Historical and economic context of the Balkans war

The Kosovo debacle, which has revealed the utter fragility of Nato, the bankruptcy of the Revolution in Military Affairs, and the underlying weakness of US policy and strategic capability, is part of the ongoing process of deepening world crisis and disarray.

The suddenness of the event also indicates the volatility of the historical moment and its potential for revolutionary catalysis. Having said that, one perhaps should not assume that anything other than a glacial calm will settle over Western-sponsored international processes once this is over and the silent, behind-the-scenes inquests begin. There will be no rush to repeat Nato's first out-of-area folly. I'm reminded of ancient Rome's last out-of-area adevnture in northern Europe, when the legate Varus lost three of the emperor Augustus's finest legions to a bunch of unlettered savages roaming the Teutoburger Forest. That was in A.D. 3, and it was a salutary lesson in hubris and nemesis which caused the patrician classes much angst: Augustus on his death bed was still exclaiming 'Varus! Where are my Legions!' But the Roman Empire still lasted another 4 centuries, converting its forward expansionist policy into one of containment, of divide-and-rule, of conscripting allies among tributary kings and comitates, a policy which Nato is now deeply into as it tries to get Bulgarians Hungarians and Russians to bale it out. So I do not expect Nato to founder next Tuesday, but it has been revealed as a paper tiger and at the same time this farce has roused the dragon of slavic nationalism, a momentous event. I've been really surprised by the popular backlash in Russia, and terribly pleased. It should have Nato planners shitting in their trousers. Will Clinton die with the name Wesley Clark on his lips? Nah, I suppose not...

I have a few more disordered reflections. First we now see that (as was also true of the Warsaw Pact), whatever Nato is for doesn't include fighting wars. Nato like the Warsaw Pact was the creature and embodiment of the Cold War, which was always just a phony war. The Cold War inverted von Clauswitz's dictum: during it, armed conflict ceased to be an extension of politics. Instead, Mutually Assured Destruction and the impossibility of actual war between the great powers absolutised economic rivalry. Capitalism was able to achieve its greatest historical flowering because it was reconstituted around an axis of geocidal military technology conjoined to the repressive desublimation of privatised mass desire thru the overgrowth of production and of metropolitan consumption (it is important to note that nuclear war was and remains distinctly thinkable and possible; it did not happen during the Cold War only because it was not strictly necessary: accumulation could gallop ahead as long as the USSR still stood as guarantor-of-last-resort of world capitalist relations of production, an under-analysed outcome of 'actually- existing socialism' -- and also while western mass consciousness could be organised and re-authenticated as its antithesis; only when the USSR collapsed did accumulation begin to stall and war become both thinkable and even necessary, including nuclear war, the inevitability of which becomes increasingly clear). Second, there is the deeply-contradcitory form of the constitution of the late-imperial civil subject and mass consciousness within the historical space so created. This took the highly paradoxical form of societies armed to the teeth but totally lacking amrtial spirit, a decadence which infected the armies themselves, reducing them to what Mary Kaldor once called 'baroque impotence' -- we have armies which are more like armadillos than fighting forces full of verve and elan and capable of blitzkrieg advances. It is a deeply gratifying sight, to see this giant armadillo threshing about in the Balkans like a dinosaur in its death throes. Nato cannot defeat a nation of 11 million. And Serbia is led by communists of the old school.

The militarisation of economies in the Cold War went with the decentring of subjectivity and the evacuation of the masses from the social process; social and psychological fragmentation and reconstitution of the subject qua worker and subject qua citizen, as individually authentic but socially impotent, ushered in an epoch of gothic obscurantism and mass disenfrachisement.

The postwar world system was locked into a dialectic of militant non-war between valorising and non-valorising subsets of the global system.

The USSR and the world of Actually-Existing Socialism bore the brunt of an oppressive triple burden: becoming the warped and distorted manifestation of working-class self-organisation, the creation-myths of its revolutionary origins subverted by the defeatism, passivity and involution of the revolution, its enslavement to capital, prostration before the gothic outerworld, condemned these prison-societies to evolve endless discourses of social trickery, of fastidious and bureaucratic mass deceit. It was bound to be so, just as every other historical instance of working-class self-emancipation has always been recuperated to capital's social horizons and incorporated as essential mechanisms in the maintenance and self-expansion of value through intensified exploitation. Unable to valorise, existing only as an enclave, and forced to bleed itself white in useless military competition which only served to legitimise, entrench and economically validate capitalism, the USSR and its tributaries were doomed (except in the case that its leadership embraced the necessity for revolutionary war, even revolutionary nuclear war, which of course it was unprepared to do).

The Cold War bound all nations, capitalist and non-capitalist alike, but unequally, into the duress of an endless economic and political and ideological competition, which after the Korean stalemate set it in concrete by 1951, could never again result in open warfare and was doomed to not merely increase capitalist wealth but also to reproduce in ever more florid forms, its most extreme, outlandish and obscene contradictions. The Soviet Union froze the imperialist world system and became the long-range guardian and guarantor of US hegemony, of the global relations of production within which the forces of production were freed to begin an unparalleled wave of intensive accumulation. When the USSR collapsed it brought down the postwar world order with it, and this postwar order, inscribed in the international Settlement which created the UN, the Bretton Woods institutions and the whole framework of international law, was itself only the continuation and consummation (or correction) of the failed Versailles Peace of 1919-21, at which the 20th century system made its first and temporarily unsuccessful appearance. That system was built upon the foudnations of the American upswing and its confrontation with Bolshevism (as Thorsetin Velblen said, Versailles, which gave the world self-determination, the International Labour Organisation and the League of Nations, nowhere mentioned Communism, but nevertheless anti-Bolshevism was the very parchment upong which the Treaty was written).

The single most patent fact to emerge from the Yugoslav debacle that Nato is incapable for not just one but many compelling reasons, of fighting wars. As has been said, 'out of area or our of business': and we see that it is going to be out of business. When the dust has settled and victory over Serbia has been declared, a convulsive post mortem, and agonising collective inquest will begin and no stone of Nato's political doctrine or military strategy will be left unturned. Since Nato is the creature if not the brainchild of US imperialism, and the US has invested most, and has most to lose geopolitically, the catatstrophe in the Balkans is above all a disaster for US global policy and the self-perceived 'national interests' of US elites. Far from the Balkans adventure entrenching the 'Euro-Atlantic structures' as the disgusting Joschka Fischer has said, it is the death-knell of Atlanticism. The Balkans fiasco follows closely on the disaster which befell world capitalism 18 months ago when the Asian Crisis began; both are above all, huge setbacks for US imperialism, they deeply destabilise the US-dominated world system and together they take the world deeper into an era of immense political fluidity and profound crisis. The War of Position announced by Gramsci long ago is over, and the international civil war hailed by Lenin and the Bolsheviks has resumed. It took the destruction of the USSR to free up the logjam. Now, in the three great zones of Eastern Europe, Asia and India, the rule of capital has been thrown into question both economically and politically. These zones together constitue the vast mass of the world proletariat and the true centre of gravity of world civilisation.

To see just how big the stakes are it is only necessary to reflect on the real reasons behind Nato's new 'out of area' strategy, which is not fatally wounded and has left Nato's institutions in deep disarray. The destruction of the integrity and homogeneity of the former Soviet Union's economical and political space, its crisscrossing by thousands of Lilliputian threads from Karelia to the Russian Far east, from the resource-rish Arctic zone to the Caucasus, was one prime objective which the West has pursued relentlessly through more than a decade of the reduction and gross, unrestrained plunder of Eastern Europe and Central Asia. The control of the key resource-axes including crucially Persian Gulf oil, during the impending era of energy-scarcity (the US now imports 60% of its oil), and against Indian, Asian and above all, Chinese, opposition, has been another key strategic pursuit of US imperialism. The catastrophe in the Balkans directly threatens both goals, which until only a few weeks ago had looked certain of success. Russia was socially disaffected, economically ruined, prey to disaggregation and a new round of barbarous irredentist strife. The access routes to the Caspian and the Gulf seemed more secure than ever, control over oil so total and Opec rivals so prostrated, that the price of crude collapsed far below what the US itself thinks appropriate. Now the extraordinary convulsions in Russian popular feeling, the tidal wave of anti-Americanism, the rekindling of Russian national spirit with the incandescent and abrupt force seen at several other key moments in Russian history (1812, 1917, 1941) make it already inconceivable that the great Eurasian space will fall like ripe fruit into western hands. Equally implausible is it that current (feverishly-drafted) Nato/EU plans for the long term 'stabilisation' of southeastern Europe will do more than reciprocally destabilise southern and central Europe.

The Kosovo endgame has already begun, a dirty endgame played out between Moscow and Washington which will reach a climax in weeks or more likely days. It is in everyone's interests to stop the carousel before it spins still more out of control. Normal service will be resumed and on the face of it, once calm is restored, things in Natoland will seem to go on as before. But the engineers have already been ordered to rip the machinery apart. Just as the naked rule of force will continue to become dominant in international relations generally, so too will the simple opportunistic pursuit of national self-interest now become the dominant process within Nato itself. From now on the test of each Nato-member's attitude to the Alliance will be, not what can we do for it, but what can it be persuaded to do for us. Most of all, American self-interest will declare itself; Nato has proved a hindrance to US freedom of action, instead of providing a screen of legitimacy and a source of tributary fighting contingents. Whatever renewed ritual genuflecting there is to the 'empowering' of things like the UN Security Council or the Nato mandate, in reality US military and foreign policy planners will be driven still more in the direction of unilateral action on the world stage, unrestrained by any external influence, Nato, UN or whatever. In short, the world-system continues to be buffeted by new shocks, and its own constructors are now busy hacking away in the foundations; each new shock, whether economic, political or military, will weaken it still further and exacerbate and intensify the strains pulling the system apart. Nothing can stop this process which will continue until the complete destruction of US hegemony, power and privilege.

Mark Jones


There have been several turning-points in the story of Yugoslavia's collapse when Slobodan Milosevic might have gone the way of other post-communist leaders who adapted to social collapse by becoming a new bourgeoisie. It did not happen. Mostly this is because the 1990s are a period of capitalist decline which produced a historical logic which pressed on the peoples and elites of the defeated states with terrible force but which in Yugoslavia served to radicalise and entrench opposition to the West instead of serving to enforce social and political capitulation. But this process was helped by the presence of a leader, Slobodan Milosevic, who never sold his people out whatever the temptations, was never a Balkans Boris Yeltsin, who showed how a small country can successfully defy the diktat of great powers.

Decadent, entropic capitalism in the 1990s totally lacks the buoyancy and accumulated reserves which world capitalism enjoyed half a century ago. Its deep crisis is becoming a political crisis even in the European metropole. This is the meaning of the Kosovo- Metohia war.

There has been no scope for vast Marshall-Plan type reconstruction programmes for shattered East European economies. Even when the money has been forthcoming, as in the ex-GDR, rebuilt by the FRG at a cost of at least $100bn a year for almost a decade, the results have been mixed at best. As Louis Proyect put it to me in a conversation the other day, the problem in Yugoslavia is that the cake suddenly got much smaller, and people began fighting over the spoils, not co-operating together to increase them.

For decades Belgrade had cross-subsidised backward regions like Kosovo-Metohia, transferring wealth from the richer western republics such as Slovenia. The Albanians in K-M were the principal beneficiaries of this redistributive process, which Serbs like all Yugoslav citizens contributed to. When socialism collapsed this equalitarian redistributional politics collapsed with it, and thus the social basis of the Yugoslav state. Today, greedy Slovene and Croat elites who no longer wished to subside the burdensome Albanians of Kosovo, shed crocodile tears on their behalf and applaud Nato raids on what until a few years ago was part of their own homeland.

After 1989 all the countries of Central Europe rushed into the embrace of Germany and the EU. Apart from Poland, which after a decade is more or less back where it started, all without exception have lost out. Hungary, the Czechs and Slovaks, Romania, Bulgaria, the Baltic states, all have lower living standards and smaller economies now than they did under socialism. Powerful redistributive forces worked to impoverish the masses while enrich the new political and business elites. They at least have a continuing interest in being part of the European capitalist economic and security system. Incidentally, the spectacular collapse of the fSU tends to disguise just how bad things are in Central Europe. But they are very bad indeed.

According to the OECD Czech GDP fell by half a billion dollars between 1990-1998. It's still better than the E European average (the incidence of poverty in Eastern Europe - as defined by a daily income of $4 or less, measured in 1990 PPP$ - increased sevenfold between 1988 and 1994, from 14 million persons to more than 119 million persons (UNDP figures).). But probably they've done better than Hungary (25% fall in industrial production since 1989) Estonia (4.5% average annual DECREASE in GNP, 1983-93) or Poland (European 'tiger' economy Poland achieved a staggering 0.1% increase in PPP GDP, 1983-93, all World Bank figures), or have they? Correct me if I'm wrong, but even the Czechs, who ought to have benefited from being a small, subsidizable satellite of German capitalism, have not done so. Instead they've got the following problems among others:

A cumulative external trade deficit 1990-97 of $9bn; increases in rents and the price of electricity, gas and heating, announced on July 1st 1998, which put two-thirds of the Czech population (2m households) on the poverty line. Unemployment has now climbed from zero to 7% (350,000), and is set to worsen further. Interest rates forced through by the Czech Republic's IMF 'managers' may cause indebtedness and/or failure of 40-60% of Czech enterprises this year. Median wages and pensions are lower than in 1990 - when economic transformation started - and the average tax burden is higher. Average wage is $300 a month, but 62% of workers get wages lower than the average and only 5% get wages higher than $600 per month. As in Russia, privatisation scams fostered by the West created a new category of super-rich. Meanwhile the Czech republic remains the most polluted in central Europe. The IMF/Government has cancelled subsidies for household heating, electricity and gas. Decreases in wages and structural adjustment programmes mean that tens of thousands of public sector workers stand to lose their jobs; hospitals, schools and railways are being closed down; unemployment is mushrooming. A recent poll showed a majority agreed with the proposition that 'things were better under Communism'. As for voucher privatisation, as World Bank chariman Joe Stiglitz put it, ' there are strong incentives not only for private rent seeking on the part of management, but for taking actions which increase the scope for such rent seeking. In the Czech Republic, the bold experiment with voucher privatization seems to have foundered on precisely these issues.' Meaning in English, the greedy sods were told it was OK to rip off the state and use pivatisation as a screen, so that's just what they did, leaving WB and IMF types to sob crocodile tears but not to actually do anything to stop the rot until their own fingers got burnt, as eg Soros''s did in the August 1998 GKO melt down. And the Czechs were just as unholy as the Russians, as even Stiglitz acknowledges.

The Czech republic's annual chronic trade deficits will condition all its future options. The integration of the 'Near European East' - that is to say, the Czech Republic, Poland, Slovakia, Hungary and Slovenia, will be a painful process. For a long time to come, the balance of trade and the balance on current account will be negative, a powerful force in the motivation of economic and political nationalism against the West. The USSR fell when it ran out of oil. Believe it or not, the same fundamental equations still apply to Central European states. The 'extractive economy' is a term used to describe a situation, when exorbitant energy consumption is used to produce a shrinking or stagnating, or at least not very rapidly growing amount of welfare. Czecho, Hungary, Poland and even the ex-GDR play precisely such an 'extractive role' in the emerging cycle of the world economy. East Europe, unable to reap the benefits of technical progress and being forced to export what there is, is thrown back to the old patterns of the extractive economy. No major advances in the energy/income balance are in sight. We witness a heavy or even increased reliance of the export sector on the extractive branches of the economy, and the inability to change the price mechanism, partially because losses in the terms of trade and the 'scissors' of lagging (legal) exports and rising imports dictate that the urban and rural poor cannot pay higher energy bills. The disequilibria involved here are mind-boggling. In 1961 it took the US economy 180kg of oil-equivalent to produce $100 of GNP. By 1991 the energy requirement for $100 GNP had fallen to only 36kg oil-equivalent. In Japan the figues are 145 kg (1961) and 13 kg (1991). In the core EU the energy-input per $100/GNP fell from 165 to 19 in the same period. But in 1991 Poland still required 155kg of oil-equivalent to produce $100 of GNP. Since 1991 energy consumption and industrial production have fallen sharply. So have living standards. The disparity in living standards between the ex-communist states of central Europe and the core-EU is if anything growing larger. Hazlett's pseudo-optimism (he can't really believe what he is saying) is not just anti-Russian, it is a hoax. The nature of the hoax is this: Hazlett and his ilk pretend that the systemic inefficiency of the communist-mismanaged, high-energy-using east, will be replaced by western efficiency. But the truth is that when the rustbelt is closed out, NOTHING will take its place. The dirty word which describes the process is deflation, the most savage in the history of capitalism. The Czechs like the Balts are victims as are the Russians. No-one is telling the truth, of course. The CIA factbook acknowledges the chronic trade deficits of Central Europe, which will cripple those economies -- but says for example of Poland that altho: "trade and current account balances officially are in deficit ... in fact both have comfortable surpluses because of large, unrecorded sales to cross-border visitors.'

Yeah, sure, cross-border visitors. Unrecorded sales. According to some estimates the Italian Mafia launders $100000 *per hour* in Poland (Polityka, 16, 1998). Of course, these states weren't communist in anything but name; by 1989 they were already integrated as dependent formations within the world economy. But tearing away the 'thin and squalid veil' of 'real socialism' away has not added to the sum total of happiness.

Yugoslavia faced the same problems but the differentia specifica of its history (the facts of Titoism, its ethnic mix, history of Balkan wars etc) produced the well-known qualitatively different intensity of collapse.

The result is that the Serbs in particular -- the core nationality of the Yugoslav state -- have been losers on too large a scale for Serbia to be integrated into the system except by force, as is now happening. This is the underlying logic of events. This is the reality which Milosevic and the Serbian leadership inherited and only with the passage of time came to fully understand. They could have gone belly-up and formed the kind of craven, quisling government of national suicide which Yeltsin has given Russia. But they did not. Therefore, as Louis Proyect rightly says, the Kosovo war is morally equivalent to the Battle of Stalingrad. This is the point at which the working classes and their social allies in the defeated and destroyed socialist world, said "Enough! This far and no further!". For this they are entitled ot receive every kind of imaginable and unimaginable punishment. Like the American Indians, they can expect to receive the most ferocious, genocidal onslaught and it will not end when the war does. Embargoes and blockades will continue to throttle devastated Yugoslavia just as it has Iraq.

Nevertheless, a people determined to fight, to defend themselves and their motherland, can never be defeated and the Serbs will not be defeated. And the same merciless logic of events will continue to push Yugoslavia and its leadership in the direction it has already set out on. We talk about a strategic alliance of India, China and Russia, based on their self-interest and on opposition to US imperialism. Such an alliance cannot ultimately be about defending and extending capitalism, but about destroying it. That a small state like Yugoslavia and a small nation like the Serbs, should play a role in catalysing such a process is a great thing and one to reflect on, celebrate and wish well.

Long Live Yugoslavia!

Mark Jones