In February 1980, the new British prime minister, Margaret Thatcher, was trying to do more to understand the Soviet Union. Two of her most experienced diplomats came over to the warren of offices behind the unassuming doorway of No. 10 Downing Street. These men, fluent in Russian, had served in Moscow.

Thatcher started off the meeting by reviewing some of the reasons she was so worried about the Soviet threat.

These “Moscow hands” heard her out. They were sympathetic. They then explained why, although there certainly were causes for concern, the Soviet system actually had some serious problems of its own. The giant was not ten feet tall.

If things were so bad, Thatcher asked, was the system on the road to collapse?

“No, no,” the diplomats assured her. “It’s not like that at all.”

The two men regarded the Soviet system like doctors watching the symptoms of a long-term and debilitating illness. “The germs of change are at work inside Soviet society,” they said.

What sort of change? “The system may eventually become more democratic and less expansionist.” For now, though, its core was still too strong. Change “will not easily happen while the Soviet Communist Party and its apparatus of repression are still intact.”¹

Later in 1980, that Soviet apparatus of repression was tested again, but in communist Poland.

Struggling to pay its external debts, the Polish government had to keep raising the price of food. The economy was breaking down. Millions of Poles began to organize themselves into groups outside of the communist system. Workers organized waves of peaceful strikes.

At first the Polish government made concessions. So the Soviet watchers wondered what that might portend for the whole communist system.

Another watcher was a military aide to the U.S. national security adviser, a Soviet expert and Air Force colonel named William Odom. In September 1980, as the Polish crisis got worse, Odom added a provocative aside to a weekly update he prepared for his White House boss, a Polish American named Zbigniew Brzezinski. Odom mused that perhaps, just perhaps, the symptoms were now showing that the illness might be mortal. Perhaps “the dissolution of the Soviet Empire is not a wholly fanciful prediction for later in this century.” Odom ventured further. He suggested that, perhaps, U.S. policy might “set its sight on that strategic goal.”²

During 1981 the Polish government finally cracked down, hard. Military rulers took over. In December of that year, the government declared a “state of war” against the protest movements. It imprisoned thousands of Poles. For some in the party and police, this did not go far enough. Their cells murdered a few especially outspoken figures, including priests.

The apparatus of repression could still work, it seemed. What was left in Poland, though, was a stalemate. The opposition had no power. The government had no legitimacy. The economy was a mess.

In Moscow, sitting atop the center of communist power in Europe, the Communist Party of the Soviet Union was not panicked by the troubles in Poland. To party leaders this was just one more symptom that it was time to make some adjustments, to renew their system.

Party leaders guided communist governments. They did not actually have to hold the state offices themselves. They could just tell the state officials what to do.

In the Soviet Union the party was led by the “general secretary” of the party’s governing committee, the Politburo. By 1985, three aging and sick general secretaries had died in less than three years. The Politburo did not need much genius to figure out that the fourth man should be younger and healthier.

The Politburo leaders wanted a new man to rejuvenate the party, the country, and the cause of socialism. They got one. His name was Mikhail Gorbachev.

He had been a hardworking peasant, a genuine man of the farms. As a boy he had driven combines along with his father from dawn to dark.

A bright student, Gorbachev found that his path out of the fields was to become a star party man, a well-read student of history and law. He chose a wife—his sweetheart in college—who could quote Dickens and taught philosophy.

Gorbachev had been a child during the Second World War, when his home was occupied for four months by German troops during the high tide of German conquest in 1942. The occupation of his region had been brief and relatively benign.

For him, the memories of Stalinism were more searing. His family had suffered hardship and hunger as a result of Stalin’s collectivization of agriculture. He remembered the Stalinist deportations that followed after the Germans had retreated. Both of his grandfathers had been arrested and imprisoned by Stalin’s secret police.³

Gorbachev’s rise through the party ranks had been rapid, yet unremarkable. He earned a reputation for unpretentious competence. His direct, no-nonsense style attracted powerful patrons in Moscow, particularly Yuri Andropov.

Gorbachev’s biography read like those of scores of other party apparatchiks of the period. There was little in his background to suggest that this general secretary of the Communist Party would be so unlike his predecessors.

As he gained power, however, it did not take long for Gorbachev’s distinctive personality to emerge. He had an attractive demeanor, and he displayed obvious intelligence, self-confidence, and courage. In 1985 he was fifty-four years old. His alert, flashing, and intense eyes were the physical attribute that most stood out, contrasting with his rather stocky build. He greeted people warmly, with a broad smile.

Gorbachev was self-aware at all times, projecting different sides of his persona—sometimes within a matter of minutes—for calculated effect. He could turn steely in direct exchanges, speaking from notes that he himself had prepared by hand. During internal debates he could savagely denounce his opponents, a side foreigners almost never saw.

In March 1985, when the ruling Politburo of party bosses placed Gorbachev at the head of the party, he was the man of the next generation. For all the leading camps—party loyalists, military innovators, and would-be liberal reformers—he was the vessel for their hopes. Muted calls to change fundamentally the Soviet Union’s relations with the West had filled the halls of Soviet academic institutes and the pages of scholarly journals for years. Now there was a Soviet leader who was prepared to explore the possibilities.

During the four years between 1985 and the end of 1988, no world leader riveted the world’s attention as much as the new man chosen to lead the Soviet Union, Mikhail Gorbachev. Rarely in history has so much of the burden of systemic change fallen on a single individual and his choices. In the Soviet bloc, as in China, so much of the story in these socialist regimes seems to turn on individuals.

In the Soviet case, that was Gorbachev. In the case of China it was Deng Xiaoping.

Both men, Gorbachev and Deng, shared a desire to get at the real facts. They shared a sense that their countries needed to change in comparison with nearby alternatives in Europe and East Asia. Both wanted more “democracy” as a way to encourage more debate and accountability—as long as democracy was handled inside the ruling party.

Both men also still believed in socialism. They believed the state, guided by the disciplined elite in the party, had to be able to direct most or all national resources for the public good. They believed it could plan with coherent, coordinated purpose. This, they thought, gave their system a great advantage when compared to anarchic capitalism and quarreling, divided Western societies.

There were also some important differences between Deng and Gorbachev. The Soviet leader ruled a vast empire that stretched from Central Europe to the Pacific Ocean. The Soviet Union was the other “superpower.” Gorbachev’s country was very advanced in many ways. It had been the first into outer space. It was second to none in pride about its scientific skills. It deployed thousands of terrifying intercontinental missiles. It oversaw a military that could inspire awe and fear, and that had played a major part in the Allied victory during World War II. In the 1950s the Soviet Union had been China’s teacher.

As we mentioned in chapter 1, Deng and his colleagues had concluded that China was relatively backward. It needed to modernize, mixing ideas borrowed from outsiders with their own insights, patiently experimenting their way forward.

Gorbachev and his allies did not regard their country as backward. They and their postwar generation believed that socialism had been effectively constructed in an advanced way.

Their diagnosis was more that the system had grown sleepy and corrupt. It was resting on its laurels of postwar rebuilding and accomplishment.

The supreme state planning entity, Gosplan, “was characterized by calm and inertia.” It “worked in low key without any great ambitions.… Naturally, the bosses were not happy about plans not being fulfilled, about the shortages and poor quality of consumer goods, but this dissatisfaction was low-key and matter-of-fact.” The planners’ view, one of them recalled, “was that the Soviet system was inefficient but stable.”⁴

To Gorbachev and his allies, the last decade had felt wasted. The West now seemed dynamic, moving forward. They felt they were stuck, standing still. That was unacceptable.

Reform Communism

When Gorbachev took power, he and his advisers could review a rich menu of ideas for socialist reform. There were no standard ideas. Communist Hungary had experimented with some market reforms. Poland was trying some possibilities. The communist parties in Western Europe, especially in Italy, had been trying out some interesting concepts. Soviet academic economists had a few of their own. Above all, the Soviets could study and reflect on what Deng’s patient experiments had accomplished in China since 1978.

Any solution had to start by understanding the system. On the surface, one could say that these were planned economies. So if there were problems, in theory it was time to change the plan.

Yet the theory was wrong. To call the Soviet system of 1985 or the Chinese system before 1978 “planned” would be too great a compliment. It is more useful to think of them as “command” economies.

The state owned practically everything. Planning set targets for production and distribution. It set prices, set wages, assigned housing, and guaranteed jobs for all. The plans would then break down in a thousand ways—fertilizer not showing up at planting time, needed parts not being available. The inevitable problems were addressed with command methods. When things went wrong, as they inevitably would, the relevant boss just gave orders to fix it.

These orders might collide, to be resolved by a bigger boss, and so on. Through such trial and error, the plans could be corrected so that, finally, everything seemed to run smoothly. Imagine: Once the commotion settled down and the bosses found they had a somewhat stable relationship of inputs and outputs, who would want to decree any changes that would mess everything up again?

Outsiders, such as experts in the West, had few realistic notions about how to reform such a system. It was incredibly complex and alien to their experience. To say that such a system could be fixed by using “market forces” was about as practical as suggesting to a friend that if she wanted to, she could jump out of a skyscraper window and fly by using “aerodynamic forces.”

In the West, “market forces” took effect through an array of private and public institutions. These institutions were then organized and fenced in by a functioning rule of law and supported by some safety nets, like bankruptcy rules or deposit insurance to supervise or close local banks.

In the communist system, the issue was not whether prices could change behavior, any more than the issue is whether air can lift a wing. The problem was how to engineer a system, to build ways of doing business that workably used these forces, where so many parts depended on others.

For instance, suppose a farmer on a farm enterprise wanted to raise the price of his wheat. Could he then refuse to fill the state ministry’s food order, with its set price?

The farmer was constrained. His farm enterprise did not own the farmland. It relied on the state to provide it with fuel for the tractors and the combines. It might rely on state credit, from the state bank, in order to buy seeds from another state enterprise, with its fixed seed prices.

Finally, suppose the farmer’s enterprise saved his best apples to sell at a market at higher-than-normal prices. These might be above the state price. Who would protect the farmer and his colleagues from being criminally prosecuted for “speculation”?

There were ways to address such problems. But just this little example shows how many interdependent decisions might be required to “reform” the system.

Soviet experts paid close attention to the Chinese experiments. “Let’s be mature,” Gorbachev told his colleagues. “China’s path in recent years deserves serious analysis.”⁵

Deng was not really the mastermind of the major reforms. He “did not have the patience to study all the details.” Deng relied on other senior officials, especially Zhao Ziyang, who was more of a Gorbachev-like figure in China.

Those top officials then nurtured experiments in some local region or economic sector. The real designers were people like the party boss in Guangdong province, who oversaw the creation of a special economic zone near, and often partnering with, allies in British Hong Kong. Or, there was an innovative party boss in the agriculture sector. He oversaw an experiment with an arrangement, a bit like in feudal Europe, with the state lending land and equipment to households. In exchange, the state would get a quota of the produce and the farmer was left free to sell the rest in slowly developing markets.

The Chinese experiments were carefully controlled. Throughout, the Chinese maintained rigorous overall budget discipline.⁶

What Deng did was create a political environment in which these energetic and entrepreneurial officials could try out their experiments. He or his key allies would protect the beleaguered experimenters just barely enough to shield them when the inevitable backlash came from those powerful officials who hated the experiments. Little was said about the experiments, to avoid a big political struggle. If one or another of them caught on, it would be allowed to spread, still with little fanfare.

In this quiet space the experimenters sorted through the early problems. Leaders had to learn how to make real plans, instead of just commanding that this thing be produced or that quota be filled. “Therefore,” one expert noted, “it is an apparent paradox that in the transition from a ‘planned’ economy, a central condition of success is the ability of the state to plan effectively. In fact, this ceases to be a paradox once one recognizes that the communist economic systems were not planned economies at all. Success in the transition was conditional upon learning how to plan, as opposed to giving orders.”⁷

After taking office in 1985, Gorbachev and his allies wanted to wake up and clean up a system where “everything is rotten.”⁸ They first tried the old command methods. Gorbachev gave orders for “acceleration.” That failed.

Then he and his Moscow allies tried writing new central laws, more of a top-down approach than the way reform had been nurtured in China. Gorbachev tried to defeat his political opponents in pitched political battles waged from the center.

From the Politburo, Gorbachev and his team could write new laws, but these were so sweeping that they often had to be compromised to allow ministries the discretion they wanted. Gorbachev himself could not master every detail. His authority was not absolute; his most reliable allies were a minority in the ruling Politburo.

There were a few significant experiments. A few daring officials had tried some small ones in the early 1980s, but “the ministries that controlled the Soviet economy obstructed experimentation.”⁹

Soviet agriculture was an important example. Gorbachev and his key allies, including his domestic chief minister, Nikolai Ryzhkov, noticed what the Chinese were doing. They grasped the Chinese idea of leasing out land to farmers and letting the farmers keep and sell most of what they grew. They tried to enact this.

But the other ministers fought back. Were the old collective farms to be allowed to go bankrupt? If not, then the government would need to subsidize the old collectives so that they could offset the competition from these liberated farmers.

And anyway, the ministers argued, the real problem was that not enough money was being given to them to buy more tractors and fertilizer. They argued for more command solutions: Give us more money to buy the inputs we need.

Finally, when the deals were made to get the law passed, the ministries obstructed the process to hand out leases to the new, supposedly liberated farmers. Thus the new farms remained miniscule.¹⁰

What the ministries could agree on was that they needed more money to produce more or innovate. Then they just used this money in the old ways. Central spending and budget deficits grew, to patch up problems. The main sectoral interest groups of the economy—like the military—seemed immovable.

As the spending grew, and more rubles were printed, ruble inflation became a serious problem. The central government could print money, but—since there was no free market—the government could not supply enough things that people wanted to buy. Oil could earn billions of dollars for the government, but in a city at the center of the oil production tens of thousands of people lived in metal wagons turned into temporary housing, with several families often sharing an outdoor toilet in a place where the temperatures frequently fell below zero. In this Siberian city of three hundred thousand people, Nizhnevartovsk, Gorbachev saw for himself in a September 1985 visit that there was not even one public movie theater. A Communist Party youth club sometimes showed movies, but tickets were hard to get.

Revising his prepared remarks to local party workers, Gorbachev began by saying, “It is embarrassing for us to talk about the millions of tons of oil and cubic meters of gas when a drilling foreman says to us that the greatest incentive in Nizhnevartovsk is to be given a ticket to see a film.”¹¹

The net result of the initial wave of reforms was another paradox, the great paradox of Gorbachev’s early years in power. Everything seemed to change. And nothing seemed to change.

To Change the USSR, Change the World

During the first few years, Gorbachev and his team worked hard to enact serious economic reforms. Having been to Western countries, Gorbachev and his team believed that the Soviet Union was not just losing a technological competition with the West. It was even falling behind, as one of his former advisers put it, in providing “more decent living conditions for the ‘working masses.’”¹² As their efforts had so little effect, he and his allies began concluding that their problem was structural. The economy was too centralized, isolated, and militarized.

This character was rooted in choices made in the late 1920s. The old Soviet system had worked well for industrialization and militarization. Since its creation, the basic premise of Soviet existence was the inevitability, the necessity, of a colossal global struggle between the socialist world and the rest. In days past, the Soviet Union had taken pride in being a pariah—neither an accomplice to nor a victim of global capitalism’s exploitation of the world. This is how Soviet leaders understood Marxist-Leninist ideology. And ideology mattered, not as a blueprint for action but in defining the range of the possible.¹³

Soviet policy from the time of Joseph Stalin had been ideological in precisely this way. It had one central tenet—that the long-term interests of the Soviet Union could not be reconciled with those of an international economic and political order dominated by capitalist democracies. The world had to be divided until the day when socialism would triumph. Marxism-Leninism was at once both the foundation for the internal organization of the Soviet Union and the basis of its place in the world.

Successive Soviet leaders believed that the West would ultimately try to destroy socialism. It would try to do this either by war or, after nuclear weapons seemed to rule this out, by subversion. The first obligation of Soviet leaders, since the success of the revolution and the 1919 creation of the Communist International, was to prepare to fight and win that war.

Stalin structured the Soviet Union as a country that would go it alone until a “ring of socialist brother states” could provide additional resources and security.¹⁴ He made it absolutely clear that the survival and prosperity of the Soviet Union was the first priority for any good communist.

The Soviet-led socialist commonwealth could not tolerate deserters. Therefore, countries that had joined the Soviet bloc could not be allowed to leave it, could not be allowed to fall prey to the forces of capitalist subversion and counterrevolution.

The policy demanded self-sufficiency for the economy and provided insulation from an international economic order that the Soviets feared. The system successfully made maximum use of the resources of its multinational empire to support Moscow’s goals and prepare the Soviet state for world war. But this isolation from the world economy, almost from the Soviet Union’s inception, doomed Moscow to live with its peculiar economic structure.¹⁵

The “new thinkers” decided to reconsider the class basis of international relations. This was at the very heart of Marxist thought. It is in this sense that Gorbachev was truly a remarkable historical figure. He understood his options differently. He concluded that Soviet domestic problems were inextricably bound up in its approach toward the world. In other words, an economy that always put top priority on preparing for war would always have trouble preparing for peace.

Gorbachev and his advisers had met foreign leaders. They judged that the “imperialist world” was in no way preparing to attack or invade the Soviet Union. One of Gorbachev’s early priorities was to end the Soviet intervention and occupation effort in Afghanistan. More than a hundred thousand Soviet troops were still trying bloodily to pacify the country, without success. He made an initial effort to settle the conflict with escalation. That failed. During 1985 and 1986, as the Chernobyl disaster seemed to signal one kind of crisis of the old way of doing things, Gorbachev decided that the Soviet Union would have to cut its losses and get all its troops out within the next two years—which is what happened. This decision went down relatively well with the military, many of whose leaders were disillusioned with the Afghan war. The military was much more concerned about Gorbachev’s wish to reform the whole size and influence of the military at home.¹⁶

By 1987 and on into 1988, Soviet leaders seemed to be clustering into two camps. On one side there was Gorbachev and the cause of “perestroika,” which can be translated as “restructuring” or “renewal.”

On the other side were the obstructionists, the “conservatives.” More and more, the “conservatives” were identified with the party bosses of the old system and the managers of the gigantic military-industrial complex. Gorbachev and his allies correctly regarded that complex as a “state within a state.”¹⁷

To defeat the “conservatives,” Gorbachev’s structural solutions had two main directions: “glasnost” (openness) and a new approach to security.

Openness meant openness to public criticism, to discussion of the past and the troubling issues of Soviet history. Openness was meant to open up honest discussion of problems, past and present. Openness could bring wider political and public pressure to bear against the party bosses who were blocking reform.

The floodgates rapidly opened in a literate country with millions of people eager to read and comment on every new disclosure about past and present. By early 1988, this deluge of exposure and criticism triggered a strong conservative backlash, a sense that the whole legacy of Soviet achievement was being attacked, belittled, and undermined from within.

Gorbachev did not back down. After his bitter experience with the Chernobyl disaster, after the repeated failures of incremental reform, the challenge to glasnost became a vital test for his rule. In April 1988, he convened a key conference among about 150 party leaders to debate the party’s future direction. He lashed out.

What the conservatives were saying, Gorbachev said, was, “Don’t touch Stalin! Don’t touch bribe-takers! Don’t touch party organizations that have long since rotted!”

Such people “don’t love their country or socialism,” he declared. “All they want is to make their little nest a little warmer.”

He turned again to Stalin’s legacy. Stalin, he said, had been “a criminal, devoid of any morality. Let me tell you on your own behalf: one million party activists were shot, three million sent to the camps to rot.… That’s who Stalin was.” Even Nikita Khrushchev, who first acknowledged the crimes of Stalin, had not told the full truth about them “because his own hands were covered with blood.”¹⁸

Gorbachev himself was so different from his predecessors—relaxed, confident, tireless, engaged. He built up a core team to help him.

When Gorbachev took power it was as the leader of the party, served by party staff. There was no “presidency” or “presidential staff” then. In foreign policy this meant using the staff of the international department of the party’s Central Committee. Gorbachev drew from such Central Committee experts, along with help from the Foreign Ministry and a few close aides chosen not only for their substantive specialties but also for their loyalty.¹⁹

He was difficult to help, according to those who worked for him, given to placing his own phone calls from his dacha and organizing his own calendar. Western officials found the Kremlin apparatus somewhat chaotic, having difficulty even in small matters, such as knowing how to locate Gorbachev for a phone call.

Gorbachev’s closest personal aide was Anatoly Chernyaev. Chernyaev was a veteran party theorist who had served as a propagandist in the international department of the Central Committee. Sixty-eight years old in 1989, Chernyaev was rarely far from Gorbachev’s side. He was the notetaker at almost all of Gorbachev’s private meetings with foreign leaders. He was the man most often designated by Gorbachev as his point of contact for U.S. officials.

Another key adviser was Alexander Yakovlev, a veteran diplomat and party ideologue known for his unconventional thinking. Yakovlev had been ambassador to Canada when Gorbachev recalled him to Moscow, soon put him in charge of the Central Committee’s international department, and eventually elevated him to membership in the Politburo.

Yakovlev had a reputation for being anti-American, but the most important thing about him was his commitment to the “new thinking.” He was, in fact, its intellectual father and a principal architect of this novel way of defining Soviet national interests.

The most important man in Gorbachev’s entourage was, like him, an outsider with no foreign policy expertise. This was Eduard Shevardnadze, the foreign minister.

Growing up in Soviet Georgia, Shevardnadze had been too young to serve in World War II. But his elder brother was killed defending Brest-Litovsk in the first days of the German invasion. Shevardnadze reflected later that “the war with fascism became a personal battle for me” and “the victory in that war became the victory of communism.” The war, he wrote, “formed my convictions and purpose in life.”²⁰ Yet, growing up in Georgia, a part of the Soviet Union that is closer to Iran than to Germany and that was never occupied by the Germans, Shevardnadze never seemed to share the deep anti-German feelings sometimes found among Russians scarred by the war.

Shevardnadze had risen through the party ranks in Georgia to leadership of the republic. He first met Gorbachev during the 1950s; the two became friends. Shevardnadze had replaced a notoriously corrupt party boss in the freewheeling Georgian republic. In the 1970s he acquired a reputation for vigilance and honesty. In many ways he was much like Gorbachev.

When the new general secretary thought he wanted to bring a gust of fresh air to Soviet foreign policy, he called on Shevardnadze. Thunderstruck, Shevardnadze recalled that July 1985 call as “the greatest surprise of my life.”²¹

He replaced Andrei Gromyko, a rigid figure of the past who had been involved in Soviet diplomacy since the time of Stalin. Shevardnadze spoke Russian with a Georgian accent. He brought a sharp change in perspective and style. The younger diplomats admired his energy, integrity, and openness.

In 1989, Shevardnadze approved the installation of a large memorial book in the front hall of the Moscow Foreign Ministry building. It listed the hundreds of diplomats whom Stalin’s tyranny had slaughtered as spies during the great purges in 1937–38, victims of the terror.

That was the kind of ministry Shevardnadze tried to run, an institution willing to look history square in the eye, discard the past, and turn to the future with hope and, sometimes, resignation. In that sense he was a true believer in the “new thinking.” He was less of a political tactician than Gorbachev. He was habitually candid, even emotional, as he worked his way through the problems.

Yakovlev, Shevardnadze, and Chernyaev took dead aim at hostile isolation, at proletarian internationalism, as an outmoded basis for foreign policy. For them, global interdependence was now the dominant factor in international life.²²

A new approach to security meant taking on the most powerful and autonomous institutions in the Soviet state: the Soviet military and its associated industries. To help do this, Gorbachev used the international diplomacy of arms control.

The Soviet military had become essentially self-governing. State planners could set some broad limits on budget and resources. But after that, everything else that was done was under military control. Top leaders had little insight, or even knowledge, about military programs and force posture.

The civilian leaders therefore had no easy ways to regulate the military internally. So one instrument was to use the negotiation of arms control agreements. Civilian leaders could sign such treaties and use them to limit and reduce the arms buildup.

Many Soviet generals had welcomed the ascension of Gorbachev. They hoped he would revitalize the country and make it more competitive. They worried about the American emphasis on new military technology.

In public there was much debate about Reagan’s much-discussed 1983 announcement that his government would seek to build space and ground-based defenses against nuclear missile attack, an idea formally called a Strategic Defense Initiative (SDI) and informally derided as his “Star Wars” idea. The idea seemed to imply that nuclear threats, and with them, nuclear deterrence, might be erased. At the time, the idea was technologically far-fetched and, though publicly the Soviets attacked the plan, secretly the Soviet military had trouble figuring out whether there was any real danger from it. What bothered them the most was not an imminent threat to their nuclear capabilities, but instead that the new American capabilities seemed to threaten the Soviets’ greatest and most costly asset, their conventional forces.

Already worried about the emphasis on “smart” munitions with sensors to find their targets, Soviet generals argued that the real impact of SDI-related research was that it might harness the sophisticated technology of the West, such as lasers, optics, and real-time information processing, to render Moscow’s vast conventional forces obsolete. American high-performance aircraft married to smart weapons and computer-aided guidance became the Soviet General Staff’s worst nightmare.²³

The worries of Soviet military leaders may seem way overblown. But it is hard for outsiders to appreciate the world of Soviet military estimates in the 1980s.

The head of the assessment department of Soviet military intelligence later reflected that in the case of estimated American tank production in wartime, “our plans were based on forecasts that were off by a factor of more than 100. Such errors were not unusual. We were off target by a multiple of ten in the estimated U.S. wartime output of aircraft.… I know for a fact that these figures were taken literally in planning our defense strategy and preparing the country for the arms race.”

It was difficult for anyone to check or debate the military’s estimates, however fanciful they were. After the Cold War, this intelligence expert talked to Americans and looked at their estimates. He envied their quarrels and their think tanks. “The Americans also made serious errors, particularly in those areas where the USSR was weak. Still, the order of magnitude of their mistakes was much less than ours.”²⁴

The exaggerated worries of the professional officers had to concern the political leaders of the Soviet Union. Military strength had first claim on the country’s resources and on its finest human and physical assets. It is no accident that military parades became more grandiose as the Soviet Union’s internal decline accelerated. Military power was a source of pride, the country’s best and brightest achievement.

In 1985, when Gorbachev was looking for big ideas to reduce tensions and cut back the military, the generals suggested that it would be nice to eliminate all nuclear weapons. Gorbachev captivated the world when he made this offer in January 1986.

It might seem surprising that the military would propose such a thing. But to the generals, this radical idea had three virtues: (1) It seemed in the realm of fantasy; (2) if it happened, it would eliminate the West’s main hedge to offset Soviet conventional military superiority on the ground in Europe; and (3) the Soviet military was alarmed by (and had greatly overestimated) the scale and dangerousness of the U.S. nuclear buildup and Reagan’s new Strategic Defense Initiative program.²⁵

Gorbachev sought to reduce tension with a series of high-profile summit meetings with Reagan. They made no breakthroughs to eliminate or even radically reduce the arsenals of nuclear weapons. A key obstacle was the SDI issue, on which Reagan had placed ill-founded hopes and the Soviets had ill-founded fears.

Yet, even if they did not agree to eliminate or radically reduce nuclear weapons, both men did accomplish a fundamental relaxation in tension. We already mentioned that in 1986 the Soviet government decided to pull all its troops out of Afghanistan within two years.

Also, thanks to the persistence of Reagan’s secretary of state, Shultz, working with Shevardnadze (both men holding off the conservative political factions in both of their countries), the two countries were able to negotiate a 1987 treaty (the Intermediate-Range Nuclear Forces, or INF, Treaty) that eliminated the intermediate-range nuclear missiles, such as SS-20s and Pershings. This INF treaty resolved the big public and political confrontation of the early 1980s over “Euromissiles.”²⁶

Still, none of this had a significant effect on the structure of the Soviet economy. The relaxation of tension and the INF treaty did not do much about the size or scope of the defense establishments on either side. Cutting back some categories of missiles might hopefully be a stabilizing thing to do. But such cuts do little to affect the underlying spending on missile R&D, nuclear weapons R&D, or intelligence and satellite systems. And, most important, the number of soldiers or sailors in nuclear forces made up a small fraction of the military establishments built up by the United States and its NATO allies, or the Soviet Union and its Warsaw Pact allies.

It was the standoff in conventional arms that dominated spending and military planning. Gorbachev and his team realized this. They wanted to talk about large reductions in Soviet forces, both conventional and nuclear. But the Soviet military insisted that these needed to be negotiated with limits that were reciprocal.²⁷

Hardly anyone knew anything about or paid any attention to conventional arms control. So it was not much noticed, then or even now, that in June 1986 Gorbachev took the initiative to offer an extraordinary new approach. Instead of the old talks, which had been dragging on inconclusively for fourteen years with a narrow scope on Central Europe, he suggested sweeping reciprocal controls on conventional arms “from the Atlantic to the Urals.”

Gorbachev’s initiative did lead to the creation of a new conventional arms control negotiation, called CFE (on Conventional Armed Forces in Europe). In 1988 these new talks were finally getting under way. But, as 1989 began, the two alliances (all twenty-three member states in NATO and the Warsaw Pact took part in these talks) could not even agree on what categories of arms should be controlled.²⁸

Gorbachev’s “Turning Point” in 1988

By early 1988, the whole reform program was tottering. Budget deficits were becoming a quite serious problem. As one sharp observer noted, “Perestroika was closer to collapse in 1988 than at any time before and probably any time after.”²⁹

Writing to his colleagues in March 1988, Yakovlev said that so far the economic reforms had produced “no effect whatsoever in many workplaces, no much-touted boost to ‘self-management and independence.’” The people had no confidence in the economic system. Ministries were “trampling” (Gorbachev’s term) on the new laws that were supposed to give enterprises more autonomy.

Outside experts agreed. One commented, “The service sector is incredibly primitive by Western standards, indeed by world standards. Consumer durables are scarce. The underlying technology dates from the early postwar years, and the quality is frequently poor. This economy seems unable to produce a cheap, reliable automatic washing machine, radio or phonograph, and cheap powerful hand calculators and personal computers are still no more than a distant hope. Decent fruits and vegetables… are seemingly out of reach even though twenty percent of the labor force works in agriculture.”³⁰

Gorbachev and his colleagues decided they had to reexamine the whole guiding ideology and structure of the Soviet government. They had to ask themselves: What was the core of a communist system? What was the irreducible “Leninist” foundation?

Preparing for the summer 1988 party conference, Gorbachev asked working groups—headed by key aides such as Yakovlev and Chernyaev—to examine thoroughly the relationship of Leninism to perestroika. Chernyaev describes Gorbachev in this period (late 1987 and the first half of 1988) reading papers that had been written for Lenin, histories of Marxist thought, and the writings of the “old Bolsheviks,” most of whom had been executed by Stalin.³¹

This period became a turning point in the “new thinking.” Gorbachev took from his studies the conclusion that there were many roads to socialism. It was permissible to be guided by the historical conditions in a given place or time, especially circumstances that Lenin himself had not foreseen. Gorbachev settled for Lenin’s vague endorsement of the need to be guided by practice.³²

The conservatives launched a major counterattack against perestroika in April and May 1988. Gorbachev and Yakovlev struck back by accelerating the pace of change.

They decided to embrace movement toward “democratic socialism.” They would ensure “solidarity and social justice,” as one ally put it, while also embracing ideals of freedom and democratic institutions.³³

Gorbachev and his team deployed their new offensive on two major fronts. First, they would bring democracy into the Communist Party. Second, they would decisively turn communist ideology away from eternal preparation for war.

During 1988, Gorbachev and his allies developed a revolutionary program of democratization. To understand it, it is important to look harder at the way the Soviet Union was set up.

When the pre-1917 Russian Empire was converted into a Union of Soviet Socialist Republics, imperial provinces became national republics. Each of these had its own national tradition. They were no longer joined by an imperial monarch. Instead the binding agent, the disciplined core, was the Communist Party of the Soviet Union. The Union was a multinational federation glued together by the common Communist Party.

“Soviets” were councils, supposed to be the seeds of a workers’ democracy. Gorbachev’s new program developed in the spring and summer of 1988 would make the local soviets in the republics into genuinely democratic institutions. Contested elections would be held in the spring of 1989. Party bosses would then chair these elected national soviets.

The people would also elect representations to an all-Union council, a Congress of People’s Deputies, more than two thousand in number. About one-third of the seats in this Congress would be reserved for public entities like the party.

The Congress would then pick representatives to turn the Union’s moribund “Supreme Soviet” into a working parliament. Gorbachev himself would chair it. He thus began planning to make himself a Soviet president, not just a party chief.

In this new system, legitimacy would thus start draining away from the party. The democratically organized soviets would be seen as the sources of popular authority.

For some time, Gorbachev had seen “personnel as the root of all our problems.” The status quo leaders were “philosophically impoverished.” They knew no other way to do things. “We won’t see new cadres come up,” Gorbachev remarked, “unless we create an atmosphere of glasnost and criticism.”³⁴

To further weaken the party and his potential conservative opponents, Gorbachev reorganized the party’s executive entity, its Secretariat. He centered power more and more on the ruling Politburo itself, and on himself. He was preparing a slow transition into becoming more of a traditional state ruler, giving direction to the state ministries and agencies.

In this process Gorbachev and his team purged more of their former conservative allies. He replaced the defense minister, top generals, the head of the KGB, and others of the old guard with less distinguished but more trusted men.³⁵

The conservatives had now clearly become an internal enemy. By 1988, however, the political contest was no longer just one of reformers versus conservatives. A third, more radical faction was gaining strength. This group called for more democracy and said Gorbachev was not moving fast enough, that his change agenda was not radical enough.

Gorbachev struck against this faction too, what he called these “ultra-leftist loudmouths.” The lead example of such a “loudmouth” was the former Sverdlovsk and Moscow party chief, Boris Yeltsin.

The elections were set for the first half of 1989. It was the internal side of the great turning point. All the powerful players in the system began to calculate next moves, including the leaders of the national republics inside the Union.

The other side of Gorbachev’s 1988 offensive was a further challenge to the generals and military-industrial barons. He planned to take on the basic doctrines guiding Soviet military posture in Europe, including the giant conventional forces.

In Gorbachev’s last major summit with Reagan, in Moscow at the end of May and early June 1988, they had made no progress on arms control. The American side complained that the Soviet government had not yet made any real changes in the defense posture, especially its conventional forces in Europe.

Privately, Gorbachev and his key allies admitted that these complaints had some force. They too were frustrated by their inability to effect real change in the scale and spending of the enormous Soviet military-industrial complex. They also believed their own military was misleading them about some of the facts.

In October 1988, Gorbachev invited West German chancellor Kohl to a summit meeting, their first. The sessions in Moscow went well. Right after that summit was done, Gorbachev went off with a small team to a resort on the Black Sea. There they deliberated about what to do next.

If leaders want to accomplish anything substantive, they need help from others who have the time and specialized concentration to develop ideas, formulate concrete objectives, and choreograph all the movements that go into a large initiative. In all the key governments in this period, the core team at the center of policy design and adaptation comprised usually about five to ten people.

Gorbachev’s core team in dealing with the world was still a select group of party staff, based in the Secretariat of the party’s Central Committee. Chernyaev and Yakovlev were still the leading advisers from the CC Staff. Below them were their top regional experts.³⁶

Over at the Foreign Ministry, Gorbachev trusted the minister, Shevardnadze. The former longtime Soviet ambassador to the United States, Anatoly Dobrynin, was still a source of valued counsel. On the military side, Gorbachev had fewer allies. He had overhauled the leadership of the Defense Ministry the previous year. He did look to his new chief of the general staff, a leading advocate of military modernization and reform, Marshal Sergei Akhromeyev, a veteran of the World War II siege of Leningrad.

On October 31, out on the shores of the Black Sea, Gorbachev met with his team. His team had already suggested that Gorbachev not wait for the CFE talks to get going, that he could start off with some unilateral cuts in Soviet military strength. The next five-year plan for the economy was to be rolled out in 1989. If there were going to be big changes in military posture, it was time to start considering them.

The group agreed that Gorbachev should make a substantial move to cut back the size of the Soviet military. The upcoming December speech at the UN would be a good occasion to announce it.

A few days later, Gorbachev laid this idea before the Politburo. He was “clearly nervous,” which he overcame by being “agitated and tough.” The INF treaty had just been a “little step,” he explained to his fellow leaders. Now it was time to make a big step.

He acknowledged the enormous scale of Soviet military deployments in Europe. With “all this hanging over them,” how could the West believe that Soviet intentions were defensive? No one spent as much of their national income on the military as the USSR did. They had to make cuts.

Gorbachev asked for questions.

There were none.

His prime minister, Ryzhkov, bearing the burden of economic management, his voice “very tense,” backed his boss. If there were no major defense cuts, he said, “we can forget about any increase in the standard of living.”

The Politburo then duly agreed to Gorbachev’s proposal.

Next, Gorbachev confronted his Defense Council with this decision. He asked them to come up with a plan. In the next few weeks one was finalized and approved.

The process seems to have been very stressful. We know little about the details. We do know that, as the plan was approved, Marshal Akhromeyev resigned his post as head of the Soviet General Staff (though agreeing to continue as an adviser to Gorbachev). He said later that he had been “distraught,” that it was “incomprehensible” that Gorbachev had acted before getting reciprocal concessions from NATO.

Within weeks, the top two Soviet commanders in the Warsaw Pact were also relieved of their commands. We also know that the Soviets had little time to consult their East bloc allies before the move was announced. Shevardnadze remained quite suspicious that the high command might not actually implement the announced plans.³⁷

As scheduled, Gorbachev rolled out his initiative in a speech to the UN General Assembly in December 1988. He said the Soviet armed forces would be reduced overall by about half a million. This would cut about one-seventh of the active-duty forces.

He promised that in the coming two years, 1989 and 1990, the Soviets would withdraw 20 percent (six of thirty divisions) of the forces they then had stationed on foreign bases in Eastern Europe. He promised, giving some suggestive numbers, that the Soviet army would also reduce the proportions of tanks and assault equipment deployed forward in Europe.³⁸

If implemented, the announced plans were significant. They would not eliminate concerns about the Soviet military. But they plainly moved into a new direction, a level of change no one had seen in a generation. Also, by announcing them publicly in this way, Gorbachev and his team had effectively pinned the Soviet military to a set of measurable targets.

There was more. Gorbachev also announced that other socialist countries—the countries of Eastern Europe—would be permitted to find their own path without interference from the Soviet Union.

These military and political initiatives were linked inextricably in Gorbachev’s mind. His aide, Chernyaev, lamented the widespread failure—even in the Soviet Union—to appreciate fully its ideological significance. It was not the first time that, from the Soviet point of view, the West had missed the point.³⁹

The Soviets had tried to get Reagan’s attention at the June 1988 summit in Moscow. They had stressed the importance of a declaration on the mutuality of interests between states in an interdependent world and the principle of noninterference in the affairs of others.

It is not hard to see why Reagan’s advisers had viewed the statement as a stock set of slogans. The Reagan administration was focused on incremental steps to advance its own four-part agenda: human rights, arms control, bilateral relations, and regional security, as in Central America.

Gorbachev, however, was trying to convey a theoretical and philosophical message that, in his world, carried enormous significance. His December 1988 UN speech emphasized what he had been saying for months: Eastern Europe was free to go its own way, leaving no ideological barriers to a more demilitarized Europe, tied together by interdependence and common values.

Months before the UN speech, Yakovlev had declared that “class struggle” had lost its meaning in the international politics of an interdependent world. Shevardnadze elaborated at a “scientific-practical conference” of the Foreign Ministry, saying that class interests had given way to those of one interdependent world.⁴⁰

Yegor Ligachev, one of the last old-style theoreticians remaining on the governing Politburo after the 1988 party conference, fought back. He appealed for reaffirmation of the fundamental nature of class struggle in international life.⁴¹

Gorbachev and his advisers did not agree. The Soviet Union would be a member of a “common European home.”

As Gorbachev would tell the Council of Europe in July 1989, “It is not enough now simply to state that European states share a common fate and are interdependent.… The idea of European unity must be collectively rethought, in a process of creative collaboration among all nations—large, medium, and small.”⁴² Two different social systems would exist side by side in this common home. Their differences would be overcome by shared human values. Gorbachev talked about European socialism and Soviet communism as if they were cousins.⁴³

When asked if he was a Leninist, Gorbachev always answered yes, forcefully and without hesitation. He did not accept Western notions of private property. He once told George H. W. Bush that he simply rejected the idea of people working for other people as a form of exploitation. But he saw no contradiction between that Leninist basis for the Soviet state and a set of common international values.

He and the new American president, Bush, had a revealing exchange on just this point when they met at Malta in December 1989. The American president asserted that the division of Europe could be overcome only on the basis of “Western values.”

Gorbachev took that opportunity to rail against this formulation. This was something he had “heard many times.” He proceeded to lecture the American president for almost twenty minutes. “We share the values of democracy, individual liberty, and freedom,” he declared.

A beleaguered Bush tried to respond. Then Yakovlev and Shevardnadze joined in the argument.

Rather than argue about the place of ideals such as democracy and individual liberty in Russian or Soviet history, Secretary of State James Baker asked if it would be more acceptable just to characterize all of these ideals as “democratic values.”

The Soviets settled down and agreed with that formulation.⁴⁴ They were still committed to socialism. But it was a socialism that was ready to be interdependent with the international system rather than independent and isolated from it. They intended to join this transformed Europe on full and equal terms.

They did not believe they were abandoning the communist dream. They believed they were modernizing it.⁴⁵

What Would All This Mean for Eastern Europe?

During 1988, the leaders of Moscow’s Eastern European allies had plenty of urgent questions about what all the new ideas would mean for them, the heads of the six member states of the Warsaw Pact: East Germany, Poland, Czechoslovakia, Hungary, Bulgaria, and Romania.

In the postwar era, Stalin put in place his “ring of socialist brother states.” The military side of the alliance was under Soviet command.

When the communists took over these Eastern European countries after World War II, they took charge of deeply scarred societies, divided throughout the twentieth century by violent internal struggles, usually between fascists and antifascists, in addition to the wars that raged across their territories. Particularly in Poland, but also in Hungary and Czechoslovakia, national feeling had also been practically synonymous with being anti-Russian.

By the 1950s the old class and fascist enemies were purged and defeated. Many in Eastern Europe refocused their resentment on Stalinist tyranny and the Russian domination. There were revolts in East Germany in 1953, in Poland and Hungary in 1956, and in Czechoslovakia in 1968. All had been put down. The Soviets and their East European allies had crushed the 1968 “Prague Spring” with two hundred thousand troops and two thousand tanks.

Soviet leaders tried to harness Eastern Europe’s economic power toward the goal of building a stronger Soviet Union. This was done principally through the Council for Mutual Economic Assistance (CMEA), an institution that had to manage all the trade and barter arrangements in a system where trade relations could not be regulated by the market or convertible money.⁴⁶

As the Soviet leaders built up this countersystem, it isolated them further from the economic and political order dominated by the West. The Western policy of containment reinforced Soviet isolation. East-West trade was constrained. The West formed an organization, COCOM (Coordinating Committee for East-West Trade), to coordinate controls on the export of militarily useful technologies to the Eastern bloc.⁴⁷

The socialist ruling elites in Eastern Europe enjoyed their new, high social status. They believed in their systems. They were proud that they had sustained socialism.

But by the 1980s their pride had ebbed. Why? The communist rulers had to “normalize” their countries in two stages. They had to, first, “crush the society into utter defeat and submission; and (2) gratify and tame it with economic rewards and material satisfaction.” Since 1956, Hungary under the rule of János Kádár had become a model for how to do both.⁴⁸

During the 1970s the socialist rulers had exhausted the economic growth gains from postwar rebuilding and the construction of old-style heavy industry. They decided to rely on loans from the West in order to keep pace with Western standards of living.

The Eastern European leaders had a theory for their borrowing from the West. In addition to buying desired consumer goods, like decent coffee, they would also use these Western loans to build up top-quality industries. The improved industries would then supposedly produce the exports to repay the loans. Meanwhile the East European countries would dump their inferior products on their Soviet trading partner in exchange for precious Soviet raw materials, like oil, at the kind of non-market subsidized prices that could be set among socialist brothers.

The theory did not work out. What happened instead is that the loans were used to subsidize imports of foreign goods and perks for the elite. Poland, Hungary, and East Germany led the way. Such borrowing became known as the “Polish disease.” But it was not unique to Poland. In East Germany, “it was hardly visible then [in the early 1970s], but that was when the switches were set,” one of that country’s planners later acknowledged in 1989. “From then on the train traveled millimeter by millimeter in the wrong direction. It traveled away from the realities of the GDR.”⁴⁹

These countries could have just accepted their limits, as Romania did. That country’s dictatorship simply imposed a bleak lifestyle on its people. Wielding a powerful and ruthless security apparatus, the dictatorship made people live with it.

The East Germans, Poles, Hungarians, and Czechs—all from countries with histories of anticommunist and anti-Russian revolts—did not think they could make Romania’s choice. They had to promise a better life.

Then came the first oil crisis of 1973–74. The Soviet Union decided to reduce its oil subsidies. It forced the East European satellites to make it more on their own. For example, in the old barter trade arrangements, in 1974 the USSR would give Hungary a million tons of oil in exchange for eight hundred Hungarian buses. In 1981 the same amount of oil had to be paid for with twenty-three hundred buses, and a few years later, four thousand buses. This was while the Soviet Union was still willing to trade oil for buses.⁵⁰

The first crises in Poland arose in 1970, then 1976. As the borrowed money ran out, the regime sharply increased the prices of imported necessities like food and fuel. The workers began organizing and striking for more wages so they could pay. Thus the Polish economic crisis turned into a political one. Society, led by strikers in Baltic shipyards, began organizing itself into a broad protest movement, called Solidarity, that brought together many factions in their hatred of the communist government.

The Soviet Union itself was not immune. It was increasingly dependent on huge amounts of imported grain and foreign technology. But for a long time the USSR was less vulnerable. Until the end of the 1980s it could rely on commodity exports, especially of oil or gas, in order to earn the hard currency to pay for these imports.

From 1979 on, to make ends meet, the East European countries relied even more on continued borrowing from Western banks, mainly in Western Europe and Japan. Then came the global financial overhaul of the late 1970s and early 1980s that we described in chapter 1. Interest rates on debts went up. There was another trebling of energy prices. The Soviet Union could handle the crisis; it had the oil and natural resources it could sell. The East European satellites did not.

In the United States and Western Europe the tight money crisis at the beginning of the 1980s meant sharp recessions and harsh “austerity” programs. In the rest of the world, debtor nations faced more difficult choices. They could radically curtail consumption. Or they could default on their debts, which would also cut off the flow of funds. This was the global debt crisis. Some governments toppled under the strain. Others, like Brazil, had to transform their political and economic system.

The East European states were neither liked nor admired by most of their people. So, they felt too precarious politically to impose painful austerity programs. Their rulers could be a feared tyranny or a weak tyranny, but they would be seen as a tyranny either way. “‘There is no socialism with a human face,’ the [Polish dissident] Adam Michnik liked to say, ‘only totalitarianism with its teeth knocked out.’” The Princeton historian Stephen Kotkin wrote that “the competition in living standards all but bankrupted the Communist systems economically, because [to their people] they were politically and morally bankrupt.”⁵¹

Rather than force their people to cut their standards of living significantly, the East European states desperately tried to mix less painful austerity programs combined with even more borrowing from the European and Japanese banks.

In 1983 and 1984, Kohl’s conservative West German government went along with this. It deliberately decided to lend billions of deutschmarks to East Germany. The loan eased political tensions in the short term and gained political leverage in the long term.

In April 1987, a periodical that tracked East bloc economies commented about the case of Hungary, “We may sound very cynical, but it is not far from the truth to say that Hungarian economic fortunes in the near future do not depend on anything done in Budapest, but will be determined in Tokyo [by Japanese bankers]. We doubt very much that Mr. Kadar yet understands this and the implications of such a situation for Hungarian economic sovereignty.”⁵²

When world oil prices finally dropped during the mid-1980s, it was not such a great relief to countries like Poland and Hungary. By then their debt holes were just too deep.

The mid-1980s drop in oil prices did hit the Soviet Union hard, because it deeply cut the foreign earnings the Soviets were getting for their oil. Then the Soviets started confronting their own challenges to maintain imports of desired foreign goods, including necessities like food. During 1988 the Soviet Union began borrowing much larger sums from Western banks than it had before. This borrowing too was almost entirely from banks in Western Europe and Japan.⁵³

During the late 1980s, America and the Reagan administration were running fiscal and trade deficits too. But the Americans could manage their problems through the market, leaning on the financial resources of allied countries in Western Europe and Japan.

The Soviets could not lean on their allies. “While the Western Europeans and Japanese developed robust economies of their own from which the United States could draw, the Eastern Europeans increasingly became a burden to the Soviets, not sources of economic strength.”⁵⁴

During 1986, Poland negotiated an end to the Western sanctions placed on it because of the martial law crackdown on Solidarity and public protest. Poland agreed to wind down martial law and grant amnesty to political prisoners. The Polish government still felt able to contain domestic unrest with its well-tested security methods. But it had no answer to the economic problems, and these kept igniting more unrest.

In 1987 the Polish foreign minister was received in Washington and the U.S. vice president, George H. W. Bush, visited Poland. Above all, the Poles wanted to talk about Polish access to Western credit and finance.⁵⁵

Bush offered U.S. help with Paris Club rescheduling of Polish debt (a promise kept later that year). But that only made new loans possible. It did not provide fresh money to alleviate Poland’s grinding economic crisis.

When it came to credits or loans from the IMF or World Bank, Bush introduced conditions. Such credit, he said, would depend on more “institutionalized pluralism.” That fancy phrase meant allowing elections with independent voices. It meant allowing the creation of independent trade unions. “Free elections and free trade unions, that is your concern, but the more Americans are able to identify themselves with your solutions the more they will be able to help.”⁵⁶

Hungary and Poland started working with the IMF on a loan program, which would also open the way for more private credit. There were those conditions again, because Poland could not pay back the loans if it did not solve its political problems.

By 1988 leaders in these two countries, Hungary and Poland, found themselves coming back again and again to three core points. Consider their problem.

• First, they could not count on the Soviet Union to bail them out.

• Second, the Western countries and outside lenders would not bend over backward to help them unless their systems became less tyrannical.

• Third, the only way to become creditworthy was to inflict more pain at home. The only way to inflict a lot more pain, without a lot more violent repression, was to strike a bargain with the opposition.

Suppose then that leaders face up to that third point—the necessary political bargain. There was only one possible bargain with the opposition: Share the choice for pain in exchange for sharing power.

The IMF managing director put it this way in talking to one Polish leader in June 1988: The government needed a “social consensus”; “increased popular participation in political decision-making might… reconcile the population to the sacrifices required for economic stabilization.”⁵⁷

During the spring of 1988 the reform communists in Hungary chose to accept this logic. They deposed the old tyrant, Kádár. They decided they would deal with a “Roundtable” among the opposition to negotiate a bargain, one that would maintain a leading role for the Communist Party but allow a loyal opposition.

The situation in Poland was worse than in Hungary. But the Polish rulers were also more stubborn than the Hungarians. The former U.S. national security adviser, Zbigniew Brzezinski, was worried about how “highly polarized” the situation was. “I fear that the combination of political and economic deterioration could create a revolutionary situation.”

Finally, during the second half of 1988, after new hardships triggered another series of strikes, the Polish rulers reluctantly also chose to open Roundtable talks. In both countries difficult negotiations began. Where these talks would go would become clear in the new year, sometime in early 1989.⁵⁸

For Gorbachev, by 1988 there had not been much change in the operation of the Soviet Union’s empire in Eastern and Central Europe. In fact, when he first took office in 1985, Gorbachev warned the Poles to be wary of “traps” in their attempts to seek more trade with the West. He derided market-style economic reform.

“Some of you,” he said, “look at the market as a lifesaver for your economies. But, comrades, you should not think about lifesavers but about the ship, and the ship is socialism.”⁵⁹

The Soviets fiddled endlessly trying to rationalize trade among the states without converting Eastern currencies. But theirs was a closed system, sustained by the exchange of shoddy products that had little value on the world market and constant gaming by the East Europeans to get more de facto Soviet subsidies. The Soviet negotiators knew what was going on, but they usually went along in order to preserve a façade of unity.⁶⁰

Although the Soviet leadership had encouraged its allies to take care of themselves, the allies still expected and received guidance and control from Moscow. Yet, under Gorbachev, Moscow was giving “meager attention” to these countries. It had no coherent strategy toward them.⁶¹

In June 1988, as part of the preparations for his historic party conference, Gorbachev finally more fully engaged the Eastern Europe issues. Building on arguments prepared for him by his advisers, his keynote address referred to “the sediment that has accumulated on our relations” with the Soviet allies in Europe. From now on, he said, “The external imposition of a social system, of a way of life, or of policies by any means, let alone military, is a dangerous trapping of the past.”⁶²

The Soviet government realized that the processes of political change that had begun in Poland and Hungary might spin out of control. Gorbachev’s main Central Committee staff expert for Eastern Europe, Georgi Shakhnazarov, wrote him a secret memo in October 1988 warning that “social instability and crisis might well engulf the whole socialist world simultaneously.”

The Soviet government did not wish to tell the Eastern European governments what to do. Moscow did not really know what they should do.

Gorbachev and his team were sure about one thing. The worst thing they could do was intervene massively with force the way their country had in the past. Then they would own the East European problems. Such an intervention might destroy perestroika at home too. So their secret preference, as they deliberated these issues on into early 1989, was to rule out Soviet military intervention, even before anyone asked for it. Instead they encouraged the Roundtable processes, like those under way in Poland and Hungary, so that these countries could fix themselves.⁶³

When Is the Cold War Over?

In November 1988 the most warlike of Cold War leaders in the 1980s, Prime Minister Thatcher, declared publicly, “We’re not in a Cold War now.” Secretary of State George Shultz too wrote that at the end of 1988 the Cold War “was all over but the shouting.”⁶⁴

Was it? Between 1978 and 1988, there had indeed been another big shift in the momentum of world history. Think of it as a kind of global election.

In this global election, there were “swing states,” the vital states where the basic direction and alignment in 1978 was up for debate and whose choices would be decisive. In 1978, these states were not the U.S. or the Soviet Union. They were states in non-Soviet Europe and in East Asia—there the main state in play was China.

Between 1978 and 1988 there was new thinking in the “West” and new thinking in the “East.” Burnham’s kind of vision of the future, dominated by the most ruthless managerial superstates, seemed notably less appealing. Orwell’s kind of vision, for freer and more humane alternatives, had come to seem much more promising. The global election seemed to be tipping toward a broad systemic crisis of the communist world and the old Cold War system—with some large new outcome.

But what would be that outcome? What comes next?

As 1989 began, the world was still divided by the core issue of what the Cold War had been about, at least since 1919: profoundly different conceptions for how to organize modern society. The communist world still believed that the state should entirely dominate commerce, society, and political life. The apparatus of repression was still very much on the job.

Core principles had been put on the table, though. Great storms were gathering. Either the managerial superstates would mutate into more powerful and perhaps menacing forms, or they might give way to something else—but what, and how? Opposing sides were mobilizing their forces for battle—in ornate conference rooms or out on the streets. They were mobilizing in cities like Moscow, Beijing, Warsaw, and beyond.

The old guard held firm power in much of Eastern Europe, most of the Soviet government, and most of the Chinese government. Perhaps the coming battles over the future of socialism would be peaceful; perhaps not. No one then knew how these battles would turn out, or what would happen then.

As 1989 began, the Soviet Union had about forty thousand nuclear weapons and the United States had about twenty-three thousand. Both countries deployed thousands of possible delivery systems, including ballistic missiles ready for launch from land or undersea, aircraft, and shorter-range rockets and artillery. Both countries were proceeding with the planned modernization of their strategic nuclear forces. Britain and France each had hundreds more weapons ready for possible use.⁶⁵

As 1989 began, in Europe, from the Atlantic to the Urals, the rival alliances fielded almost eighty thousand tanks, over sixty-three thousand artillery pieces, over nineteen thousand combat aircraft, and more than five million soldiers and airmen. Germany, West and East, was the most heavily militarized area of real estate in the history of the world.

Let us try to put these numbers in perspective. There were more than twice as many tanks fielded in Europe in 1989 were in Europe in the autumn of 1944, when the fighting in Europe during World War II had been at its absolute peak of intensity and scale.

The majority of these troops and weapons were in the Soviet-led Warsaw Pact countries. Soviets made up two-thirds of the strength of the Warsaw Pact. Though this is often forgotten on both sides of the Atlantic, Americans were a minority part of NATO forces in Europe. The majority of the ground troops readied to fight in Germany were European.⁶⁶

On the night of February 5–6, 1989, a twenty-year-old man, Chris Gueffroy, tried to cross the border from East Germany to West. Border guards riddled him with bullets. He would not be the last person to die that year trying to leave East Germany.

In other words, it is worth reflecting a little more on just what it would mean for the Cold War to end. As 1989 began, Gorbachev’s country had just been staggered by a tremendous earthquake in Armenia that took tens of thousands of lives. In his New Year’s Eve message he offered the hope that “a new vision of the world was being established” and that “the Cold War is starting to retreat.”⁶⁷

What might all that mean? For the outgoing Reagan administration in the United States as for British prime minister Thatcher, an end to the Cold War was being defined as:

1. Stabilize and reduce any danger from U.S.-Soviet rivalry in nuclear forces.

2. Defuse any major areas of tension in the U.S.-Soviet competition for influence or advantage in the Third World.

3. Persuade Moscow to respect the fundamental human rights of its citizens as a basis for full Soviet participation in the international community.

By these standards the results at the end of 1988 seemed impressive. The Reagan administration and its allies believed that the 1987 signing of the INF treaty and some progress toward a treaty on strategic nuclear forces (START) were accomplishing the first goal. They had finally persuaded Moscow to accept on-site inspection as a basis for verifying arms control.

Soviet withdrawal from Afghanistan and negotiated settlements in southern Africa were signs that the second goal was moving toward fulfillment. There had also been substantial though still uneven progress in the USSR’s recognition of human rights.

But what about the basic issues at the core of the Cold War? What of overcoming the division of Europe? There were some soaring words. In 1982, President Reagan had told the British Parliament that his goal was to lead a “crusade for freedom” that would end only when it left “Marxism-Leninism on the ash heap of history.”⁶⁸ Reagan also used the annual occasion of “Captive Nations Week” to launch rhetorical missiles against communist control and Soviet influence over the states of Eastern Europe, including the Baltic republics of the Soviet Union. His vice president, George Bush, appeared particularly convinced, delivering a provocative 1983 speech that denounced the postwar division of Europe.⁶⁹

Yet Reagan’s policies did not act on this rhetoric. In general, the Reagan administration and the Thatcher government avoided direct clashes with the Soviet government over the political division of Europe.

Reagan did give a memorable 1987 speech in Berlin, standing at the Brandenburg Gate and challenging Gorbachev to “open this gate” and “tear down this wall!” It was a speechwriter who had come up with these words, not the foreign policy professionals. One of the key aides to Shultz, a former U.S. ambassador to East Germany, remembers Reagan’s speech as “unnecessary showboating,” with its big words that “we fought as hard as we could.” Reagan liked the way the words sounded and kept them in. It had no effect on policy. Shultz, in an eleven-hundred-page memoir, simply ignores Reagan’s speech.

Reagan regretted what he had said. Unprompted, in September 1988 he told Shevardnadze that, “It had perhaps been unrealistic to have suggested [in 1987] that the Berlin Wall be torn down in its entirety.” Reagan “realized that the division of Germany and of Berlin was a product of World War II, and the feeling on the part of the Soviet Union and many others that Germany should never again be allowed to be the strongest and most dominant power in central Europe.” He just hoped that the two parts could work better with each other. “His proposals represented no attempt to interfere with anyone.”⁷⁰

None of this is meant to suggest that Reagan, Shultz, and Thatcher did not care about the division of Europe and Germany. They did.

But to them the postwar realities seemed fixed. Western defense should remain firm. The United States maintained a tough approach in the strategic nuclear arms talks. The NATO alliance had also just agreed, in May 1988, to modernize its shorter-range nuclear missiles in Europe.

Meanwhile the allies would try to make the tragic postwar system more livable, relaxing tensions amid the barbed wire and massed tanks. By those lights they were succeeding. Shultz left office in January 1989 worried that his successors in the Bush administration “did not understand or accept that the cold war was over.”⁷¹

Nearly seventy years ago the English historian Herbert Butterfield criticized the tendency to write a “whig interpretation of history.” What he meant was that historians all too often array the past before us with almost godlike powers, placing events into an order that seems to march logically from where we were to where we are, interpreting the past through the eyes of the present. “The total result of this method,” wrote Butterfield, “is to impose a certain form upon the whole historical story, and to produce a scheme of general history which is bound to converge beautifully upon the present,” preferably demonstrating “an obvious principle of progress.”⁷²

It is easy to fall into a “whig” interpretation of the end of the Cold War. As 1989 began, huge political forces had been set in motion across the socialist world.

But most of the choices that would determine the endpoints for those changes were still contested and incalculable. Gorbachev did want to “end the Cold War” and create a “common European home.” He used those phrases. But he attributed a particular meaning to them. Events did not turn out in accordance with his plans. The “whig” historian, wrote Butterfield, “too easily refers changes and achievements to this party or that personage, reading the issue as a purpose that has been attained, when very often it is a purpose that has been marred.”⁷³

In 1989 all the key governments would begin making concrete choices about what to do. The Soviet leadership, more than any other, had put the ball in motion, making the first truly catalytic set of choices during 1988. What would come next?

In December 1988 the American president-elect George Bush asked Gorbachev what the Soviet Union would be like in three, four, or five years. The Soviet leader responded with a quip: “Even Jesus Christ couldn’t answer that question!”⁷⁴

CHAPTER 2

Perestroika

The “Great Man”?

Reform Communism

To Change the USSR, Change the World

Gorbachev’s “Turning Point” in 1988

What Would All This Mean for Eastern Europe?

When Is the Cold War Over?