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Reluctant Cold War Warriors: Economists and National Security

Author(s):Kontorovich, Vladimir
Reviewer(s):Bollard, Alan

Published by EH.Net (March 2022).

Vladimir Kontorovich. Reluctant Cold War Warriors: Economists and National Security. Oxford: Oxford University Press, 2019. xiii + 266 pp. $78 (hardcover), ISBN: 9780190868123.

Reviewed for EH.Net by Alan Bollard, Professor of Economics, Victoria University of Wellington

Throughout the Cold War there was an intense focus on the Soviet Union – how big, how prosperous, and how aggressive it might be. The group of economists in universities, think tanks, and the US Administration especially its intelligence agencies, who studied this problem were called ‘Kremlinologists’ or ‘Sovietologists’. Winston’s Churchill’s quote about the Soviet Union being ‘a riddle wrapped in a mystery inside an enigma’ presented a challenge to these analysts – a huge economy, with a radically different economic system, apparently successful in its military production but less so in consumer economics, with much essential data and policy intentions cloaked in secrecy. Some of these analysts were émigré Russians or from émigré families, bringing inside knowledge about the economy, Russia’s language and institutions, and also intense personal experiences. Other analysts belonged to the Cold War Warrior schools, skilled in new mathematical techniques and raised in an environment of nuclear competition.

This book is an exercise in economic historiography – what did Sovietologists know about the Soviet economy, what were they ignorant of, and what biases did they bring? The author is well-positioned to answer these questions – Vladimir Kontorovich was educated in Novosibirsk, a Cold War ‘academic city’ in the Soviet Union, and is now a professor of economics in the US and has published widely on the Soviet economy. To him ‘the Soviet economy was the greatest economic experiment in history,’ and given its scale of ideological and institutional disruption and its radical allocation techniques, it represented a challenge to Western economic understanding. This book is a case study in economist adaptation.

The Soviet economic system was designed in the 1920s, and by the 1930s it was attracting wide interest for its central planning and high economic growth during a period of world depression. At this time most Western reporting was impressionistic and journalistic. The major academic debate sparked by Ludwig von Mises about the efficiency of socialist planning versus capitalist markets took place with little institutional reference to the Soviet economy.

Serious Western research started with World War II, and the concern of the OSS (the wartime forerunner of the CIA) over the capacity of the Soviet economy to sustain German invasion. Kontorovich cites US-based economists Abram Bergson and Alexander Gerschenkron as key founders of Western economic Sovietology. After the war, US Cold War concerns over Soviet nuclear capability led to more funding and more concerted work on the Soviet economy and its ability to compete. By the post-Sputnik era there were questions about possible Soviet economic leadership. By the later 1970s the country was seen as less of an economic threat and Sovietology went into decline.

Kontorovich surveys a large literature on the Soviet economy. There were big discrepancies in estimates of Soviet GNP. He concludes that many researchers underestimated the strength of the Soviet economy over the period 1960 to 1990; estimates from the CIA, considered at the time as being ideologically driven, were probably more accurate than those of many independent researchers.
He also argues that the Soviet military sector did not get the attention it deserved from Sovietologists. Admittedly it was hard to do this – Soviet official estimates of their military sector were suppressed or conflicting, there were different costing techniques, data quality was poor, and modelling techniques inconsistent. This brought unreliable estimates of what he calls the ‘burden of defence,’ i.e., military expenditure as a percentage of GDP, extremely high during World War Two but still high in later decades. The author provides considerable detail on the defence establishment, its supply industries, control systems, closed cities, and skilled workers.

To demonstrate the lack of attention to this key sector, he surveys several hundred books and over a thousand articles on the Soviet economy mainly by Westerners, even counting chapter numbers, page numbers and index references, to show the gap in focus. Kontorovich argues that the Soviets signalled the importance of military expenditure and its associated heavy industry production, but Sovietologists frequently failed to pick up on these transparent objectives, and data was not always as secret as claimed. He argues that ‘Sovietologists belonged to a small, low-prestige, precariously established field of economics.’

He makes these points convincingly, but at times the argument is pedestrian and unnecessarily long-winded. There are tables that cite the number of chapters, index references and page numbers relating to the military sector, drawn from several hundred books and over a thousand articles. His bibliography is 40 pages long. The arguments are heavy-handed, though convincing.

Nevertheless, this is an important book. The invasion of Ukraine by Russia at the time of this review opens up similar questions about the relative size of the Russian military sector – much smaller than in the Cold War Soviet Union, but much larger than most OECD countries. Do we still share the ignorance about Russia’s military effectiveness, geopolitical objectives, and political control systems that Kontorovich laments during the Cold War?

This book could also serve as a guide for the more recent profession of ‘Pekingologists,’ who study the rapidly growing economy of China, important for its trading implications, its financial reach and its potential military power. Kontorovich shows how academic herd behaviour, data gaps, policy secrecy, and lack of institutional understanding of a country’s characteristics, can lead to poor decision-making in the West, and US President Donald Trump has showed us the risks of that.

 

Dr. Alan Bollard is Professor of Economics at Victoria University of Wellington, New Zealand. He is the author of Economists at War: How a Handful of Economists Helped Win and Lose the World’s Wars (Oxford University Press, 2020) and is currently writing a book on economists during the Cold War.

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Subject(s):Development of the Economic History Discipline: Historiography; Sources and Methods
Economic Planning and Policy
Economywide Country Studies and Comparative History
History of Economic Thought; Methodology
Military and War
Geographic Area(s):General, International, or Comparative
Europe
North America
Time Period(s):20th Century: WWII and post-WWII