A People’s History of the World

by Chris Harman

  No imperial power could avoid being scathed by such an upheaval in its empire. The national movements inside the USSR felt increasingly confident, and the divisions within the ruling group grew ever wider and its control over society ever more precarious. Gorbachev made a last attempt to take a hard line against the opposition currents, only to be thwarted in the spring of 1991 by a second great miners’ strike and a huge demonstration in Moscow. That summer, conservative forces in his government attempted to take a hard line without him. They used troops in Moscow to stage a coup, and held Gorbachev under house arrest. Other military units refused to back them and, after a stand off, power fell into the hands of a group of reformers around Boris Yeltsin, president of the Russian republic and former party boss in the industrial city of Sverdlovsk. Yeltsin agreed on the formal dissolution of the links between the national republics, and the USSR was no more.

  The upheavals of 1989–91 were on a much greater scale than those which shook eastern Europe in 1953, 1956, 1968 and 1980–81. Yet there was a sense in which the changes which occurred were not as fundamental as those that began to occur on the previous occasions, especially in 1956 and 1980–81 – for the leadership of the movements of 1989–91 went to people determined to avoid any glimmer of workers’ power. People who had risen through the old ruling bureaucracies moved, at decisive moments, to align themselves with groups of dissident intellectuals around a programme of limited reform – and so pre-empt the possibility of real revolution. They followed a strategy of what the Italian Marxist Antonio Gramsci had called ‘passive revolution’ – pushing through change from above in order to prevent it happening from below.

  In each case it involved agreeing with the dissidents on programmes which combined various elements – a greater opening to the world market, abandonment of the old command economy, a move to relatively free parliamentary elections, and a new stress on nationalism. As sections of the old official media and former dissidents repeated the same message, the mass of workers were persuaded that the market and democracy were natural twins and could satisfy their aspirations. In the atmosphere of 1989–91 it was difficult for anyone who argued otherwise to gain a hearing, for the pre-emptive moves from above kept class movements by workers to a minimum.

  The great political changes which occurred were a result of class struggle, but it was deflected class struggle that did not find expression in the throwing up of mass democratic organisations of the exploited classes on the lines of workers’ councils. They were political revolutions, more akin to what happened in France in 1830 than to the great social revolutions of the past, a fact demonstrated by the way the same people ran the major industries and banks after the changes as before.

  Shock waves from the collapse

  The crisis in the Eastern bloc was part of a much wider crisis affecting all sorts of countries which had adopted the state capitalist model. Nowhere did it seem capable of providing the high growth rates of earlier periods. At the same time it cut off national industries from the new industrial innovations – especially those connected with microchip technology and computer software – being pioneered, on the basis of enormous investment, by the industrial giants of the US and Japan.

  Across Asia, Africa and Latin America, bureaucrats and politicians who had made their careers sponsoring versions of state capitalism switched over to praise ‘free’ markets and make deals with Western multinationals. Congress governments in India, the former Maoist movement which won a civil war in Ethiopia, the Algerian regime and the successors to Nasser in Egypt all followed this path to a greater or lesser degree. In the vanguard of the new approach was Deng Xiaoping’s China, where adoration of the market and profit-making went hand in hand with formal adherence to the cult of Mao.

  Most Third World governments showed their commitment to the new approach by signing up to the ‘structural adjustment programmes’ of the World Bank and the International Monetary Fund (IMF). There is little evidence that these could overcome the problems of low growth rates and poverty. Some 76 countries implemented adjustment programmes designed by the World Bank on ‘free market’ criteria in the 1980s. Only a handful recorded better growth or inflation rates than in previous decades. Of 19 countries which carried through ‘intense adjustment’, only four ‘consistently improved their performance in the 1980s’. 301 In 1990 some 44 per cent of Latin America’s population was living below the poverty line according to the United Nations economic commission for the region, which concluded there had been ‘a tremendous step backwards in the material standard of living of the Latin American and Caribbean population in the 1980s’. 302 In Africa more than 55 per cent of the rural population was considered to be living in absolute poverty by 1987. 303

  What happened in eastern Europe and the former USSR in the 1990s was just as devastating. The ‘economic miracles’ promised by the reformers did not take place. In 1999 only two countries, Poland and Slovenia, had a higher output than in 1989. The Czech Republic and Hungary were both slightly poorer than ten years before. The economies of Bulgaria, Lithuania and Russia had shrunk by 40 per cent or more. 304

  The cold statistics translated into the destruction of the hopes of millions. Most people in the major Russian cities like Moscow and St Petersburg became dependent on what they could grow on small allotments and preserve to supplement meagre supplies of bread and potatoes. Whole communities in Arctic regions lived in fear of the power failing each winter. Miners and steel workers were not paid for months at a time, health services fell apart, diseases like tuberculosis became common and life expectancy fell.

  Circumstances were a little better in the northern belt of eastern Europe. But even in the Czech Republic and Hungary living standards were lower than in the late 1980s: there were more goods in the shops, but few people with the money to buy them. East Germany, incorporated into the German Federal Republic, continued to have unemployment rates of 20 per cent and higher. In south east Europe, in Bulgaria, Romania and Albania, conditions were as bad as in Russia. In the southern belt of the former USSR they were much worse. No wonder the optimism among many intellectuals in 1989 had turned to despair by the late 1990s. The famed Czech poet Miroslav Holub went so far as to say, ‘If we knew that this was the price we would have to pay, then we would gladly have put up with not having our work printed and not selling our paintings’. 305 The eastern European country which suffered most was that which had maintained its independence from the USSR all through the Cold War – Yugoslavia. The Western powers no longer considered it worthwhile to provide loans on favourable terms as a counterbalance to Russian influence in the region. The IMF imposed a debt repayment programme which halved living standards in two years and produced astronomical levels of unemployment in the poorer parts of the country, and a series of bloody civil wars resulted as different political figures tried to maintain their own positions by setting national groups against one another while Western powers intervened to bolster those most friendly to them.

  There was one area of the world in which the enthusiasts for the market placed particular pride – east Asia. In its World Development Report of 1991 the World Bank spoke of ‘the remarkable achievements of the east Asian economies’, and noted ‘various degrees of reform’ in China, India, Indonesia and Korea being ‘followed by improvements in economic performance’. 306 Samuel Brittan of the Financial Times in Britain reassured his readers, ‘Someone who wants to cheer up should look, not backwards to the Great Depression, but to the developing countries of eastern Asia which have contracted out of the world slowdown’. 307

  The hollowness of such optimism hit home in 1997, when an economic crisis which began in Thailand swept through the entire region – pushing Indonesia into a slump on the scale of the 1930s and forcing South Korea, Malaysia and Hong Kong into deep recession. In the course of 1998 this ignited a sudden crisis in Russia and destabilised the biggest economy in Latin America, Brazil. Programmes drawn up by the IMF to deal with the crisis were bitterly criticise
d as likely to make things worse by its own former luminaries such as Jeffrey Sachs.

  The Chinese economy did experience rapid growth through most of the 1980s and 1990s as a result of reform of the agricultural price system in the late 1970s which involved a massive one-off transfer of resources from the state to the peasantry. There was a rapid growth in food output for a number of years, which in turn provided the base for a range of light industries to develop, catering for both the domestic and world markets. According to the official figures, total industrial output trebled.

  But the growth was incredibly uneven. Some coastal regions underwent massive industrialisation and urbanisation while vast inland regions stagnated or even regressed. There were tens of millions of new jobs in industry, but 200 million people flooded from the countryside to the towns in the hope of filling them. Rationalisation of the old heavy industries involved slashing their workforces and scrapping minimal forms of welfare provision. Wild fluctuations in growth rates saw sharp booms with rapidly rising prices giving way to periods of stagnation. Attempts to break out of these cyclical downturns by selling more on the world market threatened a classic crisis of overproduction every time the world economy slowed down or slumped.

  This combination threatened to produce massive social convulsions, as was shown vividly in 1989. Only a few months before the political collapse in eastern Europe the Chinese state itself came close to breaking down. Student demands for greater democracy became the focus for the grievances of wide sections of people, culminating in the famous demonstration in Beijing’s Tiananmen Square, but also in dozens of other cities and industrial centres. For several days the regime was paralysed, seeming to have difficulty finding soldiers prepared to bring the demonstrations to an end, before it used tanks to crush the protests.

  Tiananmen Square was not the first occasion a regime that combined state capitalist characteristics with a market orientation had faced a social explosion. Egypt had experienced a wave of strikes, demonstrations and revolts in its 13 main cities early in 1977 – the biggest wave of social unrest since the nationalist revolt against Britain in 1919. In Algeria in 1988 a wave of strikes turned into a near-insurrection as young people fought the police for control of the streets, and forced the regime to concede freedom of the press and permission for political opponents to return from exile. In South Korea in 1987 huge militant demonstrations by students and sections of the middle class shook the military regime, forcing it to concede a degree of liberalisation – to be followed in 1988 by a series of major strikes which were settled by double digit wage increases.

  All of these social explosions showed certain similarities with the events of 1989–90 in eastern Europe. They demonstrated that neither state capitalism nor the transition from state capitalism to some sort of market system could prevent the workforces created by industrial growth rebelling – and drawing behind them many other layers of society.

  Islam, reform and revolution

  It became a journalistic cliché for a time in the 1990s to say that the clash between ‘Communism and capitalism’ had been replaced by that between ‘Islam and the West’. Certainly, two of the great uprisings of recent years had taken place under the banner of Islam – the Iranian Revolution of 1979 and the Afghan resistance to Russian occupation through the 1980s – and these had inspired opposition movements in Egypt, Algeria, occupied Palestine and elsewhere. But what the cliché ignored was that Islam, as so often before in its history, could give expression to very different social interests which could end in bloody conflict with each other.

  The Iranian Revolution was an explosion of bitterness against a despotic ruler, the Shah, and the US government which backed him. His rule had antagonised traditionalist clerics, nationalist intellectuals, sections of capitalism linked to the bazaars, the new working class of expanding industry, the students, the impoverished petty bourgeoisie, the unemployed and semi-employed of the urban slums, the national minorities and sections of the peasantry. Islamic diatribes against ‘oppression’ could unite people from all these groups against a common enemy. But once the Shah had been overthrown in a classic uprising – with mass strikes, an armed insurrection and mutinies within the army – each group read the Islamic texts in a different way and drew very different practical conclusions. The first years after the rising saw not only clashes between certain Islamic and secular groups, but bloody civil wars between different Islamic factions. Eventually the faction around Ayatollah Khomeini proved victorious and justified a reign of terror against its defeated opponents in religious terms. This led many liberals to claim its barbarous methods were uniquely ‘Islamic’, a product of a mentality supposedly lacking the humanity of the ‘Judaeo-Christian tradition’. In fact Khomeini’s repression was not qualitatively different from that endorsed by French Roman Catholicism at the time of the crushing of the Commune, from that backed by Prussian Lutheranism in 1919–20, or, for that matter, from that supported by US Christian fundamentalists and Jewish rabbis as the Israeli army oversaw the wholesale slaughter of Palestinians by Phalangists in Lebanon in the early 1980s. The bloodbath was that of a counter-revolution, not the product of a religion.

  The Russian-sponsored regime in Afghanistan likewise provoked resistance from disparate social groups as it attempted to impose a Stalinist programme of rapid ‘modernisation’. When Russian troops occupied the country, killing one pro-Russian ruler to replace him with another, Islam seemed to again provide a rallying cry for resistance. But groups with contradictory interests were to end up fighting each other as well as the Russians. A civil war between Islamic groups followed the Russian withdrawal until the Taliban, backed by Saudi Arabia and bitterly hostile to the Islamic regime in neighbouring Iran, conquered most of the country. Meanwhile, many of the Islamists from across the Middle East, whom the American CIA had organised to go and fight in Afghanistan against the Russians, now directed their fire against their pro-US local rulers – and were denounced as ‘terrorists’ by the US.

  Far from Islam being a single force opposed to the West, the biggest and bloodiest war of the 1980s raged between the Islamic leaders of Iraq and the ‘Islamic Republic’ of Iran. It was a war in which both conservative Saudi Arabia and the Islamist regime of Hassan al-Turabi in Sudan backed Iraq – as did the US at decisive moments.

  The growth of Islamic political movements was a product of the alienation from the world order of tens of millions of people – especially the young and educated, who had little hope of secure employment in societies trapped by their position within the global system. The Koran’s vague injunctions against oppression and proclamation of a just society offered a terminology that seemed to provide an outlet for intense feelings of frustration. But the closer the Islamists came to holding power the more their radical edge was blunted. Islamic governments proved happy to work with Islamic capitalists, who in turn continually made alliances with other parts of the world system, including ‘the great Satan’, the US. In every clash between national states in the Middle East, Islamic governments were to be found on opposing sides.

  The new imperialism

  The old imperialism of direct colonial rule finally died in the last quarter of the twentieth century. Portugal’s ruling class was forced to abandon its colonies, the white settler regime in Rhodesia gave way to Zimbabwe, the racist regime in South Africa conceded majority rule, and Britain handed Hong Kong back to China. Even what used to be called ‘semi-colonies’ – weak governments dependent on Western backing for survival – often achieved a certain independence. The puppet became a client and the client sometimes turned on its former master – as Saddam Hussein of Iraq showed when he marched into Kuwait in 1990. But this did not mean the end of imperialism – the attempt of major capitalist states to impose their will on lesser states.

  In the mid-1990s many journalists, academics and politicians claimed that states were unimportant in the ‘new global economy’. But it did not seem like that to the heads of the multinational corp
orations or the governments which worked with them. Studies showed that the owners and directors of such corporations remained very much rooted in particular national states, using them as bases from which to advance and protect their interests elsewhere. As one study concluded:

  The rivalry between states and the rivalry between firms for a secure place in the world economy has become much fiercer, much more intense. As a result, firms have become more involved with governments and governments have come to recognise their increased dependence on the scarce resources controlled by firms. 308

  The huge multinationals centred in the US depended on the US state to help impose their policies on the rest of the world. The two major schemes for dealing with Third World debt were, appropriately, named after members of the US government – the Baker Plan and the Brady Plan. 309 Behind the IMF and World Bank talk of ‘new paradigms for development’ lay the reality of ensuring the banks were paid off handsomely. Similarly, world trade negotiations were about US attempts to impose its own ‘free trade’ hegemony on other governments, equally eager to protect the sometimes divergent interests of their own capitalists.

  But financial diplomatic pressures were not always enough to ensure the ruling classes of the most powerful countries got their way. There were points when governments felt military force alone could maintain their global dominance.

  The two Gulf wars were important examples of what could happen. Iraq waged a long and bloody war against Iran throughout the 1980s, aiming both to attract the support of the US and the wealthy Gulf states, and to cement its relations with important multinationals. When it did not gain as much financially as it had hoped from its backers in the war, it invaded one of them, Kuwait, in 1990 – miscalculating the response of the Great Powers, especially the US. America, Britain and other states reacted with a massive military build-up, a devastating bombing campaign, a land invasion and the massacre of 100,000 Iraqis as they streamed back along the road from Kuwait to Basra. They followed this with a decade of economic sanctions which are estimated by the United Nations to have killed 50,000 Iraqis a year.