FACES AND PLACES: It's a matter of trust (12/08/96)

FACES AND PLACES

by Myron B. Kuropas

It's a matter of trust

It is one of the great paradoxes of modern times that in their mercilessly massive endeavor to establish a society of disciplined collectivists dedicated to one, cooperative world order, the Bolsheviks ultimately created a society of nihilistic cynics committed to little more than self.

Preaching a doctrine that was supposed to eliminate human selfishness, the Bolsheviks, ironically, made people more selfish, suggests Francis Fukuyama in his book "Trust: The Social Virtues and Creation of Prosperity." By coercing people into "volunteer" activities for a variety of causes - everything from helping with the harvest and demonstrations on behalf of the "freedom-loving people of Vietnam and Cuba," to fighting in Spain and Angola - the Bolsheviks effectively destroyed a sense of civic-mindedness.

The work ethic also was destroyed by the Bolsheviks. "Communist states tried to inculcate a similar sense of moral obligation to the larger social group through constant propaganda, indoctrination and intimidation," writes Mr. Fukuyama. "This kind of ideological hectoring not only proved ineffective in motivating people to work but promoted a widespread cynicism which, since the fall of communism, has resulted in a pronounced lack of work values, public spiritedness and citizenship in Eastern Europe and the former Soviet Union."

Small wonder so few recently arrived Ukrainians are prepared to join Ukrainian civic organizations in North America, even those their own brethren have created.

What is lacking in post-Soviet society is what James Coleman has called "social capital: the ability of people to work together for common purposes in groups and organizations." Cooperation depends on shared values, writes Mr. Fukuyama. Without shared values there can be no trust. Without trust there can be no meaningful economic progress. This seems to be especially true in Ukraine where no one seems to trust anyone else.

In the words of Mr. Fukuyama: "The experience of many former Communist societies is that communism created many habits - excessive dependence on the state, leading to an absence of entrepreneurial energy, an inability to compromise and a disinclination to cooperate voluntarily in groups like companies or political parties - that have greatly slowed the consolidation of either democracy or a market economy. People in these societies may have given their intellectual assent to the replacement of communism with democracy and capitalism by voting for 'democratic' reformers, but they do not have the social habits necessary to make either work."

"One of the great problems of Poland, Hungary, Russia, Ukraine and other former Communist states," continues Mr. Fukuyama, "is that they have tried to establish democratic political institutions without the benefit of functioning capitalist economies. The lack of firms, entrepreneurs, markets and competition not only perpetuates poverty, it fails to provide critical forms of social support for the proper functioning of democratic institutions ... Both private companies and political parties are weak or non-existent in post-Communist societies like Russia and Ukraine, and elections lurch between extremes defined around individuals rather than coherent political programs."

This does not mean that Ukraine and Russia are devoid of community structures. They're not. "There seems to be a universal human impulse toward sociability," argues Mr. Fukuyama, "which if blocked from expression through legitimate structures ... appears in pathological forms like criminal gangs." Ask anyone about the most powerful non-governmental organization (NGO) in Ukraine today and the answer will probably be "the mafia."

Mr. Fukuyama carefully compares economic development in three high-trust societies - Japan, Germany and the United States - with low-trust societies like France and Italy, and concludes that economic growth in the latter nations has not been as vigorous as in the former, even though the rule of law is the norm. "Property rights, contracts, commercial law are all indispensable institutions for creating a modern market-oriented economic system, but it is possible to economize substantially on transaction costs if such institutions are supplemented by social capital and trust."

What options, then, remain for such no-trust nations as Ukraine? Mr. Fukuyama suggests two. "The first is one that has been exploited from time immemorial: use of the state as a promoter of economic development, often directly in the form of state-owned and -managed enterprises." This is no solution. On the contrary, state-owned enterprises in Ukraine are part of the problem because they perpetuate the welfare-state mentality and keep crooked government officials in power.

A second option is "foreign direct investment or joint ventures with large foreign partners." This can't work in Ukraine at the present time because of widespread government chicanery. According to a November 4 article by Matthew Brzezinski in the Wall Street Journal, government corruption in Ukraine is still a major roadblock to foreign investment. "Like most former Soviet states," writes Mr. Brzezinski, "Ukraine still employs thousands of apparatchiks, who have the power to block exports, ban sales, levy licensing fees, seize money from private bank accounts and generally make life miserable for business."

Over the past two years, continues Mr. Brzezinski, "American taxpayers have put $1.9 billion in grants, credits and various forms of aid to Ukraine." Much of it, as we know, has gone to dismantling Ukraine's nuclear arsenal and in cleaning up Chornobyl. Other dollars, however, perhaps millions, have gone into the creation of NGOs in Ukraine. NGOs hope to rebuild a civil society in Ukraine based on civic need.

Ukraine has a national flag, a national symbol, a national language, but no national identity. Ukraine has a Constitution, but Ukraine's people don't feel empowered. Ukraine now has a relatively stable currency, but paychecks are still low and far between. Ukraine has political parties, but their goals are neither widely known nor appreciated. Ukraine is the third largest recipient of American aid, but remains a socialist basketcase.

What is lacking in Ukraine is social capital, a sense of civic responsibility and self-confidence predicated on national pride and trust for fellow citizens. As long as those ingredients are missing, and as long as Ukrainian government officials care more about lining their own pockets than about serving the people, no amount of American assistance will extricate Ukraine from its Bolshevik past.