Random Scenes from The Capitalist Fool Tour of Eastern Europe

 In late October of last year, I found myself descending though the unscrubbed auburn over Budapest, Hungary in a Canadair Challenger bizjet. I had just made a trans-Atlantic crossing of such painlessness that I will evermore regard Coach as an insufferable purgatory.

The Challenger is the most sybaritic form of transportation since the sedan chair, over which it has several advantages: a top speed of .95 Mach, a transoceanic range, and an absence of slaves who might turn murderously upon their cargo.  Furthermore, if one has a developed sense of irony, it is about the best conveyance for tooling around the emerging Free Market of Eastern Europe.

There is also something about this aircraft which can temporarily alter a person's politics.  Watching someone get in it and fly away induces a reflexive Marxism.  But getting in it and flying away oneself will make a capitalist of you faster than anything short of a large quantity of capital. Aboard the plane with me were three software entrepreneurs whose capitalism had already been well-established by the latter means, even if they came to it by circuitous routes.

Our leader was Mitch Kapor.  He had scraped through the 70's as a psychiatric counselor, meditation instructor, Apple II consultant, and stand-up comic.  But he began the Capitalist's Decade by creating Lotus 1-2-3, the spreadsheet that wound up 10 million bizdroids.  Being the most popular chunk of computer code ever compiled, Lotus also became a cornucopia from which flowed many bounties.

Another of us was Nat Goldhaber, the developer of TOPS, the most popular software for networking Macintoshes.  When I had first heard the full name of TOPS, Transcendental Operating System, I assumed that "Transcendental"was, in this usage, some kind of computer term.  Later, I learned that, among his other odd accomplishments, Nat had founded Maharishi University.

 The third was David Cole, an Hawaiian whose self-admitted style of "guerrilla management" had, during the 3 years he was CEO of  Ashton-Tate, transformed it from a software garage into a company which owned 70% of the database market and was the world's third largest purveyor of code (after Lotus and Microsoft).

My own capitalist credentials were far more modest.  I had put in 17 years as a agricultural businessman before succumbing to the million dollar debt which I inherited along with the ranch.  While this may have endowed me with longer business experience than any of my colleagues, my relationship with capital had always been inverse.

David took a look around the luxurious cabin of the Challenger and called us the Capitalist Fools.  For a variety of good reasons, the name stuck.

We had in common a set of neo-60's attributes ranging from the adipose baggage of incipient middle age to an annealed but still-active sense of faith and mission.  We had come, as we usually did, to save the world...or at least whatever tiny bit of it would yield to our efforts.

We had also come because Esther Dyson, the computer pundit and arbiter of developing technology, had assembled a gathering in Budapest between successful digital entrepreneurs from the West and Eastern aspirants now emerging from the great stone of socialism.  They were equipped with extraordinary talents in math and science and a desire to convert those talents into globally credible currency.  As it turned out, neither side knew much about how to make that happen.

The conference took place in the Budapest Hyatt, a plywood replica of similar businessmen's paradises in the West.  Like much of Eastern Europe, it looked better at a distance than close up, but it demonstrated a studious attention to the aesthetic forms of Transnational Corporatism.

It is located on the Pest shore of the reeking Danube directly across from the Citadel of Buda, whose heights are crowned by a magnificent collection of ancient national buildings, including the cathedral and the Royal Palace.

The latter was destroyed during the Second World War and then rebuilt.  I thought it odd that communists would rebuild a palace and asked our driver about it.  "The leadership must be there," said David Cole.

"No," said the driver, "It's a state museum."

"Right," said David, "the leadership must be there."

He had a point.  Even after it's supposed liberation, one gets the sense that Hungary is governed by curators.  And there is a lot of history to sift through, so much that it seems to fill the Hungarian consciousness with a permanent goulash of ambiguities, contradictions, and solid reasons for reserving judgement.

Budapest is a laminate of historical depositions going back to the 5th Century when Attila and his Black Huns moved in from southern Russia and created one of the first post-Roman empires there.  After Attila, there sloshed over Budapest tides of White Huns, Mongols, Ottoman Turks, Austrians, Nazis, Stalinists, and now, a weird alliance of rock stars and businessmen.

It seemed as if each new incursion had laid another pane of cultural glass over the local Magyars, shattering but leaving in place the one it covered. By now, the people of Budapest peer up toward the light of What Really Is through many splintered realities, each of which had once claimed ideological perfection.  It makes them wary.  But it also gives them a richness and resonant depth which made me feel about as complex as Dan Quale.

The most recent layers are characterized by three forms of graffiti. First, one sees the bullet pox which can be found on practically every building built before 1956.  When the Soviets clanked in to the quell the Uprising of that year, they hosed down Budapest with such a storm of lead that the result on its stone face looks almost geological.  In the course of two weeks they may have murdered as many as 30,000 Hungarians.  The living left the scars as a silent monument to a catastrophe they could not publicly mourn.

The second form is a kind of aerosol iconography, the spray-painted names of rock bands and lyric scraps, anarchist symbols, and post-modern English phrases like "Rhythmic Stress."  The handwriting of the Global Teenager.  I saw one heroic Austro-Hungarian monument, displaying both its old machine gun wounds and the words "Sid Vicious" scrawled large across its plinth. Around it loitered blue-jeaned kids who reminded me far more of myself in 1967 than contemporary American mall rats do.

Finally, there are advertising posters pasted everywhere, attesting to a commercial enthusiasm which makes one think of 19th Century America.  The most common face on public display, replacing Lenin throughout the Eastern Bloc, is my old pal and horse-trading partner Darrel Winfield, the Marlboro Man.  He is followed closely by Barbie (the doll) and an ashram-ful of gurus, mystics, and spiritual healers.  Even Maharaji, now presumably the Perfect Thirtysomething-ish Guru, is making a major comeback in the East.

Also big were the two Ronalds, Reagan and McDonald.  What appeared to be the most fashionable hang-out in town was found beneath the Golden Arches. The popularity of a very superficial form of Laissez-faire was familiar to anyone who had endured the Reagan era.

These developments notwithstanding, I realized that my economic expectations of Eastern Europe, based on media mythology and a 20 year-old memory of East Germany, had been far too morbid.  There was evidence everywhere of an affluence of considerably longer standing than anything the last year could have produced.  Though I have been told that Eastern Europe is experiencing an outbreak of homelessness, there was none of the poverty visible in any American city. Consumer goods were fairly abundant, buildings were painted and well-maintained, the people were universally dressed as though middle class.

While this was more the case in Hungary, which has been experimenting with free market economic principals for about a decade, than elsewhere, there was a general marked contrast to the dowdy communist gray I had expected.

There were other positive surprises.  As Mitch, Nat, David, and I strolled the streets of Pest, we were in the company of thousands of other cheerful amblers who filled the streets from sidewalk to sidewalk.  Budapest, like Prague, is a community on foot. There is a social warmth and collegiality to this perambulation which is entirely missing in any but the smallest American towns.

This may be largely due to the scarcity of anything one might seriously call an automobile, combined with the community which always arises through shared adversity.  There is likely something more humanizing about waiting in line than waiting in traffic.

But I kept having the nagging sense that some of this collective good will arose from aspects of communism having actually worked according to spec. This was not a very comforting thought to someone whose youthful Marxism had hardened into Republicanism twenty years ago.  (Indeed, most of it had departed me quite suddenly on that morning in '68 when I rode my BMW into Czechoslovakia as Russian tanks rolled in from the other direction.)

I couldn't tell whether the egalitarian coziness I saw in those streets would be an inevitable victim of remorseless commerce but there seemed no question that it would be placed at risk.  It would not be enough to cast out communism.  The new challenge appeared to be the development of Capitalism with a Human Face.

Das Kapital Redux

At the conference, it became apparent that the development of any sort capitalism would be a more complex undertaking than Time Magazine would have one believe.  Despite a rich finish of bonhomie and outward similarity, the perceptual differences between the entrepreneurs were profound.  And again, many of those difference appeared to be the result of communism having worked better than thought...not so much as an economic system, where it had obviously failed, but as a method of creating social ethics that would be hard to shake.

A number of fundamental business concepts seemed frankly repugnant.  The idea, for example, that one might enter into a deal with the knowledge that he would win while his opposite number lost was not considered a moral concept.  Profit translated into exploitation.  But an unwillingness to exploit, however laudable, increases one's chances of becoming an object of prey himself.

One Soviet "company" called ParaGraph provided an excellent case in point. ParaGraph had arisen like a grave worm in the morbid body of something called the Soviet Institute of Mathematical Methods in Economics.  Possibly looking for something useful to pass their time with, a little group of them had started developing commercial software.

Despite its bureaucratic gloom, their environment was ideal for the construction of elegant code.  Their machines were primitive, XT clones mostly, and their mathematical skills the best the Soviet system could produce, which is to say superb.

Thus equipped, they had managed in a very short time to produce something which has so far confounded Microsoft, IBM, and Go Corporation: a digital handwriting recognition system capable of reading cursive input.  It would, furthermore, work swiftly on any 386 clone and asciify either Roman or Cyrillic.

When they brought this to Budapest, such American slicksters as Atari's Sam Tramiel were on them like a cheap suit.  Representatives of Microsoft and other corporate Golems were only slightly less avid.  Eager to do business with all and unprotected by any sense of Western deal-making, they were ripe for the plucking.

"It's our Russian style of business to tell everybody everything," said their leader, Stepan Pachikov.  As much as I personally admired this attitude, I knew he was about to get an education in the darker side of capitalism.

Far more than socialism, a free market approximates ecology in its exchanges.  It is therefore a more fluid and robust system than the hulking machine of state planning.  But ecology, as Darwin taught us, has little of what humans would call decency in it.  Pachikov had grown up in a system in which at least the stated intentions were good, despite its utter inability to deliver on them.

At a reception in the ornate atrium of what had once been the Hungarian Supreme Court, the boys from ParaGraph were bunched tightly by surrounding predators.   Mitch observed the circling pack and drew me aside.  "I'm gonna perform a humanitarian act," he said.  "I'm gonna get those guys a lawyer."

Another concept which didn't seem to travel well was that of service for hire.  According to a number of people I talked to at the conference, it was thought that to do something for money at the bidding of an individual or private firm was a form of prostitution.  It appeared that the Marxist idea of the State as Self had actually taken, in that people remain more willing to hand their will over to a Kafkesque bureaucracy than to another human being.

Actually, the list of alien ideas was long.  It included notions about the fundamental responsibilities of organizations.  In the hall outside the conference room, there was a spirited discussion of the nature of fast-growing organizations which included Mitch, David, Sun Microsystems co-founder Bill Joy, and Charles Simonyi (a Hungarian defector who had been one of Microsoft's principal resources since the early 80's).  This was a group which had seminal experience in the area of kudzu-like corporate blooms.  And each had plenty to say on the subject.

Joy proposed an elegant explanation for the apparently inevitable metamorphosis of cool start-ups into hideous corporations, which he called the Bozo2  Principal.  Wizards, he said, hire other Wizards.  Bozos hire Bozos.  As a company grows rapidly, it is inevitable that some Wizards will slip and hire Bozos, given the scarcity of the former and plenitude of the latter.  However, once a Bozo has been hired, he hires another, and "everything beneath them turns Bozo after that."  (This is related to Steve Jobs' famous: "A people hire A people.  B people hire C people.")

Our conversation was carefully monitored by a number of Russians, including several of the folks from ParaGraph.  One of them came up to me later and expressed wonder at the idea that hiring should be such a individually flexible process in the first place.  In the Soviet Union, he said, there were more reliable standards for such than simple human judgement.

"Do they work?" I asked. "I thought all Soviet organizations were Bozo."

"Well, yes, they are," he said, "But that doesn't mean we'll want to start building organizations by individual whim."

Ownership was another intractable tangle.  ParaGraph continues to use facilities provided by its host organism, even though the former is state property and the latter belongs, at least in part, to a real estate developer from Boulder, Colorado (their capitalist joint venture partner). At what point did the State either grant them the building or kick them out of it?

Indeed, the whole question of weaning the Eastern start-ups from the State was delicate.  As Esther put it, "For all the fascination with free markets, companies also miss the placid protected world of the past. Several that want to go private also want to keep government funding for 'research.'"

Then there were entrenched bureaucracies of the East, which, rather like their western counterparts, found much to do in the regulatory harassment of budding businesses, who were, moreover, direct competitors in this case.

In all, there were enough problems on display to try the faith of the most dedicated pronoid.

They were but minor vexations to Bill Joy, who remained a fountain of giddy prediction.  He gave a speech called World Peace Through UNIX, in which predicted, among other things, that UNIX, by the year 2000 would consist of 10-20 million lines of code, and would be the binding material of hard-wired global community.

He also said that technology firms, in order to compete, would have to be making at least $200,000 per employee, a figure which, being stated as it was in hard currency, drew an audible gasp from the Czech sitting next to me.

It was when he got into the matter of hardware performance that their mouths really got small and round.  He proposed Joy's Law, according to which MIPS (or millions of instructions per second which one machine could execute) would increase by the following formula:  MIPS = 2 Year-84. Following this logic, the standard MIPS throughput of a state-of-the art computer would be, by 1995,  211.  In other words, three years from now we will have sitting on our desks machines capable of cranking out over 4000 MIPS, many times the speed of the fastest Cray.  Gigabyte memories would be standard, he said.  He went on to talk of cubes of optically-connected mega-MIPS machines, each with more computing power than could be hacked together in the entire Soviet Union today.

For people who'd been paying automotive prices for Taiwanese clones, Joy's speech wouldn't have been any more marvelous if he had descended from the clouds in an iridescent orb to deliver it.

However showy his projections, Joy had the same agenda as many others at the conference:  Connecting Everything to Everything Else.   We were kind of like the Dalai Lama walking to a hot dog vendor and saying, "Make me one with everything." Our tools were vulgar: money, commerce, bytes zipping along on beams of light, but there was something faintly spiritual about our task nevertheless.

Among the Matrix Mystics there was Rusty Schweikart, a former Apollo astronaut and alumnus of the TM movement.  I asked him what motivated him. "I want to get things hooked up," he replied and talked about buying up abandoned Soviet military satellites and communications hardware in order to connect the civilians.

As we were talking, a boyish Russian approached me and asked my name.  When I told him, he smiled shyly and said, "I thought so.  I sent you some e-mail last week after reading about the Electronic Frontier Foundation."

This was pretty cosmic even for an old hippie like me.  The e-mail message itself had been a major score.  Of the thousands I'd gotten since co-founding EFF, his was the first from the Soviet Union. This was not surprising since, at the time it was sent, there were still only 32 telephone lines connecting the USSR with the rest of the Planet.  (It turned out he had sent it by hacking together a patch to a Finnish Internet node.)

Neither the Russian, Roustem Akhiarov, nor I had said anything in our electronic postcards which indicated an intention to come to Budapest and yet here we both were.  Encountering him made things seem pretty hooked up already.

And yet not.  Just as there were philosophical and cultural barriers impeding the development of a free market system in the East, so were there incredibly tedious and complex technical barricades between us and the realization of our good intentions.

For example, much of both the technology and the business we were discussing depended centrally on a communications infrastructure which simply does not exist.  Getting a telephone hook-up is, in much of Eastern Europe, an option available only to the extremely patient.  (Charles Simonyi's brother lives in Budapest and is affluent even by western standards.  He has been waiting for a phone for years.)

Nor does the requirement for patience end once the phone is installed. Placing a call from Budapest was like building a one-match fire in a strong wind.  And calling from Prague, despite the sleek Euro-styling of the phones in our hotel, was apparently not possible at all.

Even imagining the availability of western capital for a working information network...Sprint is reported to be considering laying fiber optics in the Soviet Union...there arose once more problems of ownership and bureaucracy.

The economic system which is emerging in the East has no difficulty granting its citizens the right to own television sets.  The ownership of a television station is far more problematic.  And there is no provision whatsoever for the ownership of a television network, either as a level of property law or organizational scale.  Communication remains a province which Eastern governments, despite their paralytic inability to deliver service, are extremely loathe to surrender.

Efforts to go around existing structures would almost certainly result in regulatory immune responses which would make the FCC look positively Libertarian.

And so forth and so on.  Everyone at the Conference was no less determined than we Fools ourselves to save the world, but close examination made many of our mutual hopes seem groundless.  Still, it may be that groundless hope, like unconditional love, is the only kind that really counts.

Groping Toward Hope

As one examines what has happened to consciousness in Eastern Europe over the last 40 years, it is hope which has taken the hardest hit.  Communism necessarily truncates aspiration.  Within its procrustean confines, ambition acquires an immoral flavor, connected as it is with individual competition and, by extension, domination of the less fit.  Whatever else about Life Among the Humans which Marx, Engels, and Lenin may have overlooked, they recognized that in any society where some are lofted by ambition, others will fall to maintain the balance.

They may have been driven by as much by an old Slavic mean-spiritedness as by Theory.  Charles Simonyi told me a joke about an angel who appears to a Russian peasant.  The angel offers to grant him anything he asks with the condition that the peasant's neighbor will receive double his request. After giving it much thought, the peasant asks the angel to blind him in one eye.

Whatever their motivations, the architects of communism endeavored to create a system in which all were similarly reduced and hope had little place.  It now appears they were quite effective at this.  One looks beneath the pleasant surface of these faces and beholds more empty country than I've seen outside of southern Wyoming.  This aridity has afflicted even the most chronically aspirational, the poets.

On two nights in a row, first in Budapest and then in Prague, I found myself up all hours exploring the spiritual barrens of two bartending poets, both of apparently significant local reputation as writers, despite their night jobs and their anomie.  (Both of these conversations were translated by different beautiful blonds named Petra, but never mind the Kosmic Koincidence of that...)

The first of these I encountered after finding in my hotel mail box a Hungarian note which, on translation, instructed me to appear in an out-of-the-way square with a newspaper under my arm at 11:30 PM.  There was no explanation or signature, but this invitation was so deliciously Le Carré-esque that I couldn't resist it.

I arrived there after the most terrifying cab ride of a career in which I have egged countless cabbies on to acts of reckless macho.  At times we were hurtling at 140 kph down unlit sidewalks atop a suspension system I wouldn't design onto a shopping cart.  The driver grinned at me and I grinned back.  At least he seemed in practice.  I wondered what other methods for  battling communist boredom might had been developed.

When, by the grace of God, we arrived, I skulked a couple of circuits around the square before being met by a Hungarian couple.  (They turned out to be friends of Morgan Russell, Mondo 2000's European correspondent.  He had asked them to show me the nocturnal sports of Budapest.)  They took me to a Spartan club which was packed with young Hungarians drinking a purple something called palinka and nodding morosely to a primo selection of American R&B songs.

I noticed the bartender's face when I entered the room.  He looked deep as the creases which swept down his angular face like tear gullies.  He had one of these long Magyar noses with the slight swell at the bridge and the elegant tip.  I watched him for a long time, pouring drinks, pursing his thin lips, chain smoking, and switching blues tapes.

After I had met the first English-speaking Petra (who was convinced she had seen me in a movie and did a little acting herself), I asked her about the bartender.  After she told me he was a poet, I asked to meet him.

He seemed surprisingly eager to talk, given his apparent diffidence about everything else.  He had never heard of Wyoming, but knew a lot about Marlboro Country.  I asked him what he thought of Americans and he told me, with doleful envy, that Americans, in his opinion, were characterized by their ability to have a good time.  "Not like us," he said in Hungarian, and then, "Not like me."

I asked him what his idea of fun was.  "Getting drunk and smoking cigarettes."  Which I could relate to, though it seemed a better beginning than end.

Then I asked him about Hungary.  The next day would be the first time an anniversary of the Hungarian Uprising could be publicly noted.  Torchlight parades were planned in both in solemn commemoration of the event itself as well as celebration of the changes which made it possible to commemorate it at all.  It would be somewhat equivalent to our July 4, 1787.  A big day. Would he carry a torch?

"No."  Why not?

He knew better than to get his hopes up.  There had been times in the past when things started to look up, but they had never come to anything.  In time, we would see that this government was no more enlightened than its predecessors.  They were only using the anniversary to manipulate public sentiment.  Everything political was much too complex to feel enthusiastic about.  He would just tend bar and write his little poems, which did no one any harm.

Watching his face as he spoke, I saw sentiments which had clouded other faces in Budapest.  Resignation, dullness, banished hope.

If they put a vise on your head for head for forty years, it will be a long time after they remove it before the pressure goes away.

 The next night, in Prague, David Cole and I were wandering the beautiful rococo streets near Hadcrny Castle when we heard something which sounded like live rock music coming from a 5th storey window above us.  We entered the building (which bore no signs) and climbed the stairs to what appeared to be a kind of underground hang-out. There were political cartoons all over the walls. In an adjoining room a passing imitation of punk was being tortured over.  Despite the second-hand din, the bartender made shushing noises at us as soon as we walked in.  It was as though the place were more library than bar.

We went in and listened for several "songs."  We were even starting to like the stuff.  (Better, apparently, than the audience, who took it in with rapt but unrhythmic solemnity.)  Suddenly the lights came on and an academic sort stood up and began holding forth.  The room took on the characteristics of a lecture hall.  It was, for all we could tell, a rock 'n' roll class.

I waited until things appeared to be running down before inserting my brash American self and asking, in English, what was going on.  Although I was dismissed by the professor, the second Petra appeared at this point.  Born in Czechoslovakia, her parents had taken her to the United States after the Invasion of 1968, and she had grown up American.  After the Velvet Revolution of last December, she had returned to teach English and do everything within her power to help.

After that, it was déja vu all over again.  The bartender (again with a long, anguished-looking face) was, she told us, a fairly popular poet.  He was about to close up and we invited him over for a drink after he did so.

We had an incredibly convoluted conversation in which he said over and over that we should not extrapolate from his opinion since he was only one man and surely others would feel differently.  Feel what?  He wouldn't say, but he knew it would be different.  He seemed a furtive and beaten man, quite in contrast to the image of literary faith which Czechoslovakia's President projects.

Getting nowhere asking him what he wanted out of life, I inquired about his aspirations for his children.  He struggled with this for a long time, qualified his answer twice and finally gave it.

"I hope for them that someday they will be able to go into a shop in Prague and the shopkeepers will be polite to them."

That's it?  That was all.

One wonders how long it will take the necessary optimism of enterprise to penetrate such diminished hope that the most a poet can wish for his children is agreeable shopkeepers.