Abstract
The ebbing of ‘East—West’ economic confrontation In a letter to the Western economic summit — the G-7 meeting in Paris in July 1989 — President Gorbachev declared that ‘our perestroika is inseparable from a policy of full participation in the world economy’1. He had in view Soviet membership of the three major international economic agencies, GATT, the IMF and the World Bank, and, both through them and by bilateral negotiation, non-discriminatory flows of trade, technology and capital with capitalist countries. The Soviet leader realizes the economic loss occasioned by his country’s insulation within itself or, at most, within a bloc of East European states. He spelt out this need for exteriorization more fully to the opening session of the Congress of People’s Deputies on 30 May 1989: ‘We are in favour of making the Soviet economy part of the world economy on a mutually beneficial and equitable basis, and in favour of active participation in the formulation and observance of the rules of the present-day international division of labour, scientific and technical exchanges, trade and co-operation with all those who are ready for it.’2
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Notes
E.L. Wheelwright and G.L. Crough, ‘The Changing Pacific Rim Economy’ in T. Shiraishi and Sh. Tsuru (eds), Economic Institutions in a Dynamic Society, (London: Macmillan, 1989) pp. 61
E.H. Carr, The Bolshevik Revolution 1917–1923 Vol III, (London: Macmillan, 1953), p. 57
Much of the vast literature on the origins of the Cold War, with an analysis focused on the British role, is conveniently noted in two recent studies in International Affairs; Raymond Smith, ‘A Climate of Opinion: British Soviet Policy 1945–7’ (Autumn 1988, pp. 631–47)
David Reynolds ‘The Special Relationship: Rethinking Anglo-American Relations’ (Winter 1988/9, pp. 89–111).
M. Kaser, ‘Russian Entrepreneurship’, chapter VIII in The Cambridge Economic History of Europe, Vol VII, The Industrial Economies: Capital, Labour and Enterprise, Part 2, (Cambridge: Cambridge University Press, 1978), p. 423.
Quoted in Robert Skidelsky, John Maynard Keynes. Hopes Betrayed 1883–1920, (London: Macmillan, 1983), pp. 386–7.
Alan P. Dobson, ‘The Kennedy Administration and Economic Warfare against Communism’, International Affairs, Autumn 1988, p. 599.
Gunnar Adler-Karlsson, Western Economic Warfare 1947–1967, (Almquist and Wiksell: Stockholm, 1968), p. 190
See also R. Rode and H.-O. Jacobsen, Economic Warfare or Détente, (Boulder CO, San Francisco CA and London: Westview Press, 1985.)
Cited by Kaser, (op. cit., in note 7), p. 485. For a full account see John Quigley, The Soviet Foreign Trade Monopoly, (Columbus OH: State University Press, 1974)
Robert Loring Allen, Soviet Economic Warfare, (Washington DC: Public Affairs Press, 1960), p. 44
see also Henry Aubrey, Coexistence: Economic Challenge and Response, (Washington DC: NPA, 1961.)
Central Committee resolution of 5 October 1925, cited by Michael Ellman, Socialist Planning, 2nd edn, (Cambridge: Cambridge University Press, 1989), p. 266.
The argument, due to Franklyn Holzman, Foreign Trade under Central Planning, (Cambridge, MA: 1974), and Jan Winiecki, ‘Central Planning and Export Orientation’, Eastern European Economics, vol. XXIV, No. 4, 1986, is set out in Ellman, (op. cit. in note 13), pp. 290–2.
The effect of an ‘adjustment mechanism’ is well set out by Franklyn Holzman in Alan Brown and Egon Neuberger (eds), International Trade and Central Planning, (Berkeley, CA: University of California Press, 1968), pp. 280–305.
In 1937 the six East European countries imported from each other and the USSR $127.9 m out of a total imports of $968.9 m, or 7.6% (Zdenek Drabek, ‘Foreign Trade’ in M.C. Kaser and E.A. Radice (eds), The Economic History of Eastern Europe 1919–1975, vol. 1 (Oxford: Oxford University Press, 1985)
The arguments are set out by Franklyn Holzman, ‘COMECON: a “Trade Destroying” Customs Union’, Journal of Comparative Economics, vol. 9, no. 4, 1985; and by Vladimir Sobell, The Red Market: Industrial Co-operation and Specialisation in COMECON, (Aldershot: Gower, 1984).
1987 and 1988 figures from Leonard Geron, Joint Ventures in the USSR; Data Base, (London: Royal Institute of International Affairs, 1989), p. 12
M. Kaser, ‘Economic Problems Facing Gorbachev and his Possible Solution’, in Christopher Donnelly (ed.), Gorbachev’s Revolution: Economic Pressures and Defence Realities, (London: Jane’s, 1989), p. 44.
Jan Adam, Economic Reforms in the Soviet Union and Eastern Europe since the 1960s, (London: Macmillan, 1989)
Anders Aslund, Gorbachev’s Struggle for Economic Reform, (London: Pinter, 1989)
Judy Batt, Economic Reform and Income Distribution: A Case Study of Hungary and Poland, (Armonk, NY and London: Sharpe, 1986)
Jan Ake Dellenbrandt and Ronald J. Hill, Gorbachev and Perestroika, (Aldershot: Edward Elgar, 1989)
Padma Desai, Perestroika in Perspective: The Design and Dilemmas of Soviet Reform, (Princeton, NJ: Princeton University Press, 1989)
John P. Hardt and Carl H. McMillan (eds), Planned Economies: Confronting the Challenges of the 1980s, (Cambridge: Cambridge University Press, 1988)
Ed. A. Hewett, Reforming the Soviet Economy, (Washington DC: Brookings, 1988)
Jerry F. Hough, Opening Up the Soviet Economy, (Washington, DC: Brookings 1988)
Susan J. Linz and William Moskoff (eds), Reorganization and Reform in the Soviet Economy, (Armonk, NY and London: Sharpe, 1988)
Ramnath Narayanswamy, Gorbachev, Economic Reform and Eastern Europe, (Bombay: Himalaya Publishing House, 1988)
Karl-Eugen Wadekin, Soviet Agriculture: Reform and Prospects, (London: Routledge and Kegan Paul, 1988)
Reiner Weichhardt (ed.), The Economies of Eastern Europe under Gorbachev’s Influence, (Brussels: NATO Information Directorate, 1988).
The statistical yearbook for 1987 (Narodnoe khozyaistvo SSSR v 1987g.) stated GNP in Western terms to be 825 bn roubles: I estimate inflation and growth in 1988–9 to have brought it to 912 bn roubles. In contrast to the high estimates made by the CIA and the DIA in Washington, then 13 to 14% of GNP and recently 15–16%, I estimated the defence share in 1979 at exactly 8.6% (omitting military pay in both numerator and denominator, i.e. assessing military goods as a percentage of net material product): see M. Kaser, ‘Economic Policy’ in A. Brown and M. Kaser (eds), Soviet Policy for the 1980s, (London: Macmillan, 1982), pp. 206
Two careful studies by specialists in the Public Policy Papers of the Institute for East—West Security Studies conclude that with due caution the USSR (and by implication the East European non-members) could be admitted to all three agencies. See Richard E. Feinberg, The Soviet Union and the Bretton Woods Institutions: Risks and Rewards of Membership; and Harald B. Malmgren, The Soviet Union and the GATT: Benefits and Obligations of Joining the World Trade Club, both (New York: Institute for East—West Security Studies, 1989).
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Kaser, M. (1990). The Economic Dimension of East—West Relations: Paper I. In: Heisbourg, F. (eds) The Strategic Implications of Change in the Soviet Union. International Institute for Strategic Studies Conference Papers. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-11807-6_8
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