Sarah Paine: evaluation

Transcript context

…nd the Russians were shocked by how unpopular they were. They were thinking they were going to get credit, Gorbachev, for Eastern Europe’s liberation rather than blame for Eastern Europe’s enserfment. Here you have Yuri Ryzhov, a scientist and parliamentarian going, “All of our former satellites by compulsion cast off from us as fast and as far as possible.” And Anatoly Kovalev, who is a deputy foreign minister, said, “Look, we had no confidence whatsoever concerning whom the East German army is going to shoot, the demonstrators or us. And the same thing for the Polish and Hungarian armies.” Great. With allies like this, who needs enemies? The allies kind of cover it. So this argument says unrest in the empire forced the Soviet Union to forfeit the Cold War. Okay, I got another counterargument. It says, “Nonsense, the real problem was that the satellites were unhealthy. That’s why the whole thing fell apart. So this map is 1960. You see all those tempting green places. They’re about to become independent, and they are really sick of their Western European colonizers. Enter the Soviet Union with a program to put the West out of business. There were many takers. Fast forward to late 1980s. The Soviet Union is on a roll. Small hitch, in the late 1970s there was a big recession that continued into the 80s and tanked commodity prices. For some of the newfound pals like Angola, South Yemen, Ethiopia, Nicaragua, it wrecked their export earnings because they’re exporting commodities and these commodity prices are down. In many cases, it halved them. The Soviet Union was really dependent on oil exports, still is. Oil prices tanked and oil accounted for up to 55% of the Soviet budget. So here Brezhnev has got a deep bench of non-performing piles at a time when he doesn’t have the money to support all of them. Worse yet from the Soviet point of view, it’s dumped all this money in these Third World friends but meanwhile, it’s got its own nationalities who are deeply unhappy and they want out of the empire. Most problematically, they all revolt at exactly the same time. One of the rules for continental empire is “no two-front wars”. Russia has so many fronts at this point, it can’t even keep count. The unrest in the internal empire of nationalities started as soon as Gorbachev got in. There were student movements in Kazakhstan and Yakutia, opposite ends of things. By the time you get to 1990, there are like 76 seething ethnic rebellions in different parts of this. There was too much going on for the Soviet government to handle. So you could argue that the Soviet Union bankrupted itself with the Third World while ignoring its own internal Third World of nationalities, whose simultaneous revolts brought down the Soviet Union. I got a completely different argument for you. If you don’t like all of those, I got another one for you. It’s the economy, stupid, right? That line. One could argue that communism failed as an economic system. If you look at growth statistics for the Soviet Union, they’re pretty good post-World War II when they’re rebuilding, but they really stagnate from the mid-70s onward. sm failed as an economic system. If you look at growth statistics for the Soviet Union, they’re pretty good post-World War II when they’re rebuilding, but they really stagnate from the mid-70s onward. For the decade preceding Gorbachev’s coming to power, Soviet growth stats were one to two percent lower than those of the United States, and the compounding effects of that were enormous. What’s going on? Everyone’s lying to each other. The data that Soviets are using is garbage. If you’re working for a subunit of an enterprise, you have to lie about the inventories you have, saying you have less than you do, and then you have to lie about what you need, saying you need more than you do because you’re worried about getting enough things. It’s not a market system where the price dictates it. This is all about the plan. You’ve got to enter the right numbers and then you get whatever inputs you get from the centralized plan. So everyone’s lying. They’re aggregating all the lies. The higher up the food chain you aggregate these things, the worse the data is, so that the Soviet government has no idea what the actual value of capital or labor are. It has no idea what actual productivity is, and no one has any idea what consumer preferences are. You’re not using markets and prices. The misallocation of capital and labor goes unnoticed until it metastasizes into a catastrophe. To give you a sense of these misallocations, the Soviet Union was rotting 20 to 40% of its crops. It’s using scarce hard currency for agricultural imports to make up for those crops, a total mess. You can look at what happens to the economy with oil prices down. We’re into a spiraling mess, so that from when Gorbachev comes in in ‘85 to when it hits a trough in Russia in 1998, you see this crashing share of world GDP by the Eastern bloc. If you look at Soviet statistics on deficits, trade balances, debt, they’re just soaring, and then GNP growth goes double-digit negative. That’s called shrinkage. It’s not the normal thing. Marshall Yazov, here’s his take: “We simply lack the power of all these wealthy NATO nations. We had to find an alternative to the arms race.” And here’s a foreign service officer, Anatoly Adamishin. He said, “Look, our problems began with the departure from isolation. The main reasons for collapse were internal, not external reasons. The Soviet economy was literally exhausted from this monstrous arms race, militarism, enemies with half the world.” That’s his take. Gorbachev told the Central Committee, “Look, we’re encircled not by invincible armies, but by superior economies.” He often told people, “Living this way any longer is impossible.” So you can make a powerful argument that it’s the Soviet economy that lost the Cold War. This gentleman, Alexis de Tocqueville, is very famous for writing a book about the last days of the French monarchy before the French Revolution overturned it. He also wrote something about Democracy in America, both excellent books. ille, is very famous for writing a book about the last days of the French monarchy before the French Revolution overturned it. He also wrote something about Democracy in America, both excellent books. But this one’s from the one about France, where Tocqueville observes, “The most dangerous moment for a bad government is when it begins to reform.” Russians of all political persuasions agree on at least one thing. That is that Gorbachev’s role in how the Cold War turned out was pivotal, that he played a very essential part. Gorbachev made his decision based on certain false assumptions. One of them was the irreversible direction of history. Gorbachev thought of history going always forward towards communism, never backwards to capitalism. Of course, Eastern Europe took a U-turn, went straight back to capitalism. Here is Leonid Shebarshin, who is a senior person in the KGB, their intelligence office. He said, “The thought never occurred to the government that it’s possible to withdraw from socialism.” If you think about both communist theory and how imperialism works in practice, usually the mother country is more developed than whatever all the colonies are, right? Well, the Soviet Union was an inverted empire. People in Eastern Europe as a group were more well-educated and they were richer than Russians. It was like a donut empire. So when the empire went to Eastern Europe, Russians could no longer siphon off the wealth of these enserfed populations in Eastern Europe, which explains why they wanted to leave. It also suggests why Putin wants them back. Another false assumption has to do with the sentiments of the neighbors. Gorbachev was convinced he was going to get credit for liberating Eastern Europe, rather than blame as a Russian for having enserfed them in the first place. For Gorbachev, the clock began on his watch. For other people, no, Stalin’s when it began, when he started shooting a lot of people. Here you have Anatoly Chernyaev, foreign policy adviser to Gorbachev, saying that Gorbachev thought that bringing freedom to our Eastern European satellites would have them adopt socialism with a human face. “He made an enormous mistake because these countries brutally turned their back on us.” Really, if that’s brutal, then what pray tell was Stalin? And then it gets better: “The politics in connection with our former friends were totally unexpected to us.” Really? You occupy people, you never leave, you shoot a lot of people in their government, you put in a new government, you siphon off a lot of their wealth, and you impose a non-performing economic system, and you wonder why they don’t like you. Think about the United States. It intervenes all around the world in other people’s troubles. It dumps billions in economic aid and even leaves and people don’t like us. I don’t know why the Russians think they’re so special. Another false assumption: Gorbachev believed that if the Warsaw Pact, the military alliance of the Eastern Bloc, disappeared, then NATO would disappear.…

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