Eftirfarandi viðtal við Jón Baldvin birtist í helgarblaði (Sestdiena) í Riga (september, 10-16, 2021), í tilefni af því, að 30 ár eru liðin frá því að Lettar endurheimtu sjálfstæði sitt frá Sovétríkjunum.

Q To what extent were you familiar with the internal situation of the Soviet Union and behind the iron curtain?

A. I stem from a very political clan in Iceland. My grand cousin was the founder and leader of the Trade Union movement and the Socialdemocratic Party for more than 20 years (1916-38). My father was leader of the Trade Union Movement for 20 years (1954-74), and briefly leader of the Socialdemocratic Party. My uncle studied in Paris, Berlin and Rome after WW1 and worked for the League of Nations. My oldest brother was the first person from Western Europe after WW-ll to graduate from Moscow University and did postgraduate work in Poland (1954-61).

I, myself, did postgraduate work at Harvard (1976-77), where my research project was comparative economic systems. Already at that time I had come to the conclusion, that the Soviet Union was an economic and political failure, unsustainable in the long-run and doomed to lose in the Cold War competition with the West.

We had valuable contacts with dissidents behind the iron curtain in Russia, Estonia, Lithuania, Poland and Czeckoslovakia. During my student´s days I had attended, along with other students from the Nordic countries and the UK, a special course on „the transition to a social-market economy“ in Zakopane in Poland (1961). This was to make us familiar with the theories of the emigré-Polish economist, Oscar Lange. Among our teachers was Ota Sik, who would have tested those theories in practice during the Prague-spring under Dubchek, had it been allowed to bloom. So, with this background I was not completely ignorant of the Soviet system as most of my colleagues actually were.

Q. During the crack-down in Lithuania and Latvia in January 1991 you were the only prominent politician in the West to condemn Soviet aggression. Was this simply an emotional revulsion, or was it a rational reaction based on the view, that the days of the Red Empire were numbered?

A. It was both. But primarily it was a logical conclusion of my disagreement with the declared policy of Western leaders, on how to deal with the Soviet Union during the ongoing negotiations to end the Cold War. Policy is actually not the right word, because there was none. Mainstream attitude is closer to the facts.

Within NATO the mainstream mantra at the time (1990-91) was this: Don´t do anything – and don´t say anything – which might endanger Gorbachev´s grip on power. If he were to be deposed, the hardliners would come back with disastrous consequences. In other words: They put all the stakes for success or failure in negotiating the end of the Cold War with the Soviets on the political fate of a single individual – Michael Gorbachev. This is never prudent – and least of – in this case. Because Gorbachev was not delivering on his promised refoms – perestroika – he was rapidly losing trust and becoming increasingly dependent on the hardliners, who in the end ousted him.

Gorbachev´s last line of defence was to keep the Soviet Union together at all cost. In his infamous „Chicken-Kyiv-speech“ in the Verkovna Rada, U.S. president Bush sr., August 1st, 1991, appealed to the Ukrainians to do just that: „Keep the Soviet Union together at all cost“. Thus this has become a declared Western policy as well. This has aptly been called „a monumental lack of judgement“. To my mind, even that was an understatement.

This meant that both the legitimate aspirations of the Baltic nations towards regaining independence, as well as Ukraine´s independence, were strictly excluded by the leaders of Western democracy . The freedom-fighters had become „spoilers of the peace“. Then, the course of events began to unravel this nonsense for what it was: lack of judgement: the hardliners austed Gorbachev, but failed in their putsch. Boris Yeltsin emerged as the new leader of the democratic forces and proceeded, in short order, to dismantle the Soviet Union. The so-called Western policy was in tatters. Our condemnation of Soviet aggression in Lithuania and Latvia was therefore both a matter of principle and based on realistic assessment of the internal situation, as subsequent events were to prove.

Q. After the failed putsch in Moscow in August 1991, the major powers hesitated for quite some time in making up their minds. Iceland, on the other hand, reacted quickly. Were you not afraid that your interference into the domestic affairs of the Soviet Union could have serious consequences for Iceland, especially if the democratic forces inside Russia were to lose the power struggle in the Kremlin?

A. Let us say, that we did take a calculated risk. The Soviet Union was still at that time an important trading partner. In exchange for our high quality seefood, we got all our fuel for our fleet and our domestic transport from the Soviet Union. On the other hand, the Soviet Unoin was in steep economic decline at this time, and we could easily find other markets for our exports – as well as trading partners. But I took the accusation that Iceland was guilty of „interfering in the domestic affairs of the Soviet Union“ very seriously indeed. I put together a team of legal experts, with a valuable contribution from Estonia, to compose a thoroughly argued legal document to prove that Iceland was indeed not interfering into the domestic affairs of the Soviet Union; that the Soviet Union had undertaken binding obligations to respect the borders of other countries; that the Baltic countries had been illegally annexed into the Soviet Union; and the Congress of Soviet People‘s Deputies, by declaring the Molotov-Rippentrop Pact „null and void“, along with its secret protocols, had admitted this to be the case. In conclusion we stated that Iceland´s action, with regard to the reesteblishment of the Baltic nations´ independence, was part and parcel of the radical changes in Europe´s political landscape, which could not have occured, except for the initiative of the Soviet government itself, and it was therefore in full accordance with declared Soviet policy.

Needless to say, we never received any response to this sophisticated piece of scholarship.

Q. What is your most vivid personal memory from those days?

A. It is, I suppose, mingling with the innumerable crowd of people i n the streets and squares of Vilnius, holding hands and singing songs by the bonfires in the bitter January cold, observing a nation unarmed, calmly facing down the brutal force of occupation in the name of human dignity and freedom.This was an experience of a lifetime. There is no doubt at all in my mind, that the reason why the Nobel-peace prize laureate, Michael Gorbachev, backed from the abyss at the last moment, was when he realized that he would be responsible for the greatest bloodbath in post WW-II European history. Thus he saved his soul and his place in history. Only later, did we realize, that we were witnessing a major turning point in history – the fall of the once mighty Soviet Union.

Q. When you review the post-independence developement of the Baltic countries, do you feel the expectations have been fulfilled?

A.The short answer is yes. You only have to look around at some of the neighbouring countries to confirm this. Look at Russia herself, Belarus and Ukraine. Yours is indeed a success story. You have managed to rebuild the institutions of a democratic society under the rule of law. You have succeeded in intergrating your economy with the internal market of the European Union – the biggest free trade area in the world – as well as with the global commercial system.

And most importantly: By joining NATO as well as the European Union, you have taken out an insurance policy for your fragile independence against potencial aggression. NATO was, during the Cold War, the most successfull defence and security organisation in history. It had sufficient deterrent power to keep the peace without firing a shot. Despite recent uncertainty as to the strength of the trans -atlantic relationship, it is still a pillar of strength in a world threatened by increasing discord.

Q. When we look back those 30 years since the collapse of the Soviet Union, we have to admit, that the global order established by the leaders of the West has ceased to exist. Instead of the „end of history“ we have endless conflicts of increasing severity. What went wrong?

A. If the fall of the Soviet Union offered a unique opportunity of a life time to sow the seeds of democracy and the rule of law in Russian soil – as well as building a common defence and security system for all of Europe – including Russia – we now know for sure, that this was an opportunity lost. After the dissolution and humiliation of the Yeltsin era Russia has turned back to her past as an autocratic state, dreaming of restoring the glory of empire. That is why Russia has become, once again, a dangerous neighbour. The failure to seize the opportunity to give all possible support for the democratic forces inside Russia, must be counted as the most blatant mistake of Western leadership in the post war era.

What was needed was a massive Marshall plan, comparable to the plan the US offered after WW-ll to rebuild Europe from the ruins of the war. Post-war Western institutions, such as The World Bank and The International Monetary Fund (IMF) should have had the capacity to come up with such a plan. And, as a matter of fact, there was such a plan, presented by the Russian economist , Yavlinski, in cooperation with a group of Harvard economists. What was lacking was the political will and the money needed to follow through. Implementing the plan would have cost 150 billion US dollars for a period of 5 years. This would have been enough to build the institutions necessary for a functioning market system under the rule of law.

We should have applied the lessons of Oscar Lange on, how to go about the transition from a centralized command economy to a functioning market system, where competitive markets are applicable. At the same time we should have maintained certain spheres as „not for profit“ public service, such as education, health care, social insurance and basic services. This is called socialdemocracy. It is not a new invention. It is well tested and a highly successful socio-economic model in Western Europe, where the Nordic model is the most successful example.

President Bush sr. bears the main responsibility for the abyssmal failure to seize the opportunity offered by the fall of communism. He had neither the political will nor the future vision required. The only Western leader to seize the opportunity for the peaceful unificaton of Germany, was Chancellor Kohl, although he had said that German unification would not happen in his lifetime. He realized that the Soviet Union was basically bankrupt. He paid the bills and got what he wanted: The peaceful reunification of Germany and even consent for unified Germany to remain a NATO member. That was no small achievement.

Q. Instead of a stable global order we seem to be in for a radical reshaping of the global map. How can the West overcome its internal crisis? And how can we avoid large scale shocks?

A. What do we exactly mean by saying that „the West has to overcome its internal crisis“? Basically it means that globalized capitalism, unrestrained by any international legal framework and democratic control by nationstates, is heading for a global disaster. This unrestrained and out of control capitalism is driven by polluting fossil fuels, which are threatening to disrupt our eco-system, making our planet uninhabitable.

How has this come about? The short answer is this: During the last 40 years or so we have observed a massive transfer of wealth and power (and politics is about power) from the nationstates,which supposedly exercise democratic control to a small, multinational financial elite, who owns, or is in control , the global international product (GIP), without corresponding responsibility to anyone.

This is a process that began after 1973, when the so-called Bretton-Woods system collapsed . This system was the framework for the international post WW-ll order. Under this system the US dollar was the basic currency for international trade – and other exchange- rates were fixed in proportion with the collar. This was the basis for stabilty. Capital flows across borders were restricted. This meant that the nationstates were in charge. There were only minor financial crisis. This period, after the war and into the 1980ies, has been called the golden age of socialdemocracy – or the social market economy. This applied both to the US after Roosevelt´s New Deal reforms as well as Europe, where the Nordic model was the most successfull.

Most economic and social criteria confirm the success of this system. It applies to economic growth, productivity, level of technological innovation, job creation and low unemployment, financial stability, improving standards of living and increasing equality of wealth and income. This progressive era ended in the revolt against the welfare state under the banner of neo-liberalism and with the coming to power of Reagan and Thatcher.

Since then economic policies inspired by neo-liberalism – meaning only market solutions and condemning state interference – has been the mainstream credo. This system crashed in the international financial crisis 2008-9. What saved us from a longterm economic depression á la 1929-40 was the biggest state rescue operation in history. Many societies have not fully recovered from this trauma. In spite of minor reform here and there , the international financial system remains basically the same.

Now, more than half of international trade is insider trading within the boundaries of multinational conglomerates – often in dominant market position. Financial flows across national borders are unlimited and unrecorded. Those are often speculated financial flows, which rush out at the slightest sign of danger, leaving behind collapsing currencies, mountains of debt and mass unemployment. Financial crisis have become so frequent, that they are the rule rather than an exception. The international financial institutions which serve this system, have outgrown the real economy in size and power.

The defining charatcteristic of this globalized, unrestrained capitalism is, that it operates without any coordinated, international legal framework. Nor does it abide by rules and regulations by nationstates. This means that the nationstates have been deprived of enormous revenue sources, since the multinationals employ a virtual army of experts in avoiding taxation. Neither the US nor the European Union have so far done anything to impose law and order in this global system. Among EU member states there are several countries that practically specialize in assisting companies in tax avoidance and thus depriving neighbouring states of legitimate revenue sources.

How much are we talking about? Noone knows for sure, because all of this is outside any nationl jurisdiction. According to one group of experts this hidden wealth of nations is aproaching the size of the third biggest economy of the world.

This out-of-control-capitalism is also the driving force behind the looming climate disaster. That disaster can not be avoided unless the nationstates – the guardians of democratic control – regain control of international finance. And time is running out. This has to be done now. First to repay the debts piled up because of the international pandemic; to invest in the infrastructure for generating and distributing clean and renewable energy for the future; and to put an end to the financial starvation of the welfare states during the neoliberal era. The starving of the welfare states is the breeding ground for social discontent and the populist revolt.

The fact that president Biden has recently taken the first steps in the direction of imposing law and order on the international financial system gives a pause for optimism. In the G20 group of states Biden has proposed that multinational corporations will have to pay taxes, where they sell their products and services and earn their income (but not in tax paradises where they nominally register their HQs. And also a 15% minimum tax will be imposed. Those proposals have now been adopted by 130 states.

But this is just the beginning. The power and influence of global capital is immense. The implementation of those proposals will undoubtedly be fought against every part of the way. But this is a cause which should unite the nationstates under its banner.The next step should be to lock down the tax paradises everywhere around the globe. That is a necessary first step to impose law and order to the global financial system.

Q. How should Europe react towards the revanchist policies of Russia and the rise of China?

A. Concerning Russia you have now your seat at the table, where decisions are taken and policies are formulated, be it within the European Union or NATO. And you, because of your history and experience, you are the experts. You have the knowledge and the expertise required, which they do not have in Paris and Berlin. My instincts tell me that in the case of Ukraine, the EU should be firm and consistent in its support of the democratic forces, on the condition that the political leadership of Ukraine fulfills the entrance requirements.

But generally speaking, there are many questions unanswered concerning the future of „post-colonial“ Europe in the international system in the near future. But we should not take it as a given, that Europe will act as a sub-contractor of the American superpower in the implementation of their foreign policy. The failures and follies of US foreign policy during the past decades in Afganistan, Irak, Syria, Yemen, Palestine and elsewhere – serve as a warning. It is not self-evident that the national interest of the US superpower and post-colonial Europe coincide in every case.

I am – and have always been – a strong supporter of NATO. That cooperation in the field of defence and security within NATO must in the future be on a more equal basis. And Europe should seriously start preparing its own defence and security policy, in case a future American president decides that the time has come for America to leave Europe. And the almost hysterical animosity of the the current US administration against rising China is not in the long term interest of Europe.