The Sandinistas as Entrepreneurs

...They are the ones who prepare the food, and we want to keep them hidden away in the kitchen, not to come out...

...This species of Homo sapiens revolutionaris was once similarly pursued in a newly Communist Russia, and reportedly continues to be sought after in the people's isle of Cuba...

...As Colburn points out, the Sandinistas took power with some enormous advantages...

...The Sandinistas nationalized the lands and factories of the Somoza family dictatorship and controlled exports, prices and wages...

...Now, in his latest book, Colburn presents a fair and fine-grained look at why Sandinista economic policies proved disastrous...

...Yet erstwhile entrepreneurs should note that the primitive, brutalist, klepocratic capitalism practiced in much of Central America is the cause of ills as pernicious and humanly debilitating as Marxism...

...What this means in translation, Colburn shows in his study, is that like other people the Nicaraguans do not work very well if you tell them to labor for the good of the party but severely restrict their ability to affect the most basic economic decisions determining their livelihood...

...The second point illustrated by the situation in Nicaragua is that the classic liberal approaches to the state and its role in the economy and civil affairs require serious rethinking...

...Had they actually sought to carry out their pledge, they would have been far truer revolutionaries than in practice they proved to be...

...In Nicaragua, as in every other Leftist revolutionary country, the only new man that has emerged is a weary being with a worthy measure of nationalist pride, a talent for often narrow-minded political debate and a terminal case of economic confusion...

...International credits and grants were bountiful...

...Easy to assemble, attractive to young reformers eager to pull the levers of destiny, the state in raw revolutionary societies like Nicaragua soon becomes an unwieldy, impoverishing, maddening organ whose siren promise of power quickly yields to a daily lack of success...

...Their inability to administer large enterprises, much less earn a profit on most of them, inflicted such grave economic damage that "the people" stopped supporting this self-appointed vanguard...

...The road to ruin began when Sandinista actions flatly contradicted their democratic and pluralist promises...

...But by examining closely the bureaucratic morass, gross inefficiency and overt politicization of even mundane economic matters in Managua, Colburn goes a long way toward showing how the Sandinistas fell so sharply from grace and from power...

...Neither idealized Marxism nor classic liberalism, however, provides those steps...

...Businessmen were insulted, jailed and told they were on the wrong side of history...

...Comandantes, it appears, make lousy entrepreneurs and managers...

...Revolutions destroy far more quickly and willfully than they construct...

...The new revolutionary state would be dedicated to the construction not of a militarized, smothering ruling party, but of acoherent, literate and self-directing civil society that would truly permit the withering away of the early revolutionary apparatus...

...Reviewed by James LeMoyne Correspondent, New York "Times...

...Of the many points of practical wisdom in Colburn's quiet-spoken book, two stand out...

...Before long there was less and less of either...

...Colburn bases his analysis on several months of research in 1985 at the Sandinista Ministry of Agricultural Development and Agrarian Reform and at three major Sandinista agrarian projects...

...The cost of the war, in lives, hopes, political possibility, and resources, was enormous...

...In many ways Managing the Commanding Heights is a chastened consideration of the postrevolutionary age we have entered and the sobering lessons it offers to those who care to listen and learn: There is no quick fix for poverty...

...What is needed is a new hybrid for the Third World: a revolutionary state with limited claims...

...Cuban advisers flew in to design a new financial control system for the "reformed" State agricultural sector...

...Capital was renamed "Patrimony of the People...

...One can only hope that they and their adversaries have learned the bitter lessons of the last decade of decline, and that both sides will now try to heal the wounds inflicted on Nicaragua and its badly bruised people...

...With his eye for paradox still keen, the author observes that in trying to increase their power by taking control of much of the economy, the Sandinistas actually undermined their popular standing...

...now completing a book on Central America In the loud, bitter, usually ill-informed debate over Nicaragua and recent American policy toward that small country, few voices have been as insightful or as reasoned as that of Forrest Colburn...

...For the fact is that prerevolutionary Nicaragua was a grossly unfair society in which the structure of political and economic power was decidedly skewed against improving the life chances of the majority of citizens...

...Among the tragedies of Nicaragua's experience is that this vision is not so far from what the Sandinistas promised on taking power in 1979...

...They had near unanimous popular support plus international backing that extended from Jimmy Carter's White House to the Kremlin...

...The goodly tropical Socialists decided that Current Accounts should be called "Rotating Resources...

...Colburn goes far in showing the failure of revolutionary socialism...

...An active and imaginative private sector is an absolutely necessary ingredient for growth...

...It would be a state willing to accept and work with the private sector, so long as entrepreneurs finally accept that they too must become democrats with a social conscience...

...There is little here that would surprise a Pole, Czech, Russian, or East German...

...In his first book, Post-Revolutionary Nicaragua, Colburn reached the ironic conclusion that the Sandinistas' supposedly popular policies, exacerbated by the American-backed guerrilla war, "made the continued impoverishment of peasants and laborers a structural necessity...

...The language and attitudes of class conflict were destructively force-fed to a people predisposed to seek a far more tolerant way to settle social grievances...

...Leading members of the country's business community welcorned their emergence and served in the first revolutionary junta...

...They are not invited to the banquet...

...Mass illiteracy, malnutrition, disease, early death, political powerlessness, poverty—these are the attendant consequences of the type of marketplace imposed in Guatemala, Honduras, El Salvador, and formerly in Nicaragua under the Somozas...

...Laissez-faire alone would not have resolved the problem...

...The title of the book is taken from Lenin's dictum that to control the economy, the revolutionary party need merely control its key sectors—the "commanding heights...

...There will be long debates about how much of the Sandinistas' failure was due to the economic embargo and guerrilla war backed by the Reagan Administration, and how much was due to the Sandinistas' own policies...

...Some radical steps were called for...

...Time and again Colburn shows Sandinista managers fighting a losing battle against party political demands and mountains of paperwork, while engaged in a quixotic quest for that elusive 20thcentury revolutionary being: the New Man...

...It traces the route taken by detailing work and woe at a State tobacco farm, a huge complex of cattle ranches and a mixed dairy and farming enterprise...

...That field work allows him to paint a microeconomic portrait of a macroeconomic catastrophe— a road map for running an economy straight downhill...

...Sandinista Commander Jaime Wheelock, who presided over the land reform program, showed a special talent for ruining the economy as head of the State agricultural ministry...

...But Colburn, citing the accumulated evidence of economic failure in Nicaragua, Angola, Mozambique, and Ethiopia, demonstrates that Third World revolutionary regimes attempting to manage agrarian export economies have largely been unable to command the heights they have seized...

...And simply by nationalizing the holdings of the deposed Somoza dictatorship the Sandinistas were able to peacefully expropriate nearly 25 per cent of Nicaragua's arable land along with several major businesses...

...The revolutionary elite is generally unable to manage an economy...

...Nicaragua's deterioration was particularly saddening because it was not necessary...

...The first is that the state is the most complex and politically treacherous invention of modem society...

...With a rare combination of empathy and objectivity, he has written among the most measured and substantial analyses to be found of the social and economic impact of the Sandinista revolution...

...As the years passed and fewer and fewer dishes came out of the kitchen, until the banqueting stopped, Commander Wheelock grew more pensive: "Capitalism has resolved the problem of incentives, but we have not found [the solution...

...They also used punitive expropriation to harry their perceived class enemies among capitalist entrepreneurs...

...In a characteristic pronunciamento of revolutionary hubris early on, Wheelock opined of Nicaragua's capitalists: "Their place in the revolution has been that of those who arecalled upon to prepare the food at the banquet...

...But Colburn's findings, strengthened by his observations on similar revolutionary experiments in Africa, clearly suggest that the Sandinista economic model was itself saturated with the seeds of ultimate national bankruptcy...

...We have nationalized the land, but we have not nationalized the consciousness...

...Few revolutionary governments have enjoyed such a propitious beginning...