A People's History of the World: From the Stone Age to the New Millennium (82 page)

There was one area of the world in which the enthusiasts for the market placed particular pride—east Asia. In its World Development Report of 1991 the World Bank spoke of ‘the remarkable achievements of the east Asian economies’, and noted ‘various degrees of reform’ in China, India, Indonesia and Korea being ‘followed by improvements in economic performance’.
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Samuel Brittan of the
Financial Times
in Britain reassured his readers, ‘Someone who wants to cheer up should look, not backwards to the Great Depression, but to the developing countries of eastern Asia which have contracted out of the world slowdown’.
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The hollowness of such optimism hit home in 1997, when an economic crisis which began in Thailand swept through the entire region—pushing Indonesia into a slump on the scale of the 1930s and forcing South Korea, Malaysia and Hong Kong into deep recession. In the course of 1998 this ignited a sudden crisis in Russia and destabilised the biggest economy in Latin America, Brazil. Programmes drawn up by the IMF to deal with the crisis were bitterly criticised as likely to make things worse by its own former luminaries such as Jeffrey Sachs.

The Chinese economy did experience rapid growth through most of the 1980s and 1990s as a result of reform of the agricultural price system in the late 1970s which involved a massive one-off transfer of resources from the state to the peasantry. There was a rapid growth in food output for a number of years, which in turn provided the base for a range of light industries to develop, catering for both the domestic and world markets. According to the official figures, total industrial output trebled.

But the growth was incredibly uneven. Some coastal regions underwent massive industrialisation and urbanisation while vast inland regions stagnated or even regressed. There were tens of millions of new jobs in industry, but 200 million people flooded from the countryside to the towns in the hope of filling them. Rationalisation of the old heavy industries involved slashing their workforces and scrapping minimal forms of welfare provision. Wild fluctuations in growth rates saw sharp booms with rapidly rising prices giving way to periods of stagnation. Attempts to break out of these cyclical downturns by selling more on the world market threatened a classic crisis of overproduction every time the world economy slowed down or slumped.

This combination threatened to produce massive social convulsions, as was shown vividly in 1989. Only a few months before the political collapse in Eastern Europe the Chinese state itself came close to breaking down. Student demands for greater democracy became the focus for the grievances of wide sections of people, culminating in the famous demonstration in Beijing’s Tiananmen Square, but also in dozens of other cities and industrial centres. For several days the regime was paralysed, seeming to have difficulty finding soldiers prepared to bring the demonstrations to an end, before it used tanks to crush the protests.

Tiananmen Square was not the first occasion a regime that combined state capitalist characteristics with a market orientation had faced a social explosion. Egypt had experienced a wave of strikes, demonstrations and revolts in its 13 main cities early in 1977—the biggest wave of social unrest since the nationalist revolt against Britain in 1919. In Algeria in 1988 a wave of strikes turned into a near-insurrection as young people fought the police for control of the streets, and forced the regime to concede freedom of the press and permission for political opponents to return from exile. In South Korea in 1987 huge militant demonstrations by students and sections of the middle class shook the military regime, forcing it concede a degree of liberalisation—to be followed in 1988 by a series of major strikes which were settled by double digit wage increases.

All of these social explosions showed certain similarities with the events of 1989-90 in Eastern Europe. They demonstrated that neither state capitalism nor the transition from state capitalism to some sort of market system could prevent the workforces created by industrial growth rebelling—and drawing behind them many other layers of society.

Islam, reform and revolution

It became a journalistic cliché for a time in the 1990s to say that the clash between ‘Communism and capitalism’ had been replaced by that between ‘Islam and the West’. Certainly, two of the great uprisings of recent years had taken place under the banner of Islam—the Iranian Revolution of 1979 and the Afghan resistance to Russian occupation through the 1980s—and these had inspired opposition movements in Egypt, Algeria, occupied Palestine and elsewhere. But what the cliché ignored was that Islam, as so often before in its history, could give expression to very different social interests which could end in bloody conflict with each other.

The Iranian Revolution was an explosion of bitterness against a despotic ruler, the Shah, and the US government which backed him. His rule had antagonised traditionalist clerics, nationalist intellectuals, sections of capitalism linked to the bazaars, the new working class of expanding industry, the students, the impoverished petty bourgeoisie, the unemployed and semi-employed of the urban slums, the national minorities and sections of the peasantry. Islamic diatribes against ‘oppression’ could unite people from all these groups against a common enemy. But once the Shah had been overthrown in a classic uprising—with mass strikes, an armed insurrection and mutinies within the army—each group read the Islamic texts in a different way and drew very different practical conclusions. The first years after the rising not only saw clashes between certain Islamic and secular groups, but bloody civil wars between different Islamic factions. Eventually the faction around Ayatollah Khomeini proved victorious and justified a reign of terror against its defeated opponents in religious terms. This led many liberals to claim its barbarous methods were uniquely ‘Islamic’, a product of a mentality supposedly lacking the humanity of the ‘Judaeo-Christian tradition’. In fact Khomeini’s repression was not qualitatively different from that endorsed by French Roman Catholicism at the time of the crushing of the Commune, to that backed by Prussian Lutheranism in 1919-20, or, for that matter, to that supported by US Christian fundamentalists and Jewish rabbis as the Israeli army oversaw the wholesale slaughter of Palestinians by Falangists in Lebanon in the early 1980s. The bloodbath was that of a counter-revolution, not the product of a religion.

The Russian-sponsored regime in Afghanistan likewise provoked resistance from disparate social groups as it attempted to impose a Stalinist programme of rapid ‘modernisation’. When Russian troops occupied the country, killing one pro-Russian ruler to replace him with another, Islam seemed to again provide a rallying cry for resistance. But groups with contradictory interests were to end up fighting each other as well as the Russians. A civil war between Islamic groups followed the Russian withdrawal until the Taliban, backed by Saudi Arabia and bitterly hostile to the Islamic regime in neighbouring Iran, conquered most of the country. Meanwhile, many of the Islamists from across the Middle East, who the American CIA had arranged to go and fight in Afghanistan against the Russians, now directed their fire against their pro-US local rulers—and were denounced as ‘terrorists’ by the US.

Far from Islam being a single force opposed to the West, the biggest and bloodiest war of the 1980s raged between the Islamic leaders of Iraq and the ‘Islamic Republic’ of Iran. It was a war in which both conservative Saudi Arabia and the Islamist regime of Hassan al-Turabi in Sudan backed Iraq—as did the US at decisive moments.

The growth of Islamic political movements was a product of the alienation from the world order of tens of millions of people—especially the young and educated, who had little hope of secure employment in societies trapped by their position within the global system. The Koran’s vague injunctions against oppression and proclamation of a just society offered a terminology that seemed to provide an outlet for intense feelings of frustration. But the closer the Islamists came to holding power the more their radical edge was blunted. Islamic governments proved happy to work with Islamic capitalists, who in turn continually made alliances with other parts of the world system, including ‘the great Satan’, the US. In every clash between national states in the Middle East, Islamic governments were to be found on opposing sides.

The new imperialism

The old imperialism of direct colonial rule finally died in the last quarter of the 20th century. Portugal’s ruling class was forced to abandon its colonies, the white settler regime in Rhodesia gave way to Zimbabwe, the racist regime in South Africa conceded majority rule, and Britain handed Hong Kong back to China. Even what used to be called ‘semi-colonies’—weak governments dependent on Western backing for survival—often achieved a certain independence. The puppet became a client and the client sometimes turned on its former master—as Saddam Hussein of Iraq showed when he marched into Kuwait in 1990. But this did not mean the end of imperialism—the attempt of major capitalist states to impose their will on lesser states.

In the mid-1990s many journalists, academics and politicians claimed that states were unimportant in the ‘new global economy’. But it did not seem like that to the heads of the multinational corporations or the governments which worked with them. Studies showed that the owners and directors of such corporations remained very much rooted in particular national states, using them as bases from which to advance and protect their interests elsewhere. As one study concluded:

The huge multinationals centred in the US depended on the US state to help impose their policies on the rest of the world. The two major schemes for dealing with Third World debt were, appropriately, named after members of the US government—the Baker Plan and the Brady Plan.
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Behind the IMF and World Bank talk of ‘new paradigms for development’ lay the reality of ensuring the banks were paid off handsomely. Similarly, world trade negotiations were about US attempts to impose its own ‘free trade’ hegemony on other governments, equally eager to protect the sometime divergent interests of their own capitalists.

But financial diplomatic pressures were not always enough to ensure the ruling classes of the most powerful countries got their way. There were points when governments felt military force alone could maintain their global dominance.

The two Gulf wars were important examples of what could happen. Iraq waged a long and bloody war against Iran throughout the 1980s, aiming both to attract the support of the US and the wealthy Gulf states, and to cement its relations with important multinationals. When it did not gain as much financially as it had hoped from its backers in the war, it invaded one of them, Kuwait, in 1990—miscalculating the response of the Great Powers, especially the US. America, Britain and other states reacted with a massive military build-up, a devastating bombing campaign, a land invasion and the massacre of 100,000 Iraqis as they streamed back along the road from Kuwait to Basra. They followed this with a decade of economic sanctions which are estimated by the United Nations to have killed 50,000 Iraqis a year.

The aim of the operation was not simply to discipline Iraq, or even to act as a warning to other nationalist governments and movements in the Middle East who might challenge the US oil companies. It was also intended to show the world’s other powers that they had to accept the global goals of the US, since only the US was powerful enough to be the world policeman.

Already in the 1980s, Republican administrations had set out to overcome the hangover from defeat in Vietnam, the ‘Vietnam syndrome’, by demonstrating the continued ability of the US to dominate the Western hemisphere. This was the thinking behind its invasions of Grenada and of Panama, and of its sponsorship of the right wing Contra guerillas who wreaked havoc in Nicaragua. The Bush administration subsequently showed that the US could carry out similar policing operations on a much bigger scale in the Middle East. Under his Democrat successor, Bill Clinton, one military operation followed another with increasing regularity through the 1990s—the landing of marines in Somalia, the repeated bombing of Iraq, the bombing of Serbian forces during the Bosnian civil war, the bombing of an alleged guerilla camp in Afghanistan and of a pharmaceutical factory in Sudan, and the launching of an all-out air war against Serbia.

It was not only the US which practised the new imperialism. Russia attempted to maintain its overall dominance within wide sections of the former USSR, using its military strength to influence the outcome of civil wars in Georgia and Tajikistan. France maintained a major sphere of influence in Africa, jostling with the US for dominance in regions such as Rwanda-Burundi. Britain attempted to have an impact on events in Sierra Leone and Nigeria, while Nigeria intervened in other west African states in turn under the guise of ‘peacekeeping’. Greece and Turkey periodically threatened to go to war as they clashed over their influence in the north east Mediterranean and parts of the Balkans.

The world of the 1990s was a complex hierarchy of states and connected business interests jostling for positions of influence. But they were not of equal importance, and each knew that its position in the hierarchy depended, in the end, on the armed force it could deploy. At the top, ever anxious to preserve its position, was the United States. The last year of the decade saw exactly what this entailed as the US-led NATO alliance set out systematically to degrade the infrastructure of Serbia because its leader, Milosevic, had not gained permission before emulating the viciousness of a score of US clients around the world and attacking the country’s Albanian minority.