Cold War & American Defense Spending

9 Pages 2365 Words

the growth rate.
During the 1980s, the Soviet leadership blamed this trend to Russia’s failure to achieve intensive growth after decades of extensive growth, where heavy reliance was placed on utilizing more labor and more raw materials. This extensive growth pattern was a legacy of the Stalinist system. In the thirties, it was possible to devote a large share of the national income to investment growth since the Soviet Union had large untapped reserves of natural resources and a huge peasant population that could be put to work in heavy industry by compulsion.
The Soviet economy never saw the need to shift to a pattern whereby the increases in production would be achieved primarily through growth in the overall productivity of labor and capital. The lack of productivity was also rooted in the general inefficiency of a communist economy and the subsequent reluctance of workers to strive for greater output. The traditional pattern, Stalin’s pattern, was very wasteful. In the 1970-1980 period, available manpower increased by 24 million people. In the 1980s, the increase was only 6 million. The economy was in rapid decline. It was important back then to increase the productivity of all workers, not only so that growth rates could be maintained for the existing developed industries but so that additional manpower could be allocated to underdeveloped sectors of the economy. Reform was a long way off, however, as many Russian leaders put higher priority in military spending and less into domestic programs. Condoleeza Rice contended that the increases in the military expenditures, since Stalin’s time and thereafter, hurt the civilian sector. Rice also pointed out the failures in Russian policy to sell arms to other nations. While arms sales helped to increase the number of communist governments in the world, and was a key strategy during the Cold War, it was harder to keep them within Soviet orbit. Soon many governments receiving ...