Imperial Overstretch: Some Economic Considerations over the end of the Cold War

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The Cold War was a period of open rivalry between the United States and the Soviet Union (USSR), and its end matches with the dissolution of the latter in 1991. Although many reasons explain its collapse, such as the spread of liberal ideas in the Soviet ruling élite and the rising desire for independence among Soviet constituent republics, according to the Realist theory of International Relations the key factor is the Soviet economic decline. Indeed, to Realists a state’s power is the variable that explains international dynamics, and not only do power and economic prosperity go hand in hand, but also power originates from the latter. Hence it was the cost of Moscow’s superpower status that led to its final collapse, and this article will analyse how.

The Soviet economy started stagnating in the 1970s, due to slow technological innovation caused by its isolation. Indeed, thanks to worldwide economic globalization, enhanced by the proliferation of computer technology (the “Digital Revolution”), multinational corporations relocated production thanks to improvements in transportation and coordination among them. This allowed new technology to circulate faster and favoured worldwide economic specialization and innovation. However, the Eastern Bloc markets were isolated from technological innovations developed in market economies due to their nature. The USSR produced low-quality goods which required costly maintenance, producing a technological and military gap with the West. Catching up meant putting the Soviet economy under additional stress, jeopardizing Moscow’s international standing.

Drawbacks in production made the returns of subsidizing Eastern European satellites increasingly less significant since they had Soviet-like economies facing the same issue of below-global-standards production. This was a symptom of Moscow’s imperial overstretch, reflected not only in Eastern Europe but also in costly imperialistic interventions abroad, like the Soviet invasion of Afghanistan. Moscow had to rethink its satellites’ strategic value and tolerated more autonomy, which however fostered in them the will to break away from the Warsaw Pact.

In conclusion, based on the Realist theory, the Soviet economy spiraling into recession jeopardized Moscow’s position as a superpower. As the economic and technological gap with the West widened, it became imperative for the USSR to avoid a new arms race with the West, which it simply could not afford. The sole feasible solution was to reorient its security policies toward global retrenchment and adopt domestic liberal policies to stimulate international détente. Yet with a weaker and more permissive leadership, the USSR collapsed under internal centrifugal forces, thus leaving space for a new world asset to emerge. 


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Kirshner, Jonathan. 2009. “Realist Political Economy.” In Routledge Handbook of International Political Economy (IPE), by Mark Blyth, 36-47. New York: Routledge.


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