Editor’s note: This is the debut of a twice-weekly column by
contributing editor J.R. Nyquist, author of “Origins of the Fourth World
War,” a book that explains the chilling logic of Russia’s foreign policy
in the context of American decadence. He is also editor of the Final
Phase newsletter, which tracks recent military and political
developments in the former Communist Bloc.

The feeling has grown in Russia, especially since last August’s
economic crisis, that the West’s helping hand has been squeezing the
impoverished Russian people. But is this feeling valid? Has the West
exploited Russia’s weakened economic condition? By no means should we
carelessly repeat anti-American propaganda about the “looting of
Russia.” All the same, we need to consider the Russian point of view,
especially as it relates to NATO’s attack on Russia’s ally (Yugoslavia).

An American businessman with intimate ties to Russia, who wishes to
remain anonymous, spoke to me recently. He said that living conditions
in Russia have sunk dramatically. “The children are suffering,” he
explained. “There are no hospitals. The social safety net has

I asked this businessman about the tens of billions we have poured
into Russia, in support of free-market reforms.

“What reforms? The Russian leaders are mostly Communists!” he
exclaimed. “I mean, basically, they think in terms of power, lines of
organization, personal contacts — to gain personal control.”

In other words, Russia’s political machine has not adopted a true
market system. The old system of bureaucratic back-scratching and
favor-swapping continues to control economic outcomes much as before.
Consequently, Russia’s economy is not based on a capitalist model. State
control dominates in sector after sector. Even Russia’s largest private
company, Gazprom, is 40 percent state-owned. More suggestive still, the
Russian economy remains heavily militarized, with weapons production and
heavy industry at the forefront.

Perhaps a free-market system cannot be created in today’s Russia.
Perhaps the old Communist structures run too deep, and are yet following
their old line — war socialism. However that may be, the consequences
of Russia’s continued economic failure are felt by the Russian people,
and Russian demagogues are quick to blame greedy Western businessmen,
even to the point of rejecting Western financial assistance.

Last year the International Monetary Fund (IMF) held out billions in
loans to the Russian Federation. But there were strings attached. The
Communists in the Duma, by opposing the terms of acceptance, contributed
to the collapse not only of the Russian economy last year, but to the
collapse of the liberal government — which was then replaced with the
government of Yevgeny Primakov.

How could the Communists get away with this outrageous
obstructionism? The terms imposed by the IMF appeared to Russian eyes,
harmful to Russia.

Think of it this way: When you are relatively poor and have nothing,
and someone of wealth approaches you to offer a way out, you feel
gratitude. But when, after a short spell, that helping hand suddenly
squeezes you into a corner, and dictates terms while threatening to move
against you (in Yugoslavia), then gratitude turns to anger and self
respect to indignation. You see, in the last analysis it isn’t about
money, but power. And as it happens, the poor man is still a man. He has
self-regard if nothing else. (And thousands of nuclear weapons.) So it
is with Russia and the International Monetary Fund.

“We stole from the Russians,” said my businessman contact. “We stole
their intellectual property, laser technology, surgical instruments,
lens implant technology. U.S. companies took pride in profiting at
Russia’s expense. The U.S. was the most popular country in Russia. I’m
afraid we have dissipated that good will. Worse yet, none of the aid we
sent over got to the Russian people. We helped to enrich the crooks who
were running everything.”

Is it true that American businessmen would take advantage of a poor

I didn’t want to believe what the businessman told me. I didn’t want
to think that American capitalism was capable of sinking so low. And
perhaps it’s only a few rotten apples in the big business barrel, a few
dishonest dealers; but after thinking a while, after seeing what
capitalism without morality can bring to a people, I began to wonder.
Have we lost the one thing that made capitalism superior to every other
system? Have we lost our moral center, our faith in God?

“I feel sorry for the Russian people, and we should take
responsibility for it,” said the businessman. “We stole 300 billion from
Russia — in gold, in diamonds, and anything that wasn’t nailed down. I
think there’s a potential for 1917,” he added, referring to the
Bolshevik Revolution. “There is a possibility for mass revolt.”

Last week Russian finance minister Mikhail Zadornov said: “We are
being offered our last chance, because right now Russia is technically
in default.” If Russia does not accept the IMF conditions, he noted, “We
will be cast aside economically, and therefore politically, if we do not
use this opportunity.”

At the same time, a Russian general is talking about the war in the
Balkans: “The more bombs, the more glory.”

I do not believe that we have exploited Russia as badly as my contact
said. However, our high-handed manner of dictating to the Russians,
combined with the bombing of their ally, is a dangerous mixture. Because
of it, we will have lost the good will of the Russian people themselves.
We will have strengthened Communism.

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