By Markar Melkonian
The source of Armenia’s misery and humiliation, we often hear, is not capitalism per se, but rather “gangster capitalism,” “a broken system,” “capitalism run amok.”
The goal for the future, then, is to “fix the system,” to reform capitalism, to make it more like regular, pure, genuine Free Enterprise, the kind of capitalism that works. But what if Armenia’s actually existing capitalism already is genuine capitalism?
An economist once observed that the only existential meaning of “enterprise” in the term free enterprise is “whatever capitalists happen to be doing at the time”--and “free” is the accompanying demand that they be allowed to do it.
In Armenia, successive presidents, legislators, ministers, and mayorshave certainly allowed them to “do it.”Post-Soviet cliques have privatized public land, seized factories, and plundered resources. They have shredded the social safety net,unleashed the “job creators” on child labor; eliminated overtime pay; dispensed with job safety standards, trashed even the most minimal environmentalregulations, and generally done everything they can toenrich themselves and their cronies, seemingly without a thought to the welfare of the vastmajority. Over the years, Hetq.am has done a truly admirable job of reporting the daily pillage.
Armenia’s plutocrats justify their actions in the name of free enterprise, and their point is well taken. After all, a law prohibitingthe exploitation of child labor or the poisoning of drinking water is nothing if it is not state regulation of the market. Building public schools and enacting laws that protect forestsmake markets less free.So if Free Enterprise really were as important as the IMF and the advisors from Chicago say it is, then Armenia’s oligarchs really are the national heroes they think they are.
One of the Ronald Reagan admirers who led Armenia’s charge down the road to ruinexemplified the wisdom of Yerevan’s Free Marketeers: “free market reform,” he wrote, is the path “which has been traveled by many other nations and which leads to happiness.”(Vazgen Manukian, quoted in Jirair Libaridian (ed.), Armenia at the Crossroads, 1991, p. 52.) In the years since he made this announcement, we have beheld the happiness that free market reform has wrought in many other nations, from Mexico to Greece, and from Iceland to India, where in recent yearsa quarter of a million farmers have committed suicide.
The oligarchs and their IMF advisors, of course,are willing to pay this price for the sake of their Free Market utopia. Or rather, they are willing to make the poor pay this price. For decades, sensitive commentatorsin the West excoriated Joseph Stalin for his “blood-curdling” suggestion that the end justifies the means. These days, those same commentatorsdo not give a passing thought to the hundreds of millions of lives consigned to displacement,drudgery, fear,and early death in the name of free market reform.
A quarter century ago, the Ter Petrosyan administration set Armenia off on the path to happiness by doling out state property to cronies and racketeers,guttingthe industrial infrastructure, and shredding the social safety net. Hundreds of thousands of workers lost their jobs, anduntold thousands of Armenians, especially the elderly and the very young, have died of exposure, food poisoning, preventable accidents, and lack of access to basic healthcare.
Since then, aparade of alternating opposition figures and national saviors have come into office, enriched themselves and their cronies, and then left the scene with the loot, one after another. Despite the personnel changes, though, economic policy has continued to benefit the rich few, at the expense of the poor majority.
Armenia has undergone twenty-five years of foreign-directed reform: privatization, shock therapy, conditionalities, and so on. Every time we turn around, it seems that more “reform” is needed. And the reform always seems to require further wage cuts, further cuts to social programs, further deregulation, and ever more sacrifice from the have-nots. Consider the much-ballyhooed Structural Adjustment Policies (SAPs) of earlier years: for Armenia, as for other poor debtor countries, SAPs required:
- selling off state enterprises to the private sector;
- eliminating price controls and producer and consumer subsidies for agricultural goods;
- devaluing the local currency;
- cutting consumer subsidies and charging user fees for social services such as health care and education;
- dropping protectionist measures and reducing regulation of the private sector;
- providing guarantees, state-funded infrastructure, tax breaks, and wage restraints as incentives for investment;
- dismantling foreign exchange restrictions (which has allowed wealthy locals to export funds overseas, as capital flight, worsening balance-of-payment deficits).
As a result of these policies, Armenia today can boast of Enterprise that is as Free as anywhere on Earth. Readers of Hetq.am are aware of the consequences: sky-high unemployment; proliferating poverty; the depopulation of the countryside; deforestation; plummeting birth rates; falling life expectancies, and, of course, the catastrophic outmigration of one third of Armenia’s population. Successive plutocrats have lengthened the work week, lowered the legal work age, evicted families from their homes in order to build “elite homes for elite guys,” demanded ever-higher bus fares for a privatized transport system; raised university fees far beyond the means of most families, attempted to privatize social security, and so on and so forth, ad nauseam.
It is a sad commentary on the state of intellectuals in Armenia today that few of them are even aware of the work of the great social geographer David Harvey, who has so accurately described the process of “capital accumulation by dispossession” that characterizes scores of countries like Armenia. When is someone going to translate Harvey’s book, The New Imperialism, into Armenian?
In Armenia, as we know, “free market reform” has taken place against the background of official impunity, the jailing of dissidents, electoral manipulation, and fraud so pervasive that it would have astonished even the most cynical Armenians of the Soviet period.
Let us remind ourselves that these measures were undertaken under the tutelage of the IMF and the World Bank, in strict adherence to Free Market doctrines. All the while, Western agencies and bureaucracies have heartily congratulated their Armenian followersfor rapidly privatizing state property, “making hard choices,” and faithfully carrying out Washington’s directives.
David Brooks, one of the more thoughtful American Free Market columnists, recently acknowledged that, curiously, post-Soviet success stories are rare. (“The Legacy of Fear,” New York Times, November 10, 2014.) Despite the generalized “wreckage,” however, he was able to identify several success stories, including none other than Azerbaijan and Armenia! That’s right: according to Brooks, Armenia today counts as one of “only five countries that have emerged as successful capitalist economies” from the former Soviet bloc.
This should surprise the Free Market faithful in Yerevan, who were hoping that ultimate success lay in the bright future, not in the dark present. If this is what a successful capitalist economy looks like, then the question naturally arises: What was the point of letting capitalists take over the country in the first place?
The Free Market coercion and rhetoric has come full circle: right-wing politicians in the USA, exemplified by Scott Walker, the governor of the state of Wisconsin, have tried to enact many of the same policies in the USA that the IMF, the CIA, and the economists from Chicago have foisted on vulnerable countries like Pinochet’s Chile and today’s Armenia. In their arguments for, say, privatization of social security, the Scott Walkers have pointed to policies in Latin America, Eastern Europe, and the former Soviet republics as examples of an irresistible global trend that America must follow.
When the Scott Walkers have failed to achieve their maximal demands, it is because traditional constituencies in the United States with independent organizational presence—notably labor unions—have fought against free market “solutions.” Here, ironically, America does provide a valuable lesson to Armenia: resistance to Free Market reform must be organized, sustained, and based in the working class.
The tide of misery rises ever higher, and there is no good reason to hope that further reforms along the same lines will change the trajectory. And yet capitalism still escapes blame for the disasters it has created. Instead, we are told that “capitalism run amok” is to blame, and that the only antidote is—more capitalism! This has happened over and over again.
At what point will skepticism kick in?
Free Marketeers love to sermonize about accountability and the responsiveness of the market. But the Free Marketeers escape all responsibility for their policies and get to prescribe more of the same poison to the patient.
As long as we are unable to describe the problem accurately, we will not even begin to address it in an effective manner. The first step is to start calling the thing by its name: the main source of Armenia’s devastation in the past twenty-five years is not “capitalism gone amok”; rather, it is capitalist rule.
(MarkarMelkonian is a nonfiction writer and a philosophy instructor. His books include Richard Rorty’s Politics: Liberalism at the End of the American Century (Humanities Press, 1999), Marxism: A Post-Cold War Primer (Westview Press, 1996), and My Brother’s Road (I.B. Tauris, 2005, 2007), a memoir/biography about Monte Melkonian, co-written with Seta Melkonian)
Photo by Sara Anjargolian