Reassessing Cold War Europe

Sari Autio-Sarasmo, Katalin Miklóssy, Sari Autio-Sarasmo, Katalin Miklóssy

• Editorial: Routledge
• Año: 2010
• ISBN:
  9781136898341
• Edición: 1
• Categoría: History
• Categoría: European History

This book presents a comprehensive reassessment of Europe in the Cold War period, 1945-91. Contrary to popular belief, it shows that relations between East and West were based not only on confrontation and mutual distrust, but also on collaboration. The authors reveal that - despite opposing ideologies - there was in fact considerable interaction and exchange between different Eastern and Western actors (such states, enterprises, associations, organisations and individuals) irrespective of the Iron Curtain.

This book challenges both the traditional understanding of the East-West juxtaposition and the relevancy of the Iron Curtain. Covering the full period, and taking into account a range of spheres including trade, scientific-technical co-operation, and cultural and social exchanges, it reveals how smaller countries and smaller actors in Europe were able to forge and implement their agendas within their own blocs. The books suggests that given these lower-level actors engaged in mutually beneficial cooperation, often running counter to the ambitions of the bloc-leaders, the rules of Cold War interaction were not, in fact, exclusively dictated by the superpowers.

1
The Soviet Union’s acquisition of Western technology after Stalin

Some thoughts on people and connections

Philip Hanson

Like other late-developing countries, the Soviet Union got part of its economic growth from the absorption and diffusion of technologies already in use in more advanced nations. During the Cold War this was an especially contentious process. My aim in this chapter is to give an account of some of the actors and actions involved in technology transfer in that period, both those actors and actions involved in cooperation across the East–West divide and some of what might euphemistically be called unilateral activity – in other words spying.

The channels by which the transfer of technology occurs are many. Some channels, such as the purchase of machinery embodying technology new to the importing country, or the purchase of licences on such technology, involve a buyer and a (legal) seller and therefore require the willing participation of firms controlling the technologies concerned. These I have called ‘negotiable’ channels. Other channels, such as copying or reverse engineering, that is taking a single foreign machine and working back from it to a design on which to base one’s own production, or industrial espionage we might classify as non-negotiable: they occur without the participation of the owner of the technology, and often without their knowledge.

In Stalin’s time, apart from a spurt of turnkey projects and other large contracts with Western firms in the First Five-Year Plan, and then a flow of the United States Lend-Lease supplies of equipment during World Wa-II, non-negotiable channels predominated. But soon after the death of Stalin in 1953, the Soviet Union began to open up to the outside world. Commerce with the more developed West expanded and negotiable channels of technology importation became more substantial.

My aim in this chapter is to characterise some of the human connexions involved in post-Stalin transfer of technology from the West to the Soviet Union. This is part of the micro-level analysis that is one of the objectives of this volume. I will look at examples in two main areas: negotiable transfer in the form of the import of advanced capital goods (‘embodied technology’) and non-negotiable transfer in the form of industrial espionage. In each case the focus will be on communication, both East–West and within the Western and Soviet communities involved: who negotiated what with whom, and how? How were objectives and constraints decided upon? How were objectives implemented?

The next section gives some basic information on technology flows into the Union of Soviet Socialist Republics (USSR), mainly from the late 1950s to the early 1980s, with some assessment of the impact of such flows and the role of the Western strategic embargo. Much of the information is based on Soviet sources: Soviet press reports and discussions, Soviet foreign-trade data and other Soviet economic statistics. The sections that follow are reviews of the players involved in some particular stories and their roles: in the negotiable supply of technology mainly to the civilian economy and in the non-negotiable military–industrial espionage revealed in some Soviet files (more precisely, in the contents of those files to which I was given access in the mid-1980s).

In writing this chapter I have drawn on work I published in the 1980s, on the economics of Western technology transfer to the Soviet Union, and I have added some preliminary material on the roles played by a handful of interesting individuals.

What I have added to earlier analyses is an account of individuals’ involvement in East–West economic cooperation, drawn mainly from memoirs and biographies. I stress the roles of networks, primarily on the Soviet side and in the United Kingdom.

Soviet technology acquisition from the 1950s to the 1980s: stimuli, constraints, dimensions and impact

It has been persuasively argued that a centrally planned economy will exhibit an aversion to foreign trade in comparison with a market economy of similar size, resources and development level.¹ For the central planner, foreign sources of supply and demand have an obvious disadvantage: they are not under the planner’s administrative control. Foreign trade partners, at any rate outside the Council for Mutual Economic Assistance (CMEA) trading bloc of allied communist countries, cannot be told what to produce and offer and what to purchase; all domestic enterprises, in Soviet-type planning, could be told exactly what to do, and where. They may not always have done what they were told, but they were there in the plan. Foreign firms introduce an element of uncertainty into a Soviet-style national plan.

This logic is powerful. It clearly operated at the upper levels of the planning process, among political leaders and State Planning Organization (Gosplan) staff. There were screening rules that sought to exclude the acquisition of production inputs from abroad if it could be shown that they were available domestically.² But this was not the whole story. After Stalin, with terror relaxed, planning became, to a greater extent than before, a process based to some degree on meeting demands from ‘below’ – from enterprises.

Soviet production enterprises, under Khrushchev, Brezhnev and their successors, had good reason to try and get the planners’ permission to acquire foreign machinery and, in some cases, current material inputs. They were being given output targets that usually increased year by year; often they were instructed to upgrade quality or to introduce some product that was new to them. Their potential domestic suppliers were in practice apt to be late in supplying what was ordered, lax in quality control, behind the West in technology, and not responsible for after-sales service, maintenance and the supply of replacement parts. Western suppliers sought profit, were driven, by and large, by competition and were subject to the discipline of real contract obligations. At the micro-level, therefore, they were generally more attractive as suppliers. And money was no object to the Soviet enterprise: once an input was written into the plan, the funds to pay for it were included, too. Therefore it is reasonable to suppose – and the Soviet press was full of anecdotal evidence to support this – that bids for foreign inputs to be incorporated in the plan were plentiful.

When it came to exports, the opposite applied. There were special material incentives for undertaking and completing an export order, but the usual perception of an enterprise director was that the costs exceeded the benefits. You would have to meet, in practice, more stringent quality standards than for domestic deliveries; you would be penalised for failing to meet delivery dates, and – horror of horrors – foreign customers expected after-sales service. It was a common observation in Soviet writings that being given an export contract was seen as a punishment. This is possible to see for example in the writings of Nikolai Smelyakov, a Deputy Minister of Foreign Trade.³

At the lower levels of the hierarchy, in other words, the system was export-averse but import-inclined. Insofar as branch ministries sought to make life easy for ‘their’ enterprises – and post-Stalin they generally did – enterprise preferences got transmitted up to the central planners by those ministries. At that higher level, therefore, the planners faced a pressure from below that tended towards a deficit in the trade balance. Soviet planners and top policy-makers were financially conservative, so they fought against this pressure. The balance of convertible-currency payments exercised a major constraint on the commercial acquisition of technology from the West. Finland was a bilateral-settlement trade partner, so imports of Finnish machinery were constrained separately by the overall levels of transactions that could be balanced between the two countries.

Basically, the planners rationed ‘hard-currency’ imports. There were also some more subtle ways of making ends meet. A ministry or an enterprise could be told to tie exports to its imports. This could hardly work by mere instruction. But if you could arrange a ‘product payback’ deal, in which the foreign supplier of, say, an ethanol plant accepted repayment in some of the resulting ethanol, this would allow a useful import that paid for itself and linked up the incentives on both sides of the deal. Another example, that became politically contentious in the 1980s, was gas-for-pipeline contracts: imports of large diameter pipe paid for by some of the increased flow of gas for export through the resulting pipeline.

There were limits to these product payback deals, however. Often a Western machinery supplier was not in the business of handling the product from its machinery, and had to bring in a third party to make the transaction stand up – which increased the cost of the deal. In general, the import of machinery and licences was constrained by the planners’ aversion to building up foreign debt and by the exigencies of other import requirements – such as grain.

Another constraint on the commercial, negotiable acquisition of machinery and licences was the Western strategic embargo, operated by the Coordinating Committee (CoCom) of NATO member-states less Iceland plus Japan. The United States also had a national Commodity Control List that was somewhat longer than that by which CoCom was supposed to be guided.⁴

The strategic embargo was meant to prevent the delivery to potential adversaries of items that could more or less directly enhance their military capabilities. It extended beyond weapons systems or other military materiel to what are known as ‘dual-use items’, so quite a range of non-military items were on the list. Special permission from CoCom was, in principle, required for any sale of such dual-use items to Warsaw Pact or other communist countries. Neutrals such as Finland or Austria were not members but were still subject to CoCom influence; as a rule European companies, even in non-CoCom countries, did not want to jeopardise relations with the United States.⁵ They operated with three control lists: the International Munitions List, the International Atomic List and the International Industrial List. Firms based in any CoCom country were simply not supposed to export to the Soviet Union or to other communist countries any items on the first two lists. Items on the Industrial List (dual-use items) were subject to scrutiny and their export might be allowed on a case-by-case basis. In 1985 the British version of the Industrial List ran to 62 closely printed pages, about 40 of which covered electronics, computing and telecommunications. At that time the delegations’ meetings were reviewing about 100 proposed export deals a week. Agendas and minutes were not published.

What proportion of Western exports had passed through this process and been approved is unknown. For the United States in the late 1970s it was about 4 per cent but a large share of US exports to the Soviet Union consisted of farm products. The equivalent figure for Europe would be higher.

In principle, the focus of CoCom restrictions was narrow: only those items that might directly enhance Warsaw Pact military capabilities were to be excluded from trade. An example of a generally-accepted approval was the advanced machine-tools destined for AvtoVAZ. Apparently, CoCom scrutiny determined that these could indeed be used in the production of cars but could not be adapted for use ...