4 Review

The Australian Financial Review Friday 17 November 2006 www.afr.com

The man who sold the world

Guy Rundle on the forgotten revolutionary whose ideas set modernity in motion
oving through the marketplace, squeezing through the tables of fabrics and foods, of pottery and wooden bowls, of all that Constantinople has to offer, the fat German man mops his brow as he goes. Bearded, dressed in a three-piece suit, it would be more sensible for him to adopt the looser local garb, but it is 1914, and such things are not done. He would stop for the heat he has never come to terms with the heat but he has things to do, people to meet. War is coming, and he is a merchant of arms, of materiel, of anything you want. But he is something more. From the outside, he looks nothing other than the European bourgeois, cutting a swathe through the pliable East, a man with a taste for fine clothes, fine food and more. Inside that head however, is a brain more attuned than almost anyone elses to the big picture, to the shifting possibilities of history, to what is about to happen and what can be made to happen. Within three years, the fat German will have helped draw the entire Ottoman empire into the war, while also honing the skills of those who will eventually smash it and replace it; he will have helped to push the Kaisers empire into a total commitment to the conflict which he is fairly certain will be disastrous for it; and the coup de grace he will have in 1917 spirited across enemy territory to Russia the one man he believes can turn the rebellion against the Tsar into a genuine socialist revolution. For better or worse, hes the man who with a little help from his friends made the 20th century, and you have almost certainly never heard of him. His name was Parvus, though the surname meaning poor man was, of course, a nom de plume. Or nom de guerre more like. As with other revolutionaries such as Lev Bronstein (Trotsky) or Vladimir Ulyanov (Lenin), he wrote and worked under a pseudonym after his birth name had appeared on too many secret police lists. He was born Alexander Gelfant, in Russia in 1867, and grew up in Odessa, the child of Jewish middle-class parents. The Gelfants were the sort of family that fascists and Stalinists would later label as either rootless cosmopolitans or Jewish-Bolsheviks, depending upon the denouncer. Cultured, European and particularly German in sensibility, they lived in a country which would periodically massacre whole communities of their like. Young Alexander, smart and talented, couldnt wait to get out, and at the age of 19 he went to Geneva to study philosophy. It was the late 19th century and the crisis in Christianity brought about by the rise of science had created something of a boom in the elaboration of alternative philosophies. Vitalism, spiritualism, phenomenology, egoism a hundred schools were contending. Among these however, it was Marxism which began to draw Parvus in, as it did many thousands of people in the 1880s. The German Social Democratic party had been formed in 1875, and while any skerrick of revolution has long since disappeared from it, it was originally inspired and guided by Marxs writings. It was to this organisation which quickly became a mainstay of German society that
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Parvus turned in the 1890s, rapidly becoming an editor of one of the regional Social Democratic papers. From the start it was obvious that he was one of the more original thinkers in the growing Marxist intellectual community. Even before the death of Engels in 1895, it was clear to many that history was not developing in exactly the manner suggested in the Communist Manifesto half a century earlier. Marxists had thought that capitalism could grow only by creating an ever-larger working class, whose wages would not rise above subsistence level, thus making revolution inevitable. They had not, however, counted on the imperialist carve-up of the world, which had swung into its highest gear in the 1870s, and which was creating new sources of labour and more importantly new markets for manufactured goods. Much of this new production was little more than pure slavery, prompting a boom whose benefits began to flow to European workers in the form of cheaper goods and higher wages. Revolution seemed far off and some, like writer Edward Bernstein, felt that it had been permanently transformed into a more evolutionary process. Parvus agreed that revolution had stalled, but he had no appetite for reformism. Like many, his attention turned to those places where a ferment was still in place, and the biggest of them all was Russia. Monarchical, feudal, with a massive populist movement the Narodniks advocating both a back to the people pro-peasant movement and revolution by a series of terrorist assassinations, Russia was an anomaly for Marxists. Its bourgeois revolution had been delayed so long that the middle class was far less militant than the growing working class. What, as someone said, was to be done? The answer of orthodox Russian Marxists such as Plekhanov was that the working class would have to assist the bourgeoisie to make a revolution that would usher in liberalism and capitalism, and then, as the working class developed, begin the slow process of building a socialist movement across many decades. This was hardly appealing for people wanting to change the world, and it was Parvus who first saw the solution, the concept of permanent revolution that the bourgeois revolution could be immediately pushed on to something more, without an intervening period. Parvus was heavily criticised for this idea and for more besides in particular his grandiosity, such as his idea that the Social Democrats should make money by running their own businesses to fund a greatly expanded political effort. How could Marxists be employers, when the wage relationship was, by definition, exploitation? This strategy would have to wait, but in the meantime Parvus was to be vindicated in 1905, when Russia and Japan fell into war. Across Europe, for whom Japan was a distant, pre-modern land, there was a universal assumption that Russia would prevail. Only Parvus predicted the result that the weakness of Russias military and state would be made visible in a catastrophic loss, and that the debacle would foment an uprising. Thus it proved, and in 1905, new groups called soviets

worker councils seized power in St Petersburg. What the hell is a soviet? asked Lenin from exile. Parvus and Trotsky were already there, furiously publishing daily newspapers, and trying to turn the uprising from an expression of grievance into a permanent seizure of power. The strategy one that Lenin would later urge on his more timid comrades was seen as risky to say the least, and when the soviets were suppressed at the end of the year, Trotsky and Parvus were among those arrested and held in the St Peter and Paul Fortress. Trotsky would later say that he always left such prisons with a sigh of regret, as it was the only place in which solid intellectual work could be done. Parvus by contrast, a gregarious man of action, climbed the walls. As Zeman and Scharlaus biography The Merchant of Revolution noted, Parvus came close to a total breakdown in the prison. What he also seems to have come to is a fundamental decision about what his role might be, for the wavering and timidity of large elements of St Petersburg society had taught him that history needed a bit of a shove. Coming to the same conclusions as Lenin, he believed that the working class would not of themselves have the degree of political imagination to carry forth the socialist revolution. This would have to be done by a party of professional revolutionaries. Unlike Lenin, Parvus did not believe this could be done with the trickle of donations and dues that the new Bolshevik party was relying on. Parvus believed that the revolution needed to be seriously rich if it was going to stand up to the power of the state. If he could not convince the movement to do it, he would do it himself. It was from this time forth that

Parvuss path diverged sharply from that of his comrades. His prescience regarding Russia had put him in high standing and his fully developed theory that war was the mother of revolution, weakening states and destroying their legitimacy became a key tenet of revolutionary strategy. As Asim Karaomerlioglu notes in a rare and useful re-appraisal in a recent issue of Middle East Studies, Parvuss writings from the period of 1907 to 1910 encompass many of the themes that Marxists would pursue for decades imperialism as underdevelopment, the role of the peasantry, Kondratiev long waves and much more besides. But his newly determined open pursuit of wealth and his taste for spending at least part of it on champagne and blondes was anathema to the ascetic and somewhat puritanical revolutionaries of Germany, and much of his work was ignored. Finally Parvus was held to account for his wildly successful production of Maxim Gorkys play The Lower Depths it ran for two years and the fact that Gorkys share of the profits mysteriously disappeared (today Parvus would almost certainly be a film producer). It was time to get out of town. If war was to be the mother of revolution, and wealth its father, then there was only one game to be in armaments and one place to do it, the Balkans. Thus did Parvus come to Constantinople, where he played a dizzying game of double-bluff, in a city full of sufficient intrigue to stock a dozen B-movies. With war between the Balkan alliance (Serbia and Greece) and the Ottoman empire looming, British agents, Arab nationalists, Young Turk modernisers and Zionists were all in town, hoping either to curry favour

with the old regime or to gain the spoils of its collapse. Parvus became the economics editor of a journal of the Young Turks movement, the group that would stage a couple of semi-revolutions within the empire (before Atatu finished it off after rk World War I). Parvuss position gave him the opportunity to grab some lucrative grain supply contracts for the country and arms supplies for the imperial forces. At the same time, it seems possible he was running guns to the other side. The deals made him a rich man, and he used the money to begin seeding various front groups he seems to have been the first to develop the practice as a revolutionary strategy which could channel money in various directions. The largest of these was a Copenhagenbased group called the Institute for the Social Study of the Consequences of War. By now his war-revolution thesis had expanded in a 1911 book he noted that a world revolution could be brought about only as the conclusion of a world war. He had also become, by the account of his former comrades, a pro-German chauvinist of appalling crudity. This would appear to have been part-sham and part-genuine. When war broke out, and when he had helped persuade the Ottoman government that its interests would be best served by an alliance with the Germans, he began to work on finding a client revolutionary who could hammer home the final blow he felt was inevitable in Russia. Bukharin was his first choice, but he later decided that the theoretically minded Bukharin didnt have it as a leader. Lenin, the man he had, in 1900, encouraged to break away from the reformist trends of German Marxism, was the next bet and Parvus made

The Australian Financial Review www.afr.com Friday 17 November 2006

Review 5

a celebrated 1915 trip to visit him in Switzerland. Ostensibly he was rebuffed Parvuss pro-German stance was so hated among the revolutionaries that Trotskys 1915 article about him had been called epitaph for a living friend. In fact, it seems that Lenin and Parvus had undertaken one of the great bluffs of the century. While Lenin denounced Parvus as a renegade chauvinist publicly, he put a key Bolshevik lieutenant a man named Furstenburg in a paid position in Parvuss institute. Furstenburg acted as Parvus and Lenins go-between and, after the October 1917 revolution, became the first head of the Soviet Central Bank. In 1915, Parvus had written a long memo for the German imperial staff, outlining the manner in which a revolution in Russia would help the German cause, and requesting money to sponsor the Bolsheviks as the most effective revolutionary party. Part of the money went to subsidising strike pay in St Petersburg but most of it would come handy when Tsarism collapsed in February 1917. For the Zurich-based Bolsheviks trapped in what they called the Swiss cuckoo clock it was a momentous time, but a potentially disastrous one. The revolution had come about only because of relentless working-class agitation according to the theory of permanent revolution it could now be pushed on to full socialism, which would spark the revolution in Germany and beyond. But how could a bunch of Russian nationals get across enemy territory? The answer was the famous sealed train a train defined as moving Russian territory, taking a hundred or so revolutionaries across Germany to infect St Petersburg and beyond with revolution (both Lenin and his enemies referred to Bolshevism as a bacillus which would take over the body politic). Today, there is little doubt that the crucial intermediary between the Bolsheviks and the imperial German government was Parvus, who had been working for the latter for several years. For decades, official Soviet and Western communist sources denied that Parvus had anything to do with the sealed train, until the unearthing of various archival documents from receipts to Parvuss detailed 1915 memo to the German imperial staff outlining just such a plan came to light. Whether, as has been suggested, the train also carried millions of dollars in gold bullion to pay for the revolution is more doubtful. Yet the sensitivity of many to the degree of conspiracy behind the operation is a little strange. After all, Lenin had already stated that the Bolshevik policy was defeatism using the military reversals of ones own country to gain revolutionary ground and given all the terrible things done in the name of the revolution in the years following, such double-dealing seems small potatoes. After the revolution, Parvus requested that he be allowed to come to Russia to help build it. Lenin refused, arguing that socialism could not be built with dirty hands, which was a bit rich. Nevertheless, he had a point Parvus had queered his pitch, with his enthusiastic support for the German war effort. Whether out of sheer pique or genuine concern at the incipient totalitarian society the Bolsheviks were creating, Parvus for a time let his pro-Germanism overshadow his socialism, at one point suggesting that Germany should invade southern Russia, to prevent a Russian takeover of central Europe. In effect he predicted the Cold War, and argued that only a united Europe,

a new Rome, could forestall this. The phrase should set off alarm bells like Mussolini, another former Marxist revolutionary fond of summoning up the glory of the lost empire, Parvus may have been well on the way to something else. Aside from a few intrigues, Parvus retired to a mansion on a river island, a life of champagne and choreographed orgies. Who was he? What was he? Was his pro-German stance one of the great cons of history, a sustained pretence designed to put into play exactly the conditions he had specified for world revolution in 1906? Or had he become a proto-fascist, terrified of Russian barbarism and convinced that Lenin could lead the country to revolution and ruin? His willingness to join the nascent USSR would seem to indicate the former, but his enthusiasm for national socialist (small n, small s) solutions his model of permanent revolution was the ALPs winning of power in Australia(!) would seem to suggest otherwise. Yet his arguments were always anti-totalitarian. In Turkey he had urged the Young Turks to take account of the democratic traditions of Europe, and adopt them, rather than turning away from everything European in frustration. Much of his final political involvement was devoted to establishing a basic liberal framework in postwar Germany, and arguing, as Keynes did, that reparations were preparing a second world war in the ashes of the first. For the sake of a good story, I want to believe Parvus knew what he was doing, that his zig-zagging through the great movements of the early 20th century was in pursuit of global revolution, that as theologians say of Judas he was willing to take on the most ignominious role in order to bring forth the great event. Of course, attributing too much to him has its dangers too the only other people willing to grant him a major role in history are various anti-Semitic conspiracy theorists, from the Nazis on down who tie him to (of course) the Illuminati and the idea of Bolshevism as Jewish world domination by other means and Lyndon LaRouche, who believes Parvus was a British agent furthering the aims of the Anglo-Dutch Venetian banking conspiracy (dont ask). Well, even the dumbest pig finds a truffle now and then, and you dont need to believe that Prince Phillip runs the global drugs trade to accept that Parvus has been grievously underestimated. True, the October revolution was more a genuine uprising than a coup, whatever revisionists may say, and it was Lenin who decisively led the Bolsheviks to push the revolution one stage further but without Parvus, it is possible that Lenin would never have got out of Switzerland. Without the victory of the Young Turks, it is doubtful that Britain would have enunciated the Balfour declaration supporting a Jewish homeland, and started the process towards the modern Middle East (an unintended consequence Parvus was an anti-Zionist Jew). Many find it a little dispiriting to have to acknowledge that the October Revolution was, at least in part, the first and most spectacular example of my enemys enemy blowback, and that a lying gluttonous pervert was behind it all. But if one believes the revolutionarys task is to make things happen by any means necessary, then Parvus the Communist Manifesto in one hand, a magnum of Krug in the other deserves his due.
Guy Rundles most recent work is the Max Gillies show The Big Con.

An exit from Iraq may weaken the incentive for America to placate Arab and Muslim public opinion.

Picture: MORTEZA NIKOUBAZL/REUTERS

AFTER BUSH
From page 2
Clinton and Blair promoted the neoliberal agenda in the name of the third way. At home, this meant embracing free markets while also relegitimising and modernising the welfare state. In foreign policy, neoliberals envisioned a EuroAmerican partnership that would send troops on missions of mercy around the world. Neoliberalism rested on a utopian vision of history as progress from the modern world of sovereign nation-states to a postmodern world order, in which individual human rights replaced state sovereignty as the organising principle of global politics. The idea of a Euro-American entente intervening in the name of human rights in former Western colonies in Africa, the Middle East and elsewhere always looked very much like colonialism by another name. In any event, the grandiose ambitions of neoliberal humanitarian hawks and liberal imperialists never had a chance of being realised because of the unwillingness of Western publics to support such a costly policy in the absence of other strategic concerns. The Gulf War in 1991 and the war against the Taliban in Afghanistan involved classic threats to security, and even the Iraq war was justified on the grounds of the alleged nexus of weapons of mass destruction and Iraqi links to al-Qaeda, not on humanitarian grounds. The only humanitarian war to date has been the NATO attack on Serbia in 1999. It was so unpopular in the US that Clinton waged it unconstitutionally without a declaration of war from the US congress, and without UN security council authorisation because of the opposition of China and Russia. It seems unlikely that the US and its European allies would have sent tens or hundreds of thousands of troops to Darfur,

even without the Iraq war, whose costs now make it all but certain that no such large-scale Western intervention will take place. If it did, then the US and perhaps some European allies like Britain would find themselves fighting and killing Muslims on three fronts Afghanistan, Iraq and Sudan while being blamed for Israels actions in Palestine and Lebanon. Even if there were political support in the US for an ambitious neoliberal policy of humanitarian intervention, the instruments for it simply do not exist. The US military has been strained to the point of shattering by the Iraq debacle, ruling out significant interventions in the name of nation-building, peace-making or peacekeeping elsewhere. To meet manpower goals, the military has been forced to cancel leave for many units, and to meet recruitment goals, the military has been forced to induct 40-year-olds and to lower educational and IQ requirements. As was the case after Vietnam, it will take a decade or longer to rebuild the demoralised US military. To make matters worse for would-be liberal imperialists in the Democratic party, the failure of the US military in Iraq, as in Vietnam, shows that US military culture remains deeply hostile to pacification and nation-building efforts of the kind that would dominate a foreign policy devised by humanitarian hawks. Policy wonks in Washington may fantasise about creating US constabulary forces to engage in small-scale interventions, but that idea will not be supported by Congress, the public or the military itself after Iraq. Bushs economic policy, like his foreign policy, dooms any attempt by his successors to implement the foreign policy vision of Clinton-Blair neoliberalism. Some neoliberals call for a vast program of investment in developing countries and the Middle East in particular. Whether the problems of these countries can be ameliorated by a new Marshall plan is questionable. The original plan merely restarted factories and markets in West Germany

and western Europe, which were already industrialised nation-states, and did not attempt to modernise primitive territories contested by rival ethnic nations. In any event, the experiment will never be put to the test, because the money is not there. Bush and the Republican congress have spent it on the Iraq war and tax cuts for the wealthy few, creating the biggest deficits since the Reagan years. In the second decade of the 21st century, reducing the federal budget deficit at a time when the retirement of the baby boomers is driving up government costs is likely to be the priority in Washington. US foreign aid is unlikely to increase, and may well be slashed, even as China and petropowers like Iran and Russia extend their influence by means of subsidies and arms sales. Whatever happens, it is clear that the long 1990s are finally over, their utopian hopes beyond realisation. The neoconservative vision of one big global market policed by the hegemonic US in a unipolar world now looks quaint. So does the related neoliberal vision of an alliance of north Atlantic democracies repudiating post-1945 notions of state sovereignty in order to dispatch soldiers and democratic missionaries to end ethnic conflicts, enforce human rights and bring democracy and liberty to the Middle East and Africa. The multipolar and mercantilist world coalescing around us looks very different from the unipolar free-market order described by Clinton, Blair and Bush, even though it would have seemed familiar to Richard Nixon and Charles de Gaulle. A concert of great powers, organised and led by the US, offers the best hope for reconciling international peace with liberal order, in a world in which the perfect remains the enemy of the good.
PROSPECT

Michael Lind is Whitehead senior fellow at the New America Foundation and the author, most recently, of The American Way of Strategy: US Foreign Policy and the American Way of Life (Oxford University Press).
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