All right, y'all, welcome to the Scott Horton Show.
I'm the Director of the Libertarian Institute, Editorial Director of Antiwar.com, author of the book Fool's Errand, Time to End the War in Afghanistan, and the brand new Enough Already, Time to End the War on Terrorism, and I've recorded more than 5,500 interviews since 2003, almost all on foreign policy, and all available for you at scotthorton.org.
You can sign up for the podcast feed there, and the full interview archive is also available at youtube.com slash scotthortonshow.
Okay you guys, on the line, I've got former Wall Street Journal reporter Ann Williamson, and first of all, hi Ann, welcome to the show, how are you doing?
I'm doing great.
Thanks for having me on, Scott.
Happy to have you here.
So you are kind of a mysterious figure, because you're known as, among, you know, some friends of mine anyway, and to me, as kind of the key, the one person who really explained well how it was that America influenced the destruction of the Russian economy in the 1990s, and you are said to have written this book, well first of all, there's this wonderful testimony that you gave to Congress in 1999, which I've plagiarized and reprinted at my website scotthorton.org slash fairuse, people can find it there, where you describe all this, and you say in here, and in other places it's referred to the fact that you wrote a book about it, that as far as I can tell has never been published.
Someone got the New York Review of Books, I think it was, called it a widely read manuscript, and here we are having a conversation 20 years later, and nobody's ever read this thing as far as I know.
So I'm going to start this interview with an offer, would you like me to publish this book for you, or what is the deal?
Oh, well, maybe so.
I was just reviewing some parts of it to see how well it held up, and I was pleased to see it held up well, but I still feel I need to update the manuscript, and so I'm going to do a bit of that, and then maybe you'll take a look at the whole thing and see if you want to publish it.
Absolutely.
Well, yeah, I mean, I said mysterious, I guess the word I really meant to use there was legendary.
You know, I think this is, anyway, I've been looking forward to this, I didn't, I was so surprised I had the luck to even be able to reach you to get you on the show.
So I'm so happy to have you here, and I will refer people to testimonyofannwilliamson at scotthorton.org, you can find it there and other places, too, from September 99, and then from 98, an interview that you did with this Russian chief auditor, whose name I won't try to pronounce, well, his last name, Sokolov, something like that, very, very interesting interview there, and a speech that you gave, I want to highlight, and I tweeted this out last week, a speech that you gave for the Ludwig von Mises Institute, our very favorites, even at the Libertarian Institute, the Mises Institute are our favorites, and this is called Russia, Don't Cry for Yukos, from 2005, very interesting stuff here.
So I guess I want to start where you start in this speech, which is that with or without communism, the Russians have had this kind of screwy definition of property rights that has really interfered with economic growth anyway, and we'll get to the Harvard boys in a minute, but they were starting not just with the former communist state, but they were starting with a state that didn't really have a conception of property rights in a way that's really conducive to free market capitalism in the way that we understand it.
Is that correct?
Oh, absolutely, and it's a centuries, many centuries old problem.
One way you could think about Russia prior to the Bolshevik seizure of power, and Nicholas the Second's abdication of his throne, was as, it was the personal estate of the Romanovs, which came with its own church, the Russian Orthodox Church, and its own population.
So it really worked on a system of favorites and concessions by the Tsar to favorites and subsidies from the state for development of enterprise, but of course this giant land with just one essential owner, it didn't function well as an economy, but then you had more personal freedom, and so the Russians were pretty freewheeling, and some very interesting national characteristics developed during that era, and then when we get to the Bolsheviks, we get another super shock of the centralized state, because it was actually under, since about 1860, Stolypin, a foreign minister, a finance minister, had been liberalizing Russia, and they were instituting property rights, and actually before World War I, in the latter part of the 19th century, Russia was the most rapidly developing economy in Europe, so the revolution was a real tragedy for the country.
Right, and then, so once, okay, so I was just a kid at the time, I missed a lot of this, and I've been looking at the Middle East most of the time since then, so you know, I really appreciate you being here to help fill in our collective memory here, me and my audience, about, you know, what role the Americans played in influencing the economic policies of the Yeltsin government after the fall of the Soviet Union 30 years ago now.
So, you know, they have these guys, the Harvard boys, Larry Summers and Jeffrey Sachs, who I only know Jeffrey Sachs for being really good on Syria about five, seven years ago, which I really appreciated, but apparently he was one of those guys.
Lipton and Robert Rubin, also, I forgot Lipton's first name.
These guys are said to be the Harvard boys who went over there and they gave Russia the shock therapy, and that was what was so bad, they say, although I've heard other people say that no, what happened was they resisted the shock therapy, and that in the countries in Eastern Europe where they did the shock therapy, that's where everything worked well.
So I mean, I don't think you should really electroshock anybody unless you absolutely have to, but I don't know exactly what we mean by any of these terms.
So please set us all straight about who these guys are and what happened here.
Well, it's a little different if you're going through all the Eastern European countries.
They all evolved a bit differently on this issue of privatization, and some did a pretty good job, but others, you know, they were bogged down in various problems.
But in Russia, the very strange thing to me about the Harvard people was they didn't understand the importance of property rights.
They resisted the idea whenever I would query them because they said it wasn't important.
Well, they could say things like that because they didn't understand the country.
They didn't understand where the Soviet Union ended and Russia began.
So and the really weird thing to me was these people did not understand, truly, I didn't believe, in what had made their own country so successful, which was property rights in the United States.
And they didn't pay attention to that, in my opinion, and they were mostly, they were opportunists and careerists.
And so they saw Russia as an opportunity, a personal opportunity, and to a degree, an institutional opportunity for Harvard and the Harvard Institute of International Development and all that infrastructure the university has around foreign aid and assistance.
So once they got there, I mean, they were, they functioned a bit like the old-time czars because they looked for their favorites.
And these were people who were eager to participate in the West and actually to exit Russia eventually, or so they thought.
And Anthony Chubais, he was a tremendous opportunist who also received mind-boggling assistance from the United States.
But he was a favorite and an intermediary for these Harvard people who were directing the show of privatization in Russia.
So their advice was, they didn't really look to the strengths of their own economy to assist the Russians.
So in other words, Ann, do I have you right that it's not that they were really just trying to kick Russia while they were down and destroy their economy?
It was just that they're Democrats, and so they're neoliberals, not libertarians.
They don't really understand market economics the way an Austrian school or even a Chicago school guy does.
No, they're not Austrians, not even close.
They themselves are favorites in our system, but were they trying to destroy Russia?
Yeah, to a degree they were.
They wanted to keep Russia down.
The idea was, they understood that the privatization scheme they'd come up with was mostly thievery, but they didn't care.
They would tell me, well, look, let them steal.
It doesn't matter.
They're not going to be able to operate these huge state enterprises, and they'll want to cash in, so they'll sell out to us cheap.
That was the idea.
Go ahead and let them flounder around, and then you go in and buy up the assets at a very attractive price and start claiming those cash flows, particularly from the extractive sector of the economy, gas, oil, gold, minerals.
In other words, their Keynesian economic crackpot theories played a minor role compared to, one, their opportunism, and two, in a sense, their imperialism and their willingness to punish Russia and take advantage of their new weakened position and make them weaker.
Yeah, and I think the United States government was very much in favor of that because they continued to support these people for like eight years before they kind of crashed and burned.
I guess not eight years, six years they got.
You talk about, in your Mises speech, you talk about the ruble overhang.
We got to get rid of the ruble overhang, which just meant we got to get rid of the ruble, I guess.
Is that right?
Well, it's not.
We're seeing a repeat of that idea, even in our economy.
Not right now, but think back a year or so.
There was a lot of talk about the dollar glut, the savings glut.
Well, in Russia, there was the ruble overhang, and this was so dangerous.
Oh, wow.
I'm not sure I understand what you're saying.
Their argument was that there's an excess of capital being built up in the form of savings by the people, and that's what we have to stop.
Right, because I often do compare it to the situation in the United States after World War II.
During the war, there was rationing, and you really couldn't spend your money on much in the United States, so people had accumulated enormous savings.
When the war ended and all those GIs came home, they wanted to establish their families, their businesses.
They had the capital to do so, and America roared throughout the 50s and 60s.
This could have happened in Russia because of the centrally controlled economy, there were no choices in the marketplace for the people.
You just scrambled around for essentials, all produced by the Soviet system because at that time, they weren't getting imports from the West.
This was bad.
You see, we had to get rid of that ruble overhang.
Instead of them being able to participate in the privatization, the Americans, and this was really Jeffrey Sachs's big mistake, was he started out advising them to privatize what was a monopolistic economy.
You needed to privatize enterprise by enterprise and systemically beforehand because all that happened was the monopolies just raised their prices and the ruble overhang did not survive.
That was the people's savings, the ruble overhang.
I always think it's so tragic because I think of what happened in the United States post-World War II compared to what happened in Russia after the collapse of the Soviet Union.
And now in your interview in the Mother Jones interview of 1998 with the Russian financial guy, he says that at that time, despite what you hear, the real inflation rate was 80%.
Now that's years later, right?
That's five years into the thing or six years into the thing.
So in other words, anybody who had savings in rubles, any business or any family that had savings in rubles, they were completely wiped out.
There was no capital because just like in the communist manifesto, this is why you support inflation is to destroy anyone in the middle class who is thinking of moving up, right?
Right.
And it happened a second time to the Russians that people don't recognize with as much clarity as they did the first collapse because in 1998, it all happened again.
Everybody lost their savings in the banks.
It is a tragic thing.
Okay.
To have gone through the first one and then the second one.
And that's why that gentleman was mentioning 80% inflation because that interview was in 1999, I believe, or maybe, yeah, 99, I think it's when I interviewed him, but the inflation rate was quite high.
Now, I'm sorry, I'm not much of a financial panther or anything, but could you please explain about the vouchers and the shares for loans programs and how these things worked?
And again, can you really pin all of this straight on these four or five guys that Bill Clinton sent over there?
And why was Yeltsin, sorry for all the questions in a row, why was Yeltsin letting them get away with all of this?
They just fed him vodka?
Is it that simple or what?
Well, you know, as much as I disliked Herbert Walker Bush, he was an old school fella.
And even though he was expansionistic and an American chauvinist, as I suppose you would expect any American president to be, the central bank was, the Fed was somewhat under control at that time.
But when Clinton came in, that's when everything shifted to globalization.
And so that's what he was promoting.
He and Strobe Talbot, remember?
Strobe Talbot was always saying he was for world government.
That was the direction these fellows wanted.
He wrote that in Time Magazine.
Yeah, yeah.
He was, he was, if you read his memoirs, it's all, you know, they're marinated in that idea.
But at any rate, it shifted the direction of the United States.
You know, once the Soviet Union collapsed, well, I think there are two points I want to make about that, is when the Soviet Union collapsed, the Americans weren't quite ready for it, even though they'd been scheming for it.
So that, but up until that point, America did support property rights and interaction of the citizen and the state was rather limited.
Most of our interactions was, was, you know, were between citizens, and most of our laws governed activity between citizens.
That's different today, as you can see how the legal system has evolved.
But what struck me was, as soon as the Soviets were gone, the United States became obnoxious.
You know, we started losing rights.
People didn't pay too much attention at the time, because we were experiencing exceptionally good economic times in the 1990s, unlike Russia.
So, you know, there was that problem.
And then the whole issue of getting foreign property in our hands became critical.
So they really changed direction, I would say, under the Clintons.
And it's unfortunately continued.
And now the Republicans are deeply infected.
And so, you know, I'm sorry, because the situation in Canada with the Emergencies Act, right, and I hope people notice that and think about it a little bit, because what the Canadian protesters and supporters of the protesters are experiencing is what we will experience if a Fed coin is established, electronic crypto coin under the control of the Federal Reserve.
Yeah, I saw where they're trying to, they're studying that now, but I just don't think it's going to take, they might as well start trying to produce pop music or something.
It's just, they're not going to get a hit.
You know what I mean?
People don't want what they've got to push there.
And they won't be able to outlaw Bitcoin, because Bitcoin is just a few words.
And, and remember your seed and your money goes with you forever.
Anyway, we can't, we can't go down that road, because I got to ask you, and it's my fault, because I asked you four things and one question, but can you explain about how the scams worked with the vouchers and the swaps and the shares for loans and these crazy things?
Well, I meant to pull up that chapter, because there's a formula that will interest you.
But anyway, what they did, it was really crazy, was they, you know, valued all the property in Russia, and then divided it by the population.
And that's how they came up with this 10,000 rubles certificate.
And all these, they printed the certificates, they distributed them to the population.
And they were expecting, and then they started having auctions of the properties.
Well, that really devolved into such a scam, I can't tell you, because the amount of property available to citizens with the certificate was continually being reduced.
You know, they kept excluding the really desirable stuff.
And that's what the, became the property of the oligarchs.
And eventually, you know, I mean, the IFC organized this auction in Nizhny Novgorod of old trucks.
And I remember when we were walking into the building, my assistant and I were taken by a great stack of bricks.
And we stopped and had a small conversation about it.
And he quickly calculated that the bricks were worth more than the trucks inside at the auction, because they were so run down and old and, you know, but if you didn't have a truck, I guess that was an opportunity.
But, you know, the good stuff didn't come to the people.
I wish I could find that section where I did explain it.
I used to have it memorized, but I don't recall it all now.
But it's quite instructive.
And you see how the opportunities are being continually reduced for the population at large.
Sorry, hang on just one second.
Hey, guys, anybody who signs up to listen to this show by way of Patreon will be invited to join the Reddit group.
And I'm gonna start posting stuff over there more.
That's patreon.com slash Scott Horton Show.
Thanks.
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And so that goes to the vouchers.
Essentially, instead of giving people shares in individual companies to run the individual factories or assets or whatever, they just gave them these kind of phony vouchers that then they made worthless because you couldn't buy any of the good stuff with them.
So then what was the shares for loans thing?
Because that was what finally made even those vouchers completely worthless, right?
Let me clarify there.
Okay, sure.
So what happened in these auctions and so forth after the public had received their certificates in fact, this was a calculation made by both foreigners and Russians that got the person who came out best with their voucher, the average citizen was the one who sold it or traded it for a bottle of vodka.
When they first received it, they got the most value.
So what happened was all these Western investment banks were going around buying up vouchers.
And these young energetic Russians were sort of the frontline troops in that effort.
And they would buy up the vouchers from their fellow citizens, and take these great bundles of vouchers to Moscow and sell them on to various investment banks.
Now out of that came loans for shares.
And the idea there, after they had supposedly privatized the Russian economy, and in fact, they really had not succeeded in doing that, they then decided that, well, it didn't really work because you had all these people with their certificates that the ownership was too diffuse to be effective.
So now what they were going to do was put the really desirable stuff up for auction.
And you had to use your certificate.
And this is where the Western investment banks, bankers came out really great because they'd been accumulating certificates.
And really the good idea was an Austrian idea by a woman named Larisa Piyasheva, who was in charge of privatization for the city of Moscow.
And her idea was, you know, you turn over 50, something like, let's just say, I can't remember her proportions, 50% of the value of the enterprise to the workers.
And then management got a bonus.
And then you put like 20, 25% up to foreigners or so forth.
But they would hold those certificates for a year.
And then, or they had to dispose of the certificates within a year, the workers.
And that would have invoked a market, you see, if they had all had to trade their shares.
Instead, what happened was the enterprises stopped paying the workers.
So out of desperation, they would go to what was called the skupka, which were wagons that came around to enterprises and bought up people's certificates.
And that was how many, you know, they got some money, they could buy some food, pay their rent, whatever, for a short while, because they weren't receiving wages.
So you see, it was really actually quite cruel what they managed to do.
And so then they, did they, I guess my understanding was too, that they mostly just liquidated all these giant industries, took the money and ran, rather than even really trying to keep them going, even for their own sake, much less the workers.
Is that right?
No, not exactly.
The West was counting on Russian failure, that those oligarchs would never be able to manage those huge enterprises.
And they would sell because they'd want to get money and sell to them, of course.
Well, that didn't happen.
Exactly.
Some cases, yeah, what they would do would start strip mining enterprises.
You know, all this is junk, but oh, this is desirable.
This will sell, or this will use to build the business.
You know, some people did a good job.
Not everyone, but there were success stories.
But, you know, the West couldn't get it in their head that you're not going to own Russia.
Russians are going to own Russia and Russian enterprises.
So they had a bit of a surprise when it didn't work out as they expected.
Now, some Western entities did get a hold of enterprises, but they very often ended up at one another's throats, trying to take total control of the enterprise.
So years were wasted fooling around with that.
And I just want to mention a man by the name of, who was also associated with Harvard, by the name of Marshall Goldman.
And he's, it was an old time, I don't know if he's still living, if he's retired, what's happened with him.
I'll have to look it up and see.
But he gave the advice, very good advice, that instead of getting all involved in these state enterprises, what we need to do is build new enterprises.
And that was what the Russians wanted.
They did want our businessmen.
They did want our expertise.
But they wanted us to build, to come in with entrepreneurs and investment capital and build new factories, new railway lines, new infrastructure.
And that would have been a much wiser approach.
And people who would pursue that probably would have had a very strong property right.
Because Russians do respect work and development.
They wouldn't have resented that.
That was what they really wanted.
So when the West came in and started cannibalizing and strip mining, and Russians did that as well, not just Westerners, the state enterprises, they were resented.
And there are people today who still get fantastic incomes off of some of those state enterprises.
Now, is the person you mentioned there, is that the same as David P. Goldman?
No.
His name is Marshall Goldman.
Oh, Marshall Goldman.
Because I interviewed a guy named David P. Goldman who, if I remember it right, it was a few years ago, if I remember it right, he said he was kind of one of these Harvard boys, too, or with them, and said that, yeah, it's all true.
We did kind of screw up everything, I think was the narrative, if I remember correctly.
So I thought maybe that was who you were talking about.
But anyway, I'm sorry, go ahead.
Well, what I liked about, what I want to point out about Professor Goldman is that Harvard got the grant, the assistance grant, without competing for it.
And who was it?
Well, Jeffrey Sachs, the HID people, H-I-I-D, eventually Larry Summers, Rubin, all these people got control of that money.
And the tragedy was none of them knew anything really about Russia.
And so Marshall Goldman had evolved with the country for, you know, decades, spoke Russian.
He was also a professor of business.
He liked business.
He liked businessmen.
It was interesting for him.
And he got completely cut out of the picture, which is another tragedy of that era.
And as I mentioned, just a short while ago, he gave very good advice that wasn't taken.
Yeah.
But he had no, he had no position.
All right.
So now you mentioned, and we talked about, I guess, the second major inflationary crisis there in 98, 99.
And then, so this is right during the rise of Vladimir Putin, because he's hired to fight the war in Chechnya in 97.
And then again in 99, if I remember it right, the two major crackdowns there.
And then he comes to power.
He's nominated early, a few months before the election, to replace Yeltsin on New Year's 2000 there.
And then, so if you turn on the news now, they say he's Adolf Hitler, but I wonder who he was then and why it is they hate him so much.
I think you could probably shed some light on that.
Well, he's not Hitler.
He's not a dictator.
He is a very powerful figure, obviously, in the modern Russian setup.
What he is, is he's like a bit like a Russian prince.
You know, that sounds strange.
But the original, but Russia back in the era of Kiev, and before the Tartars came, was organized around something called the Veche.
And this was property ownership was shared amongst the members of a clan.
And each household considered they had a right to a portion of the Veche's earnings.
And that just means estate, whatever it was able to produce, everyone shared in.
So, I say prince, but in the Tsarist, or prior to the Tsar's era, they were princes who ran these estates.
But what they were, were managers.
And really, that was one of their key roles.
And that's what Putin is.
He's the national manager.
And he gets fed information from a very large, complex bureaucracy that looks at all aspects of an issue, and then presents him with the information.
But ultimately, he is, he has to get approval from underlings within his own administration, he can't totally go against them.
And also the Russian Duma has some power in that.
Not much, but some.
So, if you think of him as the top manager, he's less of a political figure than he is an economic figure, or a national figure that kind of holds the whole thing together.
And he decides, okay, we need a port here, or we've got to restructure this particular stretch of railroad, or we need an express line to Leningrad.
He has a role in those decisions.
And as far as why the West hates him, well, he protects Russia, he refuses to go along with the push to world government.
So that, or he has to date, but he won't let them back in these various bad actors from an earlier time.
And he, including amongst his own people.
So in that sense, you know, the, the West would prefer that some of those other people come back because they can make deals with them.
You can't make deals with Putin that undermine Russian sovereignty.
And now, is it fair to say that he kind of replaced America's favorite oligarchs with his own?
But he did replace those old guys either way, right?
He kicked them out.
And that was part of his reasserting Russian independence, right?
Was jailing, what's his name, and kicking Berezovsky out.
Well, he did eliminate quite a few of them.
The top ones, I suppose.
But most of them fled to London and they took their money with them.
So they have lived somewhat under, they have lived under the protection of the British state.
And you know, that infuriates Putin because he's put in so many appeals for extradition or to Interpol to have different people arrested, like the infamous Bill Browder.
But the West will not cooperate no matter what agreements they have with Russia.
So he does a slow burn because he sees those surviving guys living very, very well in London.
And he can't get them.
And he can't get the Russian state's money back.
And now, so if we can go back to when he first came to power, I mean, legendarily for people who pay attention to these kinds of things, he was the first person to call W. Bush on September 11th and say, I'm your humble servant here.
How can I help you invade Afghanistan, my friend?
And then Bush, you know, tore up the ABM treaty three months later.
And, you know, things have been pretty much downhill ever since.
But I wonder if you could describe what you think his at least attempted orientation has been when it comes to dealing with the West.
Because obviously, as you're talking about, he did kick out some of their best buddies involved in all of this stuff.
Absolutely, he did.
And a lot of them just left because they were exposed legally.
So, you know, so they got out of the country.
But like Sachs left left much earlier after the election of Zhirinovsky, he and Soros moved their operation to Ukraine, to Kiev.
So, you know, anyway, all these various players made themselves scarce.
And it is Russian oligarchs, they became vassals, essentially, of the Russian president.
And, you know, they're reasonably safe, but he can keep an eye on them, because they're in Russia.
They're under his purview.
They're not hiding out in London.
So anyway, what did you Oh, yeah.
Well, Putin very much wanted to cooperate with the United States.
All this talk about Russia invading Ukraine, it is just madness.
Because if the man has attempted anything, it is to keep Russia out of war, any war, that's the last thing he wants is a war.
Because he, his job is to modernize Russia, to upgrade the country to get its economy going to try to open up that country's many capabilities that are just squandered in many of the present, much less earlier arrangements.
So he's not aggressive.
And he wanted to work with the United States that looks like the best deal.
And that was one reason he called Bush, why he he and initially he and Bush got along.
So he was hopeful.
But then when the whole invasion of Afghanistan came up, and the Americans wanted to use to establish bases in Afghanistan, he agreed, because at that time, Afghanistan, the Uzbekistan was pushing hard on Afghanistan, and that affected Russian interests.
So he, he agreed.
And I remember I was very unhappy about that, because I said, once you have a man, you'll never get rid of them.
Well, 20 years later, exhausted, the US finally left.
But that was 20 wasted years for the Afghans, the Russians, and the Americans, we, I don't know how many trillions were spent in Afghanistan alone.
But it and many Russians in the government were unhappy about his decision to let the Americans go ahead and establish a base.
But for him, it, you know, the country was broke, he had to do a lot with very little.
And for him, he looked at it and told him, we don't have the resources to defend that part of our border at this time.
So if the Americans will come in and take on the Taliban, that will give us a respite in our Central Asian republics.
So he said, if you've got a better idea, please tell me.
Well, nobody had a better idea when he put it to them like that.
So that was the, but by the time you get to his speech in Munich, he was, you know, all illusions about the West were gone.
And that's a powerful speech he gave.
So, you know, he evolved.
Um, now, uh, I think that's hilarious.
I mean, I knew that he had faced down people in his own military and government and said, I need to do this and work with the Americans here because of the other opportunities that will present and that kind of thing.
But I didn't hear that part that he said, well, we need the Americans to provide security on our Southern flank for us now since they're switching sides in the war.
We really want to help them to do so.
Um, that's a lot of fun anyway.
Um, so, uh, yeah, I remember he kicked a shell out.
They had some exploration going on in Siberia and had invested, they claimed X billion dollars and they were mad as hell that he kicked them out of there.
And that was during W. Bush.
I'm sure it was retaliation for, you know, either tearing up the ADM treaty or whatever it was.
Which company did you name Scott?
I believe it was a Dutch Royal shell was kicked out of there.
Well, that isn't what happened there.
You see the United States came in and Westerners generally, and they cut a lot of deals in the oil industry, but they were on, what do they call those contracts?
I'm trying to think there was a name for them, but the contract works like this.
The West comes in, gets, uh, rights to drill for oil or explore for oil, and then to build the infrastructure to exploit the oil.
If extracted and sell it on the market, if they succeed and they don't have to pay any, the fair share to the other half of the other side of the contract until they get their original investment back.
And then they start sharing.
Well, what Russia discovered was these guys came in, got those contracts, and then they didn't do a bloody thing.
They didn't explore for oil.
They didn't develop the properties they had gotten control of.
And that's what infuriated the Russians because they were supposed to wait 20, 25 years before exploration even began.
It was so unjust that they used an environmental complaint in order to wiggle out of those contracts.
But I don't, uh, fault them for that because it was very exploitative what the West did.
And that was what was behind, uh, those oil contracts that I think there was on the island of Sakhalin was one, um, and elsewhere.
What strange, what strange incentive structures were set up where these oil companies would rather not tap hydrocarbons out of the earth and turn that money into money?
Yeah, well, this was part of, you know, keeping Russia down.
Yeah.
She had these wonderful assets.
Don't let her exploit them.
Even when it would be, even when it would be Western companies would get this giant, as you say, the first giant cut and then a continuing cut after that.
Right.
You know, but the oil companies didn't need them at that time apparently, or else they agreed to work with whatever the government wanted to keep their other good deals.
And keep the price of hydrocarbons artificially high too.
And that was another thing.
That's a very good point.
They didn't, they wanted to keep the price of oil high at that time.
That was one reason the Bushes moved against Saddam Hussein after he switched to selling his oil in Euros.
He really was making a lot of money and they were afraid, the Bush family specifically, were afraid that he would produce so much oil he would drive down the price of it.
They didn't want that.
You know, Greg Pallas said that the impetus for the coup attempt, the short-lived coup, I guess, against Hugo Chavez in 2002 was because the NSA had intercepted Saddam Hussein on the phone with Gaddafi saying, let's lower the price.
And they said, well, we can't get to Iraq for another year, but we could get Hugo Chavez right now.
And so, because I guess he would have gone along with them or, you know, certainly not gone along with American preferences and increased production in reaction to Hussein's move.
And so this was their kind of temporary move till they could get to Baghdad was Pallas' story there.
Sounds right to me.
Right.
Hang on just one second.
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All right.
Say something else that I'm missing that I don't know enough about it to ask you the right question about America's role in kicking the Russians while they're down here in the Clinton era and even into the W. Bush era here, if you can.
What am I missing?
Well, I mean, you know, it's a complicated story.
And to explain economic issues is very difficult on the radio or television interviews.
And you're always at risk of losing the audience because, you know, the American economic educations are very poor.
Yeah.
But on the other hand, I'll turn off my mic and give you the floor.
And this is such a controversial and interesting issue.
And this audience I know is dying to hear everything that you have to say.
And they're dying to read your book and read this testimony as soon as this interview is over.
I know they're going to run over there and read it.
So, you know, say what you like.
Don't feel restricted.
Well, what exactly was your question?
Well, just about, you know, the role of the Americans here, Clinton and his crew and how they worked with Yeltsin and with these different oligarchs to put Russia in such a situation.
I mean, it seems very much, you know, like an important story out of history that, you know, the kind of reaction I mean, here we're talking about Vladimir Putin now as essentially what he's the right wing reaction to American intervention and screwing around in his country.
Now the nationalist comes to power.
They clearly hate him and demonize the hell out of him.
And so it just goes to show America had a serious program for what are we going to do with Russia after the fall of the USSR?
Well, you know, here's plan A, B and C, and they go through Z.
Well, what they really, you know, it discombobulated the West when the Soviet Union literally vanished overnight because this frame of the Cold War had really advanced American interests, particularly the military industrial complex.
And they didn't want to lose that.
It was a lot of money and a lot of power.
And here's an anecdote your audience will like.
What's the old song?
We have NATO to keep Germany down, to keep Russia out and the United States in.
It's a little wittier than that, but that's the basic summary.
No, that's it.
You just got it in the wrong order.
It's, yeah, the US in, the Germans down and the Russians out.
Just sounds a little better.
You nailed it.
Yeah, right.
But an expression your audience, I doubt very much is familiar with because very few people were at the time.
But the new phrasing after the collapse of the Soviet Union was out of the area or out of business.
So NATO knew it had to, you know, it was scheming, how do we keep this fantastic deal we've got going?
Because NATO is a money sucker.
Unbelievable how many people have a good living from that horrible standing army, which is mostly made up of Americans.
And so a big part of the 90s was, and if you read Talbot's memoirs, I remember being quite shocked because that was one of the number one issues on their plate was NATO, the survival of NATO and the expansion of NATO and how they played with this poor, sick man, this terrible drunkard, Boris Yeltsin and manipulating him.
It leaves you feeling, I mean, I'm not a Yeltsin fan, but, you know, it leaves you feeling pretty queasy when you read how they worked with him.
But it was all to get, it was not all, property was very important, but also the survival of NATO, which was, you see, the Americans sold NATO to the Europeans.
It was really the American occupation of Europe, but they sold it to the Europeans, you know, with the idea it's a mutual defense pact.
Well, that was quite something, but the Americans picked up pretty much all the costs initially, and we still pay a lot of it.
And then they found all these different institutional holes they could fill and get great jobs and essentially do nothing except go to meetings and occasionally send some soldiers out for exercises or whatever.
So it was a real scam.
So that was a big part of the 90s, and they used this structure, the Founding Act, they called it, and this was how they appeased the Russians.
They started initially with a, what did they call it, just went out of my head, I was about to say it, Partnership for Peace, I think, and they signed all these agreements with countries that would become future NATO members, particularly in Eastern Europe, and they would have exercises and so forth.
And that was to get the American people accustomed to NATO going outside of its boundaries.
There was no agreement that NATO could, you know, go outside of the treaty, signed treaty members.
And the next thing you know, we attack Serbia.
And the Russians saw that and, oh boy, they knew that this was going to be very threatening to them.
And now what, we've gone, we now have 30 members in NATO, and another 10 are allied.
So 40 memberships, 30 of which we're obliged to protect if any of their neighbors attack them under Article 5.
So it's a terrible situation of liability for the American people.
And yeah, as you say, the root of it all was money.
I mean, semi-famously, it was Bruce Jackson, an executive from Lockheed Martin, who bounded and bankrolled the Committee for NATO Expansion.
It says it all right there.
They're just getting rid of some jet fighters, which go for, you know, a few tens of millions of dollars apiece.
And there was very little public debate before the first expansion in, I think it was 99 was the first one.
You know, I remember Steve Cohen tried to bring this issue forward.
I tried, a couple of other people, but that was it.
You know, you couldn't get a debate going.
This was an early form of the kind of censorship we're now experiencing on the COVID crisis.
Just don't publish it.
Okay.
No publishing, no voice, other voice can be heard.
Therefore, no debate.
We just roll it over.
And of course, Congress was right there because they wanted the donations from the weapons manufacturers to their political campaigns.
So it was really, it was a scam to keep a racket going.
And look where it's gotten us today.
I mean, the Americans have absolutely exhausted themselves in the last eight years, trying to get just one battalion, Ukrainian battalion to attack Donbass and kill some Russians, or get some Russians to come in and kill some Ukrainians.
I mean, they have tried every trick in the book to try and manipulate these two countries.
And you're talking about, pardon me, and you're talking about since Minsk too, that the ceasefire violations, the semi-small ones, depending on how you measure it, but the ceasefire violations since Minsk too, you're saying that's the Americans trying to provoke something.
Well, yes, though, of course, when you have two armies or two nations at odds with each other lined up on a border, there probably are incidents.
I mean, 14,000 people have lost their lives in Donbass.
Those were Ukrainian conflicts with Ukrainian soldiers.
And I don't know the death count on the Ukrainian side, but they certainly had fatalities.
So that was a horrible thing.
But you see, the Russians are very disciplined now.
They're not going to invade Ukraine.
For what?
For what?
It would be terrible for them to take on this nation ruined by the West.
I mean, I feel very badly for the Ukrainian people.
They have really been shafted and their country's been looted for like the, well, the fifth or sixth time since they achieved their independence.
It's really tragic.
I mean, they have now got, you have to understand Ukraine had a lot of industry, but now they have gone through their entire legacy that they inherited from the Soviet Union.
It's been looted away and it's just tragic.
See, and they can't let Eastern Ukraine go because that's where a lot of the industry that is valuable is located.
And it was built by Russians, operated by Russians, and from when it was Novaya Rossiya, New Russia, it's a sad thing what happened to the country.
All right.
Well, speaking of censorship, as you mentioned a minute ago, I'm very curious, whatever happened to your book here?
You told Congress under oath that it was going to be published this Thanksgiving back in 1999.
So what gives?
I'm so interested to know.
Well, you know, when I gave that testimony, I was rather naive.
I thought it could help stimulate a debate.
And at that time, money for the World Bank and the IMF was up before Congress.
And the Republicans who wanted to embarrass the Democrats were very keen to have those hearings and they were very anxious for me to speak.
Well, you know, I spoke, but what I didn't understand was I was actually giving my Gallows speech, because after that, you know, I had a lot of difficulty in getting my work published or the book.
And the book, the failure to publish the book is a pretty complicated story.
And it involves actions by others that I can't prove, and therefore I shouldn't discuss.
And it was very unfortunate, very unfortunate.
But in other words, the story was not that you changed your mind about putting this thing out.
It's that there was, it sounds like you're implying that at least it seemed to you at the time, there's sort of an orchestrated agreement by publishers to not put it out or pressure on them all equally not to or something along those lines.
Yes.
My agent at the time said, Alan, these companies, these publishers are scared to death for their own business.
And your book is a threat to that business, because the government isn't going to like it.
I actually had a guy, an editor from the Oxford Press, who received the manuscript and read it.
And his reply was, part of it was, well, your book is critical of government policy.
And this house does not publish books critical of the government policy.
Can you believe the hubris to write that?
Amazing.
Yeah.
But now even back then, I mean, weren't there enough small publishing houses, nation books or anything like that, something?
No.
Well, I was known as a libertarian.
I didn't think so.
I did work with the nation, but a little bit on, well, actually quite a bit on the Harvard Boy student.
No, but I understand how that is too, though.
Yeah.
And what was really interesting was they strung me along.
A publisher would read and say, oh, this is fantastic.
We're going to publish this, and then all this exchange would go on.
And when you got around to contract signing, like every one of them said, oh, there's no market for this book.
Oh, yeah.
Right.
Yeah.
And at the time, there was a market, a very strong watch market.
Oh, and look, I mean, the story as I even introduced it is compelling as can be.
Lady reporter for the Wall Street Journal, an American living in Russia, covering economic issues with that level of a business and economic education that you would need to write about these things for the Wall Street Journal, who explains all of America's role in disrupting their economy and causing hyperinflations and all these things.
I mean, and especially has already been turned down over and over and is the victim of an attempted suppression here.
But we're going to be the brave publishing house that goes ahead and publishes it anyway.
I mean, I feel like that right now and this 20 years later.
So there's no way that they can all hide behind that excuse that nobody wants this.
That's a great story.
Well, I was sad this morning because I just had time to reread chapter one.
And it's been some years since I've looked at it.
And I, you know, I was pleased.
I was a little afraid to read it.
I said, oh, my God, there's probably so many things I've got to improve or track down.
It's not complete, really.
Well, it held together very, very well.
I'm pleased to say at least chapter one.
And I, you know, when I finished, my thought was, I wonder how this, if this book had only appeared when it was completed, I wonder how it would have changed the story, changed people's minds going forward.
It certainly would have been part of the conversation in the W. Bush years.
I mean, because your testimony to Congress has gotten around from time to time, you know, from people in the know.
And so this would have just included that many more people in the know.
It's such an important part of the story.
And so people recognize that, you know.
Well, I don't know how people got copies of the manuscript.
They weren't authorized.
But my.
Well, the PDF sure ain't online.
You know, believe me, I tried.
Yeah.
Well, my agent told me whenever I would send it out.
Well, that when it was returned, he could tell it had been copied many times.
And I said, how can you tell that?
He said, I just can.
They were copying this.
And this was before well, we had Internet and all, but people still used copiers.
You know, you didn't necessarily.
Right.
So somehow he could tell.
And he had told me that.
And I thought that was, you know, and then I hear from time to time like you saying, oh, you've heard about the book or the testimony.
And I go, well, how did that person who was it?
How did he ever get a copy of it?
You know.
Oh, and I also submitted it to 60 Minutes, hoping that they would, you know, want to at least follow up with a new story or something, you know.
And no, but I never, you know, they send a producer up.
I tried to pitch the story, of course.
And it was very important at that time.
I just met with ABC and their executive.
It was on the, all the money bundles, how we were shipping U.S. dollars or the Fed was shipping U.S. dollars to Moscow.
And that was a scandal.
And then, which was the bank, the Monte Carlo Bank, the banker himself was murdered.
I can't think of his name off the top of my head now.
Well, I'm saying he was murdered.
He was killed in a fire that, you know, most people believe was set to cover the murder.
But at any rate, Safra, Safra, that's the man's name.
So, oh, you know, why am I telling you the story of Safra suddenly?
I've forgotten my train of thought.
I brought that up, Scott.
But, you know, there's such a network.
We're suffering today from this huge network of players who are, you know, all actively working together, even though, you know, it's a really a handful of people at the top who are running the show with this pandemic and so forth.
But it's really hard to break through those networks.
They work, you know, they are successful for people.
And it's really a shame because it's very hard to defeat.
Well, I'd be happy to work with you to put the book out if you're interested.
Well, that'll inspire me to get me rolling here.
Yeah.
I mean, for an institute, I'm just a little old institute, but we've put out five books already and they all do very well.
And we'd be absolutely honored for the opportunity.
And, you know, I even got some guys already online who could help us both in terms of copy editing and, you know, getting it all set for print and everything ready to go for you.
So if you want to stay in touch about that, that sure would be great, I think.
Well, I thank you.
That would be a great thing for me because I'm not a big fan of the digital world and I'm not very handy with it.
So that would be great to have some help on those issues.
Yeah, absolutely.
Yeah, yeah.
Oh, what I was going to say about the publishers before was they were very clever.
One would really want to do the book.
They'd tell me and we'd start negotiations and talking and I'd be very excited finally, you know.
Well, then they would come up with this, oh, there's no market for this book.
And then another one would step forward and play the same script, the same scenario with me one after another.
It was exhausting and very depressing.
So that's how they work, you know.
Were all these people connected?
I don't know.
But there were a lot of similarities in what happened.
Sure sounds like maybe they were all gotten to, not that they all necessarily talked to each other, but they were all gotten to by, yeah, it doesn't take that much money.
And when you're talking about people with this much money, you're talking about very small investment in shutting up that reporter lady, you know, it could be done.
Even in America, imagine that.
Yeah, yeah.
Yeah, well, that was another problem for them, you know.
And so it went, you know, after I gave that testimony to Congress, the doors were shut in my face.
Amazing.
Should have held that fire for another couple of months.
But anyway, at least we have the short version to refer to here.
And I sure appreciate your time on the show.
It's been great.
It's an important piece of the puzzle, important piece of the history of American and Russian relations in the last 30 years here.
So it's been a real opportunity.
I'm very appreciative.
Oh, well, thank you.
Thank you for sharing your audience with me.
I appreciate it.
I think sometimes it was a bit jumbled up presentation, but I can say with these economic issues, you have to write very carefully to, you know, bring the information forward and make sure your reader has all the information they need to go on to the next step.
Right.
Absolutely.
Well, so that's why, you know, the interview is a great way to the interview is a great introduction and the next step will have to be publishing that book together here.
OK, Scott, I'll look forward to it.
Great.
All right.
Well, thank you so much and appreciate it.
OK, thank you.
My pleasure.
All right, you guys, that is Ann Williamson, again, a former Wall Street Journal reporter, and you can find her testimony to Congress from September 1999 here.
It's so important.
It's at Scott Horton dot org slash fair use.
And you can just search it up on Google.
It's been repasted a few different places.
And don't miss her great speech from 2005 to the Mises Institute.
It's called Russia.
Don't cry for Yukos.
The Scott Horton Show, anti-war radio can be heard on KPFK 90.7 FM in L.A.
APS radio dot com, anti-war dot com, Scott Horton dot org and Libertarian Institute dot org.
