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Johnson's Russia List
 

 

October 17, 1997 
This Date's Issues: 1290 1291 1292

Johnson's Russia List [list two]
#1291
17 October 1997
davidjohnson@erols.com

[Note from David Johnson:
1. A NEW NATO, A NEW EUROPE, A NEW RUSSIA.
An Address by Strobe Talbott, Deputy Secretary of State.

2. Albert Weeks: Reply to Fick (#1287).
3. Bill Fick: Re: comment from Albert Weeks.
4. Literaturnaya Gazeta: Gaydar on 'Economic Myths.'] 

********

#1
>From United States Information Agency
16 October 1997 
TEXT: TALBOTT BEFORE WORLD AFFAIRS COUNCIL OF BOSTON OCT. 16 
(Says the case for NATO enlargement is compelling) (3950)

Boston -- Deputy Secretary of State Strobe Talbott says the case for
NATO enlargement "is compelling."

Making the case before the World Affairs Council of Boston October 16,
Talbott cited these key points:

"Twice in this century Europe has exploded into world wars. Those
conflicts cost the lives of over half a million Americans. The Cold
War also began in Europe....The enlargement of NATO is key to ensuring
that Europe is a more peaceful place in the 21st century than it has
been in the 20th....

"NATO is, and will remain, preeminently, a military organization -- a
collective defense pact. The old threat that led to its creation 48
years ago has disappeared, but new ones have appeared.

"From Bosnia and Croatia in the Balkans to Chechnya and
Nagorno-Karabakh in the Caucasus, more Europeans have died violently
in the last five years than in the previous forty-five.

"New threats -- arising from the South, or from the East -- may seem
remote, but they are not unthinkable, especially in an era when
missile technology and weapons of mass destruction are spreading.

"NATO is already working to address these challenges, and the new
members can help by providing strategically important locations,
energetic fighting forces and specialized military capabilities."

Talbott noted that NATO is "not just a military organization -- it is
also a political one.

"As Vaclav Havel, the man of letters and former dissident who is now
President of the Czech Republic, pointed out when he was in Washington
two weeks ago: NATO is a catalyst for strengthening the values and
institutions that the Allies have in common: democracy, rule of law,
respect for human and civil rights, tolerance of ethnic and religious
differences, and civilian control of the military."

Following is the State Department text, as prepared for delivery:

(begin text)

A NEW NATO, A NEW EUROPE, A NEW RUSSIA

An Address by Strobe Talbott, Deputy Secretary of State

World Affairs Council of Boston
Thursday, October 16, 1997

Thank you, Don (Evans), for that kind introduction and also for the
leadership you have given to the World Affairs Council of Boston. For
almost half a century, this organization has enriched our national
dialogue on foreign policy. I'm pleased to have a chance to join you
in keeping that tradition alive.

Events like this one affirm the principle that our government is
accountable to its citizens. Those of us who work in Washington are
more likely to pursue the right policies if, from time to time, we
subject the underlying assumptions and long-range objectives of our
country's foreign policy to the "kitchen table test" with the American
people -- that is, if we get out beyond the Beltway and into the real
world. Boston unquestionably qualifies: it's grappling with real-world
issues, like how to avoid "the Big Dig" and worrying whether the
Patriots will relocate to Rhode Island and whether the Celtics will
rise again under the guidance of the gentleman from Kentucky.

Today I want to talk about a subject of great importance, considerable
interest and some controversy: the enlargement of the North Atlantic
Treaty Organization. I sat down yesterday to discuss NATO enlargement
with members of the editorial board of the Christian Science Monitor,
and I'll be meeting after I leave here with their counterparts at the
Boston Globe. As you're aware, those two papers have taken very
different positions on the subject.

We in the Clinton administration welcome a spirited, thorough debate
on what is one of the most important foreign policy issues of our day.

NATO is 48 years old. That makes it exactly the same age as the World
Affairs Council and just a little younger than the baby-boomers among
us. In 1949 12 nations of Europe and North America founded the North
Atlantic Treaty Organization in response to the clear and present
danger of Soviet expansion and aggression. Over the decades that
followed, four others joined -- Greece, Turkey, West Germany, and
Spain.

During the last several years, 12 Central European states have
expressed an interest in joining. Three months ago, in July, the NATO
heads of state and government met in Madrid to invite three of those
states -- Hungary, Poland and the Czech Republic -- to begin talks on
the terms of membership. In December we expect NATO to issue a formal
invitation to these three countries to join the Alliance. They will
accept almost instantly. A more gradual process will be the
ratification of enlargement by all 16 of NATO's member states.

Here in the United States, ratification requires approval by
two-thirds of the Senate. Last week the Senate formally began its
process of deliberation with testimony by Secretary Albright before
the Foreign Relations Committee. Other hearings will follow, and they
will undoubtedly generate increased discussion of this initiative
across the country.

We in the administration believe that the case for enlargement is
compelling. It is rooted in the most vital security interests of this
country. Quite simply, it is this:

Twice in this century Europe has exploded into world wars. Those
conflicts cost the lives of over half a million Americans. The Cold
War also began in Europe, and it meant the expenditure of the
equivalent of over 13,000,000 million dollars. The enlargement of NATO
is key to ensuring that Europe is a more peaceful place in the 21st
century than it has been in the 2Oth. And if Europe is safer and more
prosperous, the United States will be too. In short, the costs
associated with keeping NATO vigorous and relevant are a good
investment in our own future.

NATO is, and will remain, preeminently, a military organization -- a
collective defense pact. The old threat that led to its creation 48
years ago has disappeared, but new ones have appeared.

>From Bosnia and Croatia in the Balkans to Chechnya and
Nagorno-Karabakh in the Caucasus, more Europeans have died violently
in the last five years than in the previous 45.

New threats -- arising from the south, or from the East -- may seem
remote, but they are not unthinkable, especially in an era when
missile technology and weapons of mass destruction are spreading.

NATO is already working to address these challenges, and the new
members can help by providing strategically important locations,
energetic fighting forces and specialized military capabilities.

But NATO is not just a military organization -- it is also a political
one. As Vaclav Havel, the man of letters and former dissident who is
now President of the Czech Republic, pointed out when he was in
Washington two weeks ago: NATO is a catalyst for strengthening the
values and institutions that the Allies have in common: democracy,
rule of law, respect for human and civil rights, tolerance of ethnic
and religious differences, and civilian control of the military.

This is not something new. The Alliance has always had that political
function and responsibility, including in its old, Cold War
incarnation. In the `50s, NATO provided the security umbrella under
which reconciliation between France and Germany could take place, and
that laid the ground for the European Union. In the early `80s, NATO
promoted the consolidation of civilian-led democracy in Spain. On
numerous occasions, NATO has helped keep the peace between Greece and
Turkey.

Throughout its existence, NATO's unified command has removed the
incentive for military competition among West European powers. I
stress that point because it's easy to forget in today's world, when
the unity of Western Europe seems natural and commonplace, that it was
not always thus. For centuries, it was precisely the Western European
powers -- anything but unified -- that were almost constantly at war
with each other. NATO helped break that pattern of behavior and
induce, in its stead, one of cooperation, collective defense and
collective security.

Some critics of NATO enlargement pose what they believe is the
definitive rebuttal to our administration's policy: what's the point,
they ask, in having an Alliance at all -- not to mention enlarging it
-- if the original and principal adversary has disappeared? An
alliance, according to the line of thinking, needs a clear-cut enemy
in order to justify its existence.

Well, not necessarily. In fact, in the past, particularly in 19th
century Europe, alliances not only served to wage or deter war -- they
have also been a device for managing constructive, non-competitive
relations among their member-states. For example, the Quadruple
Alliance of 1815 among Austria, Russia, Prussia, and Britain was
intended to promote cooperation and stability in Europe after the
defeat of Napoleon.

NATO doesn't need an enemy to justify its continued existence -- what
it needs is an enduring purpose, and that it has: namely, to undergird
transatlantic security, to provide the mechanisms for coordinating
mutual defense, and to concert the will and capability of its members
to meet new threats.

President Clinton and his fellow Allied leaders believe that today,
while retaining its military capacity and its core identity as a
defense treaty, NATO can, more than ever before, foster integration
and cooperation between what we used to think of as East and West.
Moreover, NATO's open door to the East can foster integration and
cooperation among the Central Europeans themselves. We want to do for
the Central and East Europeans what Dean Acheson and George Marshall's
generation did for Western Europe; we want to finish the historic
project they started in 1949 -- making war in Europe impossible.

There's already progress in that direction. The very prospect of NATO
membership has encouraged positive, peaceful trends in Central Europe.
In pursuit of their goal to join NATO, a number of Central European
states have accelerated their internal reforms and improved relations
with each other. To wit: Poland and Lithuania have created a joint
peacekeeping battalion; several states have recently reached agreement
on historically divisive issues like border recognition and the rights
of ethnic minorities. Hungary and Romania have done this. So have the
Czech Republic and Germany, and Romania and Ukraine. Accords like
these can serve as potent vaccines against the kind of plague that has
befallen the former Yugoslavia.

These are the positive, affirmative arguments in favor of NATO
enlargement. When the President faced this decision, he also had to
consider the question of what the consequence would be if NATO did not
enlarge. They would have been negative and serious. Had NATO refused
to open its doors to new members, many in Central Europe would have
heard a dispiriting, even antagonizing message; they would have
concluded that we were permanently endorsing the dividing line that
Joseph Stalin carved across Europe in 1945 and that he and his
successors thereafter enforced through occupation and terror. The
Central Europeans would have inferred that, having been subjugated in
the past, they were now to be disqualified for security in the future.
That would have been, I believe, an unconscionable case of double
jeopardy.

I know there is concern that any change in NATO, including expansion
of its membership, will dilute its strength, undermine its
effectiveness or alter its very identity. But just the opposite is
true. NATO was strong during the Cold War precisely because it was
dynamic -- because it was adaptive, because it was able to face the
security challenges as they existed at the time, and as they evolved
over time. Freezing the old NATO in amber would subject it to the risk
of irrelevance and perhaps dissolution.

If NATO did not take in new members, the Alliance would weaken as the
Central and East European countries scrambled to jury-rig their own
security arrangements, no doubt often at each other's expense -- and
to the detriment of peace on the continent as a whole.

Since the Madrid Summit, at which the three invitations were issued,
there has been, naturally enough, considerable focus on the countries
that have not been invited, along with Poland, Hungary and the Czech
Republic, to make up the so-called first tranche or admissions class.
Those of us, from the President on down, who are working on this
policy spend a lot of time thinking about precisely those emerging
democracies. Some have applied for membership but were not selected at
Madrid; others have not applied; still others are wary about, or
opposed to, enlargement.

While their attitudes toward NATO vary, our attitude toward them has a
crucial common denominator: we are determined that the enlargement of
the Alliance enhance not only the security of its own members, current
and new, but that it also enhance the security of Europe as a whole --
members and non-members alike.

To that end, we are bolstering and energizing the Partnership for
Peace and creating the new Euro-Atlantic Partnership Council. These
are two bodies, the first founded in 1994 and the second just last
May, that facilitate military and political cooperation with NATO
among the 43 participating countries -- the 16 Allies, plus
traditional neutral and non-aligned states like Austria, Sweden and
Finland, plus the Central Europeans, plus the three Baltic states,
plus all 12 former Soviet republics that now make up the Commonwealth
of Independent States.

For those who have now -- or may develop in the future -- a desire to
join the Alliance, we have made clear that enlargement is not a
one-time event. Madrid was the beginning of a process, not the end.
The first will not be the last.

Moreover -- and this is an especially important principle -- the
process is ongoing and inclusive. At the Madrid summit in July, the
leaders of NATO's member states affirmed that the Alliance's door
remains open, and that no emerging democracy that aspires to full
integration is excluded.

In the days following the summit, President Clinton and Secretary
Albright traveled to a number of countries that were not initially
invited to join the Alliance to repeat and amplify that message. In
Romania, the President was cheered by an enthusiastic crowd of over
100,000, while in Vilnius the assembled foreign ministers of the three
Baltic states told Secretary Albright that they endorsed NATO's
step-by-step approach to enlargement.

In short, NATO's method for taking in new members is designed -- and
widely acknowledged -- not to leave some states out in the cold;
rather, it will, if executed skillfully, help thaw the security
environment all the way across Europe to Armenia and Azerbaijan in the
Caucasus and Kazakstan and Kyrgyzstan in Central Asia, on the border
of China.

Thinking, perhaps, of those rather exotic-sounding and remote
countries at the far end of the Silk Road, some have asked, where are
the geographical limits to NATO expansion? The right answer is: let's
see; let's not be in a hurry to answer the question; which is to say,
let's not be in a hurry to proclaim limits; let's keep an open mind as
we look out the open door of the new NATO. The wrong answer would be
one of premature and prejudicial precision, for that would be to draw
a new line on the map. It would be to betray the chance we have to
help build an undivided, increasingly integrated Europe.

Now let me say a word about one very large and important country that
is already part of the new Europe -- a country I've spent much of my
life trying to understand: Russia. As all of you know, the issue of
NATO enlargement is acutely neuralgic in Russia, especially for the
political elite there. I was there last week, so my awareness of
Russian views on this subject is quite fresh.

Part of the problem is that NATO, in Russian, is a four-letter word;
for half a century, it has been a synonym for "the enemy." Stereotypes
die hard, on both sides of what used to be the Iron Curtain. Just as
many of our own experts and commentators cling to Cold War prejudices
about Russians and what makes them tick, so many Russians still have
in mind a Cold War image of NATO. These include Russian hardliners who
long for what they remember as the glory days of the USSR and who
exploit what they depict as the specter of an armor-plated, hostile
NATO juggernaut to whip up nationalistic insecurities. There are also
plenty of Russian reformers and democrats who worry -- and warn --
that NATO enlargement threatens to strengthen those reactionary
forces. Judging from the time I've spent here, this is a view widely
held in Boston, or at least in Cambridge.

We believe that that risk is both exaggerated and manageable.
President Clinton and President Yeltsin have devoted many hours over
the past three years to discussing, face to face, how to keep their
disagreement on this subject within the bounds of an overarching
cooperative relationship between Russia and the United States. Earlier
this year, Secretary Albright met four times with Foreign Minister
Primakov to flesh out an idea that her predecessor, Warren
Christopher, proposed a little over a year ago -- a charter between
NATO and Russia.

Those negotiations, involving all the members of the Alliance and ably
led by the NATO Secretary General, Javier Solana, were successful.
Last May, the 16 leaders of NATO and President Yeltsin met in Paris to
sign the charter -- which is formally called the Founding Act on
Mutual Relations, Cooperation, and Security Between NATO and the
Russian Federation.

It sets forth the rationale for NATO-Russia cooperation and reaffirms
the basic rules of the road of international behavior. These include
respect for the inherent right of every state to choose the means for
ensuring its own security. That means any European state has the right
to seek membership in NATO.

The Founding Act also created a new consultative forum, the
NATO-Russia Permanent Joint Council. The new Council gives NATO and
Russia a means to explore the possibility of joint decision-making and
joint action on some issues, such as the prevention and settlement of
conflicts.

Let me stress that the NATO-Russia Permanent Joint Council is entirely
distinct from the North Atlantic Council, known as the NAC, which
remains NATO's governing body. The NATO-Russia Council will operate by
consensus on those issues where NATO and Russia agree to act jointly.
But that does not mean that Russia will have a veto over any aspect of
NATO activity or policy. Quite the contrary -- the Founding Act makes
explicitly clear that NATO and Russia maintain total freedom to act
independently if they do not choose to act in concert under the aegis
of the Joint Council.

The Permanent Joint Council has already met at the level of foreign
ministers -- in New York last month, during the UN General Assembly.
It was a promising beginning, and it will meet again in Brussels on
December 17.

Meanwhile, contrary to the predictions of some critics of enlargement,
as that process has moved forward, Russia has actually strengthened
its program of internal reform. President Yeltsin has beefed up his
government with innovators committed to economic modernization and
integration; he has made dramatic progress in reconciling differences
with Ukraine, participated at the Summit of the Eight in Denver, and
accelerated Russia's effort to join the World Trade Organization, the
OECD and the Asia-Pacific Economic Cooperation Forum.

And then there's Bosnia. There are 34,000 troops there as part of the
NATO-led Stabilization Force, or SFOR, which is helping to implement
the Dayton Peace Accords. 1,400 of those soldiers are Russian. They
are under the command of General Anatoly Glebovich Krivalapov of the
Strategic Rocket Forces and Colonel Alexander Sergeyevich Iskrenko, a
battle-hardened field officer who is a veteran of combat in
Afghanistan and Chechnya.

I'd ask all of you to step back for a moment and think about this bit
of current events against the backdrop of history: NATO was founded in
1949 in response to the Soviet threat, and the Soviet Union ceased to
exist in 1991. Throughout those 42 years, American and Russian troops
were squared off against each other, taking orders from Washington and
Moscow respectively. For much of his career, General Krivalapov spent
his working hours pointing intercontinental ballistic missiles at
Boston and Washington.

Throughout the Cold War, when NATO's adversary was the Soviet Union
and the Warsaw Pact, the Alliance was always ready -- but, thankfully,
it was never called upon -- to deploy for battle. NATO succeeded in
its mission of deterring the Soviet Union and the Warsaw Pact, and it
did so without ever having to fire a shot in anger. Hence its rightful
claim to being the most successful alliance in history.

Now that the Cold War is over and the threat to the peace of Europe is
instability and disintegration rather than Soviet aggression, NATO has
finally suited up and gone into action; it has done so in Bosnia, and
it has done so with Russia rather than against Russia.

This historic undertaking has not only given the people of Bosnia the
chance to continue the slow, troubled, uneven, but crucial task of
constructing a new, stable, unitary state. It has also served the
larger purpose of building a new Europe in which military, political
and economic integration will make future Bosnias far less likely to
occur.

Let me conclude with a reflection on the history of this century:

One of the keys to peace in every post-war era involves the
arrangements between former adversaries. After World War I, the
victors got it wrong. At Versailles, they imposed crashing reparations
on a defeated Germany, thus dooming the Weimar Republic and setting
the stage for the eventual rise of Hitlerite revanchism, fascism and
aggression, and, of course, the Holocaust.

After World War II, we and our Allies, having learned many of the
lessons from World War I, did a better job: rather than drawing back
into our own shell, the United States remained engaged in Europe
through the Marshall Plan and the founding of NATO itself. We
essentially got it right in the West.

But in the East, many countries suffered nearly half a century under
the shadow of Yalta. Yalta -- that is a place name that has come to be
a codeword for the cynical sacrifice of small nations' freedom to
great powers' spheres of influence, just as Versailles has come to
signify a short-sighted, punitive and humiliating peace that sows the
seeds of future war.

Russia is, in a very real sense, a former adversary in one of the
great struggles of this century and of human history. It is the
largest, most powerful successor state of the USSR, and its capital,
Moscow, was the former headquarters of the Warsaw Pact. But unlike
Germany in 1919 or again in 1945, Russia in 1997 is not a defeated
power. Quite the contrary, its people and its reformers deserve
credit, support, gratitude and patience from all of us for their role
in defeating the Soviet Communist system that oppressed them as well
as so many others for much of this century.

Part of the challenge we face in dealing with Russia now that the Cold
War is over is to avoid either a new Versailles or a new Yalta.
Versailles and Yalta: those are the Scylla and Charybdis of the course
we are steering as we make our way forward into the 21st century and
the third millennium -- which, by the way, begins in exactly two
years, two months, 15 days and 11 eleven hours.

To be sure that our country is ready for that challenge, those of us
who work in Washington had better have good answers to the toughest
possible questions, some of which I look forward to hearing from you
right now.

Thank you very much.

*******

#2
Date: Thu, 16 Oct 1997 14:27:35 -0400
From: Albert Weeks <AWeeks1@compuserve.com>
Subject: Reply to Fick (#1287)

Hi Bill,

As the expression goes, I was "not amused" by your reference to Lenin in
your JRL submission as an "intellectual." 
Whatever the conventional definition of "intellectual" may be, Vladimir
Ilyich Ulyanov does not remotely fit any such descriptive, though "znatok"
(know-it-all) or "intelligentka" (would-be intellectual) would more
apppropriate nicknames for him.
To make such a characterization, one would ask: Have you ever seen a list
of the books kept in Lenin's personal library? 
Have you read Dmitri Volkogonov's bio of Lenin (in either Russian or
English), which is based on much lately-opened archival material?
Do you know anything about Lenin's knowledge of Russian or world
literature, or of culture--art and music, e.g.? Was it deep or profound,
do you think, befitting an intellectual?
Look, Bill, if Farrakhan, Castro, Mussolini, or Hitler could be described
as "intellectuals"--because they were selective readers of agitational
stuff that supported their political aims--then I suppose Ulyanov would
qualify, too. Nor does the fact that he wrote--poorly, I might add, I have
read almost all of his writings in Russian (I'm the author, incidentally,
of a bio of one of Lenin's revolutionary-predecessors as well as an author
highly-regarded by him, the Russian Jacobin Peter N. Tkachev [1844-86],
whose Lerninism-like views I described in a piece published in Rossiiskiye
Vesti couple of years ago)--80 million words doesn't qualify him to be
termed an "intellectual." Does it? Anymore than would the publication of
the complete works of Hitler's speeches and writings so qualify him...
Lenin would be, and was, utterly lost and ill-at-ease in highly-literate,
sophisticated company. His references to Russian literature (even!) are
pedestrian and unimaginative, even stolid. His favorite Russian novel, for
instance, was Chernyshevsky's WHAT IS TO BE DONE? This is a piece of
mediocre literature (which I have read in Russian and English) by anyone's
definition of great Russian fiction--about which, Bill, if you yourself are
not up on Russian literature, you might ask any well-educated, well-read
Russian. 
The only music Lenin said he could "stand" was Beethoven's "Appassionata,"
or Sonata No. 23 in f minor, Op. 57, a relatively (for Beethoven)
simplistic, "tuneful" work anyone could hum. Lenin once said music softened
people and for him, in any case, was emotionally exhausting. In other
words, he had a tin ear for music and no interest in it at all. 
Too, his taste in art could best be described as "photographic" and, of
course, political--political-poster art having some meaning to him.
Finally--and probably most important--Lenin loathed intellectuals!!! Kind
of important, no? As a matter of fact, that word was used by him as an
epithet, a "weapon" in his bombastic, often crude political discourse
hardly befitting an intellectual by the furthest stretch of that term. 
As though to prove his point about intellectuals, once in power Lenin
oppressed thousands of them after the Bolshevik coup of Nov. 7, 1917. No
wonder in his earlier days, novelist-playwright Maxim Gorky warned other
Russians against the tyrannical, intolerant, even boorish Lenin, as he
described him in 1917.
So, Bill, I think your observation, even if meant in harmless jest (or out
of ignorance) would be considered quite insulting to such true Russian
intellectuals and writers as, say, Leonid Zamyatin, author of a Russia
"1984" novelette, titled 'US" (often translated as 'WE'), for which he was
banished from his country on Lenin's personal orders! Do intellectuals
usually do that to other intellectuals? Or take Pasternak, and scores of
others "on the other side of the barricades" even when they wrote lyric
poetry!
In my view, at the end of a bloody century this is no time to be unclear or
supercilious about Vladimir Ilyich Lenin. He led off the 20th century as
the world's first no-nonsense, totalitarian dictator (whom, Goebbels and
even Hitler admired and sought, they said, to emulate); gave immaculate
birth to Josef Vissarionovich Djugashvili (Stalin); instituted the first
single-party tyranny and concentration camps for dissidents and
"counterrevolutionaries"; oppressed religionists; instituted a pre-Gestapo
Gestapo called The Cheka; slaughtered workers and soldiers en masse if
they disagreed with his policies (e.g., Kronstadt, 1921); ordered the
taking of innocent hostages to make political points and to make the Red
Terror what he called "really terrifying" to the population (the way Hitler
murdered innocent hostages in the village oif Lidice when Heydrich was
assassinated in Prague); countenanced anti-semitism during the
"state-capitalistic" NEP period (during and after 1921, when "bag men" were
forced to wear green cards in their hats not unlike the way Jews were
forced to wear yellow stars later in Nazi Germany); preached exporting
Sovietism on the tips of bayonets (new archive materials relating to Soviet
attacks on Poland, 1920, with Lenin's ambitions and expansionist plans for
extending Soviet boundaries westward).
So, if you can find anything "nice" or "funny" to say about this monster
dressed "humbly" in a black worker's cap (furazhka), let everyone know,
will you? I'm sure it will be news to millions of people who lived through
or know Soviet history. 
Meanwhile, IMHO, you need to take time out and read, say, Richard Pipes'
two books on the Russian Revolution and State under Lenin while also
reading Volkogonov's bio of Lenin. After you do, you will never again write
as you did about V.I. The late Gen. Volkogonov, incidentally, you know,
was perhaps the Soviet Army's leading indoctrinator of Marxism-Leninism!
What was once ideological posturing for him as a "political commissar"
later turned into unmitigated shame and rage. As it might well have!
Forgive me if I sound insulting; I don't mean to be. But a kind of
insensitive or ignorant approach to bestial inhumanity, even in the
relatively remote past, is rather repulsive. Esp. with the 80th anniversary
of this large-scale, two-generation inhumanity approaching on Nov. 7.

Sincerely,
Dr. Albert L. Weeks

*******

#3
Date: Thu, 16 Oct 1997 22:25:26 +0300
From: Bill Fick <bill@samovar.ru>
Subject: Re: comment from albert weeks

David--

Here is a brief reply to Weeks that you can post as well:

I can only profess somewhat bemused puzzlement at Albert L. Weeks' reaction
to my tongue-in-cheek column. There is no point in quibbling about how
many books in which languages have been read by whom. For the record,
however:

1) I have lived in Russia for more than five years and would be the last
person to belittle the devastation that Lenin's regime and its successors
wrought on this country.

2) Saying with irony that somebody is "no intellectual slouch" is not the
same thing as calling somebody an intellectual or great thinker. Lenin was
not an idiot, and he had an interesting obsession with electricity. I
don't think that needs to be a terribly controversial statement. He was
also a founder of a regime that perpetrated terrible evil. The Lenin
"Internet legacy" about which I muse would be decidedly Forest Gump-ish,
should it even come to pass. Among genuine early-century Russian
"thinkers", I am most intrigued by Struve, to whom Pipes also devoted a
monumental 2-volume biography.

3) The notion that it is politically incorrect, or otherwise unacceptable,
to laugh at the absurd in historical horrors or muse about a strange
confluence of people, events and ideas disturbs me. In fact, it seems to
me that such uses of humor are a uniquely valuable human response to horror
that helps to make life in the wake of that horror liveable. Much about
Lenin is surreal and absurd, and I will no doubt continue to find humor
there just I will continue to laugh without qualms at John Cleese
goose-stepping around Fawlty Towers. 

********

#4
Gaydar on 'Economic Myths' 

Literaturnaya Gazeta
September 17, 1997
[translation for personal use only]
Article by Yegor Gaydar: "Demand for Money: Economic Mythology of the
Postsocialist Period. The Director of the Institute of Economic Problems of
the Transitional Period Responds to Lora Velikanova's Interview With
Nikolay Shmelev 'Let's Divide Pay by 1,000. What's Left?' (Literaturnaya
Gazeta of 3 September 1997)"

Russian society has encountered economic changes of unprecedented
proportions in recent years. It would have been hard for the intelligent
reader of the end of the 1980s even, I believe, to understand a large part
of the content of today's economic sections of Kommersant or Finansovyye
Izvestiya and to figure out the terms they use.
It is not surprising that in attempting to understand and explain what
is happening, society has frequently responded to the challenge of the
changes with the formation of stable myths and regularly reiterated
assertions that do not reflect the essential connections but which,
seemingly, are based on rooted experience and common sense like the claim:
"The earth is flat, and the sun revolves around it. Surely this is
obvious?" The key role in the formation of such myths was frequently
performed by the economic authorities of the Soviet period organically
combining an infantile naivete in their understanding of the normalities of
the market economy and ingrained self-assurance. The opinions they
expressed were then repeated many times over by journalists and politicians
and were for a long period of time perceived by public opinion as
irrefutable truths, and only later, under the influence of a development of
events that did not fit within the framework of the myth, were they
forgotten and allowed to pass into oblivion.
An example of such a myth of the 1990-1991 period was the assertion:
"Price liberalization cannot eliminate the shortages, if there are no
commodities, there will be none after liberalization either." This artless
construct was easily superimposed on the experience of life accumulated
under the conditions of an economy of shortages. If there had always been
lines and shortages in the memory of generations, how might they disappear?
I remember well how the attempts to explain that surmounting the shortages
was the simplest task and that all the serious problems would be manifested
when it had been accomplished broke up against the firm wall of common
sense.
One further example of such a myth, the peak time of whose
pervasiveness was the period of high inflation, was the assertion that "it
is impossible to arrest the growth of prices without having increased
production." The real relationships under market conditions are the direct
opposite, and the arresting of extremely high inflation precedes in the
vast majority of cases stabilization of the manufacture of products, but
none of this is of any meaning for mythology. These words were repeated
incantationlike for several years, and it is only in 1996-1997, against the
background of the clear decline in the rate of increase in prices, which
has by no means been preceded by industrial upturn, that they have
gradually begun to go out of fashion.
The year of 1997 is a time when a society accustomed to living under
conditions of high inflation has been encountering a new reality&mdash;a
decline in interest rates and a stable currency exchange rate. The
appearance of myths characteristic of the stage of currency stabilization
may now be expected under the new conditions. It could be seen in the first
half of 1997 how the new mythology was gradually maturing and becoming
virtually an inalienable attribute of the debate on economic matters. N.
Shmelev's interview in Literaturnaya Gazeta (3 September 1997, "Let's
Divide Pay by 1,000. What's Left?") imparts to the new myth a comfortable
completeness. We shall quote two passages:
"It is a fundamental and well-nigh indisputable fact that in a normal
economy&mdash;from Luxembourg to Japan&mdash;the money supply (cash plus
deposits, that is) in relation to the gross domestic product always
fluctuates in the 60-80 percent range. With us today this indicator
constitutes 8-10 percent in relation to the gross domestic product. We are
physically short of money. Various mutterings may be heard&mdash;from Kokh,
Gaydar, and banking circles&mdash;but the fact of the inadequacy of the
money supply has already been tacitly acknowledged."
"The psychological obduracy of our reformers&mdash;a refusal, come
what may, to acknowledge publicly that they have blundered, having created
an artificial money shortage&mdash;has been broken: They know full well
that they miscalculated. Proof? The simplest of all: Prices this year have
grown 8 percent, the quantity of money, 24 percent. This indicates that
they are printing a little more money."
We may be confident that these or similar arguments will in the next
few months be repeated many times over in the newspapers, on television,
and from Duma platforms. Society will become accustomed to them as to an
obvious fact. Later all this will be forgotten and will go out of fashion.
The mythmakers will by that time have a new front of work, though.
So, then, the new myth includes two basic components:
1. There is a shortage of money in the economy. The reformers have
artificially created a money shortage.
2. They have realized this and are secretly printing a little more
money.
Let's take a look. The proportion of money in the gross domestic
product is a most important parameter of the market economy. In economic
theory it has another name also: "demand for money." This indicator has
long been at the center of attention of economic science, and thousands of
empirical studies, books, and articles have been devoted to a study of the
factors that influence it. A fundamental fact that has to be understood in
beginning a conversation about the demand for money is that under the
conditions of a market economy neither the government nor the Central Bank
can control it at will. Its dynamics depend on the behavior of millions of
economic agents: from households to the biggest banks. Relying on
accumulated experience, these economic agents make decisions on how safe
savings in the national currency are and shape their own individual demand
for money ultimately determining the proportion of money in the GDP.
The government can within certain limits mildly influence public
preference, but is incapable of manipulating it. Of course, the Central
Bank could run the printing press at full power, but the standard reaction
to this practice is a flight from the national currency, the transfer of
savings to convertible currency, and price increases outpacing the increase
in the money supply. Well-studied characteristic features of the biggest
money catastrophes&mdash;hyperinflations&mdash;are the printing press
cranked up to full power and a sharp constriction of the real money supply.
Politicians who paved the way for hyperinflation are frequently puzzled:
How did this happen? We were printing money nonstop, and there is less and
less money in the economy, its quantity is in no way keeping pace with the
rising prices.
It would hardly occur even to N. Shmelev to reproach Russia's
Bolshevik government for having "over-squeezed" the money supply in
1917-1921 out of a fidelity to monetarism. Nonetheless, it remains a fact
that the actual money supply declined from November 1917 through July 1921
more than 60-fold (from 1.919 billion gold rubles to 29.1 million). Only by
the start of 1924, after the formation of the New Economic Plan, a sharp
reduction in the budget deficit, the introduction in circulation of the
gold chervonets, and a partial restoration of the demand for money, did the
money supply approach 10 percent of the November 1917 level.
Quite recently in Yugoslavia, in the course of the 1992-1994
hyperinflation, the extent of the real money supply (in dollar equivalent)
declined approximately 100-fold (from $4 billion to $40 million). By
January 1994 the monthly rate of growth of prices there was in excess of a
factor of over 3 million. D. Avramovic, chairman of the Central Bank of
Yugoslavia, who halted the hyperinflation in 1994, told me how difficult it
had been for him to explain to the country's political leaders that for
money to appear in the economy once again it was necessary not to further
increase the speed of the printing press in a fruitless attempt to catch up
with the rapidly upward-surging prices but, on the contrary, to slow it
down.
The postsocialist countries approached the formation of a market
economy by different paths. Some of them acted rapidly and decisively, and
inflation was halted in a short time here. In others the transition was
protracted, and the period of high inflation undermined trust in the
national currencies. It is not surprising that it is in the countries that
underwent rapid de-inflation, where we can speak of so-called "shock
treatment," that the decline in the demand for money was minimal and the
proportion of money in the GDP is now close to the standards of the
developed market economies. Where things moved slowly and indecisively and
extremely high inflation had to be endured for a long time, the fall in the
demand for the national currencies was far more pronounced. Among the
states formed on the basis of the Soviet bloc, the proportion of money in
the GDP in 1995 was the maximum in the Czech Republic (79.4 percent), where
the accumulated inflation since the time of the collapse of socialism was
the least, and the minimum in Georgia (3.8 percent), which is at this time
making its way with difficulty out of hyperinflation.
There is nothing surprising in the fact that the proportion of money
in Russia's GDP (12.3 in 1995, by the start of the currency stabilization)
is far lower than in Poland (31.4 percent in 1995), but markedly higher
than in Ukraine (9.5 percent in the same year). The reason for the low
proportion of money in the GDP is not the fact that some people have
deliberately "over-squeezed" the money supply but gentle, pliable monetary
policy, inflationary experiments, and the undermining of trust in the
national currencies. In order to satisfy themselves of this the leaders of
some countries had to negotiate several bursts of inflation, and each of
them was marked by a further decline in demand for the national currency,
what is more. Calls for the printing of more money to resolve the problem
of the money shortage testify merely to their authors' infinite lack of
information in the sphere of the theory of money and their complete lack of
understanding of the consequences of attempts to put their recommendations
into practice.
A fundamental problem for a country that has embarked on the path of
currency stabilization and that is emerging from an inflation crisis is the
fact that trust in national currencies is easily undermined and is hard to
restore. World economic theory knows many examples of demand for the
national currency falling by a factor of tens under the influence of
financial recklessness and of its rise being a slow and arduous process.
All attempts to force it have the opposite results. Our country will,
unfortunately, be paying for a long time for the advice, which was put into
practice, "to print money before it is too late."
The abandonment as of 1995 of the government being allocated direct
Central Bank credit issue, the reduction in the rate of increase in the
money supply (187 percent in 1994, 120.7 percent in 1995, 30.5 percent in
1996), and the stabilization of the value of the ruble supplemented in 1996
by the reelection of B. Yeltsin and the political stabilization created the
basis for a growth of the demand for money. Since the end of 1996 the rate
of growth of prices has begun to steadily trail the rate of growth of the
money supply and the velocity of money has been slowing, denoting a trend
toward the remonetization of the national economy.
The money base&mdash;the basis of the monetary system, which is
controlled directly by the Central Bank, forming the money
supply&mdash;consists of two parts: net international reserves and net
domestic assets. Simplifying things to the utmost, it may be said that net
international reserves are the part of the national money base that is
backed by gold and convertible currency, and net domestic assets&mdash;it
is these that are the printed, less dependable money. When the Central Bank
grants the government credit to finance the budget deficit, it increases
the net domestic assets. When that same Central Bank buys up currency to
prevent a rise in the value of the ruble in relation to the dollar, it
increases the net international reserves. In the spring and summer of 1994,
say, it was the policy of the accelerated increase in net domestic assets
pursued to the accompaniment of talk about a fight against economic
romanticism and nonmonetary methods of combating inflation that paved the
way to the sharp fall in the demand for rubles, Black Tuesday, and the
burst of inflation. It is not surprising, therefore, that it is the
dynamics of net domestic assets and curbs on their growth that are at the
center of attention when inflation is being forecast and stabilization
programs are being drafted.
The plans of the government and the Central Bank for 1997 contained
quite cautious projections of an increase in both net domestic assets (25
percent) and net international reserves (30 percent). The planned
preferential rate of growth of the money supply compared with the growth of
prices reflected the forecast process of an increase in the demand for the
national currency. The actual development of events has compelled serious
adjustments to these plans. A most important factor was the sharp increase
in the supply of convertible currency and the demand for rubles. Monetary
stabilization in Russia has radically changed the attitude on world
financial markets toward the prospects of the Russian economy. The flow of
capital into Russia and the demand for Russian securities have begun to
grow rapidly. To prevent a sharp rise in the value of the ruble in relation
to the dollar, in the first six months the Central Bank bought up foreign
currency and built up net international reserves on a scale greatly in
excess of that planned. In order to hold the overall rate of growth of the
money supply in check here, an increase in net domestic assets had to be
abandoned completely. Instead of secretly printing a little more money, the
Central Bank was forced, in fact, to withdraw the credit that had been
granted the government earlier.
Let us sum up.
First. The low proportion of money in the economy is a serious problem
for our country, but it has been caused not by an "over-squeezing" of the
money supply but by the preceding inflationary experiments and the
continued distrust of the national currency. It is impossible to resolve
this problem simply by printing a little more money.
Second. The lag of the rate of growth of prices behind the rate of
growth of the money supply characteristic of 1997 is the natural result of
currency stabilization and the incipient remonetization of the Russian
economy. The fact that the rate of growth of prices is trailing the rate of
growth of the money supply testifies to the growth of the demand for
rubles. Unfortunately, it will still take several more years of cautious
monetary policy to bring the proportion of money in the GDP if only to the
level of Poland, not to mention the Czech Republic. Attempts to force this
process could merely once again undermine trust in the national currency.
Third. The growth of the money supply in the first half of 1997 was
determined by the increase in Central Bank currency reserves, not lending
to the government. But this growth is not without danger also. Experience
shows that a growth of the demand for money in excess of 20 percent a year
is an extremely rare, unstable phenomenon. We had almost absorbed this
ceiling by the start of July. This is forcing the Central Bank to be
particularly cautious in increasing the money supply in the latter half of
1997.
I and my colleagues are prepared to confirm what has been said by
tables, calculations, and working models. Unfortunately, science, economic
included, has a fundamental and obvious failing: It is, as a rule, hard to
understand and requires a great deal of knowledge or a desire to comprehend
unfamiliar material in order for the real relationships to be grasped. Can
a complex tedious scientific picture of the monetary world compete with the
naive, but persuasively simple picture in which the government is secretly,
"like a thief in the night," printing a little more money? I have no
illusions, therefore. What has been said above cannot stop the formation of
a new economic myth. All the same, it is useful to know, it seems to me,
that the earth is round and revolves around the sun.

*********




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