Читать книгу The Power of Freedom - Mart Laar - Страница 9

Just as the West had failed to understand what was going on in Central and Eastern Europe after the Second World War, it continuously ignored the realities behind the Iron Curtain in the decades thereafter. After the end of Stalinism, increasing numbers of Western scholars and politicians began to view Eastern bloc Communist countries as, basically, similar to other countries in the world. According to several Western scholars, the Soviet understanding of democracy and human rights was simply ‘different’ from the Western one. At the same time, the achievements of the Eastern European Communist countries were actively promoted and praised. To foreign observers, the Soviet economic system seemed to be stagnant but nonetheless stable, so much so that almost no one predicted its swift collapse. Former special adviser to Margaret Thatcher, John O’Sullivan, has remembered how the Prime Minister’s office was full of reports, all of which declared that the Soviet economy was in good shape. It was reported, for example, that living standards in East Germany were roughly the same as in the West. Actually, it was only necessary to talk to the first taxi driver in Berlin to find out that this was far from the truth.

Table 7

Source: Maddison, 2001: 186.

Table 8

^a Reported in B. Balassa. “Growth Performance of Eastern European Economies and Comparable Western European Economies,“ American Economic Review, May 1970.

^b Cement, pig iron, steel ingots, in thousands of tons.

^c Steel, million metric tons; cement, million tons; electricity, million kilowatt-hours.

^d Total exports are the sum of exports to the convertible currency area ($8.5 bl) and exports to the nonconvertible currency area ($4.3 bl). It is likely that the latter value overstates the market value of these exports if they were to be valued at world market prices.

Source: Economist (1990), World Bank (1990), national sources.

It was not actually difficult to reach such optimistic conclusions on the health of the Soviet economy from looking at the impressive figures in Soviet statistics. After the wobbles of the early 1960s, the Communist bloc countries’ five-year GDP growth targets for the years 1966-1975 were achieved, ranging from East Germany’s 5.4 % to Romania’s 11.3 %, annually. How are decades of such high growth figures to be reconciled with the low per capita living standards? Firstly, the Communist gross figures included the double counting of input materials as well as the finished products. The figures were also often deliberately massaged to disguise the embarrassing gap between the USSR and the West. Above all, much Communist growth went into the production of items like steel that were then used to make more of the same at the expense of consumption and personal income.110 Unfortunately, such factors were often not taken into account when assessing the Communist countries’ GDP.

Of course, it cannot be said that no development or achievements were made during the fifty years under Communism. With improved healthcare, the mortality rate dropped, then the fall in the birth rate reduced population growth to a modest 1 %, quite near to Western standards. Infant mortality fell, but was still too high compared to Western levels. While mass primary education had largely come about before 1939, mass secondary education only came under Communism. The levelling of differences, which was one of Communism’s declared aims, operated most clearly in income policy where pay differentials were narrowed, thus laying the basis for fuller social integration. At the same time, we might question whether all of this would not have happened anyway as part of overall modernisation. Several Central and Eastern European countries already demonstrated rapid development in the 1930s, might they not have been better off if they had been allowed to continue on their own path? To answer these questions, we must compare the development levels of European countries in the 1930s with their development levels in the 1970s and at the end of the 1980s, during the last years of Communism.

Shop door opens in Skaryszew, Poland, 1989

During the 19th century, the average income per capita in Central and Eastern Europe was half that of Western Europe. By 1913, it had fallen to 46 % and 32 % of the rest of the Western world (US, Canada). During the years of independence between 1920 and 1939, the countries of Central and Eastern Europe developed well and even after the massive destruction of the Second World War, by 1950, the difference between Central and Eastern Europe and Western Europe had decreased. This trend continued into the 1960s and 1970s, but then a new decline began. By 1990, the per capita income in Central and Eastern Europe had fallen to 32 % of the level of the Western world. The failure to reach the economic levels that prevailed in Western Europe was especially painful as it was during this period that other less developed countries in the Mediterranean and on the Northern periphery of Europe broke free from backwardness. By the 1930s, most Central and Eastern European countries had achieved better living standards than Spain, Portugal, Greece or even Italy and competed with countries like Austria or Finland. Even in the 1950s, the average level of income in Spain, Portugal and Greece stood at only 39 % of West European levels, less than that in Central and Eastern Europe. But by 1973, the per capita income in Southern Europe soon slightly exceeded that of Central and Eastern Europe. By 1987, the difference had become very marked. Between 1973 and 1992, the average income in the Southern peripheries of Europe actually increased by 38 %, while in Central and Eastern Europe it declined by 19 % (Table 7). Countries such as Austria, Ireland and Finland also leaped forward and by the 1990s, actually surpassed the average Western living standards. Czechoslovakia had been on a par with Germany before the war and well ahead of Spain. In her growth spurt during the 1960s, Spain overtook Czechoslovakia, first, in private cars and phones per capita and then in GDP per capita. Portugal followed the trend during the 1980s.111 This clearly demonstrates that Communism perpetuated backwardness in Central and Eastern Europe by not allowing it to move forward at the same rate as other European countries with similar backgrounds. Indeed, this is not only visible in the figures for GDP per capita; the same trend can be seen if we compare the levels of social development. Consider life expectancy for example. In the 1930s, the position of Central and Eastern European countries was clearly better than a number of other European countries in this regard, but patently fell behind Western Europe during Communist rule. Average life expectancy, of course, increased everywhere, but people were healthier and lived longer when they were not living in Communist countries. It is true that healthcare was free in the Communist states, but this did not help people to stay healthy as the quality of the healthcare was, unfortunately, too low.

Table 9

Source: Lugus O & Vartia P, 1993

This picture becomes even clearer when we move away from statistics that are to a greater or lesser extent distorted – portraying the Communist economies in a more favourable light than was actually the case – to a more detailed study, namely, to a comparison of the Communist countries with some of the poorer countries in Western Europe such as Portugal or Spain, whose economies differed little from those of the less developed Central and Eastern European countries prior to the Second World War. Jeffrey Sachs, for example, compared Poland and Spain: two countries that in the 1950s were largely agricultural, Catholic, peripheral regions of Europe (Table 8). The sizes of the populations and per capita incomes were also quite similar. They had both had disastrous experiences just prior to the mid-century mark – Poland suffered some of the largest civilian casualties relative to population size in Europe during the Second World War and Spain suffered its Civil War – which not only crushed democracy but also stifled economic development. In the 1930s, Poland was ahead of Spain in terms of per capita income and the situation in 1950 had not changed greatly although by this time, the data for Poland was in all likelihood falsified. Nevertheless, it is clear that Poland was clearly a larger industrial power and a larger exporter of goods than Spain. By 1988, however, Spain’s per capita income was four times that of Poland. The enormous increase in income was also reflected in Spain’s greater ownership of consumer durables, where Poland had also been ahead of Spain before the Second World War.112

The difference between the two countries shows up most dramatically in their differing export performances. Even in the 1970s, Poland’s total dollar value of exports still exceeded Spain’s; but during the next decade, Spain’s export earnings surged ahead while Poland’s stagnated. So, after starting from a similar point in the mid-1950s, Spain shot ahead of Poland over the next 35 years. Spain began to catch up with the rest of Western Europe, while Poland fell farther behind. The central reason for Spain’s success was its shift from isolation to integration within Europe and the democratisation process that allowed the country to become a full member of the European Community.

A similar picture can be in found in Northern Europe when comparing developments in Estonia and Finland. It would be harder to find two countries more similar than these two Lutheran countries situated on Europe’s Eastern border. Because of their shared heritage as Finno-Ugric nations, Estonia and Finland have similar languages and cultures. Both countries were largely agricultural, although some industrialisation began early in the 20th century. Moreover, Finland and Estonia paralleled each other in terms of socio-economic development during the inter-war period (1920-1938). In some respects, Finland’s economic development was greater, but this was not true for all measures of growth. In sum, there were few real differences between the two countries by 1940. At this time, however, Finland and Estonia experienced disasters that set them on different courses for the next 50 years; Estonia lost its independence and one-third of its population, while Finland succeeded in keeping its independence but suffered a loss of territory and population. Life under the two different political systems resulted in vastly different economic structures and behaviour patterns that created a huge disparity in the development of Finland and Estonia.113

During the 1950s, living standards in Estonia and Finland were more or less the same. Finland had to pay war reparations to the Soviet Union, which significantly decreased living standards in the country. Gradually, however, Finland opened itself up to the world, while Estonia remained locked away under the control of the command economy. From this point onwards, Finland’s GDP grew several times faster than Estonia’s until in 1988, its GDP per capita was at least four times that of Estonia. Indeed, this may even prove to be too optimistic a picture as the calculations were based on an official exchange rate that was far from realistic. Other observations present a level of household income per capita in Finland that was 4.6 times higher than the Estonian level in 1988. If we base these calculations on a more realistic exchange rate, then Finland’s income per capita can be estimated to be 8.4 times higher. On the basis of these calculations we can conclude that in 1988-89, the Estonian GDP per capita was some 15-17 % of the Finnish GDP per capita, which was then at the level of the European average. This puts the Estonian GDP per capita at the end of the Communist period at a much lower level than most international studies would suggest. But even on the basis of the most optimistic official figures that estimate the Estonian GDP per capita to be four times smaller than Finland’s, it is clear that Finland totally surpassed Estonia during the country’s extended period of Communist domination.114

Table 10

Source: Lugus and Vartia, 1993

Table 11

Source: Lugus and Vartia, 1993

The slower economic growth in Estonia lowered the country’s living standards relative to those of Finland. In 1939, they had been very similar. When we consider the amount of goods that can be bought with the hourly wage, we see that out of 24 items of foodstuffs for which we have comparable data, the price per hour of work (PPW) by an industrial worker for 13 items was higher in Estonia, while for 10 items, Finland had the edge. In comparison with 1938, the PPW for a Finnish employee appeared, by 1988, to be between 1.45 and 2.1 times higher than the PPW for an Estonian employee, though there were two products that were relatively cheaper for an Estonian employee: rye bread and white bread. In general, however, it should be conceded that a Finnish employee would be considered clearly better off. The extreme case is coffee, which was 13.1 times more expensive for an Estonian worker than for a Finnish employee. The gap widens even further if we consider the quality of products available in the two countries, many of which, it must be remembered, could not always be purchased in Estonian shops (Table 9).

It is also possible to compare the PPW for employees with respect to certain manufactured goods and services. In 1938, this was also broadly similar for Finnish and Estonian employees yet by 1988, the Finnish workers were significantly better off. The differences in the PPW with respect to manufactured goods were even greater than they were in the case of foodstuffs. An Estonian employee had to work approximately six times longer to buy a colour TV, about four times longer to buy a refrigerator and 2–2.4 times longer to buy a pair of socks or a bar of soap than his Finnish counterpart did (Table 10). The difference in living standards is also reflected in greater Finnish ownership of consumer durables (Table 11).

Differences in living standards can also be found in the living conditions in the two countries. The average living space per person (the floor space of the dwelling divided by the number of household members) is a simple and frequently used indicator of housing conditions. In Finland, there were 31m² of housing space per inhabitant in 1988, while in Estonia this figure was only 21m². At the same time, the quality of housing in Estonia was much worse than in the Nordic countries.115

It can, of course, be argued that none of this means anything. That the capitalist system might be able to offer higher standards of consumerism, but the free education and healthcare, full employment and equality among people offered by the Communists might, ultimately, make people happier. However, this is not so. Communism did not only fail economically, it also failed socially. International statistics on human development document the widening gap between social indicators for Estonia and Finland too: in the mid 1930s, the life expectancy of 56 years in Estonia was higher than the expected 53 years in Finland, yet by the end of the 1980s, the two countries had changed places, with life expectancy in Finland now 4 years longer than in Estonia. Consider also the next widely used figure – the infant mortality rate: before the Second World War, Estonian and Finnish infant mortality rates were broadly comparable, but they began to diverge after the war. The infant mortality rate in Finland fell by more than 50 % – from 13.2 per thousand births in 1970, to 6.4 in 1986 – and is currently among the lowest in the world. Immediately after the war, the infant mortality in Estonia also fell, but there has been little improvement since 1970. Infant mortality in Estonia reached its lowest level in 1988, but was still twice as high as the figure for Finland. Serious health problems in Estonia were at least partly caused by the high level of pollution. A comparison of sulphur emissions in Finland and Estonia reveals that levels were much higher in Estonia. For example, the annual mean concentration of sulphur dioxide in Tallinn was 5-6 times higher than it was in Helsinki. The quality of the water is also significantly better in Finland, where 80 % of investigated lakes are in good condition, compared to only 20 % in Estonia.

We could continue to draw comparisons between Estonia and Finland, but the result is already clear: the level of development and the standard of living in Finland far exceeds that of Estonia despite the two countries having started from largely similar positions prior to the Second World War. The main reason for Finland’s success was its shift to a modern, export-oriented market economy and its swift integration into Europe. The same is true of many other countries: East and West Germany, Czechoslovakia and Austria. In sum, prosperity eluded the Soviet Union and its satellites. The economies and societies of the socialist camp stagnated, causing real hardships for their citizens. The socialist countries failed to respond to developing trends with the result that the technological revolution passed them by, while it brought the rest of the world closer together. In the age of modern mass media, the growing gulf in living conditions between the East and the West became increasingly evident. This created tensions in the Soviet bloc that could no longer be concealed. Having completely lost its legitimacy, the Soviet system was falling apart. Fear was the only factor keeping it together, and even this began gradually to fade away. And even this began gradually to fade away. When this happened, the time for Communism was over.