Wednesday, December 17, 2014

Isn't One Century of Muddled Thinking and Mass Mayhem Enough?

World War One, the "War to End All Wars" didn't.  Instead it begat World War Two which, in turn, begat the Cold War (that remained "cold" in large measure due to pure luck).  Now we discover that decisions taken in the wake of Cold War One, just like bad decisions taken in the aftermath of World War One and World War Two, has begat Cold War Two.

This is brilliantly analyzed by economist Jeffry Sachs who played an instrumental role in events that led to the undoing of the Soviet Union and watched as the West stupidly overplayed its hand, paving the way for inevitable conflict we're experiencing today.  In his view, "today's global problems are hangovers from bad, ungenous decisions at the end of previous conflicts."

Sachs recounts the heady days 30-years ago when he assisted Poland's transition from communism to democracy and a western economy.

As a newly minted economist some 30 years ago, I suddenly found myself charged with helping a small and largely forgotten country, Bolivia, to find a way out of its own unmitigated economic disaster. Keynes's writings helped me to understand that Bolivia's financial crisis should be viewed in social and political terms, and that Bolivia's creditor, the US, had a shared responsibility of resolving Bolivia's financial anguish.

My experience in Bolivia in 1985-86 soon brought me to Poland in the spring of 1989, at a dual invitation of Poland's final communist government and the Solidarity trade union movement that strongly opposed it. Poland, like Bolivia, was financially bankrupt. And Europe in 1989, like Europe in 1919, was at a great hinge-moment of history.

...These were heady days for me as an economic adviser. My wish, it seemed on some days, was the White House's command. One morning, in September 1989, I appealed to the US Government for $1bn for Poland's currency stabilisation. By evening, the White House confirmed the money. No kidding, an eight-hour turnaround time from request to result. Convincing the White House to support a sharp cancellation of Poland's debts took a bit longer, with high-level negotiations stretching out for about a year, but those too proved to be successful.

The rest, as they say, is history. Poland undertook very strong reform measures, based in part on recommendations that I had helped to design. The US and Europe supported those measures with timely and generous aid. Poland's economy began to restructure and grow, and 15 years later it became a full-fledged member of the European Union.

I wish that I could stop my reminiscing here, with this happy story. But alas, the story of the end of the Cold War is not only one of Western successes, as in Poland, but also one of great Western failure vis-a-vis Russia. While American and European generosity and the long view prevailed in Poland, American and European actions vis-a-vis post-Soviet Russia looks were much more like the horrendous blunders of Versailles. And we are paying the consequences to this day.

In 1990 and 1991, Gorbachev's government, seeing the emerging positive results in Poland, asked me to help advise it on economic reforms. Russia at the time was facing the same kind of financial calamity that had engulfed Bolivia in the mid-1980s and Poland by 1989.

In the spring of 1991, I worked with colleagues at Harvard and MIT to assist Gorbachev to obtain financial support from the West as part of his efforts at political reform and economic overhaul. Yet our efforts fell flat - indeed they failed entirely.

Gorbachev left the G7 summit that summer of 1991 and returned to Moscow empty-handed. When he returned to Moscow with no results, a conspiracy attempted to oust him in the notorious August Putsch, from which he never recovered politically. With Boris Yeltsin ascendant, and the dissolution of the Soviet Union now on the table, Yeltsin's economic team again asked me for assistance, both in the technical challenges of stabilisation, and in the quest to obtain vital financial assistance from the US and Europe.

I predicted to President Yeltsin and his team that help would soon be on the way. After all, emergency help for Poland was arranged in hours or weeks. Surely the same would happen for the newly independent and democratic Russia. Yet I watched in puzzlement and growing horror that the needed aid was not on the way.

Where Poland had been granted debt relief, Russia instead faced harsh demands by the US and Europe to keep paying its debts in full. Where Poland had been granted rapid and generous financial aid, Russia received study groups from the IMF but no money. I begged and beseeched the US to do more. I pleaded the lessons of Poland, but all to no avail. The US government would not budge.

In the end, Russia's malignant financial crisis overwhelmed the efforts at reform and normality. The reform government of Yegor Gaidar fell from grace and from power. I resigned after two hard years of trying to help, and of accomplishing very little indeed. A few years later, Vladimir Putin replaced Yeltsin at the helm.

Throughout this debacle, the US pundits blamed the reformers rather than the cruel neglect by the US and Europe. Victors write the history, as they say, and the US felt very much the victor of the Cold War. The US would therefore remain blameless in any accounts of Russia's mishaps after 1991, and that remains true today.

It took me 20 years to gain a proper understanding of what had happened after 1991. Why had the US, which had behaved with such wisdom and foresight in Poland, acted with such cruel neglect in the case of Russia? Step by step, and memoir by memoir, the true story came to light. The West had helped Poland financially and diplomatically because Poland would become the Eastern ramparts of an expanding Nato. Poland was the West, and was therefore worthy of help. Russia, by contrast, was viewed by US leaders roughly the same way that Lloyd George and Clemenceau had viewed Germany at Versailles - as a defeated enemy worthy to be crushed, not helped.

A recent book by a former Nato commander, General Wesley Clark, recounts a 1991 conversation he had with Paul Wolfowitz, who was then the Pentagon's policy director. Wolfowitz told Clark that the US had learned that it could now act with impunity in the Middle East, and ostensibly in other regions as well, without any threat of Russian interference.

In short, the US would behave like a victor and a bully, claiming the fruits of Cold War victory through wars of choice if necessary. The US would be on top, and Russia would be unable to stop it.

...The shadow of 1989 looms large. And Nato's continued desire, expressed again just recently, to add Ukraine to its membership, thereby putting Nato right up on the Russian border, must be regarded as profoundly unwise and provocative.

1914, 1989, 2014. We live in history. In Ukraine, we face a Russia embittered over the spread of Nato and by US bullying since 1991. In the Middle East, we face the ruins of the Ottoman Empire, destroyed by WW1, and replaced by the cynicism of European colonial rule and US imperial pretentions.

We face, most importantly, choices for our time. Will we use power cynically and to dominate, believing that territory, Nato's long reach, oil reserves, and other booty are the rewards of power? Or will we exercise power responsibly, knowing that generosity and beneficence builds trust, prosperity, and the groundwork for peace? In each generation, the choice must be made anew.

Sachs captures the cynicism of our age, the darkness that may propel us, even if unwittingly, back into war.  The bony finger of triumphalism still taps the cadence of conflict in Washington, London and Ottawa.  We somehow think that punishing Russia is worth the risk of destabilizing the great Bear and it's this warped thinking that refuses to recognize our duplicity and bullying of Russia, layer upon layer since 1991.  It's a story of hubris and death and mass suffering, again and again and again.

1 comment:

Dana said...

"It's a story of hubris and death and mass suffering, again and again and again."

Yup, since we lurched out of Olduvai Gorge.

It's what we do best.