Reform or Revolution?

1.

The word “reform” has been devalued by overuse, both in the writing of Western journalists and scholars and in the rhetoric of Communist leaders. In Lenin’s day, “reformism” was the ultimate transgression for Communists: now it is their saving grace. In Western usage, the term has been pressed into service to describe everything from a mere adjustment of economic policy to a fundamental transformation of the system, political as well as economic.

What are the reformers in Poland and Hungary today trying to reform, and why are they trying to reform it? A rather clear answer is given in a remarkable private memorandum leaked earlier this year. It is the work of Mieczyslaw F. Rakowski, who has just become Poland’s new prime minister.¹ Poland, he says, has been living through an economic, social, and political “crisis” (another devalued word!) since 1980, and arguably since 1976. The Polish crisis is sui generis, but “we should not forget that basically symptoms of crisis are becoming apparent in all socialist countries.” “Not only Poland,” he writes,

but most socialist countries are threatened with relegation to the position of countries incapable of keeping up with the revolution of technological development in capitalism.

And again,

If one could transport a capitalist society into our everyday reality, it would very soon rise up in a revolutionary struggle.

But not only a capitalist society. For “due to the development of the mass media, the societies of our countries can ‘peer into’ the everyday life of the masses under capitalism.” The conclusion is drawn a few pages later. If the socialist “formation” does not find the strength to reform itself, Rakowski writes, “the further history of our formation will be marked by shocks and revolutionary explosions, initiated by an increasingly enlightened people.”

Well, exactly. Allowing for some slight differences of terminology, this could almost be an academic analysis for the CIA. Yet this is a text by a man who is not only a Politburo member, but who, according to informed rumor, became a Politburo member on the strength of this text. Private statements by Hungarian Politburo members reflect an equally striking realism in the diagnosis of the disease—although neither they nor Rakowski are half so realistic in prescribing the cure. In other words, some men in power see the reality of decay, and the prospect of growing relative backwardness, which I sketched in the first of these articles.² They also see that if they do not do something drastic to modernize their economies, their own people will unkindly invite them to leave the stage. A younger generation, better educated, better informed, relatively unafraid, looking to Gorbachev in the East and the European Community in the West, will just not be kidded by fatuous ideology, paper patriotism, or more promises of jam tomorrow.

What the reformers want to reform is thus, in the first place, the economy. Now there is, of course, a more than thirty-year history of attempts at economic reform in Eastern Europe. But as Wlodzimierz Brus, the doyen of this subject, wrote recently, “with a single exception” these attempts “have failed even in the sense of institutionalising a new system, let alone in exercising a real impact on performance.”³ The single exception is Hungary, yet virtually all Hungarian economists now agree that twenty years of the New Economic Mechanism have not effected a real transformation from the command economy to market socialism. Interference by the central political bureaucracy has remained all-pervasive, with loss-making state enterprises consistently bailed out by huge arbitrary tax breaks or subsidies, and with a vast gray area of managerial-bureaucratic “bargaining” instead of the free play of market forces.⁴

The task of economic reform becomes more difficult with every passing year. The gap with the West grows wider. The list of the deferred tasks of modernization grows ever longer—not only closing outdated plants and opening modern ones, but also all that neglected investment in infrastructure, not to mention such luxuries as elementary environmental protection. The inevitable social cost of reform therefore continues to grow, while the regimes’ popular credit continues to dwindle. They recognize that a “radical” economic reform is necessary. Those great model enterprises of the heroic phase of Stalinist modernization—the Lenin shipyards, the Lenin steelworks, the Lenin mines—have been making losses and devouring subsidies as huge as their façades. They should have been closed long ago: they must be closed now. Subsidizing the production of basic commodities is a great burden on the state budget. Many official prices are wholly unrealistic, in relation to domestic, let alone Western, markets. The subsidies must therefore come down and the prices—up. People will only work better if they can earn more money by doing so. Some people must therefore earn more than others.

What does this perspective of reform imply for a socialist state? Socialism’s proudest boast has been full employment. Reform requires unemployment. Socialism promised equality. Reform means more inequality: a second pyramid of inequality, superimposed on the existing pyramid which has the nomenklatura sprawled across its peak.⁵ Socialism said “from each according to his ability, to each according to his need.” It is precisely the unskilled workers, the old, the weak, and the needy who will do worst out of a radical market reform. What is more, according to the sociologists in Poland at least, those who are likely to do badly out of the reform are precisely those who are at present more inclined to give the government their confidence, whereas those who support the idea of reform are least likely to support the government. And anyway, why should anyone believe that this agonizing wrench will actually produce the goods? How many times already has the regime promised jam tomorrow! Where are the guarantees?

Seeing both the social cost of economic reform and the political credibility gap, the reformers in both Hungary and Poland are now saying that political reform is the indispensable concomitant of economic reform. Indeed, the new leadership in Hungary declares that political reform is the most important side of the equation. This is in diametric contrast to reforms carried out under János Kádár, whose attraction to neighboring rulers was precisely that they seemed to demonstrate the possibility of successful economic reform without political reform. What is more, the political reforms are at least partly conceived of as what the Polish Politburo member Marian Orzechowski recently called “conscious self-limitation of the Party’s power.”⁶ The more usual euphemistic terminology is “redefining the leading role of the Party.” The “strategy of retreat” is the oldest trick in the book of Communist attempts at economic reform. It dates back to Lenin’s New Economic Policy (NEP). But as a conscious political strategy, an NPP so to speak, it is more novel. Gorbachev’s example has, of course, greatly facilitated this part of the discussion.

What would be “success” for these reforms? A minimal definition of success is easily given: to have averted revolution. A maximal definition is more difficult. For Communist reformers like Rakowski or Grósz it is a fair assumption that maximal success means fulfilling the forty-year-old promise of modernization, making their states respected, competitive members of a larger European community (small c), while at the same time retaining the maximum possible amount of power in their own hands. They want, in other words, to have their cake and eat it. The Party’s retreat, if retreat there must be, is tactical or at best strategic. There is a strong element of reculer pour mieux sauter. Lower down the Party apparatus, the selfish motive of preserving your own power and privileges may easily outweigh any larger concern about the future of the country. (This is not to imply that those at the top are any less selfish; just that they are less immediately threatened.) All this is human, all too human. There are very few universally valid laws of history, but one of them is: men cling to power.

Yet many of those outside the Party who support the reforms, and whose active participation is essential to their success—economists, journalists, academics, lawyers, some managers, entrepreneurs, private or cooperative farmers, skilled workers—have a different maximal definition of success. This is that reform should become transformation. The Party’s retreat should be permanent. The courts really should be courts. Parliament really should be parliament. Unions really should be unions. Reform begun at the behest of Party leaders (out of insight into necessity) would march ineluctably beyond those leaders’ maximal goals. The forces of change from above, change from below, and what I have called “change from the side” would somehow combine in the process of transformation: in part willingly, in part unwillingly, but nonetheless combine. The energies of social emancipation would somehow be harnessed to halt, or even reverse, the awful progress of economic and social decay.⁷ Reform would indeed avert violent revolution. But it would effect a peaceful revolution instead.

The state would re-acquire what one might call “internal sovereignty,” in the sense well described by an outstanding Polish political scientist, currently living in Rome. “The state is firmly sovereign when it governs society and also serves society, and allows the nation to realize its own subjectivity,” writes this author. “Queen of Poland!” he continues, “Queen of Poland, I also wish to entrust you with the difficult task of those who wield authority on Polish soil. The state gains its strength first of all from the support of society.” This may not be the language we usually expect from political science, but the words of Pope John Paul II, addressed as it were directly to the icon of the Black Madonna in the monastery of Jasna Góra, nonetheless express an analytical truth.⁸

Now it is obviously germane to ask how the recovery of “internal sovereignty” might relate to the expansion of “external sovereignty,” or, to revert to the central metaphor of Ottomanization, how the emancipation of societies from states relates to the emancipation of states from the imperial center. Western analysts have paid considerable attention to the cautious manifestation of verbal autonomy in foreign policy by Hungary, the GDR, and, to some extent, Bulgaria, in the years 1983–1985. This might fairly be described as a positive assertion of these states’ “limited sovereignty.” Under Gorbachev, such daring has not been necessary in foreign policy. At the same time, the external limits on sovereignty for East European states have widened, at least in practice and for the time being. This should facilitate the task of recovering a larger measure of “internal sovereignty,” but there is absolutely no guarantee that individual states, or states and societies together, will be able to take the opportunity. The widening of the external bounds is a necessary but by no means a sufficient condition.

The causal connections in the other direction are even less clear. One might argue, theoretically, that a state which can stand on its own two feet, by its own achievements, will have less need of the threat of force and the imperial center. The more a state can depend on its own people the less it need depend on Moscow. But does it follow that the imperial center will have less need of, or hold over it? The peaceful transformation, so fervently desired by most supporters of reform outside the inner power elites, might indeed reasonably be expected to increase the external autonomy and the “strength” of the state, as the Pope suggests. But that is very far from being the primary goal of the political leaders who are currently initiating “reform.” Yet before dwelling any more on these putative “problems of success,” one is bound to ask what chance, in practice, the Polish or Hungarian reform experiments have of achieving even minimal success, let alone maximal success or peaceful transformation.

2.

Clearly the preconditions are worse in Poland, given the depth of the economic crisis, the inconsistency of the economic reform program and its implementation, the mixture of popular apathy and desperation, and, above all, the continued gulf between the authorities and the most active and organized parts of society. National product per capita is still 13 percent lower than in 1978, and real wages are one fifth lower than in 1980. Inflation has been estimated at 20 percent for August alone, and will probably exceed 100 percent for the year. Increasingly, the dollar has supplanted the zloty as the Polish currency. Consumer supplies have got worse rather than better. And these are seen by the population to be the fruits of the much vaunted “second stage of the economic reform,” launched last autumn.

This is, of course, less than wholly fair. Fault can certainly be found with the technical conception of the reform. Its chief architect, Zdzislaw Sadowski, is both an able and a reputable reform economist. In the tradition of Oskar Lange and Wlodzimierz Brus, he has produced a design for a “socialist market economy.” Radical as this is by the standards of most previous reform plans, one might well argue, on the basis of Hungarian experience over the last twenty years, that even in conception it is not radical enough. Sadowski talks in general terms about “equal treatment of the public and private sectors and…market resource allocation,”⁹ but the detail of the plan, let alone the bureaucratic practice, does not begin to amount to equal treatment for the private sector. The neo-liberals would say that just because there is a strong, authentic Polish tradition of designs for “market socialism,” the importance of purely private enterprise—of capitalism blue in tooth and claw—is consistently underrated, not just by Sadowski and his team, but also by some economic advisers to Solidarity who come from the same tradition.

Of more immediate importance than these faults in design, however, is the failure to execute even the existing design. The official “Realization Program of the Second Stage of Economic Reform” of October 1987 is a hastily prepared and cumbersome document, containing a theoretical timetable of 130 “tasks” to be performed over the four years to December 1991, when, it says, all manner of things will be well. The definition of the “tasks” is often vague, but almost a year later one can go down the list and see what has not been done that ought to have been done.

This failure is the result of external and internal obstacles. The external obstacles are of two kinds. First, there are the Western obstacles, having to do particularly with the country’s desperate hard currency shortage, the dependence of much of Polish industry and agriculture on components or materials that can only be bought for hard currency, the $39 billion debt and the conditions imposed by Western banks, governments, and the IMF for continuing at least to “turn over” this debt. According to Sadowski, the government considers balancing the current account with the West to be one of its “main policy objectives,” and aims to achieve it by 1991.¹⁰ Most independent economists consider this to be quite unrealistic. Secondly, there are the “Eastern” obstacles, having to do with the need to improve trade balances with the Soviet Union, the direct involvement of the Soviet Union in parts of Polish industry, and the problem of existing commitments inside Comecon.

The internal obstacles are also of two general kinds. First, there is the passive or active resistance of large parts of the ruling class: the Party apparatus, the industry ministries, the political bureaucracy at provincial and local levels, many managers. Secondly, there is the passive or active resistance of large parts of the working class. The attempt to restore a degree of domestic market equilibrium by sharply increasing the prices of consumer goods while holding down wages can be criticized on purely technical grounds. But the plain fact is that this strategy has also been vitiated by the active resistance of workers who, particularly in the very large factories which were Solidarity strongholds, have easily won large compensatory wage rises by striking, or merely threatening to strike.

Besides this active resistance, moreover, there is a deep and almost universal popular disbelief in the possibility of Jaruzelski’s leadership realizing any reform program. If anyone was prepared to give the Jaruzelski team the benefit of the doubt after December 13, 1981—and not many were—it has squandered that confidence by the self-confessed failure of what is now called the “first stage of economic reform,” which was supposed to be pushed through under the protective carapace of martial law. These two internal obstacles, the popular and the political-bureaucratic, are, moreover, mutually reinforcing. As two leading Solidarity advisers soberly observe, political leaders who do not enjoy social support “become prisoners of their own conservative apparatus, and cannot therefore be consistent promoters of reform.”¹¹

For eight years now, Solidarity, the Church, and Western politicians have said that the only way to secure popular support for such painful but indispensable economic reform is a dialogue leading to a historic compromise between the self-organized and self-limiting “society” and the self-limiting Communist power. “Society” might be represented in different ways, but somehow, in some form, Solidarity must be included in the compromise. For nearly seven years now, the Communist authorities have done almost everything except talk to Solidarity. Any number of consultative bodies, extraordinary concessions to the Church, remarkably liberal censorship, almost free travel to the West, private enterprise, wage rises—anything, everything, except Solidarity. And after nearly seven years the workers in the country’s great industrial strongholds stand up and say: Solidarity! So the authorities do what they have so often said they would never do: they start talking to Lech Walesa. Walesa in return manages, with difficulty, to end the last strikes.

A landscape which has seemed increasingly complex and obscure suddenly looks very simple and very familiar. There is an iron gate. On one side there are police; behind the police, the army; behind the army, Jaruzelski; behind Jaruzelski, Moscow. On the other side there are workers; behind the workers, Walesa; behind Walesa, the Pope. It looks simple and familiar, but it is not. Two crucial differences between the situation now and that in 1980 were neatly expressed by a worker in the Lenin Shipyard during the strike in May of this year. Today, he said, the external conditions are better, but the internal conditions are worse. In 1980 there was a real fear of Soviet invasion. With Gorbachev, that has greatly diminished. On the other hand, in 1980 there was still some real trust in the capacity of those in power to keep their word, to speak “as Pole talks to Pole.” Where is that trust today?

The impossible keeps happening in Poland. It would therefore be more than foolish to make any firm prediction about the outcome of the promised “round table” talks between the authorities and independent representatives of “society,” including Lech Walesa. Mieczyslaw F. Rakowski, the new prime minister, is both a realist and a Party reformist, as the memorandum quoted above makes clear. He continues to enjoy a certain reputation as a “liberal” in the West. But in Poland he is seen as the man who deceived and abused Solidarity while negotiating with it as a deputy prime minister in 1981, and who has passionately even obsessively, defended the imposition of martial law. His appointment is thus turning over an old rather than a new leaf. In any case, the general prognosis can hardly be optimistic. There is deep mistrust of the authorities on the Solidarity side, and a perhaps even deeper fear among those in power of a restored Solidarity. Moreover, it is very difficult to imagine what a restored—or new—Solidarity would look like, and how it could be married to the common goal of economic reform.

If Solidarity was allowed back only on the shop floor in individual factories, then it would have to work as a trade union, fighting for the workers’ jobs and wages. As a democratic organization, and competing with the official trade unions for members, it would be almost bound to oppose factory closings and wage squeezes that its own national economic advisers regard as essential. Moreover, no one can seriously believe that it would remain without a national network for long. The alternative is that Solidarity should return in different guise: as the independent watchdog and guarantor of the whole society’s interests at the highest levels of the state.

Thus Solidarity might be represented in parliament, together with Catholic and other independent groups. Its experts might participate in a body empowered to oversee the implementation of economic reform. Its representatives or associates might even hold government office. As an independent, legal, national institution, it could then “sell” the painful economic reform program to society as a genuine program for national recovery, supporting measures which as a local trade union it would be bound to oppose. Like Churchill in 1940, Walesa would say, “I have nothing to offer but blood, sweat and tears…,” and the nation would rally round. In effect, this is what Lech Walesa and his senior advisers have been proposing to the authorities ever since July 1981.¹²

If it was not possible then, why should it be possible now? Because Gorbachev is not Brezhnev? Because the West wants it, and Poland more than ever needs economic help from the West? But the internal obstacles remain formidable. There is absolutely no blueprint for such an arrangement of power-sharing. The coalitions of 1945–1948 in East Central Europe are hardly an encouraging example. One could just conceivably imagine it working if there were to be a clear, simple, legally defined division of powers between the parties, enforceable by an independent judiciary. But that is out of the question. One might just imagine it working if there was a large amount of mutual confidence between the parties: as in an allparty wartime cabinet. But there is not.

What remains is the compromise of two boxers who recognize that neither can knock the other out, and that the ring is collapsing around them. But whence comes the boxers’ staying power? Jaruzelski’s staying power still derives from the military and the police (more than the Party apparatus), and ultimately from the Soviet leadership continuing to back him, as Gorbachev did demonstratively during his visit to Poland in July. Walesa’s power rests to some extent (as the government spokesman Jerzy Urban claims) on support from the West, and to some extent on his symbolic importance to the whole of Polish society. But his real muscle still comes, as it has all along, from the workers in a score of giant enterprises: from the miners of Silesia, the shipyard workers of Gdansk, Gdynia, and Szczecin, the steelworkers of Kraków and Warsaw, the engineering workers of Poznan and Wroclaw. If you ask, “Why is Walesa back at the table?” the basic answer is: because those workers put him there.

Now the corollary of this is that Solidarity leaders simply cannot afford to risk losing the confidence of these, their grenadiers, unless they have cast-iron guarantees of a permanent independent role in the country’s national political life. Even this time around, it was only with difficulty that Walesa persuaded the angry young men in the Lenin Shipyard and the slow stubborn miners of Jastrzebie to return to work. But the interests of the workers in these industrial strongholds are by no means identical with those of the economy as a whole. During the May strike at the Lenin Shipyard, the workers chanted, “There is no freedom without Solidarity,” while loudspeakers broadcast a message from the management saying that the yard would have to be closed altogether. In the pure interest of national economic recovery, however, the Solidarity troops should probably have chanted, “Close the yards! Open a stock exchange!” But no one can seriously expect Solidarity to cut off the branch upon which it sits, unless it has another very solid branch to go to.

One might speculate that for Poland now to break through the immense barriers of alienation and decay, the authorities would have to take not one but two radical steps: restore Solidarity and restore capitalism. An expanded private sector and new mixed forms of ownership in the public sector might generate economic dynamism and harness the energies of the skilled, the young, and the rich, but it would also exacerbate social tensions, and the private sector could never be guaranteed a stable future without political representation (or at least protection) at the highest level. Solidarity, restored as a national, political force, might just conceivably mediate (or at least alleviate) that social conflict, and provide that guarantee, but it could hardly leap over its own Christian-social trade union shadow to become the cutting edge of radical economic change. One might say half in jest (and half in mourning) that when a Solidarity branch declares a legal strike against a private employer, Poland will be on the right course.¹³

The most probable outcome, however, remains a continued muddling-through: or, rather, a muddling-down. On all Polish precedents, the result is likely, sooner or later, to be another explosion of popular protest. The result of that explosion would, in turn, depend crucially on the circumstances in the Soviet Union, but if present trends in the Soviet Union continue (and if developments elsewhere in Eastern Europe do not contribute to reversing those trends) it is not completely inconceivable that the historic compromise that could not be achieved by reform might yet be achieved by revolution. In an extraordinary passage of his memorandum, Mieczyslaw F. Rakowski writes that some people in power in Poland may still be thinking that if it comes to another revolt, “we call in aid our raison d’état and remind people that after all somebody might intervene in our internal affairs. But what,” Rakowski goes on, “if that somebody, bearing in mind his own interests, does not want to intervene?”¹⁴ A thought to concentrate the functionary’s mind wonderfully. Of course it would be morally indefensible for anyone in the West to encourage such a terrible gamble, yet equally no one in the West can prevent it. And in the long run of Ottomanization, even a failed revolution is not the last word.

3.

In Hungary, the preconditions are somewhat better. The economic crisis is still not as deep, and, although individual alienation is profound, there is no comparable gulf between “society” and “the authorities.” One of the many reform manifestoes to bloom in the Budapest spring was that of a group describing itself as the “March Front.” Its twenty signers ranged from Rezsö Nyers, who in May became a member of the Politburo, to Miklós Vásárhelyi, who was Imre Nagy’s press secretary in 1956 and might now be described as the Nestor of the democratic opposition. The March Front has not actually done anything, but in Poland it would not even be possible to get the names on the same piece of paper.

The continuum between critical intelligentsia and reformists-in-government is more substantially exemplified by the present economic reform project. In 1986 a group of reform economists working under the auspices of Imre Pozsgay’s Patriotic People’s Front produced a radical reform document entitled “Turning Point and Reform.” In January 1988, several authors of this document moved into cramped offices in the parliament building, as part of an economic kitchen cabinet working for the deputy prime minister, Péter Medgyessy. In mid-July, the new Central Committee was offered two variants of economic reform, the radical “Plan A” and the more cautious “Plan B.” “Plan A,” for which the Central Committee voted, was essentially based on the kitchen cabinet’s design, which in turn was based on the original document.

Miklós Németh, the Central Committee secretary for economic affairs, has defined the goal of Plan A as “a genuine market economy, without any qualifying adjectives.”¹⁵ It has been officially stated that the private sector could account for as much as 30 percent of this mixed economy. There is to be a real stock exchange. Western majority shareholding should be equally possible in firms from the private, cooperative, and state sectors. The change in forms of ownership inside the socialized sector, vaguely discussed in Poland, is here a detailed plan. The Hungarian reform economists (than whom no one on earth is more ingenious) have worked out a scheme whereby the net worth of a state enterprise would be converted into stocks, which would be given by the state to local councils, pension funds and the like. These councils or pension funds would then have to live (in part at least) off the dividends from these stocks rather than the direct state subsidies they currently receive. They would thus acquire at least a quasi-shareholder’s interest in the profitability of the enterprise. Irredeemable loss-makers should go bankrupt, with estimated unemployment of one hundred thousand over the next two to three years. A sharp devaluation should bring at least partial convertibility of the forint within sight. “What is socialism?” asks the joke of the year. Answer: “the longest and most painful road from capitalism to capitalism.”

Political reform is seen as indispensable for two reasons. First, to ensure that the political bureaucracy does not continue to vitiate the theoretical autonomy of enterprises, as it has for the last twenty years. What a leading member of the economic think tank laughingly calls the “invisible hand” of the center, should be reduced to an invisible finger. The Party “should be removed from economic life.” Economic policy should be the province of the government, supervised and controlled by the parliament. The new company law should provide precise, legally binding definitions of previously political, “negotiable” relationships.

Secondly, political reform must sugar the bitter pill of austerity and win popular support. New courts and new laws delimiting the freedoms of association and speech are one path to this end. An increased role for parliament and local councils, with liberalized election laws, is another. At present the Hungarian parliament meets for just eight days a year. “We want to abolish the Party-state,” a leading reformist Politburo member said to me. “We want to reintroduce the principles of Montesquieu in modern form.” This is interesting talk from a Politburo member, albeit in a private, background conversation. But as we have seen, words are cheap in the new de-ideologized climate. The deeds have yet to follow. The main economic measures are supposed to be in place by the end of 1988, the constitutional changes perhaps by 1990.

What are the chances? Even if there were no political, bureaucratic, or social hindrances whatsoever to implementing radical economic reform in its purest form, Hungary would still be running to keep up with an increasingly dynamic European Community, and with the “newly industrializing countries.” In purely technical terms it is not easy to turn a Lada into a Mercedes while continuing to drive down the motorway. Ingenious as the proposals for new forms of ownership are, one cannot imagine them having half the impact of the pure, raw, brutal reprivatization of Thatcherism (so eloquently advocated by the Towarzystwo Gospodarcze in Kraków). Radical as the reintroduction of market forces is meant to be, even in design it seems unlikely to reproduce the Schumpeterian “creative gale of destruction.” Two percent unemployment is a lot for a socialist country, but “Thatcherism” in Britain brought—and perhaps required—12 percent unemployment to revitalize a much less decrepit economy.

The hard currency debt is a goad to reform, but if the debt–service ratio becomes too steep it can be a major impediment to further reform (witness Poland). The Hungarians reckon they have a breathing space until 1991, when loan repayments to Western banks are due to increase sharply. This is not long. Moreover, while their putative West European competitors have the opportunity of the common market, they still have the burden of Comecon. To adjust your domestic market to Western markets is one thing: to adjust Comecon to your own needs is quite another. So far as I can gather, Hungary’s economic policymakers have more or less given up any hope of turning Comecon into a common market, and are merely looking for more realistic bilateral trade with individual countries, including the Soviet Union.¹⁶

Yet for political reasons, the reform package is most unlikely to be fully implemented. For a start, Károly Grósz is not, by all accounts, comparable to Gorbachev, let alone to Mrs. Thatcher. He is a clever, forceful opportunistic politician, but there is no evidence that his present endorsement of radical reform flows from any deep conviction. His Politburo contains only three people whom one could clearly categorize as reformists (Nyers, Pozsgay, and Németh), and in János Berecz he has (mutatis mutandis) his Ligachev. The higher ranks of the Party apparatus contain some intelligent, realistic, reform-minded men. But no one really has the first idea how the new separation of powers, or division of roles, between Party and State, Central Committee, parliament and courts is going to work. If the Party is not to make economic policy then what on earth is it to do? Men cling to power: surely here too. I asked an energetic, realistic, and reform-minded new member of the Central Committee secretariat what he was actually going to do there. Well, he replied, we work out the broad strategic lines of policy, and then we pass them on to Party members in the state apparatus. This sounded vaguely familiar.

Then there are the corrupt local oligarchies that flourished under late Kádárism. Can their grip really be broken? On a much smaller scale, Grósz has the problem that Gorbachev faces in the Soviet Union. In theory, he wants to decentralize. But before decentralizing, he has to reestablish central control. And then there is the great unknown of social reaction. The leadership has stated clearly that in the short run reform means that most Hungarians will get poorer. The responsible Politburo member, Miklós Németh, told the Central Committee that “Plan A” would initially mean lower or even negative growth and “a lower level of consumption by the population,”¹⁷ not to mention the one hundred thousand unemployed. Hungarian society is too divided for a Polish-style Solidarity movement to seem at all likely, but there has already been one strike in the mines. Repeated local strikes—as in Yugoslavia—and even the founding of independent unions seems possible. Any one of these levels of resistance is probably enough to preempt economic “take-off” in a highly competitive world. Together, they seem almost insuperable.

Except, perhaps, by democracy. But democracy is not on offer. Hungary’s Communist rulers quite understandably want to enjoy the benefits of democracy without paying the price of sharing or being obliged to compete for power. Legal definitions of rights can also be ways of restricting rights. “An up-to-date practice of jurisdiction can be an even more efficient means of political regulation than direct administrative instructions,” the new head of the Central Committee Agit-Prop department rather revealingly observed.¹⁸ What Mr. Grósz calls “opposition” is not what we would call opposition, and what we call opposition Mr. Grósz still calls “the enemy”—a nasty verbal throwback to darker days. While the authorities allowed the populist demonstration for Transylvania, the police broke up a much smaller democratic opposition demonstration on the anniversary of the judicial execution of Imre Nagy, with some brutality.

The liveliest, but also in a way the saddest, meeting I had in Budapest this June was with a group of law students in their early twenties who have been instrumental in setting up the new democratic youth union (FIDESZ). They have a brilliant program. It can be summed up in two words: liberal democracy. As we talked I felt, as I have done so often before, a simple anger. Why should they, who are every bit as civilized, deserving, brave, and clever as their exact contemporaries up the river in Vienna, have to put up with any more half-measures and half-truths. For God’s sake, let them have it—now! After all, we know, and they know, and their authorities know, that liberal democracy works: not perfectly of course, nothing ever does, but in all its West European variants better than any of the East European variants of anything else. If Spain can pass peacefully from dictatorship to democracy, why should not Hungary? In morality and ideology, the ruling Party has no answer. Yet no one, not even as a joke, told me that socialism is the longest and most painful road from autocracy to democracy.

The sad fact is that socialism has created in all the East European states an array of domestic barriers against the transformation to liberal democracy cum mixed economy quite as formidable as those that existed in recent West or South European dictatorships, such as Spain, Portugal, or Greece. These barriers lie not only in the system of politbureaucratic dictatorship (to use Rudolf Bahro’s apt term), and not merely in the character and interests of the nomenklatura ruling class, but also in the interests, attitudes, and fears of many of the ruled. Of course, in conditions of full external sovereignty, with liberal democracies on all frontiers, these obstacles would simply be swept aside, as they were, gloriously, in Spain, Portugal, and Greece. But those are not the conditions. The Polish revisionist Wladyslaw Bienkowski once wrote a famous text called “The Engines and Brakes of Socialism.” We have been discussing the engines and brakes of the transition from socialism. The conclusion is, alas, that even in Hungary, even in the Gorbachev era, the brakes look more powerful than the engines.

One is bound to hope against hope. The Hungarian reformists enter this experiment with that cheerful pessimism which is one of the more attractive features of Hungarian intellectual life. One of the very architects of the entire reform project told me he gives it only a 30–40 percent chance of success. It seems reasonable to suggest that the reform has a rather higher chance of minimal success—that is, of averting revolution—if only because of the further diversification of social interests which it will promote. The freeing of the private sector, in particular, means that Hungary might yet have an entrepreneurial bourgeoisie that will go to the barricades—against the revolting workers. Capitalists and Communists, shoulder to shoulder against the proletariat: a suitably Central European outcome for socialism. To estimate the percentage chance of peaceful transformation, by contrast, requires only the fingers of one hand.

4.

“To Generalize is to be an Idiot. To Particularize is the alone Distinction of Merit.” We may not go quite so far as William Blake, but virtually all general writing about “Eastern Europe” is either a catalog or, if analytically more ambitious, extrapolates from the one or two countries the author knows best. The above has something of both faults. To concentrate on Poland and Hungary is, in the autumn of 1988, justified by the fact that these are the two countries of East Central Europe in which fundamental reform experiments are underway. Even here, what has been said is fragmentary and tentative. Yet there are many common features as well as differences. I would venture to predict that when the fundamental reform experiment does get underway in Czechoslovakia, there, too, one will recognize many of the features that I have singled out in Poland and Hungary.

In the case of East Germany, the differences will perhaps be greater than the similarities. A state whose annual transfers of hard currency from West Germany cover the total interest burden on its hard currency debt, but a state also whose citizens learn about their own country every night from West German television, is in a different position from its East Central European neighbors—a position both better and worse: I have not attempted to include Romania or Bulgaria in my analysis.

For the heartlands of contemporary East Central Europe, however, for the more than sixty million Europeans living in the present territories of Czechoslovakia, Hungary, and Poland, there are certainly the contours of a common fate. The oldest of Central European tales has a German general saying to his Austrian ally: “The situation is serious but not tragic,” to which the Austrian general replies: “No, Mein Lieber, the situation is tragic but not serious.” One might say that the situation of East Central Europe today is tragic but not hopeless.

It is tragic, because a half-century of immense struggle, upheaval, work, and suffering has produced so little lasting progress. It is fashionable to talk, as Zbigniew Brzezinski does in the title of his Seton-Watson memorial lecture, of Eastern Europe being on its way “back to Central Europe.” Polite reference is made to the positive ideal of Central Europe revived by Milan Kundera, Czeslaw Milosz, Václav Havel, György Konrád, and many others.¹⁹ But there can be “return to Central Europe” in a negative as well as a positive sense. The dream of emancipatory modernization, by no means only the property of Communists in 1945, may yet end in a reality, all too familiar from Central European history, of growing relative backwardness vis-à-vis Western, “modern” Europe. It may end in a new version of Giselher Wirsing’s “Zwischeneuropa” or the intermediate zone identified by Hungarian writers and historians, its economies exporting tin saucepans, bottled fruit, cheap shoes, and cheap labor, importing German tourists and Japanese capital. A zone, that is, of weak states, national prejudice, inequality, poverty, and shlammassel. It is almost already true to talk, in the case of Hungary and Poland, of a double dependency—on the great powers to the West as well as to the East.

This situation is tragic because of its toll in avoidable human suffering. At times it seems tragic, too, in the sense of classical tragedy: that is, having a relentless logic quite beyond and in spite of the will of the participants. For the petty functionaries defending their privileges are not really evil; and far less are the unskilled workers defending their jobs in factories that should long since have been shut. The more enlightened leaders in Hungary and Poland today are personally little worse than most politicians in the West. Some genuinely care about their countries as well as themselves. But, good or evil, they can no more avoid entanglement in the web of internal contradictions that socialism has created than Oedipus could avoid marrying his mother.

So entirely hopeless it is not. It is not hopeless, because, within the setting of overall decay, there are possibilities of individual and group emancipation, of free speech, learning, worship, travel, productive work, and self-help, which did not exist even ten years ago. It is not hopeless, because these states do, in theory, possess room for maneuver in which they might restore a larger degree of internal sovereignty. It is not hopeless because the great power to the East is itself convulsed with change, whose outcome no one can predict. It is not hopeless, finally, because the great powers to the West form a more open, successful, attractive, and benign constellation for East Central Europe than at any time in modern history. This is true of the United States, of Western Europe as a whole, and particularly of (West) Germany, on whose approach the future shape of this region once again significantly depends.

To discuss what we in the West can do directly to encourage desirable change in East Central Europe would require another essay, indeed a book.²⁰ But if present trends continue, it is not unreasonable to look ahead to a time when the West will be not, as since Yalta, a tertiary actor in East Central Europe (after the Soviet Union and the countries themselves), but a secondary actor, as important as the Soviet Union, though in different ways. If we are to play this role wisely, however, the first imperative is to see East Central Europe as it really is, and not as a projection of our own fantasies or as a subcategory of Soviet politics. The metaphor of Finlandization, and the terms glasnost and perestroika, are of limited use in analyzing recent developments in East Central Europe. The impact of Gorbachev and the “new détente” in East-West relations has been great, but also complex, indirect, and ambiguous. Terms like “crisis,” “reform,” or “stability” are useless without closer definition.

In the first article in this series, I offered the crude metaphor of “Ottomanization” as at least marginally more illuminating than that of “Finlandization.” The two faces of Ottomanization, emancipation and decay, each have many dimensions: imperial, regional, and domestic; economic, social, ideological, and political; the emancipation of states from the imperial center; the emancipation of societies from states, in the overlapping spheres of religion, national articulation, “civil society,” and private enterprise, and the more or less consciously oppositional variants of each. Revolution, ending in partial failure, is as likely as reform, ending in partial success (i.e., averting revolution). On balance, the former seems more likely in Poland, the latter in Hungary. A maximal success for reform seems scarcely more probable than a maximal success for revolution. Each national case must be studied historically, and for itself. “Every thing is what it is and not another thing,” as the great Bishop Butler unshallowly remarked.

As these countries are rediscovering their own histories, so also is history the discipline most urgently called for, if we in the West are to understand their present and peer into their future. History, calling in aid economics, sociology, political science, and even security studies, but above all: history. Czechs, Hungarians, and Poles are rediscovering their own history; and they are making it again. To adapt a German philosopher, whose influence on East Central Europe future historians will record as baneful but transient, confined only to a few decades in the second half of the twentieth century: the peoples of East Central Europe make their own history, although they do not make it just as they please.

—September 27, 1988

This is the last of three articles.