Peter Gowan has written an ambitious article.footnote1 In it, he aims to show that the Group of Seven major industrial states (g7) and the international financial institutions (ifis) have, with a good deal of success, sought to impose at least an economic imperialism over the post-communist states in Central and Eastern Europe and in the former republics of the Soviet Union. They have done this, he claims, by promoting Shock Therapy (st) as the strategy of economic transformation which these states must adopt as a precondition for qualifying for imf, World Bank and other loans. This action has impoverished these states by ruining their industrial structure—a necessary step if, as is the g7–ifi intent, they are to be rendered into passive markets for Western products. Shock Therapy, he writes, was developed by the Harvard economist Jeffrey Sachs who has functioned as its main ideologist and promoter—assisted in the last of these by writers, including the anonymous correspondents of the Economist, Anne Applebaum and Michael Ignatieff in Foreign Affairs and, in the Financial Times and the London Review of Books, by me—the reason for my reply.
His proposition is extraordinary in two main ways. If true, it is an enormous scandal: for the wealthy states, which have boasted of their commitment to promoting democracy and the free market, have in fact been acting in the most cynical and mendacious fashion, pursuing their exclusive interests at the expense, not just of the economies of the states they profess to assist, but of thousands, perhaps hundreds of thousands, of human lives who, on Gowan’s account, have prematurely perished from the side-effects of Shock Therapy. In other words, the imperialism which he imputes to the g7 is of the classic kind—rapacious murder cloaked in the guise of enlightenment and improvement.
Second, the article marks the emergence of full agreement, by a Marxist economist in the world’s major Anglophone Marxist journal, with the basic tenets of the case made out in the past four years by the Communist Party of the Russian Federation (cprf), Zhirinovsky’s Liberal Democratic Party of Russia, the recently formed Congress of Russian Communities (Lebed) and many other Marxist–Leninist and nationalist groupings in
Yet there are major—and welcome—differences. Gowan’s account is of course devoid of the anti-Semitism and other racism which habitually accompanies the more robust presentations of the Western imperialist thesis. It is rather more coherent and knowledgeable. Some of its contentions are true. However, the greater sophistication of argument is also less direct and straightforward than the Eastern Marxist–nationalist case: where the cprf, Zhirinovsky and others openly and loudly accuse the West of imperialism, Gowan slides the point in below a cloak in the last paragraph. There can be no doubt about what is meant, but the meaning has to be reconstituted, like soup from a bouillon cube.
Further, its overall perspective is one of assuming that those who formed the governments of the post-communist states had wide, even limitless, scope to choose between a range of possibilities, from neo-liberalism to the ‘communism without the party’ which the leaders of Belarus, and some of the Central Asian states, now essay. Almost wholly lacking is any sense of the crises which faced the post-communist governing elites—especially those in the former Soviet states, confronted with the collapse of an empire, a trading system, an industrial and economic structure and a ruling party. This is not to deny that political choices were made and that these were both conscious and decisive. Gowan, however, implicitly denies the overwhelming importance of the pressures of particular crises on the decisions that were made. For example, the fact that many post-communist governments sooner or later raised prices, usually to or near to market-clearing levels, pointed to the common crisis of subsidization—a crisis which had long existed under, and sapped the remaining strength from, the communist regimes, but which they had been unable to radically reform because they rightly feared that their hold on power was too fragile to withstand the demand for a general belt-tightening. Those which did not so raise prices have subsidized basics as a more or less explicit indication that their governing elite will retain the powers and privileges of an authoritarian state, granting cheap minimal upkeep as such a state’s traditional concession to the populace. In Gowan there is no recognition of such a crisis, nor of the trade-offs its resolution demands: in his account, choice is a matter of good and bad alternatives, almost—at times—between good and evil. In fact, ‘Shock Therapy’ was much more than a series of desperate efforts to stem the total collapse of state finances than a cocktail of measures freely chosen from a menu.
Nowhere is this duality between good and evil more apparent than in Gowan’s brief excursion into Russian politics—that is, his use of the conflict between Boris Yeltsin and the Russian Supreme Soviet in 1993 as an example of the legitimate protest by a democratic institution against the effects of Shock Therapy, and its ruthless backing by unbridled presidential power. In this passage, he most clearly chimes with the views of the cprf and the Russian nationalists. It is not false to say that their opposition to economic reform did in part come from below: many of the Supreme Soviet deputies’ constituents—and it was a partly democratic assembly, however much Yeltsin and others might seek to portray it as wholly unrepresentative—were suffering from the huge hike in prices which the January 1992 and subsequent price liberalizations had ushered in. But that was far from the limit of their opposition, or even the most important part of it. Absent from Gowan’s narrative are the following facts:
In April 1993, fifteen months after radical reform began, both Yeltsin and economic reform were backed in a popular referendum.
The alliance of Supreme Soviet speaker Ruslan Khasbulatov and Vice President General Alexander Rutskoi had continually reneged on agreements made with Yeltsin.
The constitution which governed the Russian Federation, a patched-up version of the Soviet-era Russian constitution, in effect prescribed a struggle for power between the different levels of authority in the trackless political desert which was post-communist Russia—since it did not endow any one level with a coherent set of rights and duties.
The Supreme Soviet had not simply been asking Yeltsin to surrender—which Gowan denies they did—its leadership had been actively pursuing his impeachment, and this months after the main architect of Shock Therapy, Yegor Gaidar, had been dismissed by Yeltsin and replaced by Victor Chernomyrdin.
The Supreme Soviet leadership had openly sought to build up an independent armed force which, as the confrontation between it and the President deepened, came under the leadership of self-declared fascists.