Are they better off…?

By Greg Godwin

Several years ago, when President Ronald Reagan was running for reelection, his campaign strategists devised a simple-minded, but effective, retort to all the criticisms of his first administration.

To those who attacked his anti-working class policies, supporters would respond, "Yes, but are you better off than you were four years ago?"

Unfortunately, many middle- and upper-income voters fell prey to this appeal to narrow self-interest, thanks to Reagan's trickle-down economics and wealth-preserving tax cuts.

Today, we might ask those living in the former socialist countries a similar question: "Are you better off today than you were in 1989, before the collapse of socialism?"

While I cannot predict how respondents would answer, I do know that the recent data decisively shows that these countries have experienced something akin to an extended economic collapse.

Reviewing a report from the European Bank for Reconstruction and Development (EBRD), the Financial Times of London recently noted that the 1998 Gross Domestic Product (GDP) of the former socialist countries of Europe and the Soviet Union was only 72 percent of 1989 levels.

This collapse of production compares with the economic decline of the United States during the Great Depression. Of course, the US had restored much of its decline nine years after the Depression's onset. But for the former socialist community, the future remains bleak.

For the former Soviet Union - once the second most powerful economy in the world - the decline in production may well be the most severe ever suffered by a country in peacetime, with 1998 GDP standing at barely half that of the USSR in 1989. The situation is even worse in the now independent state of the Ukraine where 1998 GDP is only 37 percent of the 1989 level. The EBRD predicts that the decline in these countries will continue in 1999.

In human terms, it is hard to imagine the effects of such an economic step backwards. To fully appreciate the consequences, we must also remember that the destruction of of socialism brought with it an enormous increase in economic inequality. Thus, for those outside the privileged elite, the last nine years have brought an incredible drop in living standards.

The impoverishment of the former Soviet Union has led to an enormous increase in crime, both from desperation as well as corruption and the rise of a Russian Mafia. Male mortality has increased to a level known only in the most economically undeveloped areas.

Even the "success stories" of Eastern Europe - the Czech Republic, Poland, Hungary and other countries petitioning to join the European Community - have seen their economic growth stifled with the embrace of capitalism. Of the 16 countries in the EBRD report, only Poland and Slovenia have surpassed their 1989 GDP.

At 17 percent GDP growth over nine years, the Polish economy would be viewed as stagnant by the standards of most capitalist economists. And Slovenia, with a 1 percent growth in GDP over nine years, would hardly count as a ringing endorsement of capitalist reform. All the rest are at, or below, the GDP achieved in the last days of socialism.

Ironically, western propaganda portrayed the countries of the socialist community as economically oppressed and exploited by the USSR. Now, nearly a decade after their "liberation," the constituent countries of the former Soviet Union languish at GDP levels well below what they enjoyed in 1989: Latvia, 58 percent; Lithuania, 64 percent; Estonia, 76 percent.

Imagine if the tables were reversed, if a socialist revolution brought nearly a decade of economic decline, if a world power were reduced to a feudal kingdom awash with poverty and despair. Surely, opinion makers in the West would be proclaiming the failure of socialism. We can do no less: the tragic destruction of Eastern Europe and the USSR constitutes the abysmal failure of capitalism.

Greg Godwin is a reader in Pittsburgh.