Editor’s Note

This issue begins with an article by Archie Brown, who discusses the two-day seminar convened by British Prime Minister Margaret Thatcher in September 1983 to help her decide what approach she should take to the Soviet Union and Eastern Europe. This seminar, Brown argues, was crucial in persuading Thatcher to shift to a policy of engagement with up-and-coming leaders in Moscow, especially Mikhail Gorbachev, who accepted her invitation to visit Great Britain in December 1984, three months before he became General Secretary of the Communist Party of the Soviet Union (CPSU). Although the historical record shows that academic experts almost never have any meaningful impact on the highest policymakers, Brown contends that this was a special case in which Thatcher was actively seeking advice from specialists outside the British Foreign Office, an agency she had long distrusted. The two days of meetings at Chequers, the prime minister’s official country residence, on 8–9 September 1983 allowed the outside experts (including Brown) to have direct access to Thatcher, who spent hours reading their briefing papers and listening to their comments. Brown cites several former close advisers to Thatcher who claim that the meetings were of great importance in helping the prime minister to decide whether to reorient British policy. Even readers who are skeptical that the Chequers meetings were what truly changed Thatcher’s views on the matter will likely find Brown’s account a useful source about this key period in British policymaking toward the USSR and Eastern Europe.

The next three articles deal with international economic aspects of the Cold War. The first of the three, by David R. Stone, examines the activities and ultimate failure of the Soviet-sponsored International Investment Bank (IIB), an institution formed in 1971 under the auspices of the Council for Mutual Economic Assistance (CMEA), the organization responsible for coordinating multilateral economic transactions within the Soviet bloc. When the IIB was set up, it was intended to provide rigorous scrutiny of innovative proposals emphasizing multilateral industrial ventures that would incorporate advanced technology and facilitate intra-CMA economic integration. The bank during its first few years did provide financing for industrial ventures, but the success of these projects was limited by problems inherent in the nature of Soviet-style economic systems. Moreover, starting in the mid-1970s the bank shifted the vast majority of its financing to resource extraction in the Soviet Union, specifically the Soyuz natural gas pipeline that would bring much-needed energy supplies from the USSR to the East European countries. With the bank’s support, the pipeline was completed in 1978, but as this project and other resource-extraction ventures came to dominate nearly all of the IIB’s lending pool, it further diminished the bank’s ability to perform its original mission. Stone argues that the only way the IIB could genuinely have become an effective institution was if the CMEA countries had shifted to a convertible currency and meaningful prices. But such steps would have required the abandonment of cardinal features of their Soviet-style economies, something that no CMEA government (not even the Hungarian) was willing to contemplate. This constraint, Stone shows, doomed the IIB’s efforts to promote market-oriented reforms that would lead to industrial modernization and economic integration within CMEA.

The next article, by Francine McKenzie, shows that the Cold War had a far-reaching impact on the General Agreement on Tariffs and Trade (GATT), the organization set up at the beginning of 1948 to promote free trade and a liberal international economic order. Although GATT initially was intended as only a temporary body, it emerged as the main vehicle for encouraging global free trade after proposals that were broached in the mid-1940s to form an International Trade Organization finally collapsed in 1950. Most analyses of GATT focus on its economic (tariff-lowering) dimensions and portray it as having been largely unaffected by the Cold War, but McKenzie argues that debates about membership, as the contracting parties decided which countries to let into the organization and which ones to exclude, were heavily influenced by the Cold War. The United States usually got...