The 'debate' and the better turn which Alan Specter has given it
prompts me to submit something perhaps relevant thsat i just prepared for
another net. there was an appendum too, which i haven found yet.
gunder frank
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Andre Gunder Frank
University of Toronto
96 Asquith Ave Tel. 1 416 972-0616
Toronto, ON Fax. 1 416 972-0071
CANADA M4W 1J8 Email agfrank@chass.utoronto.ca
My home Page is at: http://www.whc.neu.edu/whc/resrch&curric/gunder.html
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---------- Forwarded message ----------
Date: Fri, 16 Jan 1998 16:21:22 -0500
From: "A. Gunder Frank" <agfrank@chass.utoronto.ca>
To: Andre Gunder Frank <agfrank@chass.utoronto.ca>
Subject: soviet reply
Ray Smith's January 16 contribution to the matter of "The
collapse of the USSR" prompts me to put in my own two cents
worth. First an agreement with Smith: It is indeed true that
defense expenditures were increased already under President
Carter. But his claim is not true that they only followed the
Soviet invasion of Afghanistan, which was in December 1979. For
already a half year and more earlier, Nixon's detente was
replaced by the "New Cold War" when NATO decided to increase
expenditures by 3 percent not counting inflation, instituted the
"two track" policy of negotiating with these expenditures and the
placement of cruise and other missles in Europe, and the United
States played its "China card", all of which is a matter of
public record and to which the Soviet invasion of Afghanistan was
a response. Smith and his colleagues may not have been privy
either to all the ins and outs of the new US Strategy, but Sean
Gervasi [alas now deceased] some years ago published citations
from previously secret U.S. government documents that concretely
outlined a deliberate strategy to use Star Wars and other defense
expenditures in order to spend the USSR into bankruptcy and
collapse. As I will argue below however, beyond this
'ideological' competition with the Evil Empire, Reaganomic
Military Keyenseanism also had domestic and world economic
purposes and functions.
I do that by direct quotation of excerpts of two recent articles
of mine, the first "The Cold War and Me" [BULLETIN OF CONCERNED
ASIAN SCHOLARS 29:3, July-Sept. 1997: 79-84 and expanded version
on their webpage http://csf.colorado.edu/bcas ] and my variously
titled "Soviet and Eaast European 'Socialsm': A World Economic
Review of What Went Wrong" and "The Thridworldization of Russia
and Eastern Europe" published in REVIEW OF INTERNATIONAL
POLITICAL ECONOMY I,2,April 1994:113-57, and in M. Mesbahi Ed.
RUSSIA AND THE THIRD WORLD IN THE POST-SOVIET ERA, Gainsville:
University Press of Forida 1994:45-72, which also contains the
chapter by V. Kublakova cited below.
A Mexican newspaper headline claimed that "Gunder Frank Predicted
the Fall of the Soviet Union." That is an exaggeration, but a
friend from Hungary told others and me at the 1997 meetings of
the International Studies Association that I was the only person
who had correctly analyzed the political economic process and its
outcome in his country and Eastern Europe. However that may be,
Vendilka Kublakova (1994) observed in her "Requiem for the Soviet
Union" and for Soviet studies that at least I did better than the
consensus among Western cold war Sovietologists, including many
who became media personalities whose tunnel vision made them see
only what they and their cold war conditioned public wanted. More
often than not she observes, events including finally the sudden
demise of their very subject matter itself arrived unforseen out
the blue and were inexplicable within their Sovietology paradigm.
Since then it "has become an easy target for ridicule;
collections of misguided predictions made by leading
Sovietologist now are considered amusing reading" (ibid. 29).
My analysis, on the other hand, situated the Soviet Union, but
also China and other 'socialist' countries, within the world
economy and subject to its imperatives, which conditioned and
shaped their policies just like anybody elses. Thus already in
1972 and again in 1976 under the title "Long Live
Transideological Enterprise! The Socialist Countries in the
Capitalist International Division of Labor" I argued that there
is only ONE world economic system and that the 'socialist'
countries were rapidly being 're'-integrated into it. In still
another conflict with the orthodoxies of the cold war on both
sides, I found and denounced it more and more as a snare and a
delusion. I lectured and wrote how American interest groups were
using and in every recession escalating the cold war to promote
their own economic interests not only in the Third World but in
the increasing competition that the deepening world economic
crisis generated with Western Europe and Japan.
Part of this analysis was my 1983 book The European Challenge,
which argued that, all ideological differences notwithstanding,
East and West Europe could and would be again be united, but with
the East dependent on the West. Extending the same argument at
the beginning of the last recession in early 1989 and still
before the Berlin wall came down, I argued for eastward expansion
of the European Union by 1992.
So WHAT WENT WRONG in the Socialist East? The usual answers range
from "everything" by opponents to only "Stalinism" or even
"nothing" according to erstwhile believers and/or supporters. The
answers cover policies or ideologies and periods ranging from the
first Soviet government and revolution in 1917 [or even earlier
from the birth of Marxism in 1848] to those of the last
government and reforms of Mikhail Gorbachev since 1985. About
this last Soviet period also, the answers range from the "if it
ain't broke, don't fix it" position of those who thought nothing
much was wrong to that of pronouncing the whole "system" as
unworkable. Many critics in between, like Gorbachev (1987)
himself, recognized failures and the need for some change like
perestroika, but not complete transformation. Other critics,
however, regard Gorbachev's reform efforts to fix things as
themselves misguided and literally counter-productive. Some of
these critics argue that were it not for Gorbachev's own policy
errors, the Soviet Union and its economy could have survived for
some time if not indefinitely. Among these critics are Ellman and
Kontorovich (1992) and Menshikov (1990, 1992).
All these answers and others like them are at best half truths,
of which the old adage has it that they are worse than none at
all. All these answers fall very short because 1. they focus
primarily if not exclusively on ideological reasons attributed to
"socialism", and/or 2. they are concerned primarily with
"organizational" and policy failures inside the Soviet Union and
Eastern Europe, and 3. they leave real world economic reasons out
of consideration completely or essentially. I contend that the
answer to the question of "what went wrong" must be sought much
more in the material reality of our one world economy than in any
ideological discourse about "socialism" or even policy in the
former Soviet Union and Eastern Europe.
To begin with, these regions entered the competitive development
race under the "socialist" flag with an enormous historical
handicap in their starting positions within the world economy.
>From a real[istic de-ideologized] world economic perspective, the
efforts in the Soviet Union and Eastern Europe were [much] less
to build "socialism" as to catch up. For a while, they seemed to
succeed -- before they failed. However, not so much the now
universally faulted and rejected ideological "socialism" or
political "planning" but much more the historical economic
differences and still contemporary relations between the two
parts of Europe in the world economy is responsible for the
backwardness of the East.
The same problem obtains a forteriori in the Soviet Union. A few
parts of Russia and the Ukraine were westernized by Peter the
Great and industrialized by him, Witte, and Stalin. But most of
the former Soviet Union at best still has a third world economy,
like Brazil, India, and China, which also have industrial
capacities, especially in military hardware. The Transcaucasian
and Central Asian regions are not even likely to be Latin
Americanized, but rather economically more Africanized or, God
forbid, politically Lebanonized like the former Yugoslavia. From
there, war and "ethnic cleansing" may soon srpead elsewhere
through the Balkans, and already offers a bitter foretaste of the
foreseeable future for many of the peoples.
The revolutions of 1989 in Eastern Europe and the breakup of the
Soviet Union were not so much responses to supposed differences
between economic and political policies between the "socialist"
East and the "capitalist" West. These revolutions were more the
consequences of their participation in a single world economic
system and its present world economic crisis. The world economic
crisis spelled the doom of the "socialist" economies, much more
than their "socialist planning" "command economy," which is now
almost universally blamed for the same. Not unlike the "Third
World" economies of Latin America and Africa, the "second world"
economies of the Soviet Union and Eastern Europe were unable to
bear the pace of accelerated competition in the world economy
during this period of crisis. Like every previous one, this
economic crisis forces one and all to restructure economically
and to realign politically. It is true that economic command
organization and political bureaucracy were instrumental in
depriving economies in Eastern Europe and the Soviet Union from
the flexibility necessary for adaptation to the world economic
crisis and the technological revolution and restructuring, which
that same crisis engendered elsewhere.
But both the "market" and the "arms race" also intervened
directly in Soviet economy and society. Halliday [p.129]
correctly notes that the rise in the price of oil gave the USSR a
windfall profit. However, he conveniently disregards that the
same imposed an unexpected stormy cost for oil importing
countries in Eastern Europe and that the renewed decline in oil -
and gold - prices since 1981 deprived the Soviet Union of the
much needed foreign exchange. It was generated by the oil and
gold exports, which were over 90 percent of its hard currency
earners in this market, which according to Halliday did not
intervene in Soviet economy or society!
In the United States, the same monetary and fiscal policy begun
by President Carter continued, except that now it was called
"Reaganomics" and functioned through "military Keynesianism" or
"Star Wars." Reagan's renewed increase of military expenditures
[coming on top of Carter's] generated the famed American "twin
deficits" in the federal budget and the foreign current account.
This U.S. deficit spending was necessary not only to keep the
American economy, but to keep the entire Western economy afloat
during the 1980s. This world economic imperative and the always
uneven distribution of its costs benefitted parts of the West,
including Western Europe, Japan and the East Asian NICs who were
dependent on the American market. However, it was this same world
monetary and fiscal policy that pushed Latin America, Africa,
Eastern Europe AND the Soviet Union into an economic depression,
which is already more severe than that of the 1930s. A major, but
always unmentioned, difference between the Soviet Union and
United States in the 1980 was that the former had no one to bail
it out of bankruptcy, while the latter received massive capital
contributions from Western Europe and Japan, and involuntarily
through debt service from Latin America, to plug up the American
foreign trade and domestic budget deficits, which were generated
by Star Wars. So, Halliday and many others could not be more
mistaken in claiming that the [world] market did not intervene in
Soviet economy or society and their collaspe.