Jihad vs. McWorld

by Benjamin Barber

  12. Jeffrey Sachs, Poland’s Jump to the Market Economy (Cambridge, Mass.: the M.I.T. Press, 1993), pp. 4–5 and p. 57. Although he has been relieved of his duties (or relieved himself of his duties, as he insists) in Russia, Sachs continues to be a market guru to other transitional nations. For a critique from the left, see Jon Wiener, “The Sachs Plan in Poland,” The Nation, June 25, 1990, p. 877.

  13. Robert Kuttner, The End of Laissez-Faire: National Purpose and the Global Economy after the Cold War (New York: Alfred A. Knopf, 1991), p. 18. Kuttner notices, of course, that “oddly enough, for a decade the U.S. has preached an ever more devout adherence to laissez-faire while practicing a perverse, unacknowledged Keynesianism”—namely its bankrupting support of the dollar as the international medium of exchange, its economy-overheating defense spending, and Reagan’s deficit-enlarging tax cuts (p. 18).

  14. The Economist, March 13, 1993, p. 21.

  15. See Bruce Rich, Mortgaging the Earth: The World Bank, Environmental Impoverishment and the Crisis of Development (Boston: Beacon Press, 1994); also Andrew Cohen’s review essay “Potemkin Environmentalism,” The Nation, July 18, 1994, pp. 101–103. On its fiftieth birthday, the World Bank (aka, the International Bank for Reconstruction and Development) is vowing to do better on environmentalism at least. In its 1994 statement “Embracing the Future,” it claims to be as interested in human development programs and the environment as in pure economic development and markets. See Thomas L. Friedman, “World Bank at 50, Vows to Do Better,” The New York Times, July 24, 1994, p. A 4.

  16. Kuttner, End of Laissez-Faire, p.24.

  17. Thomas L. Friedman, “When Money Talks,” The New York Times, July 24, 1994, p. E 3.

  18. Advertisement for “The Czech Republic,” The New York Times, January 7, 1994, p. 6.

  19. Holmes, “Drawing Board.”

  20. Walter B. Wriston, Twilight of Sovereignty (New York: Scribner’s, 1992), p. 12.

  21. Friedman, “When Money Talks.”

  22. It may be worthwhile citing in full Jeffrey Sachs’s prescription for economic reform in Poland (which appeared as the “Balcerowicz Plan” in honor of Leszek Balcerowicz, Poland’s Deputy Prime Minister for the economy in the government Sachs advised). The five “main pillars” of his reform were, first, macroeconomic stabilization aimed at cutting the rate of credit expansion by tightening of domestic credit via monetary and fiscal measures; second, liberalization including the end of all central planning, price controls, and regulation of international trade; third, privatization with the transfer of ownership of state assets to the private sector; fourth, the construction of a social safety net including unemployment compensation; and fifth, mobilization of international finance assistance. (Sachs, Poland’s Jump, pp. 45-46). Pillar four was never built and pillar five never provided much subsidy, so pillars one through three quickly became the essence of shock therapy. This plan, in which civil society is ignored and political reforms are taken for granted, has been a prescription for disaster almost everywhere.

  23. Ludwig von Mises, Human Action: A Treatise on Economics (New York: Van Nostrand, 1949), p. 2. Andrew Bard Schmookler in his effective if overwrought internal critique of market economics perfectly captures the delusions of the marketeers in his title: The Illusion of Choice. Carl Kaysen, whom Schmookler cites (p. 37), is typical in his confounding of consumer choice with civic freedom: “People have preferences in respect to what kinds of goods they buy; where they live and work, what kinds of occupations they pursue … what kinds of mortgages, automobile loans, bank loans they owe. The working of the market, provided that it is competitive, makes the best possible reconciliation of these preferences with the technical possibilities of production, which in combination with these preferences … determine what jobs, goods, services are available.” But “preferences” do not determine anything except what consumers happen to “want” at a given moment. Social and political choices are not the expression of preferences but of deliberative choices made in the setting of common debate with fellow citizens trying to figure out what their communities value and need (see below).

  24. Felix Rohatyn, cited in T. Friedman, “When Money Talks, Governments Listen,” The New York Times, July 24, 1994, p. E 3.

  25. Just try to talk about citizens or comrades or neighbors or brothers in the lands that have finally rid themselves of communism. In too many of these countries, the failure of the Communist “we” has extirpated hope in the possibility of a democratic “we.” Back in 1990, then mayor Gavriil Popov of Moscow, at that time an “economic reformer” under Gorbachev, wrote: “If economic transformations are to work, we must create an effective apparatus for management, yet the masses have an intense hatred of any bureaucracy.” Since then, they have permitted that bureaucracy to cripple their democratic capacity to act in common to curb wild capitalism. Or, when fed up, have fallen into a nostalgia for governmental bosses who can fix everything (in return for the resurrender of recently won liberties).

  26. Robert McIntyre, “Why Communism Is Rising from the Ash Heap,” The Washington Post, National Weekly Edition, June 20-26, 1994, p. 24. Too familiar with Stalinist government, many of Lenin’s abused children have come to regard democratic government as just one more variation on totalitarianism, the more dangerous because it wears the mantle of popular legitimacy. A cartoon by Margulies hits the mark when it depicts one Solidarity veteran standing in front of a Warsaw market after the 1990 elections in which Solidarity won overwhelmingly, and saying to another: “I’ve had it with bread lines, food shortages, and scarce housing … It’s time we got rid of this rotten government,” only to be reminded by his comrade, “WE ARE the government!” In the days of the Solidarity government; from The Houston Post, reprinted in The Washington Post, National Weekly Edition, January I—7, 1990.

  27. Critics like Schmookler and Kuttner find markets wanting in their own right and by their own measures. Regardless of whether they are correct, it is when markets usurp political functions that they must necessarily fail.

  28. Both quotes from Guillermo O’Donnell, “The Browning of Latin America,” New Perspectives Quarterly, Vol. 10, Fall 1993, p. 50.

  Chapter 17. Capitalism vs. Democracy in Russia

  1. Peter Reddaway, “Instability and Fragmentation,” in the aptly named symposium “Is Russian Democracy Doomed?” Journal of Democracy, Vol. 5, No. 2, April 1994, p. 16.

  2. Michael McFaul, “Explaining the Vote,” ibid., p. 4.

  3. John H. Fairbanks, Jr., “The Politics of Resentment,” ibid., p. 41.

  4. Padma Desai, “Ease Up on Russia,” The New York Times, December 10, 1993, p. A 35. In the same vein, Saul Estrin introduces his careful conceptual and economic analysis of privatization by admitting that “privatization of the former state sector is, however, not the only way, and may not be the best way to ensure successful transition to the market economy,” although he does not raise (and could not be expected to raise) the question of whether the market economy is the only alternative to the Communist command economy. Saul Estrin, Privatization in Central and Eastern Europe (New York: Longman, 1994), p. 4.

  5. Because so many American progressives and liberals supported Gorbachev, Yeltsin relied in the early days on more conservative advisors including the Heritage Foundation. Cold War veteran Richard Perle is currently involved in joint ventures with new Russian enterprises aimed at the conversion of military facilities! See Jim Hoagland, “The New Guest in Moscow,” The International Herald Tribune, April 1, 1992.

  6. Margaret Shapiro and Fred Hiatt, “The Agony of Reform,” The Washington Post, National Weekly Edition, March 14–20, 1994, p. 6.

  7. Michael Specter, “The Great Russia Will Live Again,” The New York Times Magazine, June 19, 1994, p. 31.

  8. Celestine Bohlen, “Russia’s New Rich on a Giant Buying Spree,” The New York Times, August 31, 1993, p. A 1.

  9. AP report, “Russia’s Reckless Capitalism,” The Berkshire Eagle, August 4, 1994.

>   10. Specter, “Russia Will Live,” p. 32.

  11. David M. Kotz, “The End of the Market Romance,” The Nation, February 28, 1994, pp. 263–265.

  12. Melvin Fagen, “Russia: Shock Therapy Isn’t the Way to Promote Democracy,” The International Herald Tribune, May 12, 1992.

  13. James Sterngold, “Summit in Tokyo: Yeltsin Arrives in Tokyo as Aid Plan Is Prepared,” The New York Times, July 9, 1993, p. A 7.

  14. Joseph Blasi, “Privatizing Russia—A Success Story,” The New York Times, June 30, 1994, p. A 23.

  15. See Louis Uchitelle, “In the New Russia, an Era of Takeovers,” The New York Times, April 17, 1994, p. C I. This is “a world of investors still more interested in buying ownership of Corporate Russia for a fraction of its value than in improving what they own.”

  16. Liesl Schillinger, “Uneasy Rider,” The New Republic, April 19, 1993, pp. 9–11.

  17. Michael Dobbs and Steve Coll, “The Free Market’s Ugly Face,” The Washington Post, National Weekly Edition, March 1–7, 1993. Also see “From Russia with Cash,” The Washington Post, National Weekly Edition, February 15–21, 1993. The polite version of this phenomenon is given by Alexander Bim, D. Jones, and T. Weisskopf in their soothingly economistic account of “Privatization in the Former Soviet Union and the New Russia,” where they write: “The predominance of insider control of privatized enterprises in Russia at the present time reflects not only problems in the tactics of the radical reformers … (but) the strong desire of a large proportion of the Russian people for stability and security.” Estrin, Privatization, p. 274.

  18. Bill Gifford, “Art of the Zdyelka,” The New Republic, February 28, 1994, p. 12. Gifford describes how the ruble exchange rate leapt in January 1, 1994, from 1,250 a dollar to, just three weeks later, I,800 a dollar, with the July 1994 ruble futures contract selling at 2,174 a dollar. The original Russian voucher plan offered every Russian vouchers worth 10,000 rubles each, or two weeks of a miner’s salary or ten bags of potatoes or three cases of vodka or in dollars, ten cups of coffee in the West. The total voucher offer was for an estimated fixed capital of I.4 trillion rubles divided by 150 million people. Companies with over one thousand employees or fixed capital of 50 million rubles were required to privatize. Bill Gifford, “Russian Citizens to Get Share,” The New York Times, October 1, 1992, p. A 1.

  19. See Wendy Carlin and Colin Mayer, “The Treuhandanstalt: Privatization by State and Market,” Paper Presented at the National Bureau of Economic Resources Conference on Transformation in Eastern Europe, Cambridge, Mass., February 26–29, 1992. Carlin admits, for example, that Germany’s office of privatization (Treuhandanstalt—see below) also shed jobs to control their own expenditures. No one seemed much interested in the impact of labor-shedding practices on the millions of East German workers who were supposed to be socialized into West Germany’s democracy.

  20. The results of the December 12, 1993, elections were:

  Liberal Democratic (ultranationalist) 22.79% (59 seats)

  Russia’s Choice (Reformist) i5.38% (40 seats)

  Communist Party i2.35% (32 seats)

  Women of Russia (Centrist) 8.i0% (2i seats)

  Agrarian (Communist farmer) 7.90% (2i seats)

  Yavlinsky-Boldyrev-Lukin Reform 7.83% (20 seats)

  Russian Party of Unity and Accord (reform) 6.76% (i8 seats)

  Democratic Party (Centrist) 5.5% (i4 seats)

  21. Only Albania, Armenia, the Czech Republic, Estonia, and Latvia have kept their Communists completely out of their governing circles.

  22. “Every Man a Tsar,” The New Yorker, Vol. 69, December 27, 1993, p. 8.

  23. For the environmental costs of the transition see Murral Feshbach and Alfred Friendly, Jr., Ecocide in the USSR: Health and Nature Under Siege (New York: Basic Books, 1992), pp. 565-566. The problem is less ongoing despoilation than the economic inability to clean up the mess left by the Soviet regime. Chernobyl, still operating, and Lake Baikal, among the world’s largest freshwater bodies (still dead for all practical purposes), are perhaps the best known examples of the economic disincentives to ecologically sound policy produced by the new market economy.

  24. Michael Specter, “Climb in Russia’s Death Rate,” The New York Times, March 6, 1994, p. A i. Falling life expectancy reflects the reemergence of diseases like cholera and tuberculosis as well as the swath being cut by crime and alcoholism through the Russian male population. Vodka, a Russian sop under commissars and tsars alike, is the one consumer item available at a realistic price (about a dollar a bottle).

  25. For a check on these generalizations, readers may wish to consult the United Nations Children’s Fund’s Crisis in Mortality, Health and Nutrition, a survey of health conditions from 1989 to 1994 in Russia, Albania, Bulgaria, the Czech Republic, Slovakia, Hungary, Poland, Romania, and the Ukraine. UNICEF director James P. Grant states: “This health crisis is unprecedented in the peacetime history of Europe in this century,” and is “obviously … eroding political support for the reforms that are under way.” Barbara Crossette, “U.N. Study Finds a Free Eastern Europe Less Healthy,” The New York Times, October 7, 1994, p. A 13.

  26. Claire Sterling, “Redfellas,” The New Republic, April 11, 1994, pp. 19-20. Also see her new book Thieves’ World: The Threat of the New Global Network of Organized Crime (New York: Simon & Schuster, 1994).

  27. Celestine Bohlen, “Russian Mobsters Grow More Violent and Pervasive,” The New York Times, August 16, 1993, p. A 1.

  28. Serge Schmemann, “Russia Lurches into Reform,” The New York Times, February 20, 1994, p. A 1.

  29. In recent times, even foreign businesses have become targets and prudent investors have had to hire their own heavily armed security forces. Only McWorld’s symbolic masters like McDonald’s and Coca-Cola have been spared, not perhaps because they are totems but because the publicity would be bad (because they are totems!). See Michael Specter, “US Business and the Russian Mob,” The New York Times, July 8, 1994, p. D 1.

  30. About measures that only Zhirinovsky’s party supported in parliament, the newspaper Isvestia commented: “Every time Russia has tried to do something for the greater good of the state, it has ended in political terror and dictatorship and extraordinary powers in the hands of extraordinary bodies.” David Gurevich is moved to ask, “Is there no third way between Vladimir Zhirinovsky and Michael Corleone?” in “The MOB—Today’s K.G.B.,” The New York Times, February 19, 1994, p. A 19. There is not yet a clear answer to his question.

  31. Andrew Solomon, “Young Russia’s Defiant Decadence,” The New York Times Magazine, July 18, 1993, pp. 16–23; see also his book The Irony Tower: Soviet Artists in a Time of Glasnost (New York: Alfred A. Knopf, 1991).

  Michael Specter, in “Could We Tell Tchaikovsky This News?,” The New York Times, February 20, 1994, Section I, p. 15, writes: “Driven by advertising and money, radio here is beginning to bear a resemblance to stations in NY and LA, where classical broadcasts are under siege.”

  32. Janusz Glowacki, “Given the Realities It’s Impossible to Be Absurd,” The New York Times, September 19, 1993, Section 2, p. 7. Glowacki is the author of “Antigone in New York.” Recalling Sartre’s paradox—we were never so free as under the Nazi occupation, he mused—another writer Glowacki interviews complains: “The worst thing is there is no censorship anymore, and when everything is allowed you don’t feel like writing.”

  33. Liesl Schillinger, “Barbski,” The New Republic, September 20, 1993, pp. 10–11.

  34. See William Schmidt, “Moscow Journal: West Sets Up Store and the Russians Are Seduced,” The New York Times, September 27, 1991, p. A 4.

  35. David Lempert, “Changing Russian Political Culture in the 1990’s—Para-sites, Paradigms, and Perestroika,” Journal for the Comparative Study of Society and History, Vol. 35, No. 3, July 1993, pp. 628–646.

  36. Quoted by Andrew Solomon, “Defiant Decadence.”

  37. “Russian Gadfly From TV to Politics,” unsigned special t
o The New York Times, December 26, 1993, p. A 18.

  38. Cited in Margaret Shapiro and Fred Hiatt, “The Agony of Reform,” The Washington Post, National Weekly Edition, March 14–20, 1994, p. 6.

  39. In an interview, “L’ecrivain international choisit la Grande Russie,” Liberation, April 6, 1992. My translation.

  40. Cited by David M. Kotz, “The End of the Market Romance,” The Nation, February 28, 1994, p. 263.

  41. Cited in The Washington Post, Weekly National Edition, April 5–11, 1993.

  42. Michael Scammell, “What’s Good for the Mafia Is Good for Russia,” The New York Times, December 26, 1993, Section 4, p. 11.

  43. This would be a sort of democracy since “Russians are used to firm control from the top. If domination by a mafia bureaucracy offered a return to the relative order enjoyed by many under the communist rule, many would embrace it.” Nikolai Zlobin, “The Mafiacracy Takes Over,” The New York Times, July 26, 1994, p. A 19.

  44. Along with other fans of order (if not law) at any price, Zlobin will be pleased to know that at least one high-flying member of the criminal class agrees with him: “The Mafia is what’s holding this country together. We do provide structure, and when we take over a business, that business works. It’s noble work.” Andrew Solomon, “Defiant Decadence.”

  45. Boris Yeltsin, Address to the Federal Assembly, February 24, 1994, pp. 32-37; translated by Nina Belyaeva, “Rule of Law for Civil Society,” paper prepared for the XVI World Congress of the International Political Science Association in Berlin, August 1994, p. 10.

  46. Interview with S. F. Cohen, “What’s Really Happening in Russia,” The Nation, March 2, 1992, pp. 259-264.

  Chapter 18. The Colonization of East Germany by McWorld

  1. The Christian Democrat poster features slogans like “Off to the future, but not with red socks.” Supporters played on Kohl’s name, which means both cabbage and cash in German, by shouting “Keine Kohl ohne Kohl”—no cash without Kohl.