Neoliberalism in Eastern Europe and the former Soviet Union

Journal of Contemporary Central and Eastern Europe, 2019

American Journal of Sociology, 2002

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This special issue explores how neoliberal ideology -and related economic policies -has been implemented in the once-socialist countries of East-Central Europe (ECE) and the former Soviet Union (FSU). Specifically, the issue argues that this ideology undergoes deep modifications as it meets post-socialist conditions: sometimes it is creatively appropriated, sometimes resisted, and sometimes 'purified' (i.e., implemented more thoroughly than in the Western nations where neoliberalism as an ideology was developed). In doing so, the issue illustrates how 'actually existing neoliberalism,' to use terminology, occurs 'on the ground.' It argues that the 'actually existing neoliberalisms,' which have developed in a variety of post-socialist contexts, can differ profoundly from the theoretical constructs propagated by neoliberalism's supporters, including the major international financial institutions such as the International Monetary Fund (IMF) and the World Bank (WB). As recent literature on policy mobility makes clear 'It is already widely recognized that it is rarely possible to transfer policies directly, precisely because they emerge from and are responses to particular 'local' sets of social and political conditions which are not replicated in the places to which they are transplanted' (Cochrane & Ward 2012, p. 5). 1 Neoliberalism comprises the policy applications of neoclassical economic theory. Academic critiques such as Harvey (2003, 2005) highlight the connections between these policies, the reinstatement of class power, and the emergence of the current phase of globalization. The narrative of Harvey and others describes a revival of neoclassical ideology in the United States (US) and the United Kingdom (UK) in the midst of the 1970s crisis of the Fordist mode of production and the Keynesian political economy model (Harvey 2010; Lipietz 2001). In the 1980s, arguably in reaction to this crisis, the Reagan administration in the US and the Thatcher government in the UK adopted policies that curtailed welfare programs and other redistributive policies; lifted barriers to trade, especially in the financial sector; reduced state intervention in the economy; and privatized many public assets. The vacuum created by the 'rolling back of the welfare state' was filled by an increasing reliance on unregulated capitalist enterprise and public-private partnerships (Harvey 2005, p. 113). Since the 1990s, the US government, along with the IMF and the WB, exerted pressure on developing and developed countries alike to adopt similar reforms (often referred to collectively as 'the Washington Consensus'). Simultaneously, the Chinese government adopted aspects of the free-market economy, marrying neoliberalism and Communist Party rule (Harvey 2005). The European Union (EU) also contributed to this process, although many of its founding members have long social democratic traditions, thus leading EU institutions to promote a medley of neoliberal and Keynesian policies in their sphere of influence. 1

The article addresses the process of neoliberal transformation of the Soviet Bloc in the late 1980-ties and early 1990-ties as analyzed on the example of Poland. Its trajectory generally confirms Loïc Wacquant’s thesis put forward in his article "Three steps to a historical anthropology of actually existing neoliberalism", that neoliberalism tends to rather capture and use than simply dismantle and weaken state structures and power mechanisms. The author shows that the transition from planned to market economy in the former Soviet Bloc was also accompanied, backed and made possible by powerful ideological operations that reshaped the construction of subjectivity and made it compatible with the neoliberal capitalism. This proves that two modes of analyzing neoliberalism – structural analysis of state power and focus on governmentality – should be treated as complimentary tools of understanding neoliberal transitions. However, contrary to Wacquant, the author claims that in this respect there is nothing new about neoliberalism as a practice, since capitalism has always required a help from the state to maintain a seemingly autonomous rule of the market. Bilbiographical address: J. Sowa, An Unexpected Twist of Ideology. Neoliberalism and the collapse of the Soviet Bloc, „Praktyka Teoretyczna” nr 5/2012.

in: Quinn Slobodian, Dieter Plehwe (ed.): Market Civilizations: Neoliberals East and South. Verso 2022, p. 109-138

Cluster of Excellence 'Contestations of the Liberal Script' 1 'Neoliberalizm' has become a popular slur for free-markets and for the dominance of economics over politics in contemporary Russia. Commentators from both sides of the political spectrum have used it to criticise what they see as Western-inspired reforms under President Boris Yeltsin in the 1990s. The left has also attached the label to the ensuing governments, claiming that 'neoliberalism has been and remains an organic part of the Putin regime.' 2 Anti-Western nationalists by contrast have triumphantly declared it a thing of the past: 'The neo-liberal paradigm was exhausted by the 2008 crisis and never recovered.', proclaimed Vladimir Yakunin, a long-term associate of President Vladimir Putin. 3 Again influential dirigiste economists have been praising the success of gradual state-led reforms in Deng Xiaoping's China as opposed to the neoliberalism allegedly imposed on Russia by the International Monetary Fund (IMF). 4 This anti-neoliberal rhetoric is in line with notions around the world that reject what is seen as Anglo-American imposed anti-statism and laissez-faire capitalism. 'When the Berlin Wall came down in 1989,' goes a fairly representative view of contemporary observers and early academic assessments, 'there was an army of committed, international economic liberals reared in the Hayekian tradition, armed with clipboards and portable phones, waiting to move into Eastern Europe and the disintegrating Soviet Union to convert their ailing economies.' 5 Such notions of 'neoliberalism' as an anti-state dogma have over the last years been questioned by intellectual historians and economic sociologists. Neoliberal ideas, they claim, are better explained by emphasising their notions of a strong state, and sometimes international governance as well as legal and monetary arrangements, to create and defend free markets and liberal institutions from potentially anti-liberal national democratic majorities. 6 But, as the editors of this volume state: even in the most innovative work, the history of neoliberalism is still told as one emanating from the West. 1 I want to thank two colleagues for their very thoughtful comments on an earlier draft of this chapter: Adam Leeds, who has put forward a similar argument about the Gaidar group in his unpublished dissertation (Adam Leeds, Spectral Liberalism: On the Subjects of Political Economy in Moscow (2016), PhD Dissertation at the University of Pennsylvania), and Chris Miller, who did ground breaking work on the generation of their academic teachers (Chris Miller,

Problems of Post-Communism, 2009

assessing the results of neoliberal reform remains controversial even twenty years after 1989. While neoliberal reform programs appeared to have finally produced rapid economic growth in the 2000s after a long transitional recession, the 2008 global economic meltdown plunged Central and east european countries back into crisis. This article offers a mixed assessment of the results of neoliberal economic reforms and questions the easy compatibility of democracy and radical reform observed during the 1990s. Since the 2000s, both democratic and authoritarian countries in eastern europe have experienced rapid growth. geopolitics, more than reform or democracy, seems to separate the winners from the losers. Successful countries are those that either joined the european Union or developed close political and economic relations with Russia. Those betwixt and between and those suffering internal strife (or both) still have not reached 1989 levels of economic production.

Theory and Society, 2007

Scholars have argued that transnational networks of right-wing economists and activists caused the worldwide embrace of neoliberalism. Using the case of an Italian think tank, CESES, associated with these networks, the author shows that the origins of neoliberalism were not in hegemony but in liminality. At CESES, the Italian and American right sought to convert Italians to free market values by showing them how Soviet socialism worked. However, CESES was created in liminal spaces that opened up within and between Soviet socialism and Western capitalism after the death of Joseph Stalin in 1953. Scholars from East and West at CESES developed new knowledge about actually existing socialism, which, due to the shifting context of the Cold War, seemed to provoke left-wing sympathies among the scholars and the students involved. CESES in fact required left-wing scholars, who had necessary skills and a fascination with a common project of democratic or market socialism, to create this new knowledge. The new knowledge that developed out of an East-West dialogue not only helped right-wing transnational networks to reorient their hegemonic projects, but also helped those on the left to understand actually existing socialism and what socialism might become. This knowledge could not be obtained without this dialogue and had to travel through liminal spaces.

Many scholars have asked themselves if and for how long they should use the concept of 'post-socialism.' We review some ways in which post-socialism is no longer used productively, and suggest that one way to analyze the enduring effects of socialism (a useful role for the concept of post-socialism) is by paying attention to how the economic and political elites in Central and Eastern Europe continue to use the ghost of state-socialism as the ultimate boogeyman, disciplinary device and 'ideological antioxidant.' References to the socialist period help the winners of transition further pass on to labor the costs of social reproduction and collective consumption. We call this blend of post-1989 anti-communism and neoliberal hegemony 'zombie socialism,' and we argue that it is a key component of contemporary capitalism in Central and Eastern Europe. We illustrate briefly some cases of zombie socialism and we use data such as EU 28 statistics on labor, wages, work-life (im)balance, income tax, housing and housing policies to show the effects of this hegemonic discourse. We look at housing in greater detail, because the continuous discounting of housing as an area of government intervention makes housing policy a telling example of zombie socialism. The presence of zombie socialism for almost three decades in Central and Eastern Europe made some of these countries 'more' capitalist than countries with longer capitalist traditions in Europe. We join others who have suggested that that there is nothing to transition any longer, as the 'transition' is long over, and also suggest that the analysis of 'actually existing neoliberalism' in Central and Eastern Europe should be pursued through post-socialism, instead of a flat, generalized and generic understanding of neoliberalism.

Constructing the Neoliberal Subject in the "Cool" Capitalism of Central and Eastern Europe, 2019

The e-paper focuses on some of ideological/cultural pillars of neoliberal subjectivity in Central and Eastern Europe after 1989.