Capitalism Kills, Concludes Study of Privatization in Russia and Eastern Europe

1951

“Shock therapy sell-offs blamed for one million deaths” was the stunning headline in the Financial Times of January 15. Research into the deaths of three million men of working age in the ‘former communist countries’ of Eastern Europe in the early 1990s was being published in the medical journal, The Lancet.

It had found that “at least one third were victims of mass privatization, which led to widespread unemployment and social disruption”. The paper continued: “The study adds to a growing body of research… demonstrating how far the economic transition led to widespread suffering through death and physical and mental illness”.

I lived in Russia at the time, working for the Committee for a Workers’ International and strenuously trying to warn workers and young people against the ‘voucherization/privatization’ trick.

In a huge propaganda campaign, the government aimed to make workers feel they were going to have a real stake in their enterprises. They had suffered decades of state ownership with no workers’ control and management and the stultifying one-party dictatorship of Stalinism.

Privatization looked like a better bet. But, two years ensued in which, as the study mentions, at least one quarter of state factories were privatized (one-third by 1993), inflation was reaching Latin American proportions, and unemployment, unknown in the planned economy, hit millions of workers who received no benefits. The president, Boris Yeltsin, showed himself to be a new dictator and the economy collapsed by 50%. Of course it killed people!

Alcoholism and poor diet have been historical problems, but, as the report also confirms, the stress of the sudden destruction of everything that had been taken as given before, was a nightmare that was bound to take its toll on the working class in the most horrific of ways. Even the vodka sold on the street was adulterated and deadly.

Oligarchs
The people who won out from this process, driving the Russian working class into misery, were a few well-placed party hacks and cronies of the president who grabbed the factories, mines, steelworks, oil and gas concerns to accumulate vast fortunes.

Sometimes it was through buying up vouchers from cash-hungry workers for a few rubles each, sometimes through setting up banks and sometimes through sheer gangsterism. It involved not a few daylight killings – of rivals, politicians and journalists – and still does.

Oligarchs who got on the wrong side of the Kremlin, like Khordokovsky and Berezovsky ended up in jail or exile. Some like British politicians’ friend Derepaska, or Potanin or Prokhorov ended up in Putin’s court camarilla [clique]. Others, like Abramovich, can hold high office in Siberia and spend vast sums on football teams in England!

Most galling in a week when this report of mass human suffering and a million deaths came to light, was to see one of the robber barons responsible for these crimes – ex-KGB agent, Lebedev – talking blithely of indulging his long-held desire to buy up the London Evening Standard. The ‘credit crunch’ has taken his vast wealth down to a mere $2.5 billion!

Some others of his ilk have suffered a blow recently with the collapse in the price of oil and the financial crisis worldwide. It has seen billions wiped off share values and the state moving in to take a more direct role in their companies.

But none of them is going to be on the streets, begging for a piece of bread, as so many of the Russian masses have done and will do, as long as capitalism survives.

Prime Minister Putin now says the collapse of the Soviet Union was “the greatest geo-political catastrophe of the 20th century” but he was not amongst those who opposed the return to capitalism at the time.

Capitalism today
The researchers pointed to Latvia, Lithuania and Estonia along with Russia and Kazahkstan as the worst affected in the early 1990s with a 42% increase in the male death rate between 1991 and 1994. Now, these countries are amongst the first to be hit by the new tsunami of capitalist destruction.

Russia has seen mass protests in more than 50 cities against the government’s attempts to make workers and middle class people pay for the crisis of their chosen system. Latvia and Lithuania (as well as Bulgaria) have seen street battles between police and angry protesters last week. Estonia has gone, like them, from a high growth rate to a contraction of 3.5% and its government’s popularity is plummeting.

As workers and students in Eastern Europe begin to identify with and follow the example of those in Athens, Paris and Rome, a new era opens up. Millions were killed and maimed under Stalin.

More millions have had their lives wrecked by capitalism. Now mass struggle for a genuine democratic socialist alternative is firmly back on the agenda.