AMERICAN CAPITALISM BEGAN TO FAIL IN ABOUT 1973---EPISODE 24

IN MARCH OF 1985, MIKHAIL GORBACHEV TOOK OVER AS LEADER OF THE SOVIET UNION 

   Gorbachev described the situation he confronted this way : "Defense spending was bleeding the other branches of the economy dry." Visits to the defense plants and agricultural production complexes drove home the point. "The defense production workshop making modern tanks . . . had the newest equipment. The one working for agriculture was making obsolete models of tractors on old-time conveyor belts." The cause of this disparity was obvious. "Over the previous five-year plans," Gorbachev wrote, "military spending had been growing twice as fast as national income. This Moloch was devouring everything that hard labor and strain produced." But even Gorbachev found it difficult to obtain the hard data needed to fully assess the situation. "What made matters worse," he explained, "was the fact that it was impossible to analyze the problem. All the figures related to the military-industrial complex were classified. Even Politburo members didn't have access to them." 

Precise figures are still hard to come by. Central Committee staffer Vitaly Katayev may have kept the most detailed and accurate records. He estimated that in 1985 the Soviet defense sector accounted for 20 percent of the economy. It incorporated nine ministries, not all of whose functions could be identified by their titles. The ministry dealing with the Soviet Union's nuclear programs, for example, was titled the "Ministry of Medium Machine Building." Defense production consumed the efforts of more than fifty cities and, according to NSA Director William Odom, ate up some 20 to 40 percent of the Soviet budget. 

To realize the goals of revitalizing the nation, Gorbachev needed to end the arms race and redeploy resources to productive purposes. He also needed to end the war in Afghanistan, a conflict he thought from the beginning was a "fatal error" and now believed was a "bleeding wound." Achieving those goals would go a long way toward refurbishing the Soviet Union's international image, which had been badly tarnished during the previous decade. One of his foreign policy advisors, Sergei Tarasenko, commented, "One of the first concerns of the Gorbachev administration was to repair this image so the Soviet Union would be viewed as the 'evil empire'." Gorbachev braced for resistance from his own defense sector.

Gorbachev wrote his first of several extraordinary letters to Reagan on March 24, 1985. It was a letter that might have been written by Henry Wallace forty years earlier : 

     Our countries are different by their social systems, by the ideologies in them. But we believe that this should not be a reason for animosity. Each social system has a right to life, and it should prove its advantages not by force, not by military means, but on the path of peaceful competition with the other system. And all people have the right to go the way they have chosen themselves, without anybody imposing his will on them from outside. 

Gorbachev also echoed Kennedy's American University commencement address when he wrote to Reagan in October that despite their differences, they must "proceed from the objective fact that we all live on the same planet and must learn to live together."