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Revisiting ”Transitology” as the Ideology of Informal Empire,” Global Jurist: Vol. 9: Iss. 2. (Topics), Article 7. Available at:

Global Jurist Topics Volume 9, Issue 2


Article 7

Capitalism, Communism . . . and Colonialism? Revisiting “Transitology” as the Ideology of Informal Empire John D. Haskell∗

∗ †

Boris N. Mamlyuk†

SOAS, [email protected] University of Turin, CLEI Centre, [email protected]

Recommended Citation John D. Haskell and Boris N. Mamlyuk (2009) “Capitalism, Communism . . . and Colonialism? Revisiting ”Transitology” as the Ideology of Informal Empire,” Global Jurist: Vol. 9: Iss. 2 (Topics), Article 7. Available at: c Copyright 2009 The Berkeley Electronic Press. All rights reserved.

Electronic copy available at:

Capitalism, Communism . . . and Colonialism? Revisiting “Transitology” as the Ideology of Informal Empire∗ John D. Haskell and Boris N. Mamlyuk

Abstract In the context of international law, “transitology” is often used to describe the literature surrounding the former Soviet Union (fSU) and the subsequent reform attempts by Western and Eastern/Central European market reformers. While it is often acknowledged there have been other “waves” of transition, this literature typically asserts that the situation in the fSU is somehow distinct in human history, and thus, to a large extent, unmixable with other past “transition” histories. Likewise, the story of the Soviet Union’s dissolution, and the subsequent reforms in its aftermath, largely avoid the radar of critical colonial discourses. In short, there is almost no effort to link the fSU to the 19th century colonial project of Western European states, in particular the story of informal empire. This article seeks to re-frame the post-communist transition debate in terms of the broader international challenges of decolonization, “neo-colonialism,” and informal empire building in the West, the former Soviet Union, as well as between the two in the post Soviet space. KEYWORDS: “transitology”, transition, Russia, colonialism, capitalism, Washington consensus, shock therapy, USSR, post-Soviet

John D. Haskell; Ph.D. Candidate in Law, School of Oriental and African Studies, SOAS, University of London (SOAS); LLM (SOAS); J.D., University of California, Hastings College of the Law (UC Hastings); Co-founder of the Centre for the study of Colonialism, Empire and International Law (CCEIL). In writing this paper, Haskell is deeply grateful to the generosity of Rob Knox and Akbar Rasulov for sharing so much of their time, encouragement and insight. In addition, he is thankful for the support and ideas shared by Bill Bowring, Matthew Craven, Catriona Drew, Richard Haskell, Ugo Mattei, Scott Newton, Kenneth Perlis, Evita Rackow, and Ignacio de la Rasilla del Moral. Boris N. Mamlyuk, Ph.D. Candidate in Law, Economics & Institutions, CLEI Centre, University of Torino; J.D., University of California, Hastings College of the Law; 20082009 Fulbright Fellow, Academic Law University, Institute of State and Law, Russian Academy of Sciences. Mamlyuk wishes to thank Ugo Mattei and Michele Graziadei for their valuable commentary and help with this work, Nikolay Mamluke for giving important historical context to his research, and the U.S. Fulbright program, Cornell Law School and Columbia University’s Harriman Institute for priceless institutional support. Errors and omissions, of course, are solely the fault of the authors.

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Haskell and Mamlyuk: Revisiting "Transitology" as Colonialism

“[I]n matters of politics one must not be deceived by speculative ideas which common people form of justice, equity, moderation, candor and the other virtues of nations and their leaders. In the end everything is reduced to force.” - Baron Biefeld1 “But if thought corrupts language, language can also corrupt thought.” – George Orwell2 Introduction: Colonialism… The Odd Man Out In the context of international law, “transitology” is often used to describe the literature surrounding the former Soviet Union (fSU) and the subsequent reform attempts by Western and Eastern/Central European market reformers. In particular, the term generally denotes the idea that Central and Eastern Europe is moving from a centrally planned, communist society to a liberal, pluralistic democracy and a market economy.3 While it is often acknowledged there have been other “waves” of transition, this literature typically asserts that the situation in the fSU is somehow distinct in human history, and thus, to a large extent, unmixable with other past “transition” histories. Likewise, the story of the Soviet Union’s dissolution, and the subsequent reforms in its aftermath largely avoid the radar of critical colonial discourses. In short, there is almost no effort to link the 1

FRANCIS RUDDY, INTERNATIONAL LAW IN THE ENLIGHTENMENT: THE BACKGROUND OF EMMERICH DE VATTEL’S LE DROIT DES GENS 38-39 (1975)(quoting Byron Biefeld). 2 George Orwell, Politics and the English Language (1946), available at Orwell/patee.html (last visited May 8, 2009). 3 See Herman W. Hoen, Is there such a thing as ‘Transition’?: Social Economic Research on Transition in Central and Eastern Europe, Carnegie Endowment for International Peace, available at (presented at 11th World Congress for Social Economics, June 8, 2004)(noting that the “recurrent theme in the debates on transition is the intertwinement of market reform and democratization” and that “democracy promotion has been one of America’s main foreign policy goals, alongside global economic … interests”); see also Josef Langer, Postcommunist Transformation and the Social Sciences, Balkan Academic News Book Review (2003)(book review); JOSEPH STIGLITZ, GLOBALIZATON AND ITS DISCONTENTS 141 (2002)(characterizing reform motives as a move to “replac[e] centralized planning with a decentralized market system … public ownership with private property, and eliminating or at least reducing the distortions by liberalizing trade”). The very term – “transitology” – prompts the notion that Central and Eastern Europe is moving away one place and towards another. The fact that the place of origin and destination have already been decided has led some authors to describe the term as “deterministically linked to the idea of modernization” and the “belief” in the “linear progress of humanity.” PETER REDDAWAY & DMITRI GLINSKI, THE TRAGEDY OF RUSSIA’S REFORMS: MARKET BOLSHEVISM AGAINST DEMOCRACY 18-19 (2001)(hereafter REDDAWAY & GLINSKI). Published by The Berkeley Electronic Press, 2009


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fSU to the 19th century colonial project of Western European states, in particular the story of informal empire. This obfuscation was achieved through the debate between the U.S. and the USSR over the meaning of “imperialism,” which became a way of each side critiquing the other’s foreign policy throughout the Cold War. For the former Soviet Union, imperialism signified the push by the North Atlantic nations and their financial institutions (such as, the predominantly American-oriented International Monetary Fund and World Bank) for new capitalist markets, primarily through “informal empire” (the dominant policy since decolonization by the majority of Western powers, and often discussed under the heading “neocolonialism”), though occasionally achieved by more aggressive means. Conversely, the United States used “imperialism” and “empire” to attack the Soviet Union, typically associating empire with communism and its global ambitions, which were seen as dressed up forms of tyranny against the individual and society. In this way, Cold War politics shifted the colonial discussion into a simplified dichotomy of capitalism versus communism: the West arguing it had moved past colonialism and empire into an era of post-colonial humanitarianism and liberal benevolent guidance; the fSU claiming that communism was the antithesis to capitalism’s inherent imperialistic tendencies – the voice of “third world” countries (the reinvented status of colonized territories under economic, and sometimes political domination in the post decolonized world). At the end of the day, neither side wished to view Central and Eastern Europe within the history of colonialism lest they be forced to turn the mirror upon themselves.4 In transitology literature, communism is characterized as categorically negative – ranging the spectrum from Ronald Reagan’s declaration that the fSU was an “evil empire” to less overtly moral critiques that it was “unnatural,” “destructive,” or an “aberrational moment in history.” Conversely, the neoclassical ideal of a fully functioning market with minimal government intrusion is offered as the ultimate, or at least, the desired scenario. In other words, transitology draws the battle lines: one the side of progress, modernity, and civilization (or, civil society) stands capitalism; on the side of backwardness, imperialism, and the “primitive” or unnatural lays communism. To move forward means to undergo a comprehensive integration into Western, and particularly


See generally Theodore H. Von Laue, The World Revolution of Westernization, 20:2 THE HISTORY TEACHER 263, 273 (February, 1987)(accusing the colonizing powers in the late 19th century of “blaming their non-western opponents for their unseemly and illegitimate ambition, never realizing that their ambition was merely the mirror image of their own political appetite”). Of course, in the wake of the fSU’s collapse, Western commentators often emphasized the idea that the Soviet system was oppressive / totalitarian.


Haskell and Mamlyuk: Revisiting "Transitology" as Colonialism

American capitalist culture and norms.5 As Thomas Friedman, chief diplomatic correspondent of the New York Times, explained in 1992: “America’s victory in the cold war was … a victory for a set of principles: democracy and the free market … [which are] the wave of the future.”6 Transitology, then, is more than a narrative; it is an informing philosophy. In retelling the story of the fSU, transitology seeks not only to understand the last 70 years behind the Iron Curtain, but to distill the causes of communism’s fall from grace and point the way forward. The future, however, meant a return to the past – to a time before communism when nation-states still had considerable leg room to roam the earth and international law allowed the technocratic experts to conduct experiments in capitalism’s interests without the baggage of its own excesses.7 To return to the long 19th century and the interwar period, international law was able to adopt legal techniques and justifications for empire that had not yet been tainted by the failure of the League of Nations and the United Nations patriarchal systems of “benevolent tutelage”; nor was it forced to acknowledge Third World critiques of capitalism and Western culture that had culminated in the 60’s movement to decolonize and the threat of the fSU as an alternative choice to the Western economic market network.8 In short, transitology functions to recreate an era where capitalism and wholesale integration into Western economic models of production were the only method towards progress and civilization (or as expressed nowadays, “self-determination,” “good governance,” and “civil society”).9 The domination of third world countries, and especially Central and 5

Cf. Katherine Verdery, WHAT WAS SOCIALISM, AND WHAT COMES NEXT? 15, 18-19 (1996)(pointing out that a common theme in post-socialist writing is transferring Western institutions, such as markets and democracy, to non-Western settings). 6 See Thomas Friedman, NYT Week in Review, N.Y. TIMES (June 2, 1992). 7 This will be discussed infra in further detail. For a glance at this approach right now see generally Miroslav Prokopijevic, Transition, Belgrade Open School and International Center for Economic Research (ICER Working Paper)(August 2001), available at (describing the purpose of transitional reforms as “expected to eliminate communist institutions and to revert to the status quo ante … communism was introduced in those countries … adjusted and improved for changes in international assumptions,” and noting that “today nothing other than democracy counts … [as expressed through] the rule of law and a market economy … due to an absence of reasonable alternatives”). Thus communism must be struck from the record and history taken back to a pre-communist world, which accounts for “changes in international assumptions” – such as the way colonialism would operate. See generally Antony Anghie, Colonialism and the Birth of International Institutions: Sovereignty, Economy, and the Mandate System of the League of Nations, 34 N.Y.U. INT’L L. & POL. 513 (2002). 8 See generally Anghie, supra note 7. 9 See id.; see also generally Valerie Bunce, Should Transitologists Be Grounded?, 54 SLAVIC REVIEW 111, 121 (1995)(pronouncing that “what is at stake in eastern Europe is nothing less than the creation of the very building blocks of the social order … not just the character of the regime but also the very nature of the state itself, not just citizenship but also identity, not just economic Published by The Berkeley Electronic Press, 2009


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Eastern Europe, by the North Atlantic powers was now characterized not as a struggle between civilization and the primitive colonies, but capitalism versus communism.10 Part I, Wallet Rule, provides a cursory historical overview of the colonial experience in international law, in particular looking at the ways colonialism operated outside of overt gestures of military rule in favor of economic persuasion – not bombs but bank ledgers. Though for some the idea of ‘informal empire’ is old hat, it may still be useful to briefly address in our context for several reasons. First, because the literature surrounding the ‘transition’ of the former Soviet Union has unfortunately tended to shy away from couching its stories and analysis in a longer historical narrative, let alone within the context of colonialism. And second, it is perhaps worthwhile to remember that colonialism was not just soldiers in colorful uniforms and hats, armed with muskets and whiskey and their nation’s flags. The economic-geared emphasis and techniques of colonialism past, and their striking resemblance to the advent of transitology, suggest that we have not put empire to rest. Part II, Revisting Transitology as Colonialism, turns our attention to some of the most common assumptions put forward in transitology literature, and draws out how these accounts silence the colonial dynamic at play in the former Soviet Union. First, we will look at how transitology has been proposed as a struggle between opposing ideological camps of economists, and how this ‘professionalization’ or ‘economization’ of the story is misleading. Second, we will turn to the regular claim that the turn to ‘capitalism’ was a spontaneous, or at least sincere, movement originating and maintained by mass democratic support and optimism (or frustration with the former Soviet Union). Finally, we will challenge the almost taken-for-granted theme that the process of leaving the legacy of the fSU has been largely non-violent (closely related in this respect to the second claim that the revolution was widely supported by the population). In writing colonialism into transitology literature, we have tried to focus on the discontinuities between the dominant account and the realities on the ground. Thus, we attempt to critically investigate legal and economic reforms through their results, yet at the same time remain cautious of how these investigations are all too often truncated through economic or pragmatic jingoism. The turn to highly technical and specialized appraisals has only led to greater abstractions, professional talk concealing deep prejudices and political ambitions.

liberation but also the foundations of a capitalist economy”). Bunce takes a common view among transitologists that, in contrast to developed, new “national economies,” the character of eastern European economies are “primitive.” 10 Transitology may be comprised of technocratic experts calling for innovative reform strategies, but here their creativity ran flat: post-colonization merely became post-communism.


Haskell and Mamlyuk: Revisiting "Transitology" as Colonialism

It tends toward apology or utopia, which has resulted in a pervading ambivalence, or perhaps cynicism, that colors our ability to understand or address the fSU. To respond to this cynical ambivalence, we have attempted to find inspiration and insight through sources beyond our typical peripheries. Thus, in revisiting ‘transitology’ through a critical colonial lens, we draw from newspaper articles, interviews, polls, and television shows in addition to the standard interdisciplinary approaches. At the end of the day, it may be as important to understand the anxiety and hopes that informed the principal actors in this drama as it is to debate various institutional reform proposals or come to any consensus on what went wrong. Interweaving the debates of economic reforms, Soviet and American bureaucrats, journalists, lawyers, as well as the expressions of the people themselves who bear the results of legal, political and economic experimentation, we have attempted to write a more compelling story that accounts for the courage and hope of the Marxist legacy in the Soviet experience. Part I: The Wallet Rule Imperialism comes in many different stripes, leading writers to oftentime unnecessarily separate various areas of study as distinct and specialized, under diverse headings such as: “neo-colonialism,” “internal colonialism,” “postcolonialism,” “globalization,” and in our case, “transitology.” This is not to say that there were not differences between 16th century Spanish / Portuguese colonialism over South America and 19th century Western European colonial rule throughout Africa (or even between Western European powers themselves), or likewise between American and Russian forms of imperial domination throughout the 20th century. It does, however, suggest that there may be more to learn by looking at similarities between these various models, rather than extolling their differences. For our purposes, it is important to keep in mind three reoccurring factors of imperial rule: first, an imperial order can take place without direct conquest; second, informal empires were actually very prominent in the history of capitalistic imperialism, under what we might call the ‘economization of progress’ (as opposed to equating empire solely with outright territorial conquest); and third, imperialism almost without fail employs humanitarian tropologies, linking domination with some form of empathy – and perhaps more disturbing, more often than not persuasively enough to enlist even more progressive voices.11 11

There is a vast literature on the links between imperialism and the international legal order. By no means extensive, we have listed some more sophisticated and compelling accounts for readers interested in pursuing this topic. See ANTONY ANGHIE, IMPERIALISM, SOVEREIGNTY, AND THE MAKING OF INTERNATIONAL LAW (2004); Nathaniel Berman, But the Alternative is Despair: European Natinalism and the Modernist Renewal of International Law, 106 HARV. L. REV. 1792 (1993); B.S. CHIMNI INTERNATIONAL LAW AND WORLD

Published by The Berkeley Electronic Press, 2009


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The direct political annexation of territory abroad during the colonial experience only met intermittent support from both cultural elite and the working populations throughout Western Europe. The debates, however, were not just fixated on the moral efficacy of colonial expansion, but rather upon what was characterized as pragmatic concerns: to buttress lagging economies with new markets and resources, alleviate domestic over-population, halt exorbitant costs in protecting missionaries and financial interests,12 and to maintain a balance of powers among Western powers.13 Despite the British mantra that it was better to exercise influence through trade than direct political rule, the initial conditions of the indigenous populations were simply not ideal to Western interests upon contact—either because the local rulers or customs were not welcoming to settlers (economically or culturally), their economies were largely nomadic or agrarian based (no industry set up to exploit the raw materials of their land), or alternatively, their economies were industrialized and sophisticated enough by Western parlance to be able to demand favorable terms to the detriment of Western profit.14 As European commercial interests pushed for the “systematic ORDER: A CRITIQUE OF CONTEMPORARY APPROACHES (1993); NOAM CHOMSKY, WORLD ORDERS, OLD AND NEW (1994); David Kennedy, International Law in the 19th Century: History of an Illusion, 65 NORDIC JOURNAL OF INT’L LAW 385-420 (1996); MARTTI KOSKENNIEMI, THE GENTLE CIVILIZER OF NATIONS: THE RISE AND FALL OF INTERNATIONAL LAW 1870-1960 (2004); CHINA MIEVILLE, BETWEEN EQUAL RIGHTS: A MARXIST THEORY OF INTERNATIONAL LAW (2005); ANDREW PORTER, EUROPEAN IMPERIALISM 1860-1914 (1994); and BALAKRISHNAN RAJAGOPAL, INTERNATIONAL LAW FROM BELOW: DEVELOPMENT, SOCIAL MOVEMENTS AND THIRD WORLD RESISTANCE (2003). 12 In 1846, for example, British colonial defense “cost the value of half of the total colonial trade”. As the legal scholar W.E. Hall would write in the late 19th century, it was the colonizing state, and not the private enterprises, that “must be left to judge how far [imperialist rule] can go at a given time, and through what form of organization it is best to work.” W. E. HALL, A TREATY ON INTERNATIONAL LAW 132-133 (4th ed., 1895). 13 To be sure, there was a push among the European powers to grab up as much territory and means of production as was possible, often with no other reason than to keep it from its rivals. In this sense, they were not that different from the fSU’s struggle against global capitalist markets in the 1970’s: both saw their interests in acquiring not capital but robbing their competitors from markets and resources, even at great personal (national) cost. To a great extent, however, even after the signing of the Berlin Treaty, the nations continued to use private enterprises to secure their economic interests. 14 The economy of Indian society, for example, was significantly undermined by the “forcible destruction of the textile industry in favor of British imported cloth.” See CHOMSKY, supra note 11, at 115 (noting that countries under colonial rule were often “de-industrialized”). Chomsky uses India as an example. Quoting John Keay’s history of the East India Company, Chomsky notes that the British government “destabilized and impoverished” Bengal through “a disastrous experiment in sponsored government”, namely – British industrialization while de-industrializing the domestic textile industry. The disastrous effects can be seen in the textile center of Dacca, which was as “extensive, populous, and rich as the city of London” in 1757, but by 1840 had


Haskell and Mamlyuk: Revisiting "Transitology" as Colonialism

importing [of] raw materials and exporting [of] manufactured products to the colonial monopoly markets”, they increasingly found this demanded nothing less than a sweeping ideological and material “transformation” of the indigenous peoples15, “radically reform[ing] its legal and political systems to the extent that they reflected European standards as a whole.”16 Imperialism then did not require territorial ambitions per se; rather they were more often than not, almost paradoxically, the offshoot of interests to maximize commercial profits and guarantee peace in Europe. Moreover, while often characterized as lawless expansion on the basis of ‘might equals right’, law was an indispensable element in great powers’ imperialist ambitions: creating justifications and conceptual frameworks for imperial adventures, smoothing out differences between rival powers, establishing entities for extracting resources and maintaining rulership (e.g., trading companies). The international legal order was increasingly ascribed a humanistic foundation, which sought to distill from the practices of Western civilization (primarily, state activity) certain universal “truths”, or less grandly stated, legal standards or norms by which states and peoples would conduct themselves. These legal norms, whether of divine or secular origin, were represented as prepolitical, manifestations of human behavior that could be discerned through careful ‘scientific’ study. As the late 19th century British jurist Thomas Lawrence would write during the height of what is somewhat erroneously called the ‘positivist’ era, “[international law is] a science … whose chief business it is to find out by observation the rules … to classify and arrange them to certain fundamental principles upon which they are based.”17 In short, international law become, according to Sir Charles Trevelyan in front of the House of Lords, “a very poor and small town … the jungle and malaria … fast encroaching”, its population shrunk from 150,000 to 30,000. Id. (citation omitted). 15 An exception to this, to a certain degree, may be seen in the client relationships between Asian and various other Eastern communities with Western imperial powers. Thus, for example, Portugal treated local rulers in the West Indies and China (Ming Dynasty) as, if not equals or within the “law of nations”, at least capable of entering into valid, binding treaties. Likewise, Britain’s predominance in China was during the 18th and 19th century was largely based on treaties guaranteeing British merchants the right to bring goods into the country, as well as extraterritorial rights in relation to ports. See generally id.; see also S. JAMES ANAYA, INDIGENOUS PEOPLES IN INTERNATIONAL LAW (1996); JAMES LORIMER, THE INSTITUTES OF THE LAW OF NATIONS: A TREATISE OF THE JURAL RELATIONS OF SEPARATE POLITICAL COMMUNITIES, Vol.1 (1884); KOSKENNIEMI, supra note 11 (referring specifically to the Treaty of Nanking in 1842 and Tientsin in 1858). 16 See Antony Anghie, Finding the Peripheries: Sovereignty and Colonialism in 19th century international Law, 40 HARV. INT. L. J. 1, 53 (1999)(quoting the British legal theorist, John Westlake: “[t]he inflow of the white race cannot be stopped where there is land to cultivate, ore to be mined, commerce to be developed, sport to enjoy, curiosity to be satisfied.”). 17 Anghie, supra note 16, at 19. The 18th century tension between the law of nations and the law of nature did not really result in the victory of one over the other, as some writers have Published by The Berkeley Electronic Press, 2009


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fashioned the conditions of their interests and couched the entire process in moral language appealing to a universal morality, or humanism: “cloaking injustice with the mantle of legalism.”18 This morality was based openly on certainty that ‘the West’ had a monopoly on “civilization.” And again, the way to this civilization standard lay extensively in integrating the non-European world into Western commerce. “[T]he merchant, the miner, and the manufacturer … enter[ed] the tropics … [not] as interlopers, or as greedy colonialists, but in fulfillment of the mandate of civilization.”19 While the moral justification of imperial expansion had shifted from spreading Christianity to infusing the benefits of the rule of law and civilization in foreign lands,20 the prime motivation remained the same: bringing the rest of the world under the reach of Western capitalism.21 Indeed, the notion of ‘progress’ and the legal restructuring of indigenous peoples’ economic, as well as political and cultural ways of life went hand in hand. This ‘economization of progress’, rationalized and structured in the language of international law and benevolent intent, operated as a key continuous ingredient of imperialism past and present. To see this, we can isolate moments across time and geography. In his 1539 lecture De Indis Recenter Inventis, Vitoria writes that while religious differences alone were not enough to condone war, “the refusal of Indians to grant the Spaniards such ‘natural rights’ as the right to trade with them or … journey in

pronounced, but rather the two concepts were merged: the increasingly secular, technocratic, rational “science” of distilling and codifying legal norms came to elevate Western civilization and characteristics to the realm that the law of nature, or even divine law, had enjoyed earlier. In fact, the narrative of legal thought somehow moving from heaven to earth, can often fall into the trap of being viewed as some sort of ‘progress’ narrative whereby lawyers become increasingly scientific and sophisticated in their ideas and reasoning. Rather, the tracing of legal thought seems to depend more on changing material relations and technological conditions, and international law only becoming a professional language in the 19th century (though still maintaining a tenacious hold on many earlier ideas from proclaimed forefathers) 18 Nathaniel Berman, In the Wake of Empire, 14 AM. U. INT’L L. REV. 1521, 1558 (1999). For a thorough discussion of how international law organized and achieved these ends see generally KOSKENNIEMI, supra note 11. 19 See Berman, supra note 18, at 1559-1560 (citing Lord F.D. LUGARD, THE DUAL MANDATES IN BRITISH TROPICAL AFRICA 60 (2d ed., 1923)). 20 Just as the Spanish justified their conquest in the name of Christianity, positivist scholars by the late 19th and early 20th century projected imperialism abroad as a humanitarian mission to raise the indigenous populations to the level of western civilization. See generally Anghie, supra note 7, at 252 (referring to this as the “society doctrine”). 21 See KOSKENNIEMI, supra note 11, at 111. See also GERRY SIMPSON, GREAT POWERS AND OUTLAW STATES: UNEQUAL SOVEREIGNS IN THE ITNERNATIONAL LEGAL ORDER 494 (2004)(noting that Western nation-states were “more concerned with the protection of commercial and diplomatic interests than with the export of human rights”).


Haskell and Mamlyuk: Revisiting "Transitology" as Colonialism

their lands were violations” could lead to Spanish acquisition of the territory.22 This belief is again echoed by Voltaire and the physiocrats: “international salvation lay in free trade” and “the answer” rested in “a proper knowledge of economic principles.”23 Likewise, in November 1864, Russian Chancellor Prince Gorchakov echoed this thought in justifying Russia’s reach into Central Asia: “[the] position … of all civilized states which come into contact with half-savage, wandering tribes …”, namely, that “the interests of security … and of commercial relations, compel the more civilized state to exercise a certain ascendancy over neighbours whose turbulence and nomadic instincts render them difficult to live with,” because “the progress of civilization has no more efficacious ally than commercial relations … requir[ing] in all countries order and stability as conditions essential for their growth … [they must] be made to understand that it is more advantageous to favor and assume trade by caravans than to pillage them.”24 Bismarck would adopt a similar rationale when addressing the opening session of the 1885 Berlin Conference: “all the Governments invited … share the wish to bring natives of Africa within the pale of civilization by opening up the interior of the continent to commerce.”25 Directly linking the concept of economic efficiency and moral progress, a pre-1917 journal equates “efficiency” with “morality” as a justification for domination: “the sound nation supersedes the unsound, because [it] … is the direct offspring of a higher efficiency, and the higher efficiency is the logical outcome of a higher morality … the crown of moral quality.” This ‘economization of progress’ would again find new life in the 20th century: the League of Nations’s ‘sacred trust of civilization’, and United Nations’ ‘benevolent tutelage’, and more recently the equating of health and material prosperity as prerequisites of moral behavior with the rise of economic romanticism and the field of law and development. Thus, Woodrow Wilson’s “open door” strategy, espoused in the League of Nations, called for “informal empire” – the North Atlantic Great Powers granting the colonized peoples political autonomy while at the same time requiring that it be conditioned on a stringent economic integration into Western capitalist markets and norms.26 And, just as early colonial practices often required coercive labor from the indigenous people in exploiting their raw materials for capitalist production, the emerging 22

Francisci de Vitoria, DE INDIS ET DE JURE BELLI RELECTIONES 156-159 (Washington: The Carnegie Institution of Washington, 1917). 23 Ruddy, supra note 1, at 851. 24 See W.K. FRASER-TYTLER, AFGHANISTAN: A STUDY OF POLITICAL DEVELOPMENTS IN CENTRAL AND SOUTHERN ASIA 319 (2nd ed. 1953)). 25 See Anghie, supra note 16, at 63. 26 Id.; see also Matthew Craven, What Happened to Unequal Treaties? The Continuities of Informal Empire, in: CRAVEN, M. & FITZMAURICE, M. (eds.), INTERROGATING THE TREATY: ESSAYS IN THE CONTEMPORARY LAW OF TREATIES, 43-80 (2005) Published by The Berkeley Electronic Press, 2009


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20th century take on empire also saw the local communities as “economic assets.”27 Progress, in other words, would be understood and structured according to Western capitalist interests. Therefore, the “law of labor” became celebrated as “a law of nature”, which “no [native] should be allowed to evade.”28 What became an increasingly new phenomenon to imperialism, here, was the emphasis on holding the local populations responsible for the outcomes of economic reform. Laying out the groundwork for this thought in the years leading up to the League of Nations, Elihu Root, the architect of American foreign policy regarding the Philippines, explained the U.S. approach: “one of [our] fundamental rules of conduct [is] the purpose to fit the Filipinos themselves for self-government.”29 Since political governance essentially meant selfgovernance, the local populations bore the brunt of the costs for the changes Ironically, as F.S. Furnivall observed in the early 1940’s, forced upon them.30 the very implementation of granting the people the right to self-government (through the rule of law) ultimately resulted in them actually being “less capable of self government.”31 To ensure that the mandate country was on the path to “self-government,” “civilization,” and “progress,” the Permanent Mandate Commission provided expertise in establishing new sets of legal technologies to create, as Lord Lytton had explained the goal of international law as viceroy of India at the height of the colonial era, a “gigantic revolution – the greatest and most momentous social, moral, and religious, as well as political, revolution, which, perhaps, the world has ever witnessed.”32 Despite all the language of eventual equal sovereignty and development in the interests of the ‘natives’, in practice it amounted to a continuing practice of political, social, and especially economic assimilation into the Western order. In short, informal empire meant empire through economic, rather than directly political subversion, but it ended up being both. The colonized people, now the mandated people, were offered a Faustian bargain where modernization was the only means to rescue oneself from exploitation, but that modernization required only another version of exploitation.


E.g., Anghie, supra note 7, at 589, 599-602 (noting that during the interwar period, progress was “understood primarily in economic terms”). Anghie’s paper gives a thorough discussion of this economic lens that America and the other League powers developed to understand and structure international law in the interwar period. 28 Permanent Mandates Commission, Minutes of the Seventh Session, League of Nations Doc. C.648 M.237 1925 VI at 201 (1925) 29 See Anghie, supra note 7, at 554 (citing PHILIP C. JESSUP, ELIHU ROOT (1938)) 30 E.g., Anghie, supra note 7, at 598-602 (correlating India’s situation in the late 19th century to the practice of informal empire in the interwar period). 31 See J.S. FURNIVALL, COLONIAL POLICY AND PRACTICE 297 (1948). 32 Id. at 561.


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Likewise, the demand for independence by colonized peoples in the 1960’s did little to actually alter their choices. Political liberation was precarious and they were forced to quickly choose between the United States and Russia for patriarchal support under the shadow of the Cold War.3334 Yet, for both America and the fSU, the humanitarian ideals espoused were in many ways perfunctory. As Nathaniel Berman has noted, “[o]ne of the main goals of international law is to try to make the deployment of power more humane.”35 Washington and its international lending agencies were first and foremost committed to the same theme that had dominated the last five hundred years of imperialism: economic domination through whatever means necessary, and since America took over the reigns from the European powers by the mid-20th century, preferably as covertly as possible in light of the Soviet threat of fermenting and encouraging third world, anti-colonial resistance.36 By the 1980’s, “economic romanticism” was the “common denominator of … new aspirations” throughout the world as the Soviet Union floundered in its death-throes: in Australia, “economic rationalism;” in Latin America, “neoliberalism;” in Britain, “Thatcherism;” and in American, “Reaganomics.”37 33

Russia exerted direct influence over the Central and Eastern European republics: assimilating them economically, politically, and culturally into the Soviet (aka, Russian) Union under the threat, and occasional application, of coercive military pressure. The fSU also extended its empire overseas through a policy that mixed elements of late 19th century colonial practice (in its motivation not solely for wealth extraction and favorable economic opportunities, such as opening up ports for use and facilitating trade, but removing markets and resources from their rivals’ grasp) with more humanitarian considerations than had colored Western expansion since the First World War. 34 Cf. MARTIN MCCAULEY, RUSSIA, AMERICA AND THE COLD WAR 3 (2004)(quoting President Harry Truman)(citation omitted). Harry Truman explained the magnitude of this conflict: “If communism is allowed to absorb the free nations, then we would be isolated from our sources of supply and detached from our friends … [it] would change our way of life so that we couldn’t recognize it as American any longer.” (emphasis added). 35 Berman, supra note 18, at 1544. 36 See generally CHOMSKY, supra note 11, at 69 (citation omitted). Chomsky cites the December 1988 New York Times article written by Dimitri Simes, a senior associate at the Carnegie Endowment for International Peace, which noted that “the apparent decline of the Soviet threat … makes military power more useful as a United States foreign policy instrument … against those who contemplate challenging important American interests.” 37 CHRYSTIA FREELAND, SALE OF THE CENTURY: THE INSIDE STORY OF THE SECOND RUSSIAN REVOLUTION 68 (2000)(quoting Kovalyev, one of Russia’s Young Reformers in the early nineties, in explaining the early nineties as “economic romanticism,” which referred to the belief that once a country “become[s] a market economy … then everything good will follow”); see also CHOMSKY, supra note 11, at 122-123. Of course, there was nothing romantic about the economic thoughts that reigned the 1980s and 1990s. Neo-liberalism itself, in some respects, has its origins in monetarism, which was promoted through the Chicago Boys in Pinochet’s Chile, but is developed by economists that came into positions of power under Reagan and Thatcher. See DEZALAY, Y. & GARTH, B., THE INTERNATIONALIZATION OF Published by The Berkeley Electronic Press, 2009


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Its purpose, as Carter’s Secretary of State, Cyrus Vance, explained: to bring countries “more fully into the world trading system … to create a better environment for international investment and the flow of technology.”38 And, in case there was any confusion, President Bill Clinton’s National Security Advisor, Anthony Lake, in presenting the first outline of the Clinton administration’s foreign policy vision, noted: “[t]hroughout the cold war, we contained a global threat to market democracies: now we should seek to enlarge their reach.”39 It is against this backdrop of imperialism, exercised increasingly through the ‘economization of progress’, that we now turn to the literature of transitology and the events following the collapse of the Soviet regime. Part II: Revisiting Transitology as Colonialism The fSU was also distinctly a product of Russian colonial ambitions from the very beginning. The 1917 October Revolution, as one scholar notes, was a “Russian revolution … carried out mostly by Russians.”40 Russian elites quickly sought to consolidate their power within Russia and reach outward through a variety of techniques that were both flexible, and in many ways strikingly similar to Western style imperialism. In accordance to provisions with the Warsaw Pact, for instance, Russia ensured that the various republics under its reach agreed to: 1) a Soviet official occupying the post of commander and chief of their armies (except for Poland); 2) automatically commit their armies in the event of a war involving the USSR; and 3) station Soviet troops within their borders.41 Russian colonial expansion also included waging cultural warfare over its non-Russian Soviet population in an effort to inject all people with a Russian identity. Russia, like the West, asserted itself as the light by which the rest of the world should turn its gaze. “Our country (Russia),” a prominent Russian textbook states, “is the country of the most advanced culture, the citadel of advanced scientific thought, of revolutionary humanism and of a new, Communist morality … [as opposed to bourgeois culture, which is] the chief obstacle to the progressive development of mankind.” The author, G.G. Karpov, continues: PALACE WARS: LAWYERS, ECONOMISTS, AND THE CONTEST TO TRANSFORM LATIN AMERICAN STATES (2002). 38 CHOMSKY, supra note 11, at 127 (citing NATHAN GODFRIED, BRIDGING THE GAP BETWEEN RICH AND POOR: AMERICAN ECONOMIC DEVELOPMENT POLICY TOWARD THE ARAB EAST, 1942-1949 194 (1987)). 39 Id. at 71 (citation omitted). 40 Joseph S. Roucek, The Soviet Treatment of Minorities, 22 PHYLON 15, 23 (1961) (citing W. KOLARZ, RUSSIA AND HER COLONIES (1952)), available at: 41 See W.W. Kulski, Soviet Colonialism and Anti-Colonialism, 18 RUSSIAN REVIEW 120.b (April 1959).


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“Russian culture was always superior to the west, but only reached full flower under Leninism, the summit of ‘Russian natural and world culture’ and eventually will impose a ‘truly unified and universal human culture.’”42 Moscow’s foreign policy with colonial territories overseas tended to adopt less coercive measures. During the 1970s, the Soviet Union entered into 11 treaties with “third world” countries.43 The conditions of the treaties usually required “close co-operation and consultation on vital issues of the day” and the overseas territories agreeing to “counter traditional Western monopolies of economic … political and military domination.” In return, the Soviet system guaranteed economic aid and military resources.44 Transitology, however, does not associate Russia’s colonial past within the history of colonialism. Instead, the literature characterizes the breakdown and subsequent reforms in the fSU in a distinctly Cold War perspective – namely, as the twilight of the battle between an ever-weakening communist presence (associated with totalitarianism and a planned economy) and the universally accepted recognition of capitalism (linked to civil society, democracy, and the drive towards modernity through market reforms). In other words, America’s tutelage in Central and Eastern Europe is not only beneficial, but necessary. There is no place for talks of imperialism or colonialism. The USSR had proposed an alternative model to capitalism, not to imperialism – and it had lost the ideological battle for structuring society. Infusing the fSU with capitalist culture is thereby presented as the only viable option. To achieve this outlook, transitology takes on a number of assumptions that seek to show that the struggle between communism and capitalism is an aberrational moment in human history – unique, unprecedented, and ultimately ahistorical.


Frederick C. Barghoorn, Soviet Cultural Diplomacy Since Stalin, 17 RUSSIAN REVIEW 41, 45 (January 1958)(quoting from G.G. Karpov)(citation omitted). Cf. Roucek, supra note 40, at 1523. Here, the author notes that the Russian language was first introduced as a required subject in all non-Russian schools from the first grade up in 1938. This was justified on the basis that it was necessary to “esteem the powerful Russian nation and to be acquainted with its language in order to share its civilization.” Id. at 20. Likewise, Stalin’s spokesperson, David Zaslavsky, wrote that “[n]obody can regard himself as educated in the full sense and true sense of the word, if he does not understand Russian and cannot read the creations of the Russian mind in the original language.” Id. at 21. The author also cites a number of other Russian authorities voicing similar refrains. “Only by learning Russian and acquiring a higher Russian education can the native intellectual open the doors to the outer world. Russian culture performs for him the same function English culture once performed for the Indian, the French culture for the North African.” See R.E. Piper, The Soviet Impact on Central Asia, VI PROBLEMS OF COMMUNISM 2, 27-32 (March-April 1957). 43 See Zafar Imam, Soviet Treaties with Third World Countries, 35 SOVIET STUDIES 53 (January 1983). 44 Id. at 66-67. Published by The Berkeley Electronic Press, 2009


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In its more extreme forms, transitologists have taken to characterize communism as a disease, and in so doing, stressed the necessity of professionals to root its legacy from the region.45 This language is nothing new. One only has to return to the early 20th century legal scholar, James Lorimer, who characterized communism as “disease and decay” and “class government … [as] a violation of nature.”46 In similar language, Gonzalo Sanchez de Lozada, the former President of Bolivia, justifies radical market reforms in the fSU, saying: “[you must] operate before [the] patient dies … get the cancer out … stop the infection.”47 Or as Moises Naim, the former Minister of Trade and Industry in Venezuela, explained, “if [you] … suffer tuberculosis … [then you] need special medicine.”48 A more optimistic tone is taken by another market reformer, noting that the “disease of communism was easily curable.”49 Since communism was “illegitimate … [and] never truly valid,” transitology asserts that market reformers must look to the early 20th century for inspiration. Countries with “established historical memories of pre-communist golden past” must “resume” and “rediscover” these “normal times … after a half century’s interruption.”50 Communism is an interruption; the purpose of market reforms is to erase this “travesty of justice” at all costs.51 “Transitional reforms are expected to eliminate communist institutions and to revert to the status quo ante … communism was introduced in those countries,” to “set the stare at the beginning of transition.”52 The way forward is to “leave the entire soviet record to history” and instead create “a new scientific category” – a “process of rule creation” that is “experimental,” “innovative,” and run by those with the


In ancient Greece, the word ‘krisis’ signifies the turning point in a disease, the moment from one condition to another. We appreciate Giuseppe Mastruzzo for this observation. 46 See Lorimer, supra note 15. 47 Interview by Daniel A. Yergin & Joseph Stanislaw with Gonzalo Sanchez de Lozada, former President Bolivia, Up for Debate: Shock Therapy: Bolivia, Poland, Russia. Same PoliciesDifferent Results, available at (hereafter Lozada). 48 Interview by Daniel A. Yergin & Joseph Stanislaw with Moises Naim, Editor, Foreign Policy Magazine; former Venezuelan Minister of Industry and Trade, available at (hereafter Naim). 49 See Prokopijevic, supra note 7 (discussing the attitude of early shock therapists). 50 See Anastasia Nesvetailova, From ‘Transition’ to Dependent Development: The New Periphery of Global Financial Capitalism (2004), available at (quoting GRAY, J., FALSE DOWN: THE DELUSIONS OF GLOBAL CAPITALISM (Granta Books 1999)). 51 See Prokopijevic, supra note 49. 52 See Hoen, supra note 1; see also Prokopijevic, supra note 51.


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“expertise.”53 Here, we now turn to look at how some of these assumptions played out in more detail to efface the colonial dynamic in the wake of the fSU. Assumption No. 1: A Gentleman’s Quarrel A ‘gentlemen’s quarrel’ refers to the seemingly opposed ideological camps (though actually quite similar) that painted the landscape of transitology throughout much of the late 80s and 90s. In general, scholarship diverges into two camps of thought: shock therapists (“big bang theorists”) and gradualists (“evolutionists”). Conventional wisdom pits these two “market reformer” camps, the “liberal economists,” against each other, and more importantly, against the nomenklatura (the state bureaucrats, the “statists”) and the siloviki (former secret police and military officials) whereby actors may be evaluated. For instance, in a special April 5th, 2005 edition of the Financial Times, the author poses the question: “[is] Vladimir Putin a reforming modernizer or a typical ex-KGB man with instincts to match?”54 The shock therapists dominated the reform landscape in Central and Eastern Europe in the early 1990s. They consisted primarily of American “academic advisors, high-level officials of international institutions … [and] policymakers” – what John Williamson would label with the cynical title, the “Washington Consensus.”55 Additionally, a small cadre of young Russian economists infused with a neo-classical macroeconomic fervor had made inroads into government and other policy shaping roles during the latter half of the perestroika period.56 According the shock therapists, such as Poland’s former Deputy Prime Minister, Leszek Balcerowicz, salvation lay in applying “classical


See T.L. Karl & Phillipe Schmitter, From an Iron Curtain to a Paper Curtain of Concepts: Grounding Transitologists or Confining Students of Post-Communism, 54 SLAVIC REVIEW 177180 (1995). 54 Neil Buckley, Market Reformers and Former Spies, FINANCIAL TIMES, April 5, 2001 at A1 (discussing the Russian President’s moves over the last few years in evaluating his sympathies). 55 Marie Lavigne, Ten years of transition: a review article, PERGAMON COMMUNIST AND POST COMMUNIST STUDIES (2000), available at (book review)(citation omitted). 56 The head of the “Young Reformers” was a young economist named Yegor Gaidar who would later be infamously dubbed the “father of shock therapy” in Russia. In 1986, Gaidar secretly gathered a small cadre of young economists at a retreat dubbed “Zmeynaya Gora” (or Snake Hill) to meet and discuss how they might shape the future of Russia. Their understandings were significantly shaped by Paul Samuelson’s neo-classical economics textbook, as well as classical neoclassical authors like Friedman, Hayek, and Adam Smith. The group met consistently until 1991 when they gained access into the Gorbachev and Yeltsin administrations to officially become the “Young Reformers.” See Freeland, supra note 37, at 25-29. Published by The Berkeley Electronic Press, 2009


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solutions”57 whereby the fSU, as Jeffrey Sachs explained, might “leap to a market economy.”58 The program called for a distinctly neo-classical approach. The “general guiding force” of this “leap” was entrusted to “market forces” through a combination of measures, including: “radical liberation of prices and economic mechanisms,” “sharp reductions in state spending … especially in subsidies,” “trade liberation,” “rapid privatization” of state-owned assets, “macro-economic stabilization,” and the creation of a “legal environment for market activity.”59 This legal environment entailed law functioning primarily to establish a market which was “independent” of government intervention. In other words, change would be conducted first and foremost by and through “market forces;” the role of government “restrict[ed]” and “withdraw[n]” in areas such as “firm size, prices, land use, privatization” affecting “banks, firms, or universities.”60 Thus, while Chubais might lament in early 1994 that these market forces “steal, steal, and steal” and that it was “impossible to stop them,” he and other transitologists comforted themselves in the belief that Hayek had preached in the early half of the 20th century – that a “market economy [is] a precondition for a democratic society.” This zealous attitude toward the market allowed Chubais to conclude: “but let them steal and take their property … [t]hey will then become owners and decent administrators of this property.” The constant references to immediate and comprehensive reform – “rapid,” “leap,” “radical,” and “sharp” – are also replete in other cronies of shock therapy. According to Wyplosz, “[i]t has paid to start early and move fast” because the “success of transition depends above all on the rapid creation of conditions … conductive of a new … domestic and/or foreign … private sector.” 61 Balcerowicz posited their position clearly in relation to the gradualists: “[to] go slowly … [was] hopeless … condemned to failure.”62 For the shock therapists, there was no time to adopt more drawn out gradualist approach. Indeed, as Yegor Gaidar pronounced, the very “discussion of gradual reform … or [the] attempt to


Interview by Daniel A. Yergin & Joseph Stanislaw with Leszek Balcerowicz, former Deputy Prime Minister of Poland (1998)(hereafter Balcerowicz) (on file with authors). 58 Interview by Daniel A. Yergin & Joseph Stanislaw with Jeffrey Sachs, Harvard University Economics Professor (1998)(hereafter Sachs) (on file with authors). 59 Id.; see also, Hoen, supra note 1; Prokopijevic, supra note 7. 60 See Prokopijevic, supra note 7. 61 See Lavigne, supra note 55. 62 See Balcerowicz, supra note 57.


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construct the idea of gradual reform … in no way reflected reality.”63 Instead, reforms had to be “tough” and undergo an “immediate creation.”64 Without a moment to lose, shock therapists huddled over their “mysterious formulas”65 even before the USSR officially collapsed to design “comprehensive radical economic reforms … [to] undercut political resistance to restructuring.”66 Their attempts were marked by an almost absurd “can do spirit of fearless[ness]” (what the late British economist Peter Wiles referred to as “capitalist triumphalism”).67 For example, Jeffrey Sachs and David Lipton produced a specific timeline of policy reforms for Poland, “including the immediate removal of price controls and privatization of state enterprises,” in a single “all-night drafting session.”68 Indeed, contrary to the popular assertion that former Soviet elites are opposed to market reforms, it was these very elites who in fact “triggered” the “collapse of communism” in favor of a market economy because of the “opportunity to become part of a group of wealthy entrepreneurs.”69 Gaidar, the father of Russian shock therapy, confirms this in describing the attitude of the soviet elite in the years leading up to the early 1990s: “[the nomenklatura had long] been groping its way forward step by step … [going] for the scent of property as a predator goes for his loot … [content] to exchange power for property.”70 The financial opportunities were enormous as individuals among the top ranks of the military, bureaucracy and managerial sectors colluded together to acquire state assets. These groups bought up key resources at subsidized prices and then resold their holdings on international and domestic markets for immense 63

Interview by Daniel A. Yergin & Joseph Stanislaw with Yegor Gaidar, former Acting Prime Minister of Russia (1998)(arguing that the reality of the early 90’s was that everything - including political institutions and processes – was disintegrating rapidly)(hereafter Gaidar) (on file with authors). 64 See Balcerowicz, supra note 57; see also Gaidar, supra note 63. 65 See Theodore H. Von Laue, The World Revolution of Westernization, 20:2 THE HISTORY TEACHER 265 (Feb., 1987) (quoting Lord Lytton, viceroy of India from 1876-1880 describing that British governance and the rules of governance to indigenous peoples were “mysterious formulas of a foreign, and more or less uncongenial, system of administration” )(citation omitted). 66 See Cynthia Roberts & Thomas Sherlock, Bringing the Russian State Back in: Explanations of the Derailed Transition to Market Democracy, 31:4 COMPARATIVE POLITICS 477, 483 (July, 1999) (adopting an unapologetic shock therapy perspective of the reasons why Russia did not develop as anticipated, primarily that reforms did not go far enough). 67 See generally Rudolf L. Tokes, Transitology: Global Dreams and Post-Communist Realities, 2:10 CENTRAL EUROPE REVIEW 2 (2000). 68 See Robert Cole, The Evolution of Jeffrey Sachs (May 18, 2005), available at 69 See Hoen, supra note 1. 70 See Peter Reddaway, The Evolution of the Distribution of Political Power in Russia, 1990-2000, Project on Systemic Change and International Security in Russia and the New States of Eurasia, available at (quoting Yegor Gaidar)(citation omitted). Published by The Berkeley Electronic Press, 2009


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profits (hence, the 7 Bankers and a number of lesser oligarchs).71 Contrary to the “trickle-down” economic theories promoted by the Washington consensus – which theorized that these profits would then manage to diffuse themselves down through the societal food chain – the new entrepreneurs then shipped their profits out of the country, resulting in tens of billions of dollars of capital flight per annum.72 They bought up state assets in major industries and then augmented already tremendous profits by carrying out massive labor cuts, asset stripping, and diminishing worker rights.73 Western “experts” also reaped huge financial benefits assisting Central and Eastern European elites and multinational corporations in the transfer of state assets into private hands. The logic made sense. Capitalism had won the war against communism as the ideological framework for the distribution of wealth and the purpose and means of production. Communist countries, therefore, would center their reforms on economic restructuring, which in turn would require legal technicians as well to make these programs (and underlying assumptions) legal. Thus, reforms in the former soviet bloc required Western technocrats – primarily with economic and legal specialties. “[T]he West … didn’t want aid workers. It wanted a corps of corporate role models – consultants, bankers, and entrepreneurs – to clinch a friendly take over.”74 It was nothing new. The words of Ghana leader, Kwame Nkrumah, concerning neocolonial domination in the 1960s in Africa ring true for the former Soviet bloc in the 1990s: “foreign capital” is “used for exploitation,” “its economic and political systems … directed from the outside.” Thus, as the world entered into the 1990s, “Western advisors were traveling eastwards … to capitals in Central and Eastern Europe to help governments bury communism and build a democratic capitalist order.”75 71

Oil, for example, was sold in the early 1990s at only 1% its international market value. See Nesvetailova, supra note 50. This paper offers a particularly perceptive discussion on how Central and Eastern European economies have become subservient to foreign capitalist interests (though the author does not frame the discussion within the context of neo-colonialism or imperialist traditions, but rather dependency theory). For more on subsidized commodities being grabbed up by Soviet and foreign powers and sold for significantly marked up prices on the world market see also Freeland, supra note 37, at 37; Stiglitz, supra note 1 , at 142. 72 The amount of capital flight is staggering. In Russia alone, by 2001, the figure is estimated by the Financial Times to stand at 26.8 billion dollars. See Nesvetailova, supra note 50 (referring to a Financial Times article from 2002)(citation omitted). Informal estimates are much larger. 73 See generally GORDON B. SMITH, REFORMING THE RUSSIAN LEGAL SYSTEM 164165 (1996) (noting that the only people who accumulated considerable sums of personal savings tended to be “high ranking members of the party” or “state elite”). 74 See CHOMSKY, supra note 11, at 153 (quoting Barry Newman, “Disappearing Act: West Pledged Billions of Aid to Poland – Where Did It All Go?”, WALL STREET JOURNAL, Feb. 23, 1994). 75 See Hoen, supra note 1.


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Foreign assistance programs sprung up overnight, America assuming the position as “the largest player … with around 400 million dollars per year devoted” to building this new market regime.76 The new market regime was also backed by the arrival of the International Monetary Fund and World Bank, which insisted on the “strictly liberal policy” as “not just the best, but the only alternative.”77 These “visiting advisors and experts … quickly launched”78 a “process … authored mainly by the IMF, the World Bank and the EBRD,”79 which was, in turn, indirectly supported by American taxpayer dollars funneled through aid programs to Central and Eastern Europe. As the Wall Street Journal reported in 1994: “hordes of U.S. consultants … are gobbling up much of the U.S. aid pie” – the number somewhere “between 50-90% of the money in a given aid contract.”80 And what did not go to Western advisors [both gradualists and shock therapists] was often earmarked for other American capitalist and political interests. Again, the Wall Street Journal notes the “use [of U.S.] taxpayer funds to help American business expand in Russia” and points to a particular 1.2 billion dollar U.S. aid program meant for nuclear disarmament in Russia in which 754 million went directly to the Pentagon budget.81 The figures and paradoxes are endless.82 The gradualist, assuming a more prominent voice in the late 20th and early st 21 centuries, seized on the growing inequalities and local corruption that their peers’ efforts had (at least in part) produced. Thus, Gorbachev contrasted the failures of shock therapist strategies in the early 1990s with his version of reform, perestroika, which he saw as “reform … aimed at evolutionary change … creating infrastructure for market economies [and] … a legal base … for the market.”83 76

Thomas Carothers, Think Again: Democracy, Carnegie Endowment for International Peace (Summer 1997), available at; see also, Tokes, supra note 67 (noting that the “number of government agencies with newly funded democracy programs grew from 2-30 between 1989-1991” to become the “new democratization cottage industry,” and consisting primarily of “Washington think tanks, teams of university based policy consultants, neoliberal journals, congressional testimony and commissioned studies on foreign policy options and aid programs by U.S. democracy experts from academia [and] government”). 77 See Hoen, supra note 1; see also Anghie, supra note 7, at 624 (noting that the “science of colonial administration” became the “science of development” under IMF and WB management and control, which eluded “conventional legal techniques of accountability”). 78 See Prokopijevic, supra note 7. 79 See Nesvetailova, supra note 50. 80 CHOMSKY, supra note 11, at 153 (quoting Barry Newman, Disappearing Act: West Pledged Billions of Aid to Poland – Where Did It All Go?, WALL STREET JOURNAL, Feb. 23, 1994). 81 Id. 82 For a thorough documentation of the results and timeline of “transition” in the first half of the 1990s, see generally CLAUS OFFE, VARIETIES OF TRANSITION: THE EAST EUROPEAN EAST GERMAN EXPERIENCE (1996). 83 Interview by Daniel A. Yergin & Joseph Stanislaw with Mikhail Gorbachev, former Soviet General Secretary (1998)(hereafter Gorbachev) (on file with authors); see also How is Russia Bearing Up?, CHALLENGE (May-June 1992), available at Published by The Berkeley Electronic Press, 2009


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As Gorbachev’s words indicated, gradualists did not debate the value of pulling Central and Eastern Europe within the reach of western markets and foreign interests. For both gradualists and shock therapists that remained the purpose of the reforms – to facilitate the adoption of “market economies.” In the gradualists’ mindset, rather, what had been missing from shock therapy programs was the need for: 1) “sequential implementation” of market institutions (the “infrastructure for market economies”); and 2) legal conditions conducive to a competitive, non-corrupt “transition” process (“a legal base … for the market”). Gradualist arguments and other critiques of the reform policies in the early 90s, however, to the degree that they may actually be distinguished from shock therapy programs and implemented, have not resulted in a significant positive change in the everyday lives of people in Central and Eastern Europe – though you wouldn’t necessarily know it by listening to transitologists or Western political and economic leaders.84 In fact, the situation has remained dire. According to an early 21st century interview with Mikhail Gorbachev, “[t]wothirds of the people [still] live in poverty. We have a shorter span, greater mortality, the population is decreasing, industrial production is one half of what it used to be, scientific centers are being destroyed.”85 In December 1998, “[t]he Kremlin [still] owes several months of salaries to practically all state employees

Gorbachev’s words, however, must be taken with a grain (or perhaps a pound) of salt. During perestroika, more than half of all the legislation dealt with economic restructuring, which resulted in opening up Central and Eastern European economies to foreign investment and undermining workers’ rights and benefits (for instance, the Law on State Enterprises in 1987 shifted the responsibility of workers’ welfare – such as benefits, payroll, etc – from government to companies, which in turn were no longer subsidized so that many went bankrupt, its employees without any means). Gorbachev sought to reduce the power of the state, but only by positioning the government (and himself) as autonomous and invested with new authority and functions. He also legalized the secondary market (the black market)(Law on Co-operation 1988). Furthermore, it was under Gorbachev’s watch that the government proposed and attempted (of course, to failure) the 500 day plan. By reducing the functions of the state (and hence the organization and daily workings of the state) and allowing for private and often criminal interests free reign to buy up state assets over a very short period of time, it is difficult to take Gorbachev completely seriously when he attempts to separate perestroika from Yeltsin and his shock therapy programs in the early 1990s. As Prime Minister Thatcher infamously described Gorbachev to President Reagan, “[h]e is a man we can do business with.” See generally McCauley, supra note 34, at 9596 (2004)(providing a historical account of the Cold War through the Gorbachev years, including some discussion of various economic strategies). 84 See generally STEPHEN F. COHEN, FAILED CRUSADE: AMERICA AND THE TRAGEDY OF POST-COMMUNIST RUSSIA (2001) for a compelling argument that the “transition” in Russia is best seen as a “failed crusade” by America. He also quotes a number of politicians and scholars commenting (both positively and negatively) on the reforms in Russia. Id. at 3. 85 See Gorbachev, supra note 83.


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and retired people,” reported an editorial in the Argentinean daily La Prensa,.86 Also, after more than a decade of transition, “the foreign takeover of domestic capital assets at drastically discounted prices” in Eastern Europe, has led to “a proportion of foreign ownership, far surpassing typical level[s] in Western European economies” – in other words, “dysfunctional capitalism where capital is mostly foreign and labour is domestic.”87 Since 1991, much of the CIS countries have found themselves in the “worst peace time industrial depression of the 20th century.” They are dependent on foreign goods, especially food and medicine. There have been more new orphans in the last two decades than resulted from Russia’s almost 20 million casualties in the Second World War.88 Even among the most celebrated examples of economic recovery from the early transition period, vast inequalities exist to question the celebratory mood. Thus, in the same breath that the British newspaper, The Sunday Times, revels in the fact that a number of Central and Eastern European countries have joined the European Union and their economies have “boomed,” the article admits that this is largely due to direct foreign investment. As Stuart Richards of the Baring Emerging Europe investment trust explains: “Investment from overseas is likely to increase as more companies take advantage of a workforce that is educated, cheap and flexible.” Western firms will continue migrating to the former Soviet bloc where “[i]t costs as much to employ a Polish worker for a day as it does a German for an hour.” Flat taxes for personal and corporate incomes are the name of the game in Estonia, Lithuania, Latvia, Russia, Ukraine, Serbia, Slovakia, and Romania (Poland joining the club in 2008).89 As one author observes, the push for modernization and civil society has resulted in “markets flooded with foreign goods … monopolistic situations … privatization [leading to firms] often shut down … production reduced … [and] planning …. left largely to western operators,” while “transnational giants” destroy the “social and cultural cohesion in Central and Eastern Europe.”90 Just as the British 19th century colonial rule undermined Indian society through the forcible destruction of the textile industry, America has engaged Central and Eastern Europe in “large scale deindustrialization,” which has, at least, “partly returned [these countries] to pre-industrial social structures.”91 Or for a different spin, citing the same facts, Johan Depoortere, VRT TV correspondent, commented in the independent Catholic De Standaard in late 1998, “the United 86

See Russian Crisis, LA PRENSA (December 10, 1998), available at (permalink expired). 87 See Langer, supra note 1. 88 See COHEN, supra note 84, at 6-40. 89 See Kathryn Cooper, Eastern Europe eclipses the rest of the EU, THE SUNDAY TIMES (May 1, 2005). 90 See Nesvetailova, supra note 50. 91 Id. Published by The Berkeley Electronic Press, 2009


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States [has] put Russia on the place where it belongs: that of any Third World country.”92 For the most part, none of this talk entered into transitology’s discourse. The language remains staunchly ahistorical and economic in focus. In the late 1990s, the gradualists’ arguments for “sequential implementation” of market institutions and “a legal base … for the market” were brought together under the call by transitologists for “good governance,” which essentially sought to address the rampant problems with corruption (emerging most noticeably in Russia, but also elsewhere) and offer an explanation for why early market integration techniques had failed without scrapping the overall concept or changing who shaped the debate.93 Indeed, while this paper has discussed shock therapists and gradualists in a linear tortoise-overtakes-the-hare narrative, in fact, the two camps (as well as former Soviet elites) are strikingly similar in their methods and objectives, as well as sharing certain assumptions, which they hold as universal, neutral “truths.” As we saw in Part I, the idea of turning to economists and capitalist economics (neoclassical macroeconomics) to formulate the path to salvation was not original. Voltaire and the physiocrats asserted that “international salvation lay in free trade” and “the answer” rested in “a proper knowledge of economic principles.”94 Likewise, as Michel Foucault noted, the League of Nations’ Mandate system turned to the “science of political economy … [so that] the very essence of government … is to have as its main objective that which we are today accustomed to call ‘the economy.’”95 Stiglitz’s assertion that the “great debate” or “reforms” revolves around the speed of economic reforms once again conceives reforms (i.e., and closely related, progress and modernization) to be centered within the “single disciple of economics.”96 For transitologists, like Stiglitz, “good governance” is like the Mandate System’s “science of political economy,” in which the “very essence of government … its main objective” is through the application of economic, “mysterious formulas” (as Lord Lytton referred to them in the late 19th century in relation to British colonial rule in India). Thus, the arguments made by transitologists in the late 20th and early 21st centuries for “good governance” to bring Central and Eastern Europe out of 92

See Johan Depoortere, Russia Searching for Role in the World, De Standaard, December 23, 1998. 93 See Hoen, supra note 1 (pointing out that the failure of shock therapy programs led to a shift in the Washington consensus to the new mantra of “good governance”). 94 See F.S. Ruddy, International Law and the Enlightenment: Vattel and the 18th Century, 3 Int’l Lawyer 839, 851 (1939); see also generally F.S. Ruddy, supra note 1. 95 See Anghie, supra note 7, at 609 (quoting MICHEL FOUCAULT, Governmentality, in THE FOUCAULT EFFECT 87, 92, 101 (Graham Burchill et al. eds., 1991))(Anghie goes on to refer to this reduction of change to economic terms as the “economization” of government). 96 Id. at 616.


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communism should be placed next to the colonial concept of “effective” governance, and its emphasis on expanding capitalist markets and exploiting the resources of colonial territories under the guise of instilling civilization – all through the design of Western economists, as well as legal experts. Their role was similar to the function economists and other technocrats had played in the interwar period: they were the designers of reform, the “gardeners who erect the trellis [in other words, the institutions and legal conditions] upon which the espalier [market economy, as well as democracy] … develop.”97 The link between “good government” and progress, on the one hand, and the adoption of a neo-classical macroeconomic approach, on the other hand, is replete in transitology literature. For Balcerowicz, a shock therapist, change is equated with techniques of opening and conforming foreign economies to capitalist market norms: “since Poland wants to be part of Europe … [it] means taking on … [the] general guiding force of trade liberation, macroeconomic stability, [and] privatization,” which he adds are the “basic dimensions of change.” Another transitologist, this time a gradualist, expands on this “guiding force” of reform to note that it is “very tempting” to “tap into those orthodox models of political and economic change.”98 Still another transitologist asserts, “[the] drive to modernity” is linked to “creating a democracy, market economy, state, institutions and united civic nation.” For the author, modernity is “forward looking” in that it “seeks to emulate Western liberal democracies.” Also, Sachs emphasizes a similar point in arguing that “there really was a role model, and there remains a role model: the role model is the Western European economy … in its basic structures.” For Sachs, the emerging territories from the fSU must therefore “tap” into “orthodox models of political and economic change” to ensure they become “a normal part of the functioning markets in Europe.” In other words, the “return to Europe” is closely linked to the application of the “basic structures” of Europe’s economy – principally, a capitalist, neoclassical system.99 It was nothing new, civilization was against gauged by the degree territories could assimilate Western economic and political norms. Here, we see that while gradualists and shock therapists might debate the particular manner or variation of reform, they essentially adhered to the same principles. Balcerowicz makes exactly this point when he says, “[even though] you have to … have some technical discussions … the basic direction is clear …


See Berman, supra note 11, at 1888 (quoting Redslob who was referring more generally to the Allies’ role). 98 See Nicholas J. Lynn, Geography and Transition: Reconceptualizing Systematic Change in the Former Soviet Union, 58 SLAVIC REVIEW 824, 827 (1999). 99 See Sachs, supra note 58. Published by The Berkeley Electronic Press, 2009


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privatize [state ownership] … [and ensure] macroeconomic stabilization.”100 Or as John Marangos writes: The debate on transition had nothing to do with the goal, method, or ideology underpinning the transition process … [namely] the dominance of neoclassical economics … These elements had already been decided and imposed upon transition economies ... The debate on transition was restricted to the speed of the reforms.101 Even the speed of reforms was perhaps not as great a difference as transitology tends to present. While Stiglitz sees the “great debate over reform strategy” occurring between shock therapists and gradualists over the “pace of reform,” to a certain degree he contradicts himself only sentences later in relating a story from when he attended a seminar in Hungary: [O]ne participant said, “We must have rapid reform! It must be accomplished in five years.” Another said, “We should have gradual reform. It will take us five years.” 102 He concludes that the debate was actually not over the speed of reform so much as the manner of reform. In other words, shock therapists and gradualists, if they differ, do so in their focus on the need for institutions and a more multidisciplinary approach, rather than the actual speed of implementing various reform programs.103 Indeed, Stiglitz spends pages emphasizing the fact that early transitologists ignored the need to establish institutions alongside privatization schemes to ensure that corruption and insider trading would not result.104 Yet even this claim – that shock therapists and gradualists differ on the manner of reforms – is somewhat dubious as evidenced by Jeffrey Sachs’


See Balcerowicz, supra note 57. See John Marangos, A political economy approach to the neoclassical model of transition – New Perspectives on Transition Economics: Europe (January 2002), available at 102 See STIGLITZ, supra note 1, at 162. Professor Scott Newton once explained this as “[o]ne man’s shock therapy is another man’s gradualism.” 103 Id. at 138-139. 104 Id. at 160-162. Interestingly, he does not decry the role of foreign investment. To the contrary, Stiglitz sees the need for the rule of law to combat “mafia capitalism” and “anarchic theft” in order to allow a more “fair” playing field conducive to the entrance of foreign markets. 101


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comments to an interviewer approximately ten years after reforms were first implemented in Poland: [the] idea of reform … [is to] make the economy open for international trade … [and] change the role of government so that government would help to regulate and create the rules of the game … fiscal reform … [and ] a legal setting which provides the rules, and, again, opens the economy to international trade and getting private investment going.105 For shock therapists, such as Jeffrey Sachs, the government was instrumental in the reform process. Indeed, Sachs tells us that “I never picked the phrase ‘shock therapy,’ and I have to say don’t much like it.” Sachs continues on to explain why. “It sounds a lot more painful in a way than what it was.” For Sachs, while some elements of reform should be implemented “very quickly,” in general, reform must be “not something you do in a day or a week, but something that [happens] in the course of a few years of hard work and a lot of politics and a lot of political and institutional change.”106 The father of Western shock therapy suddenly does not appear so different than his gradualist counterparts – change takes “years,” requiring “a lot of political and institutional change.” In similar fashion, Stiglitz does not appear so different from his shock therapist peers. As he admits in 1999, “I have no great quarrel with shock therapy as a measure to quickly reset expectations.”107 Other gradualists have also jumped on the bandwagon of soft criticism. “Transitology requires guidance … [from] the state,” notes one author, only to qualify the statement a moment later, writing, “but it has proved increasingly useless and even damaging as their economies evolved.”108 The author takes a similar approach to Stiglitz, stating that it is only realistic “to expect … [that] market operations … can emerge quickly and successfully … [if the] rule of law … [and] market institutions [are present].”109 Likewise, Gorbachev reveals that “[i]n some countries [shock 105

See Sachs, supra note 58. Sachs has appeared to move away to some degree from his earlier adherence to pure neo-classical economics rapidly injected into an economy as a total answer. In this article, however, Sachs justifies his early positions and argues that they worked. Thus, the statement concerning the need for government should not be understood as a new understanding for Sachs, but a clarification on the contours of “shock therapy.” 106 Id. 107 See Lavigne, supra note 55 (quoting Stiglitz, but not specifying from which of a number of cited sources by Stiglitz she drew the quote). 108 See Prokopijevic, supra note 7. 109 Id. Published by The Berkeley Electronic Press, 2009


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therapy] is possible and necessary.”110 For gradualists, there is no actual debate over the ultimate direction or speed of the reforms so long as necessary “market institutions” are in place. For shock therapists, there is no denial of the need for the rule of law and institutions so long as it develops briskly to ensure that reforms are carried through. The arguments are essentially the flip sides of the same coin – both look to applying neo-classical economic principles to structure reforms and measure progress. As Hernando de Soto writes, “[c]apitalist stands alone as the only feasible way rationally to organize a modern economy … no responsible nation has a choice.” As a result, “with varying degrees of enthusiasm [or lack of enthusiasm], third world and former communist nations have balanced their budgets, cut subsidies, welcomed foreign investment and dropped their tariff barriers.”111 Conversely, and essential to our understanding of how the ideological logic of informal empire maintained its grasp, human welfare is kept outside of the mix or only included to bolster an argument for tweaking economic restructuring this way or that. Indeed, social costs are ignored (the indirect result of reformist fetishism with economics and law as autonomous and distinct from any other inquiry, such as social cost)112 or treated with an almost callous indifference. For instance, while transitologist Claus Offe recognizes that shock therapy has been “painful” and a “nightmare scenario” for average Russian citizens, he exhorts them to continue the “task of patient waiting.” They must be willing to “quickly adapt themselves to the new circumstances and then be ready to wait for a long time for the fruits of this adaptation.” The people must “not interfere” with the “creative destruction” of reforms, and “hold fast, in spite of commonly available evidence to the contrary … that the shock will be a therapeutic one.” He advocates that the masses in Central and Eastern Europe wait two generations, and “three in the case of the Soviet Union” for things to get better. If the people cannot wait and insist on “making use of their newly won civil rights,” it is due to a “mixture of fear, resentment, and envy.” For Mr. Offe, this “patience” is the hallmark of “civilized behavior” – in other words, civilization means adhering indefinitely to the interests of local elites and Western business.113 Here is the catch of imperialism at its heart, the moment it lays out its forced choice: capitalist reform is asserted as the only path to greater human 110

See Gorbachev, supra note 83. See HERNANDO DE SOTO, MYSTERY OF CAPITAL: WHY CAPITALISM TRIUMPHS IN THE WEST AND FAILS EVERYWHERE ELSE 1 (2000)(noting that these reforms have been largely “repaid with bitter disappointment” and resulted in “cruelty of markets, wariness towards capitalism, and dangers of instability”). 112 See Scott Newton, Transplantation and Transition: Legality and Legitimacy in the Kazakhstani Legislative Process, in GALLIGAN, D. & KURKCHIYAN, M. (eds.), LAW AND INFORMAL PRACTICES: THE POST-COMMUNIST EXPERIENCE 151-170 (2003). 113 See Offe, supra note 82, at 44-47. 111


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welfare, but the payoff must always be deferred and if other models are presented as offering quicker or more sustainable alternatives, they must be immediately suppressed. Assumption No. 2: Transition to a Market Economy Was Spontaneous and Democratic in Character A commonly repeated trope in transitology literature is that the fall of the Soviet Union and the subsequent changes were both spontaneous and democratic. It is often stated that reforms “broke out unexpectedly” or were largely “unguided,” that they lacked a “theoretical character.”114 As Katherine Verdery asks in typical fashion, “[W]ho could have foreseen that with Mikhail Gorbachev’s resignation speech of 25 December, 1991 so mighty an empire would simply vanish?”115 Of course, the signs were there. It was not that no one looked,116 there was just no reason to acknowledge it. Transitology was the language of the victors and those that stood to profit in Central and Eastern Europe. Democracy became as much a tool for buying a voice in policy making as it was for dismantling communism in the interests of the people. Indeed, when push came to shove, the interests of Western business and former Soviet elites trumped any democratic vision. As Thomas Carothers, in an article for the Carnegie Endowment of International Peace, explains: [t]he truth lies in the middle – a bit dull, but this is ultimately where it belongs. Under Presidents George Bush and Bill Clinton, democracy promotion has been one of America’s main foreign policy goals, alongside global economic and strategic interests. Often democracy complements those other interests, in which case the United States supports it. Sometimes democracy conflicts with those interests, in which case it is essentially ignored. And many times U.S. policy toward a particular region or country is full of mutually conflicting threads … In those cases we muddle through and explain to our confused foreign


Id. at 29-31. See Verdery, supra note 5, at 19 (calling the fall of the USSR “startling”). 116 See Robert V. Daniels, Does the Present Change the Past, 70:2 THE JOURNAL HISTORY 431 (June, 1998). 115

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partners, ‘What democracy.117






Democracy in Central and Eastern Europe, then, is not about selfrepresentation or real determination; rather, it is a function of capitalism – a tool by which American informal empire expands and legitimizes itself. By arguing the “transition” was a product of the masses, market reformers could wipe their hands clean of any failure.118 At worst, they became naïve or merely too eager to help the oppressed hordes. In short, it gave the actual participants an escape plan while at the same moment legitimizing their involvement. As one newspaper argued, “Russians must solve their own problems because they have created them.”119 The U.S. message is clear, notes another newspaper, “Russia’s problems” and “solutions lie with the Russians.”120 In fact, as the last decade of the 20th century wore on, people grew increasingly hostile to the market regime. In 1993, for instance, 60% of the voting public cast ballots opposing the government, with less than 25% of votes in favor of the government remaining in power.121 Further evidence that there was never an “universal … revulsion” to “the past 75 years,” as Yegor Gaidar had stated in a recent interview, a poll conducted in 1995 found that only 1.1% of Russians characterized the economic situation as better off, while more than half felt that things were “a lot worse.” These sentiments were not restricted to Russia either. In Poland, more than 25.9% described their economic condition as “a lot worse”; in Bulgaria, 34.1%. Likewise, satisfaction with democracy boasted equally dismal numbers: In Poland, more than a quarter were “not at all” satisfied; in Hungary, 34.6%; in Russia, 52.2%. Also, while only 2.4% of Americans polled said their families were now much worse off, families in Central and Eastern Europe had very different ideas as 27.3% in Russia, and 18.4% in Poland claimed their families were suffering in much worse situations.122 117

See Carothers, supra note 76. See generally, SCOTT VEICH, LAW AND IRRESPONSIBILITY: ON THE LEGITIMIZATION OF HUMAN SUFFERING (2007). 119 See Editorial, Russians Must Solve Their Own Problems, JYLLANDS-POSTEN (December 4, 1998); for a good survey of popular press opinion regarding the fate of Russia’s transition, particularly following the 1998 default, see the review article Russia in Dire Straits; Searching for Role in World, available at 120 See Olli Kivinen, The Changing U.S. Policy Towards Russia, HELSINGIN SANOMAT (December 3, 1998). 121 See Reddaway, supra note 70. 122 See Andras Sajo, Imaginary Westernization of Legal Representations: Lessons from a Comparative Study, Reseau European Droit et Society (Individuals’ Attitudes Toward the Law: An International Comparative Research Project), available at kourilski/kourilski.htm. 118


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Yeltsin and his market reformers had never enjoyed more than 35-40% support from the Supreme Court deputies.123 It was hard to take Yeltsin seriously. He had disbanded Parliament in 1993 and banned the communists after the August coup, which had been the “backbone of the country’s administrative system.”124 As the economy destabilized (rampant inflation, unemployment, and escalating prices for basic consumer goods), Yeltsin and his cohorts followed the advice of market reformers and international lending agencies to liquidate industry and cut state subsidies to industrial workers, farmers, universities, and trade unions – all things that needed to be preserved if people were to have a real chance at weather the reform momentum.125 At the same moment, the power of the state was augmented in 1993 by a new constitution “rammed” through with a “minimum of public discussion, using a referendum held simultaneously with parliamentary elections … containing falsifications.”126 Those who became rich were few and very visible – primarily “a few thousand … nomenklatura, komosol, and mafia elements” who “quietly appropriate[ed] state assets.” In contrast, more than 75 million people throughout Central and Eastern Europe fell into poverty. Not surprisingly, in the months leading up to the 1996 election, enormous dissatisfaction towards market reforms resulted in Yeltsin support sinking to less than 6%.127 Yeltsin, of course, still was elected. This was achieved through massive contributions from the American government, its international lending agencies, and the oligarchs.128 Utilizing their media and cash resources, the oligarchs funneled hundreds of millions of dollars into Yeltsin’s campaign, “exceeding … maximum campaign expenditures by some two to three hundred times.”129 False news reports were broadcasted on oligarch-controlled radio and television. A prorock video tape was produced, Western marketing agencies brought in to pitch Yeltsin through pamphlets and other materials, and American politicians like


See Reddaway, supra note 70. Id. 125 See Lynn, supra note 98, at 833 (noting that “the World Bank, the International Monetary Fund, and a host of non-government organizations” were brought in to “guide the change from autocratic to democratic regimes” according to “orthodox models of political and economic change”); see also Nesvetailova, supra note 50 (discussing the significant role of international financial institutions and policy advisors in putting the ruling elite in power and fashioning reforms); Barry Wood, IMF / Russia, USIS Washington File, December 17, 1999, available at (describing IMF loan conditions to include that companies be liquidated instead of restructured by insiders). 126 See Reddaway, supra note 70. 127 Id. 128 For a thorough account see Freeland, supra note 37, at 191-280; see also Reddaway, supra note 70. 129 See Freeland, supra note 37, at 191-280; see also Reddaway, supra note 70. 124

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former President Bill Clinton provided vocal support for the market reformers’ regime.130 The Young Reformers asked directly for American aid and imported Western advisors and entrepreneurs over to guide the reforms. America happily obliged. Countries in the former Soviet bloc took on massive loan packages – “western aid programs and ‘know-how’ funds” - which “paid for western academics to provide technical assistance.”131 In 1997 alone, for instance, approximately 4.2 billion pounds were spent on Western consultants.132 In short, “technical experts … impos[ed] their program of change from above … isolated from popular opinion.”133 Yeltsin repaid his debts after garnishing victory. To appease international lending agencies and foreign investment, Yeltsin’s administration used workers’ pay to reduce the budget deficit, as well as boost tax collections and liberalize economic activity.134 Loans taken from the IMF, World Bank and other American sources of capital were agreed to be invested in Western goods and advisors – from 50 to 90% of the money.135 The oligarchs were also not forgotten. The shares for loans came due and a handful of wealthy bankers and business tycoons reaped cataclysmic profits: Gusinsky augmented his media empire with the acquisition of MediaMost; Smolensky’s banking business grew with his purchase of SBS Agro; Berezovsky gained control over television in grabbing Ort. Moreover, oligarchs Berezovsky and Potanin assumed government


See Freeland, supra note 37, at 191-280. See Lynn, supra note 98, at 833 (stating that “in the early stages of the transition process, neoliberal approaches dominated both policy and conceptual frameworks of transition”). 132 Id. 133 Id. 134 See Freeland, supra note 37, at 99 (noting that IMF demanded that Russia close loops in reform procedures); see also Stiglitz, supra note 1, at 133-162; Wood, supra note195, at; see generally Peter Heinlein, Russia / IMF, USIS Washington File, March 29, 1999, available at (quoting communist party chief Gennady Zyuganov that the IMF was “setting unrealistic conditions” for the loans); Worldnet with USDA Official on Food Aid for Russia, USIS Washington File, Jan. 11, 1999, available at (quoting Christopher Goldthwait, general sales manager of the Foreign Agricultural Service of the U.S. Department of Agriculture, that in providing since “Russian people are greatly in need of … food due to the shortfall in production over the 1998 drought-ridden summer and the financial crisis in their country which prevents their purchase of what little food is available,” the American government would send excess grain by American farmers but expect it to be: 1) paid back with interest, 2) subject to no import duties, 3) sold at regular, rather than discounted prices, and 4) managed by U.S. companies and experts). 135 See Chomsky, supra note 11, at 154 (citing John Fialka, Helping Ourselves: U.S. Aid to Russia Is Quite a Windfall – For U.S. Consultants, WALL STREET JOURNAL (Feb. 24, 1993))(noting also that American aid in the amount of 21 billion dollars required that half go to Western advisors and goods, but citation omitted). 131


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posts.136 One perhaps unlikely beneficiary of the “return to Europe” was the Russian Orthodox Church, which by 1996 had received the right to import alcohol and cigarettes duty free, and possessed the right to sell Russian oil abroad as a “special exporter.”137 Even the Young Reformers profited by augmenting their salaries of 500 dollars per month with sizeable cash advancements on unwritten books. As Nemtsov, a market reformer in Russia, commented in July 1997 (shortly before the big crash that would send the CIS countries into a bigger depression than the one felt by America in the 1930s): up until that point, “the period of initial capital” was accompanied by “corruption, lobbyism and so forth … [but] now, at last, we are reaping the rewards for our hard work.”138 Democracy was also kept from the people by the inherent logic of the market reformers’ programs. The ultimate idea behind transitology is that capitalism is the only answer to communism. Capitalism is understood in its most stripped down essence as the idea that market forces may act unfettered by government involvement. As Sachs explained, the “idea of reform” was to “change the role of government so that government would help to regulate and create rules of the game … allowing private business to operate … [especially] international trade.”139 In other words, the state acts to facilitate and augment the role of market forces. The state, however, is the means by which a people’s will is determined, not market forces – let alone foreign market institutions and interests. In reducing the role of the state, transitologists transferred “its economic functions to private investment and its welfare functions to the market.”140 In the name of democracy, people in Central and Eastern Europe lost their ability to exercise any meaningful democracy. It didn’t matter, therefore, what the populations preferred. The international legal order had returned to its past for inspiration, offering again the forced choice of informal empire. To quote the language of the Berlin Treaty, transitologists would “watch over” and “care for the improvement of the conditions of [the Central and Eastern European people’s] material and moral wellbeing.”141 Thus, there would be no alternative model despite the fact that, as The Economist recorded, by 1993 approximately “70% of the population” believed that the “state should provide a place of work,” as well as a “national health service, housing, education, and other services.” Nor would it make a 136

See Freeland, supra note 37, at 191-280; see also Reddaway, supra note 70. Id. at 99. 138 Id. at 347 (quoting Nemtsov from an interview)(citation omitted). 139 See Sachs, supra note 58. 140 Cf. Lavigne, supra note 55 (stating in her book review that the “sooner the government becomes small, the sooner the market can begin to rise and expand”). 141 See Berman, supra note 18, at 1541 (quoting General Act of the Conference of Berlin, Feb. 26, 1885, reprinted in ARTHUR BERRIEDALE KEITH, THE BELGIAN CONGO AND THE BERLIN 302, 302-304 (1919)). 137

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difference that, according to The Financial Times, “Russians are … hankering after the old political system.” Similarly, while privatization is asserted as fundamental to any market reform strategy, a 1990 survey found that only 13% of workers supported private ownership of their enterprises.142 As Baron Biefeld had asserted in the 18th century concerning colonial politics: In matters of politics one must not be deceived by speculative ideas which common people form of justice, equity, moderation, candor, and the other virtues of nations and their leaders. In the end everything is reduced to force.143 In the 21st century context of CEE, the “everything” that “is reduced to force” is nothing less than the entire culture – economic, political, cultural, social – of the fSU; the reduction to force is nothing but the process of “economic rationalism” by which market forces are the centerpiece of reform. Assumption No. 3: The Transition Has Been Relatively Non-Violent The fact that this “process of rule creation” is non-violent is often asserted in bolstering the legitimacy of market reformers – implicitly positing they enjoy wide support, are beneficial for society, and unique from most other “revolutionary” transitions.144 Yet, violence seems to factor repeatedly through the story. Nor do we need to point to more subtle or indirect forms of violence, such as the fact that weapons are now the third largest export item for Russia, following oil and natural gas or the various effects of economic warfare waged on the masses in the interests of foreign capital and former soviet elites.145 Transitologists seem to see the August 1993 coup where tank brigades rolled down the streets or how armed groups in the early 1990s ousted a Georgian president elected by 87% of the popular vote as moments of democracy, of victory – not unrest, uncertainty, or violence. The reoccurring Chechnya conflict – the tensions a direct result of the implosion of the Soviet empire and the fervor 142

See Chomsky, supra note 11, at 152 (citing The Economist, March 13, 1993; Andrew Hill, Financial Times, February 25, 1993). 143 See Ruddy, supra note 94, at 846 (citing ALBERT SOREL, EUROPE UNDER THE OLD REGIME 17 (F.H.Herrick, trans. 1947)). 144 Id. at 181. 145 See Naito, Amid Economic Crisis, Russian Arms Sales Up, Sankei, January 5, 1999. Indeed, this fact is also illuminative in understanding Russia’s economic turnaround over the last four years. It is primarily based on exporting its raw materials, specifically oil and natural gas (as well as a greater percentage of Russian people no longer spending money on foreign imports since their savings have been completely wiped out).


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throughout the republics and territories for ethnic self-determination (encouraged by the West) - also seems to escape the radar of transitologists, even though tens of thousands have died (including more than 300 Russians in the apartment bombings which sparked a second mobilization against Chechnya’s people).146 Likewise, the civil wars in Tajikistan are seldom mentioned, nor that, in Romania, Nicolae and Elena Ceausesau were tried and shot on Christmas day, 1989.147 The civil war in Moldova and the resulting stalemate over Transdnestria or the Azeri/Armenian conflict in Nagorno-Karabakh region are viewed as exceptions. The breakaway territories of Abkhazia and South Ossetia are seen as internal, or at least until August 2008, “frozen” conflicts. Indeed, while transitologists speak fondly of Gorbachev and his misguided but supposedly sincere perestroika reforms, almost no words are spent remembering that Moscow troops stormed radio and television centers in Lithuania leaving thirteen dead in January, 1991.148 Likewise, ethnic conflicts are also more often than not simply left out of the transitology narrative when it comes to establishing the ultimate legitimacy of market reforms even though, as one group of Russian experts have asserted, “from 1988 through 1991, more than 150 different ethnic conflicts took place in the Soviet Union … 20 of which caused human casualties.”149 Again, the literature discounts the 1992 Abkhaz conflict, the Transdnestrain conflict in Moldova, the violence in Osh, the inter-ethnic tensions in Kazakhstan, and so on. According to official police statistics from this period, “at least 1,314 people lost their lives and 12,750 people were injured in interethnic conflicts in the Soviet Union”, and more than “seven hundred thousand people were forced to flee their homes, and property destruction from these conflicts cost tens of billions of rubbles.”150 As one author notes, “ethnic nationalism … became vehicles for garnering the residues of economic and political power.” These “undeclared wars” over the “chance of eventual inclusion in Western community of wealth,” which resulted in the logic of “thwart[ing] all efforts to redistribute funds to the advantage of less developed regions,” were thus directly related to the dissolution of the Soviet system and the subsequent reform programs. 151 In fact, the collapse of the fSU 146

See Reddaway, supra note 70. See MCCAULEY, supra note 34, at 74. 148 Id. at 94-96. 149 See MARK R. BEISSINGER, NATIONALIST MOBILIZATION AND THE COLLAPSE OF THE SOVIET STATE 273 (2002)(citing Nezavisimaia Gazeta, January 10, 1992, at A5). We appreciate Akbar Rasulov’s guidance in pointing out the breadth of violence that was occurring. 150 Id. at 275. 151 See Nesvetailova, supra note 50. Nationality is sometimes presented to address, on the one hand, problems at least partially due to “various ethnic and religious clevages;” but on the other hand, “national identity and nationalism [act as] … a positive force in support of breaking with the Soviet past and promoting political and economic reforms, in order to [as Jeffrey Sachs had also 147

Published by The Berkeley Electronic Press, 2009


Global Jurist, Vol. 9 [2009], Iss. 2 (Topics), Art. 7

“accelerated … nationalist violence … even more dramatically” as the number of deaths from civil conflicts escalated to “somewhere between one hundred and two hundred thousand.”152 The bodies were often found “mutilated,” the victims “tortured, taunted, and humiliated before being murdered … [t]he acts … demonstrate[ing] authority over boundaries through domination over bodies and the utter humiliation this produces.”153 Conclusion: Demand the Impossible! We have attempted to reflect on the general tendency within transitology literature to reduce the story of the former Soviet Union to a simple dichotomy of capitalism versus communism whereby failed reforms are chalked up to a failed political legacy or simply the inability of the populations to assume the weight of freedom that is said to come with democracy. Yet, this projection of chaos onto the past has fostered a growing attitude of cynicism and ambivalence that can result in dangerous and tragic misunderstandings. On the one hand, the technocratic attitude towards reform distances professionals from the outcomes of their experimentation. We do not take responsibility for our acts. If the actual living standard of people has deteriorated, the argument goes at least foreign direct investment remains strong. On the other hand, the resort to institutional formulas – the rule of law, democracy, good governance, transparency, a market economy, national self-determination, and so on – does not seem safe-proof from manipulation by powerful political actors, liberal declarations of universal rights serving particular agendas (as seen for example in the experience of privatization). Liberal pragmatism remains political, institutions and technical pursuits advancing a certain “universal” that may itself be a tool of oppression and chaos as much as it could potentially lend answers to the harsh realities of Central and Eastern Europe. If the fall of the fSU meant ‘freedom’, the question remains: freedom for whom, and to do what? On a more fundamental level, the resort to a capitalist-communist metanarrative suggests that the liberal cosmopolitan scheme is somehow ‘natural’, a fundamental and objective fact of international existence. In this way, it becomes a sort of apology or denial of its past; asserted as a priori it obliterates its own historically embedded constellation and allows old practices a veneer of progress: informal empire becomes market reform, the colonial administrator becomes the liberal technocrat. Beneath these shifting identities, technocrats with economic put it] “return to Europe.” Thus, “[nationalism is] forward looking … an instrumental force pushing for change and reform … [and] opposes the Sovietophile … an unavoidable consequence of the drive to modernity.” 152 See BEISSINGER, supra note 149, at 294. 153 Id.


Haskell and Mamlyuk: Revisiting "Transitology" as Colonialism

and legal specializations primarily functioned to establish conditions for economic domination over the populations by local elites and foreign powers— the Hubble Marines of the 21st century’s informal empire. However, revisiting ‘transitology’ through the narrative of informal empire, we hope to articulate a feeling that it is not the time for cynicism or despair for those of us who have the social capital to speak. We believe that the legacy of the fSU is not only one of tragedy, but a space that holds out an emancipatory potential. Of course, the Soviet experience was in many respects an abysmal failure – the Stalinist terror, cultural arrogance, ruthless population transfers and human degradation in the thrust to industrialize – and there is simply no way to extract a ‘pure’ kernel, a moment before the serpent entered the garden of Marxist communism. In fact, the supposed antithesis between communism and capitalism is less pronounced than it is often made to appear as both systems bought into the ideological fantasy of unleashed, self-enhancing productivity as the way forward. In fact, it is exactly their compatibility in many respects that helps to explain how populations went along with the ‘reform’ efforts over the last few decades. If imperialism served the interests primarily of Western consumer culture and local elites, it was only possible because the populations allowed it: there was no predetermined guarantee that a capitalist imperialism would be triumphant at any moment. Yet, it is exactly in this failure that we believe may lay a window to see through the current global capitalist order that encircles us today. The results in the fSU are not the failure of democracy and capitalist enterprise, but its inevitable hidden logic brought to light: the dark sides and bureaucratic suppression that are required to maintain our professed ‘tolerant’ antitotalitarianism, and the vast inequality and unsustainable environments that occupy the endless capitalist ambition of accumulation and production. Capitalism is not something that may be challenged at some deferred future moment; it is always already collapsed, always fragile, always prone to shocks, always calling upon us to assume responsibility and take power to be entrepreneurs, to step into the breaches and to demand the impossible.154 In exact contrast to the supposedly postmodern thought that dominates progressive (and/or liberal) thinking today, with its ‘incessant reflection’ on the impossibility of miracles and true revolutionary change, we see exactly in these ‘failures’ the emancipatory Marxist challenge professed by Lenin: that not only is there no neutral position, but that there are alternatives to our supposedly forced choices. In short, it is the very impossibility of a completely different political reality that opens the space for us to demand its enunciation now. 154