Artwork: Ryszard Druch
Jadwiga Staniszkis - I think that the end of the cold war and the end of communism are very strongly connected. A warming of the cold war began in 1985. New negotiations began between the United States and Moscow, after Andrei Gromyko's surprising offer to use the Austrian paradigm (Soviet treatment for Warsaw Pact countries based on Soviet-Allied negotiations on the neutral status of Austria after World War II) when negotiating borders within Central Europe. But this warming occurred mostly because of the internal contradictions of communism, on the one hand, and a recognition of these contradictions in the Soviet Union itself. These contradictions were recognized in part because of a wave of military revolution based on a new awareness of the military's own weaknesses. Simultaneously, this warming was an outcome of the diplomatic strategy that was taken by the Western side. I refer here to the trilateral commission strategy to isolate Moscow and Reagan's strategy to punish Moscow for everything that happened in the communist world. In a sense, this pressure was too much and in order for Moscow once more to become the center of the communist world, it had to place something spectacular, this Austrian paradigm, on the negotiating table, without knowing its implications.
It is interesting that all these errors in Soviet reasoning were as important as their intentions. This was a warming of the cold war and its culmination was in a sense the changes of 1989-90, with hopes in Central Europe for a new paradigm of the world order. And now I think there is somehow a step back from this sense of hope.
Of course, to some extent Russians were ahead of these new problems. They understood (especially Karaganov, one of Russia's leading social scientists and former advisor to Gorbachev and present advisor to Yeltsin) that Moscow was unable to have both better relations with the West and control in Central Europe. The best solution for this dilemma would be to control Central Europe only to the point where it was really necessary, to avoid all symbolic politics, and to control it with the help of the West itself. With a promise of continuing democratic power in Russia, Moscow could discipline both the West and Central Europe. Karaganov wrote about this in 1989 before the collapse of the Communist Party. In a sense this scenario has been followed, leading from what I term warm to colder and colder cooperation.
I think that the internal logic of Russian modernization and Russian power struggles is somehow shifting towards a more politicized role for the military, while the defense industry is made the locomotive of economic development. It was put this way recently in a statement of Russian defense strategy. This politicization of the military and elevation of the defense industry makes many local conflicts unavoidable. Despite this, one can also see a sort of cognitive and institutional inertia in the entire world system.
International institutions are somehow autonomous; they were built during the cold war and their operating assumptions, like consensus, were possible only because there were two superpowers who disciplined their own members throughout these conflicts. International institutions are longing for a bipolar world and this becomes a self- fulfilling prophecy. They can't function without this bipolarity, and they can't change their organization because change has to be realized through consensus, a consensus that cannot be produced. So I don't think we will observe the real end of the cold war. The cold war is both conceptually and institutionally functional for many important actors of this international process. The West also would like to maintain the impression that Moscow is a real, strong world power to fool local interests and identities. Thus, the survival of the cold war is an outcome of a mixture of pretending and institutional politics. And this produces real outcomes - especially real from the point of view of small Central European countries.
M.K. - Let me pursue this point in particular. On this fifth anniversary of the Berlin Wall's collapse, the fall of the wall remains the symbolic end of an era. And we have just witnessed Bill Clinton and Boris Yeltsin negotiating a new American and Russian joint management of the world system, overcoming old oppositions and enabling new alliances. But if I understand you correctly, you are suggesting that this cooperation is masking the continuation of the cold war in a couple ways. First of all, you have American and Russian superpower statuses being preserved. And secondly, you have a range of institutions relying on this preservation of bipolar global management. But most inconsistent with the cold war continuity thesis is Eastern Europe itself. East European states now have the capacity to pursue a much more autonomous foreign policy and political economic strategy than they ever had before. So, is your point that while East European statuses have changed, they are nonetheless confronting a new form of the cold war logic? How do they understand this logic and how do they confront it?
J.S. - I remember the euphoria of 1989 and 1990, when Central Europeans thought of themselves as being quite the same as Westerners. The paradox is that Westernization itself (by which I mean the opening of the world's economic system to Eastern Europe and Eastern Europe's becoming enmeshed in the same logic of capital formation and circulation that characterizes that global system) created this consciousness that we are different from Westerners. After 1990, for the first time in my memory, Westernization created visible proof that Poland is a peripheral country and Poland's development would be different from that of the West. We now have institutional examples of this in the strategies local economic actors are using to compete with mature capitalist actors. By drawing on legacies of the communist era, they develop structures that externalize some of the costs of the private firms onto the state or other firms.
At the same time we recognize that the new era is in a sense a conflict over our markets. For instance, the trade treaty which was signed by Yeltsin would cost jobs in Russia and it would add to jobs in the United States. I think that industrialists in Russia are very conscious of this. We have to remember that the 1991 putsch in Moscow was partially a result of the agreement that was signed between US Secretary of State Baker and Germany's Foreign Minister Genscher over joint control of the conversion of the Russian military industry. The reaction in Moscow was furious.
I would look on this post-cold war restructuring as a process, on the one hand of a politics of economic strategy and on the other the economic side of politics. These two things are somehow conflicting.
There was a very interesting interview done in Poland with Zhirinovsky during his visit there. He, of course, is somehow crazy, but at the same time he is relatively good in dependency theory and the world system perspective. We have to remember that this perspective has added to the transition. It changed the Russian vision of the conflict and its possible solution. Zhirinovsky's vision was that the political interest of Western countries is somehow colliding with Western economic interests that are decided by different actors. The political interest of the West is to have cooperation with Russia, but economic interests are defined by takeovers of markets and turning our producers into sub- producers. This latter interest, this center-periphery strategy, would lead to growing political tensions. So, Western economic victory would undermine politically motivated cooperation, and vice versa. This dialectic should be understood because it is a very real political rhetoric in Russia today.
M.K. - In the book manuscript you are preparing about your evolutionary theory of discontinuous change, you outline what you call Post-Communist Peripheral Capitalism (PCPC). How does this PCPC differ from other kinds of peripheral capitalisms in the world? Obviously the adjective "post-communist" implies the difference, but to what extent is the PCPC world itself differentiated into perhaps semi-periphery and periphery? Poland's relationship to Ukraine for instance or to Belarus is different from its relationship to Hungary, and the West's relationship to Poland is different from its relationship to Ukraine.
J.S. - Well, I think that the more important distinction is between PCPC and peripheral capitalism as it exists in Latin America. Here I think a few elements are important. First of all, it is a problem of timing. In a sense, Latin America found a niche in a different stage of technological development in the Western world. In their case, of course, they provided raw materials; at least that was something. In the Far East, political and economic/technological niches in world system development enabled a fast, not so investment - intensive development that combined traditional household production with the modernization of electronics. The first problem of the peripheral status of the Post-Communist world is that we don't have any niche. We are not needed, economically speaking; our function is to be a market. Of course this is somehow moderated through politics; otherwise it would be a dangerous development for us. But we don't see any new links on the production level. This is the first difference - timing; being Post-Communist Peripheral Capitalist in the late 1980's and 90's means being without a niche.
The next element of PCPC is a paradoxical one. The communist legacy is somehow working for us, improving our situation in comparison to Latin America. Communist institutional legacies provide techniques to externalize costs; special networks, which were begun already in the early 1980s and were built on communist institutions, improved the chances of these political capitalists on the marketplace, by enhancing their sense of control and developing the concentration of local capital.
We are in a very difficult situation for growth because we must compete for markets with mature capitalism, and we must stabilize the economy. These communist institutional legacies, these continuities, don't build communism anymore, but enable peripheral capitalist actors to compete in the marketplace. When you read books by Peter Evans (Dependent Development, Princeton, 1979) about Latin America, you see that Latin America started such a new etatism only recently. It was a long time before they recognized that states are necessary and that a privatized state with its institutional hierarchies, and hierarchically organized markets is peripheral capitalism's only defense. Our political capitalists recognized it immediately because they had this institutional network in place.
Naturally, this network has positive and negative elements. First, it adds to the possibility of a concentration of capital and to the possibility of lowering costs by transferring them on to other people. By lowering your transaction costs through political connections, you make competition with Westerners possible and allow some industrial groups to survive. But at the same time, operating in an institutional vacuum, they have to invoke some personal networks, let's say, the old political apparatuses, which are now fighting with each other.
I think that this fight inside our institutional world is among business groups that are connected to different markets and which in the past were connected to different segments of power. Army people are working on the eastern market; people working in intelligence, using front organizations such as Foreign Trade and so on, are more oriented toward the West through their practice, contacts, and their epistemology. Now these two groups are fighting with each other over their particular visions of hierarchical organized markets.
Reminiscent of Japanese developments immediately after the Meiji Restoration, these markets have institutions in the center that work not only in the name of profit, but also to diversify risk. Financial institutions in Japan and now in Central Europe are operating like this in order to make survival possible for local economic actors.
The other important element of Post-Communist Peripheral Capitalism's economic strategy is a hybrid form of ownership between state and private ownership which I term a kind of denationalized state property plus a private appendix. From the point of view of these political capitalists, this is the best form to externalize their costs. Its state elements make it possible to obtain state guarantees for private operations to divide risks, and so on. At the same time, control over the firms is concentrated in a very limited group. Thus, one combines modern Western capitalist institutions with communist legacies in order to compete in the world of peripheral capitalism.
In sum, our timing and our institutional reserves make us different from other peripheries. Those who use these strategies of hybrid ownership and hierarchically organized markets are the only actors doing something to oppose the ambiguity of the full opening of our economy to the world system.
Conducted by Michael D. Kennedy
Ewa Wampuszyc and Michael D. Kennedy edited the conversation for publication in this text.
URL: http://www.engin.umich.edu:80/~zbigniew/Periphery/hybrids.html