Category Archives: economics

Romanian Democracy, 1920s–1930s

From A Concise History of Romania (Cambridge Concise Histories), by Keith Hitchins (Cambridge, 2014), Kindle Loc. 2799-2815, 2865-2899:

The 1930s was the decade of crisis for Romanian democracy. The world depression exacerbated existing economic problems and sharpened social tensions and thus gave impetus to those forces hostile to the prevailing parliamentary system. The crisis enhanced the appeal of anti-Semitism among certain elements of society, who used it to rally support for their particular brand of nationalism. Foremost among organizations that made anti-Semitism the ideological core of their new Romania was the Iron Guard, which reached the height of its popularity in the mid 1930s. The accession of Carol II to the throne in 1930 also boded ill for democracy, as he made no secret of his disdain for parliamentary institutions and of his intention to become the undisputed source of power in the state. Nor can shifts in the European balance of power be ignored. The rise of Nazi Germany and the aggressive behavior of fascist Italy combined with the policy of appeasement adopted by the Western democracies encouraged both the declared opponents of democracy and the hesitant in Romania to conclude that the future belonged to the authoritarians. The leading democratic parties themselves seemed to have lost much of their élan of the preceding decade. They proved incapable of withstanding the assault from both within and outside the country and acquiesced in the establishment of Carol’s dictatorship in 1938, an event which marked the end of the democratic experiment in Romania for half a century.

Two parties dominated political life in the interwar period – the Liberals and the National Peasants. The fortunes of the Liberal Party never seemed brighter, as it held power for long periods, especially between 1922 and 1926. The driving force within the party came from the so-called financial oligarchy, which was grouped around large banking and industrial families headed by the Brătianu family and its allies. The intertwining of banking, industry, and political power on such a grand scale was a consequence of the state’s having assumed a crucial role in promoting economic development. Through this remarkable intermingling of business and financial interests and politicians the control of industry, banking, and government inevitably fell into the hands of the same people.

One issue, nonetheless, continued to nurture rightist movements – anti-Semitism. By no means a post-war phenomenon, it could in its modern form be traced back at least to the early decades of the nineteenth century as Jewish immigration into the principalities steadily grew. In the interwar period a leading advocate of action against Jews was Alexandru C. Cuza (1857–1947), professor of political economy at the University of Iaşi. In 1923, he formed the League of National-Christian Defense (Liga Apărării Naţional Creştine), which had as its primary goals the expulsion of the Jews from all areas of economic and cultural life and the education of young people in a Christian and nationalist spirit.

One of Cuza’s most ardent followers, at least initially, was Corneliu Zelea Codreanu (1899–1938), who created his own, more extreme nationalist organization, the Legion of the Archangel Michael, in 1927. Three years later, he established a military wing of the Legion, which he called the Iron Guard, a name that was soon applied to the entire organization. Outwardly, the Guard resembled German and Italian fascism with its uniforms and salutes and its glorification of its leader – the Căpitan – but all this was merely form. The substance of Romanian fascism – the anti-Semitism, the Orthodox Christian (in a distorted form), and the cult of the peasant as the embodiment of natural, unspoiled man – came from native sources. Here, the traditionalist hostility to cosmopolitanism, rationalism, and industrialization found a crude expression. But lacking was an ideology. Guard leaders ignored calls for a Romanian corporate state on the grounds that the appearance of the new man must precede the adoption of programs. Otherwise, they argued, institutions would simply reinforce the existing “corrupt” society. While there was thus a strain of idealism in the Guard’s doctrine, repeated acts of violence and intimidation against opponents revealed at the same time its thuggish nature. When the new head of the Liberal Party and prime minister Ion G. Duca outlawed the Guard in 1933 in order to eliminate the “forces of subversion,” it retaliated by assassinating him. He was succeeded as prime minister by Gheorghe Tǎtǎrescu (1886–1957), the leader of the so-called Young Liberals, who were more tolerant of the extreme right than the mainstream Liberals.

Between the elections of 1931 and 1937 the Iron Guard became a mass movement, rising from 1 to 15.58 percent of the popular vote. Its strongest constituency was young and urban, but it cut across class boundaries, appealing at the same time to peasants and rural clergy, elements of the urban working class and the middle class, and the periphery of society. The leadership of the Guard at this time, its heyday, was formed by university-educated, middle-class intellectuals, but its nationalism appealed to all those who felt alienated by a political and social system which seemed to them to have been created outside and at the expense of “Romanian realities.”

The Iron Guard appealed especially to members of the young generation of intellectuals. Its call for a national rebirth based on the simple, traditional virtues of the Romanian countryside offered salvation from a social and political order that seemed to them corrupt and adrift. They enthusiastically embraced the exhortations of their mentor Nae Ionescu, the spiritual father of the Iron Guard, to experience life, not reduce it to abstract formulas, and they proclaimed themselves the missionaries of a new spirituality. Their mission, as they defined it, was to bring about the spiritual reconstruction of Romania, just as the previous generation had achieved political unity. The Iron Guard seemed to many of them to be the embodiment of the youthful vitality needed to set the country on the way to returning to itself. But Emil Cioran wanted to accomplish just the opposite. In his dissection of modern Romania, Schimbarea la faţă a României (The transfiguration of Romania; 1936), he looked to the Iron Guard to carry out a “creatively barbarian” revolution to save the country from disintegration by substituting totalitarianism for democracy. He praised the Guard for their “irrational merging” of themselves into the nation and for their heroism, which “began in brutality and ended in sacrifice.”

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Civil Rights in Romania, 1866–1919

From A Concise History of Romania (Cambridge Concise Histories), by Keith Hitchins (Cambridge, 2014), Kindle Loc. 1926-1950:

The formation of the two large, dominant political parties in the decade after the adoption of the Constitution of 1866 largely completed the political superstructure of the pre-World War era. With the National Liberal Party and the Conservative Party in place, the parliamentary system came fully into being.

The authors of the Constitution and the founders of political parties gave no notice specifically to women. That women should play an active role in the new political system as a distinct social group or could even have issues of their own requiring political debate, let alone legislative action, struck the majority of political leaders as highly novel ideas. Thus the Constitution of 1866 and subsequent parliamentary acts left women in a juridical status that could be traced back to the law codes of Matei Basarab and Vasile Lupu in the middle of the seventeenth century. They stipulated the legal dependence of the wife on the husband in all matters, making her position essentially that of a minor. Thus, down to the First World War, in accordance with the Civil Code of 1866, women could not be a party to any legal arrangement without the consent of her husband or a judge and could not freely dispose of their inheritance or other wealth acquired during marriage. Discrimination in public employment was widespread. Certain professions were closed even to women with university degrees, and those with legal training were not allowed to plead cases in court on the grounds that they did not enjoy political rights. Women were, indeed, deprived of political rights, and the general mood of the time made any significant change unlikely. When several members of the Chamber of Deputies, including C. A. Rosetti, during the debate on the revision of the Constitution in 1884 proposed that married women who met the financial requirements for the ballot be allowed to vote directly for candidates, the response from many colleagues was laughter.

Another category of society also had formidable obstacles to overcome in order to gain civil rights. Gypsies had been slaves since their arrival in the Romanian principalities from south of the Danube in the fourteenth century. They were subject to various labor services and payments, depending upon whether their masters were princes, boiers, or clergy and whether they themselves were settled or nomadic. Even though they contributed much to the economies of the principalities through their labor in agriculture and as craftsmen, they occupied the margins of Romanian society, since their style of life was fundamentally different. Support for their emancipation came from many sides, especially liberals. Mihail Kogălniceanu wrote Esquisse sur l’histoire, les moeurs et la language des Cigains (1837) in order to acquaint the political and cultural elites with their condition and spur reform, and Ion Câmpineanu freed his own slaves. Through the efforts of reformers the Gypsies achieved full emancipation in Moldavia in 1855 and in Wallachia in 1856. In the half-century down to the First World War some of the 200,000 to 250,000 Gypsies settled on land the state made available to them or moved to cities, while many continued their nomadic way of life. In any case, the great majority remained outsiders.

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Wordcatcher Tales: Dosanko, Marimo, Pechika

Here are a few more words I picked up from our travels in Hokkaido last month and from my followup reading in Ann Irish’s book Hokkaido (McFarland, 2009).

道産子 Dosanko ‘(Hokkai)do-born-child’ – Originally applied to a particular breed of horse, the Hokkaido Pony (北海道和種 Hokkaidō washu), this term now applies to anyone or anything from Hokkaido: from prefecture-marketing antenna shops to cooking styles to streetcar types. It has become the prefecture’s brand name.

毬藻 marimo ‘ball seaweed’ (Aegagropila linnaei) – We first saw marimo on display in a small aquarium by the souvenir shops in JR Kushiro train station. They are a species of filamentous green algae (Chlorophyta) that forms large and velvety green balls. Colonies of such balls are only known to form in lakes in Iceland, Scotland, Estonia, and in Japan, where they are one of the many attractions of Lake Akan in Kushiro. The Japanese botanist Kawakami Tatsuhiko (川上龍彦) gave it the name marimo in 1898. Ainu names for it include torasampe (‘lake goblin’) and tokarip (‘lake roller’). English names for it include Cladophora balls, Lake balls, or Moss balls. Marimo also gave rise to a whole range of mascot merchandise under the name Marimokkori.

ペチカ pechika ‘Russian stove’ – It was in Hokkaido that I learned that Japanese ikura ‘salmon roe’ was borrowed from Russian икра (ikra), and in Irish’s book I learned of another Japanese borrowing from Russian, pechika ‘Russian stove’ from печка (pechka), the diminutive of (Русская) печь ‘(Russian) oven/stove’. The Japanese who settled Hokkaido adapted some Russian techniques to deal with the harsh northern winters, including horse-drawn sleighs with curved runners and stoves that radiated heat more effectively than the open fireplaces that were standard in traditional Japanese living/dining rooms. Those settlers included not just migrants from Honshu during Meiji times, but also refugees from Sakhalin, the Kuriles, and Manchuria after World War II ended. My impression is that Japanese pechika refers not to the large Russian ovens of clay, brick, or tile, but to smaller iron stoves, like the one in this Japanese fisherman’s workroom. Irish (p. 285) mentions “the Japanese song Pechika, which describes a family telling stories around a stove.”

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The Last Major Ainu Uprising, 1789

From Hokkaido, A History of Ethnic Transition and Development on Japan’s Northern Island, by Ann B. Irish (McFarland, 2009), p. 47:

A frightening uprising with long-lasting ramifications erupted in 1789. Just as Shakushain remains a hero to many Ainu, the shocking Wajin [= ethnic Japanese] response to the 1789 events makes them a continuing spur to Ainu nationalism. At that time, Ainu were restricted to trading at posts chartered to contractors by the Matsumae. It was often these contractors who cheated or injured the Ainu. One of the worst offenders was Hidaya Kyubei, who operated in southwest Hokkaido and on Kunashir Island in the Kurils. A Hidaya man had come to Ezo as early as 1702 and obtained permission from the Matsumae to set up a lumber business. He brought workers to Ezo with him, sent the lumber his workers cut to Honshu cities, and paid large amounts to the Matsumae for the privilege. In return, his family obtained trading posts and amassed wealth. His grandson, Hidaya Kyubei, expanded his operations, in 1774 opening a trading post on Kunashir. Over the next few years he gained more and more control over the Ainu there, until they were reduced from a self-reliant society living in a traditional manner to the near-slavery and near-starvation seen at Hidaya’s other posts. Wajin frequently threatened Ainu with death or drowned their dogs. Ainu who could no longer work were killed, it was reported. Women were raped and men who tried to resist Hidaya depredations poisoned. Even Aoshima Shunzo, an Edo official sent later to probe the conflict and its causes, found that some blame lay with the Hidaya family, who forced Ainu in their region to work at rates of remuneration impossible to support life.

In 1789, a group of young Ainu, incensed because they believed that several Ainu died after Hidaya officials had given them poisoned sake, instigated hostilities, usually known today as the Menashi-Kunashir War. Ainu attacked Wajin at the Kunashir trading post, on the Ezo mainland, and on a ship in the area, leaving seventy-one dead. The young Ainu apparently planned their assault carefully, having prepared defensive measures, but local Ainu leaders who had been away at the time of the attack returned and persuaded the rebels to desist. To the elders, good relations with Wajin remained crucially important, as Ainu livelihood depended on them. Meanwhile, news got back to the Matsumae, who sent a large force to the affected region near Cape Nosappu east of Nemuro, including troops from other domains ordered by the shogunate to aid the Matsumae. The soldiers captured the eighty-seven Ainu they felt were responsible for the outbreak. Executiions of the leaders began. One of the Ainu let out a war-cry; the Wajin soldiers reacted in panic and speared prisoners randomly, leaving thirty-seven dead. Their heads were taken for display at the Matsumae capital. Hidaya lost his contract and the Matsumae issued new regulations for trading with Ainu; some improvement may have resulted.

This was the last serious Ainu challenge to the Matsumae, but as Wajin immigration continued, so did Ainu resentment.

During our recent trip to Hokkaido, the young Japanese tour guide on our bus to Cape Nosappu told the story of this uprising on our way back to Nemuro.

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How Gorbachev Came to Power

From Revolutionary Russia, 1891-1991: A History, by Orlando Figes (Metropolitan, 2014), Kindle Loc. 4437-4453:

Who knows what would have happened if Andropov had lived longer. Perhaps the Soviet Union might have undergone a more gradual transition from the old command system, modernizing the economy without relinquishing political controls, as done by the Chinese, though one wonders if this could have been achieved given the extent of the Party’s opposition to de-collectivization, the key to China’s revival. As fortune would have it, Andropov became terminally ill with kidney failure only nine months after coming into power and died, at the age of sixty-nine, in February 1984. From his death-bed in hospital, he wrote a speech to be read out at the Plenum of the Central Committee recommending Gorbachev to succeed him. But the crucial paragraph was cut by the old guard in the Politburo, opposed to reform, who on his death voted to replace him with Chernenko. Within weeks of his appointment the 73-year-old Chernenko became terminally ill. The Bolsheviks were dying of old age.

Gorbachev bided his time—careful not to alarm the old guard by giving the impression that he might go on with Andropov’s reforms yet building his support in the Central Committee and increasing his prestige by trips abroad, where he impressed the British leader, Margaret Thatcher, in particular, on a visit to London in December 1984. Such impressions were important to the Soviet government, which needed Western credits and disarmament. They no doubt helped him make the deal with Gromyko, the Foreign Minister, by which Gorbachev agreed to promote him to head of state (Chairman of the Presidium of the Supreme Soviet) if he supported him to succeed Chernenko as the Party’s General Secretary. It was the backing of Gromyko, a veteran Brezhnevite, that tipped the scales in Gorbachev’s favour in the Politburo vote on Chernenko’s death the following March. There was no battle for the leadership: the old guard simply stepped aside to let in a younger man.

The selection of Gorbachev was arguably the most revolutionary act in the history of the Party since 1917. Had the Politburo known where he would lead the Party in the next few years, it would never have allowed him to become its General Secretary. But at this stage Gorbachev’s intentions were still far from clear.

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High Oil Prices and the Brezhnev Era

From Revolutionary Russia, 1891-1991: A History, by Orlando Figes (Metropolitan, 2014), Kindle Loc. 4290-4335:

By the end of the 1970s, these small garden plots, which took up 4 per cent of the country’s agricultural land, were producing 40 per cent of its pork and poultry, 42 per cent of its fruit and over half its potatoes.

Brezhnev responded to the agricultural crisis by allowing larger garden plots to stimulate production. He might have improved the Soviet system’s chances of survival by doing what the Chinese were doing at this time: de-collectivizing agriculture and returning to an NEP-like system of cooperatives and household farms on contracts, with the state allowing them to sell what they produced beyond their quotas on the free market. Soviet reformers were not unsympathetic to these policy ideas, even if they stopped short of recommending them. Gorbachev, who at this time was in the Agricultural Department of the Secretariat, proposed giving more autonomy to enterprises and associations in deciding various production and financial questions in a memorandum to the Central Committee in May 1978 (an idea repeated by Andropov on becoming General Secretary in 1982). But the Brezhnev leadership would not accept these proposals—even as trial policies. The old guard was too committed to the Stalinist collective farm system which they had implemented as young men. The Party’s power was heavily invested in the direct management of the collective farms by thousands of officials in the localities. Perhaps, in any case, fifty years of collectivization (twice as long as in China) had destroyed any hope of bringing the Soviet peasantry back to life.

Relying on their tiny garden plots to feed themselves, the kolkhoz workers lived in squalid poverty. Many inhabited houses without running water or electricity. The ablest and most enterprising, mostly men of conscript age, ran away from the countryside, which became a ghetto of the old, the infirm and the alcoholic, who worked badly. Entire villages were abandoned or left to rot with only a few elderly inhabitants where once perhaps a hundred families had lived.

Alcohol consumption more than doubled in the Brezhnev years. People drank out of despair. By the early 1980s, the average kolkhoz family was spending one third of its household income on vodka—an official figure which does not include the moonshine made by kolkhoz workers in their homes (for every bottle bought from shops, they drank a bucket of moonshine). Alcoholism was the national disease. It had a major impact on crime rates (around 10 million people every year were detained by the police for drunkenness) and a bad effect on male life expectancy, which declined from 66 in 1964 to just 62 in 1980. The regime was unconcerned by the problem. It increased its vodka sales to extract money from the population which had little else to buy. Better to have people drunk than protesting against shortages.

Oil revenues rescued the regime from probable food riots and possible collapse. They gave a lease on life to the Soviet economy, which would have been in severe trouble without a five-fold increase in crude oil prices as a result of the 1973 crisis. The Soviet Union doubled oil production in the 1970s, mainly by developing new fields in Siberia. With its dollar earnings from the sale of oil and gas, the government was able to buy consumer goods and foodstuffs from the West. Before the revolution, Russia had been a major agricultural exporter. But within sixty years it had turned into the biggest food importer in the world. One third of all baked goods in the country were made from foreign cereals. Cattle production was totally dependent on imported grain.

High oil prices also allowed the Soviet Union to be more assertive in its foreign policy. They financed an eight-fold increase in military spending under Brezhnev’s rule. By 1982, the military budget consumed approximately 15 per cent of the country’s GNP. The rise showed the growing power of hardliners in the Brezhnev government, particularly in the KGB, the armed forces, and the defence and foreign ministries, who were committed at all costs to maintaining military superiority over NATO as the foundation of Soviet security.

Their confidence was boosted by the failure of NATO to respond to the Soviet invasion of Czechoslovakia to crush the reformist government of Alexander Dubcek in August 1968—an invasion that the Soviet Defence Minister, Andrei Grechko, had pledged to carry out ‘even if it leads to a third world war’. The Kremlin emerged from the crisis with renewed boldness. ‘The new correlation of forces is such that [the West] no longer dares to move against us,’ claimed Andrei Gromyko, the Foreign Minister.

Moscow justified its invasion and reinforced its grip on Eastern Europe by issuing the Brezhnev Doctrine, outlined in a speech by the Soviet leader to the Polish Communists in November 1968. When ‘forces hostile to socialism try to turn the development of a socialist country towards capitalism,’ Brezhnev warned the Poles, ‘it becomes not only a problem of the country concerned, but a common problem and concern of all socialist countries.’ In practice what this meant was that the Soviet Union reserved for itself the right to intervene in the internal affairs of any Warsaw Pact country if it deemed it necessary for its own security.

Revolutionary ambitions also fuelled the Kremlin’s military spending. While Brezhnev talked détente with the Americans, the hardliners in his government were increasingly directing Soviet arms in support of Third World socialist revolutions and anti-colonial movements. The Americans approached détente in the belief that the Soviet leadership was becoming more pragmatic and less ideological or revolutionary in its foreign policy—a rational approach allowing them to ‘manage’ and contain it through deterrents and rewards. A CIA report of 1969 maintained that the ‘USSR tends to behave more as a world power than as the center of the world revolution’. But this assumption soon proved wrong.

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Warlordism in Ukraine?

On 30 June, Walter Russell Mead’s blog at The American Interest carried a post on The Sad Status Quo in Ukraine, responding to “must-read” analytical reporting in the Wall Street Journal (behind a paywall). It suggests that Ukraine may be entering an era of Warlordism.

Focusing on the person of one Ihor Kolomoisky, the banking tycoon appointed as Governor of the Dnipropetrovsk region earlier this year. Kolomoisky is reportedly spending as much as $10 million a month to field a well-equipped fighting force a third the size of Ukraine’s own army, with his banking businesses looking to profit handsomely with European integration. His tactics are bare-knuckled, but effective: Dnipropetrovsk had some pro-Russian activism earlier this year, but it quickly dissipated …

In the Warsaw Pact and ex-Soviet countries that moved toward the EU and NATO, the gradual imposition of European law led to a process of state building. This has gone farther in some places than in others—Bulgaria, Romania and some of the ex-Yugoslav republics have made less progress than some others—but states have been built that, with corruption here and there, generally speaking work pretty well. But the farther east you go, the more another model was adopted: a single powerful person ends up establishing himself as the center of a new state. Some of the dictatorships in Central Asia are like this, and Putin has adopted a more advanced form of this in Moscow. Instead of oligarchs, there are autocrats or near-autocrats. Again, think feudal Europe, with a powerful ruler crushing the nobles and establishing firm central control.

Ukraine finds itself somewhere in the middle. There has not been a successful Western-oriented state-building process that creates the kind of institutions and political parties that a modern capitalist society needs. But at the same time, no single oligarch or strongman has broken the power of the rest, establishing himself as the Putin of Kiev….

Ironically, what Putin wants and the oligarchs want is probably similar now: enough Western support for rump Ukraine so it doesn’t fall completely under Russia’s control, but stopping well short of forcing major, deep reform on Ukraine. Putin can live with this because he has got Crimea and a lot of economic and political influence—and because the West will keep funneling enough cash to Russia to pay Ukraine’s gas bill. Ukraine’s oligarchs will once again have used West and East against each other to maintain a precarious independence. And Western leaders can tell themselves that they’ve achieved a glorious victory because they’ve kept Putin out of Kiev.

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