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Woes of bandit capitalism

Nearly two decades ago, a western correspondent watched Russian children boarding coaches to go to summer camp. She reflected that in the new capitalist Russia the population would get a nasty shock when they lost their free summer camps, free health care, heavily subsidised food, transport, housing and fuel, and all the other features of a socialist state. That insight, however, was not mentioned in despatches; the triumph of capitalism was not to have any cold water thrown on it by the international press. Instead the remark was made in some reminiscences years later. Today, much of Europe shivers in the double grip of an exceptionally bitter winter and an economic freeze that has terrorised its politicians and financiers, and in several European countries the public have been angry enough to take to the streets. In France, up to two-and-a-half million people came out recently in nationwide protests against the direction in which the conservative government of Nicolas Sarkozy is taking their society. In Greece a few weeks earlier, youth protests against high unemployment and police brutality threatened to topple the government. Even in stable, quiet, Scandinavian Iceland, police have used tear gas against citizens for the first time in 60 years, the neoliberal government has collapsed, and a Left-Green alliance is focussing public resentment against capitalism. One analyst says the protests are more serious than those of the iconic May 1968 Paris uprising.

Elsewhere in Europe, Bulgarian roads have been blocked by Greek farmers over the poor prices paid for Greek farm exports. The Hungarian government, penniless and watching the economy implode, has imposed more tax rises and spending cuts on a population already in trouble. Parts of the Latvian and Lithuanian capitals, Riga and Vilnius, have been wrecked in running battles between protesters and police, and their governments are as impoverished as those of many other Eastern European states. The recession must be a particularly bitter pill for the former socialist states to swallow. In the early 1990s, the rest of the world was in no hurry to tell them that they were not being transformed into successful social democracies but were being abandoned to what one Russian analyst has called bandit capitalism. Today, it is the apparently successful capitalist countries that have been hit hardest by the very bandit capitalism they foisted upon their former enemies in Eastern Europe. Sadly, the ordinary people, who will pay the biggest price in the present depression, can take little comfort from the way nemesis has come to their political and financial classes.

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