Category Archives: economics

by | 18 August 2008 · 5:39 pm

Tanzania’s Economic Breakdown, 1970s

From The Fate of Africa: A History of Fifty Years of Independence, by Martin Meredith (PublicAffairs, 2005), pp. 256-259:

The disruption caused by the ‘villagisation’ programme nearly led to catastrophe. Food production fell drastically, raising the spectre of widespread famine. Between 1974 and 1977 the deficit recorded in cereals was more than 1 million tons. Drought compounded the problem. The shortfall was made up with imports of food, but the country’s foreign exchange reserves were soon exhausted. In 1975 the government had to be rescued by grants, loans and special facilities arranged with the assistance of the International Monetary Fund and the World Bank and by more than 200,000 tons of food aid. Far from helping Tanzania to become more self-reliant and to reduce its dependence on the international market economy, Nyerere‘s ujamaa programme made it dependent for survival on foreign handouts. Nor did the idea of communal farming take root. Although by 1979 some 90 per cent of the peasantry had been moved into ujamaa villages, a mere 5 per cent of agricultural output came from communal plots.

Other aspects of Nyerere’s socialist strategy were no more successful. His programme of state control spawned a multitude of state corporations that were inefficient, incompetently managed, overstaffed and mired in debt. By 1979 some three hundred parastatal organisations had been set up – state industries, state banks, state farms, state marketing boards, state shops. They were controlled by managers who acted more like bureaucrats than businessmen and ran their domains as civil service bureaucracies, exercising considerable patronage. Workers came to regard their jobs as guaranteed by the socialist state. In a candid speech in 1977 entitled ‘The Arusha Declaration Ten Years After’, Nyerere complained bitterly of the inefficiency, indifference and laziness of managers and workers in state-run enterprises. ‘It is essential that we should tighten up on industrial discipline. Slackness at work, and failure to give a hard day’s effort in return for wages paid, is a form of exploitation; it is an exploitation of the other members of society. And slackness has undoubtedly increased since the Arusha Declaration was passed.’

But state enterprises continued to operate in the same manner, incurring huge losses. Among the most notorious were ten state-owned crop authorities. The pyrethrum board, for example, spent more on its administrative costs in 1980 than the total value of the crop it purchased; the sisal board’s overheads in 1980 were higher than the amount Tanzania earned from exporting sisal. Farmers meanwhile were offered inadequate prices and faced long delays in payment, sometimes lasting up to one year, and eventually they resorted to using the black market or growing subsistence food. The production of export crops like sisal, cashew nuts and pyrethrum fell drastically in the 1970s.

By the end of the 1970s Tanzania was in dire straits. Its trade deficit was widening all the time: in 1980 exports covered only 40 per cent of the value of imports; its foreign debt had soared. With sharp increases in world oil prices, its terms of trade were constantly deteriorating. Oil imports, which used only 10 per cent of the value of exports in 1972, took 60 per cent in 1980; a ton of exported tea in 1970 bought 60 barrels of oil, but in 1980 only 4.5 barrels. The shortage of foreign currency hampered the running of factories and farms. For want of spare parts and materials, machinery and trucks were idle. Inflation and drought added to the toll. A shortage of basic commodities like soap, sugar and cooking oil and other consumer goods produced black markets, petty corruption and smuggling – magendo, as it was called. Manufacturing output in 1980 was reduced to less than one-third of capacity. Agriculture declined by 10 per cent between 1979 and 1982. National output between 1977 and 1982 declined by about one-third. The average standard of living between 1975 and 1983 fell by nearly 50 per cent. In a broadcast in December 1981 to mark the twentieth anniversary of Tanzania’s independence, Nyerere admitted: ‘We are poorer now than we were in 1972.’

Whatever difficulties Tanzania encountered, however, Nyerere held fast to his socialist strategy, dismissing all suggestions that the strategy itself might be at fault. He acknowledged that the country was neither socialist nor self-reliant, but he argued that government policy had prevented the worst excesses of capitalism, in particular the emergence of a rich and powerful elite. Comparing socialism to a vaccine, he said in 1977: ‘We are like a man who does not get smallpox because he has got himself vaccinated. His arm is sore and he feels sick for a while; if he has never seen what smallpox does to people, he may feel very unhappy during that period, and wish that he had never agreed to the vaccination.’ At a ruling party conference in 1982, Nyerere admitted that Tanzania had many ‘very serious’ and ‘very real’ problems, but socialism, he said, was not one of them. ‘We have good policies. We have good plans. We have good leadership.’

Throughout Nyerere’s tenure as president, few in Tanzania questioned the course on which he had embarked. It was held to be a matter of ideological faith. Indeed, no serious political discussion of any kind occurred. Under Tanzania’s one-party system, parliament remained impotent; the press muzzled. Real power lay in State House in Dar es Salaam, in party committees and with a ruling class of bureaucrats, all of them intolerant of opposition. Nyerere himself was by no means averse to using Tanzania’s Preventive Detention Act to silence political critics, and Tanzania for many years remained high on the list of African countries with political prisoners.

Much was achieved as a result of Nyerere’s efforts, notably in the fields of education, health and social services. Primary school enrolment increased from one-quarter of the school-age population to 95 per cent; adult literacy from 10 to 75 per cent; four in ten villages were provided with clean tap water, three in ten had clinics; life expectancy increased from forty-one years to fifty-one years.

Yet what progress was made was financed largely by foreign aid. During the 1970s Tanzania received no less than $3 billion, mostly from the West. In 1982 the annual level reached $600 million. Without such funds, Tanzania would have plunged into penury. Nyerere’s achievement, therefore, was related not to the success of his strategy, but to his ability to persuade foreign sponsors that his objectives were sincere.

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by | 7 August 2008 · 8:41 pm

Armenian Merchant Information Networks, 1600s-1800s

The latest issue of the Journal of World History (vol. 19, no. 2) leads off with an article that somehow caught my fancy. Whitman College professor Sebouh Aslanian writes on “The Salt in a Merchant’s Letter”: The Culture of Julfan Correspondence in the Indian Ocean and the Mediterranean (Project MUSE subscription required). Here’s a bit of the introduction (omitting footnotes and page numbers).

The crucial role of information flows was particularly important for Armenian merchants from New Julfa, a suburb of the Safavid capital of Isfahan founded in 1605 by Armenian silk merchants forcibly displaced by Shah Abbas I from the town of Old Julfa on the Ottoman-Persian frontier [in the Nakhchivan Autonomous Republic in Azerbaijan]. These merchants managed a remarkable achievement by coming to preside, within a short time of their forced displacement, over one of the greatest trade networks of the early modern era. By the eighteenth century, the Armenian merchants of New Julfa had branched out from their small mercantile suburb to form a global trading network stretching from Amsterdam in the west to Canton (China) and Manila (Philippines) on the rim of the Pacific Ocean in the east. Their mercantile settlements in the Indian Ocean, Mediterranean, and northwest Europe and Russia spanned several empires, including the three most significant Islamic empires of Eurasia—that is, the Ottomans, the Safavids, and the Mughals—as well as several European seaborne empires, including the British, Dutch, French, Portuguese, and Spanish.

In the case of Julfan society, information sharing was important not only for merchants for their daily commercial affairs, but also for maintaining the integrity of the Julfan network as a whole. Letter writing connected far away commenda agents to their masters in New Julfa and also unified the trade settlements in the periphery to the nodal center of the entire network in New Julfa….

The sources for this study derive from a remarkable archive of eighteenth-century documents I discovered while doing research at the Public Records Office (PRO) in London. This archive consists of approximately 1,700 Julfan mercantile letters seized in the Indian Ocean in 1748 on board an Armenian-freighted ship called the Santa Catharina. The majority of these letters were carried by Armenian overland couriers across the Mediterranean littoral and Asia Minor to the Persian Gulf port city of Basra, where they were relayed to other merchant-couriers traveling by ship to Bengal with the purpose of being delivered to recipients there and farther east in China. What makes these letters valuable for the present investigation is that their journey was unexpectedly cut short when the ship on which they were traveling was captured as a war time “prize” by a British naval squadron patrolling the waters off the southern coast of India. The letters were confiscated along with the Santa Catharina’s other cargo and shipped to England to be presented as “exhibits” in a high-stakes trial in London. Luckily for us, this event not only ensured their survival, but also transformed them into a kind of Julfan geniza. In addition to relying on this vast trove of documents, I shall also use two other collections of business and family correspondence stored in the Archivio di Stato di Venezia (henceforth ASV) and the All Savior’s Monastery Archive (ASMA) in Julfa/Isfahan. Both collections are valuable because they contain thousands of commercial letters sent from Europe and India, many of which are examined here for the first time….

This is the kind of bottom-up, data-rich spadework that I really respect in historians, and many of the observations give one a vivid sense of what life was like as a farflung member of the Armenian (silk) trade network, such as how long it took to get a letter from Isfahan to Venice (often 6 months or so, if it got there at all). Even some of the footnotes are interesting, although the sources cited in Armenian orthography are completely opaque to me. I’ll cite just one example that relates to the language used in the letters.

In general, most correspondents maintained high levels of penmanship, a skill most likely taught to them in a commercial school operating in Julfa in the 1680s. In addition to a solid reputation and competence in the arts of mathematics and commercial accounting, literacy and good penmanship were also attributes merchants sought in a factor. Nonetheless, there are occasional letters that exhibit rather poor levels of penmanship, but, fortunately for the historian, these are rare exceptions. The language of Julfan correspondence is the defunct peculiar dialect of Julfan Armenian that flourished between the seventeenth and nineteenth centuries throughout the commercial settlements where Julfans resided, especially in India and the Far East. This dialect is so distinct from other dialects of Armenian and from modern standard Armenian that it was and still is nearly incomprehensible to most Armenians. It was, therefore, an ideal medium for confidential communication in an age when information sharing was regarded as the lifeline of merchant communities and when a merchant could never be certain that his letters would not be intercepted and read by rivals in commerce or politics. Julfan letters, like most writing before the nineteenth century, do not have standard punctuation or spelling and no paragraph breaks except those indicated by the word dardzeal (again). Some letters also had important bills of exchange or notarized powers of attorney enclosed in them.

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Filed under Central Asia, economics, Europe, Iran, language, migration, South Asia

by | 17 July 2008 · 8:43 pm

Lankov on the Origins of Commercialized Prostitution in Korea

In my reduced blog-reading of late, I’ve been a little slow to note an interesting take, by Andrei Lankov in the Korea Times, on the origins of what is now a highly developed industry in Korea (and elsewhere, in both supply and demand): commercialized prostitution.

Traditionally, most East Asian countries have had few scruples with regard to extramarital sex as far as males were concerned, but before 1900, Japan was remarkable in the development of commercial prostitution on a grand scale.

In this regard it was different from Korea, where in old times only the rich and famous could afford to buy expensive sexual services from gisaeng girls, while the “low orders” usually had no access to commercial sex whatsoever.

The Korean nationalists love to stress this fact, explaining it as another indication of the alleged “spiritual purity” of Koreans. Well, less lofty explanations are more likely, but it is difficult to deny that the large-scale prostitution industry was created by the Japanese presence.

In the 1850s, Japan was “opened” to the world, but for decades afterward it remained a very poor place, so “export-oriented” prostitution became a major industry there.

The Japanese working girls, known as “karayuki-san” (“those going overseas”), plied their trade across Asia, from Sydney to Vladivostok, from Shanghai to Singapore, usually supervised by Japanese brothel owners.

A Japanese prostitute and brothel remained ubiquitous components of urban life in the Asia-Pacific for the decades between 1870 and 1920, and remittances from these girls, who duly sent their earnings back home, were said to be the third biggest foreign currency earner for Japan at the turn of the 20th century.

Of course, neighboring Korea became one of the areas where Japanese prostitution flourished. Contrary to the now common misperception, typical commercial sexual encounters in Korea before 1900 did not involve a poor Korean girl serving some lusty Japanese male.

If anything, the situation in which a Korean male purchased sex from a Japanese female was probably more common. Until the 1910s, the vast majority of prostitutes operating in the country were Japanese.

Koreans may want to blame Japan for commercializing prostitution in Korea, but Japan can hardly be blamed for the growth of prostitution everywhere else in East, Southeast, and South Asia, except insofar as it led the way in creating a model of economic growth that spread the wealth beyond a narrow elite.

via The Marmot

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Filed under China, economics, industry, Japan, Korea, Philippines, Southeast Asia

by | 17 June 2008 · 5:40 pm

A Bad Omen: Nkrumah vs. Cocoa Farmers, 1954-57

From The Fate of Africa: A History of Fifty Years of Independence, by Martin Meredith (PublicAffairs, 2005), pp. 24-27:

After winning the 1954 election, Nkrumah seemed set to make rapid progress towards independence. But he encountered unexpected resistance centred on his conduct of government. In the final stages of colonial rule, the Gold Coast, once a model colony, was riven by such bitterness, division and violence that it appeared in danger of breaking up.

At the core of the crisis was cocoa money. To protect cocoa farmers from price fluctuations, the colonial authorities had established a Cocoa Marketing Board (CMB) which each year fixed a guaranteed price for farmers and acted as the sole buyer, grader, seller and exporter of cocoa. Once in office, Nkrumah instructed the CMB to keep the price as low as possible, aiming to raise funds for development projects. But the CMB soon became notorious for corruption and mismanagement; it was regularly exploited to distribute credit, contracts, commissions, licences and jobs to CPP [Convention People’s Party] supporters. An official investigation revealed that the CPP used a CMB subsidiary to enrich the party’s coffers, to coerce farmers into joining the party and to control petty commerce.

Soon after the 1954 election, Nkrumah announced that the price paid to farmers would be fixed for a period of four years at a level less than one-third of ruling world prices. This decision provoked a surge of anger across Asante, the central forest region where half of the country’s cocoa crop was grown. Not only farmers but cocoa traders, merchants and businessmen based in the Asante capital, Kumasi, resented the loss of income. A new opposition party, the National Liberation Movement (NLM), sprang up, proclaiming to defend Asante interests and culture against a central government it portrayed as corrupt, dictatorial and bent on undermining the beliefs and customs of the Asante people. With the blessing of the Asante paramount chiefs and backed by fervent support in the Asante heartland, the NLM demanded a federal constitution prior to independence, giving Asante and other areas that wanted it a substantial measure of local autonomy.

Nkrumah saw the issue as a struggle between a modern democratic government and the feudal power of traditional chiefs trying to protect the old order. But he misjudged the extent of popular support for Asante institutions. As the NLM and Nkrumah’s CPP struggled for ascendancy, violent disturbances broke out. A bomb attack was made on Nkrumah’s house in Accra. Alarmed by the disorders, the British government refused to set a date for independence and eventually insisted on resolving the issue by calling another general election. At the polls in July 1956, Nkrumah’s CPP won an outright majority, 72 of 104 seats, though only 57 per cent of the votes cast. While the CPP received 398,000 votes, the opposition tally was 299,000 votes. Satisfied with the result, Britain finally pronounced a date for independence: 6 March 1957….

No other African state was launched with so much promise for the future. Ghana embarked on independence as one of the richest tropical countries in the world, with an efficient civil service, an impartial judiciary and a prosperous middle class. Its parliament was well established, with able politicians in both government and opposition. The prime minister, himself, then only forty-seven years old, was regarded as a leader of outstanding ability, popularly elected, with six years of experience of running a government. The country’s economic prospects were equally propitious. Not only was Ghana the world’s leading producer of cocoa, with huge foreign currency reserves built up during the 1950s cocoa boom, but it possessed gold, timber and bauxite.

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by | 27 May 2008 · 5:50 pm

The Gulag Economy’s Peace Dividend

From The Whisperers: Private Lives in Stalin’s Russia, by Orlando Figes (Metropolitan, 2007), pp. 467-468:

Forced labour played an increasingly important part in the post-war Soviet economy, according to a policy dictated by Stalin and his ‘kitchen cabinet’ of advisers. With the ending of the war the pool of unpaid labour available for exploitation by the state grew enormously. Apart from Gulag prisoners and labour army conscripts, there were 2 million German POWs, and about another million from other Axis nationalities, who were mostly used for timber-felling, mining and construction, although those with skills were employed occasionally in Soviet industry. In some factories German POWs were so integral to production that detention camps were built on the factory grounds and officials tried to block the prisoners’ repatriation to Germany. The Gulag population also grew, despite the release of many prisoners in the amnesty of 1945; the camps took in well over a million new prisoners between 1945 and 1950, largely as a result of the mass arrest of ‘nationalists’ (Ukrainians, Poles, Belorussians, Latvians, Lithuanians and Estonians) in territories captured or reoccupied by the Red Army but never really reconciled to Soviet power. The Gulag system expanded into a vast industrial empire, with 67 camp complexes, 10,000 individual camps and 1,700 colonies, employing a captive labour force of 2.4 million people by 1949 (compared with 1.7 million before the war). Overall, it is estimated that conscript labourers represented between 16 and 18 per cent of the Soviet industrial workforce between 1945 and 1948. They were especially important in the mining of precious metals in cold and remote regions where free labour was very expensive, if not impossible, to employ (hence their contribution to the Soviet economy was even more significant than the figures would suggest). Slave labour also made up the workforce in the big construction projects of the late 1940s which came to symbolize, officially at least, the post-war confidence and achievements of the Soviet system: the Volga–Don Canal; the Kuibyshev hydro-electric station; the Baikal-Amur and Arctic railways; the extensions to the Moscow Metro; and the Moscow University ensemble on the Lenin Hills, one of seven wedding-cake like structures (‘Stalin’s cathedrals’) in the ostentatious ‘Soviet Empire’ style which shot up around the capital in these years.

The post-war years saw a gradual merging between the Gulag and civilian economies. Every year about half a million Gulag labourers were contracted out to the civilian sector, mostly in construction, or wherever the civilian ministries complained of labour shortages; about the same number of free labourers, mostly specialists, were paid to work in Gulag industries. The Gulag system was increasingly compelled to resort to material incentives to motivate even its forced labourers. The population of the camps had become more unruly and difficult to control. With the amnesty of about a million prisoners in 1945, mainly criminals, who had their sentences either reduced or annulled, the camps were left with a high proportion of ‘politicals’ – not the intellectual types who filled the camps in the 1930s but strong young men who had fought as soldiers in the war, foreign POWs, Ukrainian and Baltic ‘nationalists’ – who were hostile to the Soviet regime and not afraid of violence. Without a system of rewards, these prisoners simply refused to meet the set targets. The cost of guarding the prisoners was also becoming astronomical. By 1953, the MVD was employing a quarter of a million guards within its camps, spending twice as much on the upkeep of the Gulag than it received in revenue from its output. Several senior MVD officials were seriously questioning the effectiveness of using forced labour at all. There were even mooted plans, supported by Beria and Malenkov, to dismantle sections of the Gulag and convert the prisoners into partially civilian workers, but since Stalin was a firm supporter of the Gulag system, none of these ideas was seriously proposed.

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by | 23 May 2008 · 5:54 pm

The Rise of Salazar in Portugal

From: Sacred Causes: The Clash of Religion and Politics, From the Great War to the War on Terror, by Michael Burleigh (HarperCollins, 2007), pp. 140-142:

In contrast to Spain, where the presence of Catholics on both sides of a vicious civil war dictated a cautious response by the Vatican, there were two countries where Pius XI’s vision of a ‘golden mean’ between invasive totalitarianism and weak democracy was apparently being realised by authoritarian governments. The first was Portugal, where in 1911 the new Republican regime had introduced some of the most anticlerical legislation in Europe. The Church was an easier target for urban radicals, many of whom were freemasons, than either the army or the large landowners of the south. Church property was nationalised, the university of Coimbra’s famous theology faculty was abolished, and feast days were restored to the world of work. Foreign priests and Jesuits were expelled, and both civil marriage and divorce were introduced. Religious teaching was prohibited in all schools. Both women and the 65 per cent of the population who were illiterates were disfranchised to destroy any potential Catholic voting base. Virtually the entire hierarchy were either exiled or expelled and in 1913 the Republic broke off diplomatic relations with Rome.

The fight-back against the efforts of a radicalised minority to impose French-style laicisation began among students in the devoutly Catholic north, and particularly among students at Coimbra. Two leaders emerged, Manuel Gonçalves Cerejeira and Antònio de Oliveira Salazar, of the Academic Centre for Christian Democracy, out of which developed a political party called the Portuguese Catholic Centre Party. Circumstances enabled this moderate party to make its influence felt. During the First World War, the Republic needed the Church to provide chaplains to its army of Catholic soldiers, while missionaries became crucial to the retention of a vast overseas empire at a time when the military was overstretched. By 1919 the Republic and the Vatican had restored diplomatic relations.

Initially, Salazar, an academic economist, subscribed to democracy as ‘an irreversible phenomenon’, but by the 1920s he and many others had become disenchanted with what was a highly corrupt local version of it. When he was elected to parliament in 1921, his revulsion for the opening session was so great that he walked out and returned to university teaching the same day. Between 1911 and 1926 Portugal had eight presidents, forty-four governments and twenty attempts at coups or revolution.

In 1926 the parliamentary republic was finally overthrown by general Manuel de Oliveira Gomes da Costa. Within two months, he was in turn deposed by general Carmona. Since Carmona had few ideas of his own, he depended upon conservative lay Catholics, including Salazar, who was twice brought in to right Portugal’s parlous finances. Salazar was careful to separate his political ambitions from his Catholicism, even if this meant tensions with his old student friend Cerejeira, who had become archbishop of Lisbon. When Salazar told the latter that he represented ‘Caesar, just Caesar, and that he was independent and sovereign’, Cerejeira shot back that he represented ‘God … who was independent and sovereign and, what’s more, above Caesar’. Salazar’s dictatorship retained the Republic’s separation of Church and state.

Restoring the Portuguese economy at a time when the world was sliding into depression lent Salazar a wizardly mystique, which he used to civilianise the military dictatorship from within. In 1930 he proclaimed a new National Union, an authoritarian nonparty whose primary purpose was to demobilise opinion. One of its first casualties was the Catholic Centre Party, which, Salazar argued, would impede the march to dictatorship. Thereafter Catholic Action became the main vehicle for the Church’s plans to reconquer Portuguese society for Catholicism.

President Carmona appointed Salazar premier in July 1932. He proclaimed the New State a year later. Catholic corporatist teachings, however misunderstood, were combined with a form of integral nationalism derived from Charles Maurras. The quiet professorial dictator, who avoided public speaking and staffed his regime with numbers of fellow academics, faced one remaining challenge. Portuguese disillusioned with the low-key tone of Salazar, and suffering under his austere economic policies, turned to the National Syndicalist Blue Shirts, who modelled themselves on the Fascists and Nazis. Salazar dealt with this radical Fascist threat deftly. He co-opted its more opportunist members into the regime, and then in July 1934 dissolved the remainder. This hostility to the National Syndicalists was similar to that of the Portuguese Catholic hierarchy. Referring to their desire for a ‘totalitarian state’ he asked: ‘Might it not bring about an absolutism worse than that which preceded the liberal regimes? … Such a state would be essentially pagan, incompatible by its nature with the character of our Christian civilization and leading sooner or later to revolution.’

Salazar saw little difference between the Communists, Fascists and Nazis, all of whom were wedded to a totalitarian ideal ‘to whose ends all the activities of the citizen are subject and men exist only for its greatness and glory. Portugal had no imperial ambitions – its empire was already the world’s fourth largest – and the regime dissociated itself from Nazi antisemitism, welcoming Jewish refugees fleeing their oppressors. The regime’s object was to entrench and intensify conservative Catholic values rather than to experiment with a ‘new man’ or woman. That lack of ambition, which extended to an aversion to modernising the nation’s economy, may partly explain why Salazar remained in power in this backwater until 1968.

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by | 6 May 2008 · 8:56 pm

Stakhanovites as the New (Leisure) Class

From: Sacred Causes: The Clash of Religion and Politics, From the Great War to the War on Terror, by Michael Burleigh (HarperCollins, 2007), pp. 89-91 (reviewed here and here):

The Soviet Union was not immune to what was emerging as a global cult of celebrity, or notoriety, focused on athletes, aviators, boxers, film-stars, gangsters, mountaineers and, as we have seen, dictators. Already, the commissar for heavy industry, Sergo Ordzhonikidze, had launched the search for ‘new people’, saying, ‘In capitalist countries, nothing can compare with the popularity of gangsters like Al Capone. In our country, under socialism, heroes of labour, our Izotovites, must become the most famous,’ a reference to Nikita Izotov, a miner whom colleagues described rather sourly as ‘the human cutting machine’. But Izotov was destined to be eclipsed, along with the new hybrid Marx, Aristotle and Goethe.

In 1931 Pravda ran features under the slogan ‘The Country Needs to Know its Heroes’, consisting of photographs of aviators, collective farmers, shock-workers and the like. The concept of the exemplary elite was primarily associated with Aleksei Stakhanov, a thirty-year-old Donbass coalminer, who in August 1935 managed to cut 102 tons of coal (or fourteen times his norm) in a single shift—moreover, with the aid of a trusty Soviet-produced pneumatic pick. Stakhanov had migrated from a village in Orel, working his way up from pony-brakeman to manual pick operative, before getting his hands on the air-powered pick that brought him fame and fortune. Of course the work was done at night, enabling Stakhanov to maximise his labours as compressed air went to his pick alone, and his six-hour continuous stint was facilitated by a lengthy logistical chain beginning with the men installing timber props behind him. Nonetheless, the anonymous battalions of shock-workers were thenceforth superseded by a Soviet Hercules with a human face. ‘Recordmania’ spread like a feverish sickness, with managers and foremen sweating too lest they be denounced as ‘bigwigs’, ‘windbags’, ‘routiners’, ‘wreckers’, or ‘saboteurs’ for failing to make these ‘Stakhanovite’ feats feasible, rendering them liable to what the Kremlin’s own Al Capone sinisterly called ‘straightening out’ or ‘a tap on the jaw’. It mattered not that these epic episodes tended to deplete machinery and leave ‘Stakhanovites’ spent, or that some workers resented the diversion of resources, the subsequent lifting of their own norms, or the rich rewards such Promethean heroics brought. Schadenfreude best describes those who said of a young female Stakhanovite, who had been rewarded (one hopes she was grateful) with the selected works of Lenin: ‘That’s what the whore deserves!’ Resentment towards Stakhanovites bestriding the factory floors ‘like gods’ was compounded when they became fixtures of the factory ‘production courts’.

Much of the time of stellar Stakhanovites was increasingly spent on tour, whether visiting the Kremlin, addressing other workers or venturing confidently into places—such as the opera or theatre—where workers already did not comfortably go. Even society pages in the newspapers included such gems as ‘The brigadier-welder Vl. Baranov (28), the best Stakhanovite at Elektrozavod, glided across the floor in a slow tango with Shura Ovchinnovka (20), the best Stakhanovite at TsAGI. He was dressed in a black Boston suit that fully accentuated his solidly built figure; she was in a crepe de chine dress and black shoes with white trimming.’

In other words, although they talked incessantly about work, Stakhanovites did less and less of it, recalling it, like millionaire footballers or pop stars from humble origins, as something that took on roseate hues in memory of things past. Of course, Stakhanovites had a role to play within a wider myth-in-the-making. As an explicitly hierarchical society replaced one allegedly based on fraternity, they had to acknowledge the crucial guiding role of the nation’s father-figure, whose speeches had allegedly originally inspired them to break through artificial barriers while using technology almost as an extension of their own brain. Stakhanovites, who were often not members of the Party, were also model citizens in respects other than dutiful sons and daughters of the ultimate patriarch. Their lifestyle was supposed to exemplify the theme that ‘life is joyous, comrades’, and since they were showered with official munificence while simultaneously enjoying very high wages, the joyous life seemed like an idyllic shopping spree, for clothes, clocks, furniture, motorbikes, perfume, phonographs and so forth. Thus adorned and kitted out, Stakhanovites appeared having their leisurely breakfasts, reading the papers, lunching with friends, playing a little volleyball, tea and a game of checkers, while their wives undertook charitable work as ‘housewife-activists’ and their children were exhorted to their own heroics at school.

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Filed under economics, industry, Russia, USSR

by | 7 April 2008 · 6:02 pm

Kissinger on Asia as the Next Europe

Henry Kissinger outlines Three Revolutions that present new challenges to the old model of state-based power politics.

These transformations take place against the backdrop of a third trend, a shift in the center of gravity of international affairs from the Atlantic to the Pacific and Indian Oceans. Paradoxically, this redistribution of power is to a part of the world where nations still possess the characteristics of traditional European states. The major states of Asia — China, Japan, India and, in time, possibly Indonesia — view each other the way participants in the European balance of power did, as inherent competitors even when they occasionally participate in cooperative ventures.

In the past, such shifts in the structure of power generally led to war, as happened with the emergence of Germany in the late 19th century. Today the rise of China is assigned such a role in much alarmist commentary. True, the Sino-American relationship will inevitably contain classical geopolitical and competitive elements. These must not be neglected. But there are countervailing elements. Economic and financial globalization, environmental and energy imperatives, and the destructive power of modern weapons all impose a major effort at global cooperation, especially between the United States and China. An adversarial relationship would leave both countries in the position of Europe after the two world wars, when other societies achieved the preeminence the nations of Europe sought through self-destructive conflict with each other.

No previous generation has had to deal with different revolutions occurring simultaneously in separate parts of the world. The quest for a single, all-inclusive remedy is chimerical. In a world in which the sole superpower is a proponent of the prerogatives of the traditional nation-state, where Europe is stuck in halfway status, where the Middle East does not fit the nation-state model and faces a religiously motivated revolution, and where the nations of South and East Asia still practice the balance of power, what is the nature of the international order that can accommodate these different perspectives?

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Filed under Asia, economics, Europe, nationalism, U.S.

by | 3 April 2008 · 5:48 pm

Fallows on China the Fragile Superpower

In a blogpost about the disconnect between China’s internal poverty and external superpower status, James Fallows ends up quoting from his own piece on American values in the November 2007 issue of The Atlantic Monthly.

When living in Japan, I heard accounts from many Japanese who had gone to the U.S. for business or study in the 1950s, after the Allied occupation ended. They looked at the factories and the farms and the vastness of America and asked themselves: What were we thinking?

How could tiny Japan have imagined challenging the United States? After the Soviet Union fell and the hollowness of its system was exposed, many Americans asked: What were we thinking about “two superpower” competition with the U.S.S.R.? Its missiles were lethal and its ideology was brutal and dangerous. But a rival to America as an overall model? John F. Kennedy was only one of many to suggest as much, in his 1960 campaign references to the prestige gap as well as missile gap that had opened. Eventually, we all learned there was no comparison at all.

I think if more Americans came to China right now and saw how hard so many of its people are struggling just to survive, they too might ask: What are we thinking, in considering China an overall threat? Yes, its factories are formidable, and its weight in the world is huge. But this is still a big, poor, developing nation trying to solve the emergency of the moment. Susan Shirk, of the University of California at San Diego, recently published a very insightful book that calls China a “fragile superpower.” “When I discuss it in America,” she told me, “people always ask, ‘What do you mean, fragile?’” When she discusses it here in China, “they always ask, ‘What do you mean, superpower?’”

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Filed under China, economics, nationalism, U.S., USSR

by | 2 April 2008 · 6:27 pm

Highly Stratified Classlessness

From The Whisperers: Private Lives in Stalin’s Russia, by Orlando Figes (Metropolitan, 2007), pp. 171-172:

There was a direct correlation between the allocation of material goods and power or position in the socio-political hierarchy. Below the Soviet elite nobody had many possessions – most people lived in a single pair of clothes – and there was barely enough food for everyone. But in the distribution of even these few goods there was a strict ranking system with infinite gradations between the various categories of employee based on status in the workplace, skill level and experience, and to some extent on geographical location, for rates of pay were better in Moscow and other major cities than they were in the provincial towns and rural areas. Despite its egalitarian image and ideals, this was in fact a highly stratified society. There was a rigid hierarchy of poverty.

Private trade partly compensated for the frequent shortages of the planned economy. People sold and exchanged their household goods at flea markets. If they could afford it, they could buy the produce grown by kolkhoz peasants on their garden allotments and sold at the few remaining urban markets tolerated by the government. People were allowed to sell their furniture and other precious items at the state commission stores, or exchange their jewellery and foreign currency for luxury foodstuffs and consumer goods at the Torgsin shops developed by the regime in the early 1930s to draw out the savings of the population and raise capital for the Five Year Plan. The black market flourished on the margins of the planned economy. Goods unavailable in the state stores were sold at higher prices under the counter, or siphoned off to private traders (bribe-paying friends of the manager) for resale on the black market. To cope with the problems of supply an ‘economy of favours’ came into operation through small informal networks of patrons and clients (a system known as ‘blat’). In many ways the Soviet economy could not have functioned without these private connections. To get anything (a rented room, household goods, a railway ticket, a passport or official papers) required personal contacts – family and kin, colleagues, friends, or friends of friends. The same blackmarket principles were known to operate in Soviet factories and institutions, where many goods and services were supplied and exchanged on the basis of personal contacts and favours. Soviet propaganda portrayed blat as a form of corruption (the aim of rooting out these private networks of patron-client relations assumed an important role in the purges), and this view was shared by many workers, in particular. But most people were ambivalent in their attitude to blat: they recognized that it was not right morally, and certainly not legal, but relied on it, as everybody did, to fulfill their needs and get around a system they knew to be unfair. Without blat it was impossible to live with any comfort in the Soviet Union. As the proverb said: ‘One must have, not a hundred roubles, but a hundred friends.’

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