Opening statement, Senator Henry M. Jackson...... Testimony of Dr. Thomas W. Wolfe and Dr. Robert W. Campbell----- THE LIMITATION OF STRATEGIC ARMS WEDNESDAY, MAY 20, 1970 U.S. SENATE, SUBCOMMITTEE ON STRATEGIC ARMS LIMITATION TALKS OF THE [This hearing was held in executive session and subsequently ordered made public by the chairman of the subcommittee.] The subcommittee met, pursuant to notice, at 10:10 a.m., in room 21, Old Senate Office Building, Senator Henry M. Jackson, chairman, presiding. Present: Senator Jackson. Staff present: Richard Perle, professional staff member, Subcommittee on National Security and International Operations; LaBre Garcia, professional staff member, Armed Services Committee. OPENING STATEMENT OF THE CHAIRMAN Senator JACKSON. The committee will be in order. On the initiative of our subcommittee, Secretary of Defense Melvin Laird appeared before the full Senate Armed Services Committee on Tuesday, May 12, to discuss key aspects of the strategic balance, and the relationship of U.S. strategic force programs to the Strategic Arms Limitation Talks now underway in Vienna. I believe the May 12 hearing helped develop the crucial issue of the relationship between our efforts in the SALT talks to secure a comprehensive arms control agreement, and our programs at home to maintain and protect our deterrent posture. I suggest that Secretary Laird's opening statement at that full committee hearing be included in our record today.* We are very pleased to have with us two scholars who have spent much of their professional lives studying the Soviet Union, particularly its economic and military policies and programs. We have endeavored in this subcommittee to consider as broadly as possible the multiple elements of national policy that bear on strategic and arms control questions. In any such consideration the role of the economy is central. Many advocates of arms control believe that pressures on the economy resulting from the large capital investment necessary to procure strategic weapons are a crucial incentive to agreement. At the same time, the economic burden of arms expenditures will vary from one economy to the next and, within a single economy, from one year to the next. It is important to understand just how substantial this burden is on the United States and the Soviet Union, and how likely we each are to save these resources as a result of arms limitation. *See Appendix, p. 105. Surely every American would welcome an opportunity to both maintain an adequate deterrent force and reduce the expenditures required to do so. Professor Robert Campbell, who has studied and written extensively on the Soviet economy, will share with us his thoughts on the Soviet appreciation of these issues and the nature of the Soviet economy. Equally important for our understanding of the problems of arms control is the military policy of the Soviet Union, especially that part of its military policy that includes arms limitation. In addition to commenting on problems of the Soviet economy and technology, Dr. Tom Wolfe can shed much light on Soviet arms control policy. Dr. Robert Campbell is Professor of Economics at Indiana University and a member of its East European Institute. He has most recently worked on a study of the Soviet space program and space technology, work that is now continuing. He is the author of a number of books on the Soviet economy as well as numerous articles in scholarly journals. Dr. Thomas W. Wolfe is well known to Senate committees. He is at present a Senior Staff Member of the RAND Corporation and a member of the faculty of the Sino-Soviet Institute, George Washington University. He has served as U.S. Air Attaché in Moscow and as an adviser or delegation member to a number of international arms control negotiations involving the Soviet Union. Gentlemen, we are delighted to have you here today. You may proceed in your own way. STATEMENT OF DR. THOMAS W. WOLFE, SENIOR STAFF MEMBER, THE RAND CORP.; MEMBER OF THE FACULTY OF THE SINOSOVIET INSTITUTE, GEORGE WASHINGTON UNIVERSITY IMPACT OF ECONOMIC AND TECHNOLOGICAL ISSUES ON THE SOVIET APPROACH TO SALT Dr. WOLFE. The second round of the SALT talks in Vienna will have been underway more than a month before this paper is presented to the Armed Services Subcommittee on Strategic Arms Limitation Talks. How much progress toward agreement will have been made in the early weeks of the Vienna session cannot be foreseen. But whatever the immediate outlook for the talks may be-whether promising, discouraging or simply indeterminate-let me note at the outset that most of the issues which this paper is intended to explore have a life of their own, so to speak, and can be expected to make themselves felt in the future development of Soviet policy no matter how the negotiations at Vienna may unfold. My specific subject today concerns the impact of economic and technological factors upon the Soviet Union's approach to arms control, but in a broader sense I shall also touch upon a number of interrelated questions which seem to be of pivotal significance with regard to foreign and defense policy trends in the Soviet Union, and which may thus merit attention in the context of the negotiations now taking place in Vienna. Uneven Performance of the Soviet Economy Perhaps one may best begin with a brief examination of the performance of the Soviet economy under the present collective leadership, for upon this largely turns the question whether economic problems constitute a compelling reason for the Soviet Union to seek a halt in the strategic arms competition. During the first three years or so of the Brezhnev-Kosygin regime, up to 1968, the Soviet economy appeared to be recovering from the sluggishness which had overtaken it toward the end of the Khrushchev period. Thanks in part to several good harvests, including an all-time record grain harvest of 170 million metric tons in 1966, and perhaps in part to a program of economic reforms introduced in 1965, the new collective leadership was able to take credit for an upturn in the over-all performance of the Soviet economy. According to figures released at a Supreme Soviet. session in Moscow just prior to the Soviet Union's fiftieth anniversary celebration, in the fall of 1967, the annual rates of growth for several key economic categories had risen somewhat above the levels recorded during the latter years of Khrushchev's rule. The average annual growth rate of "national income", for example, reached 7.2 percent in 1966-67, as against 5.7 percent for the period 1961-65; industrial output growth rates for the same periods were 9.4 percent compared with 8.6 percent; while agricultural growth rates were 4.2 percent compared with 2.4 percent in the earlier period." Western analyses of Soviet economic performance, incidentally, suggest that the growth record in the three-year period 1965-67 did not surpass that of Khrushchev's latter years to the extent shown by the Soviet-released figures. For example, in terms of gross national product (a method of measurement different from the Soviet concept of "national income"), the Western estimates show an average growth rate of about 5.7 percent for 1965-67, compared with 4.9 percent for the last three years of the Khrushchev period.3 Nevertheless, even though the average growth rate may have flattened out more than Soviet authorities cared to admit, the upturn was sufficient to enable the Brezhnev-Kosygin regime to view with some optimism the prospect of meeting planned performance goals for 1970. This was the terminal year of the eighth Five-Year-Plan whose goals had been 1 The economic reforms introduced in October 1965 were at first widely interpreted as a significant departure from past "command economy" principles; the reforms were supposed to encourage initiative at local management levels, and they envisaged the use of profitability, market demand, interest, and other devices adapted from capitalist economics. In practice, numerous difficulties were encountered, including those of working out a realistic pricing system on which meaningful profit criteria must rest. as well as the problem of reconciling market mechanisms and local initiative with arbitrary centralized control. For a competent Western assessment of the first years of the reform program, see Theodore Frankel, "Economic Reform: A Tentative Appraisal", Problems of Com muniam, (May-June 1967): 29-41. For a Soviet account of reform difficulties, see N. K. Baibakov, "Plan and Production Under the New Conditions", Pravda, October 1, 1968, Report by N. K. Baibakov, Chairman of the USSR State Planning Committee, Pravda, October 11, 1967. See the chapter "Comparative Growth of the Soviet Economy", in_Soviet Economio Performance: 1966-67; materials prepared for the Subcommittee on Foreign Economic Policy of the Joint Economic Committee, Congress of the United States, Government Printing Office, Washington, D.C. May 1968, pp. 11-18. The annual figures from which the three-year averages were derived for comparative purposes were: 1962-4.2; 19632.8; 1964-7.9; 1965-6.2; 1966–7.1; 1967-4.3 percent. |