The Strategic Embargo: Western Economic Defense

On the turn of this century Russia’s Minister of Finance, Count Witte, wrote a memorandum to Tsar Nicholas II, debating the usefulness of foreign capital and know-how for a swift and successful industrialization of Russia. The fact that Western countries were actually prepared to make this useful contribution made him wonder; he wrote: ‘Why create with their own hands an even more terrible enemy? For me it is evident that, in giving us capital, foreign countries commit a political error, and my only desire is that their blindness should continue for as long as possible.’1 In Chapter 10 we quoted several Communist officials making the same point: why do the capitalist nations allow the transfer of their technology, know-how and other worthwhile commodities which will eventually diminish their own military power? According to several historians, the West has indeed made a considerable contribution to the industrialization of the Soviet Union. Anthony Sutton, for instance, has argued in his triptych Western Technology and Soviet Economic Development (1968–1973) that Western exports of technology, know-how and management techniques have formed the major impetus for Soviet economic development since the birth of the Bolshevik state.2 Without East-West trade the USSR would probably not have survived its own inefficiency.