Some commentators may find it highly comforting to take the view that the agreements signed at the Moscow summit only reflect the decisive shift in the balance of world forces against the capitalist West in favour of the socialist bloc. In reality the situation is much more complex. While the Soviet Union has achieved parity with the United States in the military field, the former continue to lag behind the latter in the economic field.
The Soviet Union’s desperate anxiety to secure massive credits from the United States, Japan and Western Europe, and to gain access to their technology and markets provides a more eloquent commentary on the relative strength of the two economic systems than any amount of partisan propaganda. Whatever gloss may be put on it, the fact remains that the Soviet Union is more than willing to expose itself to what Marxist-Leninists have described as neo-colonialist exploitation. It wants to import computers, complete plants and sophisticated machine tools from the industrialised West and Japan and pay for them by exporting gas, oil, timber and other raw materials.
On the face of it, this is a baffling phenomenon. A country which has produced powerful rockets and nuclear weapons should not ordinarily find it impossible to cope with the problems of the technological revolution. But a closer look at the state of Soviet economy will show that the men in the Kremlin are being only realistic in acknowledging that they need to strengthen ties with the United States, Japan and Western Europe so that the technological gap between them and their country does not continue to widen day after day.
Two Economies
The Soviet Union runs two parallel economies, military and civilian, and there is hardly any exchange of information and knowledge between the two. As Mr Sakharov, father of the hydrogen bomb, has pointed out more than once, security requirements and irrational methods of control make that impossible. If the first is fairly efficient in terms of results if not of costs it is because it has not been short of resources and because it has not been subject to the crippling bureaucratic controls which are the hallmark of centralised planning. The second is highly wasteful and inefficient.
It produces shoddy goods which the Russian people do not want to buy. The Soviet leadership itself knows it and acknowledges it despite the claims it makes every now and then in the interest of propaganda.
Western economists are convinced that the Kremlin cannot master its present economic difficulties merely by importing designs, plants and machinery and that it will have to reform, almost overhaul, the entire system if it is to reduce the wasteful and inefficient use of resources and meet the growing demands of its people for consumer goods. In view of past experience, this assessment cannot easily be dismissed. In any case, the balance of forces in the economic field has not shifted against the capitalist West and in favour of the communist group of nations. This overall picture will not change even if China is included in the list.
Thus one of the basic assumptions of Soviet foreign policy has not been fulfilled, not so far at any rate. This was stated by Stalin as early as 1972 and has since been repeated time and again by his successors. Stalin told a delegation of American workers: “In course of further development of international revolution, there will emerge two centres of world significance: a socialist centre, drawing to itself countries which tend towards socialism and a capitalist centre, drawing to itself countries which incline towards capitalism. The battle between these two centres for command of world economy will decide the fate of capitalism and of communism in the entire world.”
He had, of course, no doubt that victory will go to the Soviet side because it represented the wave of the future according to the laws of Marxism-Leninism. Mr Khrushchev, too, shared this naive optimism. Mr Brezhnev, Mr Kosygin and Mr Podgorny did not repeat his boastful claim that the Soviet Union would overtake the United States by 1970. But they too have talked of rival centres and the shift in the balance of world forces in their favour.
Impregnable
As things have turned out, while Moscow has made itself impregnable against invasion and acquired the capacity to project its power all over the world, it has not won the “battle for command of world economy.” It has in fact not been in a position to engage in such a contest. The attempt it has made to integrate the economies of Eastern European countries with its own should not be confused with the “battle for command of world economy,” especially as the nations in question are keen to secure capital, technical knowledge and trading facilities from members of the Common Market in order to modernise their economies.
The Soviet Union has also extended valuable assistance to countries of the third world by way of loans, technical know-how and trade and thus helped them to shake off Western dominance and improve their bargaining capacity vis-a-vis Western firms and governments. India has been one of the major beneficiaries of this policy. But no useful purpose is served by ignoring the stark fact that Soviet capacity to help developing countries is limited, that it and its socialist allies have accounted for only 10 per cent of the assistance to them and that the economic content of the aid has tended to shrink rather than expand in recent years.
The Soviet Union’s chief rival, the United States, has clearly suffered a certain loss of self-confidence as a result of its failure to win the war in Viet Nam and it no longer regards it its manifest destiny to serve as the world’s gendarme. It has also been compelled to devalue the dollar. But America’s mistakes, failures and difficulties cannot in all honesty be interpreted to mean that the capitalist system as such faces a crisis. It cannot even be said that the United States has lost the leadership of the capitalist world. Two points should be recognised in this connection.
First, the dollar has had to be devalued, not because of the strength of the rouble, but because of the failure of US industries to compete effectively either at home or abroad with the products of America’s European and Japanese allies. Washington’s expensive overseas military commitments have added to America’s economic problems.
Secondly, the United States remains far ahead of its economic partners and rivals in the twin fields of technology and management so much so that American corporations continue to make valuable contribution to the growth of new industries in Western Europe. The French government has in principle been opposed to the growth of American investments in that country. But it, too, has found it expedient not to put too many obstacles in the path of giant US corporations because it knows that by doing so it will fall behind its competitors in the European Economic Community in key and fastest growing sectors of the economy.
If this statement of the relative strength and performance of the two economic systems and of Moscow’s need for Western and Japanese capital and technology is accepted, one startling inference becomes inescapable. It is that instead of being a rival centre of economic power, the Soviet Union is likely to be gradually sucked into the capitalist system as it expands its economic ties with the West and Japan. The process will inevitably be resisted by conservative and nationalist forces in Moscow which strongly believe in autarchy and it will span decades rather than years. But over the long haul it appears irreversible. Orthodox men belonging to the military-industrial complex, who will enjoy considerable power and influence in the Kremlin, can arrest it but only temporarily. In the long run economic compulsions are likely to prevail, particularly if China forges ahead fairly rapidly and establishes meaningful economic relations with the United States, Japan and the EEC.
Breath-taking
All this is not to underestimate Soviet achievements. These have been truly breath-taking in the military field. The very fact that the United States has found it necessary to concede its claim to nuclear parity, to acknowledge that Eastern Europe falls within its sphere of influence and to seek its co-operation in defusing the conflicts in West Asia and Indochina, speaks for itself. Similarly, it is a tribute to Soviet power that Bonn has signed and ratified treaties which confer de jure recognition on the division of Germany and Poland’s post-war frontiers which incorporate chunks of German territory. China may claim that the present Soviet borders are the result of unequal treaties which the Czars imposed on its rulers in 1850 and 1860. But it dare not challenge these frontiers on the ground. All in all for the first time in Russia’s long history, the country has become invulnerable to external attack and come to occupy in the world community the place to which it is entitled by virtue of its size and resources.
This fulfilment of Russia’s long-standing desire to be a great power has clearly transformed the world scene. It has, for instance, made it impossible for the West to impose its will on under-developed countries. But these achievements, however remarkable, have been based on what has aptly been described as the “primitive accumulation of capital.” The country is yet to march into the post-industrial technological age as the United States has done and other advanced nations promise to do in coming years and to evolve institutions which are capable of coping with the immense problems of the new era
The Times of India, 7 June 1972