Table Of ContentWESTERN 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
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© Peter van Ham 1992
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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
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