Category Archives: economics

Cold War: Ransoming Emigrants

From The Great Departure: Mass Migration from Eastern Europe and the Making of the Free World, by Tara Zahra (Norton, 2016), Kindle Loc. 3613-27, 3658-74:

The profile of migrants transformed in the 1970s, as dissident intellectuals and celebrity defectors began to take center stage. There had always been a place in the West for intellectual and cultural luminaries from Eastern Europe. The “ideal” East European emigrant throughout the early Cold War had not, however, been a scientist, doctor, or novelist. He or she was a farmer, a miner, a domestic servant, or a factory worker—someone willing to work hard for low wages and fuel booming postwar economies in the West. That image subtly shifted in the late 1960s and the 1970s. In part, the sociological profile of actual emigrants changed, as the refugees who fled Czechoslovakia and Poland in 1968, in particular, tended to have a higher education. Western economies were also transforming. The 1970s brought oil shocks, growing restrictions on immigration in Western Europe, and the rise of technology and service-based industries. The “ideal” refugee from Eastern Europe—the least threatening immigrant—was now an engineer, intellectual, or tennis star, not a factory worker who would compete for ever scarcer manufacturing jobs.

Then, in the 1970s and 1980s, several Eastern bloc governments introduced reforms that attempted to “normalize” relations with the West and with emigrants abroad. These initiatives did not reflect a change of heart regarding emigration in Eastern Europe. Rather, they represented efforts by desperate governments to raise foreign currency. Socialist regimes were searching for new ways to placate dissatisfied citizens in the 1970s and 1980s. Consumer goods—everything from televisions and washing machines to blue jeans and automobiles—were powerful currency in this quest for legitimacy. East European governments largely financed the shift to a consumer economy with loans from the West. Repaying these loans was possible only with a continuous influx of foreign currency, which flowed into the country along with tourists and visitors from the West, or in the form of remittances from migrants working abroad.

Whereas socialist governments had once bitterly denounced the “human traffickers” who lured their citizens to the West, they now willingly brokered a trade in migrants for their own purposes.

Romania also ransomed Jews and Germans for profit. The exchange of Romanian Jews for money and agricultural products had begun covertly after the Second World War. A Jewish businessman in London named Henry Jacober served as the middleman between private individuals in the West and the Romanian secret service. Jacober traded briefcases full of cash, typically $4,000 to $6,000 per emigrant (depending on the individual’s age and educational status), for exit permits to the West. When Israeli intelligence officials got wind of the deals, they decided to get in on the scheme, with the approval of Prime Minister David Ben-Gurion. At Khrushchev’s insistence, the Romanians began to demand agricultural products instead of cash. Soon Romanian Jews were traded for everything from cattle and pigs to chicken farms and cornflake factories. The ransom of Jews continued under the rule of the Romanian dictator Nicolae Ceausescu after 1969. The price of exit could go up to $50,000, depending on the migrant’s age, education, profession, family status, and political importance. Israel refused to pay for young children and retirees.

Selling Jews was so profitable that the ransom scheme expanded to include ethnic Germans, who were sold to West Germany for suitcases stuffed with U.S. dollars. Germans, like Jews, were priced on the basis of their educational attainment and ransomed for rates ranging from $650 for an unskilled worker to $3,298 for an emigrant with a master’s degree or equivalent. Romania also received interest-free loans from West Germany in exchange for releasing Germans. In the mid-1970s, Ceausescu famously boasted, “Jews, Germans, and oil are our best export commodities.” Around 235,000 Jews and 200,000 Germans escaped Romania through these deals. During Ceausescu’s regime alone, an estimated 40,577 Jews were ransomed to Israel for $112,498,800; West Germany made payments of at least $54 million in exchange for exit permits for German emigrants.

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Filed under Britain, Eastern Europe, economics, education, Germany, Israel, migration, Romania, U.S., USSR

FDR and the “Jewish Problem”

From The Great Departure: Mass Migration from Eastern Europe and the Making of the Free World, by Tara Zahra (Norton, 2016), Kindle Loc. 2276-2301:

President Roosevelt was on the same page. He envisioned an ambitious transfer of populations that would solve both the immediate refugee crisis and the East European “Jewish problem” over the long term. “It must be frankly recognized that the larger Eastern European problem is basically a Jewish problem,” he maintained in January 1939.

The organized emigration from Eastern Europe over a period of years of young persons at the age which they enter actively into economic competition, and at which they may be expected to marry, is not beyond the bounds of possibility. The resultant decrease in economic pressure; the actual removal over a period years of a very substantial number of persons; the decrease in the birthrate and the natural operation of the death rate among the remaining older portion of the population should reduce the problem to negligible proportions.

Roosevelt appointed the geographer Isaiah Bowman, then president of Johns Hopkins University, to lead the search for an appropriate refuge. Bowman had previously served on the U.S. delegation to the Paris Peace Conference in 1919, and was head of the American Geographical Society from 1915 to 1935. In the years 1938–42, Bowman directed a project at Hopkins to research possibilities for refugee resettlement around the globe. The goal of the project, in Roosevelt’s words, was to locate “uninhabited or sparsely inhabited good agricultural lands to which Jewish colonies might be sent.”

Bowman and his team surveyed settlement sites on five continents, and his reports circulated widely in government and humanitarian circles. Not coincidentally, however, he did not seriously consider the United States as a potential destination (aside from a cursory examination of Alaska). Bowman firmly believed in eugenics and in natural racial hierarchies. He actually introduced a new Jewish quota at Johns Hopkins in 1942 and also banned African American undergraduates from the university. He was personally convinced that the United States had reached its “absorptive capacity” with respect to Jewish immigrants—even as he lamented declining birthrates among white, middle-class Americans.

At the international level, then, the most critical years of the Jewish refugee crisis before World War II were spent searching the globe for a new refuge, dumping ground, or homeland for European Jews. The Madagascar plan remains the most infamous resettlement scheme, since the Nazis themselves favored it. But the IGCR [Intergovernmental Committee on Refugees], in cooperation with British, American, and Jewish agencies such as the JDC and the World Jewish Congress, considered a range of territories for potential Jewish resettlement. British Guiana, Angola, the Dominican Republic, Northern Rhodesia, Alaska, and the Philippines were among the most widely discussed possibilities. At huge expense, and in a nakedly colonial tradition, intergovernmental and humanitarian organizations dispatched teams of experts in agricultural science and tropical medicine on fact-finding missions to these far-flung destinations. They wined and dined dictators; surveyed the climate, soil, and “natives” in supposedly “underpopulated” lands; and speculated about whether urban Jews could be transformed into farmers who would “civilize” colonial outposts.

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Filed under Africa, Eastern Europe, economics, Israel, labor, Latin America, migration, nationalism, North America, Philippines, U.S.

Arbeit Macht Frei in Postwar Europe

From The Great Departure: Mass Migration from Eastern Europe and the Making of the Free World, by Tara Zahra (Norton, 2016), Kindle Loc. 2719-32:

Economic logic generally set the limits of humanitarian solidarity in postwar Europe. The employment contracts offered to refugees were often highly restrictive, designed to keep them in low-paid or undesirable jobs for as long as possible. Belgium’s “Operation Black Diamond” imported 32,000 DPs as miners, but required them to work a full two years in the mines before they were allowed to seek employment elsewhere. As of 1949, 8,000 had returned to refugee camps in Germany, unable to tolerate the harsh conditions. Other employment programs were similarly restrictive. Britain’s “Westward Ho!” program enabled 82,000 migrants from Eastern Europe to emigrate to the UK, but confined refugees to employment in mining, textiles, agriculture, or domestic service, rather than allowing them to move freely between jobs or professions.

The French government, with its ongoing anxieties regarding population growth, was initially among the most eager to recruit DP labor. The French military commander Pierre Koenig immediately recognized that East European DPs “represent a human and labor resource that we will have a high interest in using to the advantage of our country,” and he urged French authorities to recruit the best workers. In 1948, the French government even set up its own vocational training courses for refugees in the French zone of occupied Germany. Conditions for foreign workers in postwar France were notoriously poor, however, and that hampered recruitment efforts. Ultimately, the IRO resettled only 38,107 East European refugees in France between July 1, 1947, and December 1950. The bulk of refugees were headed to the New World. In the same period, the United States received 238,006 refugees, Israel 120,766, Australia 170,543, and Canada 94,115.

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Filed under Australia, Belgium, Britain, Canada, Eastern Europe, economics, France, Germany, Israel, labor, migration, nationalism, U.S.

Booker T. Washington in Austria-Hungary

From The Great Departure: Mass Migration from Eastern Europe and the Making of the Free World, by Tara Zahra (Norton, 2016), Kindle Loc. 892-922:

In 1910, Booker T. Washington and the University of Chicago sociologist Robert Park set out for Europe. Their goal was to determine what was propelling millions of Europeans to American shores. “I was curious . . . to learn why it was that so many of these European people were leaving the countries in which they were born and reared, in order to seek their fortunes in a new country and among strangers in a distant part of the world,” Washington explained. Eschewing “palaces, museums, art galleries, ancient ruins, monuments, churches, and graveyards,” he embarked on an inverted grand tour, determined to immerse himself in the “grime and dirt of everyday life.”

Washington’s self-proclaimed mission was to hunt for “the man farthest down” on the European continent. In this quest to explore “the worst” that Europe had to offer, he found rich terrain in Austria-Hungary. During their two-month scavenger hunt for misery, Washington and Park toured Cracow’s Jewish ghetto, Prague’s YMCA, Bohemian mines, Hungarian farms, Viennese slums, Adriatic ports, Galician border towns, and tiny Carpathian villages.

Booker T. Washington hoped that by locating the man farthest down in Europe, he would not only diagnose the root causes of emigration but also find new salves with which to heal American social and racial inequalities. “I believed . . . that if I went far enough and deep enough I should find even in Europe great numbers of people who, in their homes, in their labour, and in their manner of living, were little, if any, in advance of the Negroes in the Southern States,” he reflected. “I wanted to study first hand . . . the methods which European nations were using to uplift the masses of the people who were at the bottom in the scale of civilization.” As he projected the racial politics of the American South onto the terrain of the Austrian empire (which he identified as part of “Southern Europe”), he found many parallels. By the time he returned home, he had concluded that the situation of the Slavs of Austria-Hungary was “more like that of the Negroes in the Southern States than is true of any other class or race in Europe.” Not only were Slavs, like African Americans, “an agricultural people.” They were also distinct from and discriminated by what Washington called “the dominant classes” of Austria-Hungary. “Although they were not distinguished from the dominant classes, as the Negro was, by the colour of their skin, they were distinguished by the language they spoke, and this difference in language seems to have been, as far as mutual understanding and sympathy are concerned, a greater bar than the fact of colour has been in the case of the white man and the black man in the South.” Indeed, Washington concluded that the peasants, workers, and Jews of Eastern Europe actually lived in more debased conditions than African Americans in the South. “There are few plantations in our Southern States where . . . one would not find the coloured people living in more real comfort and more cleanliness than was the case here,” he observed, after touring a desolate Bohemian farm. “Even in the poorest Negro cabins in the South I have found evidences that the floor was sometimes scrubbed, and usually there was a white counterpane on the bed, or some evidence of an effort to be tidy.”

By the time he returned to America, Washington was so disturbed by the poverty he encountered in Austria-Hungary that he began to sympathize with the American movement to restrict immigration. The arrival of millions of destitute East Europeans threatened to create a new kind of “racial problem” in America, he warned. “Whatever else one may say of the Negro, he is, in everything except his colour, more like the Southern white man, more willing and able to absorb the ideas and the culture of the white man and adapt himself to existing conditions, than is true of any race which is now coming into this country.”

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Persian Nader Shah vs. Moghul Empire

From A History of Iran: Empire of the Mind, by Michael Axworthy (Basic Books, 2016), Kindle Loc. 2997-3027:

Crowned shah, with his western frontiers secure and in undisputed control of the central lands of Persia, Nader set off eastward to conquer Kandahar. The exactions to pay for this new campaign caused great suffering and in many parts of the country brought the economy almost to a standstill. Nader took Kandahar after a long siege, but he did not stop there. Using the excuse that the Moghul authorities had given refuge to Afghan fugitives, Nader crossed the old frontier between the Persian and Moghul empires, took Kabul, and marched on toward Delhi. North of Delhi, at Karnal, the Persian army encountered the army of the Moghul emperor, Mohammad Shah. The Persians were much inferior in number to the Moghul forces, yet thanks to the better training and firepower of his soldiers, and rivalry and disunity among the Moghul commanders, Nader defeated them. He was helped by the fact that the Moghul commanders were mounted on elephants, which besides proving vulnerable to firearms were liable to run wild—to the dismay of their distinguished riders and anyone who happened to be in their path.

From the battlefield of Karnal, Nader went on to Delhi, where he arrived in March 1739. Shortly after his arrival there, rioting broke out and some Persian soldiers were killed. So far from home, and with the wealth of the Moghul Empire at stake, Nader could not afford to lose control. He ordered a ruthless massacre in which an estimated thirty thousand people died, mostly innocent civilians. Prior to this point, Nader had generally (at least away from the battlefield) achieved his ends without excessive bloodshed. But after Delhi, he may have decided that his previous scruples had become redundant.

With a characteristic blend of threat and diplomacy, Nader stripped the Moghul emperor of a vast treasure of jewels, gold, and silver, and accepted the gift of all the Moghul territories west of the Indus River. The treasure was worth as much as perhaps 700 million rupees. To put this sum in some kind of context, it has been calculated that the total cost to the French government of the Seven Years’ War (1756–1763), including subsidies paid to the Austrian government as well as all the costs of the fighting on land and sea, was about 1.8 billion livres tournois (the standard unit of account in prerevolutionary France). This was equivalent to about £90 million sterling at the time—close to the rough estimate of £87.5 million sterling for the value of Nader’s haul from Delhi. Some of the jewels he took away—the largest, most impressive ones, like the Kuh-e Nur, the Darya-ye Nur, and the Taj-e Mah—had a complex and often bloody history of their own in the following decades.

Nader did not attempt to annex the Moghul Empire outright. His purpose in conquering Delhi had been to secure the cash necessary to continue his wars of conquest in the west, for which the wealth of Persia alone had, by the time of his coronation, begun to prove inadequate.

Nader’s campaigns are a reminder of the centrality of Persia to events in the region, in ways that have parallels today. A list of some of Nader’s sieges—Baghdad, Basra, Kirkuk, Mosul, Kandahar, Herat, Kabul—has a familiar ring to it after the events of the first years of the twenty-first century. It is worth recalling that Persians were not strangers in any of the lands in which Nader campaigned. Although he and his Safavid predecessors were of Turkic origin and spoke a Turkic language at court, the cultural influence of Persian was such that the language of the court and administration in Delhi and across northern India was Persian, and diplomatic correspondence from the Ottoman court in Istanbul was normally in Persian, too. Persian hegemony from Delhi to Istanbul would, in some ways, have seemed natural to many of the inhabitants of the region, echoing as it did the Persian character of earlier empires and the pervasive influence of Persian literary, religious, and artistic culture.

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The Veil as Status Symbol

From A History of Iran: Empire of the Mind, by Michael Axworthy (Basic Books, 2016), Kindle Loc. 3561-82:

Traditional tribal costumes vary enormously across Iran even today, and are often colorful and eye-catching, with no veil in sight.

Of the remainder of the population, the majority were peasant farmers and laborers. But among these people, too, women had an essential economic role and some independence (insofar as anyone in the poorer classes could properly be thought of as independent). Women had to work hard in the fields and probably did the majority of the routine work—of all but the heaviest sort. Again, a veil of the enveloping chador kind was normally quite incompatible with that sort of activity.

Even in the towns and cities, the majority of people were relatively poor, and in those households most women would have had to work outside the home. And there were significant numbers of prostitutes, to whom the rules of respectability certainly did not apply. So the setup we might think of as typical—of heavily veiled women seldom leaving the home and even in the home kept apart from males who were not relatives—was in fact atypical before 1900. When it did occur, it was limited to middle-or high-class families in towns (precisely the class that looms large historically, being the book-writing, book-reading class—perhaps only four percent or less of families overall). But that arrangement was, or became, an aspiration for many men who could not afford to make it a reality. One could think of the heavy veil as a kind of elite fetish, similar to some of the fashions of nineteenth-century Europe that immobilized women, being wholly impractical and incompatible with work of any kind. For a man’s wife to be out of the house and out of his control, especially in the towns, perhaps partly because of the presence of prostitutes in the towns, potentially exposed him to derision and ridicule. But for her to be kept at home and to emerge only veiled was expensive and a sign of the man’s status. It would be easy to overlook or underestimate the significance and implications of this trope among men in Iranian society and elsewhere. Rather than being an outgrowth of traditional religion and society—there is little justification for it in the Qor’an or the earliest hadith, which originated in different social circumstances—it may largely underpin them. Possession of material goods had its patterns and its social consequences, but so also did the possession of women.

As the population later became steadily more urban and in some ways at least more prosperous, more women were more restricted, stayed in the home more, and wore the heavy veil. But we should not think of those arrangements as typical of pre-industrial Iran; one could accurately say that for the majority of Iranian women, they were a twentieth-century innovation.

An interesting comparison with foot-binding in China.

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Utility of U.S. Aid to Soviets, WW2

From Finland’s War of Choice: The Troubled German-Finnish Coalition in World War II, by Henrik Lunde (Casemate, 2011), Kindle Loc. 1676-90, 1702-16:

The most valuable aid may have been in the 1941–42 period when the Soviet war industry was moved to the Urals and beyond to keep it from falling into German hands. This was an achievement which contributed immeasurably to the ability of the Soviet Union to stay in the war and begin turning the tables on the Germans. However, production in 1941–42 was at its lowest and insufficient to meet the demands brought about by the enormous losses. Victor Kravchenko, who was involved in the Soviet armaments procurement industry during the war, claims that aid played a prominent role.

It may have been in the areas of logistics, transportation, food, communications, raw materials, and the more sophisticated equipment that the aid had its greatest importance. Bellamy points out that the Soviet armed forces had 665,000 motor vehicles at the end of the war but their own production between 1942 and 1944 was only 128,000. It is therefore obvious that most of them came from American factories and that they provided the Soviets with the capability to motorize their forces. The 436,087 vehicles, received mainly from the United States, enabled the Soviets to motorize their troops, their logistical support, and their command and control.

The 8,701 tractors, including half-tracks, provided by the US allowed the Soviets to motorize their artillery to keep up with the advancing troops. Without this the Red Army could not have kept its offensives rolling deep into central Europe. The accessories and spare parts provided to keep this vast transportation fleet running, for example, included 3,786,000 tires for the vehicles. In their final drive on Berlin the northern wing of the Soviet forces under Marshal Rokossovskiy crossed the rivers in East Prussia using General Motors Corporation DUKW six-wheel-drive amphibious vehicles.

Joan Beaumont believes that perhaps the most important contributions of the Lend-Lease program were in the fields of communications, command and control, and railway equipment. The program provided the Soviets with almost one million miles of telephone cable and about 247,000 field telephones. The US aid included half a million tons of railway tracks that were important in rebuilding the 65,000 kilometers of railway tracks and 2,300 bridges destroyed by the Germans. The aid in this area also included 1,155 railroad cars and 1,981 locomotives.

The Soviets have ridiculed the 2.67 million tons of petroleum received from the US in view of their own output of about 30 million tons per year. What is left out of their commentary is the fact that much of the US-provided petroleum consisted of high-octane aviation fuel, a type that was in short supply in the Soviet Union. The Lend-Lease program also provided much-needed raw materials, including about 75 percent of the aluminum and copper needed by Soviet industry between 1941 and 1944.

On the subjects of food aid and the provision of raw materials, Khrushchev writes:

In addition we received steel and aluminum from which we made guns, airplanes, and so on. Our own industry was shattered and partly abandoned to the enemy. We also received food products in great quantities…. There were many jokes going around in the army, some of them off-color, about American Spam; it tasted good nonetheless. Without Spam we couldn’t have been able to feed our army. We had lost our most fertile lands—the Ukraine and the northern Caucasus.

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