I am writing these recent
impressions of Latvia while visiting the US East Coast (the Boston
area). While life is no picnic here at all, there are “shiny happy
people” around instead of what I saw just before departing. I will
be going back to the drab, gray nation on Friday.
One of the things I have been doing as
a hobby is to walk around Riga and photograph people, buildings,
street scenes and the like. A place I have gone a couple of times
with my camera is the Riga Central Market, with its former Zeppelin
hangar halls and open-air area. To get there, one way is to go
through the Central Station, which has partly been turned into a
multi-level shopping center with clothing stores, electronics shops,
restaurants, newsstands and a supermarket.
To go from this modern 20th
or even 21st century environment (shops selling iPads
etc.) into the Central Market is a remarkable and depressing
transition in terms of the people one encounters. It is a
socio-economic leap to another world of mostly old, haggard, grey,
apathetic and resigned faces and bodies. Listless, old, greyish-pale
expressionless or ravaged faces abound, almost like a contingent of
people shuffling away from some disaster just around the corner or
over the horizon, too burned out to move very fast. Is this the
Third World, the photos of Somali or Ethiopian war victim and refugee
faces, only white and better nourished?
The impression one gets is of a society
from which the life-spark has vanished, or more precisely, emigrated.
There is only a scattering of young people in the otherwise old and
worn masses shuffling about the market with tattered plastic bags
(almost like the Soviet era, except that then plastic bags were a
sign of privilege, net bags and cloth abounded). The young are
tourists or shoppers seeking fresh, organically grown vegetables and
other foods from the countryside. The sellers, too, for the most part
are babushka type country
women, with a bit higher energy level than their often morose
shoppers.
I fear this somehow
illustrates the state and fate of the Latvian nation (including
non-Latvians, too). Drab, haggard, impoverished, drained of any hope
for the future and of an age when, given the overall demographics and
state of health care, there probably is little time left for many of
the individuals one encounters. All this just a few hundred meters
from the modern center of Riga, where tourists and somewhat better
looking locals gather, as well as the significant but visibly
dwindling young, who are often livelier and happier.
What is going on?
As a colleague working for a foreign news agency said, it appears
that the local Latvian media don't really care. Poverty and long-term
unemployment statistics are big news in many other countries. A shift
in the number of poor generates considerable media attention,
analyses, searches for root causes and the like. Not in Latvia. Even
the annual Human Development report seems to focus on issues of
identity and emigration/immigration (to be honest, I have only
skimmed parts of the document).
It would be facile
to say that the root of all this is the transition to a capitalist
market economy. There were similar scenes in the Central Market of
huddled, grey masses of socialist citizens waiting in huge lines
(sometimes crowds bordering on mobs) for a piece of gray frozen meat
to be hacked off a huge block with an axe. One of the roots of the
seeming exhaustion and demoralization of Latvia's people is fifty
years of occupation and a totalitarian, centrally planned economy
that did provide a dull, monotonous subsistence for most people
living under the system. It was the era of stagnation, shortages and
little apparent hope that anything would change, though with a
certain reliability that rents would be low, electricity cheap,
bread, fish, potatoes and other basic foods generally available and
the occasional sausage or fruit waiting at the end of a long queue if
you were lucky. Being a victim was nothing new to Latvians leaving
socialism and entering the new system of the 1990s.
The
problem was that the new “system” in the 1990s consisted of most
of the ex-Communist elite of an entire country trying to imitate the
behavior and lifestyle of characters on the American TV show Dallas,
since this best approximated what they had been taught about
capitalism. The idea was to immediately spend money – the more, the
better – on huge houses and big cars. Dishonesty and cheating –
whether on wives or business partners – was part of the deal.
To be
sure, stuff like that happened in the real world, so that the picture
of how things were in non-socialist economies as presented by Dallas
was selective, but not entirely inaccurate. There was no show made
called Central Committee,
which could have shown the depravity (now documented) of the
Communist elite running a state-owned, planned socialist economy and
succeeding poorly, sometimes pointlessly and often sloppily at
providing what are still the promises of socialist movements
everywhere – free healthcare, free education, and full employment.
It is obvious that
a grab-whatever-you-can economy will generate inequality, or rather,
exaggerate existing inequalities among a population that had been
indoctrinated that complete equality was possible and that, indeed, a
semblance of it existed in the low, but barely adequate standard of
living shared by most of the population. Among the old and hopeless,
memories of this have turned to nostalgia for “better times”
under the old system.
Why is Latvia
turning into a society with a significant, even dominant population
of the aging, passive and helpless poor? Some would say that the
cause of poverty is the failure to equally distribute wealth,
bringing us back to the socialist argument that all one needs is a
centralized system for equally distributing resources in a planned
way. This works, more or less, in organizations that are smaller and
somewhat less complex than society as a whole. The best example, in
rough and general terms, is the military. All soldiers have more or
less the same uniforms, weapons, food and medical support and can be
relied upon, as a whole, to carry out centrally issued orders and
instructions. The military is, looked at this way, an organization
that produces the outcomes for its members that are promised by
socialism – equality in the fulfillment of all basic needs by
central planning and allocation.
However, it can
also be argued that the root cause of poverty is low productivity.
Here the military analogy breaks down, because functionally
“socialist” armies do not produce what they consume. They are
not, strictly speaking, “economies”, and it is economic systems
that create wealth, multiply and refine resources. Latvia's poverty
stems in part from a failure to form an economic system that
increases its own productivity and, thereby, the wealth available for
“redistribution”, should anyone choose to do so.
Productive and
evolving economic systems also need strong institutions that ensure
the rule of law, the enforcement of contract and the orderly
elimination of non-productive economic entities in favor of those
that are innovative and more productive. With all their imperfections
and failings, Western European countries have created such economic
systems based largely on private ownership and market relations among
economic actors.
Since
the early 1990s, Latvia has had a long parade of advice and
instruction on how to reform and transition society from a failing
socialist economy to a modern market system, including the necessary
institutions to underpin such an economic system. To be sure, a lot
of the advice given to Latvia over the past 20+ years has been
condescending, oversimplified, overoptimistic, and presented with
little understanding of how the presumed audience – homo
(post)sovieticus saw the world.
But at the end of the day, or rather, the two decades, Latvia was
given almost all of the basic and much of the sophisticated knowledge
on reforming its society that was needed to build a socio-economic
system that would increase productivity and increase the total wealth
of society.
So it can be said
that much of the poverty in Latvia, exacerbated by the emigration of
productive and potentially productive individuals, was caused by a
failure of politicians and institutions and, to some extent, society
as a whole, to learn the lessons repeatedly given to them since 1991.
They can be summed up as – don't bribe, don't steal, deal honestly,
pay fairly, invest for the mid-to-long term, educate your workforce,
streamline government, make bureaucracy small, smart and efficient,
make the benefits of tax-paying visible and obvious, keeping taxes
moderate, etc. etc.
Too little of this
has been done. Instead, the political elite has discredited itself to
an extent unheard of since modern polling methods have been used. The
collapse of trust in institutions in Latvia is very likely
irreversible and has already mutated into a kind of social paranoia
as witnessed by the run on Swedbank. The end result is that we have a
society that, at least by street-level observation, is ravaged by
poverty and has failed to implement the practices that would have
significantly reduced that poverty. It is too late to retrain the
older part of the population to do the work, say, of five Chinese
while getting paid three times Chinese wages (probably a bad
comparison), and the young are making decisions every day to leave a
country they perceive as failing and futureless. The drab, gray,
haggard, exhausted, aged population that one sees behind the
socio-economic divide of the Riga Central Station (and probably in
many rural areas) is the result of a series of choices over the past
20 years that, whether intentional or simply clueless, have resulted
in an act of “futuricide” agains the Latvian nation.
