While the world leaders are slightly optimistic about the economic recovery in the Western countries, Eastern Europe prepares for the next wave of the crisis.
The states are short of money to indemnify for their budgets and to support businessmen, a lot of companies stand on the verge of bankruptcy, the population's employment and incomes continue to fall, and the demand slackens.
The first wave of the crisis began in the U.S.A. and moved eastward, but it looks like the second wave will move from the East to the West.
In 2008 the economic convulsions in the U.S.A. made many countries change their self-appraisals: Poland and Hungary's successes, the Baltic states' prosperity, which they had achieved through taking credits, and the economic boom in Ireland turned out to be traps, which those countries cannot get out of. At present the problems in Eastern Europe may show that the economic growth, which was declared in the West, is virtual and propagandistic. Eastern Europe's economic situation is the worst in the EU, and the economic performance of the Baltic states is the lowest in Eastern Europe, where Latvia's economic situation is the worst. Soon the country will run out of the money, which the IMF has loaned to it. In Riga's streets the people discuss the forthcoming economic slump - what is to be done when no money except debts remains in the country?
In the last weekend the Latvian Concord Center coalition organized the international discussion about the prospects of the anti-crisis policy. It is a serious bid if to take into consideration that the moderately left Concord Center, which is supported mainly by the Russian-speaking population, won the elections in Riga and now ranks first in the public opinion polls.
It is significant that the discussion was carried on in English, and the U.S. experts set the tone. However this is not a usual meeting where neoliberal Western experts teach their inexperienced foreign colleagues to build capitalism. There are quite a lot of local neoliberal economists and political scientists in the East European countries. The efficient and expensive political machine of the bourgeois hegemony formed a great number of intellectuals who do not need the foreigners' instructions to get neoliberal political priorities straight. It is clear to them that it is necessary to cut down the government expenses, maintain the currency rate and to privatize the state-owned enterprises. If after the privatization the enterprises go to ruin, it means that they should have never been built in the first place.
The problem is this policy led to the catastrophe. Now that there is a need for different ideas, approaches and theories, it turns out that the governments do not have them and have again to adopt the Western ideas and invite the Western experts. But this time left ideas rather than right ones are necessary.
Today Eastern Europe's intellectual backwardness is stronger than it was 20 years ago. In fact, by then those countries were not backward, rather their self-appraisals were too low. The East European countries followed the West's example, believed that it was ideologically and socially homogeneous and adopted its major ideas, as the only true ones, just because they prevailed in the democratic society. That a true democracy presupposes the struggle of ideas was incomprehensible to those who had lived under the authoritarian rule. The fact that some ideas won and other lost was a sufficient argument to adopt the former and reject the latter. As regards morality, it cannot exist with such an approach.
The liberal ideas have spread among the intellectuals and elites in the Eastern European countries without any foreign propaganda - only their language should have been a little refined. Whatever people think of the ideology, one has to admit that then the East European intellectuals drifted in the same direction as their Western colleagues did. They considered the right ideas to be the only response to the Communist ideological collapse. This process was global and the two parts of Europe differed from each other only in the scale and intensity of the change.
But scales are also of importance. While East European intellectuals came to support the liberal ideals as zealously as they used to support the Communist ones, in the West there were quite a few people who remained true to their initial principles. In the East European countries, during the Communist regime, the intellectuals vowed fidelity to the official ideology without believing in it, but later on everybody started to believe in the new ideology, even when the public fidelity vows were not required (the latter is not true for the Baltic states where the formal declaration about the loyalty to the new regime became a "pass" to the public sphere, especially for the Russian-speaking people).
In any event, the triumph of liberal views has turned Eastern Europe into an intellectual desert where only the ethnic nationalism weeds sometimes shoot, and small wonder. The neoliberal doctrine is incompatible with the social solidarity idea, but it allows of ethnic cleansing as long as it does not prevent the free market from developing.
The positive influence of the economic crisis upon the society is that the crisis makes people think. The fact that Latvians host foreign left-wing experts to help them does not mean that a new orthodoxy replaces the old one. The Latvians will have to make decisions by themselves, the crucial thing is they should not be too late.
The neoliberalism is becoming a thing of the past leaving ruins behind. It would be good if the ruins were only intellectual.
Boris Kagarlitsky, a fellow of the Transnational Institute, is a Director of the Institute of Globalization and Social Movements, Moscow. His latest book is Empire of the Periphery: Russia and the World System (2008).
Eurasian Home, 27 August 2009