Debating the Soviet Economy

January 13th, 2010 at 4:10 pm David Frum | 14 Comments |

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Hate to go all “Vas you der Charlie” on young Matt Yglesias, but this recent post on the debate over the size of the Soviet economy is completely wrong.

Completely.

In the 1970s and 1980s , it was Cold War hawks who argued that the Soviet economy was smaller than the conventional CIA generated estimate. From this smaller estimate, the hawks drew the following conclusions:

1) The Soviets were spending much more on weapons than conventionally estimated: maybe 1/3 of national output rather than the 1/8 guessed by the CIA. (The US was spending about 1/20 in the Reagan era.)

2) Because the Soviets were spending so much, they probably could not spend more. This implied that arms control was a waste of time. The US was trading something it COULD do (build more) for something the Soviets could not do (build more)

3) Spending 1/3 of national output on the military was unsustainable, obviously. Either their economy was teetering on the verge of collapse (the Richard Pipes view) or they were planning for a pre-emptive war (the Edward Luttwak view).

By contrast, the conventional estimate implied:

1) The Soviets could increase their arms spending, therefore arms control was worthwhile.

2) The Soviet economy did function more or less adequately, therefore the Soviet Union could expect to endure. Therefore like it or not the United States had to deal with it as a permanent fact of politics. Nor was there need to fear that the Soviets would launch an unprovoked war anytime.

3) The Soviet bloc was providing an acceptable standard of living to its people. (On the official estimate , GDP per capita in East Germany roughly equaled that in Britain. The hawks argued that East German incomes were equivalent to Mexican.) The Soviet regimes accordingly commanded something like assent from their people; dissidents were unrepresentative of public opinion generally.

Obviously, it was the conventional not the hawkish view that proved wrong. This experience permanently jaundiced many against the estimates of the CIA – and so to this limited and upside down extent, Yglesias is inadvertently correct that the debate prepared the ground for the later debate over Iraq’s nuclear capabillities, which this time we hawks got wrong.

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14 Comments so far ↓

  • DFL

    Hear, hear! But how quickly the left forgets.

  • mlindroo

    Um, what about the hawks’ predictions about the vast capabilities of the Soviet armed forces, then?

    Sinz54 in particular likes to ridicule 1970s Western lefties for not grasping the obvious flaws of the Soviet economy, but Yglesias correctly mentions the wild claims of the 1976 “Team B” exercise which claimed to find circumstantial evidence of all kinds of Soviet super weapon programs that just did not exist.

    > Yglesias is inadvertently correct that the debate prepared the ground for the later debate
    > over Iraq’s nuclear capabillities,

    Well, I have seen the Team B report [ http://www.gwu.edu/~nsarchiv/NSAEBB/NSAEBB139/nitze10.pdf ] and it seemed to me that “the usual suspects” were as wrong back then as they were in 2002-03.

    > which this time we hawks got wrong.

    I just think the hawks got lucky in the 1980s.

    MARCU$

  • balconesfault

    Arms control talks had a value independent of whether or not the Soviets could build more weapons. They were were useful as a continued way of deflating fears on both sides that a first strike by either side was inevitable (and reducing fears is certainly a factor in quality of life, and health of political discourse). They were a symbol to the rest of the world that it wasn’t necessary to always engage in an arms race. And the US really didn’t need to be spending more money on weapons that it never ended up using, either, particularly with MAD already assured.

  • mlloyd

    David, could you back this up with some links? The conventional wisdom is that Team B was formed in order to hype the Soviet threat in order to facilitate a more frightened and aggressive US foreign policy– just as happened with the “stovepiping” of intelligence to fearmongering political appointees during the Bush Jr. administration.
    http://news.bbc.co.uk/2/hi/programmes/3755686.stm
    (“The Team B operation was a classic case of threat escalation by hawks determined to increase military budgets and step up the U.S. offensive in the Cold War.”) http://www.rightweb.irc-online.org/profile/Team_B_Strategic_Objectives_Panel

    If Team B was actually a careful evaluation resulting in reduced estimates of Soviet power, you need to source that claim. It’d be like me claiming that tax rates under Eisenhower were much higher than under Clinton, and that Ike was furious at Democrats for talking about cutting taxes at a time of budget deficits. It is true, but it cuts against conventional wisdom, so you need to substantiate it to convince people.

  • sinz54

    mlloyd:

    That’s not “conventional wisdom” at all–except among left-wingers who still blame the United States for the Cold War.

    After the USSR collapsed, we found out just how extensive the Soviet military-industrial complex had really been. They had employed 100,000 Russians working on chemical and biological weapons alone, long after the U.S. had disavowed biologicals–including a really horrific Soviet program to emplace smallpox warheads on some of their ICBMs as a bio-weapon doomsday machine–something our CIA never knew existed at the time. Only after some of their scientists came forward did we find out about that (it was on PBS “Frontline” in the 1990s).

    The Soviet threat was very real, the Soviets had marched into Afghanistan, Angola, South America, and lots of other places. The public, which didn’t know from “Team B,” saw those news headlines and didn’t like them.

    But on the economic front, the situation was reversed. There, the left-wing DOVES were the ones exaggerating Soviet economic accomplishments. They did that for two reasons:

    One, because they wanted to continue to promulgate this theory that the USSR would be around forever and the U.S. had to accommodate itself to this reality as best it could. And that any attempts by the U.S. to face down the USSR decisively were bound to be futile, and even dangerous.

    The other reason, applicable to the radical Left in America and the Western European Left, was that their heart of hearts was still with socialism, regarding the private sector as a necessary evil. In the 1970s, so-called “Eurocommunism” was all the rage in Europe–the delusion that Western Europe, especially Italy, could actually go Communist while retaining Western-style free elections and civil liberties. To have to admit that this was unworkable would require socialist parties to admit that a private sector can’t be entirely abolished, not ever. And those workers waving their red banners didn’t want to admit THAT.

  • sinz54

    David Frum:

    I think it’s important to NOT get bogged down in Yglesias’s inapt analogy with the Cold War, but deal with his main claim instead: That currently, in his view, the threat from radical Islam is being exaggerated by right-wing hawks for their own nefarious purposes.

    He’s flat wrong. In the 1990s, right-wing hawks were NOT obsessed with radical Islam. (Back then, the politician who was doing the most to call for increased security at U.S. airports was Al Gore.)

    Right-wing hawks were obsessed with Saddam Hussein, who was not a radical Islamist. They ignored al-Qaeda for the most part. They didn’t care what Sayyid Qutb had written. Nor did they call for regime change in Taliban-controlled Afghanistan.

    Indeed, after the 9-11 attack, Wolfowitz and Perle didn’t draw up a list of the most radicalized countries and regimes. Instead, they proposed to take out Saddam. The Bushies took us to war against Saddam precisely because they believed that he was one of the biggest, if not the biggest, terrorist threats to America.

    Given that more Americans died on 9-11 than died in the Pearl Harbor attack, it sure looks like the threat from radical Islam was underestimated, by just about everybody, liberal and conservative. Liberals just didn’t believe the U.S. could be threatened; conservatives didn’t believe that non-state actors–a bunch of freelancing terrorists–could ever deal such a deadly blow to America.

    President Obama has sent tens of thousands of additional troops to Afghanistan. I suggest Yglesias argue with Obama about this.

  • SpartacusIsNotDead

    Frum wrote: “Because the Soviets were spending so much, they probably could not spend more. This implied that arms control was a waste of time. ”

    Doesn’t this also imply that Reagan did not win the Cold War since the Sovients were had already lost it before Reagan even took office?

    Doesn’t it also imply that the Reagan defense build-up was both unnecessary and ruinous for the country in light of huge deficits it caused?

  • SpartacusIsNotDead

    Sinz wrote: “in [Yglesias's] view, the threat from radical Islam is being exaggerated by right-wing hawks for their own nefarious purposes. He’s flat wrong. In the 1990s . . . ”

    But Yglesias isn’t talking about the 1990s. He’s talking about the past few years, so he’s not flat wrong. Yglesias also does not say that the exaggeration is for the hawks’ “own nefarious purposes.” He never claims their purposes are nefarious, just simply wrong and misguided. Again, you’ve established a straw man.

    More importantly, the actual threat from radical Islam is not nearly great enough to justify all of the actions proposed by the Neocons such as establishing a unitary Presidency, remaining in Iraq, attacking Iran, attacking Yemen, keeping Gitmo open, torturing prisoners and reducing American civil liberties. That is Yglesias’s main point and there doesn’t seem to be any evidence against it.

  • balconesfault

    Given that more Americans died on 9-11 than died in the Pearl Harbor attack, it sure looks like the threat from radical Islam was underestimated, by just about everybody, liberal and conservative.

    I know you have a Salon.com article that proves that liberals were underestimating the terrorist threat – but the Dems who mattered seemed to be taking it pretty seriously.

  • mlindroo

    > That’s not “conventional wisdom” at all–except among left-wingers
    > who still blame the United States for the Cold War.

    > After the USSR collapsed, we found out just how extensive the
    > Soviet military-industrial complex had really been.

    Really?
    Since Yglesias specifically mentions the Team B report, let’s discuss the unclassified parts.

    http://www.gwu.edu/~nsarchiv/NSAEBB/NSAEBB139/nitze10.pdf

    Frum (and Sinz54) imply that the national security hawks realized the Soviet Union was heading for economic disaster. The Team B report certainly paints a very different picture in my opinion! See e.g. the comment on page 23 about “a large and expanding GNP” that supposedly would “in the foreseeable future” empower the Commies to continue spending increasingly vast sums of money on their strategic forces without any constraining effect of civil economy competition. In fact, the Team B report expresses grudging admiration for the advantage of having “centralized control and a disciplined population” (p.24) which supposedly allows the USSR to employ a ruthlessly efficient and highly flexible arsenal of military systems. True, there are some weasel words on p.44 where the authors state they do not attempt assess the probability of the USSR actually attaining its sinister strategic objectives… But the final paragraph on p.47 clearly implies they believe the West as of 1976 lacked the “political cohesion and military strength” to stop the Communist menace.

    Other tidbits from the report:

    “3.Soviet Civil Defense” (p.23)

    The Team B warn darkly about a very “determined and effective Soviet civil defense effort” including “emphasis on the training of civilian personnel of all ages in protective measures to include practice evacuations of heavily populated areas”. Of course, these ambitious efforts “appear to be integrated with all other military programs to maximize the USSR’s capabilities to fight a nuclear war and emerge from it with a viable society,” providing an “unmistakable clue to Soviet overall doctrine with regard to general nuclear war.” A constant theme is that the Russkies clearly reject the M.A.D. doctrine since believe they can win a nuclear war particularly if they could reach an anti-ballistic missile defense (ABM) & strategic nuclear arms reduction agreement with the U.S..

    The authors conclude “there is no reason to believe their Soviets will not achieve their civil defense goal of being able to hold casualties in a nuclear exchange to an acceptable level as well as preserving intact their political system.” (p.25) I don’t think this particular prediction held up particularly well considering how poorly the Soviets handled the Chernobyl disaster and subsequent evacuation in 1987. That self inflicted calamity ALONE probably greatly hastened the demise of the USSR.

    “6.Backfire” (p.27)

    The Backfire bomber “probably will be produced in substantial numbers, with perhaps 500 aircraft off the line by early 1984″ although “recent photographic evidence of substantial plant expansion raises the possibility of even higher production rates for Backfire” (p.29). In fact, the Soviets had 235 Backfires in 1984. The Tu-22M, it later transpired, had a rather disappointing combat radius which limited its usefulness even as a peripheral weapon. Yet Team B was firmly convinced that it ought to be treated as a long-range bomber capable of damaging the U.S. since it had an in-flight refueling capability.

    “8. Soviet Strategic ASW” (p.31)

    In this section, the Team B authors strongly imply that the Soviets had advanced non-acoustic means of picking up American submarines (a method dismissed as impossible by US Navy experts at the time), although they admit there is no direct evidence. However, a “major Soviet commitment to non-acoustic research was made in the mid-1960′s” although the apparent “absence of a deployed system by this time is difficult to understand. The implication could that the Soviets have, in fact, deployed some operational non-acoustic systems and will deploy more in the next few years. Following this step in logic, it is both unprudent and illogical to estimate no success over the next ten year in programs of which we have so incomplete an understanding” (p.32).

    Got that? They could not find evidence that the Commies were doing it the way that everyone thought they were doing it, so they *must* be doing it a different but way unknown to the West! The fact that no non-acousting systems had been found did not mean they did not exist, only that the CIA had not found them… This is another consistent theme: Team B criticizes the CIA for relying too much on “hard facts” combined with analysis in a manner reflecting basic U.S. concepts such as adherence to the M.A.D. doctrine. The authors of the report essentially argue that “soft”data concerning stated Soviet strategic concepts (including propaganda…) supposedly provides a deeper insight. Inevitably, the resulting depiction of Soviet intentions and capabilities seemed extreme at the time and looks totally ludicrous in retrospect. Even worse, many of the same people made the exact same error with Saddam Hussein’s “weapons of mass destruction” three decades later.

    Fareed Zakaria wrote in NEWSWEEK on June 16, 2003:

    “For decades some conservatives, including many who now wield great influence, have had a tendency to vastly exaggerate the threat posed by tyrannical regimes.”

    “The reality was that even the CIA’s own estimates–savaged as too low by Team B–were, in retrospect, gross exaggerations. In 1989, the CIA published an internal review of its threat assessments from 1974 to 1986 and came to the conclusion that every year it had “substantially overestimated” the Soviet threat along all dimensions. For example, in 1975 the CIA forecast that within 10 years the Soviet Union would replace 90 percent of its long-range bombers and missiles. In fact, by 1985, the Soviet Union had been able to replace less than 60 percent of them.”

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  • communists-basher

    Found this at: http://econlog.econlib.org/archives/2009/12/why_were_americ.html
    Whoever wrote it is trying to make a perfect case for Socialism. Unfortunately, this is how we will be ‘nudged’ into Socialism. By a propaganda just like this one. Obviously written by someone who never lived in the USSR … but doesn’t it sound so promising for masses, especially for Liberals and Big Labor. I should not be amazed that people like this writer (communists) exist in the US … still it’s scary. Judging by the eloquent writing style and the ability to cleverly falsify all facts and the ability to carry a convincing political message, this guy is a part of the Radical Liberal ‘elite’, Harvard educated. Communist Part member? Just read …

    “I think American econ textbooks were pro-Soviet for the simple reason that the Soviet system was indisputably superior to the unforgiving ‘free market’ American system.

    Make whatever claims about ‘economic growth’ or ‘relative poverty’ or ‘lack of freedom’ you want but the Soviet Union created a large-scale, modern nation state dedicated to providing everyone with a solid, equitable lifestyle. Everyone had access to food, clothing, shelter, health-care, education, meaningful work and other necessities of life. It was guaranteed right there in their constitution. That is still not the case in the US, though with the recent passage of the landmark Health Care Reform bills we have at least made the first tentative steps towards correcting one of those desperate problems.

    The thing that economists need to realize is that life is not all about economics & money. Having a satisfying life planned for you with no uncertainty and no crucial needs left unfulfilled is necessary too. The Soviet Union went a good a way towards providing that.

    Someday we will realize what a loss it was when the vile, venal capitalists of the West arranged its downfall. After all, no amount of material wealth provided in the willy-nilly, dog-eat-dog, all-against-all ‘free market’ will ever be able to match the simple pleasures of a life dedicated to the betterment of the community, guided by the best & brightest from their commanding perch in the government.”

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