I apologize for the over-the-top characterization of your arguments, I have sacked the overzealous aides responsible for the phrasing of my remarks. Nevertheless, I felt that your statement, "The weaknesses of the Soviet bloc economies did not develop until the mid 1970s." was flatly untrue. We have a run and gun type methodology here, as you may have noted in the running battles between Mike and I. Despite the occasional drop of bile, Mike and I will sit down to a comradely beer as soon as we are in the same zip code. Your opinion (and I have enjoyed reading your comments over the last few weeks) is certainly worthy of consideration. It just happened that you were wrong.
In your lengthy comment, which I posted below, you revise and extend your first remarks. Saying that Soviet economic situation only became exploitable in the late seventies is a different thing. In many respects, your comments make my point - which is that Reagan won the cold war, and another point, which was that the weakness of the Soviet economy existed before the late 70s. I will work around to this in a minute.
But first, some thoughts on your comments. You ask the question, do economies that can't grow fail? They don't fail of themselves, they fail when they come into direct conflict with a more capable economy. While this sounds like rank social Darwinism, we have seen this time and again. A great power which can no longer compete must fail, or become a backwater.
Your example of Prussia is interesting. Prussia for years remained an economic backwater. In pre-industrial warfare, a small nation could become a power all out of proportion by a high degree of mobilization, and inspired leadership. Frederick the Great was a military genius, and one reason he was successful is that he was willing to commit his troops to decisive battle when most of the powers of the age were locked in a mindset of limited warfare of maneuver. In this sense, Frederick prefigured the genius of Napoleon. But the economic backwardness was a permanent brake on the ambitions of Prussia. Prussian leaders ameliorated this situation somewhat by absorbing more economically vital regions of Germany through military power. But the Junker class resolutely kept the Prussian vaterland in a state of economic backwardness. Prussia was destroyed by the unleashed monster of Revolutionary then Napoleonic France. Would a more economically powerful Prussia been able to resist? Possibly, but the only nation that successfully resisted Napoleon took a rather different path.
England was a rising power. Though the primary focus of England was on Naval power, the real source of her strength was financial. By copying the financial system of the Netherlands and then improving it, they laid the groundwork for the industrial revolution. But the full economic benefits of the Industrial Revolution did not really take hold until after the Napoleonic wars. In all of its eighteenth century wars (except one - yay, us!), and in the Napoleonic wars, England's powerful economy allowed it to prevail. It provided the navy, it subsidized economically backward but well populated continental allies, and allowed the Royal government to borrow money at rates well below anyone else.
You mentioned, "Spain, as a world power, could have survived had it not been for the changes in warfare. New defensive methods made waging war against cities long and costly." Who instigated those changes? The Dutch, and later the English. Maurice of Nassau completely reinvented the European army. The British adopted and improved on this. And invented the modern navy. Why did these nations take the lead in the revolution in military affairs? They had societies and economies that were open to change and innovation. The closed economy of the Spanish, kept alive on life support from New World gold and silver, had the plug pulled eventually.
How did the tiny Netherlands hold off the Hapsburg empire that was half of Europe, for ninety years? Part of the reason was their advances in military technology. But the biggest part was finance. The Spanish broke themselves on Dutch mercantile savvy. No matter what the Spanish destroyed, the Dutch could afford to rebuild, again and again. And eventually, the Spanish ran out of American silver. The result was a Spain impoverished for centuries.
When you speak of Eastern Europe, you say that the government implemented reforms under cover of détente. But these were not reforms, as you yourself state in the next couple sentences. What it was, was a shift of production goals, using the same totally inefficient system of central planning. There was no change in the apparatus of the communist economies, in Eastern Europe or the Soviet Union. Same five year plans, same endemic misreporting of economic data, same shortages of staple goods. I would argue that the Blue Jeans revolution was not a desire for actual levis, but rather for the freedom that the levis symbolized. That the governments of the Eastern Bloc attempted to bribe their citizens with material goods - after the political protests of 56 and 68 - tends to support this. (And if the Yugo is the prime example of a communist economy surmounting inherent structural problems, well, damn.)
The reason that in the west, "High levels of defence expenditure became steadily less burdensome to the US as growth increased in the 1980s," was a result of Reagan's economic policy. That the Soviet economy stagnated was a result of the political ideology of the Communists. It stagnated quicker, because the leadership made the strategic error of trying to use an inadequate tool to achieve too many goals. If they had continued to limit consumer production, the instruments of state terror could have kept the people in line - but the result would have been the same. There is no way that the Soviet economy could have kept up with the west, especially as computer technology became more and more prevalent in the west, instigating the immense productivity boom of the nineties.
Soviet growth was not exceptional - it was unstable, in that it couldn't continue. But the pressure that Reagan put on the Soviets, both through political, military and economic means, pushed them over the edge. The Soviets were spending over 30% of GNP on defense in the late eighties, in a vain attempt to keep pace with the Americans. We were spending 5%.
Of your four possibilities for the fall of the USSR, the first two really ignore Soviet history before Brezhnev. The fourth is wrong, I think, and for some of the same reasons. In the last years of Tsarist Russia, the economy was booming. Industrial production, investment, agricultural yields were all growing at high rates. The revolution put an end to all that. Between the revolution, the civil war, the disastrous first years under Lenin's economic plan, then the purges and famines of the thirties - these tragic blunders set the USSR back decades. So, while there is debate about how high Soviet GNP growth rates were in the fifties and sixties - given the constant misinformation that lower level officials fed to their superiors - they were on the steep part of the growth curve.
China dodged the bullet of communist economic decline, and achieved double digit growth rates when they introduced real market reforms - again, on the steep part of the curve, when gains are easy. If the best that the Soviet Union could do was on par with the growth of the mature industrial economy of the US, that is pathetic. The problems of the Soviet Union went far beyond those of the Tsarist regime. Brezhnev never made any structural changes to the Soviet economy - just changed production goals in the five year plan. And by the time of Gorbachev, it was too late.
While I believe that the Soviet economy was limited from the start, that is not the sole reason that the Soviet Union fell. The Soviet economy was limited because of the political ideology of the Communist rulers. In the absence of the west, an isolated communist system could have survived indefinitely. North Korea limps on, while its people starve, because the west has no driving need (yet) to directly oppose that lunatic regime. If Brezhnev had made the decision to continue to limit consumer production, and used the instruments of state terror to keep the populace in line, he might have prolonged the demise of the Soviet system. But the decision of the west to fight communism (and the fact that their political/economic system is so much more productive and flexible) is what doomed communism in general. The actions of Reagan and Thatcher in particular led to the actual downfall.There were other times when the west could have exploited significant economic weaknesses in the Soviet Union. The twenties and thirties, right after WWII, up to the mid fifties, at least in Eastern Europe. No one actually did, though. And Kennedy almost got us all killed a couple times in the sixties, when the Soviets were probably at their strongest in relation to the west. But Reagan used the freedom that is essential to both our politics and economics to defeat the Soviets. This is appropriate, and good.
on
| § 6
