One Cold War, Two Losers

SUNDAY'S New York Times editorial, "The Cold War is Over," rightly suggests that "Soviet-American relations are entering a new era." Regrettably, the piece did little to explain what lay behind the current shift in East-West relations or what lies ahead for the two superpowers.

Many observers--including the author of the Times piece--see these sudden and unexpected changes and reforms as wholly or primarily symptomatic of Gorbachev's unilateral initiative to "reduce the burdens and the risks" of the East-West confrontation.

But Gorbachev's reforms and initiatives--which include pulling out of Afghanistan, signing the INF, adopting hard-line budgeting, providing more and better consumer products and importing Coca-Cola, Billy Joel and openess--are themselves symptomatic of a dilemma which looms large in Kremlin minds. The Soviets are coming to grips with the fact that they cannot economically or politically afford to keep up the arms race and their policy of expansion at the expense of domestic priorities.

Coming out of World War II the United States, led by Harry Truman, reached a consensus shared by both Democrats and Republicans. Rather than forcefully knocking out a Soviet Russia tired and spent by Hitler's Wehrmacht, the U.S. instigated a policy of containment in response to the expansionist foreign policy pursued by the Soviet Union. The mutually exclusive nature of these stances led to the Cold War, which has been fought in Korea, the Bay of Pigs, Vietnam, Nicaragua and Afghanistan.

More importantly, the Cold War initiated a costly arms race--a war of economic attrition which the weaker Soviet economy has been unable to win--leading to the Gorbachev "reforms." The political and economic costs of the arms race and Soviet expansionism--and the realization that these policies cannot be continued with out doing great harm to the Soviet economy and regime--are what ultimately lie behind recent Russian reforms.

TO be sure, the costs of this military buildup have been immense on both sides, and in the end this may be a Pyrrhic "victory" for the U.S. The money which the Pentagon has consumed coupled with general American consumerism, has left little for the levels of investment needed to maintain American economic--and thus, over the long term, diplomatic and military--hegemony.

If the Soviet economy is not productive enough or big enough to provide for both military and consumer spending, the U.S. economy is not productive enough or big enough to support military and consumer spending and longterm economic infrastructure and human resource investment.

The result is that the Cold War and consumerism has diverted so much American money and attention from material and human resource development that early 21st-century America will almost certainly be affected adversely at home and abroad. But, then again, all this is in the future. And even doomsayers say that this foreseeable, unagreeable American future is (theoretically, at least) still largely avoidable.

For the Soviet Union, the story is different. The USSR's smaller economy has been unable to support both a military buildup and a high standard of living. Although the Soviets devoted up to twice as much of their (smaller) GNP to the conventional and nuclear arms race, the U.S. could match this expenditure and still have enough "spare GNP" for toasters, cars, VCRs and CD players.

OF course the only way for the Soviets to maintain their military buildup at the expense of their own peoples standard of living was to erect a totalitarian system. This system ultimately wasted more precious Soviet resources for the upkeep of a massive and unproductive surveillance state which further debilitated Soviet capacities.

Even more important, as Moscow has recently discovered, the totalitarian solution cannot work indefinitely. Sooner or later the sacrifice of individuals standards of living leads to domestic problems: low work incentives, low labor productivity, economic stagnation and eventually, as events prove, domestic turmoil.

Pushing the relatively weak Russian economy to keep up with the American arms buildup (redoubled in the '80s) and underwrite expansionism has led the Soviet Union into dire straits and the desire to lower the level of the arms race--an option made possible since U.S. policy is committed to the "containment" and not the "rollback" of Communism.

In short, the rise of the new era in East-West relations is not due to some new-found good intentions in the Kremlin but rather to the fact that Gorbachey sought a solution to problems--created by long-term American post-war policies--immediately besetting the Soviet Union.

The possibility of a hardliner backlash notwithstanding, one can see that the Soviets have been the short-run losers of the Cold War. In a war of economic attrition they could not keep pace with the rival U.S. and they are now reconsidering the wisdom of continuing their post-war policies.

But before one goes on to call the U.S. the victor, one should consider whether, in the end, the Cold War has not left this nation with a fatally wounded economic infrastructure--allowing it to walk off the field of the Cold War today perhaps, but only to slowly bleed in relative decline tomorrow.

The Cold War has drawn the blood of both superpowers. The Soviets have already realized that their wounds are too serious to ignore much longer, and seem to have beaten an unwanted but tactical retreat. The United States, while maintaining a vigilant attitude, should now pay attention to its own different wounds--a fatal lack of long-term economic, industrial and human investments--before it is too late. Indeed, it may already be.