The Road to Serfdom in Venezuela

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For the past thirteen years Venezuela has been moving away from a market economy towards a socialist economy under the leadership of Hugo Chavez. And now the future of Venezuelan socialism hangs in the balance. Or does it? A few days ago I spoke with Eric Ekvall, an American political consultant who has lived and worked in Venezuela since that country’s 1982 presidential election. Ekvall has helped with the election campaigns of such notables as Venezuela’s Jaime Ramón Lusinchi in 1983, Costa Rica’s Oscar Arias in 1985, and Brazil’s Lula da Silva in 1993. I asked Ekvall about the ongoing re-election bid of Venezuela’s ailing Hugo Chavez, especially as President Chavez has been in power for thirteen years and continues to build socialism there. Given the downgrading of the country’s economy, how could Chavez possibly expect to win yet another election?

The answer, according to Ekvall, is that Chavez cheats. “The first election we know he fixed was in 2004.” Ekvall explained. “One fifth of the population basically signed a petition to put a recall referendum on the ballot. This was delayed and delayed and the government used all kinds of mechanisms to push this back long enough for them to be able to purchase millions of dollars of electronic voting machines which had never been used in Venezuela before; we [in Venezuela] have always done paper balloting like most countries in the world…”

The significance of the electronic voting machines will be apparent to any who remember Stalin’s words from 1923: “I consider it completely unimportant who in the party will vote, or how; but what is extraordinarily important is this – who will count the votes, and how.” The quote comes from The Memoirs of the Former Secretary of Stalin, written by Boris Bazhanov after his defection in 1928. It is one of the earliest accounts of Soviet-style political methods, showing how power may be consolidated by a dictator. According to Ekvall, Chavez’s government was also “told by their Cuban advisors to rush in a series of major welfare programs: free education programs, free food programs, appealing to lower income people to boost their sagging popularity ratings.” And how well did this work?

According to Ekvall, “Come August of 2004 the recall referendum took place … and about 75 percent of the registered voters turned out to vote and there was euphoria in the streets … that [President Chavez’s] mandate was going to be revoked …. Veteran political pollsters from the U.S. showed that the recall referendum passed 59 to 41, but to everybody’s surprise the government official figures came out 59 to 41 – but as a loss, and this raised a hue and cry among opposition politicians who basically called ‘fraud’ on the election process.” Over the years social scientists have studied the Venezuelan election of 2004, showing that 22.5 percent of the ballots had been modified. Last year six studies appeared in Statistical Science, confirming the earlier studies. In fact, there is overwhelming evidence that Chavez has falsified the results of every Venezuelan election since 2004.

And now, eight years later, Chavez’s popularity has continued to fall. To counter this, an increasing number of Venezuelans have been put on the dole – to no avail. As Stalin also said, “Gratitude is a sickness suffered by dogs.” Unfortunately for Chavez, the Venezuelan people are not dogs. “According to reliable polls,” noted Ekvall, “opposition candidateHenrique Capriles is ahead; so we have a very tense situation in Venezuela right now.” Capriles is an attractive, likable candidate – a political “rock star,” according to Ekvall. “Chavez is literally on the ropes.” – So how does Chavez get away with stealing the election this time? Will straightforward electronic vote fraud do the trick?

“This time, this year the government has come up with … a ‘hide in plain sight’ approach to vote fraud,” said Ekvall. “The vote fraud … is right in the polling booth. When you go in and vote in the elections this time, you are going to be confronted by an array of technology the likes of which no voter anywhere in the world has ever seen. First of all, you are going to have to punch into an interactive biometric apparatus, and punch in your national I.D. number, and then put your thumb print over a scanner … and your name will pop up … and you will be told that you can move two feet to the right, where there’s an electronic voting machine, and you can cast your vote with a touch-screen machine.”

And how does this translate into fraud? Ekvall replied: “The not-very-subtle aspect of this system is that the biometric system is visibly hooked up by a cable to the voting machine, giving rise to legitimate concerns that your vote is not going to be secret.”

The significance of secret balloting in a welfare state may be understood from recent Venezuelan history, Ekvall underscored. “During the petition drive in 2004 the government got the names of all five million people who signed the petition. They were immediately placed on a black list. “And five million people found themselves … at a disadvantage when it came to welfare credits, jobs from the government, when it came to loans, student loans, anything. If you had signed the petition to recall the president you were automatically a second class citizen. Some people have called this Venezuela’s ‘Political Apartheid.’”

Here is a slick way of intimidating voters. According to Ekvall, “People have every reason to fear….” Here is a country where the welfare state is used as a carrot, but only for those who consistently support the government. If readers wish to understand what socialism signifies, and whether socialism is consistent with liberty, they should study the Venezuelan election process. Not only have the socialists ruined Venezuela’s economy, the socialists have corrupted the voting system and the voters themselves.

Will Venezuela free itself from socialism in next month’s elections? Nobody knows for sure, but Ekvall is worried. And for the rest of us, Venezuela is not the only country on the road to serfdom.

Jeffrey Nyquist is the President of the Strategic Crisis Center and Distinguished Senior Fellow in Political Science at the Inter-American Institute for Philosophy, Government, and Social Thought.

This article was originally published on Financial Sense on September 24, 2012. The opinions published here are those of the writer and are not necessarily endorsed by the Institute.

Eastern Europe’s Market System and the Changes of 1989

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AAfter 1989, when the Communist world began to crumble, the old neo-Stalinist economic system of Eastern Europe was subjected to reforms. The quality of economic reform varied from country to country as the rule of law was unevenly established throughout. While it is true that many economies of Eastern Europe moved away from all-pervasive government controls, most East European market economies have remained in the hands of former apparatchiks, criminal mafias and “former” secret police officials. Thus, economic freedom did not take hold throughout the region.

Why were the market reforms in Eastern Europe disappointing on so many levels? “It is not what people think,” says filmmaker Robert Buchar, who has released his long-awaited documentary The Collapse of Communism: The Untold Story. I spoke with Buchar [click here for audio version] about his documentary to ask what he learned from interviewing key participants in the events of 1989, including CIA director Robert Gates. One of the more interesting tidbits came from Buchar’s attempt to interview one of the top Czechoslovak Communist Party leaders in 1989, Rudolf Hegenbart, who refused to say anything on the record. “Havel’s people warned me not to speak, or I would end up at the bottom of the lake,” Hegenbart told Buchar. Afterward, Buchar sent Hegenbart a copy of his book (based on the documentary) which shows how the changes in Eastern Europe were deceptive and misunderstood, especially in the West. “Yeah, you are right pretty much in everything that is in that book. We were taught all of this in Moscow when we were studying there,” Hegenbart admitted.

Buchar was born in communist Czechoslovakia and currently teaches at Columbia College in Chicago where he is head of the faculty’s cinematography program. “I was from a bourgeois family,” Buchar explained, “as my father was an entrepreneur. He had his own company and employed sixty people.” Of course, entrepreneurs were criminals under the old communist regime and the sons of entrepreneurs were denied opportunity. Buchar went from his home town to Prague where people didn’t know his background. “I got into a school in Prague, and when I moved to Prague my [secret police] file didn’t move with me…. I had no past,” Buchar mused. But his past eventually caught up with him. “Later, around 1972, when the Russians tightened their grip on everything … because I wasn’t in the [Communist] Party I couldn’t work in the media.” When it became impossible for him to work, he found his way to freedom in the West.

Buchar’s documentary presents testimony from former Czech secret police officials who say the events of the Velvet Revolution of 1989 were orchestrated on orders from Moscow. The body of testimony on this subject is large and credible, says Buchar. “Not just … [the] guys that are talking in my film; there are many other people I talked to that refused to talk on record about this … because they fear for their lives…. There are many documents – it is very well documented that it was a prepared plan… to change the regime and the Russians were working on it for decades….”

Buchar interviewed an officer of the secret police who staged a key event in the 89 revolution. “He was just a little piece in the big puzzle,” says Buchar. “He pretty much did what he was told to do…. He was in charge of creating the students’ organization. The objective was to penetrate dissident movements … and organize the demonstration on November 17, 89 which triggered … the revolution. And at the end of this demonstration he played a dead student … killed by riot police. Of course it was a fake.”

The Soviet Union and its satellites may have changed their economic system in a presentational sense, but most of the former Soviet economic space remains under indirect (if not direct) government control. This new form of control relies on financial intermediaries, agent networks and organized crime. Using crony capitalism, together with underworld money-laundering deals, the post-Soviet economic system is spreading everywhere. It may even be colonizing the West’s market system, contaminating the whole.

If the Cold War was a struggle between economic freedom and repression, how can anyone now say the Soviet side lost? “No,” says Buchar, “the West lost tremendously….” As anyone can see, the free market system is not consistently defended in the West. We assume the market is going to triumph, but we don’t have a plan. The other side definitely has a plan. “If you watch my documentary you will see that Robert Gates gives the official CIA version of events,” said Buchar. But this is not the real story, or the whole story. “Vladimir Bukovsky is a pivotal point of my project because he got hold of documentary proof from the Communist Party Soviet Union…. Nobody can deny these documents….”

It is doubtful that Moscow’s plan worked in all the former bloc countries. Today the Czech Republic is rated by the Heritage Foundation 2012 Index of Economic Freedom as “moderately free,” ranking 30th. Of course, this does not reflect the secret levels of control which may operate through mafias and officials connected to the old system. More obviously, some East European countries have remained overtly repressive, like the former Soviet Republics of Belarus, Ukraine, Moldova and Uzbekistan. Others, like Azerbaijan, Moldova, and Russia are rated as “mostly unfree.”

Freedom seems to have prevailed, however, in the Soviet Republics of Estonia (ranking 16th) and Lithuania (rating 23rd), which are considered “mostly free” by the Heritage Foundation Index. These, of course, were among the smallest and least significant of the Soviet republics; and perhaps they were the most sophisticated in making use of the opportunities presented by the fall of the Soviet Union. In the last analysis, however, we must view the collapse of the communist bloc as equivocal. This truth is indisputably brought forth in Buchar’s documentary. And as Buchar warned at the end of my interview with him, “Many people today are wondering what’s going on in the United States and how it happened…. Nobody is really looking at it from this big picture that it’s actually not an internal problem; it’s an external problem. Whatever happened here is not just because of us; but it’s because of other forces pushing things on a global scale.”

Jeffrey Nyquist is the President of the Strategic Crisis Center and Distinguished Senior Fellow in Political Science at the Inter-American Institute for Philosophy, Government, and Social Thought.

This article was originally published on Financial Sense on August 27, 2012. The opinions published here are those of the writer and are not necessarily endorsed by the Institute.

Signs of Things to Come

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There is trouble in the Mideast and trouble in the Midwest. A serious drought threatens crops in the American Midwest while in the Middle East, a Saudi informant for Debka-Net-Weekly says, “It is already decided.” The United States will attack Iran in the fall. Another Debka story, dated July 12, says “The first week of October is now tagged as decision-time for attacking Iran.”

Jeffrey Goldberg, writing in The Atlantic, doesn’t think there will be an attack on Iran. He describes a parade of U.S. officials arriving in Israel for “top-level consultations.” A short while ago Deputy Secretary of State William Burns arrived in Israel, followed by Obama’s national security advisor, and now Secretary of State Hillary Clinton. “The number of top American officials visiting Jerusalem is outmatched only by the number of American warships already in the Persian Gulf,” wrote Goldberg. Since negotiations have stalled with Iran, Obama is sending what Goldberg calls “the Summer 2012 Please-Don’t-Bomb-Iran Tour, starring the Obama Administration, now on stage in Jerusalem.”

The claim that Goldberg and others make is that an Israeli attack against Iran would strengthen the Iranian clerical regime, instead of weakening it. Some analysts believe that a surprise strike against Iran would make Iran appear in a sympathetic light – as the victim of U.S. imperialism or Zionist aggression. Therefore, it is best to do nothing. Continue to negotiate, etc. Others believe that a strike against Iran would rally those Iranians who oppose the regime, leading to its overthrow and freedom for the Iranian people.

What are Iran’s leaders saying about all this? A few days ago the Iranian leadership vowed to back any nation that fights America or Israel. “The oppressors – and at the helm of it America and the Zionists – have been taken by surprise by the [Arab Spring] movement and are trying with all their power to control it,” said the Ayatollah Ali Khamenei in a recent speech. “However, if the Islamic nations resist the conspiracies, then it is guaranteed that they will be victorious over the world oppressors.”

The U.S. has responded to this defiance by imposing a new round of sanctions against Iranian and other companies that support Iran’s missile and nuclear programs. At the same time, the United States is embarked on a buildup of forces in the Gulf. On July 11, the Los Angeles Times reported, “U.S. deploys sea drones to Persian Gulf to clear Iranian mines.” According to the Times story, “Reopening the strait could take the Navy and its allies five to 10 days, officials said. But even a temporary disruption of tanker traffic could cause global oil prices to soar and spark widespread economic turmoil.”

The global economy is on the edge. On Saturday I spoke with a friend in Lisbon, Portugal. He said that unemployment there was 17 percent. Neighboring Spain has an unemployment rate over 24 percent. Greece has 21 percent. All countries are suffering to some extent, and recovery is either shaky or not happening. What the world wants now is a smooth ride. And the Midwest, perhaps as much as the Mideast, is promising the opposite. Consider what lies behind the following Reuter’s headline: “Drought parches more of U.S. Midwest, crops suffer.” So far this is the biggest drought in 25 years, and it might get worse. This drought will affect methanol production, food exports, domestic food prices, and more. Presently, almost two-thirds of the nine-state Midwest region is suffering drought. Unless the region gets significant rainfall by August 1 there will be crop failures. (See also, the U.S. Drought Monitor.)

According to the Climate Prediction Center of the National Weather Service, “Dryness and drought have been increasing both in extent and intensity across much of the Ohio and Tennessee Valleys, the Corn Belt region, the middle and lower Mississippi Valley, and much of the Great Plain. Drought is likely to develop, persist or intensify across these areas.” According to CNN, 1,000 counties in 26 states are natural disaster areas. About 61 percent of the lower 48 states are affected. Half the pastures and ranges are in poor or very poor condition. Not only is the United States suffering from drought, but other countries such as India have been suffering drought conditions (See the Global Drought Monitor).

It is worth noting that in 2008 Prof. William Alexander of the University of Pretoria wrote a paper titled, “The Likelihood of a Global Drought in 2009-2016.” In this paper Alexander described problems with the Global Warming hypothesis. Instead of Global Warming, Alexander believes we are headed for Global Cooling – which means global drought. Alexander noted, “This prediction model is based on the thoroughly studied, synchronous linkage between periodic solar activity and the hydro-meteorological processes…. The likelihood of prolonged, severe droughts from next year onwards is very real.” Noting the impact of the Great Depression Drought, Alexander wrote: “As I write these notes there is a considerable volume of international Internet traffic expressing concerns relating to the lack of solar activity during the past year and the possibility that the world may be entering an ice age.”

Jeffrey Nyquist is the President of the Strategic Crisis Center and Distinguished Senior Fellow in Political Science at the Inter-American Institute for Philosophy, Government, and Social Thought.

This article was originally published on Financial Sense on July 16, 2012. The opinions published here are those of the writer and are not necessarily endorsed by the Institute.

New Middle East For Old

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With financial troubles in many countries, an armed conflict between Iran and the West would be inopportune. President Barack Obama, who seeks re-election this year, hopes for an agreement with Iran. At present, Obama is bending over backward to accommodate the Iranians. He knows what a war in the Middle East might do to gasoline prices, and he knows what gasoline prices might do to his hopes for re-election. Besides Iran, there is also a crisis in Syria where up to 20,000 have been killed in the course of a bloody civil war. The West would like to facilitate an end to the Assad regime, over the objections of Russia and Iran.

As everyone knows, the Iranians are refusing to give up their nuclear program. From all appearances, the six power talks, to be held in Moscow (June 18-19), will probably not achieve much. Iranian officials say their nuclear program is peaceful, and they insist that everyone accept and believe in this peacefulness. Those that know the regime best, like former Revolutionary Guardsman Reza Kahlili, say the regime in Tehran is the opposite of peaceful. According to Kahlili, Iran’s leaders want to ignite a nuclear war in order to facilitate an Islamic apocalypse. “The only true avenue to lasting peace in the Middle East,” says Kahlili, is to “help bring about a free and democratic Iran.” Of course, this is not going to happen. The West isn’t positioned for such a gamble. The Iranian government knows this, and that’s why they are becoming increasingly difficult to deal with. Last April the Iranian newspaper Kayhan, which is under the direct supervision of the Office of the Supreme Leader threatened: “If the U.S. strikes Iran with nuclear weapons, there are elements which will respond with nuclear blasts in the centers of America’s main cities.”

Tehran’s threat implies an Iranian nuclear capability. It also implies the possibility of nuclear terrorism, relying on Islamic terror networks. Of course, the statement is defensive in nature, and must be understood as such. Yet it acknowledges a nuclear capability. This is exactly the kind of capability the West would not like Iran to have. The Israeli’s, especially, are growing desperate about the possibility of a nuclear-armed Iran. Many are frightened by the prospect.

In a recent interview, Israeli vice premier and former IDF chief of staff Moshe Ya’alon said during an interview with Haaretz, “Let me say one thing to you in English, because it is very important for English speakers to understand it: We are not bluffing. If the political-economic pressure is played out … and Iran continues to hurtle toward a bomb, decisions will have to be made.” Ya’alon is under no illusion about Iran’s readiness to retaliate, especially against Isreal: “If anyone, no matter who, decides to take military action against Iran’s nuclear project, there is a high probability that Iran will react against us, too, and will fire missiles at Israel.” And those missiles might be armed with chemical or biological warheads. If Israel and Iran begin exchanging missiles, nobody knows how it would end – but we can guess. According to Jane’s Information Group, Israel has between 100 and 300 nuclear warheads. Some of these can be mounted on cruise missiles carried by Dolphin-class submarines. Israel’s land-based delivery system, the Jericho 3 missile, has a range of nearly 8,000 kilometers. If Iran started a biological/chemical missile war with Israel, the retaliation would be withering. One may doubt, indeed, the clerics’ readiness for martyrdom. Yet there is a crisis more immediate, which may soon eclipse the Iran crisis.

According to a June 16 DEBKAfile report, U.S. military intervention in the Syrian Civil War may be inevitable. The Americans want President Bashar al-Assad to step down. That happens to be a big problem for President Vladimir Putin of Russia. Putin favors the Assad government, a longtime client of Moscow and ally of Iran. As the chief arms supplier to Syria, the Russians have recently sent attack helicopters to the Assad regime. The United States strongly objected with Secretary of State Hillary Clinton issuing a statement. “We have confronted the Russians about stopping their arms shipments to Syria,” said Clinton, who thinks the conflict could escalate “dramatically.”

Perhaps the most alarming report comes from Aaron Klein, who reports that the Russians are warning the Assad regime that if “the coming counterinsurgency … is not successful in the next 4-6 weeks, Syria should be prepared for war.” Although Klein admits confusion regarding the meaning of Russia’s warning, the language is clear enough. The DEBKAfile report (above) provides the answer: “The intervention [by Americans] will happen. It is not a question of ‘if’ but ‘when.’” Market watchers should take note. Intervention in Syria may be coming, and it isn’t likely to be a picnic. It has long been suspected that Syria manufactures Sarin, Tabun, VX and mustard gas. According to businessinsider.com, Syria is “loaded up on all kinds of missiles, weapons of mass destruction, a solid air force, and enough Cold War relics to fill a dozen Air-and-Space museums.” Then there is the question of what kind of support the Iranians or Russians might provide Syria.

It is surprising to hear Secretary of State Hillary Clinton calling on Moscow to cut ties with Assad. Clinton probably does not sympathize with Russia’s loyalty to a longtime ally. After all, Obama ditched Egyptian President Hosni Mubarak. Why shouldn’t Putin ditch Assad? It should be obvious by now that the Kremlin does not pick allies on the basis of their human rights records. Russia plays a strategic game, and if it suits Russia to defend Assad then Assad will be defended. In all probability, however, Assad is not important enough for Russia to risk a war on unfavorable terms. Russia’s game is a long game, requiring patience. Let the Americans squander their political capital and military resources on an Arab Spring that may bring radical Islamic regimes to power across the Middle East. If the Russians simply wait, together with their Chinese and Iranian friends, the regimes that come to power in Syria, Egypt and Libya might be more anti-Western than the regimes they replaced.

Jeffrey Nyquist is the President of the Strategic Crisis Center and Distinguished Senior Fellow in Political Science at the Inter-American Institute for Philosophy, Government, and Social Thought.

This article was originally published on Financial Sense on June 16, 2012. The opinions published here are those of the writer and are not necessarily endorsed by the Institute.

A Serious Threat to Western Nations

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On 21 September 1999 Richard L. Palmer, President of Cachet International, Inc. testified on “the infiltration of the Western financial system by elements of Russian organized crime before the House Committee on Banking and Financial Services….” His full testimony can be read at the Web site for the Committee on Financial Services – Democrats. Palmer’s testimony, like that of many experts, has never been placed in proper context.

Palmer warned the House Committee of “serious threats to Western nations.” He had worked as an Army intelligence officer in Europe, and served 20 years in the Operations Directorate of the CIA. His final assignment was as Chief of Station in the former Soviet Union from 1992 to 1994. For several years he monitored criminal activities related to the Russian mafia. Palmer told the Committee he had direct experience working with former Soviet security and police services, “as well as members of Russian banking, business, Organized Crime and corrupt officials.”

According to Palmer, Russia’s “market mechanism” was being suppressed by organized crime. But this was no ordinary organized crime. It was, in fact, a hybrid of totalitarian officialdom and criminal networks aligned with security and police agencies. Anyone who has debriefed former Soviet police or special services officials knows the story. A KGB colonel may be asked to join a “business”; a GRU general is given an “opportunity”; a Communist Party official is instructed to start a corporation with Party money – all done on orders from the top, from the Central Committee of the Communist Party Soviet Union. “[M]ost informed observers agree that the criminal Mafiya groups account for only about 10 to 15 percent of the makeup of [Russian] Organized Crime,” noted Palmer, “with Russian officials, former officials and their ‘newly created entrepreneurs’ accounting for the other 85 to 90 percent.”

In other words, 85 to 90 percent of Russian organized crime is the work of former Communist officials. Palmer spoke of the possibility, if proven true, that Russian bank officials may have been involved in Western bank scandals. “I would like to note,” said Palmer, “that while examining eleven cases of US and other Western firms defrauded by Russian Organized Crime (ROC) elements, I was able to identify nine cases where US/Western executives clearly had been suborned by ROC groups to assist in looting their employers.”

Palmer went on to say that “Russia is not governed by the ‘rule of law’ but functions under the rule of understandings.” In other words, property rights – and all other rights recognized by law – are not the basis of the Russian system. It would appear that post-Communist Russia operates according to Proudhon’s dictum that “property is theft.” All that occurred with the fall of Communism was a transition from one system of plunder to another. The Communists did not become capitalists, in fact, because they were incapable of embracing the fundamental moral, political and legal concepts underpinning capitalism.

The Communist Party leadership knew what was coming in the 1980s. In preparation for the coming changes in Russia, plans for moving Communist Party money to the West, said Palmer, “were first discussed in 1984 by specific sections of the Soviet Politburo, the top officials of the Communist government.” By 1986 an informal planning committee had acquired the “services of two KGB First Chief Directorate (FCD – foreign espionage) officers who were experienced in moving funds overseas both for the Party Central Committee” and for operational purposes. The Communists took pains to hide any paper trail related to their planning. According to Palmer, “No written records existed of their meetings or proceedings, except one copy to the Chairman of the KGB and one copy to the Central Committee official responsible for the Administrative Organs of the Politburo: Viktor Chebrikov. The Chairman of this planning group was CC [Central Committee] Treasurer Nikolai Kruchina.”

If you study Palmer’s statements in detail – especially where he writes about “the creation of … apparently private, commercial firms” by the KGB – you may miss the forest for the trees. Palmer appears to believe, like most analysts, that he is describing some kind of organic, spontaneous change in the Soviet system which the elite wisely foresaw. Even when he says this change was initiated from the top, and orchestrated by “an informal planning committee,” he avoids any mention of a larger Soviet strategy to deceive the West. But changes initiated from the top, by the Politburo, are anything but organic. Such changes must be understood as implemented in accordance with Soviet strategy.

Of course, writing about Soviet strategy is like wearing a tin foil hat. Western officials and strategists have always denied Soviet deception. The highest level Soviet Bloc official to defect, Jan Sejna, wrote about the West’s denial in the following terms: “One of the basic problems of the West is its frequent failure to recognize the existence of any Soviet ‘grand design’ at all.” When another defector, KGB Major Anatoliy Golitsyn, wrote about the Soviet long-range plan in a book titled New Lies for Old, he was roundly dismissed by almost everyone. Yet evidence of a plan abounds on every side, from Russia’s continuing support for Communist fronts and parties abroad, to the ongoing modernization of Russia’s Strategic Rocket Forces.

Richard Palmer believed there was a threat. He fretted about “the return of totalitarian regimes which may not necessarily be Communist.” Of course, labels don’t matter. Criminals are criminals, and a country without rule of law is invariably run by criminals. What we saw in the twentieth century, with the Soviet Union and Hitler’s Germany, was an explosion of political crime. In the twenty-first century the political criminal has become, also, a financial criminal. Here empires are made and unmade. In this context, ask yourself the following question: Was it wise to allow Russia (and China) access to America’s financial system?

Come now, the answer should be obvious.

Jeffrey Nyquist is the President of the Strategic Crisis Center and Distinguished Senior Fellow in Political Science at the Inter-American Institute for Philosophy, Government, and Social Thought.

This article was originally published on Financial Sense on April 9, 2012. The opinions published here are those of the writer and are not necessarily endorsed by the Institute.

Communism Still Alive in Romania: An Interview With Anca-Maria Cernea. Part II.

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Icontinue my interview with Anca-Maria Cernea, a citizen of Romania who knows what it means to live under Communism. Both Cernea’s parents were imprisoned by the Communists. Her father served 17 years as a political prisoner. After 1989, she was active in the National Peasant Christian Democratic Party. She and her friends left this party in 1995 when they realized it had been “colonized” by the post-Communists. Under the government of the Democratic Convention she served as head of the Foreign Affairs Division of the Department for Local Administration from 1998 to 2000. She also helped create the Ioan Bărbuș Foundation, which was named after her father and is dedicated to upholding liberty, traditional values and capitalism. She is a physician and currently works for a private clinic in Bucharest.

According to Cernea, there was no satisfactory justice for the victims of Communism in Romania. “Huge numbers of people have been killed, imprisoned, tortured, deported, deprived of their property, suffering all kinds of persecution,” she explained. “The number of people arrested or deported is estimated around 2 million, and the number of people killed by the Communists is around 200,000.” Particularly scandalous, she says, “is the fact that … former torturers still receive some of the highest pensions in Romania, as retired military servicemen, policemen, judges, etc. This is just one of the privileges they enjoy in post-1989 Romania as members of the post-Communist establishment. In other words, it is correct to say that the evil-doers are still being rewarded for the harm they have caused.”

The old Communist elite protect their privileged positions to this day. When threatened they strike back, even at the country’s president. According to Cernea, “The criminal networks that were once the institutions of the Communist state are the origin of all important networks of corruption, organized crime, political manipulation and influence from undemocratic and rather hostile foreign powers, like Russia. They constitute a serious threat … to the rule of law and to our country’s independence.” As it stands, the Romanian people need the moral support and protection of the West – of NATO and America. The same can be said of other former Communist countries.

But how can the West provide moral support when it has been so profoundly demoralized in its own turn? Whether this demoralization is due to socially destructive aspects of market hedonism, or to the cultural warfare waged by Marxists in accordance with the ideas of Antonio Gramsci, I put the following question to Cernea:  Did Romania elude demoralization because it was not among the capitalist countries targeted for cultural sabotage by the Left, or simply because Communism insulated Romania from corrosive Western influences? And further, now that Romania is relatively free, does the country begin to show symptoms similar to those found in the West?

“My answer is yes to all of your three questions,” replied Cernea. She went on to explain the “incredible surprise we had in 1989 to see so many young people being ready to risk their lives to fight Communism. It was difficult to explain after 40 years of Communist rule. There is however an explanation. Apart from the private universe of family and close friends, which managed to secretly counteract in many cases the official communist education and propaganda, and to educate their youth according to real values, in spite of all risks, we owe a huge debt of gratitude to Radio Free Europe … [which] has actually shaped generations of young people…. I am insisting on this, not only because it is a moral obligation we Romanians have to acknowledge what we owe to Radio Free Europe. It is important also for current-day issues. Once an American friend asked me how I saw the explanation for anti-American feelings spreading more and more in the whole world, if I thought the cause was something the Americans were doing wrong. I said that definitely it had nothing to do with anything you guys did or didn’t do. It’s the result of systematic propaganda. It’s not a spontaneous response of the world to American actions.”

According to Cernea, the West thinks of conflict in military terms. America has not realized that pro-U.S. propaganda is required to counter anti-U.S. propaganda. “The West is able to conceive war only in military terms,” Cernea explained; “for them, peace is the lack of military conflict. Now that they decided the Cold War is over, there is no way to make them understand that things like propaganda warfare and cultural war – which are quite familiar concepts for Marxists – really exist and are still, right now, efficiently working against them.”

Radio Free Europe, says Cernea, “could still be an inspiring model … [showing] that with a minimal investment, with some people’s talent and commitment, truth can be made to prevail against the most diabolical propaganda. Communist propaganda isn’t better or stronger than the truth – not even now, when it is more subtle and better disguised than it was before. It has no chance when confronted with reality. But somebody has to do something. At least to expose it, that would be enough.”

According to Cernea, the Romanian language broadcast of Radio Free Europe was put together by “a team of excellent and extraordinary brave journalists and cultural personalities” living in exile. Over the years, noted Cernea, “many of them were murdered or survived brutal attacks organized by the Securitate [Romanian secret police] to make them shut up.”

Radio Free Europe was important for all the Iron Curtain countries, noted Cernea, “but for Romania it was vital, as every other resource in our country was destroyed or controlled by the regime. Radio Free Europe was of course financially supported by the U.S. Congress, but the Americans didn’t interfere with the content of the broadcasts – sometimes they even tried to moderate a little bit some anti-Communist accents, but weren’t successful. Through decades, Radio Free Europe was for us the only source of trustworthy information about what was going on in Romania and in the rest of the world; it was also a kind of alternative school, we may even say university; their broadcasts about Romanian and world history, literature, cultural and political debates in the West managed to replace the total lack of access to those things in Romania. The people who were teaching us about cultural developments in the West were bright erudite intellectuals, who could discern the Communist infiltrations in Western culture … and were able to describe those things to us.”

In her last comments to me, Cernea said: “So far, the Communists have a plan, and they are acting. The West has no plan, no action, and no idea that the others have a plan. If nothing is done, there is of course a risk for the current pro-American mindset in Eastern Europe to be reversed….”

Jeffrey Nyquist is the President of the Strategic Crisis Center and Distinguished Senior Fellow in Political Science at the Inter-American Institute for Philosophy, Government, and Social Thought.

This article was originally published on Financial Sense on April 2, 2012. The opinions published here are those of the writer and are not necessarily endorsed by the Institute.

Enemies in the East: An Interview with Anca-Maria Cernea. Part I.

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Romanian analyst and writer Anca-Maria Cernea says that Communism wasn’t altogether defeated in her country. What Cernea has to say about Romania can be said for most of the former Communist countries of Europe. There is an ongoing struggle in Eastern Europe and Americans seem oblivious– especially American politicians.  A Polish journalist recently wrote to me: “I think many U.S. politicians do not have knowledge about the nature of Bolshevism. They may be historians, strategists or even experts, but it does not mean they understand Russian methods. ”

The Russian methods referred to include (1) control of the political opposition through secret agents; (2) strategic deception and disinformation to mislead and disorient; (3) political violence or the threat of political violence; (4) and monopoly control of the media, big business and the government bureaucracy. Such methods are still used in Eastern Europe, for the benefit of Russia and the former Communist elite. Sadly, the old Communist system was not completely eradicated. There was no trial of Communism, no justice for millions of innocent victims. If you want to understand what happened, read carefully the words of Anca-Maria Cernea. When I asked her if Romania is a free country she replied: “I can’t answer that question by yes or no. I would say Romania is a relatively free country.”

She is thankful, of course, that Romania enjoys more freedom than it had before 1989. “On the other hand,” she added, “I can’t say that we are really free, according to classical Western democratic standards, because our society has too many features of an oligarchic system.” This oligarchic system is partly a continuation of the old system. The democratic, pro-Western forces, she says, “never completely managed (or didn’t try hard enough) to deliver our society from oligarchic and Eastern-leaning influences, like during the terms of President Constantinescu, with the government of the Democratic Convention, and now, under President Băsescu, currently serving his second term, along with the government supported mainly by the PDL [Liberal Democratic Party, center-Right].”

Romania had one of the most repressive Communist regimes in Eastern Europe. The Communist Party and the secret police had almost total control over the population. According to Cernea, “The people who were serving the Communist regime and the almighty political police enjoyed privileged positions, socially and economically; they were connected among themselves through common interests, complicity in very serious crimes and, last but not least, fear of each other, which was meant to prevent any defections from the system. The rest of the Romanian people lived in misery and terror, cut away from the civilized world. Additionally, our society was devastated by the general distrust; everybody suspected their colleagues, neighbors and even family members of collaborating….”

Cernea explained that the Communist elite “were not ready to give up the privileges they had obtained by murder, treason and theft…. On the contrary, they and their offspring became prosperous businessmen, media tycoons and successful politicians. They constituted some kind of a privileged cast, an establishment, enjoying an enormous power, no matter who was officially governing the country.”

This establishment, Cernea says, “is the most important obstacle” keeping the country from being truly free. This establishment, made up of former Communist officials and the children of Communists, “hinders the institutions of the democratic State from functioning properly [and] it is the source of large-scale corruption….” Pro-Western forces, she explained, have always operated at a disadvantage. The post-Communist structures are dominated by the former functionaries of the Communist regime. These former Communists are also a source of what Cernea calls “serious, organized political violence.”

“Politically, we are relatively free, in the sense that we have elections, we have different parties and there is some political competition,” Cernea noted. “But the competition, however real, is far from being fair. And that can be said about other aspects of freedom, like the freedom of the press or the rule of law. To a certain extent, normal Romanian citizens can nowadays make use of their freedom of speech or they can obtain justice in a court of law. However, it is very difficult for a normal citizen to win if his/her interests collide with the interests of the post-Communist establishment.”

No longer exercising totalitarian control over the press, the former Communists nonetheless rule the media. “They own most of the media companies and they don’t hesitate to make use of them according to their convenience,” says Cernea; “they practice character assassination, slander and intimidation campaigns, against anybody who attacks the establishment – currently their target is mostly President Băsescu.” As for the rule of law, most of Romania’s judges were part of the old structures. According to Cernea, “they refuse to enforce the law if it is against the interests of the establishment. There are huge corruption networks involving politicians and judges, for instance as it was revealed recently, in the Voicu-Costiniu case, when a number of such people were arrested or indicted.”

But how could this be? The 1989 Revolution supposedly brought down the Communist system. How could the Communist elite continue to keep control of the country’s key assets? Cernea explained that there was a genuine anti-Communist revolution: “But there was also a coup d’état organized by people of the regime who were taking their orders from Moscow. The Soviets had their agents in the Romanian Communist Party and in Securitate [the secret police]; Ceausescu was aware of their existence, he was keeping them under control, but his position towards the USSR didn’t allow him to eliminate those people.”

Cernea believes the Soviets helped prepare some of the changes in Eastern Europe in 1989, with the following stipulation: “When I say ‘the Soviets were preparing’ I don’t mean that all of the changes that took place in 1989 were 100 percent KGB manipulation. I mean that the Soviets were aware of the failure of their system long before 1989, and were working on projects that would allow them to keep, or even increase their power by changing their appearance through glasnost/perestroika and by giving up certain less important aspects of their control over the region – like Marxist ideology and centralized economy. I think their plans succeeded in great part, but not completely.”

The national security implications of Cernea’s analysis should not be passed over, especially considering the present rulers of Russia, the ongoing modernization of the Russian armed forces, and Russia’s alliance with Iran. One might be tempted to ask if Romania is a reliable NATO partner. According to Cernea, “As long as Băsescu is president of Romania, I am sure there is no doubt about our commitment to the alliance with the U.S. and Israel. On the contrary, as I see the situation now, it’s rather a problem for us and for Băsescu that the United States are less and less interested in Eastern Europe and that we can’t count on our American allies to protect us against the Russians. It’s rather you Americans that will decide if Romania will stay in the Free World or will be taken back under Russian domination – if let’s say Băsescu has an accident, or is removed from power by some other means.”

Is Cernea suggesting that Russia could retake Romania?  “Romanian people are traditionally hostile to Russians,” she explained. “This is a thing deeply rooted in our culture and mentalities and it’s much older than Communism. The Communist experience has only strengthened this hostility to an unprecedented degree. Iliescu himself had to disguise his attachment to Russia, however difficult it was for him to do so.” It is not a question of the Romanian people going over to Russia. It is a question of whether the Romanian people can retain their freedom under an oligarchy that doesn’t believe in rule of law, and secretly supports Moscow.

“In my opinion,” Cernea concluded, “NATO is indeed undermined, by many things. The fact that former Communist countries, with their former Communist armies and secret services are now members of NATO is just one of the risks; it’s a real risk, but it’s not the most important, and it can be dealt with – and should be, of course. But the Western armies and secret services are probably infiltrated too. The most serious problem is not even that; it’s the fact that NATO seems to have no real political will, no realistic plan, no effective decision-making, no leadership. NATO looks more and more like OSCE, or the UN; it is just another place for debate, similar to so many other international organizations. It doesn’t act like a military alliance, committed to defend its values against real, clearly defined enemies.”

Cernea is correct, and there is more that could be said. The West has lost its way. We no longer properly identify our enemies. We no longer prepare for war with Russia – our main enemy. It seems that America’s armaments exist only to deal with weak threats – like the Taliban, Iran or North Korea. A large and powerful foe, like Russia, cannot be spoken of as a threat. Such an admission would be a scandal. We seek amelioration and peace at every turn. America’s policy is a strange combination of appeasement and presumption. Sad to say, everything may be lost if we ignore words of warning from those who are fighting against Russian tyranny – in Romania, Poland, Ukraine, and other countries.

Communism is not dead. We only have to look at American politics to see this.

Jeffrey Nyquist is the President of the Strategic Crisis Center and Distinguished Senior Fellow in Political Science at the Inter-American Institute for Philosophy, Government, and Social Thought.

This article was originally published on Financial Sense on March 26, 2012. The opinions published here are those of the writer and are not necessarily endorsed by the Institute.

The Incompetent Many

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Years ago a friend posed the following question: “How does a lower intelligence relate to a higher intelligence?” The answer, he said, was that the lesser intelligence could not relate to the higher intelligence. Then he asked: “What do you get when you empower an idiot?” The answer, of course, is a powerful idiot. From what we learned in the previous paragraph, under democracy the powerful idiot uses his vote to elect someone who is slightly less idiotic (but far more powerful).

Professor Dunning and his colleague Justin Kruger suggest that people do not possess the wisdom needed to sustain democracy. But this isn’t news. Socrates indirectly suggested the same thing in ancient Athens when he taught that the democracy of his day was riddled with ignorance and self-delusion. What Socrates found in ancient Athens can be found in modern America. The Athenians believed they were wise, and believed they had found the best system. It wasn’t long before they were ruined, their country defeated by foreign enemies and convulsed by civil war.

What happened to Athenian democracy? The conservative way was overthrown by rampant innovation. Old structures were replaced with fluid, mobile opinions (i.e., democracy). Aristocratic leaders were replaced by demagogues. A similar transformation has occurred in American life, only on a more massive scale, with innovation threatening the most basic social structures.  Everything has been transformed today, and nothing is what it once was. If we have conservatives in today’s society, they have almost nothing left to conserve. The licentiousness of the multitude is the supreme law, so that freedom no longer means freedom from an oppressive government. Rather, it is the freedom to behave in a manner that requires greater and greater government involvement; more and more government intervention – from family courts to health care.

In ancient Athens the licentiousness of the people was more narrowly focused in terms of lust for power. The Athenians built an empire and extracted money from other states. The desire for more power, more wealth and more conquest led to the fatal invasion of Sicily in which the cream of the Athenian Army was destroyed. This is not surprising, since mediocre men rose to generalship. Some Athenian leaders were demagogues, some proved to be traitors, but most were overmatched by circumstances. Compare now the situation of American democracy. Here the licentiousness of the people is more hedonistically focused. The Americans have built an empire by defending the free world against totalitarian threats (Nazism, Communism, radical Islam, etc.). Instead of extracting money from other states, the Americans have worked out an arrangement whereby they export their inflation. This allows a high standard of living on the basis of a “service economy,” with manufacturing jobs disappearing year to year. Under this arrangement, mediocre men have been elected to the U.S. presidency. Some have been demagogues. None are equal to the crisis.

The gadfly who sticks a pin into the overinflated saviors of the hour, who openly assails the prevailing notions as false, makes little headway. Socrates was condemned to death by his fellow Athenians because he had questioned and tested the best men of his day, and found they were deluded. The story of how he came to this path is rather interesting. The Delphic Oracle had said there was no one wiser than Socrates, and because of this Socrates set out to prove the Oracle wrong. He went in search of someone wiser than himself. “I went to one who had the reputation for wisdom, and observed him,” said Socrates at his trial. It was a prominent politician, with many friends. “When I began to talk with him,” Socrates continued, “I could not help thinking that he wasn’t really wise, although he was thought wise by many, and wiser still by himself; and I went and tried to explain to him that he thought himself wise, but was not really wise, the consequence was that he hated me.” Such was the unfortunate outcome for Socrates.

Today we have researchers confirming what Socrates discovered 2500 years ago. Professor David Dunning (mentioned above) and his colleague Justin Kruger have discovered something called the Dunning-Kruger effect. As it happens, there is “a cognitive bias in which the unskilled suffer from illusory superiority, mistakenly rating their ability much higher than average.” Even more interesting, “Actual competence may weaken self-confidence, as competent individuals may falsely assume that others have an equivalent understanding.” The example of Socrates adds a further dimension:  being competent, he could not believe he was the wisest man. After all, he knew himself to be ignorant. Yet the wisdom of all others he encountered proved to be nonsense. If he was wiser than others, it was only because he was not deluded by false wisdom.

The modesty of intelligent men is of this type. The more they know, the more they are humbled by their ignorance. The ancient Athenian politicians and voters, like the modern American politicians and voters, rarely notice their own ignorance. Today’s politicians present their ideas and the ignorant multitude sits in judgment. “Democracy substitutes election by the incompetent many for appointment by the corrupt few,” said George Bernard Shaw. Sadly, it would be more correct to say that democracy more and more signifies the appointment of the corrupt few by the incompetent many.

After Socrates received his death sentence, he asked for a favor which we should take to heart:

 When my sons are grown up, I would ask you, O my friends, to punish them; and would have you trouble them, as I have troubled you, if they seem to care about riches, or anything more than about virtue, or if they pretend to be something when they are really nothing – then reprove them, as I have reproved you, for not caring about that for which they ought to care, and for thinking they are something when they are really nothing.

Jeffrey Nyquist is the President of the Strategic Crisis Center and Distinguished Senior Fellow in Political Science at the Inter-American Institute for Philosophy, Government, and Social Thought.

This article was originally published on Financial Sense on March 5, 2012. The opinions published here are those of the writer and are not necessarily endorsed by the Institute.