The wild east: life in the high-rise jungle of urban post-communism is not for the faint-hearted. Richard Swift takes the measure of a new capitalism—that's all shock and no therapy

New Internationalist, April, 2004 by Richard Swift

THEY are mostly apartment-dwellers, these sceptical survivors who have lived for decades under communism. If you are lucky enough to be invited into their homes, their hospitality is exemplary. Scarce food and drink flow with unparalleled generosity. While they have memories and often connections back to a village somewhere, their life and fate these days is decidedly urban.

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Housing is a huge problem for them. Overcrowding is the norm. Privacy is at a premium. Whoever can buy an apartment, does so. For most, a single-family dwelling is inconceivable. Young marrieds have to stay with their family--maybe even share a room with a sibling or two. But at its best there is a warmth and cosiness to this kind of apartment living. It could be in an older downtown building with some residual charm. More likely it is in some kind of Soviet-era monstrosity on the outskirts of town. Whether in an Eastern European city like Sofia or the capital of a former Soviet republic like Tashkent--whether in the architectural wonder of Lviv in the western Ukraine or Tbilisi in the far reaches of the Georgian Caucasus--post-communist people are taking great care and pride 'doing up' their often cramped home interiors.

Meanwhile, the public realm outside their doors often festers with neglect. Corridors, elevators and stairwells are festooned with garbage and graffiti. Social certainties like guaranteed apartments are simply disappearing. So too are secure jobs, pensions, free (if inadequate) education and healthcare, affordable (if uninspiring) food, access to recreation. Post-communist economies are being 'reformed': marketized and privatized in ways suggested by Western consultants paid for by the World Bank or USAID.

This destruction is intended. The views of just one US economist sums up the Washington Consensus: 'Any reform must be disruptive on an historically unprecedented scale. An entire world must be discarded, including all its economic and most of its social and political institutions.' (1) The aim is to create Middle America on the Volga. 'From each according to their ability, to each according to their need' gives way to 'if you can't make money from it, then don't do it'.

Not that most people were happy with communism. But with communism's collapse, they were promised more democracy. Instead they are getting political bosses and fixed elections. If the economy had to be reformed, they wanted more opportunity. Instead they are getting oligarchy and corruption.

The champions of the unfettered market call it 'creative destruction', a phrase that comes from the conservative economic historian Joseph Schumpeter who saw it as 'the essential fact about capitalism.' (2) And for the people in what used to be the communist world there has been destruction aplenty. Destruction of jobs. Destruction of living standards. Destruction of entire industries. Destruction of health. Destruction of lives.

Life expectancy is down. Suicides are up. So are alcoholism, drug abuse, prostitution and crime as people try desperately to cope. The severity of this crisis varies. The formerly communist countries of Eastern Europe and the tiny Baltic republics seem to have coped best with the changes. But even here (see the articles on Hungary and Romania) people are scrambling just to survive.

Economic shock therapy

Hardest hit have been most of the countries that used to make up the Union of Soviet Socialist Republics (USSR). Outside the glitzy downtowns of cities like St Petersburg, Kiev or Yerevan where the few prosperous New Russians, New Ukrainians or New Armenians gather, poverty has reached staggering proportions. Between 1990 and 1999 the number of people living on two dollars a day or less more than tripled. (3) Back in 1989, 14 million people in the USSR lived in poverty. Nine years later the number had skyrocketed to 147 million. This region has undergone a depression and demodernization unprecedented in peacetime over the last century. One Russian scholar estimates the destruction to be equivalent to a 'medium-level nuclear attack'. (1)

The creative part of this 'creative destruction' is a bit more elusive. Certainly it takes a certain creativity to survive as an entire way of life gives way under your feet--as all that is solid melts. But creativity in the sense that Schumpeter meant--the profit in the market ledger--has in this part of the post-communist world been, by and large, an export industry. A lot of the loot from entrepreneurial pillage is now stored in offshore bank accounts or invested in villas in locations like the French Riviera. Two billion dollars a month was spirited out of Russia alone under the corrupt Yeltsin regime. Even the capital that stays in the post-communist world is mostly devoted to speculative purposes or high-end retail--night clubs, fancy cafes, glitzy shops beyond the imagination of most people. Russians were so disgusted with the corruption and chaos under Yeltsin that, for some at least, the autocratic order of Putin and his new cabinet comes as a relief.