CHAPTER 6

The Designs for a Commonwealth of Free Nations

President Bush first spoke of his hopes for a “commonwealth of free nations” in speeches he gave in Boston and Mainz in May 1989. Occasionally shortened to “commonwealth of freedom,” the phrase became part of the boilerplate. Bush repeated it in a number of his speeches and in his administration’s formalistic national-security strategy documents. It was an aspiration. In his January 1990 State of the Union message, for example, he referred to the “great and growing commonwealth of free nations.”

The origins of this particular phrase lie, as so many do, in an effort to find evocative language for a speech. Zelikow was trying to find some coinage for Bush that would compete with Gorbachev’s much-publicized ideal of a “common European home.” He bounced the phrase “commonwealth of free nations” around the office, and it stayed in the draft for the May speeches.

The ideal of a “commonwealth of free nations” was different from a “common European home.” It was not geographical—Gorbachev’s phrase rankled, for instance, some of us interested citizens in North America. Bush’s expression was open-ended.

Bush’s phrase was explicitly built on a foundation of “nations.” Yet the nations are bound together in a “commonwealth.” That was a very old word, one that for centuries has evoked some broadly based community. “A common wealth,” wrote one Englishman in 1583, “is called a society…of a multitude of free men collected together and united by common accord and covenants among themselves.”¹ It was a word found in the formal names of various states whose founders liked that sort of definition, states like Virginia, Massachusetts—or Australia.

And Bush’s phrase, unlike Gorbachev’s, did have this politically charged word in it: “free.” At the end of 1990, speaking to audiences in Prague and in Brasília, Bush spoke of his ideal commonwealth having “four key principles”: “an unshakable belief in the dignity and rights of man, the conviction that just government derives its power from the people, the belief that men and women everywhere must be free to enjoy the fruits of their labor, and, four, that the rule of law must govern the conduct of nations.”²

These were lofty principles. At the end of 1990 they were already being tested in some unprecedented ways. The choices made at the beginning of the 1990s laid down some basic design ideas not only for Europe, but also around the world.

Issue Map

Building a Better World (1990–91)

Future of Soviet Union

• Any window for giving major aid to Soviet Union?

• Breakup of Soviet Union

Actively support?

Actively discourage?

Neutral? What else to do?

• Future of Soviet nuclear weapons?

What could the United States do that could radically, rapidly reset the situation of all the thousands of widely deployed nonstrategic weapons?

Which of the new republics would become nuclear weapons states?

What, if any, institution could help reduce, consolidate, and secure the vast post-Soviet nuclear (and biological) weapons complex?

• Should Western aid for Russia and Ukraine (and others) be major or minor?

• What kind of conditions and policy preferences should accompany such aid?

Radical reform?

Partial reform?

• What kind of institutions could make this work?

Future of Eastern Europe

• Integration with NATO and EU?

• Should Western aid be major or minor?

• What kind of conditions and policy preferences should accompany such aid?

Radical reform?

Partial reform?

• What kind of institutions could make this work?

Integration—European and Global

• How to develop the European Union?

• EU in new global trade system and World Trade Organization?

• U.S. stance on new global trading system? New regional trade blocs—NAFTA?

Security in Europe Shifting to Global Security

• What to do about outlaw states? Iraqi crisis of 1990 as key test

Future of Germany

• Largely settled, now huge internal German work

Last Chances for the Soviet Economy

Late on the last Saturday afternoon of July 1989, Shevardnadze met with Baker in Paris. The occasion for the meeting was itself a sign of the times. They were there to work together and with others on sorting out the future of Cambodia. They were slowly winding down some of the usual hotspots of global rivalry—talking about how the Soviets were disengaging from Afghanistan and how the United States was trying to end proxy fighting in Central America.

Then they changed the subject. It was a point in the meeting, “a few, focused minutes,” Baker remembered, when Shevardnadze “fundamentally changed our relationship.”

They started talking about what had happened in China and what it meant for the Soviet Union. Shevardnadze was glad Baker had raised this. Shevardnadze then opened up, and spoke for nearly an hour.

The situation was very difficult, he began. The changes were “affecting every part of our society, and every person and every family, too. We are now in the most crucial stage in what we call our revolution.” He continued, “Indeed, we are having a revolution. The old mechanism and the old machine have been abandoned, and unfortunately the new one is not yet able to function at full strength. We are at a most difficult time, because our renewal of the political system is running well ahead of the renewal of the economic system.”

The discussion eventually ended with a common understanding about the need to avoid a “Chinese solution” in the Soviet Union. The immediate concern was about how Moscow would deal with a miners’ strike in Siberia. But the issues were much bigger than that.

“We won’t allow destabilization in the Soviet Union,” Shevardnadze said. “Destabilization in such a huge country with enormous military and economic potential would be a grave thing for the Soviet Union and the world. The same is true for Eastern Europe. It is one thing to speak of renewal (perestroika), but destabilization is harmful, and it could be catastrophic.”³

That was in July 1989. By March 1990, as Gorbachev became the first president of the Soviet Union, “destabilization” had arrived.

It had already swept Eastern Europe. It was rising in the Soviet Union. The implications of a post-communist, post–Cold War world ran right to the heart of the Soviet state that Lenin and Stalin had built.

Gorbachev led a Soviet Union that had replaced the old Russian Empire, a multinational dynastic monarchy, with another kind of empire, a multinational union of communist republics ruled from party headquarters in Moscow. The communist glue was dissolving. What principle of governance would take its place?

He led a Soviet Union that had an economy built to be a communist Sparta, overwhelmingly dedicated to heavy industry and a giant military. The military leviathan was no longer needed; the Soviet people could not eat the millions of tons of steel rolling out of the mills. What economy and society would take its place?

The decisive variables were Russian and Ukrainian policy choices, the quality of their governance, and respect for local conditions. These were well-endowed countries. They had tremendous natural resources and well-educated people. Their assets were badly misallocated into unproductive uses, including a colossal defense establishment and related heavy industry. But the great issues were about how they would reset their policies and institutions.

One reason that Soviet or post-Soviet reform could not readily imitate Chinese models is that China had been, and then still was, a very poor, mainly rural society at a low stage of industrial development. Its reform program was more one of construction and greenfield development, not of massive conversion and reconstruction of an already fully urbanized and industrialized society.

While there was still a Soviet Union, the last great window of opportunity for radical economic reform opened and closed during August and September 1990. The contest was over the rise and fall of an agenda for radical reform called the “500-day plan.”

The late summer of 1990 was Gorbachev’s opportunity to make another series of major moves, on a scale with the choices he made during 1988, which we described in chapter 2. In foreign policy, Gorbachev had done it. He had made a big move. He had waited until late in July 1990, after beating back the conservatives at the Party Congress, and then moved decisively to settle the German question and complete the agreements concluded later that year. Perhaps now he would make his big move on economic reform too.

If Gorbachev made a radical move to transform the Soviet economy, he would have to share economic management with leaders of the emerging national republics. Of these, the most important was the newly elected leader in Russia—Boris Yeltsin. There was really no way to separate such a huge economic move from a basic political shift. Gorbachev, if he wanted to lead the next wave of reform, would also have to step out to lead the growing liberal and democratic forces in the country in a direct confrontation against the communist old guard. As of August 1990, those democratic forces were looking more to Yeltsin as their standard-bearer.

Using a team of informal economic advisers headed by Stanislav Shatalin and Grigory Yavlinsky, Gorbachev took the first step. He authorized the development of a radical program for economic change, meant to be implemented on the schedule implied by its name: the “500-day plan.”

Yeltsin backed the radical reform. At first, it looked like Gorbachev and Yeltsin might indeed reconcile in support of this “500-day plan.” They seemed excitedly supportive of this new, joint strategy.

But Gorbachev still thought there was some better way to reconcile all the ideas, old and new. He asked Chernyaev to write an essay on the “Market and Socialism.” Chernyaev struggled. To him the basic problem was that “the cat loves fish but hates water. More importantly, the combination of the two words in the title doesn’t work.”

The more conservative communists heading Gorbachev’s government, led by Prime Minister Ryzhkov, hated the radical plan. Prime Minister Ryzhkov told the reformers that he was “not about to bury the state with my own hands.” He promised to “fight you, its gravediggers, as long as I have the strength.”⁴

He put forward an alternative, more conservative plan, another partial reform. Some of Gorbachev’s top advisers urged him to “say goodbye to Ryzhkov. He unites the Military-Industrial Complex, the directors (including the military men), and he unites them on anti-Gorbachev positions.”

Gorbachev disagreed. He told his advisers, “You are little kittens. If in this situation I create another opposition front here, it will be the end.” He believed a natural development of the market might happen later in the year, and that this would take care of Ryzhkov and the party.

His advisers “agreed verbally, but not in our hearts, because we are again losing time. An economic program needs to be accepted not at some vague point in the future, but this September.”⁵

After Ryzhkov’s bitter confrontation with the reformers, accompanied by threats of overthrowing the government and more, Gorbachev stepped back from the radical reform plan. He put both plans—the reformer’s and Ryzhkov’s—before the Supreme Soviet in September 1990.

The top American leaders were now preoccupied with the crisis arising from Iraq’s August 2 invasion of Kuwait. The Germans, and the Americans too, also were intently focused on the endgame of the German diplomacy.

Yet both governments were certainly following the emerging debate in Moscow about fundamental economic reform. On July 13, the U.S. ambassador in Moscow, Jack Matlock, sent in an extraordinary cable predicting a dire future for the Soviet Union and for Gorbachev. Bush asked Rice to comment. She thought the cable’s diagnosis was insightful and, while disagreeing with some of the policy suggestions, concurred with the bottom line: “Control is slipping rapidly out of the hands of the central authorities and most especially Gorbachev.”⁶

Gorbachev did not seek advice or help from Western leaders in his internal decision about whether to lead another revolutionary change in his country, joining forces with the democratic and pro-market reformers. The Soviet government still regarded itself, understandably, as a superpower. It was only beginning to invite in outsiders from the West to look around and give advice. The IMF-led research team authorized by the G-7 at their July 1990 summit was just starting its work.

If the Soviet government would have talked to any Westerners about economics and finance, they would likely have first spoken to the West Germans, who were their principal creditors. In early September, Kohl and Gorbachev, and their subordinates, did wrap up their hard bargaining about money to compensate for Soviet troop withdrawals from Germany. But they do not seem to have had a really serious, wide-ranging discussion about the fundamental choice Gorbachev was prepared to make about the Soviet future.

Gorbachev and Bush also had a good chance to discuss Soviet economic plans when they met again, in person, in Helsinki on September 9, 1990. Baker would be following up in Moscow a couple of days later to join other ministers in wrapping up the German settlement.

Bush and Baker had just organized and dispatched a group of American CEOs to arrive in Moscow, as a business mission to follow up on the buildup of U.S.-Soviet economic relations begun with the trade deal at the Washington summit back in May. They knew that the IMF-led team of experts from the international financial agencies were rapidly conducting their review of the Soviet economy as a preliminary to possible future help during 1991.

Preparing Bush for his Helsinki meeting with Gorbachev, Scowcroft and his staff called attention to the “critical juncture” now in front of Gorbachev at home. “Gorbachev’s own authority, popularity and power are in precipitous decline.” He had to work with Yeltsin and radical reformist mayors, like Gavril Popov in Moscow and Anatoly Sobchak in Leningrad. (Sobchak had added to his entourage a KGB officer who had just returned home to Leningrad from an assignment in East Germany, named Vladimir Putin.)

Scowcroft flagged how important this “500-day plan” was. Of all the problems Gorbachev had to face in the autumn of 1990, “the most serious is structuring a coherent and workable economic reform program which can successfully lead the country through the transition from a command economy to one based on free market principles.” He told Bush about Gorbachev’s “tactical” alliance with Yeltsin.

But the United States was no longer sure how much Gorbachev supported this plan. Bush’s staff thought Gorbachev “has waffled [on the economic reform program] in recent days, angering Yeltsin and confusing everyone else.” But Gorbachev would have to act soon, “which will signal whether he is indeed committed to deep and speedy reforms advocated by Yeltsin and many of his personal advisors, or the more gradualist approach of Ryzhkov which the Supreme Soviet rejected [in the spring of 1990]. If he cannot reverse the now pervasive sense that he is indecisive, he risks irrelevancy as bolder leaders emerge.”

Scowcroft concluded, “The message on economics [Gorbachev] may really need to hear yet again in Helsinki is that our ability to assist him in any meaningful way depends very much on the scope and pace of his own reforms in the months ahead.”⁷

In Helsinki, Bush worked through tough discussions with Gorbachev about the most urgent business, the Iraqi crisis. Once that was out of the way, he raised the topic of economic reform.

Gorbachev replied that on economic reform, they had “reached the decisive phase.” He described some of the issues. He said he would make his decision by October 1.

Bush wanted to understand how the process would work. Gorbachev said they would need the republics to agree. There would then be three to five months to “stabilize the market” and then start relaxing price controls during 1991 and 1992. “The transition period will come only then, and it will be long and hard.” Yet, he added, “if we do not act radically, it will be dangerous.”

Bush alluded to the various things the United States was doing to build up commercial ties. He warned that his government did not have the cash “for large economic assistance.” He was in the midst of high-stakes negotiations with Congress to cut American budget deficits. He did not lecture or lay down conditions for future support. “Out of this new order,” he said, “we can find a way.”

That was their discussion. Little more emerged during Baker’s talks in Moscow.

At the same time in Moscow, the American business executives on the presidential mission heard upbeat messages from Gorbachev and others. They were a bit bewildered by what they were told. They could not tell what the economic program would be. Nor could they figure out where authority would lie, although they were impressed by Popov and Sobchak. “None of the Soviets asked for any form of aid.”⁸

What ended up happening was that Gorbachev flirted with all the economic ideas, then rejected them. At first, beset by “paralyzing doubts,” he stalled and criticized the new ideas. Making their case to the Supreme Soviet, the reformers explained that it was no longer a choice between socialism and capitalism, but between life and the grave.⁹

Gorbachev asked for a compromise solution between the two alternatives. Then, once that was prepared, he abandoned that too. In the end the government took no meaningful action at all. Gorbachev again broke with Yeltsin.

Chernyaev, Yakovlev, and other key insiders believe that Gorbachev’s September 1990 choices about the economic reform program were, as Yakovlev put it, his “worst, most dangerous mistake.” It was Gorbachev’s last chance to prevent the collapse of public confidence along with the USSR’s monetary and fiscal structures. In his heartfelt and detailed memoir, Chernyaev puzzled over this episode at some length. He finally concluded, “In the end, it was emotions, fear of risk, and an unwillingness to break with the old ways of ruling that won out.”¹⁰

By the end of October 1990, French analysts in Paris judged that the Soviet crisis was now terminal, “the prospects for a rapid exit from the doldrums seeming virtually nil.” Their diplomats saw three possibilities: (1) Yeltsin would sideline Gorbachev as the USSR broke up; (2) there would be a turn to dictatorship to restore order and an adequate standard of living; or (3) the Soviet Union would recover. What about the chances for a recovery? “This scenario,” they wrote, “is unfortunately the most difficult to imagine.”¹¹

Gorbachev’s constant rearguard actions in 1989 and 1990—partial democracy, partial economic reform, grudging national concessions—turned out to be paths to ruin. In 1990, while his authority and the cause of reform remained relatively strong, he could have tried to get ahead of the situation with a decisive agenda of political and economic reform. This could have included a voluntary federal union with an elected president (Gorbachev was never elected to his office as head of the party or as president in a popular vote) and parliament, linked to an agenda of radical economic reform. Instead, in the last months of 1990, as he celebrated the receipt of a Nobel Peace Prize, Gorbachev reshuffled the government.

The Breakup of the Soviet Union

In December 1990, Shevardnadze resigned, warning of a coming dictatorship—a shock. In January 1991, after Ryzhkov had a heart attack, Gorbachev installed a new prime minister, who was bewilderingly incompetent. “By the turn of the year the original Perestroika team had gone,” the British ambassador recalled. “To replace them Gorbachev looked to the men of the right—conservative hacks in the old Soviet mould.”¹² Practically all these people would join the coup against him seven months later.

Gorbachev had already begun warning Bush that he would have to use his executive authority to restore order. Lithuania became a test case.

The negotiations during the spring of 1990 had persuaded the Lithuanians to suspend their independence moves for a few months. Without having settled their differences, the Soviet government began moving some elite troops into Lithuania, followed in January 1991 by an ultimatum demanding that Lithuania abandon its independence moves at once. As Gorbachev made these demands, Soviet troops began occupying government buildings in Lithuania’s capital.

From Washington, Bush condemned these moves and called Gorbachev to ask him to stop. In Moscow, Yeltsin also condemned them, suggesting that Russian draftees would not serve in such operations. As Yeltsin explained to the American ambassador, “If they are successful against the Balts, we will be next on the list!”¹³

After an elite Soviet military unit stormed the Lithuanian TV facility, killing sixteen and wounding many more, thousands of Lithuanians ringed their government buildings, defying Soviet tanks. Gorbachev vacillated and then blamed local commanders. Yeltsin went on the radio to tell Soviet soldiers in Lithuania, “You are a pawn in a dirty game, a grain of sand in the Kremlin’s building of an imperial sand castle.” Amid a general outcry, including from the United States, Gorbachev called off the military moves (which he might not even have authorized in the first place). Gorbachev asked the American ambassador “to help your president understand that we are on the brink of a civil war.” He might have to do things that would be hard to understand. The U.S. should expect a period of “zigs and zags.”¹⁴

This ominous confusion and crisis at the top was the context as, during the first half of 1991, the Soviet economy slid into collapse, hyperinflation (mainly in the growing black market for scarce food and other goods), and looming state bankruptcy. Gorbachev pushed hard for more foreign assistance. There was no credible reform program.

One of the economists involved in the 1990 effort, Grigory Yavlinsky, worked with prominent Western academics, including Graham Allison and Blackwill (then at Harvard), to persuade Western governments to offer a “grand bargain” of massive aid for the kind of reform proposed in 1990. Bush knew very well that the Soviet Union was in what he and his colleagues called “a prerevolutionary condition.”

But Gorbachev was still blending old-guard enemies of reform with the reformers, just as he had tried to do in September 1990. The U.S. government, and even Yavlinsky, could see that there was not much of a political base for reform. And the Soviet government’s authority itself was up in the air, as the national republics asserted themselves and started negotiating the terms of new union.¹⁵

Though still kept secret, the Americans and Soviets were also still trying to settle the biological weapons problem. They had arranged visits of experts on both sides. But, as Baker noted, the site visits “didn’t resolve our questions, [they] heightened them.”¹⁶

Meanwhile, despite the difficulties, Baker tried to develop some sort of assistance package to help the Soviets. “We want to work with you,” he stressed. But “we honestly don’t believe the current ‘Anti-Crisis’ [economic] program will work.” Baker presented a lengthy list of suggestions for Gorbachev’s representative, Yevgeny Primakov, who was coming to make the pitch for the G-7 grand bargain.

Primakov’s May 1991 presentation of the Soviet government’s “anti-crisis” economic program to American leaders degenerated, Gates recalled, into “as sharp and unfriendly an exchange as I could remember, as our side asked hard questions and the Soviets had no answers. Yavlinsky might as well have sat on our side of the table for the critical observations he made and his obvious lack of support for his government’s program.”¹⁷

Seeking aid, Gorbachev came to the G-7 summit meeting in London in June 1991 still without a good reform program. Delors had been to Moscow before the meeting, trying to gauge the situation for himself.

The Soviets worked hard to get ready for him. The meetings were difficult. Delors was allowed to meet with Gorbachev’s cabinet. He spoke to them in terms “so harsh,” Chernyaev noted, “that their jaws dropped.”¹⁸

At the G-7 meeting itself, in London, Delors peppered Gorbachev with some of the toughest questions about what he was trying to do. The G-7 responded cautiously to Gorbachev’s pleas, offering technical assistance in various sectors and waiting until the future of the Union was sorted out.

Kohl met with Gorbachev soon afterward, in Kiev. When Kohl’s finance minister pleaded for the Soviet government to work with the IMF, Gorbachev lost his patience. “The USSR is not Costa Rica! ‘Your’ [the West’s] behavior toward the USSR will affect the direction of history.”¹⁹

Soon after the G-7 summit, at the end of July 1991, Bush traveled to Moscow and Kiev. His summit meetings in Moscow were dominated by arms control work (success), more private discussions about biological weapons (not much success), and discussions of economic reform (inconclusive).

The exchanges on economic aid were painful for both sides. Gorbachev pressed for help and guidance. Bush had little to offer.

At one point, Gorbachev blamed Bush for not making up his mind about what kind of Soviet Union he wanted. What was he waiting for? Gorbachev asked. The Americans had found money to fight a regional war against Iraq. Here, with the fate of the Soviet Union in the balance, they were talking about a much greater project.

Bush colored at this challenge—“his eyes darkened.” He then spoke “with restraint,” Chernyaev recalled, “suppressing his agitation, in a measured tone.”

He said he would make his vision clear. “We would like the Soviet Union to be a democratic country with a market economy, dynamically integrated into the Western economy.” Without meddling in Soviet internal affairs, some understanding between the center and the republics was fundamental for private investment. “So: firstly—democracy; secondly—market; thirdly—federation.”²⁰

Throughout 1991, Bush not only did not see any credible Soviet reform program, his basic conviction was that, under the circumstances, “we [Americans] simply did not know enough to design any detailed aid programs.” That was an unsatisfyingly modest judgment. But it was true.

Bush and his G-7 colleagues did want to help somehow. Thatcher’s successor (since November 1990), John Major, played a helpful coordinating role. The G-7 states committed food, medicine, and credits to help Soviet agencies buy humanitarian goods. In about a month and a half the G-7 countries corralled emergency food aid and other credits worth about $4 billion, $10 billion during all of 1991, along with some debt rescheduling.²¹ Beyond that, they developed a broad program of “technical assistance” for various sectors of the economy, to help the Soviets come up with a plan.

It was hard to contemplate a more systematic effort until the future governance of the Soviet Union became clear. With the USSR entering a terminal economic crisis, Gorbachev finally made headway in negotiating the terms of a new, federal Union that would have included most of the old Soviet Union.

Yeltsin, now the elected leader of an emerging Russian nation-state built on the hitherto powerless Russian Soviet republic, was willing to go along. So was the leader of Ukraine.

Rather than definitely trying to destroy the Soviet Union, Yeltsin may well have hoped to take Gorbachev’s place and lead the reconstructed Union. Yeltsin and Gorbachev secretly planned to reshuffle the top security officials of the new Union.

Hearing about that plan to take away their power, the “ultras” decided to make their move. A central figure in the coup attempt was the leader of the KGB. Spying on Yeltsin and Gorbachev, he had probably learned that he and other key officials were about to be turned out of office. The August 1991 attempt to take over the Soviet government completely backfired. Not only did the coup fail, it killed any prospect for survival of a Soviet Union.²²

Gorbachev refused to go along with the plot. Yeltsin led a courageous resistance. Foreign governments—led by the United States—turned decisively against the coup plotters. Finally, the army, divided, would not go along.

After the coup collapsed, both Russia and Ukraine decided to emasculate, then discard, the Soviet Union and go their independent ways. In December 1991 the Russian and Ukrainian leaders, then joined by others, replaced the Union with a Commonwealth of Independent States.

What About the Nuclear Weapons?

In 1991, neither Bush nor Baker, nor any of the allied leaders, were in any hurry to get rid of the Soviet Union. At the time and later, some—both in and out of government—criticized that position.

The critical argument goes something like this: The Soviet Union was an enemy superpower and oppressor of subject nationalities. The United States would be better off if its enemy broke up; the subject peoples would be better off if their oppressor was gone.

One part of this logic was not controversial. The United States and most other West European governments had supported the independence of the Baltic republics and hoped their separation could be arranged peacefully.

Nor was there much controversy about the possibility of a breakup. As we mentioned in chapter 4, since September 1989, Rice had quietly been leading a small group looking at a wide range of contingent possibilities.²³ The thinking about that contingency only intensified the conclusion of Bush and his aides in late 1989: Help Gorbachev, but also—as Kohl had put it in 1990—gather as much hay as one could before the storm.

That was part of the reason for all the urgency on Germany and arms control. The CFE treaty was done. Bush and Gorbachev signed the Strategic Arms Reduction Treaty (START) in Moscow at the end of July. Some, even some Americans who should have known better, hooted at Gorbachev for having given up too much in the START treaty. Those reactions were themselves part of a Cold War mentality. With only a little hindsight, it is hard to find any serious Soviet, or Russian, interest that really ended up being harmed by that treaty.

At the beginning of August 1991, there was an issue about whether to encourage breakaway independence for Ukraine. At that time this was not so controversial among responsible officials. The consensus answer, in the United States and other allied capitals, and even with Yeltsin and the Ukrainian leader at the time, Leonid Kravchuk, was: No, don’t interfere. Let Gorbachev, Yeltsin, and Kravchuk close the deal on a new Union treaty.

That new arrangement, to create a more federal Union, was actually looking quite promising at the beginning of August 1991. That was when Bush visited Moscow, then Ukraine’s capital, Kiev.

On August 1, 1991, Bush gave a speech to the Ukrainian parliament, an elected body in which a majority favored staying with the Union and a large minority favored complete independence. Bush praised freedom, but he then added that “freedom is not the same as independence. Americans will not support those who seek independence in order to replace a far-off tyranny with a local despotism. They will not aid those who promote a suicidal nationalism based upon ethnic hatred.”²⁴

This speech has been the source of significant comment and, indeed, criticism, particularly since the Soviet Union would collapse and Ukraine become independent four months later. It is important to understand the context at the time. What were Bush’s choices?

He could have supported, openly or tacitly, those who were pushing for independence. He might have remained silent on the question. But instead he decided to take a course that appeared to be trying to restrain those forces seeking independence, a position that seemed to many to be making Moscow’s case.

However, Bush knew that a new Union treaty was in the works, viewed positively by key republic leaders. He was also affected by the experience of coping with the crisis of Yugoslavia dissolving into civil war. He also knew that since 1989, violence had come repeatedly to parts of the Soviet Union itself.

The new Union might well have come into being. In fact, it was fear of the new Union treaty, and the shakeup in Union leadership that would go with it, that caused the KGB and military ultras to organize the August coup to overthrow Gorbachev. Bush felt close to Gorbachev and quickly denounced the coup, a stance that was helpful—as Yeltsin and Gorbachev both acknowledged.

The coup attempt, in the last week of August, is what destroyed any hope of rehabilitating the Soviet Union. In St. Petersburg, Vladimir Putin was still a KGB colonel working with Mayor Sobchak, in the process of resigning from the service. The coup did not rally him to the side of his boss, the KGB head at the center of the plot. Instead, he told an interviewer in 1999, “In the days of the putsch all the ideals and goals that I had on going to work in the KGB collapsed.”²⁵

It was at the end of August, on August 30, after the coup attempt had fatally damaged Yeltsin’s and Kravchuk’s hopes for a federal Union, that a conservative New York Times columnist, William Safire, advantaged by his hindsight, went back to Bush’s August 1 speech, to deride it as a dish of “Chicken Kiev.” Back then, Safire mocked, Bush had had the chance to endorse Ukrainian independence and had chickened out.

In fact, as August ended and September began, as the possible breakup of the Soviet Union accelerated, some of the most difficult choices were just coming into view. On September 4 and 5, Bush discussed the possible breakup with his cabinet, then the next day with his usual ad hoc small group of top foreign policy advisers. Their discussion was lively, with an argument about whether the United States actually wanted the Soviet Union to break up. Secretary of Defense Cheney wanted the United States to support a breakup. Baker emphasized, “Peaceful breakup is in our interest, not another Yugoslavia.” He preferred to see the Union continue, including as a focal point for the assistance flows from the United States and other G-7 countries. Cheney thought that was “old thinking.” Scowcroft leaned toward Cheney’s view. Bush seemed to lean toward Baker’s.

A gradual transition would have been better. The military and monetary issues were just too large and difficult to handle overnight. But all the Americans could agree that the United States should not actually do anything to meddle or take sides one way or another, other than to ready deliveries of humanitarian aid.

On September 4, Baker had already announced a set of principles that were relatively simple and could “set the philosophical and practical framework within which the process of Soviet dissolution can occur peacefully and orderly.” They were: (1) peaceful self-determination consistent with democratic values and principles; (2) respect for existing borders, “both internal and external,” with any changes occurring peacefully and consensually; (3) respect for democracy and the rule of law; (4) human rights, particularly minority rights; and (5) respect for international law and obligations, especially the CSCE’s Helsinki Final Act and Charter of Paris.²⁶

It turned out that the United States would face a breakup occurring practically overnight. The monetary issues in fact did become a cause of ruinous trouble. But the military issues were even more serious than that, almost incomprehensibly dangerous. What the United States had to do was come up with basic policy directions, vectors, to cope with the likely breakup of a nuclear superpower.

In 1991, the Soviet Union had the largest stockpile of nuclear warheads of any country in the world—about 35,000. Of those, aside from weapons in storage facilities of some kind, nearly half were operationally deployed in strategic (long-range) forces in four republics: Russia, Ukraine, Belarus, and Kazakhstan. The majority were nonstrategic, shorter-range tactical nuclear weapons of many kinds. The Soviet government had been withdrawing these from Eastern Europe and the Baltic republics, but as it broke up, the thousands of such weapons were probably deployed on the territory of at least nine republics. This was a profoundly dangerous situation that had no precedent in world history. As Cheney put it in a December 1991 press interview, “If the Soviets do an excellent job of retaining control over their stockpile of nuclear weapons—let’s assume they’ve got 25,000—and they are 99 percent successful, that would mean you could still have as many as 250 that they were not able to control.”²⁷

There were three basic issues: What could the United States do that could radically, rapidly reset the situation of all the thousands of widely deployed nonstrategic weapons? Which of the new republics would become nuclear weapons states? What, if any, institution could help reduce, consolidate, and secure the vast post-Soviet nuclear weapons complex?

What could the United States do that could radically, rapidly reset the situation of all the thousands of widely deployed nonstrategic weapons?

On this issue Bush himself kicked off a crash, proactive effort to get ahead of the problem. At the informal meeting of top officials on September 5, he wanted to use this opportunity to make large further changes in U.S. defense strategy and further cuts in defense spending. He asked “impatiently” for the group to come up with something ambitious.

It was Scowcroft, working first with Cheney and then with JCS chairman Colin Powell, who—in days—developed a sweeping, creative answer that Scowcroft then went over with Bush. On the nonstrategic forces, they would bypass arms control. The United States would act on its own, unilaterally, to withdraw and eliminate almost all of the nonstrategic nuclear arms in its forces around the world—on ground, sea, and air.²⁸

Bush would then challenge Gorbachev to do the same, trusting that he would. If Gorbachev did follow suit, then the Soviet (and successor governments) too could make a crash effort to concentrate these weapons, storing and eventually getting rid of most of them. On the strategic forces, Bush would also invite another round of major arms cuts, following on the START treaty he and Gorbachev had just signed.

In just three weeks, the proposal was ready. In a September 27 speech to the nation, Bush announced what he rightly recalled as “the broadest and most comprehensive change in US nuclear strategy since the early 1950s.” Gorbachev’s response was everything Bush wished for, a striking demonstration of the trust the two men had developed, amid many strains. Gorbachev counterproposed ideas of his own. Yeltsin too was enthusiastic. The end result was successful. Tens of thousands of U.S. and Soviet nonstrategic nuclear weapons were redeployed, stored, and destroyed, A START II treaty was quickly negotiated and signed in January 1993, just before Bush left office.

Other arms control targets were met. After great progress with the Soviet Union in 1990 and 1991, in 1992 the U.S. and its allies launched a completed convention to ban chemical weapons (it now has more than 190 signatories). Secretly, Yeltsin eliminated what was left of the illegal biological weapons program, though concerns linger about continuing Russian research.

The START II treaty was worked out with only one leader—Russia’s Boris Yeltsin. The United States had decided that only one country should inherit the Soviet nuclear legacy and did all it could to make that happen.

Which of the new republics would become nuclear weapons states?

At first, Scowcroft thought “there was positive benefit” in distributing command and control over the thousands of Soviet long-range, strategic weapons among the four republics that had them on their soil. Such a result might reduce the size of an attack any one country could mount against the United States.

Others offered different arguments for Ukraine, at least, to become a nuclear weapons state. Carter’s former national security adviser, Zbigniew Brzezinski, worried about Ukraine’s ability to defend itself against Russia. A political scientist, John Mearsheimer, also thought Ukrainian nuclear weapons would be a stabilizing force.²⁹ Ukraine’s leader, Kravchuk, was also clearly tempted—at the least—to retain nuclear weapons in his country.

The Bush administration, and the Clinton administration after it, made a different choice. By the end of 1991, Baker could add a sixth principle to his original five—central control over nuclear weapons. He and his State Department colleagues took the lead in pushing for the “Russia only” outcome.³⁰

By the beginning of 1992 the policy was clear: Russia would take on the whole debt burden of the entire Soviet Union. And it would also take on many of the Union’s unique assets—its nameplate on the UN Security Council, its diplomatic missions, and every one of its nuclear weapons.

During the last months of 1991, before the Union disintegrated and before the United States had established diplomatic relations with Ukraine, a Harvard group, including Zelikow, worked informally with the Ukrainians and U.S. officials to get Ukraine to give up its nuclear weapons. In 1992 the U.S. government, led by Baker, pressed this point hard.³¹

The Germans were not directly involved, but they and other West European states entirely backed the American position and said so to the Ukrainians. If they wanted international sympathy and support, Ukraine, Belarus, and Kazakhstan had to sign the Non-Proliferation Treaty and agree to give up their weapons. In the spring of 1992, Ukraine stalled on withdrawing tactical nuclear weapons. In April, NATO’s new North Atlantic Cooperation Council (where Russia and Ukraine were both members) then placed united pressure on Ukraine to get rid of them. Ukraine relinquished the weapons; the transfer was completed the next month.

A Russian political adviser recalled how, once the United States made the nuclear issue a test of cooperation with the West, “it was solved in a week.” Another Russian said bluntly, “Baker solved the nuclear problems with Ukraine.”³²

All the other non-Russian republics went along too. Kazakhstan, fearful about the dangers in its region, also hedged. Bush and Baker persuaded the Kazakh leader, Nursultan Nazarbayev, to stick to the nonproliferation commitments, an understanding capped in May 1992. But, as Nazarbayev explained to Bush when they met in Washington, “It’s not clear what will happen in Russia. In China some of their books show part of our territory as Chinese. To the south is fundamentalism. That is why we wish to be close to the United States. This is why we wanted temporarily to remain a nuclear state.”³³

The Clinton administration, upon taking office, followed up with its full-court press. The Ukrainians and others sought security assurances against Russia. What was worked out, and concluded in a CSCE framework at the beginning of 1994, was a trio of memoranda signed by the United States, Britain, and Russia. The memoranda promised Ukraine, Belarus, and Kazakhstan that none of the three countries would use force, the threat of force, or economic coercion against any of them. If there was an act of aggression, the memorandum only promised that the signatories would seek UN Security Council action against the aggressor. The other open nuclear weapons states—France and China—offered even weaker assurances.

Twenty years later, Russia violated the pledge in this memorandum, as it also violated other international agreements with Ukraine, with fellow OSCE members, and in the UN Charter. The United States and Britain did seek Security Council action against Russia, which, predictably, Russia blocked.

Since Russia’s aggression in Crimea and the Donbass, Ukrainians and others have said that Ukraine was wrong to give up the seventeen hundred to nineteen hundred strategic weapons still on its territory and that it was wrong for the United States and others to insist that it should do this. This argument is only superficially appealing. Neither Ukraine nor the world would have been safer if such a large and deadly arsenal remained in a country undergoing a complete economic collapse and extreme corruption, which was Ukraine in the first few years of independence.

Nor, because of their long range, would these former Soviet ICBMs have been especially useful against Russian targets. Nor is it likely that the infiltration of Russian conventional forces into Crimea and the Donbass could have been deterred by threatening nuclear attack and the mass killing of Russians. The outcome of such a nuclear confrontation might more likely have been the end of the Ukrainian state itself, and perhaps much else. What Ukraine really needed was the political, economic, and military strength to be able to defend itself—without nuclear weapons.³⁴

What, if any, institution could help reduce, consolidate, and secure the vast post-Soviet nuclear weapons complex?

The post-Soviet republics outside of Russia had few resources to maintain, secure, or transport nuclear weapons or special nuclear material, including large quantities of plutonium and highly enriched uranium left at various sites, particularly in Kazakhstan, a longtime site for weapons development and testing. Especially during the early 1990s, Russia itself was desperately short of means to handle its own gigantic nuclear complex, which had reached peak size during the 1980s. And there was also a large biological weapons complex. It was especially secret because the complex had been developed in violation of the 1972 treaty the Soviet Union had signed that abolished biological weapons.³⁵

No one had really imagined the creation of a whole new institution to help address these costly and extremely dangerous legacies of the Cold War. The United States took the initiative: Specifically, in the fall of 1991 a Democratic U.S. senator, Sam Nunn, stepped up to try and fill this void. Nunn worked closely with a group at Harvard, led by Ashton Carter, along with Graham Allison and others. He later brought in the expertise of an analogous group at Stanford, led by William Perry, that had a larger quotient of scientists and engineers as well as excellent contacts with leaders in the American nuclear laboratories.

Nunn chaired the Senate committee that oversaw the Defense Department, and he proposed to tap the defense budget to find help. In November 1991 his effort to find a billion dollars for such a denuclearization initiative came up for a vote. One of Nunn’s aides recalled that just before the bill came to the Senate floor, “a Democrat [Harris Wofford] won a formerly Republican [Senate] seat in a special Pennsylvania election, largely on the basis of an ‘America first platform.’” This “sent an anti-foreign aid shock wave through the House and Senate.” The Democratic leadership pulled Nunn’s legislation.³⁶

Yet, right after that defeat, Nunn found a new ally, the senior Republican on the Senate Foreign Relations Committee, Richard Lugar of Indiana. Providing intellectual ammunition, the Harvard group also issued its first report spotlighting the new nuclear dangers and what could be done.

Baker and Bush got on board. The new “Nunn-Lugar” bill passed at the end of 1991. Baker then worked closely with Nunn and Lugar and their congressional allies to plan more aid of this kind. Another package went into an omnibus former-Soviet aid bill (called the FREEDOM Support Act) they developed and passed during 1992.³⁷

All through 1992, Bush and Baker had been pressing Ukraine’s Kravchuk to give up on nuclear weapons. Ukraine had made the general political commitment. The tactical nuclear weapons were gone.

But the strategic weapons that had been deployed in Ukraine were still there. In September 1992, Kravchuk said his country needed $174 million in U.S. assistance to eliminate the large arsenal of strategic nuclear arms still in his country. In December, the new aid bill passed, and Bush could write to Kravchuk and pledge “at least” $175 million for Ukraine. “Of course, before we can do so,” Ukraine had to complete the Non-Proliferation Treaty obligations.³⁸ The aid helped break the logjam. The Clinton administration then followed through.

When the Clinton administration took office in 1993, Perry, Carter, and Allison all got top jobs in the Defense Department. They made sure that the “cooperative security” program took root and grew. Ultimately the United States spent billions of dollars and, with its partners in the former Soviet Union, built trust and made astonishing progress in cleaning up sites, discovering and containing frightening threats, and destroying weapons—beating the Cold War’s swords into plowshares.³⁹

By the late 1990s, enriched with enormous technical experience in doing this work, the programs had evolved into a broader mission of preventive “cooperative threat reduction” of many kinds around the world. This was a timely evolution, in a world where technologies for weapons of mass destruction and organizations of transnational terrorists were evolving too.

The Shock of the New: Building Different Economies and Societies

The “new Europe” forced post-communist countries to transform their economies and societies if they wanted to maintain reasonably open borders and open economies. In chapters 3 and 4 we also explained that the West chose, starting with the Polish case, to offer substantial aid if countries would make the leap in a rapid transition from communist to market economies.

The real choices in 1990 and beyond were not about whether to provide some help to the new democracies in Eastern Europe. Any set of governments would have tried to be helpful.

The choices were at three levels: Should the aid be major or minor? What kind of conditions and policy preferences should accompany such aid? What kind of institutions could make this work?

It is hard to track and assess all of the aid. In every case, it flowed through several kinds of channels, bilateral and multilateral, and it took several kinds of forms. There were humanitarian deliveries of food or energy supplies. There were grants or credit lines to transfer or lend money to import goods. There was technical assistance—a fancy term for aid that helps people learn how to perform certain tasks or set up institutions. There was macroeconomic aid to help new central banks have more foreign exchange, often in the form of loans or credits, and microeconomic aid (including “Enterprise Funds”) for sectoral help or lending to new businesses.⁴⁰

The aid could and did help, some. But the shock of transition was not just economic. Much of it went much deeper, as the transition rocked the whole structure of society itself.

“‘Joining Europe,’ the leading slogan of the time, meant adopting the Western lifestyle, freedom, consumerism, and value system.” A whole new middle class started slowly to emerge, beginning with many new small businesses and professional offices.

An astute Hungarian observer of the process added, “The doors opened widely, but most of the people were frightened of entering an unknown world.… They had to learn an entirely new life strategy.… In the old regime, there were only a few paths to success; now several ways opened and required mobility, flexibility, entrepreneurial attitude and risk taking. All of these new behavioral patterns were difficult to learn. Most of the adult population was unaware of how to behave appropriately in this situation, and became paralyzed and bitter.”⁴¹

On top of this, the small-scale corruption that was a standard part of communist life took on a whole new meaning. The hectic reforms created many new chances for those who had or could buy connections.

“The reforms were like a pool of cold water that everybody jumped into without knowing how to swim.” Where else to jump? Gorbachev’s gradualism and partial reforms had failed. The West European models were too expensive and required institutions that these countries had not yet built. “The only life buoy floating in the pool was neoliberalism. The reformers saw no other choice than to cling to it.”⁴²

The Western plan for Eastern European reconstruction was more ambitious than anything that had been done before. Many people pointed to precedents in the postwar American European Recovery Program, better known as the Marshall Plan. In 1989 and the early 1990s analogies to the Marshall Plan were everywhere. Such analogies were not very useful.

“One of the great challenges in replicating the Marshall Plan,” a recent historian of the plan concluded, “aside from the sums involved, is making conditionality effective.” The Marshall Plan setup forced European governments to work together and drop trade barriers with each other. A special effort was made to restart Germany as a source of goods to help the rest of Europe get going, and other European governments had to accept this too.

The aid also could not take the place of good local government; it could only empower it. In their Marshall Plan partnerships, the Americans ended up supporting right-wing and left-wing governments, but they all shared core principles. In France, Marshall Plan aid had the task “essentially to fix the (many and large) potholes caused by war and occupation.” Paris would usually do this the way it wanted. “That Paris might prefer asphalt, and Washington concrete, was never going to make the difference between ultimate recovery and stagnation.”⁴³

The post-communist reconstruction project had to be different from the Marshall Plan in practically every way. The basic economic machine was not functional in market terms. It could be rebuilt on communist terms, with closed economies dealing with each other through negotiated barter arrangements. Or it had to be redesigned, with the new structures and institutions then built to a large extent from scratch, on some market basis, with open economies allowing more open (if not necessarily free) trade using world prices.

At the time and later, citizens and scholars bitterly criticized the human cost of “shock therapy” and resented the “Washington consensus” that caused so much hardship. Market reforms created plenty of short-term pain. The leading market reformers, like those in Poland, underestimated how bad the pain would be. The post-communist economies went into full depression, usually suffering declines of at least 30 percent of their GDP.

But if countries chose to have open economies rather than closed ones, this painful transition was unavoidable. It had taken a long time to destroy the old market economies and thoroughly replace them with communist ones. It would take a long time to construct another system.

Not all countries accepted radical reform. Russia and Ukraine did not. Russia tried the path of partial reform; Ukraine tried to hold on to the status quo system. But experience showed that a gradual or partial approach did not reduce the pain. It only prolonged it. Partial reform did not ease the income inequality produced by market reform. It made the inequality worse.⁴⁴

To understand why the Western push for radical reform was so important, it is worth explaining more about the politics and economics of partial reform. To begin, no Western government would subsidize the communist status quo. Western taxpayers would not appropriate money for factories to make things no one wanted to buy. Nor would they pay taxes so that Eastern Europeans could buy cheaply what their Western or southern European neighbors had to buy at market prices.

Partial reform might look better. But it could be even worse. We can start with a simple example of a common form of Western aid in these years: credit guarantees to buy food. Here is the way this might work. Suppose that a German bank loaned money to the Russian government so it could buy Western food, with the loan guaranteed by the German government. The credit guarantees were politically popular. The German government could tally it up as humanitarian food aid. The European farmers made money. The hungry Russians got food.

What might then happen was that the Russian government would get the food through a trading or food agency. The government agency would then sell the European food to local Russian firms, who would then retail it to consumers. Under partial reform, Russian food prices might still be set artificially low, so people could buy cheap bread, and in rubles that had a similarly artificial official exchange rate. The Russian firms could thus buy the European food very cheaply, at Russian prices with official exchange rates, from their government trade agency. But the Russian firms would then take advantage of partial reform to resell some or all of the European food at real market prices. They would rake in huge profits.

These profits would, of course, not go back to the Russian government that had borrowed the money to buy the food, although some officials might privately get their cut. The profits, converted into foreign currency (hopefully again at a contrived rate), might instead end up in a bank in Cyprus.

The Russian government was then saddled with a loan it could hardly pay (with the local currency it got for the food), and the German government that had guaranteed the loan might end up paying the bill. One can see how “food aid” that might sound great would in practice enrich the wrong people and also become unsustainable.

In the Soviet Union and later in Russia and Ukraine, some of the ways “partial reform” could be abused became truly epic. People could buy three tons of oil for the local black market street value of a pack of Marlboro cigarettes.

Or you could take the aluminum quota being supplied to keep your defense plant in business making Sukhoi combat aircraft. You could transfer the aluminum somehow to the new “cooperative” you or your friends had set up. You could then sell the aluminum on the world market for a 10,000 percent profit. Meanwhile the state would end up printing the money to keep the defense plant open and subsidize its employees.

Economists describe such practices with technical-sounding euphemisms like “spontaneous privatization,” or “rent-seeking.”⁴⁵ This was the world of “partial reform.” Goods and currency with world value were being bought and sold on the black market; valuable goods at subsidized prices disappeared from stores; more and more money was being printed that could buy less and less. Food was scarce; inflation would skyrocket.

Well-connected groups would make vast profits, much of which would end up in banks in Cyprus and Western Europe. Although the Soviet Union, then the former Soviet republics, offered the most dramatic examples, others can be found across the post-communist world.

Many ordinary people understood how they were being exploited. It may seem surprising, since radical reform had its own price shocks and unemployment, but where people had a real chance to vote for truly radical reform in genuinely democratic elections, they often supported it. This was true even where—as in Poland—former communists came to power and swept out the original reform group. Western insistence on radical reform could help.

The radical reformers needed all the help they could get. The opposing forces were powerful because the politics of partial reform created odd coalitions. It was no surprise that people hurt by market forces would vote against them. “More surprisingly,” the political counselor at the European Bank for Reconstruction and Development observed in 1998, “the politics of postcommunist economic reforms has not been dominated by the traditional short-term losers of economic transition—striking workers, resentful former state bureaucrats, impoverished pensioners, or armies of the unemployed.

“Instead,” he explained, “the most common obstacles to the progress of economic reform in postcommunist transitions have come from very different sources: from enterprise insiders who have become new owners only to strip their firms’ assets; from commercial bankers who have opposed macroeconomic stabilization [that would constrain money supply and spending] to preserve their enormously profitable arbitrage opportunities in distorted financial markets; from local officials who have prevented market entry into their regions to protect their share of local monopoly rents; and from so-called mafiosi who have undermined the creation of a stable legal foundation for the market economy.”

What these powerful elites wanted, and often got, was to stall reform in midair. They thrived in a “partial reform equilibrium that generates concentrated rents for themselves while imposing high costs on the rest of society.”⁴⁶

The key principles in the radical reform agenda were to insist that more open economies had to be combined with firm controls on public spending and regulation of private lending. Shock therapy is usually equated with radical privatization of state enterprises. That is not actually an automatic principle. The radical reformers did not need to insist on rapid privatization of those state enterprises that were sustainable and had some value. There was still plenty of scope to decide what should be privatized or how to set up social safety nets. Practice on privatization varied in Western Europe as well as in the East.

Some, including prominent scholars, have argued that “gradualism” could have worked better than shock therapy. They often cite the example of China. We think the China analogy is misplaced. The evidence that gradualism would have worked better is unconvincing.⁴⁷

Not all prescriptions of shock therapy had the same ingredients. Some were wiser or better tailored to local circumstances, some less so. One of the virtues of a more democratic system with rule of law was that governments would vary their practice and try to find the right balance.

As happened across Western Europe in the Marshall Plan era, citizens debated what sort of society they wanted. All the Marshall Plan aid to Britain, for example, had gone to a government ruled by a democratic socialist party, a party that was bringing major parts of the economy under state control.

In Eastern Europe at the beginning of the 1990s there were nearly violent arguments denouncing shock therapy or “neoliberalism” (an old term then being repurposed as a catchall for capitalist excess).⁴⁸ The biggest problem for those preferring a gradualist approach was that they needed a realistic alternative, one that dodged the corrupting quicksand of the “partial reform equilibrium.”

Two of the most vehement scholarly critics of the role of outsiders in the Soviet/Russian case acknowledge (in an endnote), “We should note here that Western nonmonetarist forces—whether of the social-democratic or other type—never came forward with a serious program of economic reform. Western leftists simply did not understand the reasons for Soviet citizens’ rejection of the old economic system.”⁴⁹

The term “Washington consensus” can mislead. There was a lead institution that arose to articulate and help enforce the “radical reform” conditionality. It was headquartered in Washington. It was the International Monetary Fund.

But the fund was headed by a Frenchman. Its professional staff, drawn from around the world, was mostly non-American. The term “Washington consensus” was invented in 1989 at a Washington conference in which authors from ten Latin American countries had gathered to summarize the hard lessons they had learned in their countries during the 1980s.

The man who coined the term “Washington consensus” was summarizing what the Latin Americans had learned, “never dreaming that I was coining a term that would become a war cry in ideological debates.” And, as we mentioned earlier, privatization of state enterprises was not even one of the ten recommendations at the core of this “Washington consensus.”⁵⁰ Even the “silent revolution” of ideas about free international movement of capital was at least as much European as American, as we pointed out in chapter 1, and Ronald Reagan had little to do with their ascent.

The IMF is another one of the institutions at the beginning of the 1990s that, as with NATO, had kept the outward shell of reassuring continuity, while being gutted and renovated on the inside. The IMF had been created to help governments manage balance of payments imbalances in an era of highly regulated capital movements and exchange rates in the Cold War world. The organization’s transformation began in earnest during the 1980s.

As global private capital flows took off, governments found themselves in severe debt crises beginning in 1982. The fund’s historian wrote, “The debt crisis had a transforming impact on the IMF, catapulting it into the role of international crisis manager.”⁵¹

What eventually happened was that the fund became the base of international expertise on the policy conditions for reform. Its conditions then set the standard not only for its own credits, but also for the much larger sums usually involved in other public and private credit flows.

The IMF therefore emerged as a key institution in post-communist economic transition. It was still quickly staffing up and trying to absorb lessons to play this part.

One of the earliest and most influential outside advisers on post-communist transition, David Lipton, later became a senior IMF official. He recalled how, “looking forward during the inception of reforms, the prospects for transition seemed daunting. In fact, at first, most observers thought the effort would not succeed.” At the IMF, Lipton admitted that the institution “had helped countries overcome debt and inflation, but had no experience in designing and executing the sweeping changes needed to convert economies from the communist system to capitalism.”⁵²

Other institutions were involved too, like the new G-24 coordinating structure in the EU, the World Bank, the OECD, and the new European Bank for Reconstruction and Development. But the IMF had the lead, more and more having to consider issues like corruption and regulatory systems.

The national governments had even less experience or proven expertise to guide such deep transitions. But the problems would not wait.

As some of the veterans later put it, “Interesting and critical as the answers to the questions of the optimal speed and sequencing of reform are, it was necessary to make decisions on how to proceed well before the evidence could be gathered.”⁵³ In other words, as the IMF’s historian noticed, “In most cases, the can-do and must-do-now culture of the IMF clashed badly with the must-get-it-right-even-if-it-takes-longer culture of the World Bank and other agencies.”⁵⁴

That “can-do and must-do-now” culture of the new IMF ended up playing a vital role in painful but necessary transitions. “With hindsight,” one group of scholars found, “it is apparent that radical reform has proved the best way to eliminate subsidy-seeking behavior.”

It was true that radical reformers sometimes lost elections. The former communists were strong and often more united. But it turned out that “gradualists are even more likely to lose elections.… People want faster reforms.” Foreign aid, the authors concluded, “can play a key role, but only when it is highly conditional on policies that break the power of the former elite and permanently reduce the scope for rent seeking.”⁵⁵

Russia’s Brief Window of Opportunity

As the Soviet Union collapsed at the end of December 1991, the new government of sovereign Russia, led by Yeltsin, developed its own program for radical economic reform. The Russians asked for Western help.

The aid request was for Poland-like help on a Russia-size scale, including about $6 billion in grants for a stabilization fund. There were also requests for tens of billions more for other kinds of support. Aid for “technical assistance” might or might not help, depending on the subject and the kind of outside engagement in working on it with local problem-solvers.

The stabilization fund request was credible. So were requests for help with vital supplies, so long as aid did not swamp or ruin local producers. The Russian government would also face serious issues of debt relief (mainly from German creditors). The Russian reform program was serious. The time available to work on it and develop joint action was not.

Yeltsin himself understood little about the details of an economic reform program. At the start, though, he empowered the lead figure in the reform effort, a thirty-five-year-old economist named Yegor Gaidar.⁵⁶

Gaidar felt his window of opportunity was short, before the inevitable political backlash curbed his work. “The dismissal of the reform government was a foregone conclusion. The only question was when.”

His window was perhaps shorter than he and his allies expected. One capable outside adviser, Anders Åslund, later estimated that the effective launch window for radical reform ended up lasting from about October 1991 until March 1992.⁵⁷

Should the aid be major or minor?

The aid would be major.

Bush and much of his remaining team were depleted. It is revealing that Bush and Scowcroft’s excellent memoir tails off when the story reaches the end of 1991. Bush was mustering energy for a reelection campaign in which his opponents were accusing him of spending too much time on foreign problems.⁵⁸

Kohl too was distracted. Though reelected resoundingly at the end of 1990, he was preoccupied with the issues of unification and with conclusion of the agreements creating the transformed European Union. He told Bush in March 1992 that he was at his limit for offering any bilateral aid.⁵⁹

Nonetheless, the United States, the Germans, and other allies started scrambling to help the new Russian government. As the Soviet Union disappeared at the end of December 1991, its debt was all assigned to Russia, thus freeing the other new republics of that burden. The creditors pressured the Russians not to default, so that Russia could maintain access to more credit flows. The Germans, who held more of the debt than anyone, did not want to write it off. So Russia’s debt was rescheduled with fresh payment terms over the next twenty-five years, and then repeatedly rescheduled later in the decade. (Russia eventually paid it off in the 2000s.)

Baker had already worked hard to put together a humanitarian package for the Soviet Union to get through the winter of 1991–92. This included significant grants, not just more loans. It also included more than a billion dollars in U.S.-government-guaranteed credits to buy food. The United States had also pressured the Saudis to help Gorbachev.⁶⁰

In early December 1991, before the final Soviet disintegration, Baker, energized by work with congressional allies, made another try at putting together a really large Western aid program for Russia and the other former Soviet republics. His tone, including with Bush, was emotional. “We face a great opportunity and equally great danger.” He warned that “if the democrats cannot at least build some ‘islands’ of success, we face the danger of an authoritarian reversal or fascism.” He said the case was strategic, moral, political, and historic.⁶¹

When it came to fresh aid for Russia, as that country started its independent life in 1992, the stabilization fund was a key issue. This needed billions of dollars in straight grants, not loans. In December 1991, Gaidar had warned that he needed such a fund to go with the immediate decontrol of prices, or else inflation would gallop. The British ambassador remembered him remarking, “If the fund was not in place by April the government would not survive beyond June.”⁶²

At the beginning of February 1992, Yeltsin arrived at Camp David for talks with Bush. Their meeting went extremely well. Yeltsin was at the top of his game. He outlined his economic reform plan.

Baker followed up in Moscow later that month. He pledged that he would personally work on the stabilization fund. Bush’s Treasury Department was slower to come around.

Baker met repeatedly with Bush to galvanize the work. To organize American action, overcome the reluctance of an uncertain president, and defeat his opponents in the administration, Baker joined forces with Nunn, Lugar, and their bipartisan congressional group. Together, Baker and the congressional leaders met with Bush in March 1992. They persuaded him that action was feasible and politically possible.

Baker organized a team working an omnibus aid bill with Congress, while he and the White House spurred Treasury’s work with other finance ministers. He and Scowcroft orchestrated a tandem rollout of the U.S. aid legislation and a G-7 aid agreement, both at the beginning of April. Linked to this were announcements from Bush in Washington and Kohl in Bonn, since Kohl was the current G-7 chairman.

The G-7 plan was for a total of $24 billion. The commitments were on a Marshall Plan–like scale.⁶³ They did include a commitment to raise money for the $6 billion stabilization program, to be disbursed through the IMF, with the United States to provide 20 percent of the grant money.

With help from Democrats in Congress, the Bush administration aid bill, which included the money for the U.S. share in this fund as well as much more American money for the IMF, passed Congress that summer with strenuous lobbying by Baker and by the new U.S. ambassador to Moscow, Robert Strauss. It was signed into law in October 1992. This was fast work, especially in a national election year.⁶⁴

Baker had pushed to at least get the Western offers rolled out at the beginning of April 1992, before the angry Russian parliament (elected in March 1990 under old rules) reconvened that month. But the show of Western support failed to mollify the parliamentarians. Gaidar’s political support began to fade.

Gaidar’s prediction to the British ambassador had been close to the mark. By April 1992 the stabilization fund was not yet in place; “by the middle of 1992 inflation was beginning to run amok; and at the end of the year Gaidar was forced to resign.” This was not all the West’s fault. By June 1992, when Yeltsin put a free spender in charge of Russia’s central bank, it was clear that the ruinous “partial reform equilibrium” was starting to win the battle for effective control of the spending spigots and the banking system.

Without effective budget and financial control, it was hard for the IMF to nail down an agreed program with Russia. Large Western grants and credits would fuel the corrupt partial reform machine, not curb it.

In June 1992, the IMF was ready to deliver an initial billion-dollar tranche of support. As Gaidar put it, “by the time the paperwork was finished, our stabilization program [in Russia] was coming apart at the seams.”⁶⁵

In 1993, the incoming Clinton administration made a major effort to rejuvenate and enlarge the aid programs (“less shock, more therapy,” Strobe Talbott famously commented). So did the Kohl government. In 1993 the G-7 upped its nominal offer of assistance from $24 billion to more than $43 billion. But the Russian commitment to radical reform had fractured and many of these aid plans fractured with it.⁶⁶

What kind of conditions and policy preferences should accompany such aid?

The conditionality with Russia was halfhearted. The essential conditions had to include monetary constraints, market prices, and a sustainable tax/spending balance. The prescriptions of radical reform do not require monetary inflation, unregulated banking, premature bargain-basement privatization of valuable state enterprises, selective law enforcement, or corrupted elections.⁶⁷

One valid analogy from China, one which was well noted by Soviet experts but then not followed by either the Soviet or the Russian governments, was in China’s tight oversight of spending. “Moscow’s China-watchers had long believed that Beijing’s fiscal policy was a crucial determinant of the country’s success.”

The Soviet experts had stressed, including in the advice they gave in the 1990 development of the “500-day plan,” that every time the Chinese saw a surge in inflation during the 1980s, they controlled it with “austerity measures that cut credit growth” and careful spending controls, with greater efforts to grow tax revenue and stop off-budget financing and corruption.⁶⁸

Beginning in 1992 and continuing through 1998, G-7 leaders (especially the Americans, Germans, and French) and their top officials frequently put great pressure on the leaders of the IMF, specifically on managing director Michel Camdessus and his top deputy, Stanley Fischer, to relax conditions and just give out the money, especially for Russia. IMF officials understood and often sympathized with the political reasons for the pressure. They shared the genuine concern about the conditions in Russia.

The IMF officials did not surrender their belief that the radical approach was still the best way to ease the pain; they did not openly abandon their conditions. Instead they usually gave way by accepting Russian official assurances and hoping for the best.⁶⁹

The best was not what happened. As inflation wiped out savings and output collapsed, with halting progress in reform of the political institutions, Russians endured years of terrible hardship. Ukraine’s experience was similar.

Russians often put the blame on the outside advice. Some prominent scholars in the West joined the chorus of critics. Because the citizens acidly observed that “the post-Soviet system rarely operates according to its proclaimed principles of market democracy,” terms like “democracy” and “reform” became terms of sarcasm and mockery.⁷⁰

The large added Western help did not prevent the devastating Russian financial collapse in August 1998. It may even have facilitated it. Only that further awful blow finally led to a durable radical reform measure, a clampdown on Russia’s fiscal policies.

In all the continuing quarrels about what went wrong in Russia during the 1990s, the best-informed outsiders and their most vocal critics actually are seeing many of the same things. All see the triumph of the new elites (the rising “oligarchs”) and the “informal practices” that were part and parcel of the rigged games of partial reform.

The IMF made mistakes in Russia. In 1992, its experts were divided and they waffled on the crucial issue of whether to keep a common ruble zone among the former Soviet republics. Partly for political reasons, the experts and the United States tended to favor it. Gaidar and his aides were against it. They feared that the banks of all the other republics would keep printing rubles and fueling the hyperinflation. “Why hold down the budget deficit when you’ve got your own printing press?” said the Ukrainian prime minister. And that is exactly what happened.⁷¹

The IMF also may have erred in its advice to Russia about exchange rate policy in the mid-1990s. Its experts encouraged Russia to stick too long with a strong ruble in a fixed band of value that, because of its loose fiscal policy, Russia eventually could not defend. That position contributed to the disastrous Russian financial crisis in 1998.⁷²

Despite these mistakes, the basic IMF policy prescription for radical reform, not partial reform, had been the right one. In the case of Russia, the IMF did not insist on that policy.

Yeltsin had led a Russian revolution, up to a point. But among those elites who were already seizing informal power and wealth in the declining years of the Soviet Union, there was no revolution. There was no true radical reform. For this power elite, a mix of the old and the new, the chaos of partial reform became their golden hour.

That was certainly true in Ukraine too, the next most populous country to emerge from the Soviet disintegration. But the Ukrainian case is worth its own brief look. Conditionality did not fail there. It was not as compromised by political pressures. It actually ended up working.

Ukraine started off free of Soviet-era debts and free of assets, laden with military industry to supply the Soviet military and government-run collective farms. The independent Ukrainian government tried the partial reform path, a “soft” entry into the market with large-scale price regulation and its own printing press for money. For three years it resisted radical reform. Or, as one Ukrainian official later put it, “We made all possible mistakes.”⁷³

In those three years the Ukrainian economy totally collapsed. Russia suffered terrible depression, about a 30 percent drop in per capita GDP. Total collapse is worse: The drop in Ukraine was 54 percent, along with hyperinflation.

At the end of 1994 a new Ukrainian government, led by Leonid Kuchma, changed course. It accepted radical reform. It built a partnership with the IMF. The first wave of reforms at least stabilized a badly traumatized patient.

Then, in 1998, the financial earthquake in Russia threatened to take down Ukraine with it. Working with Kuchma and his team, and with a timely boost from the French president, Jacques Chirac, the IMF made an extraordinary and successful effort to provide money and pressure on other creditors to help. The outside partners helped the Ukrainian people get through that fresh crisis.

In 2000, the Ukrainian government, still helped by the IMF, enacted another round of reforms. The rest of the 2000s was encouraging: strong growth and Ukrainian recovery. Yet in 2007, Ukraine was hit again by a crisis from the outside—the ripple effects from the global financial crisis.⁷⁴

Ukraine’s political and economic life was badly scarred by its Soviet legacy and its early years. Wealthy oligarchs dominated the three major political parties. Ukraine’s politics was a hybrid of presidential authoritarianism and parliamentary democracy, with neither fully in charge. Its rule of law started out as selective and corrupt. That system, with the usual post-communist thicket of licenses and permits and special tax rules, continues to burden business and political life even after better laws have been enacted and macroeconomic reforms take hold.

As politics in post-1998 Russia became more authoritarian, politics in post-1998 Ukraine slowly became freer and more democratic. This was hardly the usual pattern in the post-Soviet republics (except for the Baltic republics). Nor was it obvious that citizens who had been through so much would still keep trying to make democracy work. But they did.

What kind of institutions could make this work?

In Eastern Europe the institutions to help make changes work came in two waves: international financial institutions, led by the International Monetary Fund, and then the European Union. Various individual governments had bilateral programs and influence, but the international institutions were most important.

In Russia and other post-Soviet republics, the first wave was similar—the IMF and other international financial institutions. The IMF could do some good with all sorts of technical advice about financial management and central banking. But its basic policy influence was weaker, because the conditionality was being relaxed from above.

There was no second wave of outside institutional engagement. There were no EU membership plans. The post-Soviet republics remained loosely integrated with each other in their Commonwealth of Independent States.

National governments frequently dispatched aid workers or advisers, usually contractors hired in aid appropriations to give technical assistance. These efforts often did not turn out well. Such technical assistance programs, offering guidance about how to reshape particular sectors of the economy or manage particular projects, came in for plenty of criticism, much of it well deserved, throughout the 1990s. Sadly, the experience with post-communist transitions ended up providing more ammunition for the critics.⁷⁵

The “Marriott brigades” of consultants and contractors often did not engage deeply enough to adapt their advice to local conditions. Some recipe books for local privatization were ill-adapted, at best. Occasionally, the contractors were even in league with the oligarchical networks, joining in the “informal practices.”⁷⁶

The EU’s relations with Eastern Europe, annoying as they often were for both sides, imposed year after year of hard, painstaking work as local officials refashioned their institutions, while still often facing democratic accountability at the ballot box. One reason why so many Ukrainians hope for membership in the EU is that they fervently want their country to go through this same constructive ordeal of institutional adjustment, the process they have watched happen next door.

The Integration of Eastern Europe

In 1991 the Warsaw Pact disbanded. Yugoslavia broke up. The Soviet Union disintegrated.

All the former Warsaw Pact and Soviet states were groping for larger institutions in which they could take part. The former Soviet states set up their “Commonwealth of Independent States.”

At first, the new East European governments had not put a high priority on trying to get out of the Warsaw Pact. But after April 1990, watching the Soviet government try to coerce the Lithuanians, these countries, led by Hungary and Czechoslovakia, tried to exit the Warsaw Pact and get Soviet troops out of their territory as quickly as possible. They tried to get closer to the EU and NATO about as fast as they could.

Their interest in NATO puzzled some political scientists. One theorist, reviewing a book about NATO enlargement, just shook his head. “Both the theory and history of international politics strongly suggest that NATO should have dissolved, not expanded,” he wrote. “No alliance has ever survived victory; and the possession of overwhelming power in the hands of one state typically induces balancing, not bandwagoning, behavior among contenders.”⁷⁷

As the East Europeans saw it, their countries had seven basic security options. They could seek: (1) an alliance with the big power to the east—the Soviet Union or, later, Russia; (2) neutrality (à la Austria or Switzerland); (3) regional alliances with others in Central or Eastern Europe; (4) Western integration, in NATO and/or the EU’s growing security structure; (5) a pan-European approach in the OSCE; (6) a “balance of power” strategy of switching back and forth; or (7) just unilateral national defense (like Switzerland).

The former Warsaw Pact and former Soviet states sampled this menu. They joined the pan-European structures we mentioned at the end of our last chapter. They flirted with various regional groupings. But eventually all the ones in Europe concentrated on option 4, Western integration.⁷⁸

The Soviet government thought about that option too. For a brief moment, it even seemed like Gorbachev was toying with the idea of seeking membership in NATO for the Soviet Union itself. In May 1990, meeting with Baker in Moscow, he wondered aloud whether the Soviet Union might join NATO. Baker had the impression that Gorbachev was not joking. He and Zoellick regarded this at least as a theoretical option.

Baker quickly checked with Genscher, who had just met with Shevardnadze, to see if Shevardnadze had raised such an idea. Genscher replied that Shevardnadze had certainly had the opportunity to raise it, but had not. And the Soviet government did not pursue it.⁷⁹

In 1992 and 1993, Russia’s new president, Boris Yeltsin, raised the issue of Russian membership in NATO in a more serious way. At the end of 1993 he met with NATO secretary-general Wörner to discuss a possible action plan for Russian membership.

The Americans and their allies found it hard to imagine how Russia’s enormous military would relate to NATO’s integrated military command. Many Russians also could not figure out how they would fit into NATO, which they regarded as an organization in which the United States played a leading role.

Early in 1994, Yeltsin’s view had evolved to one that was more of a “concert” system, in which the United States, Russia, and Europeans cooperated together on global issues. Yeltsin was then opposed to any NATO enlargement. If NATO enlarged, Russia should be first in line. But he admitted, “In truth, Russia is not yet ready to join NATO.”

By September 1994, Yeltsin was suggesting to President Bill Clinton that Clinton publicly say that any expansion of NATO “will be gradual and lengthy. If you’re asked if you’ll exclude Russia from NATO,” he advised, “your answer should be ‘no.’”

Clinton liked that. By 1995, the general ambivalence on both sides about Russian membership in NATO had gently resolved, without either side formally ruling it out, into a dual-track approach. On one side, NATO was moving toward possible enlargement. On the other track, NATO and Russia would develop an agreement on how to manage their future relations, to respect Russia’s influence and role in European and global security. Yeltsin was mainly concentrating on how to push the issue off until after his 1996 election was done.⁸⁰

The countries in the middle, like Poland, had a rather different perspective. As Lech Wałęsa put it, “Yeltsin and I… are like drivers on a strange road at night, without road markings. The difference between us is that I am driving a baby Fiat and he a huge juggernaut.”⁸¹

By the fall of 1991, Czech leaders openly sought an “associate membership” with NATO. The United States and other allies turned that down. They did create the North Atlantic Cooperation Council in November 1991. This very much included the Soviet Union.

At first, as Poland’s foreign minister from 1989 to 1993 later recalled, “The position of the Alliance at the time was clear: from its perspective, the admission of new members was absolutely out of the question.”

As he recalled, correctly, it was not ruled out that “at some point” the United States would take more interest in this. And Germany “would not want to be forever [the alliance’s] eastern outpost.”

“However,” the foreign minister added, “that was a matter of further developments, which at the onset of the 1990s did not yet appear.”⁸²

As the Bush administration left office at the beginning of 1993, it was internally divided about next steps. At the top, though, there was little division. Bush, Baker, and Scowcroft were not yet ready to press enlargement plans.

The Kohl government, decisively reelected in December 1990, was not going anywhere. Internally, Berlin too was arguing about next steps. Like Bush and Baker, Kohl and his new foreign minister, Klaus Kinkel, were not ready to press the issue.

Western integration was not just about NATO. In fact, the EU would play a much more important part in the reconstruction of Eastern Europe. After Mitterrand’s confederation idea collapsed, Delors “suggested to Mitterrand that the task of integrating Eastern Europe with the West should have been left to EC institutions, as it eventually was. But for that to happen, the [French] president would have had to trust those institutions instead of wanting to supersede them with new ones which would be more readily susceptible to French influence.”⁸³

But, consumed with many troubles accompanying its own “deepening” into the new Union, it would be years before the transformed EU could take up the question of new members from the former communist world. Before that, the EU did offer membership to the countries of Scandinavia, and Sweden and Finland both chose to join.

With pressure growing, especially from Poland, Hungary, and the Czech Republic (Czechoslovakia having peacefully split into two countries), the first major public arguments about the NATO enlargement question broke into the open during 1993. The German defense minister, Volker Rühe, publicly advocated this limited enlargement. The new Clinton administration, battered by some early crises and missteps, began trying to make its own mark by defining a foreign policy theme of “democratic enlargement.”

Both the German and American governments remained internally divided about how to proceed. A violent struggle for power in Russia in September 1993 between president and parliament provided ammunition to both sides.

The basic philosophical tilt toward eventual NATO enlargement occurred in the winter of 1993–94. It was cemented at a meeting of NATO leaders in January 1994 with a consensus that the issue would not be “whether” but “when.” The “when” part would consume a great deal of diplomatic energy during the next five years, until the NATO enlargement added Poland, Hungary, and the Czech Republic in 1999, with more to follow.

The new U.S. administration was anxious to carve out a positive policy of its own on some big subject. This was a period of great strain over what to do about the wars in the former Yugoslavia and reverses in other crises in Somalia and Haiti.

President Clinton declared that his younger generation would go beyond what their elders had done before. “I believe,” he said, that “our generation’s stewardship of this grand alliance, therefore, will most critically be judged by whether we succeed in integrating the nations to our east within the compass of Western security and Western values.”⁸⁴

At all times, however, any choice about the enlargement of NATO depended on German assent. Germany was much closer to the pressures and the dangers. It was very involved in the trade-offs regarding relations with Russia. A number of other allied states would look to a German view on this issue as least as much as they would to one from Washington.

During the early and mid-1990s, one well-informed German observer said, “The governments of Western Europe, to put it bluntly, back NATO’s eastward extension because they cannot muster the political will to tackle in earnest an eastward extension of the European Union.” EU expansion was much more important, politically and economically. But for a time, NATO seemed like a cheaper and readier instrument for reassurance.⁸⁵

Yet once the positive political signal had been sent, the Europeans were in no hurry to enlarge NATO. There was no pressing strategic concern. The Germans and French were very concerned about Russia’s unhappiness. The French were not very interested in pushing the matter at all.

Kohl remained chancellor of Germany until 1998. Since 1989 he had personally taken part in every single major negotiation about NATO’s future with all the key leaders, Soviet, Russian, and American. No one knew better than he what had been promised, formally or informally, and he was well attuned to Russian concerns.

Kohl was ready to support further enlargement. On the other hand, though, he emphasized a careful and gradual process, one to which Russia assented.⁸⁶

That is what happened. About three years were spent (1994–96) in the “dual-track” negotiations about setting up criteria for new members and working with the candidates on the one hand, while negotiating a special NATO partnership with Russia, a NATO-Russia Founding Act.

Then another few years passed in order to work on the details of actually bringing in the first three new members (Poland, Hungary, and the Czech Republic). That happened in 1999. NATO announced in that year that it had a new, more political strategic concept. Actually, the 1999 strategic concept was not much different from the one that the transformed alliance had adopted in 1991.⁸⁷

As Kohl had intended all along, by the time NATO actually expanded, at the end of the 1990s, the EU enlargement process was slowly catching up to it. The EU enlargement process was vastly more intrusive and time-consuming. The EU, along with the International Monetary Fund and the World Bank, and various bilateral aid programs (including that of the United States), played a large part in the hard, painful work of post-communist transition.

The IMF had played a large role in post-communist transition in Eastern Europe, with more rigorous and successful insistence on programs of radical reform and the associated shock therapy. Outside pressure from the IMF or Western governments was not enough. The changes needed were so massive that much more institutional help was needed inside these countries.

Fortunately, by the mid-1990s the influence of the EU in Eastern Europe was steadily growing. Former Warsaw Pact states were soon included in a “Europe” agreement that gave them a kind of associate status. By 1994 some of them had formally submitted the first applications for full EU membership. By the late 1990s the process of EU enlargement was changing the governance of every country that hoped to join the Union.

The enlargement process cut deep. It touched the inner workings of the governments—their personnel systems, their judiciaries, their legal structures, their regulations, their protection of the environment, and more.

Often the applicants angrily resented the ordeal and red tape that accompanied the process. Yet they had to acknowledge the positive side: Billions of euros had already been sent as aid; trade skyrocketed; and private investment also flowed in.

The EU exerted most of this influence, however, before the new members joined the Union. Once in, it became harder for the Union to judge or sanction the conduct of its members.

The EU had to adjust too. The old member states had to decide how quickly to adjust their work rules to allow migrants from new members. Britain, Ireland, and Sweden were the first to open their doors.

In the early 2000s the scale of West–East aid of many kinds rose into the tens of billions. By this time the new members (the first major enlargement was implemented in 2004) were ready to make good use of the money.

In sum, as one prominent critic of outside advice conceded, “Europe’s unprecedented generosity has paid off: the countries that have joined the EU have outperformed all the others, and not just because of access to Europe’s markets. Even more important was the institutional infrastructure, including the abiding commitment to democracy and the vast array of laws and regulations.” The Union, another scholar pointed out, “did not merely influence but actually determined the Central European governments’ internal policies.”⁸⁸

All the institutions of the new Europe—NATO, the EU, IMF/World Bank, and OSCE—combined pressure on some common themes. All put pressure on post-communist governments to adopt democratic government and open economies, to peacefully settle border issues, to put civilians in control of their militaries, and to respect the rule of law. The treatment of national minorities was a frequent topic.⁸⁹

In some cases, like the breakup of Yugoslavia or the struggle between Armenia and Azerbaijan over control of a region called Nagorno-Karabakh, hardly any peaceful measure could work. Yet in many others such external pressures made a big difference.

For instance, the restored country of Estonia adopted national citizenship laws of blood ancestry. These discriminated against ethnic Russians, especially those who had come there under Soviet rule. European states, the United States, the OSCE, the EU, and the United Nations all put Estonia (and Latvia) under plenty of pressure to revise these citizenship laws. They did. Ultranationalists who rejected EU (and NATO) conditions, like the government of Vladimír Mečiar in Slovakia, were “swept away because people did not want to lose the opportunity to join Europe.”⁹⁰

How far into the post-Soviet space should NATO and the EU go? The year 1997 was one of political struggle over the future of Europe. It began with a general consensus that Poland, and at least a couple of other countries, should join both the EU and NATO by the end of the decade. The question was not about whether these institutions should enlarge, but about the limits of this enlargement.

One of the key issues in both organizations was whether the doors would be open to the Baltic republics. In the United States, the new secretary of state, Madeleine Albright, and her deputy, Strobe Talbott, had a particularly strong view, much influenced by their reading and experience with the history of the region, in favor of an “open door” for the Baltics.

In Europe, the British and the Nordic NATO members (Denmark and Norway) strongly supported Baltic enlargement. Norway was not a member of the EU, but Sweden and Finland now were (both had recently joined, in 1995), and both countries felt a strong sense of community with the states on the other side of the Baltic.

During 1997, after some heated arguments, both NATO and the EU arrived at a common consensus approach. Both decided on an open door. They would set criteria for the extension of membership to any European country from the Baltic to the Black Sea.

At a NATO summit meeting in Madrid in July 1997, the Spanish secretary-general of NATO, Javier Solana, had crafted a compromise document opening the door to all. The French president and Italian prime minister insisted on a more limited extension, preferring expansion in the Balkans rather than the Baltics.

Kohl asked to speak. “The place was absolutely silent,” an American observer remembered. Kohl said that he regretted having to contradict his French and Italian colleagues. But, he said, an open door for all, the Solana compromise, was the only proposal that all the allies would be able to accept. The Dutch prime minister seconded him.

Solana asked for approval. No one spoke and he gaveled the meeting to a close.⁹¹ The EU made a similar decision at the end of 1997, at the European Council meeting in Luxembourg.

Following up on these “open door” decisions and related criteria for membership, between 1997 and the end of 2002 both the EU and NATO proceeded to make their last great wave of positive decisions about enlargement. At the time they did not quite realize that they were hitting their limits, but they were.

Poland, Hungary, and the Czech Republic joined NATO in 1999. The EU decided to accept twelve new members, ten of whom, including Poland, joined the Union in 2004. NATO decided to accept seven new members, all of them joining in 2004. The three Baltic republics were in both groups.

As the EU and NATO expanded, a diminished Russia had a painful adjustment. Russia inherited many of the legacies of being a Cold War superpower, including the proud historical status of a “great power,” however that term is defined, since the eighteenth century. In 1989, few would have challenged the image and reality of the Soviet Union as a superpower. During 1990 and 1991 all that was changing. By 1992 the Soviet Union was gone and Moscow ruled less territory in Europe or Central Asia than it had at any time in centuries.

But during 1990 and 1991 the U.S. and West European leaders continued to deal with Gorbachev as the head of a great power. In the response to the crisis over Iraq’s invasion of Kuwait, the Soviet government played a large role. Ultimately the United States and its allies shouldered the main burden of containing, then reversing, the Iraqi conquest. But the United States devoted enormous effort to handling the issue in partnership with the Soviet Union, despite the inevitable tension and suspicion on both sides. As difficult as they were, the choices for cooperation were the right ones, on both sides.⁹²

Later in 1991, even though the United States did much of the diplomatic work to set up the first direct multilateral peace talks between Israel and all its Arab neighbors, the invitation to the talks came from both Bush and Gorbachev. Both of them opened the discussions in Madrid in October 1991, the last major diplomatic event of Gorbachev’s time in office.

Entering the 1990s, Russia was going through an inevitable period of upheaval. Still, neither the United States nor the West European leaders had written off its importance. Russia was constantly consulted and involved in the diplomacy and peacekeeping efforts in the Balkans, at least through the mid-1990s.

The leaders of the new global system were in effect keeping a seat at the table for Russia to occupy, in substance and not just form, once Russia was able to give constructive attention to European and world problems. The NATO-organized and U.S.-led intervention to end the Bosnian war in 1995 was irritating to the Russians, but Russia remained involved and this was not a breakpoint.

The enlargement of NATO was contentious. But the Clinton administration made a real, conscientious effort to assure Russia, in the NATO-Russia Act, that it would be treated as a peer, its views carefully weighed in any future NATO action.

Therefore, what stands out, especially in Strobe Talbott’s careful memoir of U.S.-Russia relations, is the significance of a small war that few Americans now remember—the U.S.-led and NATO-organized war against Serbia in 1999 to force that country to yield in its treatment of the breakaway province of Kosovo. The Serbs tried to hold on to Kosovo, with its persecuted ethnic Albanians.

Russians and Yeltsin vehemently opposed this further war against the Serbs. They believed that their views were simply overridden. Whatever one’s view of the merits of the U.S. and NATO strategy to deal with Serbian actions in Kosovo, this has to be counted among the costs.

In that crisis, which occurred in his last year in office, before he was succeeded by Vladimir Putin, Yeltsin told Clinton, “I have never met such a difficult, complicated issue as the ongoing NATO military action in Yugoslavia.” In one of several very emotional discussions, he truthfully commented, “Of course, we are going to talk to each other, you and me. But there will not be such a great drive and such friendship that we had before. That will not be there again.”⁹³

Global Designs and a New World Order

Our story has mainly focused on Europe. The Bush administration’s policies in Asia were relatively static. Resisting great pressure at home, it held open a door to normal relations with China; it held off pleas to start a trade war against a Japan that itself was in a passive phase; and it held fast to an American defense presence in East Asia.⁹⁴

The U.S. concentrated on Europe because what happened to Europe between 1988 and 1992 changed the world. To pick just one large example, in 1991 the government of India, watching what was going on, made its historic decision to modernize its economy and open up more to participation in world commerce.

With its global perspective, at the beginning of the 1990s the United States tried to look beyond Europe, and widen the promise of a global commonwealth of free nations. As we mentioned back in chapters 1 and 3, the American leaders were determined to build a new system of global trade, in negotiations called the “Uruguay Round.”

The GATT, the General Agreement on Tariffs and Trade, was developed by British and American officials during the Second World War. Once upon a time there had been hopes to create an “International Trade Organization,” but in the 1940s that seemed like a fantasy. What the Americans and the British set up with others in the late 1940s and early 1950s promoted freer trade, not free trade, applied selectively to promote Cold War goals.

It was, a historian concluded, “a moderate form of multilateralism. Free trade ideals were left behind, victims of domestic regulatory practices, the influence of protectionism, and, above all, the Cold War.”⁹⁵

By the 1980s the Cold War bargains in the GATT were no longer so meaningful. Americans began accepting a narrative that portrayed gullible Americans helping European, Japanese, or Korean allies who were now taking advantage of this American goodwill or naivete. Protectionism was rising, not only in many new trade barriers being created by the United States but also in new ones found in Japan or Europe. The problems with global trade were what led the United States and Canada to carve out a free trade agreement of their own in 1988, itself a very difficult achievement.

The Bush administration gained some momentum to try to expand trade. The U.S. trade position had improved as it took office, and the economy was recovering in the second half of the 1980s. More industries were taking advantage of global openings to obtain steel or semiconductors for their own production lines. Japan entered a prolonged slump.

Using the moment, Bush, Baker and Zoellick, and Bush’s trade negotiator, Carla Hills, all worked to reset the “vector” of U.S. and global trade, to switch it from “closing” to “opening.” They were no longer relying on the old Cold War narrative. Their argument was that expanded trade would increase business, growth, and employment on both sides of the deals. They also believed that the greater cooperation among these economies would reinforce wider political partnerships across the board.

The worldwide effort was most important, but what got most of the attention in the United States was the effort to create a North American Free Trade Agreement (NAFTA). NAFTA was forged during the Bush administration, working with Mexico and Canada. The Clinton administration followed through and, with great difficulty, secured its passage through Congress.⁹⁶ But the more important work that the Clinton administration also carried through to conclusion was the Uruguay Round and the creation of a World Trade Organization.

For the first time the United States was leading an effort to conclude a global trade arrangement that would include both the developed and developing worlds. The scope was broad, ranging from agricultural subsidies to intellectual property. In addition to new rules, Canada—with European support—suggested the creation of a new organization to provide expertise and umpire disputes.

After Bush vetoed a quota on textile imports, opening the way to getting rid of the trade restrictions on textiles that hampered poor countries, the United States was able to ask for and get concessions that it wanted. The talks began to make rapid progress.

Since 1989, as we mentioned in chapter 3, the United States had linked its support for the single European market (“Europe 92”) to European support for a successful global trade deal. In other words, the newly enlarged and built-up Fortress Europe had to be open to world trade. Although there were problems with several countries, especially Japan and India, the most significant dispute ended up pitting the United States against Europe. The issue was agriculture. The whole agreement stalled over this problem.

In early 1992 the United States retaliated against European agricultural subsidies with high tariffs on a billion dollars’ worth of European exports. After very difficult negotiations during 1992 that repeatedly involved Bush, Delors, and other top leaders, the United States and Europe finally struck a deal, the “Blair House agreement” at the end of 1992.

With that deal passed to the Clinton administration, the Europeans pushed hard for establishment of the new WTO (the Canadian name—the Europeans had called it a “Multilateral Trade Organization”). In December 1993 the United States agreed. The final agreements were signed by 117 nations in Marrakech, Morocco. The U.S. Congress approved the deal in November 1994.

This Uruguay Round agreement was “the most ambitious and far-reaching multilateral trade negotiation since the establishment of the GATT in 1947.”⁹⁷ It did not produce complete free trade. Global trade could still be an obstacle course of local regulations. But the framework was much clearer and more orderly.

The Uruguay Round agreement did not eliminate agricultural subsidies, but those were substantially reduced. Average formal tariffs were cut by about one-third. Some of the old nontariff barriers, like “voluntary” export restraints, were eliminated. There were agreements on trade in services, on intellectual property, and on investment. America was opening its market to much more of the world, but the world was also opening its market much more to America—thus many political constituencies favored the deal. It was the last such global deal.

In Asia, in 1989, the United States picked up an idea launched by the Australian prime minister, Bob Hawke, for an Asia-Pacific Economic Cooperation forum (APEC). The United States argued that APEC could coexist with the other major multilateral forum, among Southeast Asian states, called ASEAN (the Association of Southeast Asian Nations). APEC had a new configuration, mixing government officials with representatives from the business world and academia. It was a place to discuss common problems, divided by sectors, and try to find solutions.

APEC, for example, became a way to host delegations from China along with Taiwan and Hong Kong. A similar compromise was later used to bring all three into the WTO in 2001, and thus more fully into the global economic system.⁹⁸

The great test, though, was whether the United States would accept China into the new Uruguay Round global trade system, thus giving it normal trading status in the American market without the annual reviews that had happened every year since 1980, often attended by controversy and uncertainty, especially after Tiananmen Square. China had signed on to the agreement, but the United States and its Congress still had to consent.

Clinton’s trade negotiator concluded a deal in November 1999. Clinton and Congress engaged in another major battle, like that over NAFTA. Finally, in May 2000, the House passed “Permanent Normal Trade Relations” (PNTR) with China by a vote of 237–197. Two-thirds of the Democrats opposed it.

The China PNTR deal had a far larger impact than NAFTA or the earlier Uruguay Round deal did. During the 2000s, imports to the United States from China more than tripled. This “China shock” had a very heavy impact on manufacturing employment in the United States, the first such shock that can be substantially linked to trade, rather than a mix of ordinary competition and technological change. Although trade had actually helped manufacturing income in earlier years, none of the trade changes had much effect on income inequality, however, which mainly has other causes.⁹⁹

Because the United States was a big borrower from the world during the 2000s, as it is now, world sellers who accumulate a lot of dollars did not and do not need to use those dollars to buy U.S. goods. Following the pattern first established during the Reagan years (though then on a smaller scale), the foreign dollar-holders can invest in American or any other dollar-denominated assets (which then ups the prices of those assets, including the value of the dollar). Often, they are buying the bonds that lend the dollars back to Americans, who are borrowing so much money from the rest of the world. The Americans then pay the interest on their debts to their many creditors around the world.

At the beginning of the 1990s, for better or worse—but mostly for better—American and other world leaders made a deliberate, planned decision to build a global trade system. Along with the global financial systems that had evolved during the 1980s, these trade and financial structures were core features of global capitalism. That was the plan.

The next part of the global design at the beginning of the 1990s, perhaps the most prominent of all, had not been planned at all.

Iraq’s invasion and conquest of neighboring Kuwait on August 2, 1990, came as a shock to neighboring Arab countries (including Kuwait). It came as a shock to the Soviet government that had thousands of advisers in Iraq. And it came as a shock to the United States, which had very much noticed the massing of Iraqi troops on Kuwait’s border (and had consulted all the others about what it meant).

The motives of Iraq’s dictator, Saddam Hussein, would not have been easy for any outsider to understand. Those who have examined the Iraqi records have concluded that Saddam believed, from escalating tensions and financial pressures, that he and his country were the target of an American-Israeli-Kuwaiti conspiracy to “strangle Iraq and topple his regime.” So in Saddam’s mind, he would get ahead of the plot, conquer Kuwait, and annex that country and its oil riches permanently.¹⁰⁰

This precedent-setting case—Iraq and Kuwait—was extreme. It was the most brazen act of out-and-out international conquest since the Second World War. It was even more brazen than the North Korean invasion of South Korea in 1950. In the Korean case neither country had recognized the legitimate existence of the other. The Korean case was also seen, correctly, as related to the larger Cold War struggle already taking shape.

The Iraqi conquest was novel. It was not a Cold War battle. The case asked: How would the emerging global system handle outlaws? The question really had two parts. Was there any international law or norms that should be respected? If there were any, Iraq’s conquest of Kuwait violated them.

The other part of the question was: If such law or norms are to be enforced, who should do it, and how? How the world responded to this case would offer a blazing example of how such questions would be answered. Not only had Iraq seized one of the world’s larger oil producers, but its military now stood close to the oil-producing region of Saudi Arabia, a country that could not defend itself against Iraq’s army.

Both of the authors of this book were working for Bush when this invasion occurred. Both of us became quite involved in the crisis in the days and weeks to come. On the first day after news of the invasion hit Washington, Zelikow traveled with Bush to Aspen, Colorado, where Bush was planning to visit with British prime minister Thatcher.

In Aspen, by coincidence, Bush planned, and proceeded, to give a speech to announce a large drawdown of America’s military strength and a change in outlook. “We’re entering a new era,” he said, and “the defense strategy and military structure needed to ensure peace can and must be different.”

He continued, “In a world less driven by an immediate threat to Europe and the danger of global war, in a world where the size of our forces will increasingly be shaped by the needs of regional contingencies and peacetime presence, we know that our forces can be smaller.… I can tell you now, we calculate that by 1995 our security needs can be met by an active force 25 percent smaller than today’s. America’s armed forces will be at their lowest level since the year 1950.”

Bush did not waver from these plans. But he and Scowcroft (Baker was on the other side of the world, rushing home and talking to Shevardnadze) immediately made up their minds, as Bush, in impromptu fashion, told reporters a few days later, “This will not stand, this aggression against Kuwait.”

People could, and did, make their geopolitical calculations. Iraq then had one of the larger armies in the world. Ejecting it from its positions on the other side of the world would be an awful task.

But there was a core judgment, which both of the authors of this book immediately saw at the White House and which we shared. Unexpectedly, Bush had to set a precedent for the character of the new world that in August 1990 was dawning.

Baker was exactly right when he later wrote, “The President’s statement reflected his instinctive sense, very early on, that this was no ordinary crisis, that it truly would become a hinge point in history.”¹⁰¹ As to how “this will not stand,” that was a complicated path. But Bush’s determination was fixed. Scowcroft was equally determined.

And as it turned out, many others, including many world leaders, shared this core conviction. They too sensed, in different words and shadings, that a test had come. Especially for leaders of the postwar generation for whom World War II was not just something in books and film, this was a test they decided they would pass. The world was entering a new era, one way or another, and leaders who wanted to build a better one had to step up.

Before the Iraq crisis of 1990, no country had planned any of this. There were no deliberations about a new grand strategy for how best to handle novel global security problems. There were preexisting principles, institutions, and habits of thought. But these did not automatically dictate the choice about the “vectors” we have outlined.

Reasonable people disagreed. New situations forced new choices. Making those choices, often driven by the specific details of what was going on and evaluations of alternative actions, the leaders then began reflecting on the larger meaning and patterns set by what they were doing.

The “how” part was vital too. Bush decided, amid disagreements (including from Thatcher), that he would offer American leadership through a true global coalition, endorsed by the United Nations. This was a hard road. It required the support of the Soviet Union and China, among others. It was the first time that Franklin Roosevelt’s original vision for the United Nations came fully to life.

During the Second World War, while Bush was a young pilot flying missions in the Pacific, Franklin Roosevelt had imagined that the UN Security Council would have at its core a concert of the great powers. He thought of them as “Four Policemen,” the United States, the Soviet Union, Britain, and China. At that time France had not yet won permanent membership in the UN Security Council, and the China FDR had in mind was the Nationalist Chinese government led by Chiang Kai-shek (Jiang Jieshi). In this vision the great powers would join forces against future outlaws, like Nazi Germany had been.¹⁰²

The vision had never quite come true. The Korean case of 1950 came close, but the Soviet Union was out of the UN at the time the decisions were made, abstaining because it complained that the wrong China (the noncommunist one that had fled to Taiwan) then had China’s seat at the UN.

So the Iraq case in 1990 was the first true test of FDR’s original vision. And it worked about as well as he could possibly have hoped it might.

Not only did the United States and other leaders organize a political coalition for UN action, but there was also a multinational military coalition that organized a force more than half a million strong in Saudi Arabia. This included the British and French, but also troops from Egypt, Syria, and Saudi Arabia.

There was also an economic coalition that gave huge sums to countries that suffered from joining economic sanctions against Iraq (like Turkey and Jordan) but also offset the costs the United States incurred, because the Americans were also fighting on their behalf, and they, for various reasons, could not contribute that way. Baker called this his “tin cup” coalition, as he went around and asked them to contribute, which they did—more than $50 billion. The big contributors to this economic coalition were Germany, Japan, Saudi Arabia, and of course, Kuwait.¹⁰³

Across the span of world history, it is hard to find any case of a set of coalitions so intricate, overlapping, and successful. Part of the credit goes to an extreme U.S. diplomatic effort. As one of our key NSC staff colleagues, Richard Haass, put it, “Everything else was secondary. The U.S. government, for better or worse, revolved around this set of issues.”¹⁰⁴

But most of the credit for the construction of these worldwide coalitions does not go to Americans. The overlapping coalitions worked because other countries shared the objective. They recognized the test. They wanted to join to pass it.

While Bush had been flying missions in the Pacific at the end of 1944, Mitterrand had been helping to liberate France. He had no particular affection for the Kuwaitis. “To make war on behalf of these billionaire potentates will be hard for us,” he told his foreign minister. But his immediate instinct, like Bush’s, was that “we must be firm.… We have to defend international law and solidarity.”

Mitterrand, like Bush, then listened to his advisers debate what to do. They were divided. Some were reluctant, preferring to hang back from the United States, win friends in the Arab world, and concentrate on economic sanctions. After one such debate, a week after the Iraqi invasion, Mitterrand listened, and listened, and then lashed out.

“When you shelter behind those arguments you’re just reasoning in a vacuum!… The Americans know that the French and the British are the only ones [in Europe] capable of taking action. If we don’t respond, it means we are going to sit on the sidelines.… If we evade that problem, we’ve gathered here to no purpose.”

Speaking privately to his cabinet, Mitterrand spoke bluntly. “Iraq is an unscrupulous, bloody dictatorship.… In this case we must be clear about our solidarity. If we have to choose, I consider that we must fight against Hussein, whatever the consequences may be. If we don’t, we are false brothers of the West.”

Months later, as Bush phoned to say the land offensive was about to begin, Mitterrand would again evoke such comradeship. “We’re a very small group of ‘happy few,’” he told Bush.¹⁰⁵

Saddam Hussein’s Iraq would not leave Kuwait unless overwhelming force made them do so. The coalition began fighting in January 1991. To fracture it, Iraq then fired dozens of missiles at Israel, hoping that an Arab-Israeli war would break the coalition. Again, through remarkable coalition work, the world rallied to Israel’s defense without Israel itself having to go to war against Iraq and thereby play Saddam’s game.

The coalition defeated Iraq, liberating all of Kuwait. The UN imposed an armistice in 1991. In all the UN resolutions on Iraq the United States and the Soviet Union maintained a common front. The cease-fire terms required that UN inspectors be able to police Iraq and be sure the remnants of its advanced nuclear program (and other weapons of mass destruction) were dismantled and destroyed.

“In the first days of the [Iraq] crisis,” Scowcroft remembered, “we had started self-consciously to view our actions as setting a precedent for the approaching post–Cold War world… for the Security Council to operate as its founders had envisioned.” This would be a new kind of world order. Exercising their usual literary flair, Bush and Scowcroft thus thought of it as, and then began calling it, just that: a “new world order.”

The phrase itself was no more than a flat description. They did believe in world order—and what was happening was new. Scowcroft’s own description of what it meant to him was characteristically terse. “Our foundation was the premise that the United States henceforth would be obligated to lead the world community to an unprecedented degree, as demonstrated by the Iraqi crisis, and that we should attempt to pursue our national interests, wherever possible, within a framework of concert with our friends and the international community.”¹⁰⁶

The Unipolar Mirage

In the winter of 1990–91, the late Charles Krauthammer coined a memorable phrase in an essay for Foreign Affairs, which he entitled “The Unipolar Moment.” “The center of world power,” he wrote, “is the unchallenged superpower, the United States, attended by its Western allies.”¹⁰⁷

Just one year before Krauthammer wrote this essay, in September 1989, the best-informed foreign embassy in Washington had seen a somewhat different America. As we recounted in chapter 3, the British embassy had privately explained to London that the general wisdom in America was that the country had entered a period of great decline, that it was experiencing a troubling adjustment to its loss of status, and that economic nationalism was the dominant national theme.

The British diplomats of September 1989 had accurately described what they were reading and hearing. Krauthammer, too, was accurately articulating a national mood, self-congratulatory and triumphal—after the collapse of the Soviet Union and even more after the February 1991 victory against Iraq.

The U.S. government had not suddenly gained magical powers from one year to the next. During the two years from the East German election in March 1990 until the spring of 1992, the United States did seem powerful, and it was. America’s was a power gained from combining strengths—political, financial, and military—in networks of partnerships with others. The power was apparent not because leaders bragged about how much of it they had, but because well-designed policy choices produced visible, constructive results.

In a prepared address he delivered to Congress in September 1990, Bush urged his fellow Americans to see a “rare opportunity to move toward an historic period of cooperation,” one “freer from the threat of terror, stronger in the pursuit of justice, and more secure in the quest for peace.” It would be “a world quite different than the one we’ve known.”¹⁰⁸

Bush would not be reelected to lead America into that different world. By 1992, he was already being attacked on both sides for having given too much attention to the rest of the world. In his essay, written well before Patrick Buchanan, then Ross Perot, chose to run against Bush in 1992, Krauthammer already foresaw “a resurgence of 1930s-style conservative isolationism.”¹⁰⁹

Thatcher had been a dedicated cold warrior, yet struggled with all the new designs until her own party toppled her from power in November 1990. Kohl helped create a new Germany and a new Europe and stayed in power long enough to endure endless quarrels about both.

Gorbachev’s own reflections were especially poignant, mixed with satisfaction and regrets. At one point, in February 1991, he mused to Chernyaev, “It’s a new era. Even in our country it is already post-perestroika. All revolutions end in failure, even if they change the country, and some change the whole world.”¹¹⁰