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Alexander Svetlov

Economics and National Identity: is the Western View of Eastern Europe correct?


The market system in Western Europe was formed in a natural historical way, together with the formation of a national ethos, languages and consciousness. For economic theory, the quintessence of this development was the classical English political economy of Adam Smith and David Ricardo. Meanwhile, for the national spirit of European nations the quintessence was continental philosophy, literature and poetry. "Logic is the money of the Spirit," as Hegel, the patriarch of German classical philosophy, liked to say, implying that logical categories, which help man to cognize the world, are to his spiritual development what money is to the normal functioning of private enterprise. That is, without logical and philosophical categories, language, a national idea and so on, the formation of national identity is just as impossible as the development to the modern economy without money.

It is a quite different picture for nations for whom the development of national identity and economic relations was distorted by the theory and practice of Marxist totalitarianism, which negated the nation ("The proletariat has no fatherland", said Karl Marx in the Manifesto of the Communist Party), and which organized the economy in accordance with the plan, ruling out people's market-oriented behaviour, which, according to the principles of Marxism, is irrational and uncontrollable. In accordance with this, Marxism is first and foremost the theory and practice of "rational" social management, coercion and control, but not of the economic organization of the life of society, as liberally-minded Western economists tend to think. This coercive aspect of Marxism has been adopted by every fascist and totalitarian without exception, from Mussolini to Hitler and from Lenin to Andropov.

How did it happen that people - the subjects - were excluded from the very essence of economic theory? Soviet political economy found its own brilliant solution, dividing all economic production into two groups, A and B: Respectively, production of the means of production and production of commodities. In any five year plan production of group A was supposed to be greater. Correspondingly, this group received all centralized budget allocations. Meanwhile, group B, which included such "commodities" as national development, national culture and national identity, existed almost solely on paper, as the recipient of "secondary financing." As a result, a totally anomalous economy emerged, where the end point and the goal of any normal economic system--the consumer, with his individual interests, requirements and psychology--was declared to be simply non-existent, and the goal of the economy was proclaimed to be the fulfillment of the five-year plan, which was elevated to the level of a mandatory law. The task was therefore - as the old Soviet joke had it - to receive an order from the party to manufacture excavators to be used for mining iron ore in order to produce even more powerful excavators. 

In practice the introduction of this distorted concept of the "ideological economy" resulted in Europe's first holocaust in Ukraine--the artificial famine of 1932-33, initiated by Stalin, and linked to the forced collectivization of individual peasant holdings. This deliberate extermination of the Ukrainian peasantry--whom Stalin, in line with the basic principles of Marxism, considered to harbor reactionary ideas of private ownership--resulted in the deaths of between six and twelve million people.

Apart from this, the peasantry harbored the basic values of Ukrainian national identity, language and culture. The war which followed and the post-war famines practically completed the annihilation of those who bore the cultural traditions of economic management in Ukraine, which would have allowed us to speak of an "economy of national identity," and objectively divided these concepts. The dogma of subject-free economic development has since become the unconditional paradigm of economic theory and practice.

This paradigm, as demonstrated by post-Soviet economic development, is the main theoretical and practical obstacle to economic reform in Ukraine. Why is this? Because the theory of market reform in totalitarian economies envisages not merely the adoption of recommendations and prescriptions worked out by such organizations as the IMF or the World Bank, which actively support the current White House administration in hastily forming a legion of "strategic partners" for the United States from among the post-Soviet states, which are becoming increasingly intolerant of the United States.

The premise to the IMF's recommendations for the reform of transition economies, from Bolivia to Moldova, is based on a curious "economic objective idealism"--that national economic transformations are based on certain laws which have been established and enshrined once and for all in the language of mathematics and statistics. The faster a nation grasps this, and rejects theories of national models, "special paths" of development and so on, the faster it will overcome the shock of the initial transformations and reach the path of stable development. The story of post-totalitarian development in Eastern Europe shows that it is nations which have had experience of statehood and an established national identity which manage to achieve this quickest--Poland, Hungary, the Czech Republic.

For nations which have had no experience of statehood, and, more important, have no national identity, such as Ukraine, Belarus, Moldova, Romania, Bulgaria and so on, the IMF's recommendations are inapplicable. Before they can adopt them, these nations need to change their paradigm for economic development, to make the transition from the concept of a subject-free economy to the concept of an economy of national identity.

In other words, Ukraine faces the task which the developed states of Europe resolved several hundred years ago: to form a state, a nation, and national identity as the prerequisites, not the result, of economic development. For countries with an unformed national identity, "economic determinism"--be it that of Marxism or that of IMF recommendations (that is, the idea that objective economic laws determine the behaviour of economic subjects) should be exchanged for an approach according to which economic progress reflects and conveys the progress of the development of the national identity.

The crux of the conceptual revolution which Ukraine is currently undergoing so painfully lies in overcoming the Marxist paradigm, which abolished the nation and the market, and restoring the European paradigm of the natural historical development of the economy of national identity. Ukraine's "return" into Europe depends on this, and not on its artificial integration into European institutions like the Council of Europe, the European Union or NATO.