Uma história global do Leste Europeu na transição do socialismo ao capitalismo - Book review

1. Klimo on Mark and Iacob and Rupprecht and Spaskovska, '1989: A Global History of Eastern Europe' [review]

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Klimo on Mark and Iacob and Rupprecht and Spaskovska, '1989: A Global History of Eastern Europe' [review]

by H-Net Reviews

James Mark, Bogdan C. Iacob, Tobias Rupprecht, Ljubica Spaskovska. 

1989: A Global History of Eastern Europe. 

New Approaches to European History Series. Cambridge: Cambridge University Press, 2019. 380 pp. 

$84.99 (cloth), ISBN 978-1-108-42700-5; $26.99 (paper), ISBN 978-1-108-44714-0.

Reviewed by Árpád von Klimo (Catholic University of America) Published on H-Diplo (May, 2020) Commissioned by Seth Offenbach (Bronx Community College, The City University of New York)

Printable Version: http://www.h-net.org/reviews/showpdf.php?id=54866

People usually struggle to make sense of the historical period they live in. This is also true today, especially in what has been called “the West,” which includes wealthy democratic societies of Europe and the United States, countries (or their elites) that have been identifying themselves in contrast to the communist “Second World” and the poor, underdeveloped “rest,” called the “Third World” by those who believe they represent the “First World” (a designation mostly avoided because it sounds a bit pretentious). With the collapse of the political system of the “Second World” around 1989 and the early 1990s, the “First World” seemed to be the “winner” of the Cold War, although, if we look closely at what was written in the West at the time, many were rather concerned about what would follow, and the wars that accompanied the breaking apart of Yugoslavia seemed to prove that the situation was indeed dangerous. Later, for a moment, “Europeanization” of Eastern Europe seemed to bring the liberal dream of an “end of history” into reality when most countries in Europe had embraced capitalism and democracy, epitomized by the European Union. After the 2008 economic crisis, however, this “myth of 1989” came under increasing attack, not only in Hungary and Poland but also in the Western “core” of the EU.

The new 1989: A Global History of Eastern Europe focuses on the “myth of 1989” and attempts to counter a simplified, Eurocentric narrative of the Eastern part of the continent since 1989 in a number of ways (p. 1). Using a global approach, this extraordinary book, which was written by four authors, who all teach history at the University of Exeter as specialists of different regions (James Mark/Central Europe, Bogdan C. Iacob/Eastern Europe, Tobias Rupprecht/Latin America, and Ljubica Spaskovska/former Yugoslavia), critiques and revises a number of popular aspects of this Eurocentric myth of 1989. They bring back agency to elites and peoples of Eastern Europe, who were not all “waiting” longingly to become a part of the “West” (although, as the authors admit, many were!). The authors, instead, highlight that many experts, often communist “reformers,” were actively engaged in changing the state-socialist economic system by opening it to the world market, thus bringing a new dynamic into the process of globalization that had slowed down during the 1950s because of heightened East-West confrontation. Later, communist reformers sometimes played a crucial role in international debates about capitalism, sometimes asking for more radical, or “neo-liberal,” forms of capitalism in contrast to their Western counterparts who were more oriented toward a social democratic model (page 64 cites the Hungarian economist János Kornai as an example). But this happened long before 1989. Eastern Europe was not an isolated gray zone of people desperate for Western consumer goods and freedom. The images of the opening of the Berlin Wall and East Germans standing in line to get bananas have covered up these long-term developments and the manifold relations between East Germany and the Southern Hemisphere.

Decolonization since the 1960s, which had brought political independence to a number of African states, had opened new perspectives for politicians and experts in both communist and capitalist Europe and initiated an increasing spectrum of “developing” strategies and attempts to integrate or reintegrate Africa and Asia into world trade. The book shows that we have to think about the relationship of two processes: the (self-)integration of Eastern Europe into the world market and the decolonization since the 1960s with a perspective on the involvement of Eastern European communist functionaries. In the early 1980s, however, Western ideas of “Eurafrica” and Eastern European attempts to create a socialist world market in contrast to global capitalism slowly lost their popularity (p. 164). The challenges of the Islamic Revolution in Iran and, most of all, new trends in global mobility brought forth a revival of older ideas of “Christian Europe” or “fortress Europe,” accompanied by racists ideas and acts of violence (pp. 164, 165). Again, this shift could be observed in both the East and West, which demonstrates the insightfulness of the global perspective on Eastern Europe.

Another popular but partly erroneous narrative the book addresses is the idea that all Eastern Europeans wanted a liberal democratic system to replace the communist dictatorship, which was seen as a quasi essential complementary to the market economy. Many economists and communist reformers were, especially before 1989, convinced that an authoritarian-capitalist model, like the examples of South Korea under Park Chung-Hee or Chile under Augusto Pinochet, were superior to a combination of capitalism and democracy. In Russia, because of the chaotic situation in the early 1990s, the belief in “Formula Pinochet” had many adherents also after 1989. Emphasizing that the question regarding which political model to follow was fierce and not determined in 1989 in many parts of Eastern Europe is not only important for the historical record but also in relation to the authoritarian and illiberal tendencies in the region that have been observed in the last decade.

In Africa, the myth of 1989 had strong influence on the political elites who quickly abandoned Marxism and their connections to the Soviet Union and often engaged in “democracy talk” without actually giving up their grip on power (p. 221). However, the myth also brought back ideas of a “superior” Western model that Africans had to follow, introducing stronger “conditionality” in agreements or loans from the European Community or the International Monetary Fund while African elites feared that investments would now mostly flow into Eastern Europe (p. 226). A similar push to support democracy and human rights could be observed in other parts of the world, especially in the Middle East or the Balkans, where the narrative of 1989 was used to justify Western interventionism, although, as the authors underline, “third-wave democratisation and marketisation, catalyzed by Eastern Europe’s 1989, was not simply a story of instrumentalisation of the West and then export to the rest” (p. 264). Instead, traditions created by the socialist or the nonaligned world, which were not perceived as part of the West, still resonated in these parts of the world after 1989. At least since 2010, when the “Arab Spring” turned into brutal civil wars, and populist right-wing politicians started to rise in many parts of the world, the myth of 1989 as the triumph of Western capitalism and democracy has become increasingly contested and probably even “marginalized” in Eastern Europe itself (p. 308). “For many Eastern European conservatives, 1939 superseded 1989 because it symbolised both national martyrdom and the non-Western, non-liberal roots of their national and Christian European identity” (p. 310). Even the oppositional groups active today against populist governments in Hungary, the Czech Republic, or Poland are not fully behind the older Western liberal narrative but are more concerned with anti-corruption causes or government responsibility. But who knows, maybe the myth of 1989 will, eventually, return?

1989: A Global History of Eastern Europe is, in any case, an important contribution to our understanding of today’s world. The book offers a coherent narrative, and this sometimes results in repetitions, but the reflexivity of the authors who counter their own theses with counter-theses inspires further discussions. One does not have to agree with the authors’ critical, postcolonial critiques of the “neoliberal” West to see the value of the new insights their global perspectives bring to the field of Eastern European history.

Arpad von Klimo teaches modern European history at The Catholic University of America in Washington, DC. He is currently working on a project on global anticommunism, détente, and decolonization, focusing on the followers of Cardinal Jozsef Mindszenty in the early 1970s.

Citation: Árpád von Klimo. Review of Mark, James; Iacob, Bogdan C.; Rupprecht, Tobias; Spaskovska, Ljubica, 1989: A Global History of Eastern Europe. H-Diplo, H-Net Reviews. May, 2020. URL: http://www.h-net.org/reviews/showrev.php?id=54866

This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States License.

Think Again: BRICS - Antoine van Agtmael (Foreign Policy)

Think Again: The BRICS

Together, their GDP now nearly equals the United States. But are they really the future of the global economy?

BY ANTOINE VAN AGTMAEL | Foreign Policy, NOVEMBER 2012

"The BRICS Are in a Class by Themselves."

Yes and no. There is no question that the BRICS -- Brazil, Russia, India, China, and the group's newest member, South Africa -- are big. They matter. In terms of population, landmass, and economic size, their pure dimensions are impressive and clearly stand out from those of other countries. Together, they make up 40 percent of the world's population, 25 percent of the world's landmass, and about 20 percent of global GDP. They already control some 43 percent of global foreign exchange reserves, and their share keeps rising.

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Jim O'Neill of Goldman Sachs put the spotlight on the rise of the original four of these big new economic powers when he gave them the name BRICs in 2001, and their collective growth began to soar. But in reality their economic success had been a long time coming. Twenty years before that, when I was at the World Bank's International Finance Corp. (IFC), we were identifying the opportunity to rebrand these countries, which, despite their enormous economic potential, were still lumped together with the world's perennial basket cases as "underdeveloped countries" stuck in the "Third World." At the time, Third World stock markets were simply off the radar screen of most international investors, even though they were starting to grow; I gave them the name "emerging markets." Local investors were already quite active in Malaysia, Thailand, South Korea, Taiwan, Mexico, and elsewhere, as homegrown companies became larger and more export-competitive while market regulation became more sophisticated. But until the IFC built its Emerging Markets Database and index in 1981, there was no way to measure stock performance for a representative group of these markets, a disabling disadvantage when stacked against other international indices, which were skewed in favor of developed countries such as Germany, Japan, and Australia. This brand-new research on markets and companies provided investors with the confidence to launch diversified emerging-market funds following the success of individual country funds in markets such as Mexico and South Korea.

The BRICs, however, took much longer to get ready for prime time. Until the beginning of the 1990s, Russia was still behind the Iron Curtain, China was recovering from the Cultural Revolution and the Tiananmen Square unrest, India remained a bureaucratic nightmare, and Brazil experienced bouts of hyperinflation combined with a decade of lost growth. These countries had largely muddled along outside the global market economy; their economic policies had often been nothing short of disastrous; and their stock markets were nonexistent, bureaucratic, or supervolatile. Each needed to experience deep, life-threatening crises that would catapult them onto a different road of development. Once they did, they tapped into their vast economic potential. Their total GDP of close to $14 trillion now nearly equals that of the United States and is even bigger on a purchasing power parity basis.

Here's the problem, however, with asking whether the BRICS "matter": Big is not the same as cohesive. The BRICS are part of the G-20, but not a true power bloc or economic unit within or outside it. None is fully accepted as "the" leader even within its own region. China's rise is resented in Japan and distrusted throughout Southeast Asia. India and China watch each other jealously. Brazil is a major supplier of commodities to China and has relied on it for its economic success, but the two powers compete for resources in Africa. Russia and China may have found common cause on Syria, but they compete elsewhere. And though intra-BRIC commerce is growing rapidly, the countries have not yet signed a single free trade agreement with each other. Then there's South Africa, which formally joined this loose political grouping in 2010. But being a member of the BRICS doesn't make it an equal: South Africa doesn't have the population, the growth, or the long-term economic potential of the other four. Indonesia, Mexico, and Turkey would have been other logical contenders -- or South Korea and Taiwan, for that matter, which have comparable GDPs but much smaller populations than the original BRICs.

The BRICS are also nowhere near economically cohesive. Russia and Brazil are way ahead in per capita income, beating China and India by a huge amount -- nearly $13,000 compared with China's $5,414 and India's $1,389, according to 2011 IMF data. And their growth trajectories have been very different. What's more, the BRICS face stiff competition from other emerging powerhouses in the developing world. While China and India seemed to have a competitive edge for a while due to their low labor costs, countries like Mexico and Thailand are now back on the competitive map. And while growth in the BRICS seems to be slowing, many African countries are receiving more foreign investment, may be more politically stable, and are at long last moving away from slow or no growth toward much more robust economies.

ALEXEI NIKOLSKY/AFP/GettyImages

"The Continued Rise of the BRICS Is Inevitable."

True, but their growth is slowing. Forecasts by Goldman Sachs and others project China will overtake the United States in GDP before 2030. China, meanwhile, dwarfs the other BRICS, whose combined economic size isn't expected to catch up to China during that period. The BRICS will approach the total size of the seven largest developed economies by 2030, and by the middle of this century they are projected to be nearly double the size of the G-7.

BRICS consumers are also beginning to rival their American counterparts in terms of total purchasing power. More cars, cell phones, televisions, refrigerators, and cognac are now sold in China alone than in the United States. Even with slower growth, the economic engine of the BRICS should be more important than that of the United States or the European Union for most of the 21st century.

Then again, there's no guarantee that the BRICS can maintain their torrid growth rates. Just as their expanding economies took the world by surprise over the past decade, the big shock for the next decade may be that they will grow less quickly than assumed. Japan, South Korea, and Taiwan have already shown that growth rates slow down once a basic level of industrialization has been reached. The unquenchable thirst for "goods" tends to moderate when basic infrastructure is in place and consumers want more health care, education, and free time.

To some extent, this is already occurring. Leading Chinese economists now expect China's annual growth to slow down from rates of 10 to 12 percent to 6 to 8 percent by the end of this decade. Dreams of India reaching sustainable annual growth of 8 percent or more have been lowered to 5 to 6 percent after the country hit an inflation barrier and offshore gas production disappointed. Brazil has also struggled to return to its exuberant pre-crisis growth, while Russia has been staggered by Europe's economic problems. The projections by Goldman Sachs and others always expected slower growth for the future, but some enthusiasts did not read the footnotes.

VANDERLEI ALMEIDA/AFP/Getty Images

"The Financial Crisis Was Good for the BRICS."

Not for long. The 2008 financial crisis did not emanate from emerging markets. Instead, the BRICS came to the rescue when the United States, Europe, and Japan collapsed due to their overspending, fiscal imprudence, and overreliance on just-in-time production that made them too dependent on a consumer economy that quickly blew up. After the BRICS suffered brief, V-shaped recessions of their own, as swift in their decline as they were in their recovery, the BRICS' demand helped pull the global economy out of its initial slump.

It certainly wasn't clear initially that this was how the crisis would play out. The Financial Timeswarned (and many investors feared) that the banking systems of emerging markets would succumb to the same massive financial problems that plagued the United States and Europe, but Asia and Latin America had learned their lessons from earlier financial crises and put their houses in order. The Chinese had ample reserves for a fiscal stimulus that was not only massive, but, unlike its U.S. counterpart, also disbursed funds quickly. The BRICS' central banks, along with those in other emerging markets, cooperated on global monetary easing. Without it (and without China's quickly disbursed stimulus at home), Western stimulus and easing would have been inadequate and ineffective. With it, demand for commodities stabilized and the world avoided a depression.

These crisis interventions came at a significant cost, however, the full price of which is not yet clear even today. The real estate bubble, which played such a big part in the United States and Southern Europe, didn't burst in the BRICS. Inflation also increased well beyond the comfort zone of central banks in China, India, and Brazil. Although all this did not provoke another crisis, it might have planted the seeds for future problems. Economic history teaches us that the next crisis usually comes from the region where the applause and self-satisfaction were loudest the previous time around. If that holds true, the next economic shock will more likely than not come from the BRICS.

FABRICE COFFRINI/AFP/Getty Images

"The BRICS Are Unbeatable Competitors."

No. The BRICS benefited for several decades from cheap labor, higher productivity, massive (but far from universal) investment in infrastructure and education, and a hunger to catch up with wealthier rivals. Their transformation was remarkable: With better-off populations, domestic markets finally became economically attractive, South-South trade exploded, and leading corporations transformed themselves from second-rate producers of cheap goods into world-class manufacturers of smartphones, semiconductors, software, and planes. China's Lenovo took over IBM's PC business. Brazilian and South African beer companies became leading global brewers. Just as had been the case with the Russians after Sputnik and the Japanese in the 1980s, the BRICS became feared and formidable competitors, even if some of the fears about their rise were exaggerated.

But the story is not over. Cheap, abundant energy from shale gas is attracting new investment in the United States, giving energy-intensive industries a renewed competitive edge. Abundant shale gas could also make Russian Arctic drilling and Brazilian pre-salt production too expensive. Stagnant U.S. wages and soaring pay in China and India are eroding the BRICS' labor-cost advantage, while their seemingly bottomless labor pool has suddenly started emptying out, leaving them with shortages of trained labor.

Mechanization is also allowing the developed world to make a comeback. Increasingly affordable and sophisticated robots can now do what 10 or more human workers did until recently. They work 24 hours a day and do not ask for higher wages or better benefits. Smartphones and tablets may still be made in Asia, but the BRICS lag behind in taking advantage of the productivity gains they bring. As a result, traditional multinationals are fighting back after years of retreat, from General Motors winning the biggest market share in China to General Electric's foray into producing low-cost medical equipment to Nestlé's invention of the wildly successful Nespresso machines, turning high-end coffee from a store-bought luxury into an at-home convenience. The competitive edge may be turning back to the West much faster than we thought.

ALEXANDER JOE/AFP/Getty Images

"The BRICS Are the Best Place to Invest."

No longer true. Until 2008, the BRICS performed far better than other emerging equity markets -- or developed markets, for that matter. And by a lot: For the five years ending in 2007, investors in the four original BRICs earned an annualized 52 percent return, compared with just 16 percent in the G-7 markets. But in the past five years, through Aug. 31, that figure was -3 percent for the BRICs and -1 percent for the G-7. This was in part a correction to exaggerated expectations, which drove up valuations and currencies to unsustainable levels. It also seems, however, that the BRICS' competitive edge is now being questioned in more fundamental terms. Of course, it makes perfect sense for investors to diversify and not ignore such a huge, successful part of the global economy, but that is different from blind euphoria.

Each of the BRICS is very different, and so are the question marks that accompany their economies. For example, China's wage costs had been so much lower than Mexico's for several decades that Mexico had difficulty competing, despite its closeness to the U.S. market. But that wage gap has closed in recent years -- Chinese labor rates have grown from 33 percent of Mexico's in 1996 to 85 percent in 2010 -- and now investment is flowing back to Mexico. Even when Indian growth rates went through the roof, bureaucracy, budget deficits, and infrastructure bottlenecks remained serious impediments. Brazil successfully turned around its floundering economy in the 1980s and then benefited from three windfalls: China's thirst for commodities, energy discoveries, and a competitive edge as an agribusiness giant. Now, however, China's slowing economy and the world's shift toward ubiquitous shale gas is changing the picture. Or consider Russia, which, to its peril, has squandered its oil-and-gas weapon by pooh-poohing the potential of shale gas, opening up export opportunities for the United States in Europe.

PETER PARKS/AFP/Getty Images

"The BRICS Will Surpass the West."

Not so fast. Yes, the BRICS will remain the main source of growth in tomorrow's world, as they already are today. Together they will dominate the global economy later this century the way Europe and the United States once did.

Just as the pendulum swung far toward the BRICS but then swung back hard in recent years, there are signs of new forms of BRICS competitiveness. Research and development in the BRICS is paving the way for increasingly high-value-added production. Ninety-one percent of U.S. plants are more than a decade old, versus only 43 percent of China's plants, according to a 2007 IndustryWeek survey. While 54 percent of Chinese companies cited innovation as one of their top objectives in the survey, only 27 percent of U.S. respondents did. Chinese telecom equipment-makers are giving more traditional players a run for their money, Indian-made generic drugs are making inroads, Brazilian protein producers dominate world markets, and Russian oligarchs are making smart investments abroad. The BRICS are going through a rough patch right now, yet they're poised for a roaring comeback.

But though the era of American or Western domination may be over, BRICS domination is still some time off. What is already a fact is that the clear delineation between developed and "backward" countries is a thing of the past. Western multinational companies are seeking to expand in the BRICS as growth in their home markets has dried up. Chinese and Indian corporations are building their brands in other emerging markets and the West. More than ever, developed countries' economic fates are tied to those of emerging markets.

Intellectual property remains a strong suit of advanced economies. The United States, Japan, and Germany -- just three advanced economies -- accounted for 58 percent of patent filings in 2011, according to the World Intellectual Property Organization. But even here the BRICS are catching up: China's applications soared 33 percent in 2011, Russia's filings were up 21 percent, Brazil's 17 percent, and India's 11 percent. Compare that with 8 percent growth for the United States and 6 percent for Germany. Chinese telecommunications equipment giant ZTE Corp. dislodged Japan's Panasonic from the global top spot with 2,826 patent applications. China's Huawei Technologies was in third place, while a previous American leader, Qualcomm, dropped from third to sixth place in 2011. Why does it matter? Because patents are a key indicator of future economic strength.

TEH ENG KOON/AFP/Getty Images

"Politics Could Be the BRICS' Undoing."

True, and you disregard them at your peril. The spread of democracy and free markets in much of Asia, Latin America, and Eastern Europe is impressive, but some BRICS have been laggards rather than leaders in this area. Legitimacy in these countries often depends on meeting sky-high expectations for economic success, while political checks and balances remain in their infancy. So forget about all those paeans to "authoritarian capitalism" you read in the op-ed pages. Just because Beijing has a fancy new airport and President Vladimir Putin can bulldoze entire neighborhoods at will doesn't mean China's and Russia's politics give them an edge. Even in democratic India, politics are often overwhelmed by corruption, and politically open Brazil struggles with crippling crime stats and political scandals.

The BRICS may seem stable now, but nobody knows what the future holds. Admiration for oligarchs easily turns into envy and anger. Ubiquitous mobile-phone cameras and instant Internet distribution constrain the use of public force. Under the surface and among the younger generation, pride in economic achievements and a sense of material well-being are now coupled with demands for better health care and national recognition. Increasingly, more is not the answer -- citizens of the BRICS want better. Local elites must act adroitly to keep this new mood from developing into a combustible mix. The current generation of leaders in China has not forgotten the lessons of the Cultural Revolution -- but the next generations may.

Some tailwinds that have benefited the BRICS these past decades may yet turn into headwinds. For instance, these countries have benefited from relatively low budget allocations to military spending -- a fruit of Pax Americana. That could change if conflict broke out on the Indian subcontinent or Iran acquired nuclear weapons. And serious political unrest could easily derail the rise of the BRICS: The Bo Xilai case in China, the upheavals following the Arab Spring, and the power blackout in India were recent red flags that showed the dramatic impact of sudden events.

Still, the BRICS are not going anywhere. Sure, they may face tough adjustments getting used to less lofty growth expectations while satisfying more demanding populations. But one way or another it's safe to say: These big emerging economies will put their stamp on the 21st century.

SAJJAD HUSSAIN/AFP/Getty Images

 

Antoine van Agtmael, a founder and former chairman of AshmoreEMM, is author of The Emerging Markets Century.