Western Doctrines on East-West Trade: Theory, History and Policy PDF
Preview Western Doctrines on East-West Trade: Theory, History and Policy
WESTERN DOCTRINES ON EAST-WEST TRADE Western Doctrines on East-West Trade Theory, History and Policy Peter van Ham Researcher, Dept. of Political Science University of Leiden, The Netherlands M MACMILLAN © Peter van Ham 1992 Softcover reprint of the hardcover 1st edition 1992 All rights reserved. No reproduction, copy or transmission of this pUblication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988 or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 33-4 Alfred Place, London WCIE 7DP. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. First published 1992 Published by MACMILLAN ACADEMIC AND PROFESSIONAL LTD Houndmills, Basingstoke, Hampshire RG21 2XS and London Companies and representatives throughout the world Edited and typeset by Grahame & Grahame Editorial, Brighton British Library Cataloguing in Publication Data Ham, Peter van Western doctrines on East-West trade: theory, history and policy. 1. Eastern Europe. Foreign trade. I. Title. 382.091713047 ISBN 978-1-349-12612-5 ISBN 978-1-349-12610-1 (eBook) DOI 10.1007/978-1-349-12610-1 Contents List of Figures and Tables Vll Preface Vlll General Introduction 1 Part One 1 Economic Interdependence: The Functionalist View on East-West Economic Relations 21 2 The Origins of Economic Interdependence: A Historical Note on Peace Through Trade 35 3 Lloyd George's Option: Trading the Soviets into Civilization 44 4 Creating Trust and Understanding: Aid to the Soviet Union 58 5 Economic Convergence: 'These Things Too Shall Pass Away' 70 6 Economic Interdependence as a Strategy: German Ostpolitik Since the Late 1960s 81 Part Two 7 Economic Containment: The Strategic View on East-West Economic Relations 97 8 The Origins of Economic Containment: From Cordon Sanitaire to Iron Curtain 110 9 Economic Security and the Cold War: Selective Peace and Prosperity 123 10 Economic Warfare: Better Safe Than Sorry 138 v vi Contents 11 The Strategic Embargo: Western Economic Defense 156 12 Economic Linkage: What to Link? 171 13 Economic Strategies of Differentiation: Evoking the Yalta Myth 186 Part Three 14 Conclusions 203 Notes 213 Bibliography 256 Index 270 List of Figures and Tables Figures A Explaining foreign policy actions in terms of beliefs and doctrines. 3 B Major premises of the belief systems underlying the alternative Western doctrines on East-West economic relations. 7 C Axis of premises underlying Western economic doctrines. 11 n 5.1 The confluence of economic orders through time. 7.1 The correlation between the supply effect and influence effect of East-West trade. 102 11.1 Premises of the scope of the Western strategic embargo on East-West trade. 159 Tables A Divergent economic interests: exports to the USSR (1983). 13 8.1 Value of foreign trade of Russia (in millions of rubles). 116 vii Preface Why do we study Western doctrines on East-West trade? The simplest answer would be that trade with the Soviet Union differs from most other economic relations since the Soviet Union has been the West's 'enemy' in military, political and moral terms. The Soviet military threat has only been felt since World War II, and especially since nuclear parity came about. Political and ideological antagonism, however, stem from an earlier date, from 1917 onwards, to be precise. Communist ideology and practice have upset both Western elites and public opinion. Without this perception of Soviet hostility, East-West trade would probably attract less attention from political scientists, and fall into the exclusive domain of economists. But this is obviously not the case. East-West trade and technology transfer touch upon the issue of 'national security', and raise all sorts of questions of generic political interest and importance. Due to the East-West conflict, Western democracies have been reluctant to leave East-West trade to the interplay of 'free market forces', but have made interbloc commerce subject to their national political and strategic ends. Over time, East-West trade has been instrumental to the achievement of a wide range of policy objectives, and has played a central role in many political strategies. East-West trade has both been used 'to trade the Soviets into civilization', and in order to stimulate an expected Soviet clampdown. Since the major overhaul in Eastern Europe in late 1989, East-West trade has attracted renewed attention, both of the business community and of Western policymakers. To the latter group, economic relations with the East pose difficult political questions, due to the changing national security environment on the European continent. But then again, the West, be it through multilateral coordinated channels, or unilaterally, has to react somehow. And it is exactly these economic strategies we want to identify and analyze. In this study we will look into the subject of Western doctrines on East-West trade through a fish-eye lens, drawing many aspects of eco nomics, politics, history - but also psychology - into one picture. Such an approach will have the advantage that concepts of different scientific disciplines can be linked and applied to a subject which is usually only studied from one scientific angle. This may have the disadvantage that, viii Preface ix like in a real fish-eye lens, certain details may become blurred in order to get the total picture. It is of special importance that this study does not restrict itself to East-West economic relations after World War II, but also takes into account Western trade policy vis-a-vis the USSR in the period of the interbellum. This wide historical scope will open up opportunities to draw analytical parallels between the two periods. I would like to thank several people and institutions which have provided me with personal and financial support which has enabled me to write this study. The Netherlands Organization for Scientific Research (NWO) was kind enough to provide a generous grant (no. 430-212-028) which started off the research project 'East-West Trade and Technology Transfer; Economic Benefits versus Security Requirements', which was conducted at the Department of Political Science of Leiden University. I would also like to thank NWO and the NATO Institutional Fellowships Program for enabling me to work for one semester (Fall 1990) at the Institute of War and Peace Studies at Columbia University, New York. Several people have read parts of earlier drafts of this study, and have given valuable comments and advice. Among them are David A. Baldwin, Gary K. Bertsch, Michael Mastanduno, Reinhard Rode, Hendrik Roodbeen, Alfred van Staden, Angela E. Stent, and Jan Zielonka. I would like to thank them all. Needless to say, none of those referred to bears any blame for this book's defects nor for the many controversial opinions expressed in it. PETER V AN HAM Leiden, 1991 General Introduction One of the main goals of this study is to present a comprehensive overview of Western economic doctrines on East-West economic relations. With 'doctrines' we want to indicate the 'principle or belief, or a set of principles or beliefs which is thought by its supporters to be absolutely true and therefore the only one acceptable'.l In particular, we want to map out and analyze the catalogue of foreign policy doctrines of Western countries pertaining to the political efficacy of East-West trade and technology transfer. When this task is set, every scholar has to proceed by choosing the most promising methodological way to reach his goal; that is to accomplish his task and answer his research questions. Here we will proceed along the lines of the methodology introduced by the Swedish scholar Walter Carlsnaes, in his book Ideology and Foreign Policy (1986). There Carlsnaes has sought to conceptualize the major elements explaining foreign policy actions. He eventually arrived at a figure explaining the foreign policy actions of a state in terms of beliefs and doctrines (see Figure A). Carlsnaes justly argues that this figure represents 'two fundamental methodological claims: (1) that we should regard all the various doctrinal aspects of foreign policies as intentional in nature and hence as teleological in thrust; while (2) all psychological-cognitive notions such as belief systems should be viewed as dispositional factors and hence as causal in relation to both doctrines and foreign policy actions in general'.2 We will argue in this study that the doctrinal aspects of foreign economic policy can be captured under the same theoretical structure. Western doctrines on East-West trade are generally teleological in nature, which means that they are devised to achieve something outside the direct realm of commercial benefits derived from trade itself. This does of course not exclude the factor of pure profit as a substantial drive to conduct commercial relations with communist states. In order to come to a useful subdivision of these different Western economic doctrines, we will especially focus upon the relationship between the belief system of policymakers and observers, and Western foreign policy doctrines - a relationship which Carlsnaes typifies as being causal in thrust. Due to the assumed causality of belief systems and foreign policy doctrines, the study of Western doctrines on East-West trade must take into account a thorough 1
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