The failure of US foreign policy in reviving Eastern Europe after in end of the Cold War.
George Bush Sr. talked like a golfer doing an orange juice commercial and was a prototypical Organization Man, an Establishment, a consensus politician of the 1950s and an Episcopalian Tory rather than a fiery, evangelical true believer. Free Marketeers and morality campaigners of the right never accepted him as one of their own, and still remembered when he called Reagan’s program “voodoo economics”. Bush regarded many of Reagan’s supporters as “marginal intellectual thugs” and for his equally centrist friend James Baker the transition in 1989 that it was not a “friendly takeover.” Lacking any “deep convictions” on strategy, Bush simply wanted the world to run smoothly, although he accommodated the right wing of the Republican Party because his own “internationalist, Atlanticist wing” was in decline.[1]
Bush Sr. was not well equipped by instinct or background to handle the revolutionary events of 1989-91. When the times called for a bold initiative, possibly a Second Marshall Plan at home and abroad, but the United States had no leader of stature equal to the times.
There was not even a shadow of such a Marshall Plan for Eastern Europe or anywhere else after the Cold War, because there was no longer any threat to the West from a powerful and potentially aggressive Soviet state as 1947. Communism as a movement was defunct, even though democracy did not necessarily replace it, and the Eastern European countries were bankrupt, in debt, capitalism without capital, and fearful of becoming “economic fiefdoms of the new world giant”--by which they meant the reunified Germany, not the United States. In the scramble for assets in this emerging market, the Germans and other Europeans had the advantage, one that would become greater once the east joined the European Union in 2004. Almost all the economic aid they received was in the form of “export credits paid to Western companies operating in the region.” Poland got $8.7 billion in 1996, but only $1.6 billion in actual funds for public use and the rest as export credits, as both the Bush and Thatcher governments agreed that the best policy for Eastern Europe would be “radical free market ideas or shock therapy.”
Eastern Europe had no influence on any of these policies but simply had to take what the West offered or go without, which was certainly not the cold reception they had been expecting after forty years of dictatorship. Perhaps they should not have been surprised, given Western indifference to their fate during the Cold War and no real assistance beyond the rhetorical level from politicians like Reagan. Both the U.S. and Western Europe mandated the “swift construction of a market or capitalist economy along lines preferred by the West” that created of few glittering islands of prosperity in some cities along with high poverty and unemployment--up to 25% in Poland, for example. Public infrastructure like schools and medical care eroded while foreign companies bought up any assets that were worth having, like Volkswagen’s purchase of Skoda in the Czech Republic in 1991. By the end of the Second Gilded Age of 1973-2001, every major bank or major industry in the region was not foreign owned.[2]
As capitalist economies without capital, the newly ‘liberated’ nations had no other choice except to take the best terms the market would offer. They needed special economic development zones, if not all publicly funded, then at least by some authority that could issue debt instruments in its own right as the World Bank should be able to do. They also needed cooperative and community development banks, as well as grants for housing, education and transportation, which would even have made capitalist sense because they would have become much larger consumer markets.
[1] Misha Glenny, The Rebirth of History: Eastern Europe in the Age of Democracy (Penguin, 1993), 196-98, 223-25, 238-42; Halberstam, 376
[2] Beschloss and Talbott, 4-11; Halberstam, 61, 71-72
