After the Second World War, the United States of America (U.SA.) and Soviet Russia (U.S.S.R.) became two great powers of the world. The entire world got divided into two power blocs. This led to the emergence of a Cold War between the western powers of the U.S.A. and the communist bloc of Russia. The term “Cold War” was first used by Bernard Baruch, an American statesman. In a speech on 16th April 1947, he said “Let us not be deceived we are today in the midst of a Cold War.”[footnoteRef:1] Cold War can be termed as a state of extreme political unfriendliness between two or more countries, although they do not actually fight each other which leads to the formation of a condition that can be called a state of uneasy peace. The Cold War, which started roughly after the end of the Second World War in 1946 continued till 1991 after U.S.S.R. collapsed. In my paper, I will focus on the end of the Cold War highlighting the significance of the Soviet economic decline and “the Gorbachev effect” in the processes that ultimately ended it. [1: Andrew Glass, “Bernard Baruch coins term 'Cold War,' April 16, 1947,” April 16, 2010, https://www.politico.com/story/2010/04/bernard-baruch-coins-term-cold-war-april-16-1947-035862 (accessed March 8, 2019).]
Beginning of the Soviet economic decline
The Soviet economy was growing at impressive rates in the 1950s and showed respectable performance during the 1960s, but in the second half of the 1970s, it entered an acute decline from which it never fully recovered. By the time Mikhail Gorbachev had become a general secretary in 1985, the Soviet Union had grown on an average of at least 1–2 percent slower than the United States over the following decade. In 1980-81, for example, the annual growth rate of the economy averaged only 1.5 percent a year, and in 1982 Soviet leaders announced that there was no increase in income per capita planned for that year.[footnoteRef:2] Further, U.S. allies such as Germany and Japan were also growing in their economies rapidly, making Russia’s relative decline all the more prominent. This period of economic decline was called the era of stagnation by Mikhail Gorbachev which started during the time when Leonid Brezhnev became the general secretary and continued under Yuri Andropov and Konstantin Chrenenko. It is because their policies were weak and not up-to-date which did not give the desired results. [2: Valerie Bunce, “The Political Economy of the Brezhnev Era: The Rise and Fall of Corporatism,” British Journal of Political Science 13, no. 2 (1983): 130.]
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There are various causes of the soviet economic decline, but the widespread agreement is that an important part of the explanation lies in the large and growing costs of the Soviet Union to maintain its international position. As Vladimir Kontorovich sums up, “The achievement of strategic parity with the west and the macroeconomic stagnation, or decline, in the late 1970s to early 1980s, is strongly related.”[footnoteRef:3] Defense claimed a massive proportion of Soviet resources. Despite daunting measurement problems, different sources converge around an estimate of roughly 40 percent of the budget and 15–20 percent of GDP in the early 1980s, or at least four times the U.S. level. By any comparative standard, this is a punishingly high peacetime commitment to military power. Not only was the defense burden in December high, but it was generally rising from the mid-1970s on.[footnoteRef:4] During this period Soviet troops invaded Afghanistan. It also provided military assistance, without overt participation, in the civil wars of Ethiopia and Angola. The amount spent on the front was much more than disclosed. Some of the superior materials and human resources which were allocated to the military should have been spent on civilian activities. [3: Vladimir Kontorovich, Michael Ellman (eds.), The Disintegration of the Soviet Economic System (U.K.: Routledge, 1992), 9.] [4: William C. Wohlforth (eds.), Cold War Endgame: Oral History, Analysis, Debate (U.S.A.: Penn State Press, 2010), 277. ]
At the same time productivity declined not only in the industrial sphere but also in the agricultural sphere. A structural change was required in the economy but the communist government refused to admit that the collectivization of land could not solve the economic problems of the nation. Consequently, it relied on increased investments in agriculture, which were used to subsidize this sector. In 1977, annual subsidies to agriculture reached 19,000 million roubles. However, the peasants were still dissatisfied with the regime and their work remained the same. Also, the cheap and abundant labor which had previously been a major asset of the government became scarce, expensive, and difficult to handle. It was because of the declining birth rates in Russia, Ukraine, Belorussia, and the Baltic republics. The only available laborers were peasants whose lands had been confiscated by the government; they were a dissatisfied lot who had suspicion and ill-will against the government and did not work wholeheartedly which increased after the introduction of the Liberman Reforms (which reduced their profit margins). The estimated growth rates of industry and agriculture slowed down, as it happens, by the same amount as GNP as a whole. Between them, they accounted for only a little over half of GNP, but clearly, the sum of transport, construction, and services experienced a closely similar slowdown.[footnoteRef:5] The inability of the agricultural sector to supply the Council of Mutual Economic Assistance (CEMA) partners with the right quantity of raw materials also led to the disqualification of the Soviet Union for the sophisticated foreign technology that the West was scheduled to give her to provide a fillip to her economy. Meanwhile, the country’s long-standing qualitative lag increased in exactly this period, with the productivity of research and development (R&D) and technological progress both declining. [footnoteRef:6] [5: Philip Hanson, The Rise, and Fall of The Soviet Economy: An Economic History of the USSR 1945 – 1991 (U.K.: Routledge, 2014), 132. ] [6: William C. Wohlforth (eds.), Cold War Endgame: Oral History, Analysis, Debate (U.S.A.: Penn State Press, 2010), 276. ]
During the Brezhnev period, the raw materials to the west of the Urals had been used, and while 90 percent of energy resources were needed for the development of this area, 90 percent of energy resources lay in the inhospitable, frozen areas of Siberia and in the other parts of the Soviet Union. Output in 1980 was indeed below target, at 603.2 million tons. West Siberian production exceeded its 300 million tons target for 1980 but ran into trouble later. Production west of the Urals did indeed fall more steeply than the planners envisaged. But total output kept on increasing through 1983, to just over 616 million tons.[footnoteRef:7] The exploitation of natural gas, minerals, and oil was an expensive, time-consuming process, which was useful in the long run, but at that time it dramatically weighted down the economy. In April 1977 the CIA published what became one of its more widely cited reports arguing that the Tenth Five-Year Plan target of 640 million tons annual output (12.8 million barrels a day) in 1980 would not be reached and that the country's total oil output would fall at some point between 1979 and 1983. At a time when oil was increasing its share in the Soviet energy balance (the shift from coal, like other technological shifts, came late in the USSR), and was contributing substantially to export earnings.[footnoteRef:8] [7: Philip Hanson, The Rise, and Fall of The Soviet Economy: An Economic History of the USSR 1945 – 1991 (U.K.: Routledge, 2014), 134.] [8: ibid., 132. ]
Another important factor that harshly affected the economy was the flourishing of the illegal black economy. Because of this, while the Russian consumers purchased in the black market the goods they considered essential for their existence, they preferred to wait for better times to buy luxury items when the prices would be reasonable and the quality of the products will be satisfactory. This led to a peculiar situation where the free flow of money was considerably restricted which hastened the process of decline. The conservative bureaucracy and the political leaders retained their theory of communist ideology and did pay much attention to these disasters. They instead adopted short-term resolutions like the senseless printing of countless roubles to compensate for a concealed budget deficit and increasing subsidies and bank credits to enterprises to cover losses, but they naturally backfired. So this increasingly creaky economy, led by increasingly creaky old men, was enjoying its strategic golden age, throwing its military weight around, alarming NATO countries and its close neighbors while trading more intensively than ever with the traditional enemy and benefiting from windfall gains in energy prices. Neither the muscle-flexing nor the petro-dollars, apparently, did much to alleviate the country's deep-seated economic problems.[footnoteRef:9] [9: Philip Hanson, The Rise, and Fall of The Soviet Economy: An Economic History of the USSR 1945 – 1991 (U.K.: Routledge, 2014), 131. ]
The coming of Mikhail Gorbachev
Mikhail Gorbachev was the most dynamic communist leader Russia had ever seen for many years. He tried to revitalize and transform the country and introduced several policies which revolutionized the internal and external affairs of the Soviet Union. He aimed to reform and modernize the Communist Party. His era witnessed important developments of momentous consequence, which included glasnost or openness and perestroika or restructuring, and finally the dissolution of the U.S.S.S.R. which were a part of his “new thinking.” Historians have tried to explore how Gorbachev could take these decisions in a society that rewarded conformity and that insisted that people work within the framework of the dogmas outlined by it. One contributory factor was that he was not a product of the Revolution of 1917. He was born after the revolution and as such did not witness the euphoria which accompanied the later turning point events. According to Vladislav Zubok, the Cold war came to an end because of the personality and power of Gorbachev and the leader of the Soviet Union. This is evident when he quotes British political scientist Archie Brown and writes, “This energetic, handsome man with sparkling eyes and charming smile did more than anyone else to end the Cold War between East and West.” [footnoteRef:10] [10: Vladislav M. Zubok, A Failed Empire: The Soviet Union in the Cold War from Stalin to Gorbachev (U.S.A.: University of North Carolina Press, 2009), 304. ]
Roughly a year after becoming the general secretary Gorbachev seems to have decided on a major new departure, centering on the concept of glasnost.[footnoteRef:11] This led to greater openness on the part of the soviet authorities on several issues, including those that had been forbidden previously. It also allowed greater freedom of discussion and criticism through various media such as print, radio, television, and art. The concept gained momentum in April 1968 when the worst nuclear accident in the world took place at Chornobyl due to insufficient security measures. The government was keen on hiding the facts relating to the disaster but so great were its magnitude and the international implication that the government was compelled to give out details. There is plenty of evidence, some from Gorbachev himself, that he was encountering serious resistance in the party apparatus and in the central economic bureaucracy, in opposition to even the modest Andropovite reforms he was pursuing up to that time. Ironically, the relaxation of Stalin-type despotism made it harder for a reformist leader to command change from above; the behavior of the bureaucracy in the face of the Chornobyl disaster only confirmed this fact. Faced with such difficulties, Gorbachev turned to the intelligentsia as a social base for reform and liberated the press and writers as instruments to prod reform along with the pressure of informed opinion.[footnoteRef:12] He believed that discussion and criticism of various issues would be constructive and that it would strengthen the system. He also allowed Andrew Sakharov, a scientist and a human rights activist, who was previously sent to Gorky from Moscow during Brezhnev’s rule as foreigners were not allowed to visit that city, to return to gain the support of the intelligentsia. Further, he also freed 1000 political prisoners. Gorbachev argued that glasnost “awakened people from their social slumber, helped them overcome indifference and passivity and become aware of the stake they had in change and of its important implications for their lives.” The intent of glasnost was to allow dissenting voices to legally be heard and also to allow people to see what conditions were like outside of the Soviet Union in the hopes that it would reaffirm their support for communism. However, the exact parameters and overall aims of glasnost were not directly articulated by Gorbachev or his government. This failure to clearly state the purposes and meanings of policies was a problem that plagued Gorbachev’s reforms until the fall of the Soviet Union as pointed out by Laura Cummings.[footnoteRef:13] [11: Robert V. Daniels, “Gorbachev's Reforms and the Reversal of History,” The History Teacher 23, no. 3 (1990): 238.] [12: ibid., 238. ] [13: Laura Cummings, “Gorbachev’s Perestroika and the Collapse of the Soviet Union,” 59.]
In addition, long-banned anti-Stalin films and novels were also allowed to publish. Writers and filmmakers were given the freedom to express themselves, a development that brought new life into creative organizations such as the Writers’ Union and the Cinema Worker’s Union. Some noteworthy works which were popular during this period were Anatoly Marchenko’s prison-camp memoirs, My Testimony, and Andrei Sakharov’s Thoughts on Progress, Peaceful Co-existence, and Intellectual Freedom. Most of them focused on the corruptness of the soviet system and looked to the West for a solution to their problems. Foreign books which were previously banned were also published during this time, like Hitler’s Mein Kampf and George Orwell’s 1984 and Animal Farm. Interestingly, a satire on Gorbachev was also published. These new arrangements, like glasnost, called into question not only the basic political development of Stalin's time, the dominance of the party apparatus, but also the central principle going back to Lenin, the hegemony of the Communist Party as a whole in the country's life. [footnoteRef:14] [14: Robert V. Daniels, “Gorbachev's Reforms and the Reversal of History,” The History Teacher 23, no. 3 (1990): 241. ]
While pursuing his growing reform agenda and fighting off the challenge of the conservatives, Gorbachev simultaneously began to recast some of the Soviet regime's basic principles in matters of ideology. He soft-pedaled all the familiar Marxist categories, starting with the proletariat, in favor of higher “humanist” values, and embraced what amounted to the interest group analysis favored by North American political scientists to take cognizance of all the functional and occupational groupings that make up any modem society. “Socialist pluralism” became the new byword.[footnoteRef:15] He also talked about the need for demokratizatsiya (democratization). [15: Robert V. Daniels, “Gorbachev's Reforms and the Reversal of History,” The History Teacher 23, no. 3 (1990): 241.]
Gorbachev struggled hard to introduce several changes aimed at improving the precarious condition of the Soviet economy. He used the term perestroika, which means rebuilding or restructuring, to indicate the various steps he had taken to modernize the Soviet economy. The word signified most of the changes that had taken place during the Gorbachev period. He brought about some very important reforms for improving the economy. Amongst these was uskoreniye or acceleration, where the government tried to speed up production by introducing advanced technology, completing projects that had been started, and building the necessary infrastructure. At the 27th party congress, Gorbachev made this point when he said he was after “a new quality of growth: an all-out intensification of production on the basis of scientific-technical progress…...” He wants the Soviet Union to become competitive internationally even in high-technology fields like electronics and computers.[footnoteRef:16] Zubok shows us that in mid-1987, Gorbachev wrote a book called Perestroika: New Thinking for Our Country and the World. It contained an image of international relations based on a just and democratic world order, in which the U.S.S.R. would play a key role and the United Nations would reign supreme. Gorbachev replaced one messianic revolutionary-imperial idea that had guided Soviet foreign policy with another messianic idea –“that perestroika in the U.S.S.R. was only a part of some kind of global perestroika, the birth of a new world order.”[footnoteRef:17] Cummings also points out, “perestroika did not only deal with the economy; it dealt with politics as well. The political reorganization called for a multi-candidate system and allowed opposition groups to speak out against communism. Although the motivations and intentions of perestroika are debated in the historiography of the period, its importance to the Cold War is clearly evident. To some degree, perestroika contributed to the fall of communism and the dissolution of the Soviet Union. Although Gorbachev was trying to save the system, his reforms contributed to its end.” [footnoteRef:18] [16: “The Soviet Union: GORBACHEV'S REFORMS,” Great Decisions, eat Decisions (1988): 42.] [17: Vladislav M. Zubok, A Failed Empire: The Soviet Union in the Cold War from Stalin to Gorbachev (U.S.A.: University of North Carolina Press, 2009), 309.] [18: Laura Cummings, “Gorbachev’s Perestroika and the Collapse of the Soviet Union,” 54. ]
In 1987, Gorbachev allowed private ownership of land for the first time since the 1920s. Apart from this, small-scale private enterprises were also allowed in the services, manufacturing, and foreign trade sectors. He also removed central control over raw materials, production quotas, and trade so that factories could work according to the orders of the customers. This led to the emergence of a semi-free market system and a semi-mixed economic system in Soviet Russia. He further introduced many reforms in the state-controlled agricultural sector and also made arrangements for alternate employment facilities for many people. He also allowed foreigners to invest in the Soviet Union in the form of joint ventures with the ministers, state enterprises, and corporations which gave him capital, technology, expertise, and in some cases products and services of the best quality.
However, Gorbachev’s reforms did not help much to improve the economic conditions of the country. Cummings shows that by 1987, there was an overwhelming tension in Soviet society that arose from their worries over perestroika. The fact that the economy had not stabilized and grown as hoped caused the people to lose faith in the system. Gorbachev wrote in his memoirs that there was a growing sense of “confusion caused by the haphazard transition of the industry to a system of cost accounting, self-financing, and self-management. Those who feared change began to capitalize on troubles.”[footnoteRef:19] The formulation of perestroika by the Soviet government affected not only internal Soviet affairs but external foreign affairs as well, especially in terms of how Gorbachev was viewed by President Ronald Reagan of the United States and Prime Minister Margaret Thatcher of Great Britain. In his personal diary, Reagan wrote in 1985 that he believed “that Gorbachev will be as tough as any of their leaders. If he wasn’t a confirmed ideologue he never would have been chosen by the Politburo.”[footnoteRef:20] [19: Laura Cummings, “Gorbachev’s Perestroika and the Collapse of the Soviet Union,” 62.] [20: ibid., 63. ]
For this reason, Gorbachev felt that the Soviet Union could no longer afford to spend large sums on the military system. This led to the signing of the Strategic Arms Reduction Treaty (SALT) with the U.S. which hinted at the end of the long ongoing cold war. The soviet army also withdrew from Afghanistan to save the costly expenditure of the state. He further declared that the Soviet Union would no longer maintain political control over the WARSAW Pact countries and gave them the right to follow their own political principles. This led to the conversion of eastern European countries like Poland by democratic parties through peaceful democratic revolutions. Most importantly, the Berlin Wall was broken down and Germany got unified again in 1989. These proceedings largely alarmed the conservative section of the party placing Gorbachev under house arrest and trying to take control of the government known as the August Coup. However, they failed and Gorbachev was released after three days. This led him to dissolve the Communist Party of the Soviet Union (CPSU) and resigned from his post as General Secretary. The next general secretary Boris Yeltsin met the leaders of the other republics and announced the dissolution of the U.S.S.R. and decided to form the Commonwealth of Independent States (C.I.S.) of fifteen Republics, ending the world’s largest and most influential Communist regime also ending the cold war which had dominated world politics since 1945. In this regard, Zubok writes, “The peaceful and rapid end of the Cold War secured Gorbachev’s place in international history. The unwitting destruction of the Soviet Union made him one of the most controversial figures in Russian history.”[footnoteRef:21] He further talks of an ideological crisis among the soviet elites “were Gorbachev and those who supported him were not prepared to shed blood for the cause they did not believe in and for the empire they did not profit from. Instead of fighting back, the soviet socialist empire, perhaps the strangest empire in modern history, committed suicide.”[footnoteRef:22] [21: Vladislav M. Zubok, A Failed Empire: The Soviet Union in the Cold War from Stalin to Gorbachev (U.S.A.: University of North Carolina Press, 2009), 335.] [22: ibid., 344. ]
Assessment
In the reasons for the end of the cold war, John Gaddis has stated economic insolvency and deficiency of morals within the Soviet Union as one of the reasons for the end of the cold war along with military, cultural, and ideological factors. It is because of the Soviet economic decline that there emerged a crisis in the communist ideology which lead to new planning and policies among the party and it is here that Gorbachev’s “new thinking” comes in and plays an important role in speeding the process of the end of cold war thereby ending it at last.
References
- Valerie Bunce, “The Political Economy of the Brezhnev Era: The Rise and Fall of Corporatism,” British Journal of Political Science 13, no. 2 (1983): 129-158.
- “The Soviet Union: GORBACHEV'S REFORMS,” Great Decisions, eat Decisions (1988): 37-48.
- Robert V. Daniels, “Gorbachev's Reforms and the Reversal of History,” The History Teacher 23, no. 3 (1990): 237-254.
- Kontorovich, Vladimir, Michael Ellman (eds.), The Disintegration of the Soviet Economic System. U.K.: Routledge, 1992.
- M. Zubok, Vladislav, A Failed Empire: The Soviet Union in the Cold War from Stalin to Gorbachev. U.S.A.: University of North Carolina Press, 2009.
- C. Wohlforth, William (eds.), Cold War Endgame: Oral History, Analysis, Debate. U.S.A.: Penn State Press, 2010.
- Glass, Andrew. “Bernard Baruch coins term 'Cold War,' April 16, 1947,” April 16, 2010, https://www.politico.com/story/2010/04/bernard-baruch-coins-term-cold-war-april-16-1947-035862 (accessed March 8, 2019).
- Hanson, Philip. The Rise and Fall of The Soviet Economy: An Economic History of the USSR 1945 – 1991. U.K.: Routledge, 2014.
- Laura Cummings, “Gorbachev’s Perestroika and the Collapse of the Soviet Union.”
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