Never waste a good economic crisis.
The problem is that the Right has been making hay in the latest one, especially in Eastern Europe. Faced with the vestiges of public assets – public transport, medecine, education and so on – the Right has aggressively offered the spurious claim that these are the source of ‘sovereign debt’ and has been jumping in to turn these dreadfully unprofitable ventures into sources of profit. And what better way than to force the sale of those public assets to your cronies in
organised crime the business world. But it turns out to be the latest phase in a consistent assault of over two decades.
As Rossen Vassilev points out in ‘The Tragic Failure of “Post-Communism” in Eastern Europe‘ (1o March 2011):
Romania is mired in a severe recession and its battered economy is expected to decline by at least 2% in 2010, after contracting by 7.1% the previous year. Instead of trying to assist the unemployed and the socially weak, the Bucharest government, which is reportedly riddled with corruption, cronyism and nepotism, has slashed public-sector pay by one-quarter and trimmed all social expenditures, including heating subsidies for the poor as well as unemployment, maternity, and disability benefits. At the same time, the national sales tax was hiked from 19% to 24%, as the authorities are striving to hold the national deficit down to 6.8% in order to meet the stringent fiscal requirements of the European Union (EU), which Rumania had joined in January 2007.
In the Czech Republic:
20,000 hospital doctors were quitting their jobs en masse to protest the decision of Prime Minister Petr Necas’s cabinet to cut all public expenditures, including healthcare spending, by at least 10% in order to keep the country’s troubled finances afloat. These mass resignations were part of the “Thanks, We Are Leaving” campaign launched by disgruntled physicians across the country aimed at putting pressure on the Prague authorities to increase their low wages and provide better working conditions for all medical workers. Confronted with the worst healthcare crisis in the ex-Communist country’s history which was endangering the lives of many patients, the Czech government threatened to impose a state of emergency which would force doctors either to get back to work or face harsh legal and financial penalties.
Latvia’s conservative government borrowed heavily from the EU and IMF on punishing repayment terms that have imposed such harsh austerity policies that the Latvian economy shrank by 25% (neighboring Estonia and Lithuania have experienced an equally steep economic decline) and unemployment, currently running at 22%, is still rising. With well over a tenth of its population now working abroad, Latvia’s guest-workers send home whatever they can spare to help their destitute families survive. Latvian children (what few of them there are as the Baltic country’s marriage and birth rates are plunging) have been thus “left orphaned behind,” prompting social scientists to wonder how this small nation of 2.3 million people can survive demographically. These are the results of post-Communist austerity budgets that have cut ordinary people off at the knees while international creditors and local bankers are bailed out.
Official statistics show that both the annual gross national product (GNP) and the per capita income of the population have plummeted, the social-safety net has disintegrated, and even the physical survival of many impoverished Bulgarians is in peril. The immediate effects of market-oriented “reforms” have been the destruction of Bulgaria’s industry and agriculture, unemployment, inflation, flagrant inequality of incomes, crushing poverty, and even malnutrition. Organized crime and endemic corruption in the form of nepotism and cronyism, graft on the job, embezzlement, bribe-taking, influence-peddling, smuggling, protection rackets, illegal gambling, prostitution and pornography rings have exacted a heavy toll on post-Communist living standards and livelihoods. Another unfortunate effect is the widespread neglect of the economic and social rights of ordinary Bulgarians, for many of whom the 8-hour work day is now only a memory.
Right across ex-Soviet countries the story is the same:
Sharp government cutbacks in social welfare, education, healthcare, public transportation, and other basic social-infrastructure spending threaten to undermine economic security, long-term development, and political stability across the ex-Soviet bloc countries, young people are emigrating in droves to better their lives rather than suffer in an economy without any employment opportunities. The citizens of the ex-Communist nations now have to pay out of their own pockets for all previously free, government-provided medical services even though they also have to pay income, real-estate, and sales taxes—something they did not have to do under the Communist regimes. There is also the monetization and/or privatization of the previously free educational services, especially in higher education and the new private schools, colleges, and universities where students have to pay for their training, including many fees that each student must pay for taking entrance exams and other mandatory tests required at every level of schooling. Government subsidies for everything from healthcare, education, and legal representation to housing, energy, and public transportation are disappearing in the scramble to slash social spending and trim budget deficits, making it even harder for ordinary people to survive in their daily struggle for existence.
Who has gained from all this?
A new breed of rapacious and ruthless plutocrats with insatiable appetites for wealth and power has pillaged—through an unjust and corrupt process of privatization—the assets of the formerly state-owned economy.
In other words, capitalism as usual.
Nearly all of these twenty-eight Eurasian countries have experienced a long-term economic decline of catastrophic proportions (only Poland has thus far surpassed its Communist-era GDP). Grave economic setbacks, deep-rooted corruption, and widespread popular frustration with the hardships and deprivations of the seemingly endless post-Communist transition are undermining the prestige of the new authorities and even the population’s belief in Western-style democracy and market-based capitalism.
So is communism really better than this? As a 68-year old retired Romanian mechanic said:
I regret the demise of Communism—not for me, but when I see how much my children and grandchildren struggle. We had safe jobs and decent salaries under Communism. We had enough to eat and we had yearly vacations with our children.
In another time and in the same place, Lenin and the communists turned an economic crisis in a very different direction.