Category Archives: economics

by Joel | 26 January 2025 · 6:41 am

Caribbean Gold Rush, c. 1500

From The Other Slavery: The Uncovered Story of Indian Enslavement in America, by Andrés Reséndez (HarperCollins, 2016), Kindle pp. 32-34:

Spanish miners and prospectors flocked to the streams, savannas, and mountains of Cibao. Although flecks of gold could be found all over the region, only certain areas contained enough gold to make extraction profitable. An early colonist, Gonzalo Fernández de Oviedo, tried his hand at gold panning and left the most detailed portrayal of these activities.

Each Spaniard arrived with his cuadrilla, or team of Indians. In most cases, the “miner” was merely a colonist with no knowledge of metals or mining techniques. Once he settled on a place—probably chosen after a mixture of hearsay, intuition, and preliminary digging and sampling—he had his Indians clear a square trench of about eight by eight feet. Sandy beaches along the rivers were ideal, but many alluvial placers were in wooded areas, known as arcabucos, or along hillsides that required the removal of large rocks and trees. Once the Indians completed this preparatory work, they dug the cleared area to a depth of about twice the length of a worker’s palm setting aside the removed sand and earth. They dug with simple tools, even with sticks and their bare hands in the early years. This was strenuous labor, but easier than the next step.

The same “digging” Indians or other members of the cuadrilla transported the piles of dirt to the nearest stream. An average-size trench produced more than six thousand pounds of dirt mixed with the tiniest fragments of gold. The Indians carried this dirt on their bare backs, in loads weighing three to four arrobas, about sixty to ninety pounds. These were very heavy burdens considering the slender build of most of the bearers. The work proceeded ceaselessly all day. Instead of using valuable beasts of burden, the Spaniards compelled Natives to do all the hauling; horses and mules were devoted to the tasks of conquest and pacification. The Indians were even forced to carry their Christian masters in hammocks. As a result, they developed “huge sores on their shoulders and backs as happens with animals made to carry excessive loads,” commented Friar Las Casas, who arrived in Española right at the time of the gold rush, “and this is not to mention the floggings, beatings, thrashings, punches, curses, and countless other vexations and cruelties to which they were routinely subjected and to which no chronicle could ever do justice.”

By the water, a third group of “washing” Indians—usually women, because this work was less physical—received the cargo. Standing in the stream with the water up to her knees, each woman held a large wooden pan called a batea. “She grabs the batea by its two handles,” wrote Oviedo, “and moves it from one side to the other with great skill and art, allowing just enough water to rush in as the earth dissolves and the sand is washed away.” With some luck, after sifting thousands of pounds of earth, the woman would find “whatever God wishes to give in a day”—a few grains of gold—in the bottom of the batea.

Each cuadrilla consisted of at most a few dozen laborers. The smallest had only five: two diggers, two carriers, and one washer. Yet put together, all these teams made Cibao a veritable anthill. In promising areas, the competition was fierce. When a miner struck gold, others immediately flocked there. To prevent rivals from setting up next to him, he would “invite someone whom he wishes to help and chooses as a neighbor” to move in first. Even though Columbus and his family attempted to limit the number of Spaniards going to the gold region, the number of cuadrillas grew steadily in the late 1490s and early 1500s. During the first decade of the sixteenth century, the heyday of gold production in Española, the island may have yielded around two thousand pounds of gold per year. It is possible to imagine an enormous ingot of that weight, but it is much harder to comprehend the madness of some of the Spanish owners—one of whom became notorious for throwing parties in which the saltshakers were full of gold dust—or to grasp the suffering of some three or four thousand able-bodied Indians—perhaps as many as ten thousand—toiling daily in the gold mines of Cibao to make such opulence possible for the colonists.

Like any other rush, the gold rush of Española was chaotic and destructive. “Take the most advantage, because you do not know how long it will last” was a saying that circulated among the early miners. This bit of wisdom applied not only to the amount of gold one could extract but also to the number of Indians one could command. Columbus’s initial proposals for enslavement fit perfectly with the labor needs. The first slaves working in the mines were islanders who had rebelled during the 1490s and whom the Spaniards had defeated and captured. The end of these rebellions, coupled with Queen Isabella’s insistence that the Indians were free, threw a monkey wrench into his plans and brought to the fore the problem of keeping the mines supplied with workers.

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by Joel | 23 January 2025 · 5:26 am

Long-term Effects of Pacific Crossings

From Conquering The Pacific: An Unknown Mariner and the Final Great Voyage of the Age of Discovery, by Andrés Reséndez (HarperCollins, 2021), Kindle pp. 242-244:

Among other things, the newfound transpacific connection led to a population boom in Asia, driven by the introduction of New World crops, especially sweet potatoes, corn, and peanuts. Today, China is the second-largest producer of corn in the world, after only the United States; China and India are the top two producers of peanuts; and New Guineans obtain more calories per person from sweet potatoes than anyone else in the world. Corn, for example, was domesticated in the Americas at least nine thousand years ago but spread across the Pacific only in the sixteenth century. In China, this New World crop made inroads along the Yangtze and Han River valleys, where rice had been cultivated for millennia. Rice requires flooded fields of arable land, so cornfields sprang up at higher elevations and in drier conditions, where rice cultivation was marginal or impossible, thus extending China’s agricultural frontier and transforming what had once been forested hills into cornfields. Roughly speaking, corn produced the same number of calories per hectare as rice, but with far less irrigation and labor. This led to a significant population boom. Although the precise timing and magnitude of this demographic expansion varied from one Asian nation to another, all of them benefited from the incorporation of New World crops. A full accounting of this vast energy transfer from the Americas to Asia has yet to be made, but the preliminary information shows that it was enormous.

Regular transpacific contact also created the first global trading system recognizable to us even today. Economic activities in the Americas came to depend not just on colonial-metropolitan relationships across the Atlantic but on supply and demand around the world—especially in Asia. Excellent examples are the great silver mines of Peru and Mexico, which constituted a mainstay of the economy of the Americas in colonial times and structured life for hundreds of thousands of Native Americans who directly or indirectly, forcibly or not, became a part of the silver economy. Traditionally, this is told as a story of European empires extracting valuable resources from their American colonies. Left unsaid is that the most important end-market customer by far was not Europe but China, where a major tax reform known as “the single lash of the whip” replaced paper money with silver in the sixteenth century. With this tax reform, China instantly became a worldwide magnet for the white metal, absorbing the silver production of neighboring Japan and then turning to the New World mines, which produced upwards of eighty percent of the world’s silver between 1500 and 1800. Without China’s massive and persistent demand for silver, the mines on the American continent would never have attained the scale they did, nor would their profits have spilled over into other colonial enterprises and affected so many lives throughout the hemisphere. The sixteenth century gave rise to the first truly global economy, in which Asia’s relative demographic and economic weight was significant and at times paramount. This feature of our world economy has become familiar to us, as China has continued to demand global resources such as soybeans, copper, and steel, affecting markets all around the world.

By the end of the eighteenth century, British and especially American merchants began building on these earlier transpacific linkages to launch their own ventures. As the Spanish empire in the Americas crumbled in the early nineteenth century, American ships came to replace the old Spanish galleons. The story of the United States’ expansion through the Pacific is well known, as the nation took control of Hawai‘i, Guam, and the Philippines, opened direct trade with Japan and China, and forged a vast network of transpacific interests. As we live in a world increasingly centered on the Pacific, it is imperative that we understand how we got here. The voyages of Urdaneta and of Lope Martín, the Black pilot who now takes his place in world history, were at the dawn of this transformation.

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Filed under Britain, China, economics, food, Mexico, migration, Pacific, Philippines, Spain, U.S.

by Joel | 17 January 2025 · 6:46 am

Magellan in Spain

From Conquering The Pacific: An Unknown Mariner and the Final Great Voyage of the Age of Discovery, by Andrés Reséndez (HarperCollins, 2021), Kindle pp. 52-55:

Columbus’s exploits loom so large in our understanding of the past that other great discoveries recede into the background. In truth, any reasonable observer at the turn of the sixteenth century would have conceded that, even after Columbus’s famous voyages, Portugal’s lead in the global race had widened until becoming almost unassailable. Portuguese navigators reached the tip of Africa in 1488 and found the route to India a decade later. King Manuel I of Portugal took pleasure in writing lengthy letters to the Spanish monarchs, his in-laws and rivals, informing them, “Our Lord has miraculously wished India to be found” and telling them about the spices, precious stones, elephants, exotic peoples, and the immensely profitable trade carried on there. “We are still awaiting news from the twenty-five ships that we sent the previous year [1502],” Manuel gloated to Ferdinand and Isabella in one of his letters, “and after they come back in September there will be time to send some more.”

In the meantime, Spain could point to only a few Caribbean islands and inklings of an unknown continent, but no precious spices, porcelain, or silk. The new lands did offer some gold, but they never replaced the original quest of finding a western approach to the incalculable riches of the Far East. Spaniards explored the continent blocking their way, looking for a passage that would connect the Atlantic with the Pacific. They came up empty-handed until Fernão de Magalhães—a Portuguese defector like the Afro-Portuguese pilot Lope Martín a generation later—put Spain back in the race. Ferdinand Magellan had come of age during Portugal’s torrid expansion into Asia in the 1500s. Yet he had a falling-out with the Portuguese crown and went knocking on neighboring doors. It is difficult to overstate the significance of Magellan’s move to Spain.

Magellan caught up with the roving Spanish court at the town of Valladolid. For someone accustomed to the sound of waves and the proximity of sailboats, it must have been strange to have to journey to the middle of Iberia to propose a maritime venture in a town surrounded by agricultural fields and interminable plains. He did not arrive alone but was accompanied by two brothers, Rui and Francisco Faleiro, both cosmographers whose reputations exceeded Magellan’s. The trio complemented one another well. Magellan came across as a man of action who had fought in India, Malaysia, and North Africa, while the Faleiros were armchair academics. As they waited for an audience with the Spanish king in February and March of 1518, the Portuguese visitors grew unsettled by what they heard. The new monarch, Charles I, was an awkward eighteen-year-old who had come from Belgium just a few months before and had great difficulty communicating in Spanish let alone Portuguese. Worse, the trio had to tread carefully in a court riven by a power struggle between Charles’s advisers recently arrived from Belgium and the old Spanish officials from the previous monarch.

Interestingly, during the early negotiations Rui Faleiro rather than Magellan emerged as the leading voice. The older of the two Faleiro brothers, Rui was deferentially referred to as a bachiller (or bacharel in Portuguese), the highest university degree one could get at the time. Before leaving Portugal he may have been considered for a new chair in astronomy established at the oldest university in the kingdom (what is now the University of Coimbra) by the Portuguese king himself. It was the highest position in the field. One of the reasons that perhaps impelled Rui Faleiro to join Magellan in Spain was being passed over for this prestigious appointment; academic rivalries and pettiness were already alive and well in the sixteenth century! In spite of this setback, and notwithstanding a rumor that “he was possessed by a familial demon and in fact knew nothing about astrology,” Rui Faleiro remained a top European cosmographer. Sixteenth-century Spanish chronicler Gonzalo Fernández de Oviedo described Rui Faleiro as “a great man in matters of cosmography, astrology, and other sciences and humanities.” There is little doubt that he was extremely accomplished if mercurial and mentally unstable. Rui’s younger brother Francisco Faleiro was just as talented and would go on to find long-term employment in Spain as a leading nautical expert. Together the two Faleiros and Magellan were very credible petitioners.

On the day of the audience, Magellan and Rui Faleiro arrived not with charts as would have been expected but with “a globe that was very well painted and showed the entire world, and on it Magellan traced the route that he would follow.” The two petitioners explained that they intended to cross from one ocean to the other “through a certain strait that they already knew about.” Even though the globe was detailed, the portion of South America where the strait was supposed to be had been left intentionally blank. Magellan and Faleiro had evidently taken some precautions in case anyone present at the audience should wish to steal their project.

Their knowledge of a passage between the oceans—the alpha and omega of many New World explorations—would have been more than enough for the royal sponsorship. But Magellan and Faleiro went further. As one witness at the audience recounted, “They offered to demonstrate that the Moluccas [Spice Islands] from where the Portuguese take spices to their country are on the side of the world that belongs to Spain, as agreed by the Catholic Monarchs and King Juan of Portugal.” The 1494 Treaty of Tordesillas had established a line of demarcation running from pole to pole through the Atlantic but did not contemplate extending the line to the other side of the world. As Portugal and Spain, however, had continued to sail in opposite directions, such an antimeridian had become necessary. Measuring longitude or east-west distance was still extraordinarily difficult in the early sixteenth century, so no one knew quite where to draw this line in the distant Pacific. All the same, in the early 1510s the Portuguese had planted trading forts in Malaysia and the Spice Islands while Spain had stood by helplessly. Yet in the winter of 1518, Magellan and Faleiro had become persuaded that the Spice Islands were actually on the Spanish side, a conclusion all the more startling in Spain because it was coming from these top Portuguese navigators and cosmographers.

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Filed under economics, Indonesia, Latin America, migration, nationalism, Philippines, Portugal, science, Spain

by Joel | 16 January 2025 · 4:37 am

Columbus in Portugal

From Conquering The Pacific: An Unknown Mariner and the Final Great Voyage of the Age of Discovery, by Andrés Reséndez (HarperCollins, 2021), Kindle pp. 38-41:

What made this contest [between Portugal and Spain] all the more startling was the stark differences between the two competitors. To put it bluntly, it was a race between a dolphin and an elephant. With a population of barely one million by 1500, Portugal was just too small to take over the world. Lisbon was a very modest capital and base of exploration of around forty thousand people. As it expanded through western Africa, Brazil, India, Malaysia, Indonesia, Japan, and China—even if only to establish trading forts or feitorias—the Lusitanian nation became overstretched. Everyone at home was scrambling to keep things running or consumed by one of these ventures halfway around the world. Still, what Portugal lacked in population it more than made up for in experience, cutting-edge nautical technology, and clarity of purpose.

In contrast, the kingdoms that coalesced into Spain contained some five to seven million inhabitants, easily dwarfing Portugal in human and material resources. Yet this aggregation of kingdoms was difficult to manage. Some of them possessed significant maritime experience: elephants do swim. Yet the core of this composite monarchy, the Crown of Castile, was more terrestrial than Portugal. This land orientation is evident in the cities where the Spanish court tended to reside: Valladolid, Toledo, and finally Madrid, right in the middle of the Iberian Peninsula, as far as possible from any coast or sea.

There is no better way to get a sense of these two contenders and understand the nature of the race than by following in Columbus’s footsteps. He lived in Portugal for a decade before moving to Spain and setting the contest in motion by proposing to his new hosts “to reach the east by way of the west.” Columbus’s initial arrival in the Iberian kingdoms had been entirely unplanned. Pirates had attacked the ship on which he was traveling and a great fire had broken out, forcing everyone to jump into the water, “and Columbus, who was a strong swimmer,” a near-contemporary chronicler informs us, “swam for two leagues [seven miles] to the closest land, holding onto an oar to get some rest along the way.” The twenty-five-year-old Columbus washed up on Portugal’s southwestern tip in 1476. It was probably the farthest he had ever been from his native Genoa. Up to that time, Columbus had been trading wools and textiles on behalf of his family, mostly within the Mediterranean.

Once in Portugal, the future “Admiral of the Ocean Sea” remade his life. After drying off his clothes and resting his weary limbs, he made his way to Lisbon where he found a community of Italian financiers, merchants, and nautical experts deeply involved in Portugal’s ventures of exploration. This group included Columbus’s own brother, Bartholomew Columbus, who had moved out of the family household years earlier and relocated to Portugal. The two brothers formed a partnership and made a living by drawing nautical charts and selling books. A contemporary who met Columbus in those years described him as “a dealer in print books of great intelligence although little book learning, and very skilled in the art of cosmography.”

Lisbon, surrounded by massive walls except along the waterfront, was a town on the move at the time of Columbus’s arrival. Sitting on the highest hill was the Castle of São Jorge, a structure that looked ancient even in the fifteenth century. It had a commanding view of the Tagus River and the Atlantic Ocean. In the 1470s through 1490s, when Columbus lived in Lisbon, the castle remained the nerve center of Portugal’s exploration activities. A huge map of the world mounted on gold-plated wood in a cavernous room signaled Portugal’s grand design. Officials bustled around the premises, keeping accounts, levying taxes, and organizing sales of exotic goods coming from Africa as well as from Asia and America later on. Some of these items were on display, including two lions kept in a pen to impress visitors.

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by Joel | 18 December 2024 · 2:15 am

U.S. Navy in Wartime Honolulu

From The Mighty Moo: The USS Cowpens and Her Epic World War II Journey from Jinx Ship to the Navy’s First Carrier into Tokyo Bay, by Nathan Canestaro (Grand Central, 2024), Kindle pp. 56-57:

Hawaii had occupied a special place in the American popular consciousness since the 1930s. Even during the darkest days of the Depression, as much as half of the US population saw a movie every week, and “Hawaii Hollywood-style” was a staple of the films of the era. A string of blockbusters romanticized it as a tropical paradise with a hula girl under every palm tree. The islands’ exclusiveness also added to their popular mystique. In the prewar era, a Hawaiian vacation was well out of reach of the vast bulk of American society, affordable only for the very affluent.

Once servicemen arrived in Honolulu, it was difficult to reconcile the popular image of the place with reality. Rather than an idyllic paradise, Honolulu was just another crowded Navy town, “full of sunlight and sailors and bad liquor.” Pearl Harbor was a major shipyard, supply center, and way station for the Pacific Fleet, and from 1941 to 1945 more than a million servicemen and defense workers passed through it on their way to or from the war. Sam Sommers commented that with the huge volume of men, equipment, and supplies pouring into Hawaii, “the island could have fought a pretty good war by itself.”

Few servicemen said much good about it, however, dubbing it “the rock.” Some of this was just a case of unrealistic expectations, although there were also plenty of legitimate gripes. These included overcrowding by fellow servicemen, high prices, a male-to-female ratio that most men swore was at least several hundred to one, and the seedy industries that sprung up to separate the sailors from their $50-a-month salary. The complaint that there were just too many servicemen was the most common. The men waited in line for everything—restaurant, movie theater, bar, or brothel. The crowds would reach their peak in December 1944, when 137,200 soldiers, sailors, and Marines were ashore, more than half of Honolulu’s 1940 population. The islands had a tradition of hospitality, but many residents felt they had avoided a Japanese invasion only to suffer through a Navy one.

Cowpens had six days at anchor in Pearl Harbor before putting out to sea for exercises, and during that time McConnell released the crew for liberty in rotating shifts. While the officers enjoyed time in the O clubs or playing golf and tennis, some of the sailors went sightseeing, or swam or sunbathed on Waikiki Beach, seeing for the first time that the iconic beach was marred with double lines of barbed wire and patrolled by sentries. Other popular destinations were the USO clubs, the largest being the Army-Navy YMCA in downtown Honolulu. At these clubs, A-list celebrities such as Bob Hope and Jack Benny put on lavish musical variety shows, which interspersed big band music with stand-up or dance routines. The Navy had its recreation center, the Breakers Club, on Waikiki Beach—Artie Shaw and his Navy band made it famous, and up to 4,400 men visited every day.

The Army’s Maluhia Club, at the other end of Waikiki, had the best dance floor on the island. Many soldiers and sailors went there in hopes of meeting women, but the odds were skewed against them. Paraphrasing Winston Churchill, the men joked that “never have so many pursued so few, with so much, and obtained so little.” The Maluhia was staffed by a cadre of volunteer USO girls, many of them the daughters of socially prominent Hawaiian families, each accompanied by a watchful chaperone. Perhaps 250 or so were there on any given night to dance with 3,500 or so men. There was no cutting in until the whistle blew, which it did every 2.5 minutes. The female volunteers danced for three or four hours at a stretch just to make sure each of the lonely servicemen got their turn. One such group of patriotic women volunteers called themselves the “Flying Squadron,” and in twelve months from 1942 to 1943 they attended 127 dances with more than sixty thousand men.

The most popular destination for the enlisted men in Honolulu was Hotel Street, the city’s vice district—where they went to get “stewed, screwed, and tattooed.” While the men had arrived looking for the Hawaii they had seen in the movies, on Hotel Street they found the Hawaii later depicted in From Here to Eternity. James Jones’s iconic 1951 novel detailed the intersection between the island’s servicemen and its seedy side, what one scholar of the period called “a small world of rough men and prostitutes, of drinking, gambling, sex, violence, and despair.”

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by Joel | 14 December 2024 · 2:27 pm

Rising Nationalist Communism, 1960s

From From Peoples into Nations: A History of Eastern Europe, by John Connelly (Princeton University Press, 2020), Kindle pp. 619-621:

Romania asserted itself more boldly in the international sphere. From late 1958, its trade expanded with the West and contracted with the Soviet Union. In the Soviet Bloc’s equivalent to West Europe’s Common Market, the Council of Mutual Economic Assistance (or COMECON), Romania opposed the plans of its allies to make it the agricultural base for their more developed economies. In the eyes of Romania’s leaders, such a scheme would have condemned the country to backwardness; yet it also aggravated long-festering inferiority complexes among them toward other, better established Communist parties, but also toward their own population. The Six-Year Plan that commenced in 1960 provided for sharp increases in Romania’s rate of industrialization, and Marxism-Leninism became a tool for Romanian national development. In 1963 Ceaușescu accompanied Foreign Minister Ion Gheorghe Maurer on a trip to China, North Korea, and the Soviet Union, meeting with Mao, Kim Il Sung, and Khrushchev.

Ceaușescu became the party leader after Gheorghiu-Dej’s death in 1965 and built his popularity on defiance of Moscow. Neither legitimation through Marxian utopianism nor recourse to crude violence was enough to stabilize rule in an intensely anticommunist population, and Ceaușescu evolved into a nationalist extremist, whose personal power increased as did his personal identification with the nation. Romania was surrounded by hostile countries, Ceaușescu claimed, and he was the only force that could protect the people. A younger generation joined him in the Romanian Communist Party leadership, and together they promoted a collective identity based on cults of Romanian historical heroes as well as anti-Russian and anti-Semitic insinuations. They eschewed violent strategies of maintaining power. In the post-Stalinist period, these were not only inappropriate, they were no longer necessary. Earlier mass repression had smashed hostile social groups.

Marxism-Leninism tinged with nationalism thus permitted Romania’s Communists to develop a sense of their political legitimacy for the first time in their history, and also to make appeals to the population and tap “dormant social energies,” among workers and among intellectuals. While firming his grip on power, Ceaușescu permitted the publication of works of previously forbidden authors and fostered collusion with intellectuals that was not entirely new but was greatly intensified. The turn against the Soviet Union was a rupture with previous practice, however, and endeared Ceaușescu to the West. The French leader Charles De Gaulle visited Romania in May 1968, just as workers and students were testing his own regime. He found much to admire in a country that maintained independence against the superpowers and seemed so orderly. “For you such a regime is useful because it gets people moving and gets things done,” he told the Romanian dictator. In 1969, Richard Nixon became the first US president to visit Romania, and nine years later, Ceaușescu touched down in Washington, DC, as neither the first nor last repressive dictator to be accorded full state honors. What seems unusual in retrospect is that Jimmy Carter would celebrate Ceaușescu as a champion of human rights.

Such was the topsy-turvy world of East Central Europe after Stalin, where strategies of national legitimation brought Hungary toward economic reform but took Poland to the center of a very old and toxic nationalism, on a backdrop of slow economic disintegration. Bulgaria as well as Romania retained important facets of Stalinist control under strong party leaders and pervasive security apparatuses, yet one was inseparable in foreign policy from the Soviet Union, while the other treated Moscow almost as a hostile power. East Germany behind the Berlin Wall was modeling itself as Moscow’s most loyal student, but also building pride as the strongest economy in the East Bloc, pride that would evolve into a kind of minor nationalism, “socialist in the colors of the GDR,” black, red, and gold. In 1962 the Soviet Union would force Czechoslovakia to destalinize, and after that, this country also went on its own path, toward something called “socialism with a human face,” which, as it turned out, was initially a detour back to the 1930s, connecting with native traditions of democracy and Masaryk’s idea that truth will prevail.

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by Joel | 12 December 2024 · 11:04 am

Khrushchev’s Effect on Soviet Satellites

From From Peoples into Nations: A History of Eastern Europe, by John Connelly (Princeton University Press, 2020), Kindle pp. 595-597:

Kádár’s ethos of making life better had consequences for Party elites as well. Under Rákosi, they had rewarded themselves with vacation houses, special stores, and innumerable perquisites. Kádár cut those back, and now even top leaders relied on the Hungaria-Balaton Tourism and Holiday Company to get rooms in summer houses. Kádár called this policy “strengthening Communist morals.” Functionaries lost the privilege of traveling with 50 percent reduction on state railways and could no longer use state automobiles and telephones for private purposes. Thus, party power was restored but there was no return to the Stalinist status quo ante. More consumer goods became available, and living standards rose by a third from 1957 to 1960. Beginning in the early 1960s, televisions, washing machines, and refrigerators became commonplace, and average wage-earners lived in much greater comfort and security than did their parents or grandparents.

This non-nationalistic, consumption-oriented program also matched Hungary’s specific national predicament. Kádár reckoned that after decades of being called to sacrifice for great causes—the Nazi enterprise of saving Europe and then the Soviet one of propelling humankind into a utopian future—Hungarians were ready for things more tangible. Socialist society was being built, not for the sake of ideology, he assured the population, but “because it ensures a better life for the people, and that the country and the nation will flourish.”

To make this strategy succeed, Hungary’s Communists turned their attention to economic reform more seriously than comrades did elsewhere, over a longer period, with greater consistency and support from the top, despite objections from Moscow, and even during upheavals in other states. Socialist states had grown their economies rapidly in the early 1950s by introducing underused resources to production, especially raw materials and labor, but by the 1960s, those avenues were becoming exhausted. Now industrial growth would depend on increased productivity and technical development. The challenge of slower growth was felt keenly in the Soviet Union, given Nikita Khrushchev’s bold pronouncement of October 1961 that the Soviet Communist Party would attain “over the next 20 years a living standard for the people that will be higher than that of any capitalist country.” “For the first time,” he said, “there will be a full and final end to the situation in which people suffer from shortage of anything.” (See Tables A.5 and A.6 in the Appendix.)

Hungary faced severe disequilibrium. It had mounting debts to countries outside the Soviet Bloc, going from 1,600 million forints in 1959 to 4,100 million in 1963, and its debt-servicing commitments to those countries exceeded the value of its exports to them. More than 80 percent of the growth in debt involved short-term credits that expired within three months and had to be constantly refinanced. The sum of repayment obligations was more than twice as large as the foreign exchange earnings exports could cover.

Pressure for changes was strongest in agriculture, because Hungarians spent most of their money on food and because the quality of diets had dropped sharply under Stalinism. The completion of collectivization by 1961/1962 had only aggravated matters: in the following half-decade, food production barely reached the average of 1958/1959. The time of coercing people to join cooperatives was over. Now the party had to ensure that they worked effectively and conscientiously.

The response was to strike out in a direction where no socialist society had gone. Perhaps stretching the truth, Kádár claimed in 1960 that Khrushchev had said each socialist country had the primary duty of satisfying its own grain requirements, and the Soviet Union would not bail them out in case of shortfalls. Two years later, Kádár told fellow party leaders that other socialist countries had taken paths of coercion that Hungarians should not follow; he was delighted that Hungary had not done “the kind of thing the Bulgarian comrades did,” or for that matter, the East Germans or Czechs. Forced collectivization in East Germany had driven tens of thousands to the West. As his listeners knew, that outflow had led to the construction of the Berlin Wall, probably the greatest public embarrassment for the East Bloc in its history.

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Filed under Bulgaria, economics, Germany, Hungary, migration, nationalism, philosophy, USSR

by Joel | 11 December 2024 · 2:15 pm

Yugoslav Heresies in the 1950s

From From Peoples into Nations: A History of Eastern Europe, by John Connelly (Princeton University Press, 2020), Kindle pp. 563-565:

In 1953, the question of what socialism would be after Stalin was not purely theoretical because Yugoslavia’s Communists had been experimenting with new models since Stalin’s break with them in 1948. The rupture was not about ideology (that is, about how to build socialism or to structure the party): it was about obedience to Stalin personally. Tito and his comrades had enraged the Soviet leader by failing to seek permission, for example, for their policies toward the other Balkan states. For the time being, references to Tito were anathema in the Soviet Bloc; as recently as December 1952, top Czech Communist leaders had gone to the gallows for association with Titoist heresies. But now Stalin’s successors sought peace with Yugoslavia, leading to full restoration of relations by the summer of 1955. When the Soviet leader Nikita Khrushchev denounced Stalin the following winter in a secret speech, many Hungarian and Polish Communists, as well as workers, thought the Yugoslav way might become their way.

The best-known component of this Yugoslav path to socialism was worker self-management, enshrined in law in 1951. It grew out of a struggle of leading Yugoslav Communists for orientation after their expulsion from the Cominform. Tito had been so tightly bound to the Soviet party that he later recalled the first days of estrangement as a “nightmare.” Yet Yugoslav Communists had no doubt that they were in the right; their victory in the Partisan struggle, with little Soviet help, showed that history was on their side. The question was where the Soviets had gone wrong.

Yugoslav Communists located the causes of the Soviet deviation in the Communist Party itself and its untrammeled power. Tito’s lieutenants Milovan Djilas and Edvard Kardelj reasoned that power in the Soviet Union lay not with workers and peasants but with bureaucrats. For example, managers and not workers controlled Soviet factories. Like capitalists, they determined what men and women on the factory floor produced, and like capitalists, they had the privileges of higher salaries. In effect, exploitation of the working class continued. This was a vital recognition and critique for a political order that claimed to embody emancipation of all human beings. Soviet reality was not socialism but “state capitalism.”

Somehow Soviet leaders had failed to heed Marx’s warnings about “usurpers” who might derail the revolution. Indeed, the very idea of a strong state, as the Soviet one undoubtedly was, had seemed anathema to Marx.

…

Djilas and Kardelj, along with the Slovene Boris Kidrič, reread these lines from Marx’s and Engels’s Communist Manifesto, and during a chat in a limousine outside their villas in 1949, decided that this vision of workers’ power held a solution to Yugoslavia’s predicament of being a socialist state cut off from the socialist motherland. They suggested it to Tito, and he quickly recognized the promise, exclaiming: “Factories belonging to the workers, something that has never been achieved!”

…

The party elite now took central planning out of its straight jacket and introduced some flexibility, for instance, giving firms tax breaks for better production. Though Yugoslavia was far from being a market economy, it became possible for managers to seek marketplace advantages and make higher profits. At the same time, firms were not required to act according to market rules, and bank credits became available to cushion them against budget shortfalls (that is, noncompetitive performance). After 1953, partly aided by Western credits, the Yugoslav economy—and living standards—improved markedly. One sign of this was growth in personal consumption, which went up by 45.8 percent between 1957 and 1961.

A transformation took place from a “distributive model” of the early postwar years, whose aim had been to remedy deprivation, to one in which the needs and preferences of consumers guided the production of the country’s enterprises. From the late 1950s, Yugoslavia thus embarked on the path to a “consumer society,” and the Yugoslav economic reforms of 1965 would be the most ambitious market-oriented changes seen anywhere in the Communist world before 1989.

Yet for all the heady experimentation in the economic realm, the Yugoslav way soon gave evidence of its limitations, and oddly, that involved its founding thinker, Milovan Djilas. Marx had been radical in his belief that the state must die under socialism, and so was Djilas. From October 1953 to January 1954, Djilas published articles in the party daily Borba attacking the power of the Yugoslav Communist bureaucracy. His views had evolved…. The more the party succeeded in building socialism, the less it was needed. Yet in reality, the party-state in Yugoslavia was becoming ever more entrenched.

In one of the last articles he was able to publish in socialist Yugoslavia, Djilas doubted whether that country was still in the throes of a “class struggle.” The bourgeoisie had been destroyed. What then was the need for a Communist organization of any kind, no matter what it called itself? Already alarmed, Tito moved to silence his former lieutenant, proclaiming that, yes, there would be a withering of the League, but the process would be protracted, because there were still many class enemies afoot. Djilas himself was evidence of this fact.

Djilas was now removed from the Central Committee and denied permission to publish. But he continued to give interviews with Western journalists, and in 1956, he published a book arguing that the party had become a new class. For the crime of “conducting propaganda hostile to Yugoslavia,” Djilas was sent to prison.

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by Joel | 8 December 2024 · 1:58 pm

Communist Takeover in Prague, 1948

From From Peoples into Nations: A History of Eastern Europe, by John Connelly (Princeton University Press, 2020), Kindle pp. 535-538:

At the Cominform’s founding, [the Soviet leaders] urged the radical Yugoslav faction to publically humiliate French and Italian Communists for sharing government with imperialist forces, and Czechoslovak Communists understood they were implicated as well. At that time, they were sharing a coalition with Catholics, Czech National Socialists, and Social Democrats, and were gearing for parliamentary elections in 1948. On returning to Prague, Party General Secretary Rudolf Slánský informed his Politburo that the time had come for a decisive act to place the country on a direct path to socialism. That implied a rupture with existing policy: the previous year, party leader Gottwald had still been speaking of a “Czechoslovak road to socialism,” without a dictatorship of the proletariat or violence on the Soviet model.

In February 1948, Czech and Slovak Communists used their huge cadre base and control of the military and police to stage a rapid seizure of power. Though backed by overwhelming force, the coup was bloodless. They took advantage of an embarrassing mistake by the National Socialist and Catholic politicians, who were tiring of the sundry illegalities of their Communist coalition partners. In November 1947, Communist authorities in Prague had staged a purge of the police force. Believing the population would support them, the Catholic and National Socialist ministers resigned in protest on February 21, thinking that the president would now dissolve the government and immediately call for elections. But they miscalculated: the Communists and their Social Democratic allies still had a majority of seats in the government, and simply replaced the ministers who had resigned with politicians of their own choosing. Then they summoned party cells across the country to form “action committees” that would purge every institution in public life.

The leaders got more than they bargained for. Within a few days, mostly young and impatient Communists had ousted directors and managers from newspapers, state administration, sporting clubs, political parties, schools, and cultural institutions such as theaters. Then they began firing people the next level down. The purge was so thorough that party chief Gottwald had to restrain students, who believed that they had advanced into a new stage of history. Charles University was expecting guests from across Europe to celebrate its six-hundredth anniversary, and the young radicals had just unseated the rector, causing several Western universities to withdraw their participation and spoiling the event’s propaganda value. Gottwald got on the phone to the student leader in charge and asked whether he and his comrades were thinking with their heads or “their behinds.” He did not object to the purges that students were carrying out in their own ranks. Opposition leaders were simply arrested, but the rest of the student body was required to appear before “verification commissions,” which expelled more than one-fifth of them. These “class enemies” were usually sent to do heavy labor, often in mines, and thus were erased from Czechoslovak cultural, economic, and political life.

A final stage now occurred in salami tactics. Having sliced off independent peasant, nationalist, and Catholic politicians, the Communists devoured their Social democratic partners whole. This was a regional trend. In the summer and fall of 1948, these more moderate Marxist parties were compelled to form “unity” parties with the Communists. The result in Hungary was the Hungarian Workers Party and in Poland the Polish United Workers Party. In East Germany, the Soviets had forced the merger of Communists and Social Democrats in April 1946, producing the Socialist Unity Party of Germany. In all these cases, the joint cadre base of the new party was much larger than when the Communists stood alone; the challenge was now to subject Social Democrats to Leninist discipline. Czechoslovakia’s Communists dispensed with the pretense of a new name, however, and after absorbing the smaller Social Democratic party, they remained the Communist Party of Czechoslovakia.

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by Joel | 20 November 2024 · 5:43 pm

Antifascists in 1930s Bulgaria

From From Peoples into Nations: A History of Eastern Europe, by John Connelly (Princeton University Press, 2020), Kindle pp. 428-430:

Fascists in Bulgaria faced a distilled concentration of all the problems that handicapped counterparts in Yugoslavia or Poland: a native strongman, a native national movement that valued democracy, and an agricultural societal structure. In Bulgaria, fascism lacked the disorientated and enraged middle- and working-class constituencies that allowed it to flourish farther west. Still, like everywhere else, a native version did emerge, and it did so from the top of the political elite. After Stamboliiski’s murder in 1923, the economics professor Aleksandar Tsankov became prime minister and vigorously suppressed the Bulgarian left. He fell from power in 1926 because his rule involved brutalities that shocked European opinion, causing London bankers to threaten the withholding of loans. After that, a moderate government took office under the centrist Andrey Lyapchev (1866–1933), and the country again managed to secure international financing.

Tsankov did not fade from the scene entirely, however, and became increasingly attracted to fascist politics. In May 1934 he called for a rally ahead of Nazi leader Hermann Goering’s visit to Sofia. Some 50,000 supporters were expected. Yet three days before Goering’s visit, the Bulgarian military (“Military League”) stepped in and seized power from a weak assemblage of mainstream parties. The army officers were supported by the civilian association Zveno (“The Link”), which held that Bulgaria must be modernized from above by the enlightened few because parliaments were a thing of the past. Under Zveno’s rule, Bulgaria conformed to regional patterns: increasing dependence on the German economy, nationalist chauvinism—reflected, for example, in the changing of Turkish to Bulgarian place names—and central rule. Zveno believed the state bureaucracy had to be streamlined and rationalized, and it reduced the ranks of the civil service by one-third.

Zveno is yet another case of the terminological confusion of that period surrounding the word fascism. Although Zveno was not a paramilitary, radical nationalist, or a mass mobilization regime, the US newsweekly Time called it “fascist.” In fact Zveno was moderate in foreign policy and sought better relations with Belgrade rather than a violent seizure of disputed territory. As in Marshall Piłsudski’s Sanacja, prominent leaders were military men (Damyan Velchev, Pencho Zlatev, Kimon Georgiev), and like Sanacja, they vowed to undo the corruption of public life. Yet unlike Polish counterparts, they did not establish a government party (like BBWR) or mass movement (like OZON), although they did abolish the political parties. The National Parliament (subranie) and local governments continued, but candidates had to run as individuals. Still, most successful candidates for office had belonged to the old parties and were recognized as such. Subranie elections in early 1938 netted the opposition one-third of the votes despite the sort of harassment and manipulation seen in Poland, Romania, Hungary, and Yugoslavia.

In early 1935, King Boris III, concerned about republican sentiment in the government, disbanded the Military League and appointed a civilian prime minister loyal to himself (he maintained the ban on parties). From that moment until his death in 1943, the king controlled Bulgarian politics, appointing prime ministers as he saw fit, yet acting as a benign dictator, maintaining peace with totalitarian Germany and Russia while trying to associate Bulgaria with democratic France. As far as possible, he suppressed the terrorist IMRO. Calling himself a “democratic monarch,” Boris stayed in touch with Bulgarians by touring the country in his own locomotive, occasionally stopping to visit with villagers, to whom he dispensed trinkets and other small gifts. Several right-wing associations emerged in the late 1930s that admired Nazism, but Boris kept them in check.

Yet he also adopted certain popular fascist appearances. Given his impressive record as field commander in World War I, Boris wore a uniform with some justification, and his regime formed corporatist organizations like a state-run “patriotic” union, through which, one Communist asserted, the “fascists buried the class struggle.” Again we see the period’s flexible understanding of “fascist.” For Communists, the authoritarian antisocialist regimes were fascist by definition. In 1936 Zveno created a “Bulgarian Workers’ Union” that attempted to usurp the workers’ cause in order to strengthen the state (again very reminiscent of Italy). May Day parades continued, but red flags were replaced by Bulgarian tricolors that were blessed by priests. As we will see in Chapter 17, Boris supported the rescue of Bulgaria’s Jews when they were threatened by Germany.

Like Hungarian and Romanian authoritarians, Boris suppressed fascism yet expended much less energy for similar results. His country, even more rural and with rampant illiteracy, featured few large towns in which people might be mobilized for fascist causes. In addition, Bulgarian politics offered other options to absorb radical energies. There was Stamboliiski’s mass agrarian movement in the 1920s as well as a potent military ultra-right, and there was IMRO, the Macedonian separatist movement, which featured a strong Bulgarian irredentist faction. All of this meant that Tsankov’s followers had little chance in the urban spaces where fascism thrives. And much more successfully than Horthy or Carol, Boris III, a popular and uniformed war hero, appeared to embody the national cause. It was easy for his police to identify and arrest the relatively few fascists, especially at the universities, which served as hothouses for radical ideologies.