Notes

Introduction

1“In Today’s Mail,” Magyar Nemzet, December 15, 1989, 6, translated in Joint Publications Research Service, Eastern Europe (JPRS-EER), JPRS-EER-90-005, 28–29.

2“In Today’s Mail,” 29.

3Although I refer throughout this book to “the Cold War” and “the end of the Cold War” writ large for narrative purposes, I am confining my analysis to the Cold War in what is now called the Global North, formerly referred to as the First and Second Worlds or the Eastern and Western Blocs. In the interest of narrative, I also use terms such as “democratic capitalism” and “state socialism,” “industrialized nations of the West” and “state socialist countries of the East,” “Western Bloc” and “Eastern Bloc,” and “Western welfare states” and “state socialist states” throughout the text. I do so with the recognition that there was a great deal of variation within “the West” and “the East” and that any term such as “welfare state,” “democratic capitalist,” or “state socialist” presupposes certain characteristics about nation-states within each bloc that were present in highly varying degrees in each state. This book, however, is primarily interested in comparing the experience of the two blocs—i.e., the Global North—in the world economy of the 1970s and 1980s, so terms that signify what united the two blocs or distinguished the two blocs from each other will have to be used.

4Kenneth Rogoff, The Curse of Cash (Princeton, NJ: Princeton University Press, 2016), 119.

5Paul Volcker and Toyoo Gyohten, Changing Fortunes: The World’s Money and the Threat to American Leadership (New York: Times Books, 1992), 166.

6Within the voluminous literature on neoliberalism, some of the most important works are David Harvey, A Brief History of Neoliberalism (Oxford; New York: Oxford University Press, 2005); Quinn Slobodian, The Globalists: The End of Empire and the Birth of Neoliberalism (Cambridge, MA: Harvard University Press, 2018); Philip Mirowski and Dieter Plehwe, eds., The Road from Mont Pèlerin: The Making of the Neoliberal Thought Collective (Cambridge, MA: Harvard University Press, 2009); Johanna Bockman, Markets in the Name of Socialism: The Left-Wing Origins of Neoliberalism (Stanford, CA: Stanford University Press, 2011); Daniel Rodgers, Age of Fracture (Cambridge, MA: Harvard University Press, 2011); Angus Burgin, The Great Persuasion: Reinventing Free Markets since the Depression (Cambridge, MA: Harvard University Press, 2012); Daniel Stedman Jones, Masters of the Universe: Hayek, Friedman, and the Birth of Neoliberalism (Princeton, NJ: Princeton University Press, 2012); Wendy Brown, Undoing the Demos: Neoliberalism’s Stealth Revolution (Cambridge, MA: Harvard University Press, 2015); Wolfgang Streeck, Buying Time: The Delayed Crisis of Democratic Capitalism, 2nd ed., trans. Patrick Camiller and David Fernbach (London: Verso, 2017); Leo Panitch and Sam Gindin, The Making of Global Capitalism: The Political Economy of American Empire (London: Verso, 2012); Julian Germann, Unwitting Architect: German Primacy and the Origins of Neoliberalism (Stanford, CA: Stanford University Press, 2021); and Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: The Belknap Press of Harvard University Press, 2014).

7Two notable exceptions to this are Charles Maier and Stephen Kotkin. This book is highly indebted to their numerous calls over the past three decades to see capitalism and communism in comparative perspective. Among many examples, see Charles S. Maier, “The Collapse of Communism: Approaches for a Future History,” History Workshop, no. 31 (Spring 1991), 34–59, and Stephen Kotkin, “The Kiss of Debt,” in The Shock of the Global: The 1970s in Perspective, ed. Niall Ferguson et al. (Cambridge, MA: Harvard University Press, 2010), 80–96. See also Odd Arne Westad, The Cold War: A World History (New York: Basic Books, 2017), and Giovanni Arrighi, “The World Economy and the Cold War, 1970–1990,” in The Cambridge History of the Cold War, vol. 3, ed. Odd Arne Westad and Melvyn Leffler (Cambridge: Cambridge University Press, 2010), 23–44. Other scholars have also ably investigated the economic history of Eastern European socialist states. See Angela Romano and Federico Romero, eds., European Socialist Regimes’ Fateful Engagement with the West: National Strategies in the Long 1970s (New York: Routledge, 2021); Randall Stone, Satellites and Commissars: Strategy and Conflict in the Politics of Soviet-Bloc Trade (Princeton: Princeton University Press, 1996); Ivan Berend, From the Soviet Bloc to the European Union: The Social and Economic Transformation of Central and Eastern Europe since 1973 (Cambridge: Cambridge University Press, 2009); Kazimierz Poznanski, Poland’s Protracted Transition: Institutional Change and Economic Growth (Cambridge: Cambridge University Press, 1996); André Steiner, The Plans That Failed: An Economic History of the GDR (New York: Berghahn Books, 2010); Jonathan Zatlin, The Currency of Socialism: Money and Political Culture in East Germany (Cambridge: Cambridge University Press, 2007); and Attila Mong, Kádár Hitele (Budapest: Libri Kiadó, 2012).

8Important studies of the global history of energy and finance in the late twentieth century include Eric Helleiner, States and the Reemergence of Global Finance: From Bretton Woods to the 1990s (Ithaca, NY: Cornell University Press, 1994); Daniel Yergin, The Prize: The Epic Quest for Oil, Money, and Power (New York: Free Press, 2003); David Spiro, The Hidden Hand of American Hegemony: Petrodollar Recycling and International Markets (Ithaca, NY: Cornell University Press, 1999); Rawi Abdelal, Capital Rules: The Construction of Global Finance (Cambridge, MA: Harvard University Press, 2007); Daniel Sargent, A Superpower Transformed (Oxford: Oxford University Press, 2014); and Giuliano Garavini, The Rise and Fall of OPEC in the Twentieth Century (Oxford: Oxford University Press, 2019).

9For discussion of this phenomenon, including its limits in the United States, see Samuel Moyn, Not Enough: Human Rights in an Unequal World (Cambridge: Harvard University Press, 2018). See also, Melvyn Leffler, “Victory: The ‘State,’ The ‘West,’ and the Cold War,” in Safeguarding Democratic Capitalism: U.S. Foreign Policy and National Security, 1920–2015 (Princeton, NJ: Princeton University Press, 2017), 221–242.

10See Kristy Ironside, A Full-Value Ruble: The Promise of Prosperity in the Postwar Soviet Union (Cambridge, MA: Harvard University Press, 2021), and William Taubman, Khrushchev: The Man and His Era (New York: Norton, 2003), chap. 18.

11Important works that address the end of the Cold War as a whole include Hal Brands, Making the Unipolar Moment: US Foreign Policy and the Rise of the Post-Cold War Order (Ithaca, NY: Cornell University Press, 2016); Robert Service, The End of the Cold War, 1985–1991 (New York: Public Affairs, 2015); and Jeffrey Engel, When the World Seemed New: George H. W. Bush and the End of the Cold War (New York: Houghton Mifflin Harcourt, 2017). The so-called Reagan Victory School can be found in Peter Schweizer, Victory: The Reagan Administration’s Secret Strategy That Hastened the Collapse of the Soviet Union (New York: Atlantic Monthly Press, 1994). Some of the most important work on the end of the Cold War has been done through edited volumes. Among the most important are Thomas Blanton, Svetlana Savranskaya, and Vladislav Zubok, eds., Masterpieces of History: The Peaceful End of the Cold War in Europe, 1989 (New York: Central European University Press, 2010); Silvio Pons and Federico Romero, eds., Reinterpreting the End of the Cold War: Issues, Interpretations, Periodizations (New York: Frank Cass, 2005); and Wolfgang Mueller, Michael Gehler, and Arnold Suppan, eds., The Revolutions of 1989: A Handbook (Vienna: OAW, 2015).

12Some may be inclined to include a fifth process, the breakup of the Soviet Union, in the end of the Cold War. But while the collapse of the USSR as a communist state from 1985 to 1990 was an integral part of the end of the Cold War, the breakup of the Soviet Union in 1991 was not. As a geopolitical conflict, the Cold War had started over the Soviet-American contest to determine the fate of postwar Germany. Thus, it ended on October 3, 1990, when the German Democratic Republic was dissolved and the newly reunited Germany emerged on fully Western terms.

13Among many works, see Melvyn Leffler, For the Soul of Mankind: The United States, the Soviet Union, and the Cold War (New York: Hill and Wang, 2007); Simon Miles, Engaging the Evil Empire: Washington, Moscow, and the Beginning of the End of the Cold War (Ithaca: Cornell University Press, 2020); James Graham Wilson, The Triumph of Improvisation: Gorbachev’s Adaptability, Reagan’s Engagement, and the End of the Cold War (Ithaca: Cornell University Press, 2014); Raymond Garthoff, The Great Transition: American-Soviet Relations and the End of the Cold War (Washington, DC: Brookings, 1994); Frances FitzGerald, Way Out There in the Blue: Reagan, Star Wars, and the End of the Cold War (New York: Simon & Schuster, 2000); and Matthew Evangelista, Unarmed Forces: The Transnational Movement to End the Cold War (Ithaca: Cornell University Press, 2002).

14Robert English, Russia and the Idea of the West: Gorbachev, Intellectuals and the End of the Cold War (New York: Columbia University Press, 2000) and “Power, Ideas, and New Evidence on the Cold War’s End: A Reply to Brooks and Wohlforth,” International Security 26, no. 4 (Spring 2002); and Evangelista, Unarmed Forces. Much of the most important work on the end of the ideological competition has been done by scholars taking Mikhail Gorbachev or human rights as their subjects. On Gorbachev, see William Taubman, Gorbachev: His Life and Times (New York: W.W. Norton, 2017); Andrei Grachev, Gorbachev’s Gamble: Soviet Foreign Policy and the End of the Cold War (Cambridge: Cambridge University Press, 2008); and Archie Brown, Seven Years that Changed the World: Perestroika in Perspective (New York: Oxford University Press, 2007). On human rights, see Sarah Snyder, Human Rights Activism and the End of the Cold War: A Transnational History of the Helsinki Network (Cambridge: Cambridge University Press, 2011).

15The classic account of the 1989 revolutions is Timothy Garton Ash, Magic Lantern: The Revolution of ’89 Witnessed in Warsaw, Budapest, Berlin, and Prague (New York: Random House, 1990). A highly revisionist account is Stephen Kotkin and Jan Gross, Uncivil Society: 1989 and the Implosion of the Communist Establishment (New York: Modern Library, 2009). See also Mark Kramer, “The Demise of the Soviet Bloc,” Journal of Modern History 83, no. 4 (December 2011): 788–854. Other monographs explaining change across Eastern Europe in 1989 include Jacque Lévesque, The Enigma of 1989: The USSR and the Liberation of Eastern Europe (Berkeley: University of California Press, 1997), and Padraic Kenney, Carnival of Revolution: Central Europe 1989 (Princeton: Princeton University Press, 2002). Recent scholarly monographs on the collapse of various communist states include Gregory Domber, Empowering Revolution: America, Poland, and the End of the Cold War (Chapel Hill: University of North Carolina Press, 2014); Andrzej Paczkowski, Revolution and Counterrevolution in Poland, 1980–1989, trans. Christina Manetti (Rochester, NY: University of Rochester Press, 2015); Lazlo Borhi, Dealing with Dictators: The United States, Hungary, and East Central Europe, 1942–1989 (Bloomington, IN: Indiana University Press, 2016); Mary Sarotte, Collapse: The Accidental Opening of the Berlin Wall (New York: Basic Books, 2014); and Hans-Hermann Hertle, Der Fall der Mauer: Die unbeabsichtigte Selbstauflösung des SED-Staates (Opladen: VS Verlag für Sozialwissenschaften, 1996). On the collapse of the Soviet state, see R. G. Pihoia and A. K. Sokolov, Istoriia sovremennoi Rossii: krizis kommunisticheskoi vlasti v SSSR i rozhdenie novoi Rossii. Konets 1970-kh - 1991 gg (Moscow: Rosspen, 2008); Stephen Kotkin, Armageddon Averted: The Soviet Collapse 1970–2000 (Oxford: Oxford University Press, 2008); Christopher Miller, The Struggle to Save the Soviet Economy: Mikhail Gorbachev and the Collapse of the USSR (Chapel Hill: University of North Carolina Press, 2016); and Yegor Gaidar, The Collapse of an Empire: Lessons for Modern Russia, trans. Antonina Bouis (Washington, DC: Brookings Institution Press, 2007).

16While recognizing the important historical difference between titling this process “unification” versus “reunification,” this book uses the terms interchangeably in the interest of narrative. Works that have dealt with the history of German reunification include Kristina Spohr, Post Wall, Post Square: How Bush, Gorbachev, Kohl and Deng Shaped the World after 1989 (New Haven, CT: Yale University Press, 2020); Philip Zelikow and Condoleezza Rice, To Build a Better World: Choices to End the Cold War and Create a Global Commonwealth (New York: Twelve, 2019) and their earlier Germany Unified and Europe Transformed: A Study in Statecraft (Cambridge, MA: Harvard University Press, 1995); Mary Sarotte, 1989: The Struggle to Create Postwar Europe (Princeton, NJ: Princeton University Press, 2014); Andreas Rödder, Deutschland einig Vaterland: Die Geschichte der Wiedervereinigung (Bonn: Bpb, 2010); and the four volumes of the Geschichte der Deutschen Einheit (Stuttgart: Deutsche Verlags-Anstalt, 1998).

17John Lewis Gaddis, The Long Peace: Inquiries into the History of the Cold War (New York: Oxford University Press, 1987).

18This is not to deny, of course, that Eastern and Western governments, particularly the United States and the Soviet Union, were keenly aware from the beginning of the Cold War that access to plentiful oil was extremely significant. The Soviet Union spent the first two decades of the postwar period building up its own oil extraction and refining capabilities, and the United States sought to secure oil’s flow from the Middle East long before 1973. See Daniel Yergin’s The Prize: The Epic Quest for Oil, Money, and Power (New York: Free Press, 1991) and David Painter, “Oil and the American Century,” Journal of American History 99, no. 1 (June 2012): 24–39, among others.

19Thane Gustafson, Crisis Amid Plenty: The Politics of Soviet Energy Under Brezhnev and Gorbachev (Princeton: Princeton University Press, 1989), 23.

20Marc Levinson, An Extraordinary Time: The End of the Postwar Boom and the Return of the Ordinary Economy (New York: Basic Books, 2016).

21Eric Hobsbawm, The Age of Extremes: A History of the World, 1914–1991 (New York: Vintage Books, 1996), part 2. Barry Eichengreen, The European Economy since 1945: Coordinated Capitalism and Beyond (Princeton, NJ: Princeton University Press, 2007), chaps. 4 and 7.

22Angus Maddison, The World Economy, vol. 1, A Millennial Perspective (Paris: OECD, 2006), 265, appendix B, table B-22.

23“The Kitchen Debate—Transcript,” July 24, 1959, CIA Online Reading Room, accessed April 28, 2017, https://www.cia.gov/library/readingroom/docs/1959-07-24.pdf.

24Among many, see Ferenc Jánossy, The End of the Economic Miracle (White Plains, NY: International Arts and Sciences Press, 1971); Phillip Armstrong, Andrew Glyn, and John Harrison, Capitalism since 1945 (Oxford: Oxford University Press, 1991); and Robert Gordon, The Rise and Fall of American Growth (Princeton, NJ: Princeton University Press, 2016).

25Armstrong, Glyn, Harrison, Capitalism since 1945, chap. 14; Gordon, introduction to Rise and Fall.

26From 1974 to 1982, per capita growth in the industrialized West averaged 1.4 percent per year, while it averaged 1.3 percent in Eastern Europe and 1.2 percent in the Soviet Union. “Selected Macroeconomic Indicators, 1951–1988,” table 18 in World Economic Outlook: A Survey by the Staff of the International Monetary Fund (Washington, DC: International Monetary Fund, 1990), 65.

27Anatolii Cherniaev, ed., V Politbiuro TsK KPSS: Po zapisiam Anatoliia Cherniaeva, Vadima Medvedeva, Georgiia Shakhnazarova (Moscow: Gorbachev-Fond, 2006), 180.

28Document 18, “Record of Negotiations between Gorbachev and Margaret Thatcher, London,” April 6, 1989, in Csaba Békés and Malcolm Byrne, eds., Political Transition in Hungary, 1989–1990: A Compendium of Declassified Documents and Chronology of Events (Washington, DC: National Security Archive, 1999).

29“Urban Population (% of Total Population)—China,” World Bank, World Development Indicators, Urban Population Statistics, https://data.worldbank.org/indicator/SP.URB.TOTL.IN.ZS?locations=CN.

30On the importance of these differences for China and the Soviet Union, see Miller, Struggle to Save the Soviet Economy, particularly the conclusion.

31On China’s price reform debates in the 1980s, see Isabella Weber, How China Escaped Shock Therapy (New York: Routledge, 2021). See also, Barry Naughton, Growing out of the Plan: Chinese Economic Reform, 1978–1993 (New York: Cambridge University Press, 1995).

32I thank Max Krahé for our many conversations on these issues and for making this particular point clear to me. See his “TINA and the Market Turn: Why Deindustrialization Proceeded under Democratic Capitalism but Not State Socialism,” Critical Historical Studies 8, no. 2 (Fall 2021).

33For two important examples, see Michel Crozier, Samuel Huntington, and Joji Watanuki, The Crisis of Democracy: Report on the Governability of Democracies to the Trilateral Commission (New York: New York University Press, 1975), and Paul McCracken et al., Toward Full Employment and Price Stability: A Report to OECD by a Group of Independent Experts (Paris: OECD, 1977).

1The Oil Shock to the Cold War

1“Niederschrift über die Verhandlungen zwischen dem Vorsitzenden des Ministerrates der DDR, Genossen Willi Stoph und dem Vorsitzenden des Ministerrates der UdSSR, Genossen A.N. Kossygin, am 10.12.1976,” December 12, 1976, DE/1/58569, Bundesarchiv Berlin-Lichterfelde (BArch Lichterfelde).

2Conversation reconstructed from two documents that recorded the same events. Willi Stoph, “Information über die Beratung mit Genossen Kossygin am 10.12.1976 in Moskau,” and “Niederschrift über die Verhandlungen,” both in DE/1/58569, BArch Lichterfelde.

3Except for Romania, which imported most of its oil from the world market. This freed the country from dependence on Soviet oil but dramatically increased its dependence on Western capital.

4Daniel Yergin, The Prize: The Epic Quest for Oil, Money, and Power (New York: Free Press, 1991), chap. 29.

5Daniel Sargent, A Superpower Transformed (Oxford: Oxford University Press, 2014), 132, 135.

6Robert Brenner, The Economics of Global Turbulence (New York: Verso, 2006), chap. 9.

7“Inflation (CPI),” OECD, accessed March 19, 2017, https://doi.org/10.1787/eee82e6e-en.

8Harold James, International Monetary Cooperation since Bretton Woods (New York: Oxford University Press, 1996), 264.

9Charles S. Maier, “Inflation and Stagnation as Politics and History,” in The Politics of Inflation and Economic Stagnation: Theoretical Approaches and International Case Studies, ed. Leon N. Lindberg and Charles S. Maier (Washington, DC: Brookings Institution, 1985), 17.

10“Inflation (CPI),” OECD.

11Quoted in Robert J. Samuelson, The Great Inflation and Its Aftermath (New York: Random House, 2008), 55.

12Charles S. Maier, “‘Fictitious Bonds . . . of Wealth and Law’: On the Theory and Practice of Interest Representation,” in In Search of Stability: Explorations in Historical Political Economy (Cambridge: Cambridge University Press, 1987), 251.

13See Maier and Lindberg, ed., Politics of Inflation, especially Albert O. Hirschman, “Reflections on the Latin American Experience,” 53–77.

14Business Week and Samuelson quoted in Jefferson Cowie, Stayin’ Alive: The 1970s and the Last Days of the Working Class (New York: New Press, 2010), 223.

15Fritz Stern, “The End of the Postwar Era,” Commentary 57, no. 4 (April 1974): 27.

16Cowie, Stayin’ Alive, 72.

17Andrei S. Markovits, Appendix 10, “Wages and Productivity per Person,” in The Politics of the West German Trade Unions: Strategies of Class and Interest Representation in Growth and Crisis (Cambridge: Cambridge University Press, 1986), 459.

18Kevin Hickson, The IMF Crisis of 1976 and British Politics (London: I. B. Tauris, 2005), 53.

19James, International Monetary Cooperation, 283.

20T. J. Pempel, “Japanese Foreign Economic Policy: The Domestic Bases for International Behavior,” in Between Power and Plenty, ed. Peter J. Katzenstein (Madison: University of Wisconsin Press, 1978), 184.

21Richard P. Mattione, OPEC’s Investments and the International Financial System (Washington, DC: Brookings Institution, 1985), 23.

22William Withrell for Assistant Secretary Parsky, “World Capital Markets Study,” August 14, 1974, Folder “1974,” Box 1, Office of Assistant Secretary for International Affairs, Chronological Files of the Office of Financial Resources and Energy Finance, 1974–1977 (OASIA), National Archives and Records Administration (NARA), College Park, Maryland.

23Department of State to OECD Capitals, “OECD Committee on Financial Markets Meeting, November 21–22, 1974,” Folder “1974,” Box 1, OASIA, NARA.

24Charles Stabler, “Jitters on the Euromarkets,” Wall Street Journal, June 28, 1974, 14.

25“Remarks by William Witherell, Director of the Office of Financial Resources, U.S. Department of the Treasury,” June 17, 1975, Folder “June 1975,” Box 1, OASIA, NARA, 12.

26Jeffrey A. Frieden, Global Capitalism: Its Fall and Rise in the Twentieth Century (New York: W. W. Norton, 2006), 368–369.

27Judith Stein, Pivotal Decade: How the United States Traded Factories for Finance in the Seventies (New Haven, CT: Yale University Press, 2010), 112–115.

28Markovits, Politics of West German Trade Unions, 126–132, quote at 126.

29Fred Hirsch, The Social Limits to Growth (Cambridge, MA: Harvard University Press, 1976), 11, 170, 190.

30Calculated based on oil and currency values in “Preise für den Import von Erdöl und Erdgas aus der UdSSR seit 1972 Gegenüberstellung dieser Preise zu den kapitalistischen Weltmarktpreisen und Ausweis des Vorteils für die DDR,” undated but 1985, DE/1/58747, BArch Lichterfelde.

31Gerhard Schürer, “Information über ein Gespräch zwischen Genossen Schürer und Genossen Baibakow am 9.12.1974,” December 9, 1974, DE/1/58586, BArch Lichterfelde. Soviet officials expressed the same sentiments in their meetings with Hungarian officials. See, “Zapisʹ Besedy—nachalʹnika Upravleniia torgovli s sochialisticheskimi stranami Uvropy t. Loshakova M.G. s nachalʹnikom upravleniia Ministerstva vneshnei torgovli VNR t. A Federerom,” July 10, 1974, Russian State Archive of the Economy (RGAE), f. 413, o. 31, d. 6631, l. 22.

32“Standpunkt der DDR zur Gestaltung der RGW-Preise 1976–1980,” May 30, 1974, DE/1/58577, BArch Lichterfelde.

33Attila Mong, Kádár Hitele (Budapest: Libri Publishing House, 2012), 150.

34“Standpunkt der DDR,” BArch Lichterfelde.

35Underlining in the original. Horst Sölle, “Niederschrift über eine Zusammenkunft des Ministers für Außenhandel der DDR, Genossen Sölle, mit dem Minister für Außenhandel der UdSSR, Genossen Patolitschew, anläßlich der Übergabe des Aid-mémoires zur Bildung der Vertragspreise im RGW 1976–1980 und 1975,” October 3, 1974, DE/1/58588, BArch Lichterfelde.

36Sölle, “Niederschrift über eine Zusammenkunft,” BArch Lichterfelde.

37Letter from Erich Honecker to Leonid Brezhnev, December 9, 1974, DE/1/58586, BArch Lichterfelde.

38Gerhard Schürer, “Information über ein Gespräch zwischen Genossen Schürer und Genossen Baibakow am 9.12.1974,” December 9, 1974, DE/1/58586, BArch Lichterfelde.

39Patolichev quoted in, “Niederschrift über die Beratung zwischen Genossen Erich Honecker und Genossen Baibakow am 21.12.1974,” December 21, 1974, DE/1/58586, BArch Lichterfelde.

40Klopfer, “Persönliche Niederschrift über eine Beratung beim 1. Sekretär des Zentralkomitees der SED am 9.8.1974,” August 9, 1974, DE/1/58586, BArch Lichterfelde.

41Klopfer, “Persönliche Niederschrift über eine Beratung beim 1. Sekretär des Zentralkomitees der SED am 9.8.1974,” August 9, 1974, DE/1/58586, BArch Lichterfelde.

42Gerhard Schürer, “Vermerk,” January 31, 1975, DE/1/58746, BArch Lichterfelde.

43Quoted in Mong, Kádár Hitele, 151.

44Mong, Kádár Hitele, 150–151.

45Gerhard Schürer, Gewagt und Verloren: Eine deutsche Biographie (Frankfurt/Oder : Frankfurter Oder Editionen), 75.

46Günter Mittag, Um Jeden Preis: Im Spannungsfeld zweier Systeme (Berlin: Weimar Aufbau-Verlag, 1991), 61–63.

47At this time, a valuta mark was valued at a rate of 2.5 VM to 1 US dollar, so this total represented about $3.5 billion.

48Günter Ehrensperger and another author whose signature is illegible, “Probleme und Konsequenzen aus der Arbeit am Volkswirtschaftsplan 1974 auf dem Gebiet der Zahlungsbilanz gegenüber dem nichtsozialistischen Wirtschaftsgebiet bis 1980,” November 6, 1973, DY/30/25761, BArch Lichterfelde.

49See James, International Monetary Cooperation, 320 for this context.

50Grünheid, “Information für Genossen Schürer über die Planberatung mit dem Minister für Außenhandel, Genossen Sölle, zum Stand der Ausarbeitung der Staatlichen Aufgaben für 1975 und zur Konzeption für den Zeitraum 1976 bis 1980,” March 28, 1974, DE/1/58580, BArch Lichterfelde.

51“Die Auswirkungen der krisenhaften Situation auf dem Eurogeldmarkt auf die Lösung der Finanzierungsaufgaben der Außenhandelsbank im Rahmen der Zahlungsbilanz 1975 und für die weiteren Jahre,” attachment to “Tagesordnung für die Sitzung der Arbeitsgruppe Zahlungsbilanz am 27. September 1974, 8.30 Uhr, Zimmer 441,” September 27, 1974, DY 3023/963, BArch Lichterfelde.

52William Witherell, “Policy Issues in International Finance,” June 17, 1975, Folder “June 1975,” Box 1, OASIA, NARA.

53This figure only counted publicized Eurocurrency loans and so likely substantially understates the total flow of capital into the region. A much-greater, but also untraceable, percentage of the debt was built up through short-term deposits that Western banks placed in Eastern Bloc central and foreign trade banks. See “How the East Bloc Tapped the Euromarkets,” Euromoney, January 1977, 24.

54Charles Schmidt, “Comecon’s Borrowing Requirements in 1976,” Euromoney, January 1976, 12.

55Schmidt, “Comecon’s Borrowing,” 14.

56“The Debt That Overhangs East-West Dealings,” Business Week, May 3, 1976, 118–119.

57Bernard Nossiter, “U.S. Urges Wariness in East Trade,” Washington Post, June 22, 1976.

58“Information über Aspekte und Beziehungen SW/NSW Nr. 8,” February 2, 1976, DN/11/6431, BArch Lichterfelde.

59“Debt That Overhangs,” Business Week.

60Richard Ensor and Francis Ghiles, “CMEA Debts May Be $45 Billion, but the Loans Have Kept Flowing,” Euromoney, January 1977, 23.

61Ensor and Ghiles, “CMEA Debts,” 23.

62“Debt and Transition (1981–1989),” International Monetary Fund, Money Matters: An IMF Exhibit—The Importance of Global Cooperation, accessed October 17, 2021, https://www.imf.org/external/np/exr/center/mm/eng/mm_dt_01.htm

63Schmidt, “Comecon’s Borrowing,” 12.

64Gabriel Eichler, “Country Risk “Country Risk Analysis and Bank Lending to Eastern Europe,” in Eastern European Economic Assessment: Part 2–Regional Assessments, (Washington, DC: Government Printing Office, 1981), 759–775, quote at 767.

65Padraic Fallon, “Hungary’s Marxist Economist and Central Banker, János Fekete,” Euromoney, January 1977, 14–17.

66Description of Wołoszyn in Padraic Fallon, “Roman Malesa. Bank Handlowy’s President and Negotiator,” Euromoney, January 1977, 31.

67Nicholas Cumming-Bruce, “Jan Wołoszyn’s Struggle for Poland,” Euromoney, October 1980, 60–62.

68The best historical monograph on Schalck and KoKo is Matthias Judt, KoKo: Mythos und Realität: Das Imperium des Schalck-Golodkowski (Berlin: Ed. Berolina, 2015). A stimulating and comprehensive overview of West German Ostpolitik and its attendant financial transfers remains Timothy Garton Ash, In Europe’s Name: Germany and the Divided Continent (New York: Knopf, 1993).

69Edward C. Keefer and Peter Kraemer, eds., Foreign Relations of the United States, 1969–1976, vol. E-15, part 1, Documents on Eastern Europe, 1973–1976 (Washington, DC: United States Government Printing Office, 2008).

70See Michael Kieninger, Mchthild Lindemann, and Daniela Taschler, eds., Akten zur Auswärtigen Politik der Bundesrepublik Deutschland 1975 (Munich: R. Oldenbourg Verlag München, 2006).

71Fallon, “Hungary’s Marxist Economist,” 17.

72Author’s calculations based on tables 8 and 9 of Jan Vanous, “Soviet and Eastern European Trade in the 1970’s: A Quantitative Assessment,” in Eastern European Economic Assessment, part 2, Regional Assessments, 696.

73János Fekete, Back to the Realities: Reflections of a Hungarian Banker (Budapest: Akademiai Kiado, 1982), 12.

2Years of Illusion and Reckoning

1Figures given in Joan Parpart Zoeter, “Eastern Europe: The Hard Currency Debt,” in Eastern European Economic Assessment, part 2, Regional Assessments (Washington, DC: Government Printing Office, 1981), 716–731, figures at 720.

2Andrzej Paczkowski, The Spring Will Be Ours, trans. Jane Cave (University Park: Pennsylvania State University Press, 2003), 357–358. Timothy Garton Ash, The Polish Revolution (London: Penguin, 1999), 19.

3For a characteristic interpretation, see Garton Ash, Polish Revolution.

4Harold James, International Monetary Cooperation since Bretton Woods (New York: Oxford University Press, 1996), 279–282.

5Original italics. Samuel Brittan, Economic Consequences of Democracy (London, UK: Temple Smith, 1977), xi, 255, 267.

6Quote from James, International Monetary Cooperation, 279–282, quote at 282. On the decline of the British Left, see Kevin Hickson, The IMF Crisis of 1976 and British Politics (London: I. B. Tauris, 2005).

7The communists did not formally join the government, but the ruling coalition relied on the communists’ abstention from voting to pass legislation.

8See Robert Flanagan, David Soskice, and Lloyd Ulman, Unionism, Economic Stabilization, and Incomes Policies (Washington, DC: Brookings Institution, 1983), 546–556. Also James, International Monetary Cooperation, 283–285.

9“Niederschrift über eine Beratung zum Entwurf des Fünfjahrplanes 1976–1980 unter Leitung des Generalsekretärs des ZK der SED, Genossen Erich Honecker, am 5.11.1076,” November 5, 1976, DE/1/58633, BArch Lichterfelde.

10Attila Mong, Kádár Hitele (Budapest: Libri Publishing House, 2012), 157, 160.

11Włodzimierz Brus, “Aims, Methods, and Political Determinants of the Economic Policy of Poland, 1970–1980,” in The East European Economies in the 1970s, ed. Alec Nove, Hans-Hermann Hohmann, and Gertraud Seidenstecher (London: Butterworth-Heinemann, 1982), 108–139.

12“Wpływ Bilansu Płatniczego y Krajami Kapitalistycznymi na Społeczno-Gospodarczy Rozwoj Polski w Latach 1977–1980,” March 11, 1977, PZPR-KC XI A-510, Archiviwum Akt Nowych, Warsaw. I would like to thank Lukas Dovern for sharing this document with me.

13Quoted in Hans-Hermann Hertle, Der Fall der Mauer: Die unbeabsichtige Selbstauflösung des SED-Staates (Opladen, Germany: Westdeutscher Verlag, 1999), 37.

14Hertle, Der Fall der Mauer, 38.

15“Notizen zu einer Beratung des Generalsekretärs mit den 1. Sekretären der Bezirkleitung der SED im Anschluß an die 6. Tagung des Zentralkomitees am 24.6.1977,” July 1, 1977, DE/1/58618, BArch Lichterfelde.

16Quoted in Hertle, Der Fall der Mauer, 38.

17Richard Ensor and Francis Ghiles, “CMEA Debts May Be $45 Billion, but the Loans Have Kept Flowing,” Euromoney, January 1977, 23.

18Central Intelligence Agency, Intelligence Memorandum, The Impending Soviet Oil Crisis, March 1977, CIA Online Reading Room, accessed March 22, 2017, https://www.cia.gov/library/readingroom/docs/DOC_0000498607.pdf.

19Central Intelligence Agency, Intelligence Memorandum, The Impending Soviet Oil Crisis, March 1977, CIA Online Reading Room, accessed March 22, 2017, https://www.cia.gov/library/readingroom/docs/DOC_0000498607.pdf.

20Thane Gustafson, Crisis Amid Plenty: The Politics of Soviet Energy under Brezhnev and Gorbachev (Princeton, NJ: Princeton University Press, 1989), particularly 27–29.

21Abteilung UdSSR, “Arbeitsniederschrift über das Gespräch zwischen Genossen Grünheld und Genossen Worow am 12.2.1978 in Berlin,” February 12, 1978, DE/1/58564, BArch Lichterfelde.

22“Rede des Leiters der Delegation der UdSSR auf der XXXI. Tagung des RGW, Genossen A.N. Kossygin,” June 15, 1977, DE/1/55847, BArch Lichterfelde. On how the oil-production problems began to affect the Soviets’ bilateral relations with bloc countries, see, for example, “Zapisʹ besedy Predsedatelia Gosplana SSSR t Baibokova s zamestitelem Predsedatelia Soveta Ministrov NRB tov A Lukanovym,” November 11, 1977, Russian State Archive of the Economy (RGAE), f. 4372, o. 66, d. 819, l. 19–25.

23Underlining in the original. Staatliche Plankommission, “Information zu einigen Problemen der Außenhandelsbeziehungen der DDR,” May 21, 1975, DE/1/58558, BArch Lichterfelde.

24“Zur langfristigen ökonomischen Zusammenarbeit zwischen der DDR und der UdSSR und Arbeit an den Zielprogrammen,” November 30 and December 1, 1976, DE/1/58569, BArch Lichterfelde.

25Staatliche Plankomission Abt. Energiewirtschaft, “Problemmaterial zur energetischen Sicherung der Entwicklung der Volkswirtschaft 1981–1985 unter Berucksichtigung vom Prämissen aus den Verhandlungen mit der UdSSR über Rohstoff- und Energieträgerliefermögichkeiten,” undated but likely from 1978 or 1979, DE/1/58657, BArch Lichterfelde.

26“Zur Frage der Aufwendungen der DDR in freikonvertierbaren Währung im Zeitraum 1971/76,” July 10, 1977, DE/1/58554, BArch Lichterfelde.

27Abteilung UdSSR, “Arbeitsniederschrift über das Gespräch zwischen . . .,” BArch Lichterfelde.

28Karl Grünheid, “Information über Gespräche mit Vertretern des Gosplan der UdSSR auf Expertenebene zu den Fragen der Rohstofflieferungen im Zeitraum 1981 bis 1985,” October 29, 1978, DE/1/58665, BArch Lichterfelde.

29“Überschlagsrechnung zur Auswirkung der bisherigen Mitteilungen über Rohstofflieferungen der UdSSR 1981/85 gegenüber der volkswirtschaftlichen Konzeption,” October 30, 1978, DE1/58665, BArch Lichterfelde.

30“Information über die Beratung mit Genossen Kossygin im Moskau am 8. Dezember 1978,” December 8, 1978, DE/1/58666, BArch Lichterfelde.

31“Stenograpfische Niederschrift der Beratung des Vorsitzenden des Minterrates der DDR Genossen Willi Stoph, mit dem Vorsitzenden des Ministerrates der UdSSR Genossen Alexei Kossygin,” December 8, 1978, DE/1/58666, BArch Lichterfelde.

32The amount of $3.2 billion is the author’s calculation from the numbers given in the document using an exchange rate of 2.5 valutamarks to 1 US dollar. Staatliche Plankomission Abt. Energiewirtschaft, “Problemmaterial zur energetischen Sicherung der Entwicklung der Volkswirtschaft 1981–1985,” BArch Lichterfelde.

33Werner Polze, “Bericht über eine Dienstreise nach den USA und Kanada in der Zeit von 8. bis 19.5.1978,” May 23, 1978, DN/10/447, BArch Lichterfelde.

34The front-page article is Christopher Bobinski and Anthony Robinson, “Poland Seeking Long-term $500m Euro-loan” Financial Times, November 30, 1978, 1. Quotes from Christopher Bobinksi, “Poland to Open Its Books for $500m Loan,” Financial Times, November 30, 1978, 2.

35Werner Polze, “Bericht über eine Dienstreise des Präsidenten der Deutschen Außenhandelsbank nach Großbritannien in der Zeit vom 25.10.–2.11.1978,” November 3, 1978, DN/10/447, BArch Lichterfelde.

36Underlining in the original. State Planning Commission, “Information und Vorschläge zur Ausarbeitung des Planansates 1980,” June 7, 1979, DE/1/58657, BArch Lichterfelde.

37“Stenographische Niederschrift der Zusammenkunft des Generalsekretärs des ZK der SED und Vorsitzenden des Staatsrates der DDR, Genossen Erich Honecker, sowie der weiteren Mitglieder und Kandidaten des Politbüros des ZK der SED mit dem Generalsekretär des ZK der KPdSU und Vorsitzenden des Präsidiums des Obersten Sowjets der UdSSR, Genossen Leonid Iljitsch Breschnew,” October 4, 1979, DY 30/2378, Stiftung Archiv der Parteien und Massenorganisationen der DDR im Bundesarchiv, Berlin (SAPMO), 91. Brezhnev pounding his fist during this meeting comes from Hertle, Der Fall der Mauer, 42.

38Quoted in William Greider, Secrets of the Temple: How the Federal Reserve Runs the Country (New York: Simon & Schuster, 1987), 58.

39“The Polish Problem,” Euromoney, April 1979, 5.

40Quoted in Theodore H. White, America in Search of Itself: The Making of the Presidents 1956–1980 (New York: Harper and Row, 1982), 149.

41“Historic Inflation United States—CPI Inflation,” inflation.eu, Worldwide Inflation Data, accessed March 26, 2017, http://www.inflation.eu/inflation-rates/united-states/historic-inflation/cpi-inflation-united-states.aspx.

42James, International Monetary Cooperation, 303–306.

43Daniel Yergin, The Prize: The Epic Quest for Oil, Money, and Power (New York: Free Press, 1991), chap. 33. Judith Stein, Pivotal Decade: How the United States Traded Factories for Finance in the Seventies (New Haven, CT: Yale University Press, 2010), 211–215.

44Underlining in the original. W. Michael Blumenthal, Memorandum for the President, May 25, 1979, Folder “Venice Summit 1980,” Box 90, Staff Office—Council of Economic Advisors, Jimmy Carter Presidential Library (JCPL), Atlanta, GA.

45Jimmy Carter, “Energy and National Goals: Address to the Nation,” July 15, 1979, Jimmy Carter Library, accessed March 27, 2016, https://www.jimmycarterlibrary.gov/documents/speeches/energy-crisis.phtml.

46Jefferson Cowie, Stayin’ Alive: The 1970s and the Last Days of the Working Class (New York: New Press, 2010), 300–301.

47See Greider, Secrets, 47. See also W. Carl Biven, Jimmy Carter’s Economy: Policy in the Age of Limits (Chapel Hill, NC: University of North Carolina Press 2002), 238–239.

48Arthur Burns, “The Anguish of Central Banking,” in The 1979 Per Jacobsson Lecture, September 30, 1979, accessed March 27, 2017, http://www.perjacobsson.org/lectures/1979.pdf.

49Quoted in William L. Silber, Volcker: The Triumph of Persistence (New York: Bloomsbury 2012), 197.

50Greider, Secrets, 121.

51Greider, Secrets, 83–86, Schulz quote at 86.

52Coldwell quoted in Greider, Secrets, 123.

53“Transcript of Press Conference with Paul A. Volcker, Chairman, Board of Governors of the Federal Reserve System, October 6, 1979,” accessed October 18, 2021, https://fraser.stlouisfed.org/title/statements-speeches-paul-a-volcker-451/transcript-press-conference-held-board-room-federal-reserve-building-washington-dc-8201.

54The $200 million figure is calculated from the VM 520 million figure given in the document at an exchange rate of 2.5 VM to 1 US dollar. Letter and Attachment from Horst Kaminsky to Günter Mittag, October 25, 1979, DY 3023/1093, SAMPO, 129–131.

55Benjamin Cohen, In Whose Interest? International Banking and US Foreign Policy (New Haven, CT: Yale University Press, 1986), chap. 6.

56Horst Kaminsky and Werner Polze, “Analyse der Lage auf den internationalen Geld- und Kreditmärkten, besonders des US-Dollar als Leit- und Reservewährung und Massnahmen zur Erhöhung des Aufkommens an relative stabilen Wahrungen sowie Sofortmassnahmen fur die Arbeit auf der Leipziger Frühjahrsmesse 1980,” February 6, 1980, DY 3023/1094, SAPMO.

57“Notatka w sprawie aktualnej oceny warunków realizacji Narodowego Planu Społeczno-Gospodarczego na rok 1980 i wniosków wynikających z tej oceny,” May 31, 1980, in Tajne Dokumenty Biura Politycznego (London: Aneks, 1992), 7–13.

58Fred Hirsch, The Social Limits to Growth (Cambridge, MA: Harvard University Press, 1976), 175.

59Greider, Secrets, 107.

3 A Tale of Two Crises

1On Thatcher and Thatcherism, see John Campbell, The Grocer’s Daughter (London: Jonathan Cape, 2000) and The Iron Lady (London: Jonathan Cape, 2003); Charles Moore’s three volume biography, Margaret Thatcher: From Grantham to the Falklands (New York: Knopf, 2013); Margaret Thatcher: At Her Zenith (New York: Knopf, 2016); Margaret Thatcher: Herself Alone (New York: Knopf, 2019); Robert Skidelsky, ed., Thatcherism (London: Chatto & Windus, 1988); and Andrew Gamble, The Free Economy and the Strong State: The Politics of Thatcherism, 2nd ed. (London: Macmillan, 1994). On 1980s Britain, see Graham Stewart, Bang! A History of Britain in the 1980s (London: Atlantic Books, 2013) and Alwyn W. Turner, Rejoice, Rejoice! Britain in the 1980s (London: Aurum, 2010). On the Polish Crisis, the most important titles in English are Timothy Garton Ash, Solidarity: The Polish Revolution (London: Granta Books, 1991); Andrzej Paczkowski and Malcolm Byrne, eds., From Solidarity to Martial Law: The Polish Crisis of 1980–1981 (Budapest: Central European University Press, 2007); David Ost, Solidarity and the Politics of Anti-Politics: Opposition and Reform in Poland Since 1968 (Philadelphia, PA: Temple University Press, 1990); and Gregory Domber, Empowering Revolution: America, Poland, and the End of the Cold War (Chapel Hill: University of North Carolina Press, 2014).

2For Thatcher’s thoughts on Hoskyns, see Margaret Thatcher, The Downing Street Years (New York: HarperCollins, 1993), 30. For Jaruzelski’s thoughts on Rakowski, see Wojciech Jaruzelski, Mein Leben für Polen: Erinnerungen (Munich: Zürich Piper, 1993), 243.

3Thatcher, Downing Street Years, 377.

4Letter from John Hoskyns to Keith Joseph, quoted in John Hoskyns, Just in Time: Inside the Thatcher Revolution (London: Aurum Press, 2000), 26.

5Hoskyns’s journal, quoted in Hoskyns, Just in Time, 28.

6Hoskyns’s journal, quoted in Hoskyns, Just in Time, 40.

7Hoskyns’s journal, quoted in Hoskyns, Just in Time, 63.

8Hoskyns’s journal, quoted in Hoskyns, Just in Time, 40.

9John Hoskyns and Norman Strauss, “Stepping Stones,” November 14, 1977, original in Margaret Thatcher Papers, Churchill Archives Centre, Cambridge University, (THCR), File THCR 2/6/1/248. Accessed via Margaret Thatcher Foundation Digital Collection (MTFDC), accessed December 19. 2017, https://www.margaretthatcher.org/document/111771, S-1 and S-2.

10Hoskyns and Strauss, “Stepping Stones,” 22, 24, 25, 27.

11Hoskyns and Strauss, “Stepping Stones,” Appendix, “The Union Problem,” A-1, A-2.

12Hoskyns, Just in Time, 79.

13Quoted in Hoskyns, Just in Time, 80. See also Stewart, Bang!, 23.

14Quoted in Hoskyns, Just in Time, 85.

15Rakowski, Rzeczpospolita na progu lat osiemdziesiątych (Warsaw: Państwowy Instytut Wydawniczy, 1981), 69.

16Rakowski, Rzeczpospolita na progu lat osiemdziesiątych, 56, 31.

17Rakowski, Rzeczpospolita na progu lat osiemdziesiątych, 32–33.

18Rakowski, Rzeczpospolita na progu lat osiemdziesiątych, 33, 183, 177, 188, 189, 190.

19Only after the Polish Crisis began and Rakowski’s views became mainstream was the book published in 1981.

20Ost, Solidarity, 99–121.

21Quoted in Rakowski, Dzienniki polityczne 1979–1981 (Warsaw: ISKRY, 2004), 278.

22Jaruzelski, Mein Leben für Polen, 242–243.

23Stewart, Bang!, 56.

24Stewart, Bang!, 57–59.

25Hoskyns, Just in Time, 118, “moral and intellectual bankruptcy” from 125.

26See introduction in Paczkowski and Byrne, From Solidarity, for further analysis of public opinion during the crisis.

27In March 1980, the governor of the Bank of England conveyed his “serious misgivings about the whole exercise” to Thatcher in a meeting of senior advisors. A. J. Wiggins to John Hoskyns, March 10, 1980, MTFDC, https://www.margaretthatcher.org/document/113049.

28Nigel Lawson, The View from No. 11: Memoirs of a Tory Radical (London: Corgi, 1993), 67.

29John Hoskyns, “Economic Strategy,” June 13, 1980, PREM19/172 f129, Margaret Thatcher Foundation, Thatcher digital archive (MSS), accessed December 29, 2017, https://www.margaretthatcher.org/document/115536.

30Italics in the original. Hoskyns to the Prime Minister, “Public Sector Pay,” July 18, 1980, PREM19/182 f134, Margaret Thatcher Foundation, Thatcher digital archive (MSS), accessed December 20, 2017, https://www.margaretthatcher.org/document/115669.

31Hoskyns to Thatcher, “Policy Options,” November 11, 1980, PREM19/174 f222, Margaret Thatcher Foundation, Thatcher digital archive (MSS), accessed December 20, 2017, https://www.margaretthatcher.org/document/115566.

32Hoskyns to Thatcher, November 20, 1980, PREM19/174 f196, MTFDC, accessed December 29, 2017, https://www.margaretthatcher.org/document/115568.

33Hoskyns to Thatcher, “Government Strategy,” December 22, 1980, PREM19/174 f11, MTFDC, accessed December 29, 2017, https://www.margaretthatcher.org/document/115579.

34Margaret Thatcher, “Speech to Conservative Party Conference,” October 10, 1980, CCOPR 735/80, MTFDC, accessed June 15, 2021, https://www.margaretthatcher.org/document/104431.

35Thatcher, “Speech to Conservative Party Conference.”

36Hoskyns’s diary, quoted in Hoskyns, Just in Time, 260.

37Thatcher, Downing Street Years, 132.

38Capitalization and italicization in the original. Memorandum from Alan Walters, David Wolfson, and John Hoskyns to Thatcher, “Budget Strategy,” February 20, 1981, PREM19/439 f200, MTFDC, accessed December 29, 2017, https://www.margaretthatcher.org/document/114016.

39Quoted in Stewart, Bang!, 59–60.

40See, for example, the debate on British policy in Michael Bordo and Athanasios Orphanides, eds., The Great Inflation: The Rebirth of Modern Central Banking (Washington, DC: National Bureau of Economic Research Conference Report, 2013) and Skidelsky, ed., Thatcherism, chaps. 5 and 6.

41Lawson, View from No. 11.

42Stewart, Bang!, 85–99.

43Quoted in Garton Ash, Solidarity: The Polish Revolution, 153.

44Rakowski, Dzienniki polityczne 1979–1981, 336.

45Rakowski, Dzienniki polityczne 1979–1981, 355–356.

46Rakowski, Dzienniki polityczne 1979–1981, 360.

47For the intricate details and primary sources of this Soviet pressure, see Paczkowski and Byrne, From Solidarity to Martial Law. For further details on the domestic aspects of the Bydgoszcz crisis, see Ost, Solidarity, 125.

48Mark Kramer estimates total Soviet financial assistance during the crisis reached almost $3 billion. See Mark Kramer, ed., “Soviet Deliberations in the Polish Crisis,” Special Working Paper No. 1, April 2000, Cold War International History Project, 135n216.

49Paczkowski and Byrne, “The Polish Crisis: Internal and International Dimensions,” in From Solidarity to Martial Law, 22.

50Mario Nuti, cited in Garton Ash, Solidarity: The Polish Revolution, 202.

51Garton Ash, Solidarity: The Polish Revolution, 115.

52Paczkowski and Byrne, From Solidarity to Martial Law, xl.

53Rakowski, Dzienniki polityczne 1981–1983, 9.

54Rakowski, Dzienniki polityczne 1981–1983, 18–19.

55Rakowski, Dzienniki polityczne 1981–1983, 12.

56Official report of the meeting, quoted in Garton Ash, Solidarity: The Polish Revolution, 205. Also Ost, Solidarity, 128.

57Accounts of the August negotiations are notoriously contradictory on the issue of who was ultimately responsible for the breakdown in the talks. This account is based on Rakowski, Dzienniki polityczne 1981–1983, 18–22; Garton Ash, Solidarity: The Polish Revolution, 204–206; Ost, Solidarity, 128; and Władysław Baka, Zmagania o Reformę: z dziennika politycznego 1980-1990 (Warsaw: Wydawn, 2007), 40–41.

58Rakowski, Dzienniki polityczne 1981–1983, 23.

59Ost, Solidarity, 132.

60“The Solidarity Program,” in The Solidarity Sourcebook, ed. Stan Persky and Henry Flam (Vancouver, Canada: New Star Books, 1982), 211.

61Ost, Solidarity, 136; “The Solidarity Program,” 211; and Garton Ash, Solidarity: The Polish Revolution, 221.

62Rakowski, Dzienniki polityczne 1981–1983, 64, 71, 72.

63Rakowski, Dzienniki polityczne 1981–1983, 77, 80.

64Rakowski, Dzienniki polityczne 1981–1983, 89.

65Document 73, “Protokół nr 14 z posiedzenia Biura Politycznego KC PZPR 10 listopada 1981 r.” in Zbigniew Wlodek, ed., Tajne Dokumenty Biura Politycznego: PZPR a “Solidarność,” 1980–81 (London, UK: Aneks, 1992), 516–527.

66Rakowski, Dzienniki polityczne 1981–1983, 112–119. Ost, Solidarity, 144.

67Rakowski, Dzienniki polityczne 1981–1983, 120.

68Document 77, “Protokół nr 18 z posiedzenia Biura Politycznego КС PZPR 5 grudnia 1981 r.,” in Wlodek, ed., Tajne Dokumenty Biura Politycznego, 549–550.

69Document 77, “Protokół nr 18 z posiedzenia Biura Politycznego,” 562.

70Rakowski, Dzienniki polityczne 1981–1983, 125.

71Rakowski, Dzienniki polityczne 1981–1983, 126.

72Quoted in Andrzej Paczkowski, Revolution and Counterrevolution in Poland, 1980–1989, trans. Christina Manetti (Rochester, NY: University of Rochester Press, 2015), 97.

73Garton Ash, Solidarity: The Polish Revolution, 274.

74Polish Ministry of Foreign Affairs, “The Polish Economic Reform: Major Prerequisites, Model Provisions, and State of Implementation,” undated but spring of 1982, Box 58, File 1, EUR Country Files, International Monetary Fund (IMF) Archives, Washington, DC.

75David Mason, Public Opinion and Political Change in Poland, 1980–1982 (Cambridge: Cambridge University Press, 1985), 231.

76Moore, Margaret Thatcher: From Grantham to the Falklands, 643.

77Peter Walker to the Prime Minister, “Memorandum on a Conservative Strategy for the Next Two Years,” February 16, 1982, THCR 1/15/6 f3, MTFDC, accessed December 29, 2017, https://www.margaretthatcher.org/document/122920.

78Moore, Margaret Thatcher: From Grantham to the Falklands, 752.

79Moore, Margaret Thatcher: From Grantham to the Falklands, chaps. 23 and 24 provide a thorough history of the Falklands War.

80Quoted in Moore, Margaret Thatcher: From Grantham to the Falklands, 755.

81Figure 2.1 in David Butler and Dennis Kavanagh, The British General Election of 1983 (London: Macmillan, 1984), 15.

82Thatcher to Hayek, February 17, 1982, Margaret Thatcher Foundation, Hayek MSS (Hoover Institution), Box 101, MTFDC, accessed December 29, 2017, https://www.margaretthatcher.org/document/117179.

83John Vereker to Alan Walters, December 24, 1982, PREM19/1092 f155, MTFDC, accessed December 29, 2017, https://www.margaretthatcher.org/document/138788.

84Nigel Lawson to Margaret Thatcher, January 21, 1983, PREM19/1092 f134, accessed December 29, 2017, https://www.margaretthatcher.org/document/138768.

85Hoskyns to Thatcher, March 27, 1981, PREM19/540 f186, MTFDC, accessed January 4, 2018, https://www.margaretthatcher.org/document/126057.

86Hoskyns wrote this in a memo about a possible Civil Service strike, but as his “general rule” phrase suggests, he believed it equally held for all areas of the economy. Hoskyns to Thatcher, April 8, 1981, PREM19/400 f64, MTFDC, accessed January 4, 2018, https://www.margaretthatcher.org/document/125602.

87Lawson to Thatcher, January 21, 1983, PREM19/1092 f134, MTFDC, accessed January 4, 2018, https://www.margaretthatcher.org/document/138768.

88Figures from Butler and Kavanagh, The British General Election of 1983, 280.

89Peter Gregson to Thatcher, September 14, 1983, PREM19/1329 f244, MTFDC, accessed January 5, 2018, https://www.margaretthatcher.org/document/133119.

90“Record of a Meeting Held at No. 10 Downing Street,” September 15, 1983, PREM19/1329 f243, MTFDC, accessed January 5, 2018, https://www.margaretthatcher.org/document/133121.

91David Pascall to Andrew Turnbull, March 7, 1984, PREM19/1329 f140, MTFDC, accessed January 5, 2018, https://www.margaretthatcher.org/document/133140.

92Quoted in Thatcher, Downing Street Years, 350.

93David Pascall, “The Coal Dispute—Public Opinion,” June 14, 1984, PREM19-1331 f225, MTFDC, accessed June 21, 2021, https://www.margaretthatcher.org/document/133376.

94Moore, Margaret Thatcher: At Her Zenith, 155.

95Moore, Margaret Thatcher: At Her Zenith, 162.

96“The Miners and the TUC Conference,” August 31, 1984, PREM19-1332 f10, MTFDC, accessed June 21, 2021, https://www.margaretthatcher.org/document/133497.

97Pascall, “The Coal Dispute—Public Opinion,” June 14, 1984.

98Moore, Margaret Thatcher: At Her Zenith, 156.

99Police approval rating in Pascall, “The Coal Dispute—Public Opinion,” June 14, 1984; Thatcher approval rating in “Public Opinion Background Note,” July 4, 1984, THCR 2-6-3-87 f262, MTFDC, accessed June 21, 2021, https://www.margaretthatcher.org/document/137582.

100Marc Levinson, An Extraordinary Time: The End of the Postwar Boom and the Return of the Ordinary Economy (New York: Basic Books, 2016), 192, 194.

4The Capitalist Perestroika

1The most straightforward English translation of the word perestroika is “restructuring.” For a holistic definition, see Abel Aganbegyan, The Economic Challenge of Perestroika, trans. Pauline M. Tiffen (Bloomington, IN: Indiana University Press, 1988). Note that this book was published using the transliteration “Aganbegyan,” and thus I have retained that spelling when referring to this book in the notes.

2Gosbank memorandum, “Mezhdunarodnyi valiutnyi fond i sotsialisticheskie strany,” November 11, 1983, Russian State Archive of the Economy (RGAE), f. 2324, o. 33, d. 406.

3“Usloviia kreditovaniia zapadom razvivaiushchikhsia stran progressivnoi orientatsii,” March 20, 1987, RGAE, f. 2324 o. 33 d. 640.

4Anatolii Cherniaev, ed., V Politbiuro TsK KPSS:Po zapisiam Anatoliia Cherniaeva, Vadima Medvedeva, Georgiia Shakhnazarova (Moscow: Alpina, 2006), 180.

5V. B. Benevolenskii, “Ekonomicheskaia vzaimozavisimostʹ i vneshniaia politika SShA,” January 21, 1989, Archive of the Russian Academy of Sciences (ARAN), f. 2021 d. 2 o. 70, l. 266.

6Jonathan Levy, Ages of American Capitalism: A History of the United States (New York: Random House, 2021), 605.

7Kevin Kruse and Julian Zelizer, Fault Lines: A History of the United States since 1974 (New York: W. W. Norton, 2019), 105.

8Paul Volcker, “A Rare Opportunity,” Speech at the Tax Foundation, December 3, 1980, Folder “Federal Reserve Board Paul Volcker (1 of 7),” Box 15, Subject File, Martin Anderson Files, Ronald Reagan Presidential Library (RRPL), Simi Valley, CA.

9Statement by Paul A. Volcker, Chairman, Board of Governors of the Federal Reserve System before the Committee on Banking, Housing and Urban Affairs, United States Senate, January 7, 1981, Folder “Federal Reserve Board Paul Volcker (1 of 7),” Box 15, Subject File, Martin Anderson Files, RRPL.

10This refers to the bank prime loan rate. See Federal Reserve data at “Bank Prime Loan Rate,” Federal Reserve Bank of St. Louis, accessed June 5, 2021, https://fred.stlouisfed.org/series/MPRIME,.

11Figure 2.2 in Andrew Glyn, Capitalism Unleashed: Finance, Globalization, and Welfare (New York: Oxford University Press, 2006), 26.

12Levy, Ages of American Capitalism, 603.

13Michael Mussa, “U.S. Monetary Policy in the 1980s,” in American Economic Policy in the 1980s, ed. Martin Feldstein (Chicago: University of Chicago Press, 1994), 104.

14Steven Greenhouse, The Big Squeeze: Tough Times for the American Worker (New York: Knopf, 2008), 80–83.

15“First Inaugural Address of Ronald Reagan,” January 20, 1981, Yale Law School, Lillian Goldman Law Library, The Avalon Project, accessed June 5, 2021, https://avalon.law.yale.edu/20th_century/reagan1.asp,.

16Levy, Ages of American Capitalism, 379.

17Calculated from the constant dollar data set for Figure 9.1 in Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Harvard University Press, 2014), 309. Data set available at http://piketty.pse.ens.fr/files/capital21c/en/xls/, accessed June 15, 2021.

18Herbert Meyer, “The Decline of Strikes,” Fortune, November 2, 1981, 66.

19Quoted in Jefferson Cowie, Stayin’ Alive: The 1970s and the Last Days of the Working Class (New York: New Press, 2010), 363.

20Levy, Ages of American Capitalism, 605.

21Meyer, “Decline of Strikes,” 70.

22Stephen Hayward, The Age of Reagan, vol. 2, The Conservative Counterrevolution, 1980–1989 (New York: Three Rivers Press, 2009), 173.

23Greenhouse, Big Squeeze, 80.

24Barry T. Hirsch and David A. Macpherson, Union Membership and Coverage Database, “Union Membership, Coverage, Density and Employment, 1973–2020, Private Sector Historical Table,” accessed July 2, 2021, http://unionstats.com.

25Robert Brenner, The Economics of Global Turbulence (New York: Verso, 2006), 196.

26For more detailed discussion of this broad conclusion, see Brenner, The Economics of Global Turbulence, 209–210.

27“Business Conditions: How High the Rate?,” July 26, 1981, New York Times, sec. 3, 18.

28Figure 9.3 in Barry Eichengreen, The European Economy since 1945 (Princeton, NJ: Princeton University Press, 2007), 265.

29Glyn, Capitalism Unleashed, 116.

30Brenner, Economics of Global Turbulence, 230.

31Tony Judt, Postwar: A History of Europe since 1945 (New York: Penguin, 2005), 555.

32Marc Levinson, An Extraordinary Time: The End of the Postwar Boom and the Return of the Ordinary Economy (New York: Basic Books, 2016), 215; Laura Cabeza Garcia and Silvia Gomes Anson, “The Spanish Privitsation Process: Implications on the Performance of Divested Firms,” International Review of Financial Analysis 16 (2007): 390–409.

33Cherniaev, ed., V Politbiuro TsK KPSS, 180. Levinson, An Extraordinary Time, 217.

34OECD social spending data set at “Social Spending,” OECD, accessed July 8, 2021, https://data.oecd.org/socialexp/social-spending.htm#indicator-chart.

35Thomas Rodney Chistofferson, The French Socialists in Power, 1981–1986: From Autogestion to Cohabitation (Newark: University of Delaware Press, 1991), chap. 2.

36Levinson, Extraordinary Time, 204–208; Judt, Postwar, 551–554.

37Judt, Postwar, 554.

38Rawi Abdelal, Capital Rules: The Construction of Global Finance (Cambridge, MA: Harvard University Press, 2007), particularly chap. 4.

39Levinson, Extraordinary Time, 196.

40Judt, Postwar, 558.

41David A. Stockman, The Triumph of Politics: How the Reagan Revolution Failed (New York: Harper & Row, 1986), 8.

42Stockman, Triumph of Politics, 265.

43Stockman, Triumph of Politics, 67.

44Stockman, Triumph of Politics, 60.

45“First Inaugural Address of Ronald Reagan,” January 20, 1981, Yale Law School, Lillian Goldman Law Library, The Avalon Project, accessed June 5, 2021, https://avalon.law.yale.edu/20th_century/reagan1.asp.

46The ERTA favored debt investment over equity investment much more than the law’s authors initially intended. The 50 percent estimation is from 1989 Economic Report of the President (Washington, DC: United States Government Printing Office, 1989), 87.

47Calculation based on current dollar figures provided in table 4.5 in James Poterba, “Federal Budget Policy in the 1980s,” in ed. Feldstein, American Economic Policy in the 1980s, 248.

48Emphasis in the original. Stockman, Triumph of Politics, 343.

49Reagan, October 17, 1981, in Douglas Brinkley, ed., The Reagan Diaries (New York: HarperCollins, 2007), 44.

50Brinkley, Reagan Diaries, 53.

51Statement by Paul Volcker, Chairman, Board of Governors of the Federal Reserve System before the Committee on the Budget, United States Senate, September 16, 1981, Folder “Federal Reserve Board Paul Volcker (4 of 7),” Box 15, Subject File, Martin Anderson Files, RRPL.

52Lawrence Kudlow, Memorandum for the Council on Economic Affairs, “Financial and Economic Update (Executive Summary),” January 21, 1982, Box 19, WHORM Subject File, Federal Government Organization, Cabinet Councils, RRPL.

53Memorandum for Secretary of the Treasury et al., “The Cabinet Council on Economic Affairs Working Group on International Investment,” June 17, 1981, Folder “Cabinet Council on Economic Affairs June 1981,” Box OA7424, James Burnham Files, RRPL.

54Murray Weidenbaum, “The United States and the World Economy,” September 16, 1981, Folder “Cabinet Council on Economic Affairs September 1981,” Box OA7424, James Burnham Files, RRPL.

55Henry Kaufman and Paul Volcker being two of the most prominent doubters. See Paul Volcker’s “The Twin Deficits,” Challenge 26 (March/April 1984): 4–9, and Henry Kaufman, Interest Rates, Markets, and the New Financial World (New York: Times, 1986).

56William A. Niskanen, Reaganomics: An Insider’s Account of the Policies and the People (New York: Oxford University Press, 1988), 110.

57The 1984 Deficit Reduction Act and the Tax Reform Act of 1986 also followed. “Piecemeal” is James Poterba’s characterization in “Federal Budget Policy in the 1980s,” 250.

58From July 1980 to March 1985, the dollar appreciated 18.1 percent against the Japanese yen, 94.5 percent against the deutsche mark, and 122.6 percent against the British pound. Harold James, International Monetary Cooperation since Bretton Woods (New York: Oxford University Press, 1996), 419.

59Martin Feldstein, Memorandum for the Cabinet Council on Economic Affairs, “Is the Dollar Overvalued?,” April 8, 1983, OA10700, William Poole Papers, RRPL.

60Roger B. Porter, “Economic Policy Study Number 9: Economic Impact of International Trade,” June 30, 1983, Folder “Cabinet Council on Economic Affairs, July 1984 (1),” Box OA10700, William Poole Papers, RRPL.

61Robert Dederick, Memorandum for the Cabinet Council on Economic Affairs, “Report of the CCEA Working Group on the Economic Impact of International Trade,” September 26, 1983, Folder “Cabinet Council on Economic Affairs, October 1983 (1),” Box OA10700, William Poole Papers, RRPL.

62William Greider, Secrets of the Temple: How the Federal Reserve Runs the Country (New York: Simon & Schuster, 1987), 561.

63Greider, Secrets, 561.

64Greta R. Krippner, Capitalizing on Crisis: The Political Origins of the Rise of Finance (Cambridge, MA: Harvard University Press, 2011), 189n34.

65Robert G. Dederick, “Report of the CCEA Working Group on the Economic Impact of International Trade,” September 26, 1983, Folder “Cabinet Council on Economic Affairs, October 1983 (1),” Box OA10700, William Poole Papers, RRPL.

66Sidney Jones, “Report of the CCEA Working Group on the Economic Impact of International Trade: Macro Economic Policy Options,” January 24, 1984, OA10700, William Poole Papers, RRPL.

67Stuart Auerbach, “U.S. Becomes World’s No. 1 Debtor Nation,” Washington Post, June 25, 1986, G01.

68Calculated from data series in table S8.2, “Top Income and Wage Shares in the US, 1900–2010,” in Piketty, Capital in the Twenty-First Century, available in “Chapter9TablesandFigures.aspx” at http://piketty.pse.ens.fr/files/capital21c/en/xls/.

69Doubling of consumer credit statistic from Louis Hyman, Debtor Nation: The History of America in Red Ink (Princeton, NJ: Princeton University Press, 2011), 223, fig 7.3. Two-thirds of American households with credit cards from Louis Hyman, Borrow: A History of America in Red Ink (New York: Vintage, 2012), 226.

70Giovanni Arrighi, “The World Economy and the Cold War, 1970–1990,” in The Cambridge History of the Cold War, vol. 3, ed. Melvyn P. Leffler and Odd Arne Westad (Cambridge: Cambridge University Press, 2010), 23–44.

71Peter Field, “The Shunning of the Sovereign Borrower,” Euromoney, May 1982, 27, 30.

72National Intelligence Council Memorandum, “Implications of the LDC Debt Problem,” October 1982, CREST, CIA Online Reading Room, accessed November 5, 2018, https://www.cia.gov/library/readingroom/document/cia-rdp85m00363r001302940047-6.

73William Clark, Memorandum for the White House Summit Group, “Give-and-Take Session with the President,” April 21, 1983, Folder “Economic Summit Meeting Notes,” Box OA9811, Martin Feldstein Papers, RRPL.

74Roger W. Robinson to Norman A. Bailey, “Comments Related to Federal Reserve Staff Paper on IMF date 4/5/82 for Meeting of International Monetary Group on 4/20/82,” Folder “International Finance 4/20/1982—11/16/82,” RAC Box 3, Roger Robinson Papers, RRPL.

75James, International Monetary Cooperation, chap. 12 recounts the Latin American debt crisis in great detail. Very similar packages of IMF aid, commercial bank and government financing, and domestic structural adjustment were signed with Argentina and Brazil in fall 1982.

76See the summary of the US debt strategy provided in Christopher Hicks, “IG-IEP on International Debt,” August 15, 1984, Folder “Interagency Group on International Economic Policy (IG-IEP) on International Debt,” Box OA10699, William Poole Papers, RRPL.

77“Reagan Thanks Democrats,” New York Times, October 25, 1983, D1.

78Minutes of National Security Council Meeting, November 23, 1982, NSC00067, NSC Executive Secretariat Meeting Files, RRPL.

79Hal Brands, Latin America’s Cold War (Cambridge, MA: Harvard University Press, 2010), 233.

80Brands, Latin America’s Cold War, 224. See also James, International Monetary Cooperation, 386; Barbara Stallings and Robert Kaufman, eds., Debt and Democracy in Latin America (Boulder, CO: Westview Press, 1989); Samuel Huntington, The Third Wave: Democratization in the Late Twentieth Century (Norman: University of Oklahoma Press, 1991); and Peter H. Smith, Democracy in Latin America: Political Change in Comparative Perspective (New York: Oxford University Press, 2011).

5The Economic Cold War

1Padraic Fallon and David Sheriff, “The Betrayal of Eastern Europe,” Euromoney, September 1982, 21.

2Fallon and Sheriff, “Betrayal,” 22.

3L. A. Whittome to the Managing Director, December 21, 1981, File 3, Box 29, European Department Immediate Files (EDIF), International Monetary Fund (IMF) Archives, Washington, DC.

4Fallon and Sherriff, “Betrayal,” 19.

5These numbers are drawn from the Central Intelligence Agency’s Handbook of Economic Statistics, 1983 (Washington, DC.: Central Intelligence Agency, 1983), 68, table 47.

6See Thane Gustafson, Crisis Amid Plenty: The Politics of Soviet Energy under Brezhnev and Gorbachev (Princeton, NJ: Princeton University Press, 1989), chap. 3.

7Yakov Feygin, “Reforming the Cold War State: Economic Thought, Internationalization, and the Politics of Soviet Reform, 1955–1985” (Publicly Accessible Penn Dissertations, 2017), 308.

8Memorandum for the Record, “The Dollar Costs of Soviet Military Involvement in Afghanistan,” June 12, 1981, CIA Online Reading Room, accessed March 14, 2019, https://www.cia.gov/library/readingroom/docs/CIA-RDP96R01136R003100080030-5.pdf.

9Document 3, “Session of the CPSU CC Politburo,” October 31, 1980, in Mark Kramer, ed., “Soviet Deliberations during the Polish Crisis, 1980–1981,” Special Working Paper No. 1, Cold War International History Project, 57.

10The precise level is difficult to evaluate, but $4 billion is the figure mentioned by Brezhnev in his meeting with Kania and Jaruzelski in August 1981. See Document 16, “Information about Cde. L. I. Brezhnev’s Meeting with Cdes. S. Kania and W. Jaruzelski,” August 22, 1981, in Kramer, “Soviet Deliberations,” 135.

11Document 2, “Session of the CPSU CC Politburo,” October 29, 1980, in Kramer, “Soviet Deliberations,” 52–53.

12Document 38, “Transcript of CPSU CC Politburo Meeting,” March 26, 1981, in From Solidarity to Martial Law: The Polish Crisis of 1980–1981, ed. Andrzej Paczkowski and Malcolm Byrne (Budapest: Central European University Press, 2007), 234–235.

13“Niederschrift über das Treffen zwischen Genossen L. I. Breshnew und Genossen E. Honecker am 3. August 1981 auf der Krim,” DY 30/11853, SAPMO.

14Breznhev to Honecker, August 31, 1981, DE/1/58682, BArch Lichterfelde.

15Quoted in Hans-Hermann Hertle, Der Fall der Mauer: Die unbeabsichtige Selbstauflösung des SED-Staates (Opladen, Germany: Westdeutscher Verlag, 1999), 47.

16“Niederschrift über das Gespräch des Generalsekretärs des ZK der SED, Genossen Erich Honecker, mit dem Sekretär des ZK der KPdSU, Genossen Konstantin Vikorowisch Russakow, am 21. Oktober 1981,” DY 30/23379, SAPMO, 80.

17“Niederschrift über das Gespräch des Generalsekretärs,” 82.

18“Niederschrift über das Gespräch des Generalsekretärs,” 67.

19Matthew J. Ouimet, The Rise and Fall of the Brezhnev Doctrine in Soviet Foreign Policy (Chapel Hill: University of North Carolina Press, 2003), 182–183.

20Document 43, “Transcript of CPSU CC Politburo Meeting,” April 9, 1981, in Paczkowski and Byrne, From Solidarity to Martial Law, 259–264.

21Quoted in Ouimet, Rise and Fall of the Brezhnev Doctrine, 202. Vojtech Mastny provides slightly different timing for this decision, placing it in April 1981, in his “The Soviet Non-Invasion of Poland in 1980/81 and the End of the Cold War,” Working Paper No. 23, September 1998, Cold War International History Project.

22Ouimet, Rise and Fall of the Brezhnev Doctrine, chap. 6.

23Quote from Document 56, “Report to HSWP CC Politburo with Verbatim Transcript of July 21 Telephone Conversation between Kania and Brezhnev,” in Paczkowski and Byrne, From Solidarity to Martial Law, 317. For other references to similar Soviet messages, see Kramer, “Soviet Deliberations,” 18–20.

24For evidence of debt affecting internal actions toward Solidarity, see Document 26, “Protocol of Meeting of Leading Aktiv Members of Ministry of Internal Affairs,” in Paczkowski and Byrne, From Solidarity to Martial Law, 171. For discussions with Soviet officials, see Document 60, “Information on Brezhnev Meeting with Kania and Jaruzelski on August 14, 1981, August 22, 1981,” in Paczkowski and Byrne, From Solidarity to Martial Law, 342.

25See my own “Fugitive Leverage: Commercial Banks, Sovereign Debt, and Cold War Crisis in Poland, 1980–1982,” Enterprise & Society 18, no. 1 (March 2017): 72–107.

26Wojciech Jaruzelski, Mein Leben für Polen: Erinnerungen (Munich: Piper, 1993), 426.

27Document 81, “Transcript of CPSU CC Politburo Meeting,” December 10, 1981, in Paczkowski and Byrne, From Solidarity to Martial Law, 449.

28Paczkowski and Byrne, From Solidarity to Martial Law, 450.

29Ouimet, The Rise and Fall of the Brezhnev Doctrine, particularly chaps. 6, 7, and conclusion.

30Douglas Brinkley, ed., The Reagan Diaries (New York: HarperCollins, 2007), 55.

31Constant dollar figure cited in Hal Brands, Making the Unipolar Moment: U.S. Foreign Policy and the Rise of the Post-Cold War Order (Ithaca, NY: Cornell University Press, 2016), 76.

32Special Intelligence Estimate, “Dependence of Soviet Military Power on Economic Relations with the West,” November 17, 1981, in Foreign Relations of the United States (FRUS) 1981–1988, vol. 3 (Washington, DC: United States Government Publishing Office), 352.

33Quoted in Brands, Making the Unipolar Moment, 75.

34Quoted in Brands, Making the Unipolar Moment, 87.

35Quoted in Brands, Making the Unipolar Moment, 78.

36Robert Service, The End of the Cold War: 1985–1991 (London: Macmillan, 2015), 45.

37National Security Planning Group Meeting, December 5, 1984, NSPG 0101, Ronald Reagan Presidential Library (RRPL).

38Memorandum from Allen to Reagan, “Economic/Financial Situation of the Soviet Union and Eastern Europe Countries,” November 18, 1981, in FRUS 1981–1988, vol. 3, 362.

39“The State of the Soviet Economy and the Role of East-West Trade,” October 26, 1981, in FRUS 1981–1988, vol. 3, 342.

40“The Impact of Credit Restrictions on Soviet Trade and the Soviet Economy,” April 21, 1982, Folder “Buckley Mission Apr 1982–Present [1983] [6 of 10],” RAC Box 5, Norman Bailey Papers, RRPL.

41Special National Intelligence Estimate, “The Soviet Gas Pipeline in Perspective,” September 21, 1982, in FRUS 1981–1988, vol. 3, 706.

42Intelligence Assessment Prepared by the Central Intelligence Agency, “Can the Soviets Stand Down Militarily?,” July 1982, in FRUS 1981–1988, vol. 3, 652. A similar, albeit more tentative, conclusion is reached in “The Impact of Credit Restrictions,” RRPL, 48–49.

43Minutes of a National Security Council Meeting, October 16, 1981, in FRUS 1981–1988, vol. 3, 322.

44The internal administration debate over a formal policy for engaging the Soviet Union extended through January 1983, when Reagan endorsed National Security Decision Directive 75, a foundational strategy document for his administration. For the text of the directive, see FRUS 1981–1988, vol. 3, 861.

45Stephan Kieninger, The Diplomacy of Détente: Cooperative Security Policies from Helmut Schmidt to George Schultz (London: Routledge, 2018), 109, and “Energy and Economic Evaluation of the Soviet-West European Natural Gas Pipeline Project,” October 7, 1982, Box 28, Folder “October–December 1982,” Soviet Flashpoints Collection, National Security Archive, Washington, DC.

46Minutes of a National Security Council Meeting, February 4, 1982, in FRUS 1981–1988, vol. 3, 482.

47“Response to NSSD 11–82: U.S. Relations with the USSR,” December 6, 1982, in FRUS 1981–1988, vol. 3, 820.

48The key NSC meetings on this issue took place on February 4 and February 26, 1982. See FRUS 1981–1988, vol. 3, 481–484, 490–495.

49Memorandum of Conversation, “Debrief of Under Secretary Buckley’s Trip to Europe,” March 25, 1982, in FRUS 1981–1988, vol. 3, 505.

50Quotes from Kieninger, Diplomacy of Détente, 113, and paragraph based on chap. 3.

51Memorandum of Conversation, “Debrief of Under Secretary Buckley,” 506.

52Minutes of National Security Council Meeting, May 24, 1982, in FRUS 1981–1988, vol. 3, 563.

53Quoted in editor’s note, FRUS 1981–1988, vol. 3, 572–573.

54National Security Directive 66, November 29, 1982, in FRUS 1981–1988, vol. 3, 812.

55Author’s calculations from appendix table C.10 in Economic Survey of Europe in 1990–1991 (Geneva, SZ: United Nations, 1991), 249.

56See the essays in Duccio Basosi, Giuliano Garavini, and Massimiliano Trentin, eds., Counter-Shock: The Oil Counterrevolution of the 1980s (London: I. B. Tauris, 2018).

57Schlack to Mittag, December 1, 1981, DY 3023/981, SAPMO, 322–324.

58L. A. Whittome to the Managing Director and the Deputy Managing Director, December 21, 1981, Box 29, File 3, EDIF, Country Files (CF), IMF.

59Gerhard Schmitz, “Information zu Meinungen sowjetische Genossen über die Frage der Verschuldung sozialistischer Länder in konvertierbaren Devisen,” March 3, 1982, DY 3023/982, SAPMO, 32.

60Schalck to Honecker, March 5, 1982, DY 3023/982, SAPMO, 33.

61Horst Kaminsky to Günter Mittag, April 8, 1982, DY 3023/982, SAPMO, 84.

62L. A. Whittome to the Acting Managing Director, November 2, 1981, Box 57, File 3, EUR Country Files, IMF.

63Blair A. Ruble, “Summary: Discussion of Polish Economic Situation and Prospects for Economic Reform,” September 15, 1981, Box 57, File 3, EUR Country Files, IMF.

64Underlining in the original. “Zur Entwicklung der Zahlungsbilanz im 1. Halbjahr 1982,” attached to Schalck to Mittag, March 4, 1982, DY 3023/982, SAPMO, 19–21.

65Gerhard Schmitz, “Information zu Meinungen sowjetische Genossen über die Frage der Verschuldung sozialistischer Länder in konvertierbaren Devisen,” March 3, 1982, DY3023/982, SAPMO, 28–31.

66Kaminsky to Mittag, April 8, 1982, DY3023/982, SAPMO, 90.

67W. J. E. Charles, “The International Banking System: The Effect of an Eastern Bloc Default,” January 21, 1980, 3A143/1, Bank of England (BoE) Archives, London, United Kingdom.

68I have not found an instance of a communist official even raising the idea of collective default as a remote possibility to be considered.

69P. J. Bull, “June EDC Paper: Poland,” June 5, 1980, 3A143/2, BoE Archives. For the broader debate among Western central banks over the dangers and likelihood of a communist default, either as individual countries or as a bloc, see the other files in 3A143/1–3A143/7 at the BoE Archives.

70For exemplary statements of this view from the Soviet perspective, see “Mezhdunarodnyi valiutnyi fond i sotsialisticheskie strany,” November 11, 1983, Russian State Archive of the Economy (RGAE), f. 2324, o. 33, d. 406, and “Usloviia kreditovaniia zapadom razvivaiushchikhsia stran progressivnoi orientatsii,” March 20, 1987, RGAE, f. 2324, o. 33, d. 640.

71See the files in Box 29, File 2, European Department Immediate Files, Country Files, IMF.

72Poland became a member in 1946 but withdrew from membership in 1950 under pressure from the Soviet Union.

73Roger Gough, A Good Comrade: János Kádár, Communism and Hungary (London: I. B. Tauris, 2006), 214. Also “Information über den Beitritt der UVR zum Internationalen Währungsfonds und zur Internationalen Bank für Wiederaufbau und Entwicklung,” November 11, 1982, DE/1/58682, BArch Lichterfelde.

74Kaminsky to Mittag, April 8, 1982, DY3023/982, SAPMO, 89.

75L. A. Whittome to the Managing Director, June 2, 1982, Box 29, File 3, EDIF, CF, IMF.

76“IMF Executive Board Meeting,” December 8, 1982, EBM/82/157–12/8/82, accessed April 18, 2019, https://archivescatalog.imf.org/Details/ArchiveExecutive/125000218.

77See “Press Release: Hungary Stand-By Agreement,” January 13, 1984, accessed April 24, 2019, https://archivescatalog.imf.org/Details/ArchiveExecutive/125073812.

78Author’s calculations from World Bank project history database, accessed April 29, 2019, http://projects.worldbank.org/search?lang=en&searchTerm=&countrycode_exact=HU.

79“Hungary—Membership Mission, Minutes of Meeting No. 1,” November 25, 1981, Box 30, File 1, EDIF, CF, IMF.

80P. de Fontenay, Memorandum for Files, “Meeting on September 28 with Mr. Marjai.” September 29, 1982, Box 29, File 4, EDIF, CF, IMF.

81H. B. Junz to the Managing Director, May 16, 1983, Box 30, File 3, EDIF, CF, IMF.

82“Briefing Paper—1984 Mid-Term Review and Possible Use of Fund Resources,” March 30, 1984, Box 31, File 4, EDIF, CF, IMF.

83“Hungary—Staff Visit, Minutes of Meeting,” September 11, 1984, Box 31, File 4, EDIF, CF, IMF.

84Quoted in Attila Mong, Kádár Hitele (Budapest: Libri Publishing House, 2012), 238.

85L. G. Manison, “Recovery of Lending to Eastern Europe,” July 13, 1984, Box 21, File 2, EUR Department Fonds, Country/Country Desk Files, IMF.

86Alexander Schalck-Golodkowski, Deutsche-Deutsche Erinnerungen (Reinbek, Germany: Rowohlt, 2000), 285.

87The East German government imposed very limited austerity in the early 1980s, essentially holding living standards constant in 1982 and 1983. See Matthias Judt, Das Bereich Kommerzielle Koordinierung: Das DDR-Wirtschaftsimperium des Alexander Schalck-Golodkowski—Mythos und Realität (Berlin: Ch. Links Verlag, 2013), 166–171.

88A. Schalck, “Niederschrift über das am 25.05.1983 zwischen dem Vorsitzenden der CSU, F.J. Strauß, und Genossen Schalck in Spöck/Chiemsee geführten Gespräches,” May 26, 1983, DL/226/1137, BArch Lichterfelde.

89Matthias Judt, KoKo: Mythos und Realität: Das Imperium des Alexander Schalck-Golodkowski (Berlin: Ed. Berolina, 2015), 158.

90Stephan Kieninger, “Freer Movement in Return for Cash: Franz Josef Strauß, Alexander Schalck-Golodkowski, and the Milliardenkredite for the GDR, 1983–1984,” in New Perspectives on the End of the Cold War: Unexpected Transformations?, ed. Bernhard Blumenau, Jussi Hanhimäki, and Barbara Zanchetta (London: Routledge, 2018).

91Judt, KoKo, 164.

92The Soviets were not completely unwilling or unable to help the GDR. In early 1982, Schalck devised an arbitrage scheme to buy extra oil from Moscow using hard currency with a ninety-day payment period, resell it on the world market, and use the funds to service the GDR’s debts during the ninety-day lag. See Judt, KoKo, chap. 2.2.

93“Niederschrift über das Treffen zwischen Genossen Erich Honecker und Genossen Konstantin Ustinowitsch Tschernenko am 17. August 1984,” August 17, 1984, DY30/2380, SAPMO, 107.

94“Zasedanie politbiuro TsK KPSS 23 maya 1984 goda,” May 23, 1984, f. 89, o. 42, Hoover Archives.

95William Taubman, Gorbachev: His Life and Times (New York: Simon & Schuster, 2017), 209.

6The Socialist Perestroika

1Robert English, Russia and the Idea of the West: Gorbachev, Intellectuals, and the End of the Cold War (New York: Columbia University Press, 2000).

2Abel Aganbegyan, Moving the Mountain: Inside the Perestroika Revolution (London: Bantam Press, 1989), 65–66.

3Linda J. Cook, The Soviet Social Contract and Why It Failed: Welfare Policy and Workers’ Politics from Brezhnev to Yeltsin (Cambridge, MA: Harvard University Press, 1993).

4Chris Miller makes this point particularly well in his The Struggle to Save the Soviet Economy: Mikhail Gorbachev and the Collapse of the USSR (Chapel Hill: University of North Carolina Press, 2016).

5Stephen Kotkin, Armageddon Averted: The Soviet Collapse, 1970–2000 (Oxford: Oxford University Press, 2001), chap. 1.

6Aganbegyan, Moving the Mountain, 68.

7This paragraph discusses capitalist economies in their ideal type. Capitalist economies do not and did not live up to this ideal type, as oligopolistic behavior pervaded capitalist economies and continues to do so. See János Kornai, “‘Hard’ and ‘Soft’ Budget Constraint,” Acta Oeconomica 25, no. 3/4 (1980): 231–245.

8Nikolai Ryzhkov, Desiat’ let velikikh potriasenii (Moscow: Assotsiatsiia “Kniga Prosveshchenie Miloserdie,” 1995), 42.

9Working Memorandum, “Soveshchanie sekretarei TsK KPSS,” January 18, 1983, Container 25, Reel 17, Dmitry Volkogonov Papers (DVP), Hoover Institution Archives (HIA), Stanford, CA. See also Robert Service, The End of the Cold War, 1985–1991 (New York: Public Affairs, 2015), chap. 5.

10Ryzhkov, Desiat’ let, 42–47.

11For two slightly different accounts of this price-increase episode, see Mikhail Gorbachev, Zhizn’ I reformy, Vol. 1 (Moscow: Novosti, 1995), 234–235, and Valentin Pavlov, Upushchen li shans? Finansovi kliuch k rynku (Moscow: Terra, 1995), 69–72.

12“Ekonomicheskaia strategiia partii,” July 14, 1983, Gorbachev Foundation Archive (GFA), Moscow, Russia, f. 14574, o. 5, d. 1.

13E. I. Kapustin, “Problemy ratsional’nogo ispol’zovaniia trudovykh resursov,” August 13, 1984, GFA, f. 5, o. 1, d. 15011.

14V. N. Kirichenko, “O nekotoryx predposylkakh obespecheniia dinamichnogo razvitiia ekonomiki strany i dal’neishego sotsial’nogo progressa,” January 30, 1984, GFA, f. 5, o. 1, d. 14912.

15Kirichenko, “O nekotoryx predposylkakh obespecheniia.”

16Ryzhkov, Desiat’ let, 59. English, Russia and the Idea of the West, chap. 5.

17Service, End of the Cold War, 111.

18S. F. Akhromeev and G. M. Kornienko, Glazami marshala i diplomata (Moscow: Mezhdunarodnye Otnosheniia, 1992), 35.

19Anatoly Chernyaev, trans. Robert English and Elizabeth Tucker, My Six Years with Gorbachev (University Park: Pennsylvania State University Press, 2000), 22. Note that this book was published using the transliteration “Anatoly Chernyaev” so that spelling has been retained in the notes for this book.

20Anders Aslund, Gorbachev’s Struggle for Economic Reform: The Soviet Reform Process, 1985–1988 (Ithaca: Cornell University Press, 1991), 68.

21Aslund, Gorbachev’s Struggle, chap. 3.

22Aslund, Gorbachev’s Struggle, 78.

23Anatolii Cherniaev, ed., V Politbiuro TsK KPSS: Po zapisiam Anatoliia Cherniaeva, Vadima Medvedeva, Georgiia Shakhnazarova (Moscow: Alpina, 2006), 66.

24Table H.1 in International Monetary Fund, A Study of the Soviet Economy, vol. 1 (Washington, DC: International Monetary Fund, 1991), 109.

25Cherniaev, ed., V Politburo TsK KPSS, 50.

26All preceding quotes from Cherniaev, ed., V Politburo TsK KPSS, 102–105.

27Mikhail Gorbachev, Memoirs (New York: Doubleday, 1996), 401.

28See Anatoly Dobrynin, In Confidence: Moscow’s Ambassador to Six Cold War Presidents (Seattle: University of Washington Press, 2015), 570. Akhromeev and Kornienko, Glazami marshala i diplomata, 36. Pavel Palazchenkel, My Years with Gorbachev and Shevardnadze: The Memoirs of a Soviet Interpreter (University Park: Pennsylvania State University Press, 1997), 81.

29A. A. Kokoshin, “Finansirovanie voennykh prigotovlenii SShA v 1986–1992 gg.,” May 27, 1987, Achive of the Russian Academy of Sciences (ARAN), f. 2021, o. 2, d. 40, l. 117–125.

30See, for example, James Graham Wilson, The Triumph of Improvisation: Gorbachev’s Adaptability, Reagan’s Engagement, and the End of the Cold War (Ithaca: Cornell University Press, 2014).

31Quoted in Vladislav M. Zubok, A Failed Empire: The Soviet Union in the Cold War from Stalin to Gorbachev (Chapel Hill: University of North Carolina Press, 2009), 307.

32Cherniaev, ed., V Politbiuro TsK KPSS, 86–87.

33For a summary, see Service, End of the Cold War, chap. 14.

34Service, End of the Cold War, chaps. 17 and 18.

35Quoted in Chernyaev, My Six Years, 84.

36Cherniaev, ed., V Politbiuro TsK KPSS, 86.

37See Service, End of the Cold War, chap. 20.

38Cherniaev, ed., V Politbiuro TsK KPSS, 103.

39Cherniaev, ed., V Politbiuro TsK KPSS, 77.

40“Document No. 9: Notes of CC CPSU Politburo Session, January 29, 1987,” in Thomas Blanton, Svetlana Savranskaya, and Vladislav Zubok, eds., Masterpieces of History: The Peaceful End of the Cold War in Europe, 1989 (New York: Central European University Press, 2010), 241–243.

41“Niederschrift über das Treffen der Generalsekretäre und Ersten Sekretäre der Zentralkomitees der Bruderparteien der Teilnehmerstaaten des Warschauer Vertrages am 23. October 1985 in Sofia,” DY 30/2352, SAPMO, 103–109.

42Calculations and quote from “Soviet Energy Trade During 1986–87,” PlanEcon 4, no 28 (July 15, 1988): 5.

43Cherniaev, ed., V Politbiuro TsK KPSS, 77.

44Cherniaev, ed., V Politbiuro TsK KPSS, 69.

45Cherniaev, ed., V Politbiuro TsK KPSS, 93.

46“Document No. 7: Notes of CC CPSU Politburo Session,” July 3, 1986, in Masterpieces of History, 234–235.

47“Niederschrift über das Treffen der führenden Repräsentanten der Bruderparteien sozialistischer Länder des RGW am 10. Und 11. November 1986 in Moskau,” November 10–11, 1986, DY 30/2358, SAPMO, 5–6.

48“Rede des Genossen Mikhail Gorbatschow,” November 10, 1986, DY 30/2359, SAPMO, 8–46, at 14.

49“Niederschrift über das Treffen der führenden Repräsentanten der Bruderparteien sozialistischer Länder des RGW am 10. Und 11. November 1986 in Moskau,” November 10–11, 1986, DY 30/2358, SAPMO, 18–20.

50“Niederschrift über das Treffen,” SAPMO, 11.

51“Document 8: Transcript of CC CPSU Politburo Session, November 13, 1986,” in Masterpieces of History, 236–240.

52“Document No. 9: Notes of CC CPSU Politburo Session, January 29, 1987,” in Masterpieces of History, 241–243.

53See, for example, Jacques Lévesque, “The East European Revolutions of 1989,” in The Cambridge History of the Cold War, vol. 3, ed. Melvyn P. Leffler and Odd Arne Westad (Cambridge: Cambridge University Press, 2010), and Zubok, A Failed Empire, chap. 10.

54Even the leading conservative Yegor Ligachev said in reference to the decision to let Eastern Europe go free, “We made that decision in 1985, 1986. . . . We already had the example of Afghanistan before us.” David Remnick, Lenin’s Tomb: The Last Days of the Soviet Union (New York: Random House, 1993), 234.

55See influential accounts in Archie Brown, The Gorbachev Factor (Oxford: Oxford University Press, 1997) and Lévesque, “East European Revolutions.”

56Quotes from Cherniaev, ed., V Politbiuro TsK KPSS, 59. See also Service, End of the Cold War, 105, 150, 330–331. The war continued for two more years as the Kremlin sought a negotiated exit from the conflict. The last Soviet troops left Afghanistan in February 1989.

57IMF, A Study of the Soviet Economy, 22.

58Cherniaev, ed., V Politbiuro TsK KPSS, 169.

59Chernyaev, My Six Years, 108–109. IMF, A Study of the Soviet Economy, vol. 2, 14.

60Chernyaev, My Six Years, 109.

61Cherniaev, ed., V Politbiuro TsK KPSS, 169.

62Ryzhkov, Desyat’ let, 80.

63“Gorbachev Speech to June Central Committee Plenum,” in Foreign Broadcast Information Service, Soviet and Central Asia (FBIS-SOV), FBIS-SOV-87-123, June 26, 1987, R28.

64Abel Aganbegyan, “People and Economics,” Ogonyok, July and August 1987, in Gorbachev and Glasnost: Viewpoints from the Soviet Press, ed. Isaac J. Tarasulo (Lanham, MD: Rowman & Littlefield, 1989), 94.

65Nikolai Shmelev, “Advances and Debts,” Novy Mir, no. 6 (1987), in Gorbachev and Glasnost, 83.

66Shmelev, “New Worries,” Novy Mir, no. 4 (April 1988), in Gorbachev and Glasnost, 124.

67Ryzhkov speech to the Supreme Soviet, “On the Restructuring of the Management of the National Economy at the Present Stage of the Country’s Economic Development,” Pravda, June 30, 1987, translated in FBIS-SOV-87-126, R6 and R10.

68Gorbachev speech, June Plenum, in FBIS-SOV-87-123, June 26, 1987, R33.

69Yakovlev, “Text of Presentation at the CC CPSU Politburo Session,” September 28, 1987, in “Perestroika in the Soviet Union 30 Years On,” National Security Archive Electronic Briefing Book No. 504, March 11, 2015, accessed December 4, 2016, http://nsarchive.gwu.edu/NSAEBB/NSAEBB504/, 1.

70Cherniaev, ed., V Politbiuro TsK KPSS, 198.

71Gorbachev, Memoirs, 315.

72Daily Report, January 28, 1987, in FBIS-SOV-87-018, R20.

73Author’s calculations from lines 4 and 5 of table D.6 in IMF, A Study of the Soviet Economy, 99.

74The 1989 numbers are estimates collected by the IMF from Soviet officials in 1991. Table II.2.3 in IMF, A Study of the Soviet Economy, 55.

75Aganbegyan, Moving the Mountain, 70.

76Cherniaev, ed., V Politbiuro TsK KPSS, 187.

77Cherniaev, ed., V Politbiuro TsK KPSS, 180.

78Cherniaev, ed., V Politbiuro TsK KPSS, 184–185.

79Gorbachev, Memoirs, 235.

80Cherniaev, ed., V Politbiuro TsK KPSS, 187.

81“Basic Provisions for Radical Restructuring of Economic Management,” Pravda, June 27, 1987, translated in FBIS-SOV-87-125, R11–12.

82“Plenum Theses,” June 29, 1987, FBIS-SOV-87-125, R10.

83Memorandum of Conversation, Robert Gates and V. I. Kryuchkov, February 9, 1990, folder “Gorbachev (Dobrynin) Sensitive July–December 1990 [1],” OA/ID 91128-001, Special Separate USSR Notes Files, Gorbachev Files, Brent Scowcroft Collection, George H.W. Bush Presidential Library.

84“USSR: Financial Assets of Enterprises, 1980–1990,” table K7 in IMF, A Study of the Soviet Economy, 131.

85IMF, A Study of the Soviet Economy, 98, table D5.

86IMF, A Study of the Soviet Economy, 96, table D3.

87Chernyaev, My Six Years, 192.

88“Document No. 12: Notes of CC CPSU Politburo Session,” April 16, 1987, in Masterpieces of History, 249–252, quote at 251.

89Service, End of the Cold War, 246–247.

90“Postanovlenie TsK KPSS, O nashei dal’neishei takticheskoi linii v otnoshenii peregovorov s SShA po voprosam iadernykh i kosmicheskikh vooruzhenii,” February 20, 1987, Vitalii Leonidovich Kataev Papers, Box 5, Folder 24, HIA. Cherniaev, ed., V Politbiuro TsK KPSS, 151–152.

91See, for example, Wilson, Triumph of Improvisation, 123–124, and Andrei Grachev, Gorbachev’s Gamble: Soviet Foreign Policy and the End of the Cold War (Cambridge: Cambridge University Press, 2008), 93–100.

92These internal Soviet dynamics on the decision to decouple the arms control package are best discussed in Service, End of the Cold War, chap. 22.

93Cherniaev, ed., V Politbiuro TsK KPSS, 169.

94“Memorandum of Conversation between M.S. Gorbachev and US Secretary of State George Schultz,” April 14, 1987, in Svetlana Savranskaya and Thomas Blanton, eds., “The INF Treaty and the Washington Summit: Twenty Years Later,” National Security Archive Electronic Briefing Book No. 238, accessed December 15, 2016, https://nsarchive2.gwu.edu/NSAEBB/NSAEBB238/index.htm.

95Cherniaev, ed., V Politbiuro TsK KPSS, 160.

96Cherniaev, ed., V Politbiuro TsK KPSS, 161.

97Quoted in Milan Svec, “The Prague Spring: 20 Years Later,” Foreign Affairs 66, no. 4 (Spring 1988): 990.

98Cherniaev, ed., V Politbiuro TsK KPSS, 166.

99Cherniaev, ed., V Politbiuro TsK KPSS, 274.

100Cherniaev, ed., V Politbiuro TsK KPSS, 275.

101Cherniaev, ed., V Politbiuro TsK KPSS, 242.

102Cherniaev, ed., V Politbiuro TsK KPSS, 230.

103Service, End of the Cold War, 277–289.

104Service, End of the Cold War, 287, 291.

105Andrei Grachev, “Gorbachev and the ‘New Political Thinking,’” in The Revolutions of 1989: A Handbook, ed. Wolfgang Mueller et al. (Vienna: Verlag der Osterreichischen Akademie der Wissenshaften, 2015), 41n14.

106“Address by Mikhail Gorbachev at the UN General Assembly Session (Excerpts),” December 07, 1988, History and Public Policy Program Digital Archive, CWIHP Archive, accessed October 30, 2021, http://digitalarchive.wilsoncenter.org/document/116224.

107“Document No. 26: Notes of CC CPSU Politburo Session,” June 20, 1988, in Masterpieces of History, 286–287.

108Chernyaev, My Six Years, 194–195.

109All words in brackets were added by the translator in “Document No. 35: Transcript of CC CPSU Politburo Session,” December 27–28, 1988, in Masterpieces of History, 332–340.

110“Document No. 19: Notes of CC CPSU Politburo Session,” March 10, 1988, in Masterpieces of History, 265–267.

111Y. V. Ponomarev, “O valyutno-finansovom polozhenii sotsialisticheskikh stran,” November 24, 1988, Russian State Archive of the Economy (RGAE), f. 2324, o. 33, d. 696.

112“Document 1: Georgy Shakhnazarov’s Preparatory Notes for Mikhail Gorbachev for the Meeting of the Politburo,” October 6, 1988, in The End of the Cold War, Cold War International History Project Bulletin, Issue 12/13 (Fall/Winter 2001), 15.

113“Document No. 39: Report from Mikhail Gorbachev to the CC CPSU Politburo regarding His Meeting with the Trilateral Commission,” January 21, 1989, in Masterpieces of History, 349–351.

114Emphasis in original. Document No. 41: Memorandum from CC CPSU International Department, “On a Strategy for Relations with the European Socialist Countries,” February 1989, in Masterpieces of History, 353–364.

115“Document 42: Memorandum from the Bogomolov Institute, ‘Changes in Eastern Europe and Their Impact on the USSR,’” February 1989, in Masterpieces of History, 365–381.

116“Document No. 51: Notes of Mikhail Gorbachev’s Meeting with Soviet Ambassadors to Socialist Countries,” March 3, 1989, in Masterpieces of History, 414–417.

117E. Shevardnadze, D. Yazov, and V. Kamenstev, “Tovarishu Gorbachevu M.S.,” March 25, 1989, Kataev Papers, Box 13, Folder 14, HIA.

118“‘Europe as a Common Home’ Address Given by Mikhail Gorbachev to the Council of Europe (Strasbourg, 6 July 1989),” Making the History of 1989, Roy Rosenzweig Center for History and New Media, accessed December 10, 2016, https://chnm.gmu.edu/1989/archive/files/gorbachev-speech-7-6-89_e3ccb87237.pdf.

7A Period of Extraordinary Politics

1Leszek Balcerowicz, “Understanding Postcommunist Transitions,” Journal of Democracy 5, no. 4 (October 1994): 75–89, quotes at 84–85.

2Two examples are Timothy Garton Ash, “The Year of Truth,” in The Revolutions of 1989, ed. Vladimir Tismaneanu (London: Routledge, 1999) and Gregory F. Domber, Empowering Revolution: America, Poland, and the End of the Cold War (Chapel Hill: University of North Carolina Press, 2014).

3Quoted in Domber, Empowering Revolution, 136.

4Quote and figures in Domber, Empowering Revolution, 136, 139.

5W. Allen Holmes to the Secretary of State, “Poland: Effectiveness of Economic Sanctions,” May 28, 1982, Folder May–June 1982, Box 27, Soviet Flashpoints Collection (SFC), National Security Archive (NSA), Washington, DC.

6For an example of such an exchange, see “Zasedanie Politbiuro TsK KPSS,” April 26, 1984, Container 25, Reel 17, Dmitrii Volkogonov Papers, Hoover Institution, Stanford, CA.

7L. A. Whittome, Memorandum for Files, “Poland,” March 25, 1985, Box 36, File “Poland 330—Meetings with Banks 1981–1989,” Country/Country Desk Files, Country Files (CF), International Monetary Fund (IMF) Archives, Washington, DC.

8Paul McCarthy, “Poland: The Long Road Back to Creditworthiness,” July 21, 1986, Poland—corresp. and memos 1986 (Jan.–Sept), Box 60, EUR Country Files, IMF Archives.

9“Poland—Debt Restructuring,” undated, Box 60, File “Poland—corresp. and memos 1986 (Jan.–Sept),” EUR Country Files, IMF Archives.

10“Take out” from Jim Prust to Mr. Hole, “Poland—Debt Servicing Prospects,” January 6, 1987, File 1, Box 24, EUR Division Country Correspondence Files, IMF Archives.

11Domber, Empowering Revolution, 40–41.

12National Security Decision Directive 54, “United States Policy toward Eastern Europe,” September 2, 1982, Ronald Reagan Presidential Library (RRPL), accessed April 20, 2018. https://www.reaganlibrary.gov/sites/default/files/archives/reference/scanned-nsdds/nsdd54.pdf.

13Walt Raymond to Paula Dobriansky, April 16, 1983, File “Poland—Strategy EE,” RAC Box 4, Paula Dobriansky Files, RRPL.

14William Clark to George Schultz, “Poland: Next Steps,” undated but late March or early April 1983, File “Poland—Strategy EE,” RAC Box 4, Paula Dobriansky Files, RRPL.

15“Poland: Implications of IMF Membership,” intelligence memorandum with no author, August 24, 1984, File “Poland—IMF (1),” RAC Box 3, Paula Dobriansky Files, RRPL, 10–11.

16Domber, Empowering Revolution, 74–80.

17Quoted in Domber, Empowering Revolution, 75.

18Polish emissary Adam Schaff quoted in Domber, Empowering Revolution, 123.

19Domber, Empowering Revolution, 123–127.

20Jan Vanous quoted in Stanislaw Gomulka, “Polish Economy in the 1980s and the International Monetary Fund’s Reform and Policy Options,” September 15, 1985, Box 59, File 3, EUR Country Files, IMF Archives.

21Schmitt to Whittome, “Poland—Negotiating a Program,” June 25, 1986, Box 60, File “Poland—corresp. and memos 1986 (Jan.–Sept),” EUR Country Files, IMF Archives.

22Memorandum from the Economic Commission of the Parisian Collective—Solidarite avec Solidarnosc—to Peter Hall and A. Whittome,” September 17, 1985, Folder “Polish Trade Union ‘Solidarnosc,’” Box 1, Country Files, Central Files, IMF Archives.

23Memorandum from SecState to AmEmbassy Warsaw, May 23, 1989, Box 35, File “May 16–30, 1989,” SFC, NSA.

24Memorandum from the Economic Commission of the Parisian Collective, September 17, 1985, IMF Archives.

25Andrzej Olechowki and Jan Woroniecki, “Notatka w sprawie korzystania przez Polskę ze środków MFW i Banku Swiatowego (strategia, procedury, instyucje),” April 10, 1986, Kolekcja Miedzeszyn M10—Sprawy gospodarcze i referendum 1987, Box 6, KC PZPR Files, Hoover Institution.

26Paul McCarthy, “Poland: The Long Road Back to Creditworthiness,” July 21, 1986, Poland—corresp. and memos 1986 (Jan.–Sept), Box 60, EUR Country Files, IMF Archives.

27Memorandum for Files, “Poland—Managing Director’s Lunch with Professor Baka,” February 26, 1987, Box 24, File 1, EUR Division Country Correspondence Files, IMF Archives.

28Domber, Empowering Revolution, 155–156.

29Prust to Whittome, “Poland—Your Meeting and Lunch with Mr. Krowacki and Colleagues,” April 28, 1987, Box 24, File 1, EUR Division Country Correspondence Files (EUR DCCF), IMF Archives.

30Memorandum for Files, “Poland—Meeting with Polish Delegation to Annual Meetings,” October 2, 1986, Box 24, File 1, EUR DCCF, IMF Archives.

31Document 1, “Propozycje w sprawie rozszerzenia zakresu stosowania ustawy z dnia 17 lipca 1986 r. o szczególnym postępowaniu wobec sprawców niektórych przestępstw,” in Polska 1986–1989: Koniec Systemu, vol. III, Dokumenty, ed. Antoni Dudek and Andrzej Friszke (Warsaw: Trio/ISP PAN, 2002), 14–15.

32Document 4, “Pro memoria dla abp. Bronisława Dąbrowskiego z rozmowy Andrzeja Święcickiego, Jerzego Turowicza i Andrzeja Wielowieyskiego z Kazimierzem Barcikowskim, Stanisławem Cioskiem i Kazimierzem Secomskim w Belwederze 18 października 1986 r.,” in Dudek and Friske, Polska 1986–1989, 25–26.

33Quoted in Andrzej Paczkowski, The Spring Will Be Ours: Poland and the Poles, trans. Jane Cave (University Park: Pennsylvania State University Press, 2003), 486.

34Document 8, “Zapis stenograficzny rozmowy Ericha Honeckera z Wojciechem Jaruzelskim 16 września 1987 r. (fragmenty),” September 16, 1987, in Dudek and Friszke, Polska 1986–1989, 48.

35Anatolii Chernaiev quoted in “Dialogue, The Musgrove Conference, May 1–3, 1998,” in Masterpieces of History: The Peaceful End of the Cold War in Europe, 1989, ed. Svetlana Savranskaya, Thomas Blanton, and Vladislav Zubok (Budapest: Central European University Press, 2010), 134.

36Karen Elliott House, Robert Keatley, and Barry Newman, “Jaruzelski Seeks Major Economic Reform,” Wall Street Journal, July 30, 1987, 18.

37Jim Prust to Mr. Russo, “Poland,” July 31, 1987, Box 24, File 1, EUR DCCF, IMF Archives.

38Document 8, “Zapis stenograficzny rozmowy,” in Dudek and Friszke, Polska 1986–1989, 52–53.

39“A Synthesis of the Domestic Situation and the West’s Activity,” August 28, 1987, in “The End of the Cold War,” Cold War International History Project Bulletin, no. 12/13 (Fall/Winter 2001), 98–99.

40Domber, Empowering Revolution, 203–204.

41“Poland: Options for U.S. Policy if the Roundtable is Successful,” Condoleezza Rice 1989–1990 Subject Files, Folder “Poland—Roundtable,” George H. W. Bush Presidential Library (GHWBL), College Station, TX.

42Quoted in Michał Sieziako, “Kulisy referendum z 29 listopada 1987 r.,” Polityka, November 28, 2017, accessed October 1, 2019, https://www.polityka.pl/tygodnikpolityka/historia/1728812,1,kulisy-referendum-z-29-listopada-1987-r.read.

43“Jaruzelski Says Reforms ‘A Necessity’ in Poland,” December 16, 1987, Box 38, File “Poland 914—Economic reform 1987 and onwards,” Country/Country Desk Files, Central Files, IMF Archives.

44Antoni Dudek, Reglamentowana rewolucja: Rozkład dyktatury komunistycznej w Polsce 1988–1990 (Krakow, Poland: Wydawn. Arcana, 2004), 124.

45Document 10, “Informacja o stanie nastrojów społecznych i działalności przeciwnika w pierwszym okresie n etapu reform,” March 2, 1988, in Dudek and Friszke, Polska 1986–1989, 78–79.

46Dudek, Reglamentowana rewolucja, 121–122.

47Quoted in Dudek, Reglamentowana rewolucja, 127–128.

48Quoted in Dudek, Reglamentowana rewolucja, 127.

49Tellingly, the advisors proposed no similar consultations with their Soviet comrades in Moscow. Dudek, Reglamentowana rewolucja, 129–130.

50Document 12, “Uwagi ekspertów o sytuacji w kraju i wynikających z niej wniosków,” May 6, 1988, in Dudek and Friszke, Polska 1986–1989, 86–87.

51Massimo Russo to Mr. Whittome, “Poland,” June 24, 1988, Box 24, File 3, EUR DCCF, IMF Archives.

52Document 12, “Uwagi zespołu ekspertów KC PZPR o sytuacji kraju i wynikających z niej wnioskach przesłane członkom kierownictwa PZPR 6 maja 1988 r.,” in Dudek and Friszke, Polska 1986–1989, 89.

53Dudek and Friszke, Polska, 1986–1989, 85.

54Memorandum for Files, “Poland: MD’s Lunch with Mr. Sadowski,” June 27, 1988, Box 61, File “Poland—corresp + memos June—Sept 1988,” EUR Country Files, IMF Archives.

55Wojciech Jaruzelski, Erinnerungen: Mein Leben für Polen (Munich: Piper, 1993), 323.

56Dudek, Reglamentowana rewolucja, 132, 165.

57Document 12, “Uwagi zespołu ekspertów KC PZPR o sytuacji kraju i wynikających z niej wnioskach przesłane członkom kierownictwa PZPR 6 maja 1988 r.,” in Polska 1986–1989, 89.

58Dudek, Reglamentowana rewolucja, 147–148.

59Dudek, Reglamentowana rewolucja, 166.

60Mieczysław Rakowski, Dzienniki polityczne, 1987–1990 (Warsaw: Iskry, 2005), 213.

61Dudek, Reglamentowana rewolucja, 162.

62“Spotkanie Robocze w Magdalence, 16 września 1988 r., godz. 15.15–19:00,” in Magdalenka, Transakcja epoki: Notaki z poufnych spotkań Kiszczak-Wałęsa, ed. Krzysztof Dubiński (Warsaw: Sylwa, 1990), 19–20.

63Paczkowski, The Spring Will Be Ours, 492–493.

64Rakowski, Dzienniki polityczne, 1987–1990, 218–219.

65“Informacja z roboczej wizyty w Moskwie Członka Biura Politycznego КС PZPR Prezesa Rady Ministrów Mieczysława F. Rakowskiego (20–21.10.1988 r.),” Folder “NR 2/49 (2/2),” Box 49, Mieczysław Rakowski Papers, Hoover Institution. In his memoirs, Rakowski describes many journalists drawing parallels between him and Thatcher, parallels that he ultimately dismissed. See Mieczysław Rakowski, Es begann in Polen: Der Anfang vom Ende des Ostblocks, trans. Maria Janssen (Hamburg, Germany: Hoffman und Campe, 1995), 217–219.

66“Excerpts from “Debate Between Lech Walesa and Alfred Miodowicz, 30 November 1988,” Making the History of 1989, The Roy Rosenzweig Center for History and New Media, George Mason University, accessed November 20, 2019, http://chnm.gmu.edu/1989/archive/files/walesa-miodowicz-debate_019f3357aa.pdf.

67Dudek, Reglamentowana rewolucja, 218–219.

68Dudek, Reglamentowana rewolucja, 221–224.

69Dudek, Reglamentowana rewolucja, 231.

70Underlining original to the document. Jim Prust to Massimo Russo, “Poland—Missions and Visits,” February 2, 1989, Box 61, EUR Country Files, IMF Archives.

71J. Prust to the Managing Director and the Deputy Managing Director, “Poland-Back-to-Office Report on Staff Visit,” November 10, 1988, Folder “Poland—corresp. + memos Oct–Dec. 1988,” Box 61, EUR CF, IMF Archives.

72“Poland—Staff Visit, Minutes of Meeting No. 7,” October 28, 1988, Folder “Poland—corresp. + memos Oct–Dec. 1988,” Box 61, EUR CF, IMF Archives.

73Jim Prust to Mr. Russo, “Poland: ETR’s Comments on Draft Briefing Paper,” March 6, 1989, Folder “Poland—corresp. + memos Jan.–May 1989,” Box 61, EUR CF, IMF Archives.

74Memorandum AmEmbassy Warsaw to SecState, January 30, 1989, Box 35, File “January 1989,” SFC, NSA.

75Memorandum AmEmbassy Warsaw to SecState, January 30, 1989, Folder “January 1989,” Box 35, SFC, NSA.

76Memorandum from AmEmbassy to SecState, February 9, 1989, Folder “Feb. 1–17 1989,” Box 35, SFC, NSA.

77Memorandum from AmEmbassy to SecState, February 15, 1989, Folder “February 1–17 1989,” Box 35, SFC, NSA.

78Memorandum from AmEmbassy to SecState, February 15, 1989, Folder “February 1–17 1989,” Box 35, SFC, NSA.

79Memorandum from AmEmbassy Warsaw to SecState, February 17, 1989, Folder “February 17–28 1989,” Box 35, SFC, NSA.

80Memorandum AmEmbassy Warsaw to SecState, February 21, 1989, Folder “February 17–28 1989,” Box 35, SFC, NSA.

81Memorandum from AmEmbassy Warsaw to SecState, March 3, 1989, Box 35, Folder “March 1 -15, 1989,” SFC, NSA.

82Memorandum from AmEmbassy Warsaw to Sec State, March 1, 1989, Box 35, Folder “March 1–15, 1989,” SFC, NSA.

83SecState to AmEmbassy Warsaw, “Department Meeting with Solidarity Advisor Jacek Kuroń,” May 3, 1989, Box 35, File “May 1–15, 1989,” SFC, NSA.

84Underlining in the original. Condoleezza Rice to Robert Gates, “DC Meeting on U.S. Policy Options if the Polish Roundtable Succeeds,” March 29, 1989, OA/ID CF00716-014, Condoleezza Rice 1989–1990 Subject Files, GHWBL.

85Brent Scowcroft, “Meeting with the National Security Council,” April 4, 1989, OA/ID 90000-009, NSC Meeting Files, GHWBL.

86Robert Hutchings to Brent Scowcroft, “National Security Council Meeting on Western Europe and Eastern Europe,” April 3, 1989, NSC0008a, NSC Meeting Files, GHWBL.

87Rice to Gates, “DC Meeting on U.S. Policy Options if the Polish Roundtable Succeeds,” March 29, 1989, OA/ID CF00716-014, Condoleezza Rice 1989–1990 Subject Files, GHWBL.

88SecState to AmEmbassy Warsaw, April 17, 1989, Box 35, Folder “April 16–30,” SFC, NSA.

89AmEmbassy Warsaw to SecState, “Continuing Controversy on the ‘Michnik Plan,’” July 6, 1989, Box 34, File “Poland Cables January–September 1989,” SFC, NSA.

90“Minutes of the Meeting of the Presidium of the Citizens’ Parliamentary Club,” August 1, 1989, in “The End of the Cold War,” Cold War International History Project Bulletin, no. 12/13 (Fall/Winter 2001): 120–121.

91Jeffrey Sachs, Poland’s Jump to the Market Economy (Cambridge, MA: MIT Press, 1993), 32.

92Document 171, “Projekt harmonogramu działań Rządu na najbliższe miesiące,” undated but late August 1989, in Stanisław Gomułka i transformacja polska : dokumenty i analizy 1968–1989, ed. Stanisław Gomułka and Tadeusz Kowalik (Warsaw: Wydawn. Nauk. Scholar, 2010), 493–495.

93Balcerowicz, “Understanding Postcommunist Transitions,” 84–85.

94Sachs, Poland’s Jump, 33.

95Jeffrey Sachs, The End of Poverty: Economic Possibilities for Our Time (New York: Penguin, 2005), 120.

96Jeffrey Sachs and David Lipton to Leszek Balcerowicz, “Preparation of a Document for International Circulation,” September 14, 1989, Box 62, File “Poland—corresp. + memos August–Sept 1989,” EUR Country Files, IMF Archives.

97Massimo Russo to the Managing Director and the Deputy Managing Director, “Poland,” September 25, 1989, Box 62, File “Poland—corresp. + memos August–Sept 1989,” EUR Country Files, IMF Archives.

98Brent Scowcroft to the President, “NSC Meeting on New Assistance for Poland,” October 3, 1989, OA/ID CF00716-011, Condoleezza Rice 1989–1990 Subject Files, GHWBL.

99Steve Greenhouse, “Poland’s Foreign Lenders Accept Unusual Extension of Payments,” New York Times, February 17, 1990, 1.

100Letter to Michel Camdessus, August 27, 1993, Box 1, File “Fund Relations with Commercial Banks,” Country Files, Central Files, IMF Archives. Letter to Michel Camdessus, March 25, 1994, Box 1, File “Fund Relations with Commercial Banks,” Country Files, Central Files, IMF Archives.

101Sachs, Poland’s Jump, 39–40, 48.

102Rakowski, Dzienniki polityczne, 1987–1990, 555.

103Jaruzelski quoted in Wiktor Osiatynski, “The Roundtable Talks in Poland,” in The Roundtable Talks and the Breakdown of Communism, ed. Jon Ester (Chicago: University of Chicago Press, 1996), 62–63n7.

8The Coercion of Creditworthiness

1Underlining in the original. PlanEcon Report 3, no. 14–15 (April 10, 1987): 3, 5.

2Scholars have long recognized the “negotiated” nature of Hungary’s revolution in 1989, but they have not drawn a significant connection between this reform process and the country’s international financial position. For leading accounts, see Lazlo Borhi, Dealing with Dictators: The United States, Hungary, and East Central Europe, 1942–1989 (Bloomington: Indiana University Press, 2016) and Rudolf Tökés, Hungary’s Negotiated Revolution: Economic Reform, Social Change, and Political Succession, 1957–1990 (Cambridge: Cambridge University Press, 1996). This chapter is highly indebted to Attila Mong’s outstanding book, Kádár Hitele (Budapest: Libri Publishing House, 2012), for perspectives on Hungarian debt.

3Quoted in Mong, Kádár Hitele, 238.

4Memorandum for Files, “Hungary,” September 23, 1986, Box 159, File 1, European Department Immediate Files, Country Files (EURAI CF), International Monetary Fund (IMF) Archives, Washington, DC.

5Memorandum for Files, “Meeting with Mr. J. Fekete, Senior Vice President, National Bank of Hungary,” March 27, 1985, Box 32, File 2, EURAI CF, IMF Archives.

6Minutes of Meeting, “Meeting with the President of the NBH,” August 17, 1987, Box 32, File 3, EURAI CF, IMF Archives.

7United Nations, Economic Commission for Europe, Economic Survey of Europe, 1991 (Geneva: United Nations, 1991), 250, appendix table C.11.

8Memorandum for Files, “Hungary,” April 26, 1985, Box 32, File 2, EURAI CF, IMF Archives.

9L. A. Whittome to the Managing Director, “Hungary,” October 9, 1985, Box 32, File 2, EURAI CF, IMF Archives.

10Memorandum for Files, “Hungary,” October 10, 1986, Box 32, File 2, EURAI CF, IMF Archives.

11PlanEcon Report 3, no. 14–15 (April 10, 1987): 4.

12Quotes in Mong, Kádár Hitele, 258.

13L. A. Whittome to the Managing Director, April 8, 1986, Box 32, File 3, EURAI CF, IMF Archives.

14“Our Problems and Possibilities: An Interview with Karoly Grósz,” translated and added to Memorandum for Files, “Hungary—Interview with Mr. Karoly Grosz,” December 4, 1986, Box 159, File 1, EURAI CF, IMF Archives.

15“Hungary: Brief for the Managing Director’s Visit to the United Kingdom,” May 5, 1988, File 1, Box 172, EUR Country Files, IMF Archives.

16“Our Problems and Possibilities: An Interview with Karoly Grósz,” translated and added to Memorandum for Files, “Hungary—Interview with Mr. Karoly Grosz,” December 4, 1986, Box 159, File 1, EURAI CF, IMF Archives.

17Quoted in Tibor Kovácsy, “Politikai reformtervek Magyarországon—FORDULAT ÉS REFORM,” in Magyar Füzetek 18, Válság és reform, accessed June 28, 2021, https://epa.oszk.hu/02200/02201/00016/pdf/, 91–103, quote at 92.

18Quoted in Kovácsy, “Politikai reformtervek Magyarországon,” 100.

19Quoted in Kovácsy, “Politikai reformtervek Magyarországon,” 94.

20George Kopits, Memorandum for Files, “Hungary—Overview of Change and Reform,” March 26, 1987, Box 32, File 3, EURAI CF, IMF Archives.

21Imre Pozsgay, “Political Institutions and Social Development,” Tarsadalmi Szemle, no 3 (1987), translated in Joint Publications Research Service—Eastern Europe (JPRS-EER), JPRS-EER-87-060, 41–49.

22“After the Resolution: Interview with Janos Hoos,” Otlet, December 4, 1986, translated in JPRS-EEC-87-024, 20-26.

23Document 8, “Transcript of CC CPSU Politburo Session,” in Masterpieces of History: The Peaceful End of the Cold War in Europe, 1989, ed. Svetlana Savranskaya, Thomas Blanton, and Vladislav Zubok (Budapest: Central European University Press, 2010), 239.

24Unknown financial periodical article, “Bad Blood,” November 1986, in Box 159, File 1, EURAI CF, IMF Archives.

25János Fekete, “Proposal for the Solution of the Debt Crisis: A Program for World Economic Recovery,” December 4–5, 1986, Box 159, File 1, EURAI CF, IMF Archives.

26Memorandum for Files, “Hungary- Meeting with Mr. J. Fekete,” March 3, 1987, Box 32, File 3, EURAI CF, IMF Archives.

27Minutes of Meeting No. 2, “Hungary—Staff Visit,” April 13, 1987, Box 32, File 3, EURAI CF, IMF Archives.

28“Interview with Bela Szikszay, State Secretary and President of the Office of Material and Price Control,” Figyelő, July 2, 1987, translated in JPRS-EER-87-145, 69.

29Minutes of Meeting No. 17, “Hungary- Staff Visit,” April 18, 1987, Box 32, File 3, EURAI CF, IMF Archives. The 1986 current account deficit and initial budget deficit projection is from “Briefing Paper- Use of Fund Resources,” November 20, 1987, Box 33, File 1, EURAI CF, IMF Archives.

30Helen Junz to Mr. J. Marjai and Mr. J. Fekete, “Staff Visit to Hungary, April 12–18, 1987,” April 17, 1987, Box 32, File 3, EURAI CF, IMF Archives.

31Helen Junz to the Managing Director and the Deputy Managing Director, “Hungary- Back-to-Office Report—April 12–18, 1987,” April 28, 1987, Box 32, File 3, EURAI CF, IMF Archives.

32Minutes of Meeting No. 17, Mr. Fekete and Mr. Németh, April 18, 1987, Box 32, File 3, EURAI CF, IMF Archives.

33Helen Junz to the Managing Director and the Deputy Managing Director, “Hungary- Back-to-Office Report.”

34Quoted in Mong, Kádár Hitele, 269.

35Quoted in András Oplatka, Nêmeth Miklós: Mert ez az ország érdeke (Budapest: Helikon, 2014), 138.

36Quoted in Mong, Kádár Hitele, 267.

37L. A. Whittome to Mr. Rose, “Hungary,” June 8, 1987, Box 32, File 3, EURAI CF, IMF Archives.

38Helen Junz to János Fekete, June 12, 1987, Box 32, File 3, EURAI CF, IMF Archives.

39Dokumente 1, “Stellungnahme des Zentralkomitees der Ungarischen Sozialistichen Arbeitspartei bezüglich des Programms der wirtschaftlich-gesellschaftlichen Entfaltung vom 2. Juli 1987,” in Die politisch-diplomatischen Beziehungen in der Wendezeit, 1987–1990, ed. Andreas Schmidt-Schweizer (Berlin: De Gruyter Oldenbourg, 2018), 215–227.

40Dokumente 1, “Stellungnahme des Zentralkomitees,” in Die politisch-diplomatischen Beziehungen, 226.

41János Fekete to Massimo Russo, Patrick de Fontenay, and Helen Junz, July 21, 1987, Box 32, File 3, EURAI CF, IMF Archives.

42Minutes of Meeting No. 1, “Hungary—Staff Visit,” August 17, 1987, Box 32, File 3, EURAI CF, IMF Archives.

43Minutes of Meeting No. 2, “Hungary—Staff Visit,” August 17, 1987, Box 32, File 3, EURAI CF, IMF Archives.

44Minutes of Meeting No. 10, “Hungary—Staff Visit,” August 19, 1987, Box 32, File 3, EURAI CF, IMF Archives.

45József Marjai to Michel Camdessus, September 24, 1987, Box 32, File 3, EURAI CF, IMF Archives.

46P. de Fontenay, Memorandum for Files, “Hungary,” October 9, 1987, Box 32, File 3, EURAI CF, IMF Archives.

47István Horváth, Die Sonne ging in Ungarn auf (Munich: Universitas, 2000), 230.

48Horváth, Die Sonne ging, 252.

49Dokument 6 in Schmidt-Schweizer, Die politisch-diplomatischen Beziehungen, 249–250.

50“Our Wishes Can Be Realized on the Basis of National Consensus,” Magyar Nemzet, March 16, 1987, translated in JPRS-EER-87-077, 33–34.

51“Taking a Stance,” Magyar Nemzet, September 26, 1987, translated in JPRS-EER-87-151, quotes on 1–2.

52Memorandum for Files, “Hungary—Meetings with Mr. Németh, Secretary of the MSZMP Central Committee,” June 17, 1988, File 2, Box 33, EURAI Country Files, IMF Archives.

53Memorandum for Files, “Reform of Housing and Housing Finance,” December 28, 1987, Box 33, File 1, EURAI CF, IMF Archives.

54Memorandum for Files, “Hungary—Meeting with the Prime Minister, Mr. Grosz,” January 11, 1988, Box 33, File, 1 EURAI CF, IMF Archives.

55Memorandum for Files, “Hungary- Meeting State Development Institution and Interest Rate Trigger,” January 12, 1988, Box 33, File, 1 EURAI CF, IMF Archives.

56P. de Fontenay to the Acting Managing Director, “Hungary- Stand-By Arrangement,” January 25, 1988, Box 33, File, 1 EURAI CF, IMF Archives.

57P. de Fontenay to Mr. Boorman, “Hungary-Stand-by Arrangement,” February 11, 1988, Box 33, File, 1 EURAI CF, IMF Archives.

58Mong, Kadar Hitele, 272.

59Dokumente 11, “Stellungnahme der Landeskonferenz der Ungarishen Sozialistichen Arbeiterpartei . . . ,” May 22, 1988, in Schmidt-Schweizer, Die politisch-diplomatischen Beziehungen, 290–305.

60Dokumente 13, “Bericht der bundesdeutschen Botschaft in Budapest . . . ,” July 6, 1988, in Schmidt-Schweizer, Die politisch-diplomatischen Beziehungen, 316–317.

61“Hungary—1988 Stand By Review,” July 1, 1988, Box 33, File, 1 EURAI CF, IMF Archives.

62G. Belanger to the Managing Director, “Hungary—Staff Visit,” September 13, 1988, Box 33, File, 1 EURAI CF, IMF Archives.

63P. de Fontenay to Mr. Whittome, “Hungary- Briefing Paper for the Review Mission,” June 29, 1988, Box 33, File 1, EURAI CF, IMF Archives.

64“Hungary—1989 Use of Fund Resources, Meeting No. 2,” August 29, 1989, Box 34, File 2, EURAI CF, IMF Archives.

65G. Belanger to the Managing Director, “Hungary—First Mid-Term Review,” July 13, 1988, Box 33, File 1, EURAI CF, IMF Archives. Hans Schmitt to Mr. Russo, “Hungary—SBA Review,” August 8, 1988, Box 33, File 1, EURAI CF, IMF Archives.

66Tökés, Hungary’s Negotiated Revolution, 305–314.

67P. de Fontenay to the Acting Managing Director, “Hungary- Staff Visit,” December 15, 1988, Box 11, File “Hungary 1988,” Country Files, Office of the Managing Director Fonds Michel Camdessus Sous-Fonds, IMF Archives.

68See Németh’s comment on December 13, 1988, about the economy returning to health in four more years in “Chronology,” in Political Transition in Hungary, 1989–1990: A Compendium of Declassified Documents and Chronology of Events, National Security Archive and Cold War International History Project, accessed June 29, 2021, https://www.wilsoncenter.org/publication/political-transition-hungary-1989-1990.

69Quoted in film 1989: A Statesman Opens Up, dir. Anders Ostergaard and Erzsebet Racz (New York: Icarus Films, 2014).

70Németh has offered this explanation on a number of occasions. For statements in English, see film 1989. He has not explicitly linked the decision to IMF pressure, but it is clear from the documentary record that the 1989 budget was crafted under significant pressure from the IMF. See Memorandum for Files, “Hungary: Minutes of the Opening Meeting held at the National Bank of Hungary on February 16, 1989,” March 2, 1989, Box 34, File 1, EURAI CF, IMF Archives.

71For a succinct summary and analysis of these events, see Andreas Oplatka, “Hungary 1989: Reunification of Power and Power-Sharing,” in The Revolutions of 1989: A Handbook, ed. Wolfgang Mueller et al. (Vienna: Verlag der Osterreichischen Akademie der Wissenschaften, 2015), 77–91.

72Memorandum for Files, “Hungary,” January 30, 1989, Box 34, File 1, EURAI CF, IMF Archives.

73Massimo Russo to the Managing Director, January 18, 1989, Box 34, File 1, EURAI CF, IMF Archives.

74All the previous quotes from the February 7, 1989, meeting come from Document 9, “Meeting of the MSZMP Political Committee. Verbatim Record of Minutes,” February 7, 1989, in Political Transition in Hungary, 63–94.

75Document 16, “Memorandum of Conversation between M.S. Gorbachev and Károly Grósz,” March 23–24, 1989, in Political Transition in Hungary, 133–134.

76Massimo Russo to the Managing Director and the Deputy Managing Director, “Brief for President Delors’ Visit to Hungary and Poland,” November 14, 1989, Box 34, File 1, EURAI CF, IMF Archives.

77Minutes of Meeting No. 7, “Hungary—1989 Use of Fund Resources,” November 16, 1989, Box 34, File 2, EURAI CF, IMF Archives.

78Minutes of Meeting No. 14, “Hungary—1989 Use of Fund Resources,” September 5, 1989, Box 34, File 2, EURAI CF, IMF Archives.

79Gérard Bélanger to the Acting Managing Director, “Hungary—Staff Visit and Request for Follow-Up,” June 1, 1989, Box 34, File 2, EURAI CF, IMF Archives.

80“Mr. Camdessus’ Telephone Conversation with Mr. Bartha on Monday,” November 20, 1989, Box 34, File 1, EURAI CF, IMF Archives.

81Minutes of Meeting No. 1, “Hungary—Use of Fund Resources,” August 28, 1989, Box 34, File 2, EURAI CF, IMF Archives.

82Minutes of Meeting No. 6, “Hungary- 1989 Use of Fund Resources,” August 31, 1989, Box 34, File 2, EURAI CF, IMF Archives.

83“The Plundering of Resources Did Not Begin with Foreign Indebtedness,” Heti Vilaggazdasag, March 18, 1989, translated in JPRS-EER-89-050, 42–44.

84Németh interview with “The Week,” translated in Foreign Broadcasting Information Service—Eastern Europe (FBIS-EEU), FBIS-EEU-89-072.

85Istvan Garamvolgyi, “The State as Debtor,” Magyarorszag, December 3, 1988, translated in JPRS-EER-89-012, 35–36.

86János Kis in “Reform and Hungary, Szazadveg’s Questionarre Concerning Reform,” Szazadveg, no. 4–5 (1987), translated in JPRS-EER-88-042, 15.

87Tamas Bauer et al., “Capitalist Support for Hungary: Target Premium,” Heti Vilaggazdasag, August 5, 1989, translated in JPRS-EER-89-103, 41–42.

88“The Hungarian National Bank President and the Hungarian Democratic Forum: He’s Bluffing,” Heti Vilaggazdasag, August 19, 1989, translated in JPRS-EER-89-104, 5.

89Eva Kaluzynska, “Delors Suggest Bridging Loan for Hungary,” November 17, 1989, Box 34, File 1, EURAI CF, IMF Archives.

90Minutes of Meeting No. 24, “Hungary—1989 Use of Fund Resources,” December 6, 1989, Box 34, File 2, EURAI CF, IMF Archives.

91G. Bélanger to the Managing Director and the Deputy Managing Director, January 31, 1990, Box 159, File 2, EURAI CF, IMF Archives.

92Massimo Russo to the Managing Director and the Deputy Managing Director, “Hungary- Follow-up Mission for the Use of Fund Resources,” January 10, 1990, Box 159, File 2, EURAI CF, IMF Archives.

93G. Bélanger to Mr. de Fontenay, “Mr. Szapary’s Report on the Managing Director’s Visit to Budapest,” May 16, 1990, Box 159, File 4, EURAI CF, IMF Archives.

94Imre Tarafás and Ferenc Rabár to Michel Camdessus, November 13, 1990, Box 160, File 2, EURAI CF, IMF Archives.

9Exit, Violence, or Austerity

1Albert Hirschman, Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States (Cambridge: Harvard University Press, 1970).

2The Frankfurter Allgemeine Zeitung, the leading newspaper in West Germany, published an article six days after the fall of the Wall titled “Abwandern, Widersprechen: Zur aktuellen Bedeutung einer Theorie von A.O. Hirschman.” Hirschman discusses the use of his theory in the GDR in Albert Hirschman, “Exit, Voice, and the Fate of the German Democratic Republic,” World Politics 45, no. 2 (January 1993): 173–202. See also, Stephen Pfaff, Exit-Voice Dynamics and the Collapse of East Germany (Chapel Hill, NC: Duke University Press, 2006).

3See Hans-Hermann Hertle, Der Fall der Mauer: Die Unbeabsichtige Selbstauflösung des SED-Staates (Opladen: VS Verlag für Sozialwissenschaften, 1996) and Das Ende der SED: Die Letzten Tage des Zentralkomitees (Berlin: Links, 2014); Charles S. Maier, Dissolution: The Crisis of Communism and the End of East Germany (Princeton, NJ: Princeton University Press, 1997); and M. E. Sarotte, The Collapse: The Accidental Opening of the Berlin Wall (New York: Basic Books, 2014).

4See, in particular, Sarotte, Collapse.

5Schalck and König, “Information zur Kostenentwicklung,” May 14, 1986, DL/226/1145, BArch Lichterfelde, 4–7.

6Untitled, Schalck and König to Mittag, January 29, 1985, DL/226/1145, BArch Lichterfelde, 178–185.

7Schalck and König, “Standpunkt zum vorgelegten Material der Staatlichen Plankomission ‘Grundlinien der Zahlungsbilanz für den Fünfjahrplanzeitraum 1986–1990,” March 19, 1985, DL/226/1146, BArch Lichterfelde, 144–147.

8Egon Krenz, Herbst ’89 (Berlin: Neues Leben, 1999), 214.

9Numbers cited from Matthias Judt, Das Bereich Kommerzielle Koordinierung: Das DDR-Wirtschaftsimperium des Alexander Schalck-Golodkowski—Mythos und Realität (Berlin: Ch. Links Verlag, 2013), 232, table 45.

10Export values cited in André Steiner, The Plans That Failed: An Economic History of the GDR (New York: Berghahn, 2010), 175.

11Untitled Letter, Schalck and König to Mittag, September 16, 1985, DL/226/1249, BArch Lichterfelde, 213–214.

12Untitled Letter, Schalck and König to Mittag, March 6, 1986, DL/226/1249, BArch Lichterfelde, 296–298.

13Hertle, Der Fall der Mauer, 63.

14Schalck to Mittag, August 5, 1986, DL/226/1249, BArch Lichterfelde, 180–181.

15Matthias Judt, KoKo: Mythos und Realität: Das Imperium des Schalck-Golodkowski (Berlin: Ed. Berolina, 2015), 232, table 45.

16All underlining original throughout the chapter. Schalck and König, “Standpunkt zur voraussichtlichen Entwicklung der Zahlungsbilanz NSW 1988 -1990 und der NSW-Verschuldung,” October 16, 1987, DL/266/1143, BArch Lichterfelde, 47–52.

17Schalck quoted in Gerhard Schürer, “Information über die Beratung der Ständigen Arbeitsgruppe zur operativen Leitung und Kontrolle der Durchführung der Zahlungsbilanz der DDR mit dem nichtsozialistischen Writschaftengebiet vom 15.10.1987,” October 15, 1987, DL/266/1143, BArch Lichterfelde, 100–103.

18Schalck interview in Theo Pirker et al., eds., Plan als Befehl und Fiktion: Wirtschaftsführung der DDR (Opladen : Westdeutscher Verlag, 1995), 148.

19Schürer, “Überlegungen zur weiteren Arbeit am Volkswirtschaftsplan 1989 und darüber hinaus,” April 26, 1988, DE/1/58736, BArch Lichterfelde, 318–330. Quotes at 320, 325, and 326–327.

20Quoted in Hertle, Der Fall der Mauer, 69.

21Günter Mittag, “Zur Prüfung des Materials des Vorsitzenden der Staatlichen Plankomission, Genossen Gerhard Schürer . . . ,” undated but May 1988, DE/1/58736, BArch Lichterfelde.

22Quoted in Hertle, Der Fall der Mauer, 69.

23Heinz Klopfer, “Persönliche Notizen über die Beratung im Politbüro des ZK der SED am 28.6.1988,” June 28, 1988, DE/1/58736, BArch Lichterfelde.

24“Arbeitsniederschrift über eine Beratung beim Generalsektretär des ZK der SED, Genossen Erich Honecker, zu den Materialen des Entwurfs der staatlichen Aufgaben 1989,” September 6, 1988, DE/1/58738, BArch Lichterfelde.

25Quoted in Hertle, Der Fall der Mauer, 71.

26“Arbeitsniederschrift über eine Beratung,” DE/1/58738, BArch Lichterfelde.

27Quote in Krenz, Herbst ’89, 120; Also see Gerhard Schürer, Gewagt und Verloren: Eine deutsche Biographie (Frankfurt Oder: Frankfurter Oder Editionen, 1996), 158.

28Quoted in Hertle, Der Fall der Mauer, 73.

29Andreas Oplatka, Der Erste Riß in der Mauer: September 1989—Ungarn öffnet die Grenze (Vienna: Paul Zsolnay Verlag, 2009), 25.

30Oplatka, Erste Riß, 36.

31Oplatka, Erste Riß, 46.

32Oplatka, Erste Riß, 67.

33Sarotte, Collapse, loc. 815 of 8079, Kindle.

34Oplatka, Erste Riß, 154–164.

35Andreas Oplatka, Németh Miklós: Mert ez az ország érdeke (Budapest: Helikon, 2014), 224.

36Oplatka, Erste Riß, 178.

37Oplatka, Erste Riß, 194–197.

38Serge Schmemann, “Hungary Allows 7,000 East Germans to Emigrate West,” September 11, 1989, New York Times, accessed June 27, 2016, http://www.nytimes.com/1989/09/11/world/hungary-allows-7000-east-germans-to-emigrate-west.html?pagewanted=all.

39Sarotte, Collapse, loc. 889 of 8079, Kindle.

40Document 57, “Schreiben des Bundeskanzlers Kohl an Ministerpräsident Németh,” October 4, 1989, in Hanns Jürgen Küsters and Daniel Hofmann, eds. Deutsche Einheit: Sonderedition aus den Akten des Bundeskanzleramt 1989/90 (Munich: R. Oldenbourg, 1998), 442.

41Document 46, “Gespräch Gobachev mit dem Staatsvorsitzenden Honecker am 7. Oktober 1989 [Auszug],” in Aleksander Galkin and Anatolij Tschernjajew, Michail Gorbatschow und die Deutsche Frage: Sowjetische Dokumente, 1986–1991 (Munich: Oldenbourg Verlag), 187–190, quotes at 189.

42Hans-Hermann Hertle, “The Fall of the Wall,” in The End of the Cold War [TECW], Cold War International History Project Bulletin, Issue 12/13 (Fall/Winter 2001), 133.

43Krenz, Herbst ’89, 120.

44“Standpunkt zur Sicherung der Zahlungsfähigkeit bis 1995/96,” DL/226/1258, BArch Lichterfelde, 153–157.

45Schürer, Beil, König, Schalck, and Polze, Untitled, September 28, 1989, DE/1/58166, BArch Lichterfelde.

46Schalck to Krenz, October 13, 1989, DL/226/1195, BArch Lichterfelde, 17–20.

47Krenz, Herbst ’89, 146.

48Quoted in Hertle, Der Fall der Mauer, 114.

49Sarotte, Collapse, loc. 1849 of 8079, Kindle.

50Sarotte, Collapse, loc. 2118 of 8079, Kindle.

51Krenz’s Herbst ’89 passim. Schürer, Gewagt und Verloren, 164.

52Mark Kramer, “The Demise of the Soviet Bloc,” 842.

53Sarotte, Collapse, loc. 2194 of 8079, Kindle.

54Hertle, ed., Das Ende der SED, 269.

55Schalck to Krenz, October 13, 1989, DL/226/1195, BArch Lichterfelde, 3–5.

56Alexander Schalck-Golodkowski, Deutsch-deutsche Erinnerugen (Reinbek: Rowohlt, 2001), 322.

57Schalck, Erinnerugen, 323.

58“Vermerk über ein informelles Gespräch des Genossen Alexander Schalck mit dem Bundesminister und Chef des Bundeskanzleramtes der BRD, Rudolf Seiters, und mit dem Mitglied des Vorstandes der CDU, Wolfgang Schäuble, am 24.10.1989,” in Hertle, Der Fall der Mauer, 439–443.

59Krenz, Herbst ’89, 224.

60“Ton-Aufzeichnung eines Telefonats zwischen Egon Krenz und Helmut Kohl, 26.10.1989,” in Hertle, Der Fall der Mauer, 447.

61Schalck, Erinnerugen, 325.

62Schalck, Erinnerugen, 325–326.

63The Interior Ministry and the Stasi had also received direction from the Politburo on October 24 to begin drafting the new travel law. See Sarotte, Collapse.

64Gerhard Schürer, Gerhard Beil, Alexander Schalck, Ernst Höfner, and Arno Donda, “Analyse der ökonomischen Lage der DDR mit Schlußfolgerungen, Vorlage für das Politbüro des Zentralkomitees der SED, 30.10.1989,” in Hertle, Der Fall der Mauer, 448–460, here 451.

65Schürer et al., “Analyse der ökonomischen Lage,” 454.

66Schürer et al., “Analyse der ökonomischen Lage,” 455.

67Schürer et al., “Analyse der ökonomischen Lage,” 455, 457.

68Schürer et al., “Analyse der ökonomischen Lage,” 459, 460.

69Hertle, Der Fall der Mauer, 148–149.

70Krenz, Herbst ’89, 246, 249.

71Krenz, Herbst ’89, 249, 250.

72Krenz, Herbst ’89, 266.

73“Document No. 1: Memorandum of Conversation between Egon Krenz, Secretary General of the Socialist Unity Party (SED), and Mikhail S. Gorbachev, Secretary General of the Communist Party of the Soviet Union (CPSU), 1 November 1989,” in TECW, 144.

74Krenz, Herbst ’89, 267.

75“Document 1: Memorandum,” TECW, 144.

76“Document 1: Memorandum,” TECW, 144.

77Krenz, Herbst ’89, 267.

78“Document 1: Memorandum,” TECW, 144.

79Krenz, Herbst ’89, 276.

80Sarotte, Collapse, loc. 2340 and 2377 of 8079, Kindle.

81Schalck, “Vermerk über ein informelles Gespräch des Genossen Alexander Schalck mit dem Bundesminister und Chef des Bundeskanzleramtes der BRD, Rudolf Seiters, und dem Mitglied des Vorstandes der CDU, Wolfgang Schäuble, am 06.11.1989,” in Hertle, Der Fall der Mauer, 483–486.

82Krenz, Herbst ’89, 302.

83Schalck, Erinnerugen, 327.

84Sarotte, Collapse, loc. 2396 and 2423 of 8079, Kindle.

85Document 74, “Besprechung der beamteten Staatssekretäre,” 6 p.m., November 6, 1989, in Deutsche Einheit: Sonderedition, 482.

86“Document 3: Letter from Alexander Schalck to Egon Krenz, November 7, 1989,” in TECW, 153.

87Krenz, Herbst ’89, 305.

88Text provided untitled in Deutsche Einheit: Sonderedition, 491.

89Gerhard Lauter interview in Hertle, Der Fall der Mauer, 330.

90“Document 7: Transcript of the Tenth Session of the SED Central Committee,” in TECW, 156.

91“Document 8: Günter Schabowski’s Press Conference in the GDR International Press Center,” in TECW, 157–158.

92Sarotte, Collapse, chap. 6.

93Schalck and König to Schürer, November 14, 1989, DL/226/1206, BArch Lichterfelde, 55–59.

10Discipline or Retreat

1Horst Teltschik, 329 Tage: Innenansichten der Einigung (Berlin: Siedler Verlag, 1991), 52.

2For arguments characteristic of this viewpoint, see Kristina Spohr, Post Wall, Post Square: How Bush, Gorbachev, Kohl and Deng Shaped the World after 1989 (New Haven, CT: Yale University Press, 2020); Jeffrey Engel, When the World Seemed New: George H. W. Bush and the End of the Cold War (Boston: Houghton Mifflin Harcourt, 2017); Mary Elise Sarotte, 1989: The Struggle to Create Post-Cold War Europe (Princeton, NJ: Princeton University Press, 2009); and Philip Zelikow and Condoleezza Rice, To Build a Better World: Choices to End the Cold War and Create a Global Commonwealth (New York: Twelve, 2019) and their Germany Unified and Europe Transformed: A Study in Statecraft (Cambridge, MA: Harvard University Press, 1995). Leading German-language accounts include Andreas Rödder, Deutschland einig Vaterland: Die Geschichte der Wiedervereinigung (Bonn: Bpb, 2010); Bernd Florath, “Die SED im Untergang,” in Das Revolutionsjahr 1989: Die demokratische Revolution in Osteuropa als transnationale Zäsur, ed. Bernd Florath (Göttingen: Vandenhoeck & Ruprecht, 2011); and Klaus-Dietmar Henke, ed., Revolution und Vereinigung 1989/90: Als in Deutschland die Realität die Phantasie überholte (Munich: Deutscher Taschenbuch Verlag, 2009). For views on the process from many vantage points, see Frédéric Bozo, Andreas Rödder, and Mary Elise Sarotte, eds., German Reunification: A Multinational History (London: Routledge, 2017). These works build on the original conclusions of the first wave of German historiography anchored by the monumental four-volume Geschichte der Deutschen Einheit published in the late 1990s.

3Vladislav Zubok has charted a course very much in line with the arguments in this chapter in “With His Back against the Wall: Gorbachev, Soviet Demise, and German Reunification,” Cold War History 14, no. 4 (2014): 619–645 and his chapter in Bozo, Rödder, and Sarotte, eds., German Reunification.

4Zubok, “With His Back,” 625.

5Memorandum of Telephone Conversation, Bush-Kohl, November 29, 1989, George H. W. Bush Presidential Library (GHWBL), College Station, Texas.

6Memorandum of Conversation, Bush and Kohl, February 24, 1990, GHWBL, accessed January 20, 2020, https://bush41library.tamu.edu/files/memcons-telcons/1990-02-24--Kohl.pdf.

7Anatolii Cherniaev, ed., V Politbiuro TsK KPSS: Po zapisiam Anatoliia Cherniaeva, Vadima Medvedeva, Georgiia Shakhnazarova (Moscow: Gorbachev-Fond, 2006), 383.

8William Taubman, Gorbachev: His Life and Times (New York: W. W. Norton, 2017), 450.

9Cherniaev, ed., V Politbiuro TsK KPSS, 425.

10Iu. S. Moskovskii to N. I. Ryzhkov, March 22, 1989, Russian State Archive of the Economy (GARF), f. 5446, o. 150, d. 72, Yegor Gaidar Online Archive (GOA).

11A Study of the Soviet Economy, vol. 1 (Washington, DC: International Monetary Fund, 1991), 59, table II.2.7.

12L. A. Whittome, “Memorandum for Files: Meeting with Dr. Storf and Colleagues of the Deutsche Bank,” August 16, 1990, File 7, Box 2, Office of the Managing Director—Alan Whittome Papers, International Monetary Fund (IMF) Archives.

13Underlining in the original. Iu. S. Moskovskii to N. I. Ryzhkov, August 12, 1989, GARF, f. 5446, o. 150, d. 73 [numbers difficult to read], GOA.

14“Na zasedanii Politbiuro TsK KPSS 24 iiulia 1986 goda,” July 21, 1986, in Aleksander Galkin and Anatolii Cherniaev, eds., Mikhail Gorbachev i germanskii vopros (Moscow: Ves’ mir, 2006), 16.

15Aleksander Galkin and Anatolii Cherniaev, eds., Michail Gorbatschow und die Deutsche Frage (Berlin: Oldenbourg, 2012), 84n24.

16Andrei Grachev, Gorbachev’s Gamble: Soviet Foreign Policy and the End of the Cold War (Malden, MA: Polity Press, 2008), 135.

17“Obmen rechami vo vremia torzhestvennogo obeda,” June 12, 1989, in Galkin and Cherniaev, eds., Mikhail Gorbachev i germanskii vopros, 167.

18“Beseda M.S. Gorbacheva s Villi Brandtom,” October 17, 1989, in Galkin and Cherniaev, eds., Mikhail Gorbachev i germanskii vopros, 227–228.

19Cherniaev, ed., V Politbiuro TsK KPSS, 521–524.

20Cherniaev, ed., V Politbiuro TsK KPSS, 525–529.

21K. F. Katushev to the Council of Ministers, December 12, 1989, GARF, f. 5446, o. 162, d. 1457, GOA.

22Sarotte, 1989, 68.

23Andreas Rödder, “Transferring a Civil Revolution into High Politics,” in Bozo, Rödder, and Sarotte, German Reunification, 44.

24A point picked up on by British diplomats. See Mr. Broomfield (East Berlin) to Mr. Hurd, November 13, 1989, in Documents on British Policy Overseas, ser. 4, vol. 7, German Unification, 1989–1990 [DBPO], 111.

25Hans Modrow, Aufbruch und Ende (Hamburg, Germany: Konkret Literatur Verlag, 1991), 41.

26“Gespräch des Bundesministers Seiters mit dem Staatsratsvorsitzenden Krenz und Ministerpräsident Modrow,” November 20, 1989, in Hanns Jürgen Küsters and Daniel Hofmann, eds. Deutsche Einheit: Sonderedition aus den Akten des Bundeskanzleramt 1989/90 (Munich: R. Oldenbourg, 1998), 558.

27Modrow, Aufbruch und Ende, 52.

28“Helmut Kohl’s Ten-Point Plan for German Unity (November 28, 1989),” German History in Documents and Images, accessed February 20, 2020, http://germanhistorydocs.ghidc.org/pdf/eng/Chapter1_Doc10English.pdf.

29See Sarotte, 1989, 75.

30Quoted in Engel, When the World, 278–279.

31Bush and Kohl telcon, November 29, 1989, GHWBL, accessed January 20, 2020, https://bush41library.tamu.edu/files/memcons-telcons/1989-11-29--Kohl.pdf.

32Letter from Mr. Powell (No. 10) to Mr. Wall, January 20, 1990, in DBPO, 215–219.

33“Iz besedy M.S. Gorbachevas G.D. Gensherom,” December 5, 1989, in Mikhail Gorbachev i germanskii vopros, 276–277.

34“Very critical” from Document 98, “Vorlage des Ministerialdirektors Teltschik an Bundeskanzler Kohl,” November 21, 1989, in Sonderedition, 563. The other quotes from Document 101, “Schreiben des Bundeskanzlers Kohl an Präsident Bush,” November 28, 1989, in Sonderedition, 569.

35Document 105, “Fernschreiben der Ständigen Vertretung bei der DDR an den Chef des Bundeskanzleramtes,” December 1, 1989, in Sonderedition, 591.

36Underlining original. Document 116, “Vorlage des Ministerialrats Ludewig an den Chef des Bundeskanzleramtes Seiters,” Sonderedition, 625–626.

37For December 1989 and January 1990, the party was actually the SED-PDS, before removing the SED name completely in February 1990. One leader Modrow could not apprehend was Alexander Schlack-Golodkowski, who fled to the West in early December. Schalck-Golodkowski, Deutsche-Deutsche Errinerungen (Reinbek bei Hamburg, Germany: Rowohlt, 2001).

38Mr Bloomfield (East Berlin) to Mr. Hurd, December 6, 1989, in DBPO, 151–156.

39Document 129, “Gespräch des Bundeskanzlers Kohl mit Ministerpräsident Modrow im erweiterten Kreis,” December 19, 1989, in Sonderedition, 670.

40Helmut Kohl, Erinnerungen, 1982–1990 (Munich: Knauer eBook, 2014), loc. 13338 of 14521, Kindle.

41Quoted in Engel, When the World, 321.

42On the Soviets’ commission on the “German-German question,” set up in the fall of 1989 under Shevardnadze’s direction, see Zubok, “With His Back,” 625.

43Cherniaev, ed., V Politbiuro TsK KPSS, 541.

44“Material k dokladu o sotsial’no-ekonomicheskom polozhenii strany,” January 2, 1990, RGAE, f. 2324, o. 33, d. 741, GOA.

45Subsidy figure from table 1 in Byung-Yeon Kim, “Causes of Repressed Inflation on the Soviet Consumer Market, 1965–1989: Retail Price Subsidies, the Siphoning Effect, and the Budget Deficit,” Economic History Review 55, no. 1 (February 2002), 109. Budget deficit figure from table J.3 in International Monetary Fund, A Study of the Soviet Economy (Washington, DC: International Monetary Fund, 1991), 123.

46“Material k dokladu o sotsial’no-ekonomicheskom polozhenii strany,” January 2, 1990, RGAE, f. 2324, o. 33, d. 741, GOA.

47Chris Miller, The Struggle to Save the Soviet Economy: Mikhail Gorbachev and the Collapse of the USSR (Chapel Hill: University of North Carolina Press, 2016), 152.

48Quoted in Taubman, Gorbachev, 503.

49Teltschik, 329 Tage, 101–102.

50Modrow, Aufbruch und Ende, 49, 119.

51“Iz besedy M.S. Gorbacheva s Kh. Modrovym,” January 30, 1990, in Mikhail Gorbachev i germanskii vopros, 312–324. The 30 percent drop was calculated using Modrow’s number for the shortfall in the first quarter, 1.2 million, multiplied by 4 and subtracted from the annual planned delivery total of 17 million tons.

52“Obsuzhdenie germanskogo voprosa na uzkom soveshchanii v kabinete Generalʹnogo sekretaria TsK KPSS,” January 26, 1990, in Mikhail Gorbachev i germanskii vopros, 307–311. Also, “The Diary of Anatoly Chernyaev, 1990,” trans. Anna Melyakova, National Security Archive, accessed February 3, 2020, https://nsarchive2.gwu.edu/NSAEBB/NSAEBB317/chernyaev_1990.pdf, 11.

53Document 106, “Minute from Mr. Hurd to Mrs. Thatcher,” January 25, 1990, in DBPO, 224.

54Sarotte, 1989, 134.

55Sir C. Mallaby (Bonn) to Mr. Hurd, February 5, 1990, in DBPO, 252.

56Document 138, “Gespräch des Bundeskanzlers Kohl mit Ministerpräsident Modrow,” February 3, 1990, in Sonderedition, 753–756.

57Document 157B, “Schritte zur deutschen Wirtschaftseinheit,” in Sonderedition, 752–753.

58Kohl, Erinnerungen, 1982–1990, loc. 13792 of 14521, Kindle.

59For this political calculus, see Document 157, “Vorlage des Regierungsdirektors Mertes an Bundeskanzler Kohl,” February 2, 1990, in Sonderedition, 749–750.

60See Teltschik’s notes on the campaign, 329 Tage, 153–175.

61For one perspective on this change, see the comments by the former head of the Soviet mission in Berlin, Valentin Koptelsev, in Grachev, Gorbachev’s Gamble, 156.

62Brent Scowcroft to the President, January 13, 1990, OA/ID 91117-009, U.S.-Soviet Relations Chronological Files, USSR Collapse Files, Scowcroft Files, GHWBL.

63Quoted in Engel, When the World, 315.

64“Enhancing the Political Role of NATO,” March 14, 1990, 1989–1990 Subject Files, Condoleezza Rice Files, GHWBL.

65This pledge, and others like it in February 1990, has subsequently become the subject of enormous controversy and debate. Among many, see Joshua R. Itzkowitz Shifrinson, “Deal or No Deal? The End of the Cold War and the U.S. Offer to Limit NATO Expansion,” International Security 40, no. 4 (Spring 2016): 7–44; Mary Elise Sarotte, “Not One Inch Eastward? Bush, Baker, Kohl, Genscher, Gorbachev, and the Origin of Russian Resentment toward NATO Enlargement in February 1990,” Diplomatic History 34, no. 1 (January 2010): 119–140, and “A Broken Promise? What the West Really Told Moscow about NATO Expansion,” Foreign Affairs 93, no. 5 (September/October 2014): 90–97; and Mark Kramer, “The Myth of a No-NATO-Enlargement Pledge to Russia,” Washington Quarterly 32, no. 2 (April 2009): 39–61.

66Memorandum of Conversation, Baker, Gorbachev, and Shevardnadze, February 9, 1990, in Thomas Blanton, Svetlana Savranskaya, and Vladislav Zubok, eds., Masterpieces of History: The Peaceful End of the Cold War in Europe, 1989 (New York: Central European University Press, 2010), 675–684.

67Memorandum of Conversation, Baker, Gorbachev, and Shevardnadze, in Masterpieces of History.

68“Iz besedy M.S. Gorbacheva s G. Kolem odin na odin,” February 10, 1990, in Mikhail Gorbachev i germanskii vopros, 345, 333.

69Document 166, “Vorlage des Ministerialdirektors Teltschik an Bundeskanzler Kohl,” no date but placed in the volume in early February before Kohl’s visit to Moscow, in Sonderedition, 772–773.

70Memorandum of Conversation, “Meeting with Helmut Kohl, Chancellor of the Federal Republic of Germany,” February 24, 1990, GHWBL, accessed February 5, 2020, https://bush41library.tamu.edu/files/memcons-telcons/1990-02-24--Kohl.pdf.

71Iu. S. Moskovskii to S. A. Sitarian, April 25, 1990, GARF, f. 54456, o. 162, d. 1463, GOA.

72V. V. Rerashenko to S. A. Sitarian, April 4, 1990, GARF, f. 5446, o. 162, d. 1464, GOA.

73K. F. Katuchev to S. A. Sitarian, April 13, 1990, GARF, f. 5446, o. 162, d. 1515, GOA; V. A. Bikov to S. A. Sitarian, April 11, 1990, GARF, f. 5446, o. 162, d. 1492, GOA.

74Document 90, “Zapis’ Besedy A.N. Iakovleva s Chlenom Nabliudatel’nogo Soveta ‘Doiche Bank AG’ F. Kristiansom (FRG),” April 4, 1990, in Perestroika, 1985–1991: Neizdannoe, Maloizvestnoe, Zabytoe, ed. Alexander Yakovlev (Moscow: Mezhdunarodnyi fond “Demokratiia,” 2008), 443–446.

75S. A. Sitarian to N. I. Ryzhkov, May 3, 1990, GARF, f. 5446, o. 162, d. 1464, GOA.

76Quoted in Vladislav Zubok, “Gorbachev, German Reunification, and Soviet Demise,” in Bozo, Rödder, and Sarotte, German Reunification, 95.

77“Zapiska V.M. Falina M.S. Gorbachevu,” April 18, 1990, in Mikhail Gorbachev i germanskii vopros, 398–408.

78Document 250, “Non-paper der Regierung der UdSSR,” April 19, 1990, in Sonderedition, 1023–1024.

79Document 253, “Gespräch des Bundeskanzlers Kohl mit Botschafter Kwizinskij,” April 23, 1990, in Sonderedition, 1026–1030.

80Shevardnadze read it and forwarded it to Gorbachev. Document 267, “Gespräch des Bundeskanzlers Kohl mit Außenminister Schewardnadse,” May 4, 1990, in Sonderedition, 1084–1090.

81“The Diary of Anatoly Chernyaev,” May 5, 1990, 29.

82Teltschik, 329 Tage, 220–221.

83Yuli Kvitsinskii, Vor dem Sturm: Erinnerungen eines Diplomaten (Berlin: Siedler, 1993), 25.

84Teltschik, 329 Tage, 220–221.

85Teltschik, 329 Tage, 226–227.

86We do not have a transcript of this opening meeting, so the best sources are Teltschik and Kvitsinskii. “Great detail,” Teltschik, 329 Tage, 230.

87Quotes from Kvitsinskii’s recollection of the meeting, Kvitsinskii, Vor dem Sturm, 27.

88Teltschik, 329 Tage, 232.

89Kvitsinskii, Vor dem Sturm, 27.

90Document 277, “Gespräch des Ministerialdirektors Teltschik mit Präsident Gorbatschow,” May 14, 1990 in Sonderedition, 1114–1118.

91Teltschik, 329 Tage, 243.

92Document 284, “Schreiben des Bundeskanzlers Kohl an Präsident Gorbatschow,” May 22, 1990, in Sonderedition, 1136.

93Memorandum of Conversation, Secretary Baker and Mikhail Gorbachev, May 18, 1990, OA/ID 91126-004, File: Gorbachev (Dobrynin) Sensitive 1989-June 1990 [4], Scowcroft Files, GHWBL.

94Memorandum for the Record, “Aid to the Soviet Union,” May 29, 1990, OA/ID 91118-003, File: USSR Collapse: US-Soviet Relations Thru 1991 (April-May 1990) [2], Scowcroft Files, GHWBL.

95“Economic Aid for the USSR—the $20 Billion Question,” May 25, 1990, OA/ID CF01309-003, “Chron File: May 1990-June 1990,” Nicholas Burns Files, GHWBL.

96Brent Scowcroft to the President, “A Strategic Choice: Do We Give Aid to the Soviet Union?,” May 29, 1990, File “U.S.-USSR Soviet Relations [2],” Condoleezza Rice Files, GHWBL. See also, Zelikow and Rice, To Build a Better World, 272.

97Memorandum for the Record, “Aid to the Soviet Union,” GHWBL.

98Nicholas Brady to the President, May 24, 1990, OA/ID CF01309-002, File “May 1990-June 1990,” Burns Chronological Files, GHWBL.

99Brent Scowcroft to the President, “A Strategic Choice,” GHWBL.

100Anatoly Chernyaev, My Six Years with Gorbachev (University Park: Pennsylvania State University Press, 2000), 266. At the Washington summit, Gorbachev momentarily accepted Germany’s right to join NATO based on the “Helsinki Principle” that each state had the right to choose its own alliances. However, he and his team retracted the admission, so the question of German membership in NATO remained open until Kohl’s summit in the Soviet Union in July.

101Quoted in Grachev, Gorbachev’s Gamble, 158.

102Document 277, “Gespräch des Ministerialdirektors Teltschik mit Präsident Gorbatschow,” May 14, 1990, in Sonderedition, 1114–1118.

103Memorandum of Ryzhkov to CC CPSU, June 29, 1990, quoted in Zubok, “With His Back,” 640–641.

104Kohl actually expressed this confidence even before receiving the letter. Quote from Memorandum of Conversation, Bush and Kohl, June 8, 1990, GHWBL. For reaction to the letter, see Teltschik, 329 Tage, 265.

105Document 329, “Vorlage des Ministerialdirektors Teltschik an Bundeskanzler Kohl,” June 27, 1990, in Sonderedition, 1275–1276.

106Zelikow and Rice, To Build a Better World, 476–477n50.

107Sarotte, 1989, 171.

108Zelikow and Rice, To Build a Better World; Sarotte, 1989, 176.

109Quoted in Zelikow and Rice, To Build a Better World, 286.

110Taubman, Gorbachev, 519–521.

111Helmut Kohl, Erinnerugen, 1990–1994 (Munich: Knaur, 2014), loc. 2156 of 10167, Kindle. Teltschik, 329 Tage, 316.

112Document 350, “Gespräch des Bundeskanzlers Kohl mit Präsident Gorbatschow,” July 15, 1990, in Sonderedition, 1340–1348.

113Document 353, “Gespräch des Bundeskanzlers Kohl mit Präsident Gorbatschow im erweiterten Kreis,” July 16, 1990, in Sonderedition, 1355–1367.

114Document 353, “Gespräch des Bundeskanzlers Kohl,” in Sonderedition, 1361–1363. “Profitable for both sides” was actually from the West German foreign minister Hans-Dietrich Genscher.

115T. G. Stepanov-Mamaladze’s diary and notes from July 16, 1990, quoted in Zubok, “With His Back,” 642–643.

116Minutes of Real Sector Meeting R-15, August 17, 1990, File 1, Box 3, Office of Managing Director - Alan Whittome Papers, IMF Archives.

117Minutes of Real Sector Meeting R-4, August 14, 1990, File 1, Box 3, Office of Managing Director—Alan Whittome Papers, IMF Archives.

118Document 399, “Vorlage des Vortragenden Legationsrats I Kaestner an Ministerialdirektor Teltschik,” August 27, 1990, in Sonderedition, 1500–1502.

119Document 415, “Telefongespräch des Bundeskanzlers Kohl mit Präsident Gorbatschow,” September 7, 1990, in Sonderedition, 1527–1530.

120All the preceding quotes from the Soviet memorandum of the conversation. The German transcript has not been released. “Iz telefonnogo razgovora M.S. Gorbacheva s G. Kolem,” September 10, 1990, in Mikhail Gorbachev i germanskii vopros, 563–566.

121Philip D. Zelikow and Condoleezza Rice, Germany Unified and Europe Transformed: A Study in Statecraft (Cambridge, MA: Harvard University Press, 1995), 363–365.

122“The Diary of Anatoly Chernyaev,” September 15, 1990, 53.

Conclusion

1Quoted in Charles S. Maier, “The Collapse of Communism: Approaches for a Future History,” History Workshop, no. 31 (Spring 1991): 34–59, quote at 39.

2On his economic argument, made to Lithuanians on the street, see William Taubman, Gorbachev: His Life and Times (New York: Simon & Schuster, 2017), 503–504. On his confidence they would stay in the union, see Robert Service, The End of the Cold War: 1985–1991 (London: Macmillan, 2015), loc. 8753 of 14516, Kindle.

3Hans-Hermann Hertle and Gerd-Rüdiger Stephan, eds., Das Ende der SED: Die letzten Tage des Zentralkomitees (Berlin: Links, 2014), 363.

4“Document No. 19: Notes of CC CPSU Politburo Session,” March 10, 1988, in Masterpieces of History: The Peaceful End of the Cold War in Europe, 1989, ed. Thomas Blanton, Svetlana Savranskaya, and Vladislav Zubok (New York: Central European University Press, 2010), 265–267.

5Kvitsinskii quoted in “With His Back against the Wall: Gorbachev, Soviet Demise, and German Reunification,” Cold War History 14, no. 4 (2014): 643.

6Mieczysław Rakowski, Dzienniki polityczne 1987–1990 (Warsaw: Wydawn, “Iskry,” 2005), 517, 562.

7John Hoskyns, “Government Strategy,” June 12, 1979, PREM 19/24 f11, Margaret Thatcher Foundation, Thatcher MSS (digital collection), accessed December 14, 2017, https://www.margaretthatcher.org/document/115016.

8Hoskyns, “Government Strategy.”

9Hoskyns, “Government Strategy.”

10Some of these quotes have been rearranged from their original order to present a coherent summary of Hoskyns’s argument. Hoskyns, “Government Strategy.”

11“Our Problems and Possibilities: An Interview with Karoly Grósz,” translated and added to Memorandum for Files, “Hungary—Interview with Mr. Karoly Grosz,” December 4, 1986, Box 159, File 1, European Department Immediate Files, Country Files (EURAI CF), International Monetary Fund (IMF) Archives.