PRAGUE — This city was deliberately chosen as the venue for the annual meetings of the International Monetary Fund and World Bank to showcase what IMF managing director Horst Kohler triumphantly called "the new Prague", the jewel of a capitalist Eastern Europe. For the demonstrators outside, however, this city and the whole region provide a stark example of the failure of the market policies of the IMF and World Bank to provide security, equality or prosperity to the majority of people.
91×ÔÅÄÂÛ̳ Weekly's SARAH PEART spoke to BORIS KAGARLITSKY, the renowned Russian socialist analyst and activist, during the INPEG counter-summit here, September 22-24, about the role of Eastern Europe in the global economy and the significance of S26 demonstrations. Below are his abridged comments.
Economic reforms started in the Soviet Union around 15 years ago. The Soviet Union was falling behind the West. The level of consumption was less and there was a widening technological gap. Living standards were getting worse and the economy was very slow. These were the main economic complaints.
There were also complaints about the lack of democracy, which was for me the most basic reason to oppose the system. The capitalist media in the West and the mainstream pro-reform communist media in the East insisted that the economic system had failed. That was why they insisted that not just democracy be introduced, but capitalism too.
The people wanted democracy, but they also wanted more goods and services. But people couldn't go into the streets and demand "I want a new refrigerator", so they demanded more democracy and went along with the economic change.
However, capitalism does not automatically lead to increased consumption. I'm not saying that to defend consumerism, but there are some justifiable consumer demands. It is not good when people don't have the consumer goods they need. There is nothing morally wrong with calling for more consumption especially if it is equally distributed among the population.
But the reality of free trade capitalism in Eastern Europe has not been an even increase in consumption, but a lot of consumption for a few with much less for everyone else. Capitalism is not just about consumption, it is about inequality and in that sense capitalism is anti-consumerist.
So the hidden agenda of the West and the pro-capitalist elements in the East was to bring in capitalism behind a consumerist facade. Russia was the most typical case — the old leaders that taught us about Marxism and Leninism suddenly started teaching us about neo-liberalism.
Do you know what happened to the last generation of Communist Youth League (Komsomol) leaders? They all became bankers.
It was very clear that the same Soviet elite that led the system into crisis was also the strongest driving force for the reintroduction of capitalism. The Soviet case is the key case because if this shift had not happened there, there could not have been similar shifts in the other Eastern European countries.
In the period of the late 1980s, the Soviet leaders were not interested in suppressing the Eastern European movements calling for democracy. They allowed them to go forward because they needed these movements for their own purposes.
This does not mean we were wrong to call for democracy 10 years ago — we were absolutely right to do this. The bad guys used us and that is part of history. Sometimes our victories can turn into defeats.
But look at the system 10 years later. The so-called transformation period has increased the technological gap with the West, the income gap has increased and the consumer paradise never developed in Eastern Europe.
This leaves us with the question: if the failures of the former system were bad enough to wreck the system then, why is the new system not falling apart now?
The answer is that nowadays we are part of a big, brutal, global capitalist system. We are not a separate part of the world competing with the West, as it was in the 1960 and 1970s. The periphery must be poorer than the centre. The centre is rich because the periphery is poor. That's how the system works.
It is very important that the people in Eastern Europe avoid nationalist temptations. The problem is not that we are exploited as the people of Eastern Europe. The problem is that we are exploited as part of the periphery and therefore we have the same fate and role in the world as Latin America, Africa and Asia. We have to call for stronger solidarity with the countries of the South.
When the people in Eastern Europe realise that they are not getting from capitalism what they expected, they can get angry and nostalgic for the "communist" past. But we have to face reality. The transition is over and the societies we live in are a very specific part of the Third World. Unless we break the rules of the capitalist system, there is no way out for the people of the periphery and no way out for the people in the West either.
The traditional socialist project of eliminating private ownership and breaking the control of the market over the economy is still crucial. We need to build a broad front for change and we cannot just agree on what we don't want. We need an agreement on the general direction for change.
After 10 years of defeats and retreat in Eastern Europe and Russia, we are now beginning to start an offensive. I have waited 10 years of my life in Russia and S26 could be a turning point. We need to keep fighting, organising, recruiting and thinking. And we must learn too and this has to happen through action and participation.