naval fleets from the Mediterranean) were ignored. Reduction of tension is of little value, short of the return of the miscreants to their service role.12
The Soviet Union reached the peak of its power by the late 1950s, always far behind the West. A 1980 study of the Center for Defense Information (CDI), tracing Russian influence on a country-by-country basis since World War II, concluded reasonably that Soviet power had declined from that peak to the point where by 1979, "the Soviets were influencing only 6 percent of the world's population and 5 percent of the world's GNP, exclusive of the Soviet Union." By the mid-1960s, the Soviet economy was stagnating or even declining; there was an accompanying decline in housing, commerce, and life expectancy, while infant mortality increased by a third from 1970 to 1975.13
The Cuban missile crisis of 1962, revealing extreme Soviet vulnerability, led to a huge increase in military spending, levelling off by the late 1970s. The economy was then visibly stagnating and the autocracy unable to control rising dissidence. The command economy had carried out basic industrial development but was unable to proceed to more advanced stages, and also suffered from the global recession that devastated much of the South. By the 1980s, the system collapsed, and the core countries, always far richer and more powerful, "won the Cold War." Much of the Soviet empire will probably return to its traditional Third World status, with the old CP privileged class (the Nomenklatura) taking on the role of the Third World elites linked to international business and financial interests.14
A 1990 World Bank report describes the outcome in these terms: "The Soviet Union and the People's Republic of China have until recently been among the most prominent examples of relatively successful countries that deliberately turned from the global economy," relying on their "vast size" to make "inward-looking development more feasible than it would be for most countries," but "they eventually decided to shift policies and take a more active part in the global economy." A more accurate rendition would be that their "vast size" made it possible for them to withstand the refusal of the West to allow them to take part in the global economy on terms other than traditional subordination, the "active part in the global economy" dictated to the South by the world rulers.15
Throughout the period, great efforts have been undertaken to present the Soviet Union as larger than life, about to overwhelm us. The most important Cold War document, NSC 68 of April 1950, sought to conceal the Soviet weakness that was unmistakably revealed by analysis, so as to convey the required image of the "slave state" pursuing its "implacable purpose" of gaining "absolute authority" over the world, its way barred only by the United States, with its almost unimaginable nobility and perfection. So awesome was the threat that Americans must come to accept "the necessity for just suppression" as a crucial feature of "the democratic way." They must accept "a large measure of sacrifice and discipline," including thought control and a shift of government spending from social programs to "defense and foreign assistance" (in translation: subsidy for advanced industry and export promotion). In a 1948 book, liberal activist Cord Meyer, an influential figure in the CIA, wrote that the right to strike must be "denied" if it is not voluntarily restricted, given "the urgency of [the] defense plans" required. And "citizens of the United States will have to accustom themselves to the ubiquitous presence of the powerful secret police needed for protection against sabotage and espionage." As under Wilson, fascist methods are needed to guard against the threat to "stability."
By 1980, no one with eyes open could fail to perceive the "loss of hegemony and relative economic decline" of both superpowers "as the bipolar system of the postwar years has gradually evolved to something more complex," and the corresponding decline of "the Cold War system that proved so useful for both superpowers as a device for controlling their allies and mobilizing domestic support for the ugly and often costly measures required to impose the desired form of order and stability on their respective domains." Nor was there any doubt as to their relative strength and influence, as the CDI and other sane analysts were aware. Nevertheless, the period was marked by rising hysteria about the gargantuan Soviet system, leaping from strength to strength, straddling the globe, challenging the US and even threatening its survival, establishing positions of strength in Cambodia, Nicaragua, Mozambique, and other such crucial centers of strategic power.16
These delusionary efforts were accompanied by much fantasy about Soviet military spending. Again, no little ingenuity was required, if only because the Pentagon's own figures in 1982 showed that NATO (including the US, facing no foreign threat) outspent the Warsaw Pact (including the USSR, deploying much of its force on the border with its Chinese enemy) by $250 billion from 1971 to 1980. But these figures, as economist Franklyn Holzman has been demonstrating for some years, are inaccurate, much overstating Soviet strength. When corrected, they reveal a total gap in NATO's favor of about $700 billion for the decade of the 1970s. The Carter military build-up, extended under Reagan, and pressures on the NATO powers to do the same, were "justified in part by the false claims of a steady increase in the Soviet rate of military spending," Raymond Garthoff observes: "The `relentless Soviet buildup' to an important extent reflected an American error in estimating Soviet outlays, rather than being a `disquieting index of Soviet intentions'," as claimed during the late Carter years, and "the American lead in absolute numbers of strategic bombs and warheads actually widened between 1970 and 1980." Holzman makes a strong case that the errors involved "deliberate [CIA] distortion" from the late 1970s, under intense political pressure.17
Exaggeration of the enemy's power is a characteristic feature of the North-South conflict; at the outer limits, one hears that Sandinistas were about to march on Texas, even that Grenada was a menace, "strategically located" to threaten US oil supplies, as "the Cubans surely appreciate" (Robert Leiken). The procedure was not invented with the Cold War. "A review of alarmist scenarios from the past might well begin with the threat from Chile posited in the 1880s by advocates of a new navy," John Thompson observes, reviewing the "tradition" of "exaggeration of American vulnerability." Recall as well the "mingled hordes of lawless Indians and negroes" who compelled us to conquer Florida in self-defense, and on back to colonial days.18
The purpose is transparent. The cultural managers must have at hand the tools to do their work. And apart from the most cynical, planners must convince themselves of the justice of the actions, often monstrous, that they plan and implement. There are only two pretexts: self-defense and benevolence. It need not be assumed that use of the tools is mere deception or careerism, though sometimes it is. Nothing is easier than to convince oneself of the merits of actions and policies that serve self-interest. Expressions of benevolent intent, in particular, must be regarded with much caution: they can be taken seriously when the policies advocated happen to be harmful to self-interest, a historical category that is vanishingly small.
In the Cold War case, there is another factor that may have helped extend the delusional system beyond its normal practitioners: the Russians had their own reasons for depicting themselves as an awesome superpower marching on towards a still grander future. When the world's two major propaganda systems agree on some doctrine, however fanciful, it is not easy to escape its grip.
A striking example is the delusion that the Cold War was a struggle between socialism and capitalism. The Soviet Union, from 1917, has been even more remote from socialism than the US and its allies have been from capitalism, but again, both major propaganda systems have had a longstanding interest in claiming otherwise: the West, so as to defame socialism by associating it with Leninist tyranny, and the USSR, so as to gain what prestige it could by associating itself with socialist ideals -- ideals whose force was powerful and wide-ranging. "I believe that socialism is the grandest theory ever presented, and I am sure some day it will rule the world," Andrew Carnegie told the New York Times, and when it does, "we will have attained the millennium." To this day, almost half the population find the phrase "from each according to his ability, to each according to his need" to be such an obvious truth that they attribute it to the US Constitution, a text largely unknown but taken to be akin to Holy Writ. The absurd association of Bolshevik tyranny with socialist freedom was doubtless reinforced by the accord between the two major doctrinal systems, though for intellectuals, the appeal of Lenin's authoritarian deviation from the socialist tradition has deeper roots.19
By the early 1980s it was becoming impossible to sustain the illusion of Soviet power, and a few years later, it was laid to rest.
If early modern Eastern Europe was "a testing ground for bankers and financiers to practice what they would later perfect in more distant lands" (Feffer), then by the 1980s the shoe was on the other foot: it was to be a "testing ground" for the doctrines of laissez-faire economic development that had been avoided by every successful developed country, and applied under Western tutelage in the South with destructive effects. A symbolic illustration of the reversal is the role of Harvard economist Jeffrey Sachs, who "in the 1980s had devastated the Bolivian economy in the name of monetary stability," Feffer accurately observes, and then moved on to Poland to offer the harsh medicine conventionally prescribed for the service areas.
Following the rules, Poland has seen "the creation of many profitable private businesses," the knowledgeable analyst Abraham Brumberg observes, along with "a drop of nearly 40 percent in production, enormous hardships and social turmoil," and "the collapse of two governments." In 1991, gross domestic product (GDP) declined 8-10 percent with an 8 percent fall in investment and a near doubling of unemployment, reaching 11 percent of the workforce in early 1992, after an official GDP decline of 20 percent in two years. A 1992 World Bank report on the Polish economy, discussed by Anthony Robinson in the Financial Times, concluded that "The fiscal situation has worsened to the point where hyperinflation is an immediate danger. Unemployment has reached a level that cannot be tolerated for long. Investment in infrastructure and human resource development has shrunk to levels that, if maintained, will undermine the prospects for sustained growth." It warned that "None of the long-term supply side reforms" that the Bank advocates "stands any chance of success if Poland slides back into hyperinflation, or if its economy continues to decline as dramatically as it has in the last two years." "Private savings were virtually eliminated by hyperinflation and the 1990 economic stabilisation programme," Robinson adds, while problems were exacerbated by capital flight of several tens of millions of dollars a month. While the decline will "bottom out," prospects appear dim for much of the population.
Russia has been going the same way. "On some estimates," Michael Haynes observes, "capital flight from the USSR was somewhere between $14-19 billion in 1991," some of it short-term, some for longer-term structural reasons. Production declined in 1991. Economic and finance minister Yegor Gaidar warned of a further drop of 20 percent in early 1992, with the "worst period" still ahead. Light industrial production fell by 15-30 percent in the first 19 days of January 1992 while deliveries of meat, cereals, and milk fell by a third or more. From early 1989 through mid-1992, according to IMF and World Bank statistics, industrial output fell by 45 percent and prices rose 40-fold in Poland and real wages were almost halved; figures for the rest of Eastern Europe were not much better.
Western ideologists are impressed with what has been achieved, but concerned that economic irrationality might impede further progress. Under the heading "Factory Dinosaurs Imperil Poland's Economic Gain," New York Times correspondent Stephen Engelberg looks at "a worst-case instance of how the industrial legacies of the Communist system threaten to drag down economic reform plans in Poland and other Eastern European nations": the city of Rzeszow, dependent on an aircraft manufacturer for employment, tax revenues, even heat from industrial by-products. The free market policies have "brought cities like Warsaw or Cracow alive with commerce," Engelberg notes, doubling the number of private businesses (though the people too impoverished to buy even basic goods do not reach the threshold). But this welcome progress is threatened by calls for government intervention to meet minimal human needs and rescue enterprises suffering from loss of markets and supplies and unpaid debts after the collapse of the USSR.
No less ominous, Engelberg observes, is "social unrest from the workers," who now have a measure of control in factories and even go on strike to prevent closure of plants that might be rescued by "Government-guaranteed loans to rebuild foundries." The Solidarity Union calls on the Government "to forgive overdue taxes and place big new airplane orders for the Polish army." A Solidarity leader says that "the Government has to make a decision whether or not it needs an aircraft industry or whether it has to be restructured or whether one-half should produce aviation and the rest something else." But Western analysts understand that such decisions are not for the Poles to make: they are to be made by the "free market" -- or more accurately, the powerful institutions that dominate it. And no embarrassing questions are raised about the fate of the US aircraft industry, or advanced industry in general, without the huge public subsidy to create and maintain it; and so on through the functioning parts of the economy. Or about the Chrysler bail-out or Reagan's rescue of Continental Illinois Bank; or the hundreds of billions of taxpayer dollars to pay off S&L managers and investors, freed from both regulation and risk by the genius of Reaganomics. We put aside the question of how "economic irrationality" of the kind denied to the Third World created an economy in which Americans no longer pursue their comparative advantage in exporting furs.
The problem of uppity workers is also noted by Financial Times correspondent Anthony Robinson. He writes that many communities depend upon "large plants where workers' councils exert strong influence on management unversed in the ways of the market." This unwarranted influence of working people undermines the lessons of economic rationality and democracy that we are patiently trying to impart. Economic rationality requires that the tools of production overcome their reluctance to see their communities and families destroyed. "It is not for the commodity to decide where it should be offered for sale, to what purpose it should be used, at what price it should be allowed to change hands, and in what manner it should be consumed or destroyed," as Karl Polanyi commented in his classic study of the laissez-faire experiment in 19th century England, quickly terminated as it came to be understood by the business classes that their interests would be harmed by the free market, which "could not exist for any length of time without annihilating the human and natural substance of society; it would have physically destroyed man and transformed his surroundings into a wilderness."
As for democracy, in the approved sense it allows no room for any popular interference in the totalitarian structure of the corporate economy, with all that follows in other spheres of life. The role of the public is to follow orders, not to interfere.
Gabrielle Glaser reports one of the results of "Poland's opening to Western market forces" in the New York Times under the heading: "Booming Polish Market: Blond, Blue-Eyed Babies." An "unexpected side effect" of the free market, she writes, is "a booming traffic" in this commodity, as "young mothers are being pressed to sign away the rights to their children." The numbers may reach tens of thousands. "I hate to say it," the director of a state adoption agency comments, "but it seems to me that Poland has one of the most serious markets of white babies." Polish journals tend to shy away from the role of the Church, Glaser reports, but one inquiry reported that the Mother Superior of one adoption home receives $15,000 for each baby girl and up to $25,000 for each baby boy. Asked about the report, she replied: "I cannot give you any information. Good-bye." She did, however, display her papal award for "defending life," "an honor Pope John Paul II bestows on anti-abortion crusaders in his native Poland," Glaser comments.
Why this side effect is "unexpected," Glaser does not explain. Indeed, as she notes, such reports "are not new in Eastern Europe or the third world: Romania became notorious for the practice after its 1989 revolution." Post-1989 Romania is a curious choice. The phenomenon is a well-known concomitant of the integration of the South into the world order in the service role; reports of sale of children are, in fact, some of the more benign that are familiar to those who do not choose to shield themselves from the wrong kind of facts. The "side effects" of the subjection of the South to market forces are not in the least unexpected, except to the laser-like vision of the trained ideologue.
"Unexpected side effects" of the invisible hand have also been found in Russia, again eliciting much surprise. A front-page New York Times headline reads: "The Russians' New Code: If It Pays, Anything Goes." "It is not just a matter of crime, corruption, prostitution, smuggling, and drug and alcohol abuse," all on the rise: "There is also a widespread view that...people are out for themselves and anything goes" -- unlike the United States, where pursuit of "the vile maxim of the masters" is unknown, or the Third World domains that have been subject to our helping hand. "Swindles and bribes are hardly a new phenomenon in Russia," correspondent Celestine Bohlen observes, and were familiar in the "old Communist system" -- again, unlike the US and its clients.
During the same days, the Times was reporting the saga of President Fernando Collor of Brazil, the fair-haired boy of Washington and the business community, who broke new records in corruption in a richly-endowed country that has been a "testing area" for US experts for half a century (see
chapter 7). One may recall a few domestic examples of corruption as well, from the days of the Founding Fathers, no slouches in this game, and on to the Reaganites and Wall Street in the 1980s. Corruption is an intrinsic feature of "the old Communist system," the ideological institutions (correctly) proclaim: under "capitalist democracy," it is an aberration, quickly corrected.
The new "ostentatious wealth sets most citizens' nerves on edge," Bohlen continues, describing the standard consequences of neoliberal remedies. "Crime has soared in Russia after the collapse of Communism, as it did in Eastern Europe," including white-collar crimes, which have "taken off." But "the levels of crime are still well below New York's standards." There is still room for progress towards the capitalist ideal.
The economies of Eastern Europe stagnated or declined through the eighties, but went into free fall as the IMF regimen was adopted with the end of the Cold War in 1989. By the fourth quarter of 1990, Bulgaria's industrial output (which had previously remained steady) had dropped 17 percent, Hungary's 12 percent, Poland's over 23 percent, Romania's 30 percent. The UN Economic Commission for Europe reported in late 1991 that the region's output had declined 1 percent in 1989, 10 percent in 1990, and 15 percent in 1991, predicting a further decline of 20 percent for 1991, with the same or worse likely in 1992. One result has been a general disillusionment with the democratic opening, even some growing support for the former Communist parties. In Russia, the economic collapse has led to much suffering and deprivation, as well as "weariness, cynicism, and anger, directed at all politicians, from Yeltsin down," Brumberg reports, and particularly at the ex-Nomenklatura who, as predicted, are coming to be the typical Third World elite serving the interests of the foreign masters. In public opinion polls, half the respondents considered the August 1991 Putsch illegal, one-fourth approved, and the rest had no opinion.
Support for democratic forces is limited, not because of opposition to democracy, but because of what it becomes under Western rules. It will either have the very special meaning dictated by the needs of the rich men, or it will be the target of destabilization, subversion, strangulation, and violence until proper behavior is restored. Exceptions are rare.20
Loss of faith in democracy is of small concern in the West, though the "bureaucratic capitalism" that might be introduced by Communists-turned-yuppies is a potential problem. In the Western doctrinal system, democratic forms are meritorious as long as they do not challenge business control. But they are secondary: the real priority is integration into the global economy with the opportunities this provides for exploitation and plunder.
With IMF backing, the European Community (EC) has provided a clear test of good behavior for Eastern Europe. In the old days, the Russians had to prove that they were not "flirting with the thought" of supporting the aspirations of "the common man." Today, East Europe must demonstrate that "economic liberalization with a view to introducing market economies" is irreversible. There can be no attempts at a "Third Way" with unacceptable social democratic features, let alone more substantive steps towards democracy and freedom, such as workers' control. The chief economic adviser to the EC, Richard Portes, defined acceptable "regime change" not in terms of democratic forms, but as "a definitive exit from the socialist planned economy -- and its irreversibility." One recent IMF report, Peter Gowan notes, "concentrates overwhelmingly on the Soviet Union's role as a producer of energy, raw materials, and agricultural products, giving very little scope for the republics of the former Soviet Union to play a major role as industrial powers in the world market." Transfer of ownership to employees, he notes, "has commanded strong popular support in both Poland and Czechoslovakia," but is unacceptable to the Western overseers, conflicting with the free market capitalism to which the South must be subjected.
The South, that is. Conforming to traditional practice, the EC has raised barriers to protect its own industry and agriculture, thereby closing off the export market that might enable the East bloc to reconstruct its economies. When Poland removed all import barriers, the EC refused to reciprocate, continuing to discriminate against half of Polish exports. The EC steel lobby called for "restructuring" of the East European industry in a way that would incorporate it within the Western industrial system; the European chemical industry warned that construction of free market economies in the former Soviet empire "must not be at the expense of the long-term viability of Western Europe's own chemical industry." And as noted, none of the state capitalist societies accept the principle of free movement of labor, a sine qua non of free market theory. Eastern Europe, or at least large parts of it, is to return to the Third World service role.21
The situation is reminiscent of Japan in the 1930s, or of the Reagan-Bush Caribbean Basin Initiative, which encourages open export-oriented economies in the region while keeping US protectionist barriers intact, undermining possible benefits of free trade for the targeted societies.22 The patterns are as pervasive as they are understandable.
The US has watched developments in Eastern Europe with some discomfort. Through the 1980s, it sought to impede East-West trade relations and the dissolution of the Soviet empire. In August 1991, George Bush advised Ukraine not to secede just before it proceeded to do so. One reason is that after Reagan's wild party for the rich, the US is not well-placed to join German-led Europe and Japan in taking advantage of the newly opened sectors of the South. Liberal Democrats urge that "foreign aid" be diverted from Central America to the USSR, warning that without the traditional export-promotion devices, the EC and Japan will exploit "the vast trade and investment potential of Eastern Europe" while "We debate how to clear up two foreign policy debacles" (Senator Patrick Leahy); no serious person would be so rude as to suggest that we might at least help wash away some of the rivers of blood we have spilled. In 1992, President Bush proposed his Freedom Support Act to remedy the problem. A "stream of high-ranking US officials and big-business leaders" lobbied for the measure, Amy Kaslow reports. Ambassador Robert Strauss urged rapid action "lest US firms lose out to competitors...in the huge consumer market of the former Soviet Union." The Act will provide "new opportunities" for US "farmers [agribusiness] and manufacturers," and "help pave the way for US corporations to explore vast new markets." There is no confusion about just whose "Freedom" is being "Supported."23
It would only be fair to add that the IMF-World Bank recipe now being imposed upon the former Soviet empire has its successes. Bolivia is a highly-touted triumph, its economy rescued from disaster by the 1985 New Economic Policy prescribed by the expert advisers now plying their craft in Eastern Europe. Public employment was sharply cut, the national mining company was sold off leading to massive unemployment of miners, real wages dropped, rural teachers quit in droves, regressive taxes were introduced, the economy shrank along with productive investment, while inequality increased. In the capital, Melvin Burke writes, "street vendors and beggars contrast with the fancy boutiques, posh hotels and Mercedes-Benzes." Real per capita GNP is three-fourths what it was in 1980, and foreign debt absorbs 30 percent of export earnings. As a reward for this economic miracle, the IMF, Interamerican Development Bank, and the G-7 Paris Club offered Bolivia extensive financial assistance, including secret payments to government ministers.
The miracle that is so admired is that prices stabilized and exports are booming. About two-thirds of export earnings are now derived from coca production and trade, Burke estimates. The drug money explains the stabilization of currency and price levels, he concludes. About 80 percent of the $3 billion in annual drug profits is spent and banked abroad, mainly in the US, providing a lift to the US economy as well. This profitable export business "obviously serves the interests of the new illegitimate bourgeoisie and the `narco-generals' of Bolivia," Burke continues, and "also apparently serves the United States national interest, inasmuch as money laundering has not only been tolerated by the United States but has, in fact, been encouraged." It is "the poor peasant coca growers" who "struggle to survive against the combined armed might of the United States and the Bolivian military," Burke writes. There are always plenty more to ensure that the economic miracle will continue, eliciting much praise.
Confirming these figures, Waltrad Morales estimates that about 20 percent of the labor force depends for a livelihood on coca/cocaine production and trade, which amounts to about half of Bolivia's GDP. The export miracle has disrupted land prices and agricultural development, "and as a consequence Bolivians can no longer feed themselves." Malnutrition for children under 5 is over 50 percent higher than the (awful) regional average. A third of the country's food must be imported. "This `national food crisis' -- further aggravated by the neoliberal economic model -- has contributed to the marginalisation of the peasantry, which has forced many of them to grow coca leaf in order to survive," in a downward cycle.24
On to Poland.
Achievements have also been recorded elsewhere, thanks to timely US intervention and expert management. Take Grenada. After its liberation in 1983 -- following several years of US economic warfare and intimidation that have been effectively barred from history -- it became the largest per capita recipient of US aid (after Israel, a special case). The Reagan Administration proceeded to make it a "showcase for capitalism," the conventional formula as a country is rescued from its population and set on the right course by its benefactors; Guatemala in 1954 is another announced "showcase" that should be famous (see
chapter 7.7). The reform programs, which brought the usual social and economic disaster, are condemned even by the private sector they were designed to benefit. Furthermore, "the invasion has had the long-term effect of neutering the island's political life," Carter Special Assistant Peter Bourne reports from Grenada where he is teaching at the Medical School whose students were "rescued": "No creative vision aimed at plans for solving Grenada's social and economic ills has emerged from the lackluster and pliantly pro-American leaders" as the island suffers from record levels of alcoholism and drug abuse, and "crippling social malaise," while much of the population can only "flee their beautiful country."
There is, however, one bright spot, Ron Suskind reports in a front-page Wall Street Journal article headlined "Made Safe by Marines, Grenada Now is Haven for Offshore Banks." The economy may be "in terrible economic shape," as the head of a local investment firm and member of Parliament observes -- thanks to USAID-run structural adjustment programs, the Journal fails to add. But the capital "has become the Casablanca of the Caribbean, a fast-growing haven for money laundering, tax evasion and assorted financial fraud," with 118 offshore banks, one for every 64 residents. Lawyers, accountants, and some businessmen are doing well; as, doubtless, are the foreign bankers, money launderers, and drug lords, safe from the clutches of the carefully crafted "drug war."25
The US liberation of Panama recorded a similar triumph. The poverty level has increased from 40 percent to 54 percent since the 1989 invasion. Guillermo Endara, sworn in as President at a US military base on the day of the invasion, would receive 2.4 percent of the vote if an election were held, according to 1992 polls. His government designated the second anniversary of the US invasion a "national day of reflection." Thousands of Panamanians "marked the day with a `black march' through the streets of this capital to denounce the US invasion and the Endara economic policies," the French press agency reported. Marchers claimed that US troops had killed 3000 people and buried many corpses in mass graves or thrown them into the sea. The economy has not recovered from the battering it received from the US embargo and the invasion. A leader of the Civic Crusade, which led the middle-class opposition to Noriega, told Chicago Tribune reporter Nathaniel Sheppard that "Economic sanctions imposed by the U.S. against our will in 1987 to oust Noriega did nothing to hurt him but ruined our economy. Now we believe the sanctions may have been part of a plan to destroy our economy in such a way that we would not have strong ground to demand dignity and better treatment from the US." George Bush's June 1992 visit, which ended quickly in a well-publicized fiasco, "focused attention on long-simmering animosity toward Bush" for the invasion, Sheppard reported; the "rifle-toting American troops" in residential neighborhoods are a particular irritant, and the mood was not improved when security forces accompanied by "about eight American personnel" invaded the home of a National Assembly member, rifling through papers, taking passports, firing shots, and intimidating his wife, who was home alone, he alleged.
A post-invasion report on Panama presented to the UN Committee of Economic, Social and Cultural Rights by Mexican Ambassador Javier Wimer reports that the economy has collapsed, with "catastrophic effects in the areas of food, housing, and basic services such as health, education, and culture." Human rights violations are on the rise as a result of the invasion and subsequent efforts to "liquidate the vestiges of the former nationalism," with labor rights under particular attack along with any institutions that might be "nuclei of civic protest and political opposition." The governments of Panama and the US are jointly responsible for "serious and systematic" human rights violations, his report concluded. According to the respected Central America Report (Guatemala, CAR ), the US drug war may be providing a cover for attacks on community activists by the security forces and other human rights abuses.
But some indicators are up. The General Accounting Office of Congress reported that drug trafficking "may have doubled" since the invasion while money laundering has "flourished," as was predicted at once by everyone who paid attention to the tiny European elite whom the US restored to their traditional rule. A study financed by USAID reported that narcotics use in Panama is the heaviest in Latin America, up by 400 percent since the invasion. The executive-secretary of the Center of Latin American Studies, which participated in the study, says that US troops "constitute a very lucrative market for drugs," contributing to the crisis. The increase is "unprecedented, ... especially among the poor and the young," the Christian Science Monitor reports.26
Another triumph of free market democracy was recorded in Nicaragua, where the Chamorro government and US Ambassador Harry Shlaudeman signed accords opening the way for the US Drug Enforcement Agency (DEA) to operate there "in an attempt to control the growing drug trafficking problem," CAR reports. The DEA agent in Costa Rica declared that Nicaragua is now "being used as a corridor for transferring Colombian cocaine to the United States," and a Department of Justice prosecutor added that the Nicaraguan financial system is laundering drug money. There is also a growing drug epidemic within Nicaragua, fueled by the high level of drug use by recent returnees from Miami as well as the continued economic decline and the new avenues for drug trafficking since the US regained control. "Since the installation of the Chamorro government and the massive return of Nicaraguans from Miami," CAR reports, "drug consumption has increased substantially in a country long free from drug usage." Miskito leader Steadman Fagoth accused two members of the Chamorro cabinet, his former contra associate Brooklyn Rivera and the minister of fishing for the Atlantic Coast, of working for the Colombian cartels. The Nicaraguan delegate to the Ninth International Conference on the Control of Drug Trafficking in April 1991 alleged that Nicaragua "has now become a leading link in cocaine shipments to the US and Europe." In Managua, the number of street children is rapidly increasing, as is drug addiction, which had been virtually eliminated by 1984. Ten-year-old children sniff glue on the street, saying that "it takes away hunger."
In fairness, we should mention a sign of economic progress now that the US has regained control: marketing of shoe cement to fill the children's bottles, imported through a multinational supplier, has become a lucrative business.27
A conference attended by government officials and NGOs in Managua in August 1991 concluded that the country now has 250,000 addicts and is becoming an international bridge for drug transport, (in comparison 400,000 addicts are reported in Costa Rica, 450,000 in Guatemala, 500,000 in El Salvador). Addiction is increasing particularly among young people. A conference organizer commented that "In 1986 there wasn't one reported case of hard drugs consumption" while "in 1990, there were at least 12,000 cases." 118 drug dealing operations were identified in Managua alone, though it is the Atlantic Coast that has become the international transit point for hard drugs, leading to increased addiction. US journalist Nancy Nusser reports from Managua that cocaine has become "readily available only since president Violeta Chamorro took office in April 1990," according to dealers. "There wasn't any coke during the Sandinistas' time, just marijuana," one dealer said. Minister of Government Carlos Hurtado said that "the phenomenon of cocaine trafficking existed before, but at a low level." Now it is burgeoning, primarily through the Atlantic Coast according to "a ranking Western diplomat with knowledge of drug trafficking" (probably from the US Embassy), who describes the Coast now as "a no man's land." In the Miami Herald, Tim Johnson reports that El Salvador too "is finding itself afflicted by a new scourge: drug trafficking." It is now outranked only by Panama and Guatemala as a corridor for cocaine shipments to the US.28
Drugs are becoming "the newest growth industry in Central America," CAR reports, as a result of the "severe economic conditions in which 85 percent of the Central American population live in poverty" and the lack of jobs, conditions exacerbated by the neoliberal onslaught. But the problem has not reached the level of Colombia, where security forces armed and trained by the US are continuing their rampage of terror, torture, and disappearances, targeting political opposition figures, community activists, trade union leaders, human rights workers, and the peasant communities generally while US aid "is furthering the corruption of the Colombian security forces and strengthening the alliance of blood between right-wing politicians, military officers and ruthless narcotics traffickers," according to human rights activist Jorge Gómez Lizarazo, a former judge. The situation in Peru is still worse.29
These are only symptoms of much deeper malaise, to which we return in
There is little reason to expect that "the great work of subjugation and conquest" will change in any fundamental way with the passing of the Cold War phase of the North-South conflict. But as always, stable policies must be adapted to changing contingencies, as they were when a New World Order was established in 1945, and again when Richard Nixon announced his "New Economic Policy" in 1971, in both cases, reflecting real changes in the distribution of power. The Soviet decline that accelerated from the late 1970s yields a situation that is also new in a number of respects, though major tendencies persist, including the internationalization of production and finance, the disorders of the affluent alliance, the relative weakening of the still-dominant US economy, and the marginalization of much of the domestic public of the world-dominant societies.
One consequence of the Soviet collapse is the project of imposing the neoliberal mode of subordination on large parts of the region. A second is that new pretexts are needed for intervention. Despite much bombast, the problem of the vanishing pretext was recognized through the 1980s. The population was therefore regaled with international terrorists, Hispanic narcotraffickers, Islamic fundamentalists, crazed Arabs, and other useful constructions, as attempts were made to adapt the standard formula for diverting and subduing the public: fear of some Great Satan, followed by awe as our Grand Leaders heroically overcome him and march on to new triumphs. Regular confrontations were manufactured with the convenient Libyan punching bag; Grenada was about to cut off sea lines and bomb us from a Cuban-built airbase; Sandinistas were spreading their "revolution without borders" and advancing on Texas; Noriega (after he was fired) was leading the Colombian cartel to poison our children; Saddam Hussein stepped out of line and became the Beast of Baghdad, etc. But in general, as the variety of targets illustrates, the formula is not available as routinely as before. President Bush has been criticized for his failure to formulate grand designs in the manner of his predecessors, but that is unfair, given the disappearance of the "monolithic and ruthless conspiracy" to which JFK could appeal, and its variants. The standard formula may lose its effectiveness for other reasons too, as conditions of life decline for the superfluous population.
Other consequences were pointed out forthrightly by rational analysts. In a 1988 end-of-year analysis of the Cold War in the New York Times, Dimitri Simes wrote that the impending disappearance of the Soviet enemy offers the US three advantages: first, we can shift NATO costs to European competitors; second, we can end "the manipulation of America by third world nations," "resist unwarranted third world demands for assistance," and strike a harder bargain with "defiant third world debtors"; and third, military power can be used more freely "as a United States foreign policy instrument...against those who contemplate challenging important American interests," with no fear of "triggering counterintervention," the deterrent having been removed. In brief, the US can regain some power within the rich men's club, tighten the screws on the Third World, and resort more freely to violence against defenseless victims. The senior associate of the Carnegie Endowment for International Peace was right on target.30
The fall of the Berlin wall in November 1989 can be taken as the symbolic end of the Cold War. After that, it took real dedication to conjure up the Soviet threat, though habits die slowly. Thus, in early 1990, much excitement was generated by a document published anonymously by University of California Sovietologist Martin Malia, railing about how Brezhnev had "intervened at will throughout the Third World" and "Russia bestrode the world" while "the liberal-to-radical mainstream of Anglo-American Sovietology" regarded Stalinism as having "a democratic cast," indulging in "blatant fantasies...about democratic Stalinism" and "puerile fetishization of Lenin," along with a host of similar insights apparently picked up in some Paris café. But in the 1990s, only the most disciplined minds can handle this kind of fare with appropriate gravity.31
Much can be learned about the Cold War era by observing what happened after the Berlin wall fell. The case of Cuba is instructive. For 170 years, the US has sought to prevent Cuban independence. From 1959, the pretext for invasion, terror, and economic warfare was the security threat posed by this outpost of the Kremlin. With the threat gone, the reaction was uniform: we must step up the attack. The banner is now democracy and human rights, upheld by political leaders and moralists who have demonstrated their commitment to these values with such integrity over the years, for example, during the murderous US crusade against the Church and others who dared organize the undeserving public in Central America through the 1980s. It would not be easy to invent a clearer demonstration of the fraudulence of the Cold War pretext; being doctrinally unacceptable, the conclusions remain invisible (see
US opposition to Haitian independence for two centuries also continued, quite independently of the Cold War. Events of the 1980s, notably after the fall of the Berlin wall, also illustrate with much clarity traditional US distaste for democracy and indifference to human rights. We return to details (chapter 8).
Another instructive example is Saddam Hussein, a favored friend and trading partner of the West right through his worst atrocities. As the Berlin wall was tottering in October 1989, the White House intervened directly, in a highly secret meeting, to ensure that Iraq would receive another $1 billion in loan guarantees, overcoming Treasury and Commerce department objections that Iraq was not creditworthy. The reason, the State Department explained, was that Iraq was "very important to US interests in the Middle East"; it was "influential in the peace process" and was "a key to maintaining stability in the region, offering great trade opportunities for US companies." As is the norm, Saddam Hussein's crimes were of no account until he committed the crime of disobedience. And the West soon returned to tacit support for him against an even greater enemy, freedom and democracy in the Third World, as already discussed.32
Again the lesson is clear: the priorities are profits and power; democracy in more than form is a threat to be overcome; human rights are of instrumental value for propaganda purposes, nothing more.
As Simes had observed, one consequence of the Soviet collapse is that overt intervention became a more feasible option. It comes as small surprise, then, that Bush should inaugurate the post-Cold War era by invading Panama to save us from the arch-demon Noriega, after a carefully designed propaganda campaign to which the press lent its considerable talents, even suppressing the fact that the invasion was accompanied by the announcement of new aid for Bush's friends in Beijing and Baghdad, who made Noriega look like a choir boy in comparison. Real interests again were served: US business partners were placed back in power, the security forces were returned to US control, and the Washington was able to direct the fate of the Panama Canal. The meaning of the Cold War is once again dramatically illustrated, though the doctrinal system remains immune.33
The second act of post-Cold War aggression was Iraq's invasion of Kuwait on August 2, 1990, shifting Saddam Hussein overnight from moderate-who-is-improving to reincarnation of Attila the Hun. The US-UK alliance moved quickly to bar the diplomatic track for fear that peaceful means might "defuse the crisis" with "a few token gains" for their former friend, as the Administration position was outlined by Times diplomatic correspondent Thomas Friedman in late August. Had these fears been realized, the invasion would have resembled the US invasion of Panama, an unacceptable outcome of course. The Times and its colleagues dutifully suppressed the opportunities for a negotiated Iraqi withdrawal that opened from mid-August, according to high-ranking US officials. On the eve of the January 15, 1991 bombing, the US population, by about 2 to 1, favored a diplomatic settlement along the lines of an Iraqi proposal that had been released by US officials, but were unaware of the existence of this proposal, and the instant US rejection of it, thanks to media discipline. The rascal multitude, once again, was kept in its proper place. At no time was the Administration called upon to present an argument for war rather than diplomacy -- at least one that could not be refuted instantly by a literate teenager. The doctrinal institutions succeeded brilliantly in excluding every fundamental question that would have arisen in a functioning democracy.
The war policy was also strongly opposed by the population in the region. The Iraqi democratic opposition, always rebuffed by Washington (hence the press), opposed US policy throughout: the pre-August 1990 support for the Iraqi dictator, the refusal to explore peaceful means, and finally the tacit support for Saddam Hussein as he crushed the Shi'ite and Kurdish rebellions. One leading spokesman, banker Ahmad Chalabi, who described the outcome of the war as "the worst of all possible worlds" for the Iraqi people, attributed the US stand to its traditional policy of "supporting dictatorships to maintain stability." In Egypt, the one Arab ally with a degree of internal freedom, the semi-official press wrote that the outcome demonstrated that the United States only wanted to cut Iraq down to size and thus to establish its own unchallenged hegemony, in "collusion with Saddam himself" if necessary, agreeing with the "savage beast" on the need to "block any progress and abort all hopes, however dim, for freedom or equality and for progress towards democracy" (April 9). The media suppressed the basic facts throughout with their usual discipline. Thus, immediately after Egypt denounced the US for colluding with Saddam, Times correspondent Alan Cowell informed the public of the "strikingly unanimous view" among the Arab allies in support of the US position that "whatever the sins of the Iraqi leader, he offered the West and the region a better hope for his country's stability than did those who have suffered his repression" (April 11). The Times does deserve credit, however, for Friedman's lucid explanation of why we must seek some clone of Saddam Hussein to rule with an "iron fist" rather than face the threat of freedom for the people of Iraq ("instability").
The United Nations suffered further blows. The invasion of Kuwait was unusual in that the US and UK opposed an act of international violence, and thus did not pursue their usual resort to the veto or other means to block UN efforts to reverse the crime. But under US pressure, the Security Council was compelled to wash its hands of the matter, radically violating the UN Charter by leaving individual states free to act as they chose. Further US pressures prevented the Council from responding to the call of member states for meetings, as stipulated by council rules that the United States had vigorously upheld when they served its interests. That Washington has little use for diplomatic means or institutions of world order, unless they can be used as instruments of its own power, has been dramatically illustrated in Southeast Asia, the Middle East, Central America, and elsewhere. Nothing is likely to change in this regard, including the efficiency with which the facts are concealed.34
In the case of Iraq, the disappearance of the Soviet deterrent was a crucial factor in the US-UK decision for war, as widely discussed. It might have been a factor in the invasion of Panama, as claimed by Reagan Latin America hand Elliott Abrams, who exulted that the US was now free to use force without fear of a Russian reaction.
Hostility to functioning democracy in Central America continued without any change. As the Berlin Wall fell, elections were held in Honduras in "an inspiring example of the democratic promise that today is spreading throughout the Americas," in George Bush's words. The candidates represented large landowners and wealthy industrialists, with close ties to the military, the effective rulers, under US control. Their political programs were virtually identical, and the campaign was largely restricted to insults and entertainment. Human rights abuses by the security forces escalated before the election. Starvation and misery were rampant, having increased during the "decade of democracy," along with capital flight and the debt burden. But there was no major threat to order, or to investors.
At the same time, the electoral campaign opened in Nicaragua. Its 1984 elections do not exist in US commentary. They could not be controlled, and therefore are not an inspiring example of democracy. Taking no chances with the long-scheduled 1990 elections, Bush announced as the campaign opened in November that the embargo would be lifted if his candidate won. The White House and Congress renewed their support for the contra forces in defiance of the Central American presidents, the World Court, and the United Nations, rendered irrelevant by the US veto. The media went along, continuing to suppress the US subversion of the peace process with the diligence required on important affairs of state. Nicaraguans were thus informed that only a vote for the US candidate would end the terror and illegal economic warfare. In Latin America, the electoral results were generally interpreted as a victory for George Bush, even by those who celebrated the outcome. In the United States, in contrast, the outcome was hailed as a "Victory for U.S. Fair Play," with "Americans United in Joy," Albanian-style, as New York Times headlines put it.
It is not that the celebrants were unaware of how the US victory was achieved. Rather, there was unconcealed joy at the grand success in subverting democracy. Time magazine, for example, was quite frank about the means employed to bring about the latest of the "happy series of democratic surprises" as "democracy burst forth" in Nicaragua. The method was to "wreck the economy and prosecute a long and deadly proxy war until the exhausted natives overthrow the unwanted government themselves," with a cost to us that is "minimal," leaving the victim "with wrecked bridges, sabotaged power stations, and ruined farms," and thus providing the U.S. candidate with "a winning issue": ending the "impoverishment of the people of Nicaragua." To appreciate the character of the political culture, it is only necessary to imagine the same story appearing in Stalinist Russia with a few names changed, an intellectual exercise far beyond the capacity of Western commissars.35
The frankness is refreshing, and reveals with exactitude just what is meant by the "Americans United in Joy" who proclaim their dedication to "democracy."
Washington has employed similar methods to bring "democracy" to Angola; here too the country has been devastated, with a death toll reaching hundreds of thousands. From 1975, Angola was under attack by South Africa and the terrorist forces of Jonas Savimbi's UNITA, operating from Namibia and then Zaire with US support. Virtually alone, the US refused to recognize the MPLA government and subjected it to economic warfare. South Africa finally withdrew after a military defeat by the Cuban forces that had resisted its aggression since 1975, and a peace agreement was signed (May 1991) calling for elections. As in Central America, the US moved at once to subvert it, continuing its support for UNITA terror. The results are described by South African journalist Phillip van Niekerk: peasants "don't like UNITA," "But most of the people are afraid that if UNITA loses the elections, the war will go on" (quoting a Dutch development worker in the countryside).
People who are "aware of the atrocities committed by UNITA" may be "appalled" at the prospects, van Niekerk continues, but continuation of the war is more than the population can bear. The ruling MPLA "sacrificed a generation to repel the years of South African aggression and US-funded destabilization by Unita," Victoria Brittain writes. It lost any early credibility; what it might have done without the US-South African attack is anyone's guess. A "new wave of white settlers" is "re-colonizing" Angola, van Niekerk reports, now Afrikaners, later perhaps Portuguese returning to reclaim their lands. "The only optimism," Brittain concludes, "comes from the South African businessmen who occupy the lobbies of the newly refurbished hotels" in Luanda, where cynics say that "If Unita wins they'll have the country handed to them on a plate, if the MPLA wins they'll still have the country, for a handful of rands."36
It is, again, only natural that at the dissident extreme, Anthony Lewis should laud the "consistent American policy" from the 1970s "to help negotiate an end to the brutal civil war" in Angola, and the successful pursuit by the Bush Administration of "a peaceful policy" aiming at "a political solution in Nicaragua."37
The traditional attitude toward democracy was reiterated by a Latin America Strategy Development Workshop at the Pentagon in September 1990. It concluded that current relations with the Mexican dictatorship are "extraordinarily positive," untroubled by stolen elections, death squads, endemic torture, scandalous treatment of workers and peasants, and so forth. But "a `democracy opening' in Mexico could test the special relationship by bringing into office a government more interested in challenging the U.S. on economic and nationalist grounds," the fundamental concern over many years.38
Each year, the White House sends to Congress a report explaining that the military threat we face requires vast expenditures -- which, accidentally, sustain high-tech industry at home and repression abroad. The first post-Cold War edition was in March 1990. The Russians having disappeared from the scene, the report at last recognized frankly that the enemy is the Third World. US military power must target the Third World, it concluded, primarily the Middle East, where the "threats to our interests...could not be laid at the Kremlin's door," a fact that can now be acknowledged, the Soviet pretext having disappeared. For the same reason, the threat now becomes "the growing technological sophistication of Third World conflicts." The US must therefore strengthen its "defense industrial base," with incentives "to invest in new facilities and equipment as well as in research and development," and develop further forward basing and counterinsurgency and low-intensity conflict capacities.39
In brief, the prime concerns continue to be power within the rich men's club, control of the service areas, and state-organized public subsidy for advanced industry at home. Democracy must be opposed with vigor, except in the PC sense of unhampered business rule. Human rights retain their usual irrelevance. Policies remain stable, adapted to new contingencies, with parallel adjustments by the cultural managers. The points are so glaringly obvious, and made with such manic consistency, that it takes real talent to miss them.
With the end of the Cold War, the US is more free to use force to control the South, but several factors are likely to inhibit the resort to these traditional methods. Among them are the successes of the past years in crushing popular nationalist and reform tendencies, the elimination of the "Communist" appeal to those who hope to "plunder the rich," and the economic catastrophes of the last decade. In light of these achievements, limited forms of diversity and independence can be tolerated with less concern that they will lead to a challenge to ruling business interests. Control can be exercised by economic measures: the IMF regimen, selective resort to free trade measures, and so forth. Democratic forms are tolerable, even preferable, as long as "stability" is ensured. If this dominant value is threatened, the iron fist must strike.
Another inhibiting factor is that the domestic base for foreign adventures has eroded. An early Bush Administration National Security Policy Review concluded that "much weaker enemies" (meaning any acceptable target) must be defeated "decisively and rapidly," because domestic "political support" is so thin.40 Another problem is that other centers of economic power have their own interests, though the Defense Planning study cited earlier is correct in noting that basic interests are shared, notably, the concern that the Third World fulfill its service function. And the increasing internationalization of the economy gives a somewhat new cast to interstate competition, as already discussed. These are factors of growing importance.
The use of force to control the Third World is a last resort. Economic weapons are more efficient, when feasible. Some of the newer mechanisms can be seen in the GATT negotiations. Western powers call for liberalization when that is in their interest, and for enhanced protection when that is in their interest. One major US concern is the "new themes": guarantees for "intellectual property rights," such as patents and software, that will enable TNCs to monopolize new technology; and removal of constraints on services and investment, which will undermine national development programs in the Third World and effectively place economic and social policy decisions in the hands of TNCs and the financial institutions of the North. These are "issues of greater magnitude" than the more publicized conflict over agricultural subsidies, according to William Brock, head of the Multilateral Trade Negotiations Coalition of major US corporations.41
In general, each of the wealthy industrial powers advocates a mixture of liberalization and protection (the Multifiber Arrangement and its extensions, the US-Japan semiconductor agreement, Voluntary Export Arrangements, etc.), designed for the interests of dominant domestic forces, and particularly for the TNCs that are to run the world economy. The effects would be to restrict Third World governments to a police function to control their working classes and superfluous population, while TNCs gain free access to their resources and monopolize new technology and global investment and production -- and of course are granted the central planning, allocation, production, and distribution functions denied to governments, unacceptable agents because they might fall under the influence of popular pressures reflecting domestic needs. The outcome may be called "free trade" for doctrinal reasons, but it might more accurately be described as "a system of world economic governance with parameters defined by the unregulated market and rules administered by supranational banks and corporations" (Howard Wachtel), a system of "corporate mercantilism" (Peter Phillips), with managed commercial interactions within and among huge corporate groupings, and regular state intervention in the three major Northern blocs to subsidize and protect domestically-based international corporations and financial institutions.42
The facts have not been lost on Third World commentators, who have been protesting eloquently. But their voices are as welcome as those of Iraqi democrats.
Meanwhile, the US is establishing a regional bloc that will enable it to compete more effectively with the Japan-led region and the EC. Canada's role is to provide resources and some services and skilled labor, as it is absorbed more fully into the US economy with reduction of the welfare system, labor rights, and cultural independence. The Canadian Labour Congress reported the loss of over 225,000 jobs in the first two years of the Free Trade Agreement, along with a wave of takeovers of Canadian-based companies (see
chapter 2.5). Mexico, Central America, and the Caribbean are to supply cheap labor for assembly plants, as in the maquiladora industries of northern Mexico, where harsh working conditions, low wages, and the absence of environmental controls offer highly profitable conditions for investors. Internal repression and structural adjustment will ensure ample cheap and docile labor. These regions are also to provide export crops and markets for US agribusiness. Mexico and Venezuela are also to provide oil, with US corporations granted the right to take part in production, reversing efforts at domestic control of natural resources. The press failed to give Bush sufficient credit for his achievements in his Fall 1990 tour of Latin America. Mexico was induced to allow US oil companies new access to its resources, a policy goal of a half-century. US companies will now be able "to help Mexico's nationalized oil company," as the Wall Street Journal prefers to construe the matter. Our fondest wish for many years has been to help our little brown brothers, and at last the ignorant peons will allow us to cater to their needs.43
Such policies are to be extended to appropriate sectors of South America. And, crucially, the United States will attempt to maintain its dominant influence over Gulf oil production and the profits that derive from it. Other economic powers, of course, have their own ideas, and potential sources of conflict abound.
There are many familiar reasons why wealth and power tend to reproduce. It should, then, come as little surprise that the Third World continues to fall behind the North. UN statistics indicate that as a percent of developed countries, Africa's GDP per capita (minus South Africa) declined by about 50 percent from 1960 to 1987. The decline was almost as great in Latin America.44
For similar reasons, within the rich societies themselves, large sectors of the population are becoming superfluous by the reigning values and must be marginalized or suppressed, increasingly so in the past 20-year period of economic stagnation and pressures on corporate profit. As noted earlier, societies of the North -- notably the United States -- are taking on certain Third World aspects. The distribution of privilege and despair in a society with the enormous advantages of ours is not, of course, what one finds in Brazil or Mexico. But the tendencies are not hard to see.
In general, prospects for the overwhelming majority at home and abroad are not auspicious, in the "new imperial age."
1 Brenner, in Aston and Philpin, Brenner Debate, 277ff., 40ff. Stavrianos, Global Rift, chs. 3, 16; Feffer, Shock Waves, 22; Shanin, Russia (quoting historian D. Mirsky). Zeman, Communist Europe, 15-16 (citing T. Masaryk), 57-8. Gerschenkron, Economic Backwardness.
2 Leffler, Preponderance, 359. Gaddis, Long Peace, 10.
3 Gerschenkron, Economic Backwardness, 146, 150. Du Boff, Accumulation, 176, citing Kuznets.
4 See FRS, 51-2, for details on Indochina. Wood, 177, on Guatemala; US and Fascism-Nazism, Mexico, DD, chs. 1.3-4, 11. Sklar, Washington's War, and a substantial further literature on Nicaragua.
5 DD, ch. 11. FDR, Zeman, Communist Europe, 172n.; Kimball, Juggler, 34. Truman, Garthoff, Détente, 6, citing NYT, June 24, 1941.
6 Leffler, Preponderance, 78; Indochina, see RC.
7 NI, 185f., on the Red Scare; 272f. on Libya, and P&E, ch. 3.
8 Leffler, Preponderance, 58-9, 15.
9 Leffler gives a detailed and largely sympathetic account of the actual fears and their basis. On the UN, see references of n. 10, ch. 2.
10 DD, 103.
11 Leffler, Preponderance, 284-5.
12 DD, ch. 1. Khrushchev's moves were revealed by Raymond Garthoff, International Security, Spring 1990, as an "interesting precedent" to Gorbachev's; see p. 365, below. Kennedy, Strategy of Peace, 5; cited by Leacock, Requiem, 7.
13 Defense Monitor, Jan. 1980. Zeman, Communist Europe, 267-8.
14 See Charles S. Maier, Why Did Communism Collapse in 1989?, Program on Central and Eastern Europe, Working Paper Series #7, Jan. 1991.
15 World Bank statement published in Trócaire Development Review, op. cit. (ch. 2, n. 46).
16 Quotes from TNCW, 3, 204. On NSC 68, see DD, ch. 1.1. Meyer, cited by Pisani, CIA, from his Peace or Anarchy.
17 Holzman, Challenge, May/June 1992. Garthoff, Détente, 793-800. In an addendum of June 11, 1992, Holzman notes that a Review Committee of 5 distinguished economists set up by the House Permanent Select Committee on Intelligence found the same technical problems and was unable to get satisfactory explanations in face-to-face meetings with the responsible CIA analysts, who were described as lacking in "candor."
18 Leiken, Foreign Policy, Spring 1981; cited by Schoultz, National Security, a useful review of the delusional systems of planners, whether real or contrived, one can only speculate. See DD, ch. 3.6, for further discussion. Thompson, Diplomatic History, Winter 1992.
19 Carnegie, cited in Krause, Homestead, 235. 1987 poll cited by Lobel, Less than Perfect, 3. See APNM, ch. 1; "Intellectuals and the State," reprinted in TNCW.
20 Feffer, Shock Waves, 22, 112, 129. Brumberg, NYRB, Jan. 30; FT, Feb. 3; Robinson, FT, April 28, 1992. Haynes, European Business and Economic Development, Sept. 1992. Economic indicators; FT, Sept. 28, 1992. Engelberg, NYT, Feb. 9; WSJ, Feb. 4; Glaser, NYT, April 19; Bohlen, NYT, Aug. 30, 1992. Continental Illinois, see p. 63. Children, see DD, ch. 7; ch. 9.5, below. Polanyi, Great Transformation. Miller, Founding Finaglers. On the Costa Rican exception and US attitudes towards it from the 1940s, see NI, 111f., App. V.1; DD, 221f., 273ff.
21Gowan, World Policy Journal, Winter 1991-92.
22 See Deere, In the Shadows, 213; McAfee, Storm Signals.
23 See DD, chs. 1.6, 3.3. Kaslow, CSM, Aug. 12, 1992.
24 Burke, Current History, Feb. 1991; Morales, Third World Quarterly, vol. 13.2, 1992. See also Peter Andreas et al., "Dead-End Drug Wars," Foreign Policy, Winter 1991-92.
25 McAfee, Storm Signals, ch. 7. Bourne, Orlando Sentinel, April 12, 1992. Suskind, WSJ, Oct. 29, 1991. DD, 162. On the suppressed history, see NI, 177f.
26 CAR, Sept. 27, 1991; June 5, 1992. Latinamerica press (Lima), June 4, 1992. AFP, Chicago Sun-Times, Dec. 22, 1991. Sheppard, CT, June 18, May 22, Sept. 1, 1992. Proceso (Mexico), Dec. 2, 1992 (LANU.) Kenneth Sharpe, CT, Dec. 19, 1991. Andreas, op. cit. Joachim Bamrud, CSM, Jan. 24, 1991.
27 CAR, Sept.20, Nov. 29, May 3, 1991. Links (National Central America Health Rights Network), Summer 1992.
28Felipe Jaime, IPS, Subtext (Seattle), Sept. 3-16; Nusser, NYT news service, Sept. 26; Johnson, MH, Dec. 3, 1991.
29 CAR, Oct. 11, 1991. Gómez, NYT, Jan. 28, 1992. See Americas Watch, `Drug War'; WOLA, Clear and Present Dangers.
30 Simes, NYT, Dec. 27, 1988. For further detail, see DD, 97f.
31 See Daedalus, Winter 1990; NYT, Jan. 4, Aug. 31, 1990. DD, 61, for more.
32 Lionel Barber and Alan Friedman, FT (London), May 3, 1991. Serious mainstream coverage of the topic in the US began with the Los Angeles Times, Feb. 23, 25, 26, 1992. On information available before the invasion of Kuwait, often ignored in the mainstream, see DD, 152, 194f.
33 DD, chs. 4-5.
34 DD, ch. 6 and "Afterword." For fuller detail, my article in Peters, Collateral Damage. "Iron fist," p. 38, above.
35 DD, 141f., ch. 10. See COT, NI, DD, for an ongoing record of subversion of the peace process and media complicity. See Robinson, Faustian Bargain, on US subversion of the election itself.
36 Van Niekerk, G&M, Jan. 25, 29, 1992. Britain, Guardian (London), March 30; Guardian Weekly, April 5, 1992. See George Wright, Z magazine, May/June, 1992, for background.
37 Lewis, NYT, Aug. 24, 1992.
38 Latin America Strategy Development Workshop, Sept. 26 & 27, 1990, minutes, 3.
39 DD, 29-30, for further detail.
Maureen Dowd, NYT, Feb. 23,
1991; see DD,
Khor, Uruguay Round, 10. See also Raghavan, Recolonization.
42Wachtel, Money Mandarins,
266; Peter Phillips, Challenge, Jan.-Feb. 1992.
Virginia Galt, G&M, Dec. 15, 1990. John Maclean, CT,
May 27, 1991; WSJ, Nov. 28, 1990.
44 Monthly Review,