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Eastern Europe: from empire to dark age

Latvia

Neos describe the "transition" and "reform" of Latvia to be a success, even though production has fallen about 40% in ten years of "reform".

Their only example is part of the city of Riga, with a few extremely rich people. A UN report estimates Riga exports 15,000 women into the sex trade annually.

Former Soviet Union

When the Soviet Union finally collapsed, citizens expected the freedom and prosperity that had been promised.

Instead, more than 40% of their national income was lost during 1990s - worse than our Great Depression. An IREX report extimates that 500,000 women have entered the Western sex industry.

This is because Russia went from control by communist extremists to capitalist extremists -"macro-economists whose faith in the market was absolute. These economists had no knowledge of history or of the details of the Russian economy nor did they believe that they needed any" according to the former Vice President of the World Bank, Joseph Stiglitz. (He was kicked out of the World Bank for this.)

The neos believed that "shock therapy works for all countries on their way to the market economy; the stronger the dose (and the more painful the reaction), the more quickly the change is effected."

(Boris Yelsin, in his autobiography wrote that "I would use shock therapy on myself, and not just one time." Actually, Yelsins office (complete with ballroom chandeliers) were even more expensive than the old communist party headquarters. Of course, these "shocks" are not needed for the rich and neos themselves, for some reason.)

Joseph Stiglitz continies: "The rapid privatisation imposed on Moscow by the IMF and the US Treasury had allowed a small group of oligarchs to take control of the country's assets." This fraud has been estimated at 130 billion dollars (tax-free) since 1993. Meanwhile the external debt has risen from 60 to 155 billion dollars between 1990 and 1999. "When the government began to run short of money for paying pensions, the oligarchs diverted important national resources to Swiss or Cypriot bank accounts. The United states were implicated in these obnoxious transactions. In mid-1998 Larry Summers replaced Robert Rubin in the post of US Finance Secretary, He appeared by the side of Anatoly Chubais, the chief architect of the Russian privatisations. In acting thus the United States appeared to be allying themselves with the forces responsible for the impoverishment of Russia. The US Treasury and the IMF continued to insist that the problem did not result from too much therapy but from too few shocks. But during the course of the '90s, the Russian economy continued to collapse. Whereas only 2% of the population were living in poverty at the end of the Soviet period, the 'reforms' saw the rate of poverty climb as far as 50%, with more than half of Russian children living beneath the poverty threshold. Today Russia is eaten away by enormous inequalities and the majority of Russians have lost faith in the market economy." Neos who bragged about putting communism in the "dustbin of history" were actually living the Marxist prediction about the "contradictions of capitalism". In short, the neos have done more damage to capitalism in ten years than the communists could do in 80.

Reaction

The effect of neoism on Russia was so devestating that Stalinism and Fascism gained popularity. In October 1993 a coup attempt killed about 150 and nearly plunged Russia straight back into civil war and authoritarianism. The hatred of Yelstin was only countered by the fear of takeover by fascists.

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Czech Republic

September 2000: At the IMF-WB meetings in Prague tens of thousands of protestors impose a reverse sort of "austerity measure": an Opera for the delegates shut down and the meetings end a day early after pink-clad pacifists outflank police and protest within a few feet of delegates.

Poland

Poland is the only one of the 19 "transition economies" in Eastern Europe that has reached its 1989 level of income - after six years of disaster.

What is transition?

Russia and Eastern Europe are economic disasters. Neos say this is because suffering is inevitable when changing from communism to capitalism. (Of course, propaganda like "Voice Of America" never predicted this, or if they did, they chose not to tell anyone.) More likely it is because this transition is run by neos instead of moderates. The real question to ask neos is:

How long will "transition" last?

Or perhaps: will "transition" ever end?

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