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After the Rain

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After the Rain

How the West

Lost the East



1st EDITION






Sam Vaknin, Ph.D.






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Lidija Rangelovska






Lidija Rangelovska

A Narcissus Publications Imprint, Skopje 2001


Published in association with Central Europe Review and

Central and East European New Media Initiative















(c) 2000 Copyright Lidija Rangelovska.

All rights reserved. This book, or any part thereof, may not be used or
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ISBN: 9989-929-07-6

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Created by: LIDIJA RANGELOVSKA

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C O N T E N T S






I n t r o d u c t i o n


The P E O P L E


The Author of this Article is a Racist

The Cavemen and the Alien

Is Transition Possible?

Can Socialist Professors of Economics Teach Capitalism?

The Poets and the Eclipse

The Rip van Winkle Institutions

Inside, Outside - Diasporas and Modern States

The Magla Vocables

The Elders of Zion

The Last Family

Rasputin in Transition

The Honorary Academic

Quis Custodiet Ipsos Custodes?

Who is Guarding the Guards?

Herzl's Butlers

The Phlegm and the Anima

An Impressionistic Canvass

The Dance of Jael

Homo Balkanus

The MinMaj Rule

The Balkans between Omerta and Vendetta

On the Criminality of Transition

The Myth of Great Albania

The Bad Blood of Kosovo

The Plight of the Kosovar

The Black Birds of Kosova

The Onset of Cultural Imperialism

The Defrosted War

Russia's Role in a Brave, New World

The Bones of the Grenadier

Endgame in the Balkans

Millenarian Thoughts about Kosovo

NATO's Next War

Why did Milosevic Surrender?

The Deadly Antlers

NATO, the EU and the New Kids on the Block

The Treasure Trove of Kosovo

Lucky Macedonia or Macedonia's Serendipity

The Good Fortune of Neighbouring a Human Catastrophe

Black Magic, White Magic - Managing our Future

The Friendly Club

The Books of the Damned

The PCM Trail

The Mind of Darkness


The E C O N O M Y


Central Europe - The New Colonies

New Paradigms, Old Cycles

Lessons in Transition

Lucky Russia

Russian Roulette

Foreigners do not Like Russia

Russia's New Economy

IMF - Kill or Cure

The IMF Deconstructed

Financial Crisis, Global Capital Flows and the International Financial
Architecture

The Shadowy World of International Finance

The Typology of Financial Scandals

The Revolt of the Poor

The Demise of Intellectual Property

Scavenger Economies, Predator Economies

Market Impeders and Market Inefficiencies

Public Procurement and very Private Benefits

Liquidity or Liquidation

The Predicament of the Newly Rich

The Solow Paradox


E p I l o g u e


The A u t h o r






I N T R O D U C T I O N






This is a series of articles written and published in 1996-2000 in
Macedonia, in Russia, in Egypt and in the Czech Republic.

How the West lost the East. The economics, the politics, the
geopolitics, the conspiracies, the corruption, the old and the new, the
plough and the internet - it is all here, in prose, as provocative and
vitriolic and loving and longing as I could make it.

From "The Mind of Darkness":

"'The Balkans' - I say - 'is the unconscious of the world'. People stop
to digest this metaphor and then they nod enthusiastically. It is here
that the repressed memories of history, its traumas and fears and
images reside. It is here that the psychodynamics of humanity - the
tectonic clash between Rome and Byzantium, West and East,
Judeo-Christianity and Islam - is still easily discernible. We are
seated at a New Year's dining table, loaded with a roasted pig and
exotic salads.

I, the Jew, only half foreign to this cradle of Slavonics. Four Serbs,
five Macedonians. It is in the Balkans that all ethnic distinctions
fail and it is here that they prevail anachronistically and
atavistically. Contradiction and change the only two fixtures of this
tormented region.

The women of the Balkan - buried under provocative mask-like make up,
retro hairstyles and too narrow dresses. The men, clad in sepia
colours, old fashioned suits and turn of the century moustaches. In the
background there is the crying game that is Balkanian music: liturgy
and folk and elegy combined. The smells are heavy with musk-ular
perfumes. It is like time travel. It is like revisiting one's
childhood."

How were the articles and essays contained herein - many of them
translated and published in local languages - received by people
everywhere?

My readers from the Balkans reacted to these essays with an admixture
of rage and indignation. They erected defensive barricades of
self-aggrandizement and of my devaluation. And they let their ingrained
paranoia run rampant (Jewish conspiracies, Western spies, world plots).
I asked a resident of this tortured region to write the foreword to
this book. People from other parts, from Central and Eastern Europe,
were more argumentative and contemplating, though much less passionate.
And Westerners - especially those with interest in these regions of the
world - reacted with great, cathartic enthusiasm.

In reading this book, I wish upon you the joy and the revulsion, the
dark fascination of this region and its surrealist dreams and
nightmares. This is what I experience daily here and it is my hope that
I succeeded to convey the siren's song, the honeyed trap, the lure and
the allure of this tortured corner of the earth.


Dr. Sam Vaknin

Skopje, February 2000


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After the Rain

How the West

Lost the East









The PEOPLE






The Author of this Article is a Racist






Or, so say many of the readers, who react vehemently - not to say
minaciously - to my articles. They insist that I demonise, chastise,
disparage, deride and hold in contempt groups of people simply and
solely because they are born in a given geographical area or are of a
given genetic stock. Few stop sufficiently long to notice that the
above two accusations contravene each other. A territory as vast as CEE
cannot and is not inhabited by one "race". It is an historical cocktail
of colours and origins and languages and bloodlines. Disregarding the
pan-Slavic myth for a minute, a racist would find the CEE a very
discouraging neighbourhood.

Am I a racist? If this is taken to mean "do I believe in the inherent
inferiority or malevolence or impurity of any group of people (however
arbitrarily defined or capriciously delimited) just because of their
common origin or habitation" - then of course I am not. I am not an
adherent of genetic predetermination and I think that there is very
little point in discussing fictitious entities such as "pure races".
That people are what they are made out to be by their up-bringing,
society, and history and by the reactions of other humans to them - is
what I subscribe to.

Yet I do believe in the temporary inferiority, malevolence and impurity
of groups of people who experienced and were subjected to prolonged
corrupting and pathologising influences. Historical processes exact an
exorbitant toll. Ideologies, indoctrination, totalitarianism,
authoritarianism, command economies, statism, militarism, malignant
nationalism, occupation - all carry a hefty price tag. And the currency
is the mind of the people: their mental health, their socialization
processes and, ultimately, the social fabric. Beneath a thin veneer of
kultur - the masses were savaged, the individual was crushed into a
moral pulp. I do believe in mass pathology: mass hysteria, mass
personality disorders, mass psychoses. I do believe in common
depravity, all-pervasive venality and inescapable subornation of whole
societies and of each of the individuals who comprise them. I do
believe in the osmosis of evil, in the diffusion of villainy, in the
corruption of the soul. In short: I do believe in terminally sick
societies, whose prospects of recovery are nil. The only hope lies in
their demise. Not in the abstract sense of the word - but in the actual
death and decomposition of each and every individual until the whole
"generation of the desert" is done with and a new, less contaminated
one, emerges to take its place.

This is why I believe that the future of Africa, the Middle East and
the countries of the CEE and NIS is, for the time being, behind them.
Their horizon is dim and empty. They are looking forward to the past.
They are the zombies of the international arena, the walking dead and
it is death that they multiply. Their growth is stunted, their speech
is stifled, their leaders a vicious lot, the states that they inhabit
are dens of barbarous criminality and lawlessness. Their institutions
are a travesty, their parties nests of avarice and vile. Their media
prostituted and defiled. The farce of elections and the newspeak of
democracy and human rights and freemarketry are props to hide the vast
wilderness of moral bankruptcy. These are Potemkin states run by
Chicago mobs. Instruments of extortion and coercion no different to
their predecessors - only they provide less security, both physical and
economic. They know no different. They think no different. They swear
by their malaise and by their malaise they shall die.

And die they shall. The signs are auspicious. Biology, the West and
international financial institutions all conspire to retire the beast.
New blood, new ideas, new hopes and aspirations are in evidence. Still
overwhelmed by the abrupt and cruel exposure of their elders, still
taken aback by the enormity of the project of rehabilitating the very
psyche of their people, still torn between illegal self enrichment and
service to their fellow citizens - but there they are, the young ones.
The battle is on. The consensus of the baksheesh and the political
assassination is replaced, ever so gradually, by the dissension of the
market place. Wars are fought with spreadsheets, experience imported
from afar, new knowledge craved, corruption decried. It is a
refreshing, gargantuan, change. And it will consume yet one more
generation. But it has started and it is irreversible. And it is in the
eyes of the youth, a flickering flame, so ephemeral, so vulnerable and
yet, so irresistible. This flame is called the future.


(Article written on January 15, 2000 and published January 31, 2000

in "Central Europe Review" volume 2, issue 4)


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The Caveman and the Alien






"'Life' must be curious, alert, erudite and moral, but it must achieve
this without being holier-than-thou, a cynic, a know-it-all or a
Peeping Tom."

(Edward K. Thompson, managing editor of "Life", 1949-1961)


When Chancellor Kohl's party and Edith Cresson are suspected of gross
corruption - these are labelled "aberrations" in an otherwise honest
West. When NASA in collaboration with its UK counterpart blow a 130
million US dollars spacecraft to smithereens having confused the metric
system for its pound/feet archaic predecessor - people nod their head
in disapproval: "accidents happen". When President Clinton appoints his
wife to suggest an overhaul of the multi-hundred billion dollars US
health system - no one thinks it odd. And when the (talented) son of
the police investigated, rumoured to be hyper-corrupt Minister of
Interior Affairs of Israel becomes a Minister himself, no one bats an
eyelash. Yet, when identical events happen in the decrepit countries of
Eastern, Central, or Southern Europe - they are subjected to heaps of
excoriating scorn, to vitriolic diatribes, to condescending preaching,
or to sanctions. It is, indeed, a double standard, a hypocrisy and a
travesty the magnitude of which is rarely to be encountered in the
annals of human pretensions to morality.

The West has grossly and thoroughly violated Thompson's edict. In its
oft-interrupted intercourse with these forsaken regions of the globe,
it has acted, alternately, as a Peeping Tom, a cynic and a know it all.
It has invariably behaved as if it were holier-than-thou. In an
unmitigated and fantastic succession of blunders, miscalculations, vain
promises, unkept threats and unkempt diplomats - it has driven Europe
to the verge of war and the region it "adopted" to the verge of
economic and social upheaval.

Enamoured with the new ideology of free marketry cum democracy, the
West first assumed the role of the omniscient. It designed ingenious
models, devised foolproof laws, imposed fail-safe institutions and
strongly "recommended" measures. Its representatives, the tribunes of
the West, ruled the plebeian East with determination rarely equalled by
skill or knowledge. Velvet hands couched in iron gloves, ignorance
disguised by economic newspeak, geostrategic interests masquerading as
forms of government characterized their dealings with the natives.
Preaching and beseeching from ever-higher pulpits, they poured
opprobrium and sweet delusions on the eagerly deluded, naive,
bewildered masses. The deceit was evident to the indigenous cynics -
but it was the failure that dissuaded them and all else. The West lost
Eastern and Southeast Europe not when it lied egregiously, not when it
pretended to know for sure when it surely did not know, not when it
manipulated and coaxed and coerced - but when it failed. To the peoples
of these regions, the king was fully dressed. It was not a little child
but an enormous debacle that exposed his nudity. In its
presumptuousness and pretentiousness, feigned surety and vain clichés,
imported models and exported cheap raw materials - the West succeeded
to demolish beyond reconstruction whole economies, to ravage
communities, to bring ruination upon the centuries-old social fabric,
woven diligently by generations. It brought crime and drugs and mayhem
but gave very little in return, only a horizon beclouded and thundering
with eloquence. As a result, while tottering regional governments still
pay lip service to the Euro-Atlantic structures, the masses are enraged
and restless and rebellious and baleful and anti-Western to the core.
They are not likely to acquiesce much longer - not with the West's
neo-colonialism but with its incompetence and inaptitude, with the
nonchalant experimentation that it imposed upon them and with the abyss
between its proclamations and its performance.

In all this time, the envoys of the West - its mediocre politicians,
its insatiably ruthless media, its obese tourists and its armchair
economists - continued to play the role of God, wreaking greater havoc
than even the original. While knowing it all in advance (in breach of
every tradition scientific), they also developed a kind of world weary,
unshaven cynicism interlaced with fascination at the depths plumbed by
the local's immorality and amorality. The jet-set Peeping Toms resided
in five star hotels (or luxurious apartments) overlooking the communist
shantytowns, drove utility vehicles to the shabby offices of the native
bureaucrats and dined in $100 per meal restaurants ("it's so cheap
here"). In between sushi and sake they bemoaned and grieved over
corruption and nepotism and cronyism ("I simply love their ethnic food,
but they are so..."). They mourned the autochtonal inability to act
decisively, to cut red tape, to manufacture quality, to open to the
world, to be less xenophobic (while casting a disdainful glance at the
sweaty waiter). To them it looked like an ancient natural phenomenon, a
force of nature, an inevitability and hence their cynicism. Mostly
provincial people with horizons limited by consumption and by wealth,
they adopted cynicism as shorthand for cosmopolitanism. They
erroneously believed it lent them an air of ruggedness and rich
experience and the virile aroma of decadent erudition. Yet all it did
is make them obnoxious and more repellent to the residents than they
already were.

Ever the preachers, the West - both Europeans and Americans - upheld
themselves as role models of virtue to be emulated, as points of
reference, almost inhuman or superhuman in their taming of the vices,
avarice up front. Yet the disorder in their own homes was broadcast
live, day in and day out, into the cubicles inhabited by the very
people they sought to so transform. And they conspired and collaborated
in all manner of corruption and crime and scam and rigged elections in
all the countries they put the gospel to. In trying to put an end to
history, they seem to have provoked another round of it - more vicious,
more enduring, more traumatic than before. That the West will pay the
price for its mistakes I have no doubt. For isn't it a part and parcel
of their teaching that everything has a price and that there is always
a time of reckoning?


(Article written on November 23, 1999 and published December 6, 1999

in "Central Europe Review" volume 1, issue 24)


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Is Transition Possible?


Can Socialist Professors of Economics

Teach Capitalism?






Lest you hold your breath to the end of this article - the answers to
both questions in the title are no and no. Capitalism cannot be
"learned" or "imported" or "emulated" or "simulated". Capitalism (or,
rather, liberalism) is not only a theoretical construct. It is not only
a body of knowledge. It is a philosophy, an ideology, a way of life, a
mentality and a personality.

This is why professors of economics who studied under Socialism can
never teach Capitalism in the truest sense of the word. No matter how
intelligent and knowledgeable (and a minority of them are) - they can
never convey the experience, the practice, the instincts and reflexes,
the emotional hues and intellectual pugilistics that real, full scale,
full-blooded Capitalism entails. They are intellectually and
emotionally castrated by their socialist past of close complicity with
inefficiency, corruption and pathological economic thinking.

This is why workers and managers inherited from the socialist-communist
period can never function properly in a Capitalist ambience. Both were
trained at civil disobedience through looting their own state and
factories. Both grew accustomed to state handouts and bribes disguised
as entitlements were suspicious and envious at their own elites
(especially their politicians and crony professors), victims to
suppressed rage and open, helpless and degrading dependence. Such
workers and managers - no matter how well intentioned and well
qualified or skilled - are likely to sabotage the very efforts whose
livelihood depends on.

When the transition period of post-communist economies started,
academics, journalists and politicians in the West talked about the
"pent up energies" of the masses, now to be released through the twin
processes of privatisation and democratisation. This metaphor of humans
as capitalistically charged batteries waiting to unleash their stored
energy upon their lands - was realistic enough. People were, indeed,
charged: with pathological envy, with rage, with sadism, with
pusillanimity, with urges to sabotage, to steal, and to pilfer. A
tsunami of destruction, a tidal wave of misappropriation, an orgy of
crime and corruption and nepotism and cronyism swept across the
unfortunate territories of Central and Eastern Europe (CEE). Transition
was perceived by the many either as a new venue for avenging the past
and for visiting the wrath of the masses upon the heads of the elites -
or as another, accelerated, mode of stripping the state naked of all
its assets. Finally, the latter propensity prevailed. The old elites
used the cover of transition to enrich themselves and their cronies,
this time "transparently" and "legally". The result was a repulsive
malignant metastasis of capitalism, devoid of the liberal ideals or
practices, denuded of ethics, floating in a space free of functioning,
trusted institutions.

While the masses and their elites in CEE were busy scavenging, the West
engaged in impotent debate between a school of "shock therapists" and a
school of "institution builders". The former believed that appearances
will create reality and that reality will alter consciousness (sounds
like Marxism to me). Rapid privatisation will generate a class of
instant capitalists who, in turn, will usher in an era of real,
multi-dimensional liberalism. The latter believed that the good wine of
Capitalism could be poured only to the functioning receptacles of
liberalism. They advocated much longer transition periods in which
privatisation will come only after the proper institutions were
erected. Both indulged in a form of central planning. IMF-ism replaced
Communism. The international financial institutions and their hordes of
well-paid, well-accommodated experts - replaced the Central Committee
of the party. Washington replaced Moscow. It was all very familiar and
cosy.

Ever the adapters, the former communist elites converted to ardent
capitalism. With the fervour with which they recited Marxist slogans in
their past - they chanted capitalist sobriquets in the present. It was
catechism, uttered soullessly, in an alien language, in the marble
cathedrals of capitalism in London and Washington. There was commitment
or conviction behind it and it was tainted by organized crime and
all-pervasive corruption. The West was the new regime to be suckered
and looted and pillaged and drained. The deal was simple: mumble the
mantras of the West, establish Potemkin institutions, keep peace and
order in your corner of the world, give the West strategic access to
your territory. In return the West will turn a blind eye to the worst
excesses and to worse than excesses. This was the deal struck in Russia
with the "reformists", in Yugoslavia with Milosevic, the "peacemaker",
in the Czech Republic with Klaus the "economic magician" of Central
Europe. It was communism all over: a superpower buying influence and
colluding with corrupt elites to rob their own nations blind.

It could have been different.

Post-war Japan and Germany are two examples of the right kind of
reconstruction and reforms. Democracy took real root in these two
former military regimes. Economic prosperity was long lived because
democracy took hold. And the ever tenuous, ever important trust between
the citizens and their rulers and among themselves was thus enhanced.

Trust is really the crux of the matter. Economy is called the dismal
science because it pretends to be one, disguising its uncertainties and
shifting fashions with mathematical formulae. Economy describes the
aggregate behaviour of humans and, in this restricted sense, it is a
branch of psychology. People operate within a marketplace and attach
values to their goods and services and to their inputs (work, capital,
natural endowments) through the price mechanism. This elaborate
construct, however, depends greatly on trust. If people were not to
trust each other and/or the economic framework (within which they
interact) - economic activities would have gradually ground to a halt.
A clear inverse relationship exists between the general trust level and
the level of economic activity. There are four major types of trust:

a. Trust related to Intent - the market players assume that other
players are (generally) rational, that they have intentions, that these
intentions conform to the maximization of benefits and that people are
likely to act on their intentions;

b. Trust related to Liquidity - the market players assume that
other players possess or have access, or will possess, or will have
access to the liquid means needed in order to materialize their
intentions and that - barring force majeure - this liquidity is the
driving force behind the formation of these intentions. People in
possession of liquidity wish to maximize the returns on their money and
are driven to economically transact;

c. Trust related to knowledge and ability - the market players
assume that other players possess or have access to, or will possess,
or will have access to the know-how, technology and intellectual
property and wherewithal necessary to materialize their intention (and,
by implication, the transactions that they enter into). Another
assumption is that all the players are "enabled": physically, mentally,
legally and financially available and capable to perform their parts as
agreed between the players in each and every particular transaction. A
hidden assumption is that the players evaluate themselves properly:
that they know their strengths and weaknesses, that they have a
balanced picture of themselves and realistic set of expectations,
self-esteem and self-confidence to support that worldview (including a
matching track record). Some allowance is made for "game theory"
tactics: exaggeration, disinformation, even outright deception - but
this allowance should not overshadow the merits of the transaction and
its inherent sincerity;

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