The Atlantic and Its Enemies

by Norman Stone

  There was even a weird descant on the old French line, applicable in a surprisingly large number of countries, that ‘the south governs and the north works’: Ukrainians made up over 80 per cent of the Politburo in 1979. Under Petro Shelest and then Vladimir Shcherbitsky, a Ukrainian but also a Russifier, Kiev went its peculiar way as the Moscow centre came to rely on local ‘barons’ who could promote their own nationality, though in the form almost of a freemasonry. In this way, Haydar Aliev in Azerbaidjan or Leonid Kravchuk in the Ukraine were able to emerge as national leaders when the USSR itself disintegrated; in Central Asia the transition was even smoother. There, a system not far from apartheid developed, as Islam was a way of life almost independent of institutions, and there was almost no way of controlling, say, circumcision (although a fatwa pronounced it unhealthy in 1962). The four Sufi tarikat flourished surreptitiously, and Murids avoided contact with non-Moslems; after 1970 the proportion of the European population declined, and Moslems rose from one eighth to one fifth of the whole. Only in Kazakhstan did the Russian element rise, in proportion. To placate the locals, the great Uzbek monuments at Tashkent and Samarkand were restored, partly as a gambit in foreign policy, given Moscow’s closeness to the Arabs. But mosques were also closed down, and only twenty men were allowed to go on the Mecca pilgrimage every year. This was not reflected in Moscow, where there were few non-Slavs, but, short of Stalinist methods, there was no way to run the localities except through these locals, even if Andropov tried to break the system in the Caucasus by having ‘workers’ representatives’ somehow pushed in.

  In the early 1970s, while accepting the Germans’ Ostpolitik, Andropov had told the Politburo what, in effect, the strategy was. The Soviet Union was falling behind the United States, and in areas that mattered, as distinct from kitchen equipment. He even hinted that, one day, the Soviet Union might just abandon central and eastern Europe, as a liability. Get rid of the Berlin Wall, cultivate good and profitable relations with Germany, fall back within the Soviet borders, and use the respite to recoup: it was not bad, as Leninist strategy, and in effect the various coups of 1989 were in some degree provoked or stage-managed, though none quite as obviously so as that in Romania. So far so good: Gorbachev was hero of the hour in the West, which, Germans in the lead, did indeed offer a great deal of money. However, Andropov’s strategy went wrong: he had clearly utterly underestimated the threat that would come, within those borders, from separatist nationalism, and officials had always claimed that Communism had solved the problem. But in 1990 this began to spread — in the event, overnight destroying the entire Soviet Union.

  The process was devious, but the main lines were clear enough. Already in the later 1970s there had been a great many detailed studies as to how reform should be conducted, and at the 27th Congress, early in 1986, these had been implemented. After ‘acceleration’ there was to be ‘reconstruction’, the famous perestroyka. Great slabs of prose were then written about this, but the Party shrank back from any sort of private property, and the most that emerged was permission for a few small co-operatives. Later on, there was talk of ‘joint ventures’ with the West, a scheme by which the West supplied capital and knowledge, and the Soviet side the land. For the moment very few of these emerged, and they did not last for long, as the Western investors soon found themselves losing money through this or that administrative trick, what the French call chicane. Then there was the even more famous glasnost, ‘openness’ or perhaps just ‘criticism’: the intellectuals, the periodicals, the press were now free to discuss earlier taboo subjects. Ridiculous pieces of censorship were set aside, as for instance with the great writer Mikhail Bulgakov, and the historians were supposed to become less dishonest. This, welcomed universally, was not quite what it seemed: Bulgakov had been quite widely read in pirated editions, and no-one really needed to be told about the crimes of Stalin all over again. It can even be said that when, later on, some archives were opened, there were remarkably few ‘revelations’, or at any rate there was very little that came as a surprise. Still, what there was, in a Soviet context, was remarkable enough, and in Germany there was ‘Gorbymania’. By 1989, under pressure to show democratic credentials, Gorbachev did allow a Congress of People’s Deputies, in which roughly a fifth of the members had been freely elected. In that context, Russian nationalism now emerged in great strength, as the figure of Boris Yeltsin took the lead.

  Yeltsin was an odd hero, yet another of those sinister clowns whom Russian history throws up. His background was pure Party, and he was mayor of Moscow from 1985 to 1987; there he criticized Party privileges, and attacked Gorbachev himself. He was then humiliated and sacked. However, he had his friends, and they were now advancing the cause of Russian nationalism: Russians were poor, and blamed the ungrateful empire for this; get rid of it, and keep the fabulous material resources of Siberia. Yeltsin was elected to Gorbachev’s Congress in 1989, and now set about conquering the power structures of Russia, as distinct from the Soviet Union: he became in effect president of a ‘sovereign’ Russia in 1990 (though formally only in 1991). Russians were supposed to obey him, and not Gorbachev; there were clashes. However, quite obviously, he knew how to manage powerful Russians, such as Anatoly Sobchak, the mayor of Leningrad, and these powerful Russians were responding to the evidence of collapse. By 1990 the economy was running down, as there was an explosive increase in paper money, translated into a black market that occupied more and more of output. Worse, the various regions had developed their own networks, independently of Moscow, and these were now pushing ‘sovereignty’ — the first, Estonia in September 1988, the pebble announcing the avalanche. Panic-buying emptied the shops; by spring 1991 there were demonstrations of 150,000 people in Moscow, and Yeltsin took the lead. By this time the Party’s sharper men (there were not many women) were preoccupied with their own survival, and took up shadowy contacts with Western banks: thousands of millions went abroad, and the gold reserve disappeared (when the whole system fell apart in August 1991, the two men most obviously in the know as to this, Nikolay Kruchina (the treasurer) and Georgy Pavlov (the finance minister), committed suicide in circumstances that, for Kruchina, might suggest murder).

  As nations declared ‘sovereigny’ — i.e. would not obey Soviet laws — and as mass demonstrations caught the attention of the Western media, Gorbachev responded initially by repression. Of course, once nationalism was released in this system, it expressed the frustration and rage that Communism produced; it was doing precisely the same in Yugoslavia, itself a little version of the USSR, complete with its Western subsidies. Troops were used in Lithuania, in January 1991, as had happened in Baku, in the Caucasus; but this time round, they were answered by mass demonstrations in Moscow itself, let alone in Baku. It was Yeltsin who now held the cards, and Gorbachev attempted to sort out a new constitution for the various peoples of the USSR; but this did not solve anything, the more so as there were now quite serious strikes, even in Byelorussia. In August came a mysterious affair: the putsch. Men whom Gorbachev had recently appointed, including the head of the KGB, appeared on 18 August, with tanks, on the streets, while Gorbachev was ostensibly on holiday on the Black Sea. They would take power, and to begin with the world took them seriously. However, this was almost a farce. One of the plotters, at a press conference, had obviously been calming his nerves with drink; fingers rapped nervously on the table. The tanks, on their way to Yeltsin’s headquarters in the Russian parliament, stopped at traffic lights, where old women with shopping bags banged on their sides, shouting at the drivers. Yeltsin was not even tracked to his country house; Sobchak in Leningrad was not touched, and rallied that city at once; the Yekaterinburg KGB came out for Yeltsin. In the event, the putsch disintegrated within three days, and the plotters flew to see Gorbachev, asking what to do. It had all been a clumsy manoeuvre, to make out that Gorbachev must be supported against ‘dark forces’. The whole affair ended within a week, allowing Yeltsin to appear as saviour of his country, as he stood on a ta
nk and denounced the plotters; but the probability is that he had tricked them into thinking he would support them. At the end, Russia became independent, and the Communist Party was banned. But it left a country in many ways ruined, and bright men and women all over now wondered how they could turn it into a normal European country. Quite naïvely, to begin with, they looked at the Western model.

  28. ‘Ending History’

  As the Iron Curtain collapsed, there was much interest in the causes and consequences. The Left was mainly taken by surprise, and was (and, again mainly, is) quite unable to account for what had happened: Susan Sontag remarked honestly and pertinently that Reader’s Digest had been closer to the truth all along. But the academic observers of the bloc scene were also caught napping. A British expert on international relations, Philip Windsor, remarked, seeing the fall of the Wall on television, that it was the end of an empire; when his companion asked whether he meant the Soviet one, he said, no, political science. Very, very few people in the West had foreseen the end — the first was a 25-year-old Frenchman, Emmanuel Todd, whose The Final Fall (1976) seems to have been inspired by rock music, listened to in a shabby student flat in Budapest. Earlier, in 1970, a very brave Russian, Andrey Amalrik, had guessed, on the basis of day-to-day impressions, that the end was coming, though he got the date wrong. Grave seniors, the world over, shook their heads at such perversity, and when Gorbachev appeared, there was a sort of parade of guards of ‘useful idiots’, including J. K. Galbraith, who thought that the achievement of full employment was the great strength of the USSR. This writer will not plead innocence, having informed students until 1986, though not in print, that the Soviet Union had ‘solved the nationality problem’. But it is clear now that the most reliable guides all along had been the shunned ‘Cold Warriors’, men such as Alain Besançon, Robert Conquest or Vladimir Bukovsky, whose accounts (in Jugement à Moscou) of his dealings with American foundations read tellingly: when he explained to them, back in the 1970s, what was really going on in the Soviet Union, he was no longer welcome, and was even missed off the Christmas card list. In the same way, most of West German academe and much of the media was entirely taken aback when East Germany imploded. There is a counterpart in economics, where the ‘supplysiders’ of the early eighties had been widely dismissed, with derision, and had then turned out to be right, in so far as economics is about prosperity.

  In 1991 there was much triumphalism on the Right, the more so as, by a quirk of history, the fall of the Berlin Wall more or less coincided with the fiftieth anniversaries of the Marshall Plan and NATO or, for that matter, of the German Federal Republic itself (celebrants of which could often only mumble a half-remembered and rather soppy version of the old national anthem). It was an Atlantic hour, a triumph of American power, soft, as exemplified by CNN, and hard, as exemplified by the IMF. The Fukuyama thesis, that the West, catchily described as free market and democracy, had won, had captured Japan and South Korea, and would go on turning all countries of the world into versions of Denmark, sounded quite convincing. But which ‘West’? For most of the world, it was Reagan’s United States — and not the European countries that practised the minor virtues, such as thrift, failing to make babies and padding their pensioners.

  Efforts were made to parade the European Union (as it was soon to be called) as an alternative model, of ‘Rhenish’ as distinct from ‘Atlantic’ capitalism. On one level, Europe, or at any rate the Europe of the Single European Act, unquestionably did good, in that it could break into stagnant pools of local protectionism, and for a Spain or a Greece, emerging from stupid military dictatorships, joining Europe was important for morale and in a limited degree finance. The same was, on the whole, true for former Iron Curtain countries, which got German investment and remittances from migrants to the West. But, as generally happens with multinational organizations, Europe was good only at dealing with limited and well-defined problems. Her efforts on the world stage were laughable — never more so than when the then presiding officer, a Luxemburger named Jacques Poos, turned up with two other worthies at the start of the Yugoslav civil wars in 1991 to warn against nationalism — in this case, that of the Slovenes, who were ticked off for thinking that their country (an elephant beside his own) was large enough to indulge in independence. At bottom, Europe was itself in any case an Atlantic creation, and French aspirations to make it independent of the United States very speedily broke down. Lacking armed forces, it had only two lines in foreign affairs: ‘Me, too’ to the Americans, and then ‘Oh, dear’ to the Americans.

  Even the ‘Swedish model’, long and finger-waggingly upheld as a sort of ‘third way’, broke down. It had thrived, with a small population sitting on raw materials, had thrived further because it had stayed out of both world wars, had done well out of the export of arms, while its political establishment moralized at the rest of the world. Up until the 1970s, Swedish Lapps had been sterilized in tens of thousands on the grounds that they, stunted in growth and drunken in habits, were not worthy to reproduce themselves. In the 1990s, Swedish delegations were appearing in Turkey to reproach Turkey for her handling of the Kurds, a handling that most certainly did not include sterilization. By 1990 Sweden herself had slipped from being second most prosperous country in the world to being seventeenth, and was overtaken by Finland, a former colony, where affairs were less pretentiously managed. In 1990 the only European of any serious interest in the former Communist bloc was Margaret Thatcher, herself, of course, no great respecter of the European Union.

  Great numbers of hungry, intelligent Russians (and others from the old bloc) came west, with a view, often dewy-eyed, to learning what the secret had been. Others did not need any such training. Communism had had, in the form of Alain Besançon’s ‘C’ system, its own hidden, brutal and corrupt form of a market, and vicious figures made enormous fortunes out of the Soviet rubble. Russia then went through a very difficult decade, most Russians becoming disillusioned. The end of the Soviet empire was of course the culminating moment of the eighties, but there was an air of anti-climax to it all, as with most such moments, including Victory Day in 1945. Besides, this particular victory would clearly bring great problems, the worse for having been so widely unforeseen by the bureaucracies that had come into existence in the era of détente in the 1970s. Yugoslavia, the very model of Communism-with-a-human-face brotherhood-of-peoples, exploded, and the unification of Germany brought headaches of unemployment and mass migration to the prosperous places of the West. After a year or two of patriotic euphoria, the European countries of the former bloc were mainly taken over by variants of reformed Communists, now generally learning to talk another wooden language, that of ‘Europe’; their young migrated, their agriculture generally languished, particularly when European regulations were used to suppress the old-fashioned ways with, say, ham or smoked fish or wine that might have let them be competitive. Much effort went into making out that this was all a great success for Europe, and for a brief period there was even a parody of the old Sovietology, in which ‘transition’ from Fascism or Communism was solemnly studied, as if there could be any conceivable comparison between Spain and Russia except at the most superficial level. But the reality after 1990 was, mainly, depressive, and the collapse of population growth almost everywhere demonstrated as much.

  However, even the extraordinary showcase boom of the eighties came to an abrupt end, as American and German financial problems introduced a recessionary period. Japan herself, where an asset bubble had enabled the Colombians to sell their Tokyo embassy and pay off the national debt, now stuck and shrank. Ronald Reagan had retired in 1988, succeeded by the much more conventional George Bush I; Margaret Thatcher herself lost office in November 1990, manoeuvred out by her own party and especially by the Europe-minded element. The pound had, despite her misgivings, been put into the emerging European single-currency arrangements. Quite soon, her misgivings were shown to be right, as the strains proved too much: interest rates, set by mainly German ne
eds, rose to such a degree that credit was choked off, recession followed, and the pound was pushed out again, much to the benefit of astute speculators. Reagan was lucky to the end, in that he managed to retire before the bill had to be paid for a piece of extraordinary maladministration.

  For well-intended reasons, Americans had been encouraged to buy houses on mortgage in the 1930s through federal-regulated institutions, Savings and Loans (as happened with the building societies in England). The interest paid by buyers was fixed, which made sense when there was not much inflation, as, until the 1960s, was mainly the case. However, these institutions, borrowing money, had to pay the going interest rate, which in the 1970s became double that of the interest rate that could be charged from their own borrowers. Money went elsewhere. In 1980, with Paul Volcker’s 20 per cent rate, the Savings and Loans were in trouble, and bankruptcy threatened. If Reagan had adhered to his own announced principles, the hundreds of insolvent institutions would have been allowed to collapse, but in the depression of the early 1980s he shrank from this, and in any case the troubles in the end were not of his making. The government insured deposits up to a value of $100,000. With this collateral, the institutions could borrow a great deal more. In 1985 they could have been shut down for a comparatively modest sum, but the Reagan administration itself encouraged easy credit — deregulation and an Act of 1982 allowed the Savings and Loans to move, beyond simple mortgages, into the world of speculation, and a further move abolished the rule that there had to be at least 400 shareholders: from then on, they could be owned by a single man, thereby empowered to borrow huge amounts of money on the basis of deposits guaranteed by the US government. On top of this, the amount of his own capital that he had to put in was decreased to 3 per cent of the money out on loan. The problem was further put off by accounting rules that allowed losses to be unreported for ten years, during which the institution might go on as before. So the more buccaneering of these institutions went on, especially in Texas, vastly over-building office blocks and the like; by 1990, of the 2,500 that survived, only half could be considered healthy. Some 750 Savings and Loans then went bankrupt, costing $160bn dollars and causing damage to house-building: depression then followed, in 1990, as the bill came in, and it wrecked the presidential career of Reagan’s successor.