Edward S. Herman
With
the discovery of the massive laundering of Russian money– some of it
compliments of the IMF, and U.S. taxpayers–through the Bank of New York, the
issue of Russian corruption is now "in." But it presents the
establishment with a problem. After all, didn’t we help put into power and
encourage people who were the alleged "reformers," the good guys as
opposed to the threatening communists? It is awkward that a rapidly enlarging
number of the reformers and their allies have been charged with or are under
investigation for stealing and laundering money.
Serge
Schmemann in the New York Times, raising the question "What Makes Nations
Turn Corrupt?" (Aug. 28), runs through the usual litany of rationales, such
as "the deep scars of Communism, or…an innate proclivity for corruption
in certain cultures." But he never mentions the curious fact of steadfast
Western support for the thieves in many egregious corruption cases. He cites
World Bank opinion, assuring us that the Bank "has made control of
corruption in client nations a top priority." He also cites economists,
who, like World Bank officials, contend that corruption is "a symptom of a
sick state, and therefore curable through reforms of incentives, institutions
and monitoring mechanisms."
Schmemann
does not mention that the World Bank gave massive loans to Indonesia for decades
although perfectly aware of very extensive corruption, and that the Bank only
began to question that corruption with the collapse of the Suharto dictatorship.
This long-standing support of a seriously corrupt system, which actually
involved considerable looting of World Bank monies, suggests that looting may
not be intolerable to the Bank (and to the West), if associated with other
considerations deemed more important, such as ready access to resources by
international oil companies and similar largesse to other transnational
corporate interests.
This
in turn suggests that a model explaining systemic corruption might be developed
based on the western need to find joint venture partners in Third World (and
more recently, Second World) states who will serve the West, as Suharto did by
exterminating a left opposition and providing an open door to foreign investors.
During the Vietnam war, spokespersons for the National Liberation Front coined
the phrase "country-selling governments," to describe the series of
governments headed by former French mercenary officers like Marshal Ky and
General Thieu, put in place by the United States, who were willing to
participate in the destruction of their country on behalf of the United States
in order to "save it" from communist control.
In
the case of Vietnam and other Southeast Asian and Latin American countries, and
in the Philippines and Zaire, the United States had to settle for not only
ruthless but also venal scoundrels in its search for people who meet its
standard for service. Thus, in describing the pattern of selection of leaders in
Vietnam, Malcolm Browne stated back in 1965 that "Unfortunately, most of
the really intelligent, dedicated and patriotic men and women who formed the
stuff of sound leadership stayed with the Vietminh." In short, the endemic
corruption of "our" Vietnamese was linked to the fact that our
requirements caused us to select from within a narrow set of denationalized and
mercenary elites. As this selection process occurred widely, we don’t need a
model resting on "Asian nature," or any other kind of nature to
explain systematic corruption.
Noam
Chomsky and I explained it with our mini-model of the "shakedown
state" in The Washington Connection and Third World Fascism (pp. 61-66),
where we reviewed a number of important cases and concluded that, with the U.S.
system of client states "the support base of privilege and the entire
network of arrangements, including the selection of leaders qualified to do the
work to be done, makes corruption integral to the system."
This
model applies well to the case of Russia. If Serge Schmemann failed to mention
it or anything similar, perhaps this is because the model implies that
corruption flows from Western choices, which conflicts with the ideological
premise that the West is good and would by definition oppose corruption. In the
case of Russia, the West helped bring into power and gave unstinting support to
"reformers" who were clearly corrupt or linked to corrupt groups. With
U.S. and other Western backing and pressure, the reformers pressed a massive
privatization operation in an extremely unpropitious environment, lacking the
minimal market institutions, knowledge, and political structures that would make
such a radical restructuring honest, equitable, and socially useful.
The
West’s preferred reformers were in fact the most opportunistic and
denationalized of the old communist nomenklatura, who helped engineer the
revolution from above in order to allow themselves to seize opportunities for
gain precluded in the older order (a main theme of David Kotz’s and Fred Weir’s,
Revolution from Above). And the abuses and corruption that they brought to the
privatization process were evident very quickly. But it did not cause the
slightest decline in Western support for the reformers or for rapid
privatization. The 50 percent decline in Russian GDP, the immense capital
flight, and the beggaring of a large majority of Russians also did not alter the
Western commitment. World Bank and IMF aid kept flowing, as in the Suharto case,
in the face of evident massive corruption as well as economic failure.
In
short, the reformers were doing what the West wanted done. In her recent
analysis of Russia, Katrina Vanden Heuvel claims that that "the Clinton
administration’s Russia policy has failed…None of the administration’s short-
or long-term goals have been achieved." (Nation, Sept. 6/13, 1999). This
conclusion is based on Vanden Heuvel’s taking at face value the administration’s
claim of an interest in consolidating "democracy" in Russia. It is
certainly true that democracy was not enhanced by administration policy, but
rather than assuming that this resulted from error, we should recognize that
democracy was no more the objective in Russia than it is in Saudi Arabia or that
it was in Suharto’s Indonesia.
I
think it is pretty clear that the primary Western policy objectives in Russia
were to make the death of socialism irreversible, to reduce Russia’s economic
and political power, to facilitate western economic penetration, and even to
transform that country into a Western client state. These objectives were
advanced by very rapid privatization that built up a strong indigenous
capitalist base, an openness to foreign investment, and by the degeneration of
the Russian economy. As with Suharto’s regime, the corruption and negative
effects on the political order were acceptable spin-offs, and the decline of the
economy, increased financial dependency on the West, and the ending of any
Russian military threat, also point to the main Western objectives having been
successfully accomplished.
Obviously
the Russian people have suffered greatly from these policies, and the long-term
destabilizing effects of helping Yeltsin and company destroy Russia in order to
save it may be very costly. But the western leadership thinks short-term, and in
that frame of reference their policies have been strikingly successful. And
while the chickens of corruption coming home to roost may create a puzzle for
Serge Schmemann and others, they are familiar chickens that have a simple
explanation: they are the acceptable costs of a shakedown state that has done
its job well.