The forgotten workers’ control movement of Prague Spring

At the time of the [August 1968] Soviet invasion [of Czechoslovakia], two months after the first workers’ councils were formed, there were perhaps fewer than two dozen of them, although these were concentrated in the largest enterprises and therefore represented a large number of employees. But the movement took off, and by January 1969 there were councils in about 120 enterprises, representing more than 800,000 employees, or about one-sixth of the country’s workers. This occurred despite a new mood of discouragement from the government from October 1968.

From the beginning, this was a grassroots movement from below that forced party, government, and enterprise managements to react. The councils designed their own statutes and implemented them from the start. The draft statutes for the Wilhelm Pieck Factory in Prague (one of the first, created in June 1968) provide a good example. “The workers of the W. Pieck factory (CKD Prague) wish to fulfill one of the fundamental rights of socialist democracy, namely the right of the workers to manage their own factory,” the introduction to the statutes stated. “They also desire a closer bond between the interests of the whole society and the interests of each individual. To this end, they have decided to establish workers’ self-management.”

Prague (photo by Beentree)

Prague (photo by Beentree)

All employees working for at least three months, except the director, were eligible to participate, and the employees as a whole, called the “workers’ assembly,” was the highest body and would make all fundamental decisions. In turn, the assembly would elect the workers’ council to carry out the decisions of the whole, manage the plant and hire the director. Council members would serve in staggered terms, be elected in secret balloting and be recallable. The director was to be chosen after an examination of each candidate conducted by a body composed of a majority of employees and a minority from outside organizations.

A director is the top manager, equivalent to the chief executive officer of a capitalist corporation. The workers’ council would be the equivalent of a board of directors in a capitalist corporation that has shares traded on a stock market. This supervisory role, however, would be radically different: The workers’ council would be made up of workers acting in the interest of their fellow workers and, in theory, with the greater good of society in mind as well.

By contrast, in a capitalist corporation listed on a stock market, the board of directors is made up of top executives of the company, the chief executive officer’s cronies, executives from other corporations in which there is an alignment of interests, and perhaps a celebrity or two, and the board of directors has a duty only to the holders of the corporation’s stock. Although this duty to stockholders is strong enough in some countries to be written into legal statutes, the ownership of the stock is spread among so many that the board will often act in the interest of that top management, which translates to the least possible unencumbered transfer of wealth upward. But in cases where the board of directors does uphold its legal duty and governs in the interest of the holders of the stock, this duty simply means maximizing the price of the stock by any means necessary, not excepting mass layoffs, wage reductions and the taking away of employee benefits. Either way, the capitalist company is governed against the interests of its workforce (whose collective efforts are the source of the profits), and by law must be.

National meeting sought to codify statutes

The Wilhelm Pieck Factory statutes were similar to statutes produced in other enterprises that were creating workers’ councils. It was only logical for a national federation of councils to be formed to coordinate their work and for economic activity to have a relation to the larger societal interest. Ahead of a government deadline to produce national legislation codifying the councils, a general meeting of workers’ councils took place on 9 and 10 January 1969 in Plzeň, one of the most important industrial cities in Czechoslovakia (perhaps best known internationally for its famous beers). A 104-page report left behind a good record of the meeting (it was also tape-recorded); representatives from across the Czech Lands and Slovakia convened to provide the views of the councils to assist in the preparation of the national law.

Trade union leaders were among the participants in the meeting, and backed the complementary roles of the unions and the councils. (Trade unions, as noted earlier, convened two-thirds of the councils.) One of the first speakers, an engineer who was the chair of his trade union local in Plzeň, said a division of tasks was a natural development: “For us, the establishment of workers’ councils implies that we will be able to achieve a status of relative independence for the enterprise, that the decision-making power will be separated from executive powers, that the trade unions will have a free hand to carry out their own specific policies, that progress is made towards a solution of the problem of the producers’ relationship to their production, i.e., we are beginning to solve the problem of alienation.”

Some 190 enterprises were represented at this meeting, including 101 workers’ councils and 61 preparatory committees for the creation of councils; the remainder were trade union or other types of committees. The meeting concluded with the unanimous passage of a six-point resolution, including “the right to self-management as an inalienable right of the socialist producer.”

The resolution declared,

“We are convinced that workers’ councils can help to humanize both the work and relationships within the enterprise, and give to each producer a proper feeling that he is not just an employee, a mere working element in the production process, but also the organizer and joint creator of this process. This is why we wish to re-emphasize here and now that the councils must always preserve their democratic character and their vital links with their electors, thus preventing a special caste of ‘professional self-management executives’ from forming.”

It's Not Over coverThat democratic character, and the popularity of the concept, is demonstrated in the mass participation—a survey of 95 councils found that 83 percent of employees had participated in council elections. A considerable study was undertaken of these 95 councils, representing manufacturing and other sectors, and an interesting trend emerged from the data in the high level of experience embodied in elected council members. About three-quarters of those elected to councils had been in their workplaces for more than ten years, and mostly more than 15 years. More than 70 percent of council members were technicians or engineers, about one-quarter were manual workers and only 5 percent were from administrative staffs. These results represent a strong degree of voting for the perceived best candidates rather than employees simply voting for their friends or for candidates like themselves—because the council movement was particularly strong in manufacturing sectors, most of those voting for council members were manual workers.

These results demonstrated a high level of political maturity on the part of Czechoslovak workers. Another clue to this seriousness is that 29 percent of those elected to councils had a university education, possibly a higher average level of education than was then possessed by directors. Many directors in the past had been put into their positions through political connections, and a desire to revolt against sometimes amateurish management played a part in the council movement. Interesting, too, is that about half the council members were also Communist Party members. Czechoslovak workers continued to believe in socialism while rejecting the imposed Soviet-style system.

Government sought to water down workers’ control

The government did write a legislative bill, copies of which circulated in January 1969, but the bill was never introduced as Soviet pressure on the Czechoslovak party leadership intensified and hard-liners began to assert themselves. The bill would have changed the name of workers’ councils to enterprise councils and watered down some of the statutes that had been codified by the councils themselves. These pullbacks included a proposed state veto on the selection of enterprise directors, that one-fifth of enterprise councils be made up of unelected outside specialists, and that the councils of what the bill refers to as “state enterprises” (banks, railroads and other entities that would remain directly controlled by the government) could have only a minority of members elected by employees and allow a government veto of council decisions.

This proposed backtracking was met with opposition. The trade union daily newspaper, Práce, in a February commentary, and a federal trade union congress, in March, both called the government bill “the minimum acceptable.” In a Práce commentary, an engineer and council activist, Rudolf Slánský Jr. (son of the executed party leader), put the council movement in the context of the question of enterprise ownership.

“The management of our nation’s economy is one of the crucial problems,” Slánský wrote.

“The basic economic principle on which the bureaucratic-centralist management mechanism rests is the direct exercise of the ownership functions of nationalized industry. The state, or more precisely various central organs of the state, assume this task. It is almost unnecessary to remind the reader of one of the principal lessons of Marxism, namely he who has property has power…The only possible method of transforming the bureaucratic-administrative model of our socialist society into a democratic model is to abolish the monopoly of the state administration over the exercise of ownership functions, and to decentralize it towards those whose interest lies in the functioning of the socialist enterprise, i.e. the collectives of enterprise workers.”

Addressing bureaucrats who objected to a lessening of central control, Slánský wrote,

“[T]hese people like to confuse certain concepts. They say, for example, that this law would mean transforming social property as a whole into group property, even though it is clearly not a question of property, but rather one of knowing who is exercising property rights in the name of the whole society, whether it is the state apparatus or the socialist producers directly, i.e. the enterprise collectives.”

Nonetheless, there is tension between the tasks of oversight and of day-to-day management. A different commentator, a law professor, declared,

“We must not…set up democracy and technical competence as opposites, but search for a harmonious balance between these two components…It would perhaps be better not to talk of a transfer of functions but rather a transfer of tasks. It will then be necessary for the appropriate transfer to be dictated by needs, rather than by reasons of dogma or prestige.”

These discussions had no opportunity to develop. In April 1969, Alexander Dubček was forced out as party first secretary, replaced by Gustáv Husák, who wasted little time before inaugurating repression. The legislative bill was shelved in May, and government and party officials began a campaign against councils. The government formally banned workers’ councils in July 1970, but by then they were already disappearing.

This is an excerpt from It’s Not Over: Learning From the Socialist Experiment, officially published February 26 by Zero Books. Citations omitted. The omitted sources cited in this excerpt are: Robert Vitak, “Workers Control: The Czechoslovak Experience,” Socialist Register, 1971; Oldřich Kyn, “The Rise and Fall of the Economic Reform in Czechoslovakia,” American Economic Review, May 1970; and several articles anthologized in Vladimir Fišera, Workers’ Councils in Czechoslovakia: Documents and Essays 1968-69 [St. Martin’s Press, 1978]

Colonialism and nationalism in the building of liberation movements

The Sandinistas, in their difficulties with the Indigenous peoples of the Atlantic, had not reflected on the irony of being on the opposite side of the nationalist equation than they were when, as the representatives of Nicaragua, they encountered the United States. It had not initially occurred to the Spanish-speaking majority of Nicaragua that they, too, walked in the shoes of a colonialist. Larger nations have long dominated smaller nations, but a nation can be both a larger and a smaller nation at the same time, in relation to various other nations.

Nicaragua, a small country of 3 million, was long the plaything of far larger neighbors. But Nicaragua is an artificial construct: the dominant people of Spanish descent are dominant because their ancestors decimated the people who had already lived there. The concept of a Nicaraguan nationality is itself a legacy of colonialism, but also the peculiarities of local geography. Why are there seven countries on the narrow strip of land between Mexico and Colombia? Five of those countries, all speaking the same language, were part of a single Central American Federation. Yet that federation broke apart, unlike Mexico, because communication and travel were so difficult due to the mountainous terrain.

Over time, patriotisms developed, separate in each country created by the breakup. Domination by more powerful countries, and repeated direct interventions in the twentieth century by the latest, and most powerful yet, of those more powerful countries helped forge strong national identities. But those identities did not include the people who were already there, and had seen their numbers decimated through war, disease and plunder—in plain language, through a hemispheric genocide. It is easy to understand a colonial relationship when you are on the wrong end; it is far more difficult to understand this when you are on the power side of the equation.

Celebrating the 10th anniversary of the Nicaraguan revolution in Managua, in 1989 (photo by tiarescott from Managua)

Celebrating the 10th anniversary of the Nicaraguan revolution in Managua, in 1989 (photo by tiarescott from Managua)

Nicaragua’s nationalism was forged in its colonial relationship to the European powers and then to the United States. Augusto Sandino was able to articulate these feelings, and Sandino’s writings and example were strong enough to form a key pillar of a movement decades later. But as the majority Nicaraguans found their voices, found the confidence to create a revolution and to attempt to develop their culture free of colonial domination, the minorities in their midst, the descendants of those Indigenous nations decimated centuries earlier, felt themselves oppressed by those very same people who were so motivated by their own oppression at the hands of the giant neighbor to the north.

The movement of the majority, the Sandinistas, were not oblivious to their country’s history nor to the minorities of the Atlantic east, and were acutely aware of the poverty, underdevelopment and cultural trampling endured by the Indigenous minorities. But the Sandinistas had thought and acted in a mechanical manner, and so, initially, inflamed rather than soothed.

“The Left here did not incorporate anthropological concepts because it was married completely to the strict classical scheme: bourgeoisie versus proletariat without analyzing the cultural differences and the ‘civilizing’ conflicts that took place,” is the assessment of journalist and feminist activist Sofía Montenegro, who was one of the leading figures of the official Sandinista newspaper, Barricada. “What has happened here is not a mixing of the races but a clash of two civilizations, the Occidental and the Indigenous, in which one imposed itself on the other but was never able to completely conquer it.”

Marxist difficulties with nationalism

Marxism’s practitioners have often had a difficult time coming to terms with nationalism. The downgrading of the nation-state was articulated clearly in the movement’s most important early document, The Communist Manifesto written by Karl Marx and Friedrich Engels in 1848. The two wrote: “The workingmen have no country. We cannot take from them what they have not got…National differences between peoples are daily vanishing, owing to the development of the bourgeoisie, to freedom of commerce, to the world market, to uniformity in the mode of production and in the conditions of life corresponding thereto.”

Corporate globalization is not a new phenomenon, although of course the process has vastly accelerated since those words were written in the nineteenth century. Despite the increasing cross-cultural fertilizations in which better communications and increased commerce played no small role, the strength of nationalism only increased through the nineteenth century as disunited nations such as Germany and Italy struggled to unify their many pieces and other nations struggled to end their domination by stronger powers.

Those ongoing developments led to a current within Marxist theory that saw a difference between the nationalism of a colonial power and that of a captured nation seeking to throw off the hegemony bonding it. Self-determination for all nations had to be backed and therefore support should be given to independence movements. Independence was the right of all peoples in the name of self-determination. But it was also believed that national struggles were a “distraction” for the vast majority of a nation in that as long as they were oppressed by another nation they would not be able to fight for their emancipation as a class—they would not be able to free themselves of their domination by their native capitalists and aristocracy.

Humans can have multiple motivations, of course. World War I provided an excellent example: Nationalism was whipped up successfully in order to get millions to willingly fight a war that was fought to determine the capitalist division of the world’s resources. There was no other way to get those millions to fight. The war had to be brought to an end when those millions started to think more in terms of class, and of their common interests with the soldiers in the opposite trench, rather than in solely national terms. Very different feelings were unleashed, thanks to bitter practical experience.

Nationalism seen as a distraction from class

But the nonetheless still living body of nationalism continued to engender strong debates among the various strains of Marxism. A forceful argument against advocacy of self-determination of nations was put forth by Rosa Luxemburg, one of the outstanding contributors to twentieth-century political theory. Regardless of how valid a reader finds Luxemburg’s argument, she had the moral authority to make it. She was triply oppressed—as a woman in a male-dominated world, as a Jew in a Central Europe riddled with anti-Semitism and as a Pole (until the last days of her life, Poland was occupied and divided among three empires: Tsarist Russia, Prussian-dominated Germany and monarchal Austria-Hungary). Luxemburg adamantly refused to endorse independence for her native Poland, or any other nation.

It's Not Over cover“[T]he duty of the class party of the proletariat to protest and resist national oppression arises not from any special ‘right of nations’…[but] arises solely from the general opposition to the class régime and to every form of social inequality and social domination, in a word, from the basic position of socialism…The duty to resist all forms of national oppression [under an apolitical ‘right of nations’] does not include any explanation of what conditions and political forms” should be recommended, Luxemburg wrote in 1909. Generic calls for self-determination don’t provide any analysis of underlying social conditions and therefore cannot provide a guide to action.

A further basic weakness of generic calls for self-determination, Luxemburg argued, is that they do not take into consideration the highly differentiated status of nations. “The development of world powers, a characteristic feature of our times growing in importance along with the progress of capitalism, from the very outset condemns all small nations to political impotence,” she wrote. “Apart from a few of the most powerful nations, the leaders in capitalist development, which possess the spiritual and material resources necessary to maintain their political and economic independence, ‘self-determination,’ the independent existence of smaller and petit nations, is an illusion, and will become even more so.”

Further, within each nation, there exist a multitude of interests that cannot be reconciled. “In a class society, ‘the nation’ as a homogeneous sociopolitical entity does not exist,” Luxemburg wrote.

“Rather, there exist within each nation classes with antagonistic interests and ‘rights.’ … There can be no talk of a collective and uniform will, of the self-determination of the ‘nation’ in a society formed in such a manner. If we find in the history of modern societies ‘national’ movements, and struggles for ‘national interests, ’ these are usually class movements of the ruling strata of the bourgeoisie, which can in any given case represent the interest of the other strata of the population only insofar as under the form of ‘national interests’ it defends progressive forms of historical development.”

Luxemburg here argued that movements for national independence or self-determination are effectively controlled by the nation’s capitalists who, by virtue of their economic dominance, will control the movement to establish their own narrow rule and thereby subjugate the working people of the nation. Therefore, only the widespread adoption of socialist economic relations can truly free the working people of any nation.

Seventy years after those words were written, the capitalists of Nicaragua indeed sought to control the liberation movement of their country. Nicaragua wasn’t fighting for independence in the formal sense, but it was a country with very little self-determination. In the modern system of capitalism, the interests of local capitalists in subordinate countries align with the capitalists of the dominant nation. The interests of the Nicaraguan plantation owners and industrialists were simply to rid themselves of their local dictator, Anastasio Somoza, and establish their own rule. Rule by these local capitalists would be dependent on capitalists from the dominant power, through the medium of multinational corporations, and therefore compatible.

When direct rule of a colonized nation is no longer possible because of resistance, formal “independence” is granted, but a compliant dictator can be put in charge. When the rule of the dictator is no longer viable, a more “modern” form of domination is put in place, the rule of a local oligarchy. The local industrialists and plantation owners are ready to step in and assume domination of society; eager to fulfill what they see as their natural role, they seek to topple the dictator. Nicaragua’s capitalists could not do that on their own (they are numerically minuscule) and so joined the rapidly building mass liberation movement in an attempt to wrest the movement’s leadership from the Sandinistas. The capitalists were unable to do so because the working people of Nicaragua took an expanded, rather than narrow, view of self-determination, and this understanding led them to swell the ranks of Sandinista organizations.

But should nationalism be ‘skipped’ as a stage?

But although Nicaraguans were aware of their class interests, and that their liberation necessitated changes in their societal institutions and social relations, nationalism played a significant role. Sandinista National Liberation Front co-founder Carlos Fonseca had helped create the FSLN’s philosophy by skillfully blending the nationalism of Sandino with Marxism. The importance of nationalism was a consequence of the force of colonialism upon Nicaragua. Therefore, for the colonized, nationalism can potentially play a partly progressive role if it is combined with other political ideas. Another outstanding political theorist, Frantz Fanon, writing in the middle of the twentieth century at the peak of the Global South’s national liberation movements, argued that nationalism is an important stage that can’t be skipped.

National and racial differences are used to create and continue colonial situations, Fanon argued, and therefore, for the colonized, this divide adds to the complexities of a class analysis.

“In the colonies the economic infrastructure is also a superstructure. The cause is effect: You are rich because you are white, you are white because you are rich. This is why a Marxist analysis should always be slightly stretched when it comes to addressing the colonial issue. It is not just the concept of the pre-capitalist society, so effectively studied by Marx, which needs to be re-examined here. The serf is essentially different from the knight, but a reference to divine right is needed to justify this difference in status. In the colonies the foreigner imposed himself using his cannons and machines. Despite the success of his pacification, in spite of his appropriation, the colonist always remains a foreigner.”

The urban and rural working people of Nicaragua could not free themselves without “kicking out” the foreigner (the US commercial interests that dominated their country) and instead institute balanced trading relationships with interests outside their borders. No colonized country can attempt such a liberation without developing a sense of itself as a nation, and that sense of nationhood can’t be separated from the differences between the newly awakened nation and the nation that dominates it. During Nicaragua’s domination, just as throughout Latin America, the Caribbean, Africa and elsewhere, these differences were pointed to by the colonizing power as justification for the colonial nature of the relationship.

It is the recovery of nationalism, Fanon wrote, that provides the basis for an independence struggle. “A culture is first and foremost the expression of a nation, its preferences, its taboos, and its models…The nation is not only a precondition for culture…it is a necessity. Later on it is the nation that will provide culture with the conditions and framework for expression.” It is impossible to skip this stage of development. “Humanity, some say, has got past the stage of nationalist claims,” Fanon wrote.

“The time has come to build larger political unions, and consequently the old-fashioned nationalists should correct their mistakes. We believe on the contrary that the mistake, heavy with consequences, would be to miss out on the national stage. If culture is the expression of the national consciousness, I shall have no hesitation in saying, in the case in point, that national consciousness is the highest form of culture. ”

Sandinistas used national understanding as a scaffold

Fanon wrote as a Caribbean activist deeply involved in Algeria’s 1950s struggle against brutal occupation by France, and so it may seem that his expressions of nationalism and equating those expressions with a definition of culture are too strong, but if a people are oppressed on a national basis, then it is only natural that a culture takes on that oppression in that form. It is not necessary to agree with Fanon’s elevation of nationalism to such heights to find merit in his formulation. The course of the past century demonstrated the validity of Fanon’s theories: Nationalism has been, and continues to be, an extremely powerful political force.

Fanon’s integration of nationalism (grounded in profound sympathy for the distortions imposed by colonialism) with Marxism provides a more realistic analysis than Luxemburg’s dismissal of national liberation movements. Not because Luxemburg’s analysis of the lack of autonomy for the world’s smaller nations is incorrect (in fact, it was fully accurate then as it still is today) but because it, to use Fanon’s phrase, “skips” an important stage of development. A national consciousness bound together Nicaraguans in the struggle against Somoza, but rather than make that struggle a purely nationalist movement, the Sandinistas built upon nationalism, using it as a scaffolding upon which they erected a much larger understanding of what would be needed for Nicaraguans to liberate themselves. A struggle against an internal dictator, underdevelopment, lack of education and external domination is necessarily, in part, a cultural struggle.

Such a struggle by a national majority, however, inevitably contains differences from the concurrent struggle experienced by national minorities, and these differences, too, are cultural. The Sandinistas, to their credit, did come to understand, in a concrete manner rather than in their previous abstract theoretical manner, that they had to provide sufficient space for their own minority nations to develop their culture, and that those minority cultures had been stultified to a degree more severe than their own cultural underdevelopment.

This is an excerpt from It’s Not Over: Learning From the Socialist Experiment, officially published February 26 by Zero Books. Citations omitted. The omitted sources cited in this excerpt are: Katherine Hoyt, The Many Faces of Sandinista Democracy [Ohio University Press, 1997]; Karl Marx and Friedrich Engels, The Communist Manifesto [Washington Square Press, 1964]; “The National Question and Autonomy (Excerpts),” Rosa Luxemburg, anthologized in Paul Le Blanc (ed.), Rosa Luxemburg: Reflections and Writings [Humanity Press, 1999]; and Frantz Fanon, The Wretched of the Earth [Grove Press, 2004]

War crimes and forgetting

Forty years after the long Vietnamese struggle for independence concluded with the capture of Saigon, the mythologies surrounding the war on the other side of the Pacific Ocean have not loosened their grip. The “debate” surrounding the war is a textbook example of corporate media obfuscation.

A strong debate played out in the corporate media outlets of the United States concerning the Vietnam War at the end of the 1990s, and that same debate, with the same parameters, continues today. This debate, however, is only between two “acceptable” viewpoints — an honorable effort that tragically failed or a well-intentioned but flawed effort that should not have been undertaken if the U.S. was not going to be “serious” about fighting.

A U.S. Air Force plane drops a white phosphorus bomb on Vietnam in 1966.

A U.S. Air Force plane drops a white phosphorus bomb on Vietnam in 1966.

Left out are the widely held views that the war should never have been fought because it was a war to extend U.S. hegemony or that the U.S. simply had no business fighting in another country’s civil war. Further, the first “acceptable” viewpoint implies, and the second explicitly states, that the U.S. didn’t really fight hard to win the war, ignoring the actual intensive level of the U.S. war effort in which most of North Vietnam’s larger cities were reduced to rubble, much of the farming lands were destroyed and three million Vietnamese were killed.

Thus there was all the appearance of a free and open media at the same time that the media obscured.

Elections only when you do as we say

What were some of the messy things going on in Southeast Asia at the time? (Most of the following is taken from Manufacturing Consent by Noam Chomsky and Edward S. Herman, Pantheon Books, 1988.) The U.S. sabotaged the scheduled 1956 all-Vietnam election that was a cornerstone of the 1954 agreement that ended the French intervention; an election that was not allowed to occur precisely because Ho Chi Minh would have won. The U.S. set up South Vietnam as an artificial puppet state, overthrew and killed South Vietnam’s “leaders” and installed new “leaders,” who were invariably military thugs.

The U.S. invented the Gulf of Tonkin attack, a deliberate lie to create a cover for increasing the U.S. military role. By the time of the U.S. land intervention in 1965, American aerial bombing, napalming and gassing had already killed 15,000 Vietnamese. The U.S. carried out a policy of rural and urban terror. The military forced peasants in wide parts of the country off their land and into “strategic hamlets” — in reality, rural concentration camps — and killed peasants who refused to leave their homes. Tens of thousands were swept from their homes and sent to camps in single ground operations.

A writer in Foreign Affairs wrote that destroying the countryside and forcing rural residents into cities was necessary because the Viet Cong were “a powerful force which cannot be dislodged from its constituency so long as the constituency continues to exist.” The U.S. systematically destroyed by force any South Vietnamese grouping opposed to the installed military dictators, even non-Communist groups such as organized Buddhists.

The U.S. leveled major cities — 77% of the buildings in Hue, one of Vietnam’s biggest cities, were completely destroyed. Dams were blasted away, allowing salt water from the South China Sea to flood farmland, making the growing of food impossible. When North Vietnam agreed to the Paris Peace Agreements in 1972, Henry Kissinger decided not to accept the pact, began demanding major changes to an agreed-upon document, then launched the Christmas bombings of Hanoi and Haiphong when the North Vietnamese government insisted the agreement be signed.

In South Vietnam, 9,000 of 15,000 hamlets were damaged or destroyed, as were 25 million acres (100,000 square kilometers) of farmland and 12 million acres of forest. Killed were 1.5 million cattle. One million widows and 800,000 orphans were left behind.

In North Vietnam, 34 of the largest 36 cities suffered significant damage, with 15 completely razed, while 4,000 of about 5,800 communes were damaged. More than one million acres of farmland and 400,000 cattle were destroyed in the North. The Central Intelligence Agency admitted that at least 30,000 North Vietnamese were killed per year by 1967 by U.S. bombing, with these deaths primarily civilian. The total tonnage of bombs dropped by the U.S. in Vietnam exceeded that of all bombing by all countries during World War II. Reports of the countryside at the end of the war spoke of entire regions as “bare, gray and lifeless.”

No mercy in neighboring countries

Next door, in Laos, following a 1958 election in which a two-party Left coalition won 13 of 21 legislative seats, the U.S. swiftly overthrew the government, with the new government seated by the U.S. vowing to disband the Pathet Lao, which had won the most seats. Two years later, that new government was overthrown by the U.S., which installed a CIA-backed extreme Right-wing general.

In rural Laos, entire districts were wiped out by bombing. A series of articles in Le Monde reported on a district capital that had been deserted for three years because of repeated bombings. This capital was a portion of a 20-mile area stretching into the countryside in which not a single building was left standing and in which were found the remnants of American fragmentation bombs, which are dropped to maximize civilian casualties.

There were areas of Laos where villagers hid in nearby mountains, in caves or in ditches during daytime because of the ceaseless bombardment and who could conduct life only at night. Craters so saturated some areas that it was impossible to distinguish them, and all vegetation was destroyed. More than 350,000 Laotians — more than 10% of the country’s population — were killed and a similar number left homeless.

In Cambodia, bombing by the U.S. during the period 1969 to April 1975 resulted in 600,000 deaths and two million refugees, according to the same Finnish Inquiry Commission that concluded one million people died during the subsequent Khmer Rouge régime. As the bombing was ending in 1975, the U.S. government estimated that deaths from starvation in the Cambodian capital, Phnom Penh, were near 100,000 per year.

This horrific bombing is believed to have played a role in the rise of the Khmer Rouge, which the U.S. covertly sided with during its murderous four-year reign. A U.S. government report in 1975 said 75 percent of Cambodia’s draft animals had died and that it would likely be three years before the country could regain rice self-sufficiency.

The carnage inflicted on Vietnam reverberates still. An estimated 19 million tons of toxic herbicides were applied that has resulted in more than half a century of damage to health and birth defects.

Such is the price of empire, paid by those on the receiving end. If these are not war crimes, then what would be?

Our world is awful, yes, but it isn’t fascism — yet

The term “fascism” gets tossed around much too casually. I am not speaking here of right-wing political illiterates who call a centrist like Barack Obama a “socialist” one day and a “fascist” the next. I am referring to people on the Left who ought to know better.

If we call anybody on the Right a “fascist” or use the word as an all-purpose pejorative, we fail to understand the real thing, and that is to our collective peril. Yes, economic conditions in the present era of global neoliberalism, of the corporate race to the bottom abetted at every turn by the world’s governments, of wars actual and threatened necessary to maintain the global capitalist system, are harsh. But a sham “formal democracy” and an outright fascist state are two very different things.

At its most basic level, fascism is a dictatorship established through and maintained with terror on behalf of big business. It has a social base, which provides the support and the terror squads, but which is badly misled since the fascist dictatorship operates decisively against the interest of its social base. Militarism, extreme nationalism, the creation of enemies and scapegoats, and, perhaps the most critical component, a rabid propaganda that intentionally raises panic and hate while disguising its true nature and intentions under the cover of a phony populism, are among the necessary elements.

Despite national differences that result in major differences in the appearances of fascism, the class nature is consistent. Big business is invariably the supporter of fascism, no matter what a fascist movement’s rhetoric contains, and is invariably the beneficiary.

Mural paintings in honor of  Jecar Neghme of Chile's MIR in the place where he was killed by the Pinochet government. (Credit: Ciberprofe)

Mural paintings in honor of Jecar Neghme of Chile’s MIR in the place where he was killed by the Pinochet government. (Credit: Ciberprofe)

Instituting a fascist dictatorship is no easy decision even for the biggest industrialists, bankers and landowners who might salivate over the potential profits. For even if it is intended to benefit them, these big businessmen are giving up some of their own freedom since they will not directly control the dictatorship; it is a dictatorship for them, not by them. A few of this class will oppose the institution of a fascist dictatorship, some will be ambivalent and perhaps a few were squeamish about the Nazis’ virulent anti-Semitism.

It is only under certain conditions that business elites resort to fascism — some form of democratic government, under which citizens “consent” to the ruling structure, is the preferred form and much easier to maintain. Working people beginning to withdraw their consent — beginning to seriously challenge the economic status quo — is one “crisis” that can bring on fascism. An inability to maintain or expand profits, as can occur during a steep decline in the “business cycle,” or a structural crisis, is another such “crisis.”

Massive corporate subsidies and the funding of gigantic projects, such as military buildups and monumental buildings, are used to combat stagnating or declining profits. If the crisis is severe enough, the level of subsidies and projects required can be achieved only against the will of working people, for it is from them that the necessary money will come, in the form of reduced wages and benefits, increased working hours and the speeding-up and intensification of their work. Fascism overcomes resistance through force.

Exploiting middle class anxieties

But, no matter how powerful they are, numerically these big capitalists are a minuscule portion of the population. How to create popular support for a movement that would ban unions, turn working people into helpless cattle, regiment all spheres of life, destroy all freedom, mercilessly destroy several groups of society, reduce the standard of living of those who still had jobs and inevitably lead to war? This is not an appealing program.

The Nazis, for example, skillfully appealed to German middle class fears of economic dislocation, the increasing numbers of unemployed blue-collar workers, the threat of being swallowed by big business and political instability (although the Nazis were the most responsible for the last of those four), creating the social base needed by the economic elite to bring its movement to power. A movement that was as anathema to the middle class as it was to the lower economic ranks, although its middle class supporters were blind to that reality as the Nazis simultaneously appealed to its grudges against societal elites.

Leon Trotsky, the sharpest observer and analyst of fascism of his time, exposed at the time the false facade of the Nazis. The party’s full name was the National Socialist German Worker’s Party, a name intentionally chosen to fool the middle and lower classes. Capitalism was discredited in Germany, so the Nazi leadership let a populist socialist-sounding program be put forth, and Hitler himself thundered against bankers, albeit generally as part of his anti-Semitic rants.

Many storm troopers believed the party’s rhetoric, even as Hitler was saying very different things to his corporate benefactors and the storm troopers were being used to burn union offices and beat and kill the workers who presumably were the victims of the bankers the storm troopers’ leaders were fulminating against. In a vivid 1932 essay, Trotsky wrote:

“In National Socialism, everything is as contradictory and as chaotic as in a nightmare. Hitler’s party calls itself socialist, yet it leads a terroristic struggle against all socialist organizations. It calls itself a worker’s party, yet its ranks include all classes except the proletariat. It hurls lightning bolts at the heads of capitalists, yet is supported by them. … The whole world has collapsed inside the heads of the petit bourgeoisie, which has completely lost its equilibrium. This class is screaming so clamorously out of despair, fear and bitterness that it is itself deafened and loses sense of its words and gestures.”

A fascist régime can not take root without a social base. Although we are accustomed to seeing storm troopers or their equivalent as coming from the depths of society, the middle class largely supplies that base, as was the case in countries as different as 1930s Germany and 1970s Chile. The historian Isaac Deutscher, in the third volume of his Trotsky biography, The Prophet Outcast, captured the mood of German shopkeepers and other middle class people who came to ruin during the Weimar Republic:

“The Kleinbürger normally resented his social position: he looked up with envy and hatred at big business, to which he so often hopelessly succumbed in competition; and he looked down upon the workers, jealous of their capacity for political and trade union organization and for collective self-defense. … At big business the small man shook his fists as if he were a socialist; against the worker he shrilled his bourgeois respectability, his horror of class struggle, his rabid nationalist pride, and his detestation of Marxist internationalism. This political neurosis of impoverished millions gave [Nazism] its force and impetus.”

Great for profits, awful for workers

It is important to remember, however, that fascist dictators like Hitler and Mussolini were appointed to power, not elected. It is true that the Nazis came in first place in Germany’s July 1931 vote, although with just 37 percent of the vote. The Nazis’ showing in another vote three months later declined to 33 percent and totaled two million less than the combined vote for the Social Democrats and Communists. The traditional nationalist conservative parties decided to “use” Hitler in the belief that they could control him; that the Nazis were in such a position was due to the massive money they received from Germany’s bankers, industrialists and large landowners. A representative of those landowners, Marshal Paul von Hindenburg, was president and appointed Hitler chancellor. It took Hitler only three months to consolidate his power.

Mussolini, too, was appointed prime minister by King Vittorio Emmanuel and received heavy support from Italy’s capitalists. What did they — and capitalists in Spain, Chile and Argentina — receive for their investment in fascist movements?

  • In Germany, corporate profits more than doubled in five years, while from Hitler’s ascension to power on January 30, 1933, to the summer of 1935, wages dropped 25 to 40 percent. In 1935, a “labor passport” was instituted in which the employer wrote reports on the holder. The employer could confiscate the passport at will, without which employment could not be taken, effectively making it impossible to change jobs. In 1938, it was formally made illegal for a worker to change jobs.
  • In Italy, from 1926 to 1934, industrial wages were reduced at least 40 to 50 percent, while agricultural wages were reduced 50 to 70 percent. Unemployment meant the specter of starvation, and as a further whip to keep wages down, children were regularly used in agricultural and factory work as substitutes for fired adults. From 1935, many factory employees were placed under direct military discipline; missing more than five days of work was a penalty subject to nine years’ imprisonment. All workers had to carry a “labor passport.”
  • In Francisco Franco’s Spain, real wages in 1949 were 50 percent of those in 1936. Rationing lasted until 1952; the rations alone were insufficient to maintain human existence. The historian Paul Preston, author of two books that closely examine Franco and his regime, quoted Hitler aide Heinrich Himmler as calling the Franco regime “more brutal in its treatment of the Spanish working class than was the Third Reich in its dealings with German workers.”
  • In Augusto Pinochet’s Chile, the majority of workers earned less in 1989 than in 1973 (after adjusting for inflation). Labor’s share of the national income declined from 52 percent in 1970 to 31 percent in 1989. The minimum wage dropped almost by half during the 1980s, and by the end of that decade, Chile’s poverty rate reached 41 percent and the percentage of Chileans without adequate housing was 40 percent, up from 27 percent in 1972. One-third of the country’s workforce was unemployed by 1983.
  • In Argentina, the main union federation was abolished, strikes outlawed, prices raised, wages tightly controlled and social programs cut. As a result, real wages fell by 50 percent within a year. Tariffs were reduced deeply, leaving the country wide open to imports and foreign speculation, causing considerable local industry to shut. For the period 1978 to 1983, Argentina’s foreign debt increased to $43 billion from $8 billion, while the share of wages in national income fell to 22 percent from 43 percent.

It was not inevitable then, it is not inevitable today

Although there were differences among these régimes due to national characteristics, and the ratio of armed street gangs and storm troopers versus direct repression by the military varied considerably, organized extreme violence, up to and including massacres, is the common thread. This mass violence is what the world’s capitalists are prepared to do if their rule is threatened, or even if their profits are in serious jeopardy.

Violence is certainly not absent from the conduct of formally democratic capitalist governments but there is a large difference between that and what is meted out by fascist régimes, at least internally. We lose our understanding of what fascism would mean in everyday life, and erode our ability to combat the tendencies from which it derives, if we obliterate these differences.

The German Communist Party pretended not to know the difference in the early 1930s, preferring to concentrate its attacks on the Social Democrats rather than the Nazis under the inane idea that the Social Democratic-run Weimar Republic was already “objectively fascist” and that the Nazis would not make much difference. The Communists very swiftly found out otherwise, becoming the first to be rounded up. In the years after World War I, the Social Democrats helped the German military and traditional right-wing parties suppress not only Communists but workers’ revolts in general — not excepting their own social base — thereby paving the road for Hitler.

On top of those blunders, the Communists and Social Democrats had their own militias, which could have countered the Nazi storm troopers, but were never put into action. It was not ordained that Hitler would come to power, or that other fascist régimes would do so. Chile’s Left was highly organized, for example.

History does not repeat itself neatly, but the wide differences among the five examples cited underscore that the threat of fascism exists in any and all capitalist countries. That does not mean that fascism is inevitable, although if capitalist economies continue in a generally downward spiral, some capitalists will undoubtedly begin thinking of it as a last-ditch effort to maintain profits despite the bad ending such régimes invariably meet. It can’t be denied that some of the pieces of fascism are in existence — including militarized police forces and ubiquitous spying agencies.

A better world, one designed to fulfill human need rather than private profits, not only is necessary for human salvation, it is the only way to put an end to the risk of turns to the authoritarian Right, in nationalist, fascist or other forms. That can only arise from organized social movements, confident in themselves and linking hands across borders. May the new year accelerate the process.

You can have democracy as long as you vote for the boss

The idea that democracy and capitalism go together is a relatively recent phenomenon. The pairing don’t really go together: How much control do you have at your job? Over the development of your city? Over a political process responsive only to the greed of the one percent?

Early capitalists and their publicists believed political democracy was an outright impediment. Adam Smith and another influential classical economist, David Ricardo, among many others, opposed universal suffrage. Ricardo was prepared to extend suffrage only “to that part of them [the people] which cannot be supposed to have an interest in overturning the right to property.” Smith’s reluctance seemed to be rooted in his honest assessment of how few are able to enjoy that right to property: “For one very rich man, there must be at least five hundred poor, who are often driven by want, and prompted by envy, to invade his possessions.”

Not long afterward, the influential British politician and writer Thomas Babington Macaulay said universal suffrage would be “the end of property and thus of all civilization.”  (“Property” refers to the means of production, not personal possessions.)

Along U.S. Highway 20/26/93, west of Arco, Idaho (Photo by Pete Dolack)

Along U.S. Highway 20/26/93, west of Arco, Idaho (Photo by Pete Dolack)

Because capitalism is an impersonal system, it does not require that members of the dominant capitalist class actually hold political posts, although frequently they do. It is enough that the political structure that is a byproduct of the ideologies of capitalists’ institutions, corporations, remain in place, and that capitalists exert decisive influence over a society’s other institutions.

The modern state itself is a creation of the rise of capitalism and the need of industrialists and financiers for a structure to provide protection for investments and to settle disputes among themselves. These features are wrapped tightly in nationalism, with continual references to a given nation’s mythologies, to bind working people tighter to the system. Capitalism also requires a literate, educated population, in contrast to earlier systems, and a literate, educated populace is more inclined and more able to agitate for its interests.

Self-interest in expanding the vote

There is more communication — this, too, is a necessity for the increased commerce of capitalism — and if the people of one nation wrest a gain from their rulers, people in other nations will know about it, and will struggle to get it for themselves as well. Further, in the early days of capitalism, its development was seldom in a straight line; sometimes there could be an incremental expansion of the voting franchise because one bloc of capitalists believed the new voters would vote for their party.

Once the vote is made available to more citizens, pressure builds from below to further extend the vote; moreover, the creation of a modern working class brings together masses of people, enabling the creation of mass movements that can organize struggles for more democratic rights. Social media has proven to be a powerful tool for democracy activists, although by itself it can’t substitute for real-world organizing and a physical presence at key locations.

Capitalists intended to establish democracy only for themselves, but the spaces and contradictions contained within the political systems created to stabilize the functioning of capitalism (including institutions to adjudicate conflicts among the capitalists and mechanisms for selecting political leadership in the absence of an absolute monarchy or the continued ascendency of a static landed aristocracy) enabled their workers to wrest some of that democracy for themselves. None of that came easy — untold lives were snuffed out and untold blood was shed, and even in cases when a struggle has been bloodless, many advances required decades of dedicated activism to accomplish. The process is called “struggle” for a reason.

Summing up an essay in New Left Review on the development of voting rights across the world, Göran Therborn wrote:

“Democracy developed neither out of the positive tendencies of capitalism, nor as a historical accident, but out of the contradictions of capitalism. Bourgeois democracy has been viable at all only because of the elasticity and expansive capacity of capitalism, which were grossly underestimated by classical liberals and Marxists alike.”

Not endlessly expansive, however. Hard-won political rights are not only circumscribed by the immense power concentrated in the hands of corporate institutions and the class that controls those institutions, but those rights end at the entrance to the place of work.

A democratic lack of control?

If one class of people has the ability to bend the political process to benefit itself; arrogates to itself an unlimited right to accumulate at the expense of everybody else and at the expense of future generations; has the right to dictate in the workplaces, controlling employees’ lives; and can call on the state to enforce all these privileges with force, if necessary, then how much freedom do the rest of us really have? If one developer has the right to chop down a forest to build a shopping center that the community does not need or the right to build high-rise luxury towers that force out others who already lived there because one individual can earn a profit, and the community has no recourse, is this state of affairs truly democratic?

If a capitalist decides it would be profitable to move the factory to a low-wage country and thousands are put out of work as a result, is it not capital that actually possesses freedom? If enterprises were collectively run and/or under community control, would people vote to send their jobs to a low-wage haven thousands of miles away?

If the political system is so dominated by corporate power — the concentrated power of industrialists and financiers — that a politician at the national level who might genuinely wish to give working people a better break can’t because that corporate power is decisive, or that a politician at the local level might want to make the local factory owner do a little more for the community or simply pay a fair amount of taxes can’t because to push the idea would lead to the factory owner closing the factory and sending many townspeople to the unemployment office, then can this system said to be democratic?

Men and women have the vote, and have constitutionally guaranteed rights — lives were sacrificed to gain these rights. But if there is such a concentration of power that most elementary decisions are taken by a small number of people — either big capitalists or politicians acting on their behalf or under their influence — then the rights enshrined in a constitution are mere shells. Democracy is formal, and cannot be more than formal without democracy extending to all spheres of life. That is impossible under capitalism because concentrated economic power is leveraged into power over the political, cultural, social and educational life of a nation, and that power, as wielded by capital, will be tightened at home and expanded abroad due to the impetus to expand.

Capitalism is an impersonal system, and the competition that drives it inevitably leads to this dynamic, regardless of which personality is where. The world has not reached its present state by accident, and although it does not guarantee any particular capitalist a permanent place at the top, it does guarantee extreme inequality and the immiseration of the many (working people) for the benefit of the few (industrialists and financiers). No reform can wish that away.

Freedom for capital, not people

Libertarianism is a philosophy of might makes right. The natural philosophy for the age of neoliberalism, as well demonstrated by the Koch brothers, but also, it would appear, a justification for the ugliest elements of United States history.

Consider the following words of Ayn Rand:

“Now, I don’t care to discuss the alleged complaints American Indians have against this country. I believe, with good reason, the most unsympathetic Hollywood portrayal of Indians and what they did to the white man. They had no right to a country merely because they were born here and then acted like savages. The white man did not conquer this country. …

Since the Indians did not have the concept of property or property rights — they didn’t have a settled society, they had predominantly nomadic tribal ‘cultures’ — they didn’t have rights to the land, and there was no reason for anyone to grant them rights that they had not conceived of and were not using. …

What were they fighting for, in opposing the white man on this continent? For their wish to continue a primitive existence; for their ‘right’ to keep part of the earth untouched — to keep everybody out so they could live like animals or cavemen. Any European who brought with him an element of civilization had the right to take over this continent, and it’s great that some of them did. The racist Indians today — those who condemn America — do not respect individual rights.”

A U.S. Air Force plane drops a white phosphorus bomb on Vietnam in 1966.

A U.S. Air Force plane drops a white phosphorus bomb on Vietnam in 1966.

The occasion for Ayn Rand’s cold-blooded, racist words was her speech to the graduating class of the U.S. Military Academy at West Point on March 6, 1974. She said the above during the question-and-answer session, but the text of the actual talk wasn’t much more humane. During her talk, among many head-slappers, the infamous philosopher of greed said:

“Something called ‘the military-industrial complex’ — which is a myth or worse — is being blamed for all of this country’s troubles. Bloody college hoodlums scream demands that R.O.T.C. units be banned from college campuses. Our defense budget is being attacked, denounced and undercut by people who claim that financial priority should be given to ecological rose gardens and to classes in esthetic self-expression for the residents of the slums.”

Civilizing them with a gun

I recall someone named Dwight Eisenhower raising concerns about a “military-industrial complex.” It seems to me he was in a position to know what he was talking about, even if he waited until the end of his career to provide a warning after devoting so much of it building up said complex.

At the time of the West Point talk, three million Vietnamese were dead due to a war nearing its conclusion. Was it valid to protest? Among other feats, the U.S. leveled major cities — 77% of the buildings in Hue, one of Vietnam’s biggest cities, were completely destroyed. Dams were blasted away, allowing salt water from the South China Sea to flood farmland, making the growing of food impossible.

In South Vietnam, 9,000 of 15,000 hamlets were damaged or destroyed, as were 25 million acres of farmland and 12 million acres of forest. Killed were 1.5 million cattle. In North Vietnam, 34 of the largest 36 cities suffered significant damage, with 15 completely razed, while 4,000 of about 5,800 communes were damaged. More than 1 million acres of farmland and 400,000 cattle were destroyed in the North. (These statistics are from Manufacturing Consent by Noam Chomsky and Edward S. Herman.)

The Vietnamese were ungrateful for this exemplary treatment, in the imperialist mind, similar to the ungrateful Native Americans who are “racist” because they have failed to appreciate the lessons in civilization they were being taught while the subjects of a genocide.

I don’t see why the above words of Ayn Rand should be considered any different than Nazi pronouncements on Jews.

Domination in the age of financialization

Although there is a temptation to think of libertarians as young conservatives who want to smoke marijuana — a picture sometimes true of libertarian followers — when libertarian leaders talk about “freedom,” what is really meant is freedom for the holders of capital to pursue profit maximization without limits. The cult of the market is a logical expression of the extreme individualism embodied in libertarianism.

One of the most influential articulators of that was Friedrich Hayek. The Austrian School economist asserted that solidarity, benevolence and a desire to work for the betterment of one’s community are “primitive instincts” and that human civilization consists of a long struggle against those ideals. “The discipline of the market” is the provider of civilization and progress, he wrote.

Thus, unregulated capitalism is “civilization” and anything else is a product of “primitive” group instincts that have survived from our prehistoric hunter/gatherer ancestors in the Hayekian worldview.

From these ideas, it is a small step to the concepts of “money equals speech” and “corporations are people” promulgated by the U.S. Supreme Court. This is an extension of “shareholder rights” to the political sphere — the more you own, the more say you have. A form of conquest and domination for the age of financialization.

If there is no community, no common interest, then why can’t someone, anyone, take whatever they want from the less strong? Give Ayn Rand credit for one thing: She stripped away all the accretions of individualist verbiage, all the rarefied theory of orthodox economics, and enunciated with unusual clarity what lies at the core of capitalist triumphalism. It hasn’t served the world very well.

“Justice” for a billionaire, none for the state he ripped off

There has been much cheering across the corporate media about the Permanent Court of Arbitration in The Hague ordering the Russian government to pay more than US$51 billion as compensation for confiscating the assets of Yukos, yet silence concerning the original theft of the company by Mikhail Khodorkovsky.

The basis of the decision by the arbitration court was that the assets of Yukos, seized for alleged non-payment of taxes, were sold for US$9 billion, well below the estimated value of the company. Conveniently left out of this picture is that Mr. Khodorkovsky purchased the assets for $159 million seven years earlier in a rigged process that he controlled. He did so as one of seven oligarchs who bought deeply unpopular former President Boris Yeltsin a second term and were handed control of the country’s vast natural resources as a reward.

This is a story that can not be separated from the fall of the Soviet Union and the looting of its assets, with a handful of newly minted oligarchs, mostly former black marketeers who became bankers, coming to control post-Soviet Russia’s economy. Estimates of the size of the assets that came to be owned by the seven biggest oligarchs (Mr. Khodorkovsky was one of them) in the late 1990s range up to one-half of the Russian economy. This at the same time that the Russian economy shrank by 45 percent and an estimated 74 million Russians lived in poverty according to the World Bank; two million had been in poverty in 1989.

Siberian mountain formation (photo by Irina Kazanskaya)

Siberian mountain formation (photo by Irina Kazanskaya)

An important factor in the failure of Mikhail Gorbachev’s perestroika was that working people saw the reforms as coming at their expense. A 1987 reform loosened job protections in exchange for enterprise councils that were to have given workers a voice in management, but the councils were largely ineffective or co-opted by managements. The law had also been intended to eliminate labor shortages. It didn’t, and a 1990 reform was stealthily passed to reduce employment and eliminate the ability of working people to defend themselves. Enterprises would now have private owners with the right to impose management and ownership shares could be sold.

Exhaustion from years of struggle also were a factor in the lack of organized resistance to the elements of capitalism that were introduced in the last years of perestroika and to the shock therapy that was imposed on Russia at the start of 1992, days after the formal dissolution of the Soviet Union and the assumption of uncontested power by President Yeltsin. Shock therapy wiped out Russians’ savings through hyperinflation and state enterprises were sold at fire-sale prices, or sometimes simply taken.

Connections allowed him to set up businesses

Mr. Khodorkovsky used his connections as an official within the Communist Youth League to found a company that imported and resold computers and other goods at huge profits and engaged in currency speculation. The proceeds were used to buy companies on the cheap and found a bank. His bank, Menatep, earned large fees by providing credit when it was in scarce supply during the post-Soviet collapse.

When President Yeltsin was up for re-election in 1996, he faced a daunting challenge as his popularity rating was well below 10 percent — tens of millions of Russians had been plunged into poverty and the economy had contracted for several years in succession. The president admitted in his memoirs that he was about to cancel the election. But he was presented with a plan by the seven oligarchs, the scheme that became known as “loans for shares.”

These seven oligarchs offered President Yeltsin a bargain: In lieu of paying taxes, they would make loans to the government so it could meet its expenses, such as actually paying its employees. In return, the government would give the oligarchs collateral in the form of shares of the big natural-resources enterprises that were soon to be privatized. (Other state enterprises had been quickly privatized upon the implementation of shock therapy.)

If the loans were repaid, the bankers would give the shares back. If not, the oligarchs would hold auctions to sell the collateral. The government had no ability to pay back these loans, but President Yeltsin issued a decree sealing the deal in August 1995.

The oligarchs used their own banks to conduct the subsequent auctions, and, through a mix of rigged terms and conveniently closed airports, won them all at prices that were small fractions of the enterprises’ reasonable market value. These enterprises represented Russia’s enormous reserves of oil, nickel, aluminum and gold, and a minority share in the dominant gas company, Gazprom.

These seven oligarchs all became billionaires through the “loans for shares” scam. The oligarchs, who owned almost the entire Russia mass media, spent 33 times the legal limit on the election and provided 800 times more television coverage of President Yeltsin than was provided to his opponents.

Mr. Khodorkovsky’s bank, Menatep, was put in charge of the auction of Yukos. It avoided competitive bidding, enabling his holding company to buy it for $159 million, only $9 million above the starting price. As long as Boris Yeltsin was president, the oligarchs could steal all they wanted. Nor did Western authorities complain about this; President Yeltsin’s bombardment and illegal disbanding of the Russian Parliament in 1993, resulting in more than 500 deaths, was celebrated as a democratic triumph. Indeed, the World Bank’s chief economist for Russia declared, “I’ve never had so much fun in my life.”

Corporate lawyers as arbitrators

The Permanent Court of Arbitration that handed down the $51 billion judgment is one of the international tribunals that hear investor-state disputes behind closed doors. As is customary with these bodies, the arbitrators are corporate lawyers appointed by governments.

In the Yukos case, each side could choose one of the three panelists who hear the case. The deciding panelist was Yves Fortier, a former chair of one of Canada’s biggest corporate law firms and of Alcan Inc., a mining company since bought by Rio Tinto, and a director of several other companies.

I see no sense in denying that politics were behind Mr. Khodorkovsky’s prison sentence and his loss of Yukos. But there can be no dispute that politics and shady dealing earned him his fortune in the first place. The gangster capitalism in which he excelled in the 1990s, cheered on by the West, was without mercy. Are there going to be outpourings of sympathy for the tens of millions of Russians immiserated so that the country’s Khodorkovskys could become billionaires? I think we already know the answer.