West Can’t Stand Aside as the East Bloc Writhes

The German Democratic Republic observes its 40th anniversary this week in quasi-disintegration, another member of the Soviet Bloc in crisis. The Soviet Union itself, by the account of its own leaders, is on the brink of economic collapse. In Yugoslavia, Serbian nationalism is driving a confederation with an already-wrecked economy toward political upheaval.

The passivity of the West, and in particular of the United States, in the face of all this can be explained in part by a lack of ideas about what to do, but also by complacence and a degree of Schaden freude : pleasure in watching the communists writhe.

This is irresponsible, and stupid to boot. If the Soviet Union should collapse, it will take a great deal else down with it. Mikhail Gorbachev has liberated reason in the Soviet Union, which at last is responding to the outside world and to its own crisis with reason, debate, truth-telling and humility.

If the reforms fail, the possibility of a return to irrationality is well-attested by today’s empty Siberian camps, the mass graves there and in Eastern Europe only now being exhumed, the memory of the tens of millions who perished, and of the hundreds of millions whose lives were stunted during 70 years of Soviet communism.

It may be that there is very little the Western powers can do for the Soviet Union. Food, loans, technical assistance--all inevitably are palliatives when a nation as huge as the Soviet Union confronts a crisis so fundamental and so complex. It is difficult to feel much optimism.

On the other hand, it may be possible for the West to contribute to a constructive evolution of the Central and East European and Balkan situations--to an evolution unthreatening to the Soviet Union in which the Soviets might find positive reinforcement for their own reform.

The idea of a Marshall Plan for the East comes up again and again. One should recall what the Marshall Plan really was. Secretary of State George Marshall said at the Harvard Commencement of 1947 that because of the breakdown of Europe’s economic structures in the war, a vicious circle existed. Farmers were unwilling to sell their produce in exchange for money that could not be spent because industrial goods for consumption were not being manufactured. Governments were compelled to buy food and fuel abroad, using funds that should be going to reconstruction. The situation resembled today’s in much of the East.

The remedy, Marshall said, could not be piecemeal: There had to be a general restoration. What followed was the creation by the Europeans of a cooperative organization that evolved into the Organization for Economic Cooperation and Development, the OECD. Plans were drafted, priorities set, a budget established. Then came money from the United States. The result was brilliantly successful.

Two things, though, must be remembered: A powerful prewar and wartime European economy had existed, and was waiting to be reactivated. What made its reactivation possible was less the money than the regaining of confidence among the Europeans themselves.

It is different in Eastern Europe and the Soviet Union. Virtually new economies have to be created there--ones that will produce what people actually require and work to world norms of efficiency and quality. None of this has existed there for 40 years--for 70 years in the Soviet case. Investment is needed, but intelligent investment. France’s ex-President Valery Giscard d’Estaing has proposed that the European Community set up a Euro-Polish investment bank to make long-term, low-interest loans to Polish enterprises, on a scale of a billion dollars a year.

This seems much better than the classic loans or grants to governments. Needs have to be analyzed and reform planned. Surely the OECD possesses an institutional memory and a wealth of experience in reconstruction planning and organization that could help the East European countries undertaking reform today.

Are Polish-Hungarian counterparts to the OECD’s original national planning groups imaginable, to cooperate with OECD, the European Community and the United States? Might such an arrangement be open to others initiating reforms? Could Yugoslavia, or individual Yugoslav republics, be brought into this? Possibly the Soviets could be associated, or have an observer role.

West Germany is already deeply involved with Hungarian reforms, while Poland today has to a considerable extent become a dollar economy. Austria has close links with the Slovenian and Croatian economies. Is there something the Western countries could contribute to stabilizing currencies in the East? Yugoslav inflation is somewhere around 1,000%, and Poland’s is expected to be 300% by the end of the year.

I am asking questions. It is obvious that I do not have answers. Surely there are economic planners and bankers who could come up with better ideas than have been put forward so far. We cannot simply stand aside. A Polish Communist recently said bitterly to a Western audience: “You abandoned us in 1939, and we understood, and Poles fought for you on every Western front, and inside Poland itself. You abandoned us again in 1944-45. We understood. Are we to believe that you are now abandoning us again?”