Economic Realities: The 1973 Oil Crisis
- Both superpowers had huge demands for oil that outweighed their own production. Although the Soviets had a rich wealth of oil, inefficient production and a focus on iron and steel production put the farming of oil on the backburner
- Egypt and Syria invaded Israel 1973, known as Yom Kippur War. The US sides with Israel
- October – OPEC raises fuel prices by 70% to put pressure on US and GB, and cuts supplies to countries that support Israel, including the US
- This leads to panic buying. Prices rise which leads to even more panic buying, and so there is a shortage of goods.
- Britain suffers strikes
- US concerned – February 1974 the Washington Energy Conference produces agreement on harmonising Western energy policies
- US also abolishes capital controls - allows US banks to use surplus dollars. Although this threatened the US economy temporarily, in the long-term it actually strengthened capitalism
- Oil companies in the West benefitted from increased cost of fuel
Economic Realities: Soviet economic problems 1
- USSR had failed to exploit its economic wealth, by having an inflexible economy and a focus placed on heavy industry, such as iron and steel production.
- Although Soviets opened vast Siberian oil reserves to cushion the impact of the Oil Crisis, there were still severe underlying economic problems. Its reliance on satellite states as opposed to its own resources was problematic for the leaders in Moscow, who wanted to prove the competence of communism
- USSR resources were diverted into the military and industrial sector to keep up with the US, especially in terms of the arms race, and technology. Nearly 1/3 of all Soviet workers were engaged in this sector. This meant that the economy struggled hugely in terms of consumer goods and agriculture
- The USSR also had inefficient transport. Although it grew enough grain to feed its population, it could not all be transported to the places it needed to be and so often spoiled and went to waste. This led to shortages and high prices, and a dependency on other countries for food. The USSR wanted increased trade with the US in order to fulfil this.
Economic Realities: Soviet economic problems 2
- The farmers also had little desire to work hard, as their wages depended on how hard the other farmers working on their collective farms worked. This meant that production was extremely low.
- Vast sums of money went to supporting Communist allies such as Vietnam, Cuba, Ethiopia and Angola. The USSR wanted to keep their hold over these governments and by improving living standards in these countries, the USSR felt that they would be able to prove that communism was an effective ideology. Unfortunately, living standards remained extremely low in all Soviet countries, and Russia’s economy suffered more as a result.
- The communist system required rigorous planning and the economy was inflexible and easily disrupted in the face of unforeseen events. This is seen especially by the 1973 Oil Crisis and Soviet dependency on other countries such as Siberia.
- Soviet technology was falling behind the US despite huge spending. Although the Soviets had developed a lithium bomb in 1953, the US followed only 7 months later with their own. Although the Soviets sent the first man into space (Yuri Gagarin) in 1961, the US put the first man on the moon in 1969. American technology was constantly catching up and overtaking Soviet technology.
Economic Realities: the USA
- The Oil Crisis of 1973 put economic pressure on US to form détente with USSR, especially because of military spending. It had temporarily alarmed and threatened the American leadership and economy; the US wanted an end to the pressures put on their economy by the continuation of the Cold War with the USSR. Negotiation was seen as necessary.
- The USA’s economy was suffering after the Vietnam War, from 1955 to 1975. Although an end to this war was secured by Kissinger, discontent was high within the American public, who were tired of American intervention into other countries. This put pressure on the American govt to stop intervention in Soviet matters
- Its economy was also struggling due to the high demands of the arms race. After the development of the hydrogen bomb by the Soviets in August 1953, the race was on for the US to develop their own. They did this in March 1954, but the development caused economic difficulties
- President Johnson (1963-69) also sought to expand the government welfare state. Coupled with America’s high military spending, it led to a huge strain on the economy. The leaders felt under pressure to pursue détente.
Needs of the USSR 1
- Wanted recognition and accommodation from the west
Legitimacy for its power over Eastern Europe
Recognise its sphere of influence
Wanted stability in Europe (1968 Czech crisis and strikes in Gdansk, Poland meant they needed a stronger hold)
Ensure the west would not intervene in their sphere of influence
Needs of the USSR 2
- Wanted to limit the pace of the USA’s nuclear development
Arms race caused competitiveness – vulnerability for the power that failed to keep up with the pace of technology
Many of Khrushchev’s boasts were not supported by reality – his personal insecurities
The soviets ICBMs were less impressive than it seemed – early missiles were very unreliable and unsuitable for operational use as Khrushchev knew. By 1960, the USSR only possessed four ICBMs that were functional
USA knew there wasn’t a missile gap – use of u-2 spy planes
By 1962 the USA had 4,000 missile warheads compared to the Soviet Union’s 220 warheads
Needs of the USSR 3
- Sino-soviet split
Wanted to ensure the USA would not get involved in conflict between the USSR and China
Vulnerable against two large powers allied together
Sino-soviet split meant the force of World communism was weaker
Ussuri river dispute 1969 showed that China was prepared to use force against the USSR. Improved relations with the USA could deter the Chinese from using force against the USSR
Needs of the USSR 4
· Mounting economic problems and poor living standards meant they wanted to divert resources away from the military sector
Consumer goods in short supply and agriculture was backwards
Didn’t want Communism to look like it was failing to communism – not show weakness
· Wanted to access western technologies and grain supplies
Soviet technology was fast falling behind the west – Communism looking weak against capitalism
Needs of the USSR 5
· Wanted equal status with the USA
Reputation damaged after Cuban Missile Crisis – secret agreements so looked to public as if Soviets backed down to USA
Split with China – China looks to US – Soviets less powerful and USA more powerful
Needed to regain superpower status
Fear of Nuclear War 1
Cuban missile crisis 1962
- Highlighted the dangers of a Superpower confrontation resulting in nuclear war
- President Kennedy threatened to us American nuclear missiles if Soviet missiles were not withdrawn from Cuba. His threats caused anxiety around the world
- With America turning its back on Cuba they turned to the USSR for sugar trade and weapons deal, for the protection of the country against hostile America
- U2 Planes show missile development on the island of Cuba with nuclear captivities aided by the Soviets
Fear of Nuclear War 2
Development of bombs
- With the nuclear arms race leading to developments of ever more efficient missile, the fear of future war increased.
- By 1969, the USSR had matched the capability of the USA for Mutually Assured Destruction.
- American atomic bomb in 1945 & the Soviet atomic bomb in 1949
- USA hydrogen bomb in 1952
- USSR lithium super bomb in 1953 & American lithium bomb in 1954
Fear of Nuclear War 3
Development of delivery systems
- In the 1955, the USA had the first bomber with intercontinental range (B52-Stratofortress) It was the first ICBM
- In 1956, the USSR developed their own bomber (TU20 Bear)
- Development of Sputnik by the Soviet in 1957- highlighted the success of the Soviet rocket programme
- In 1960, the USA developed the submarine with missile launching capability (Polaris)
Fear of Nuclear War 4
The situation not only posed a threat to economic wellbeing of both superpowers, but also provided a balance of power that would act as a deterrent.
The pressure to forge ahead in the arms race constantly threatened the delicate balance.
The necessity of reducing the risk of future nuclear war pushed both superpowers to seek to reduce tensions & cause détente.
The Role of Kissinger
Secretary of State to Nixon.
With support from Nixon, he followed views of the ‘Realists school of Diplomacy’
He pursued his policy of ‘Realpolitik’ – downplaying ideological differences and seizing opportunities available to secure national interests.
His main achievements were:
- Developing détente with the USSR
- Establishing rapprochement with China
- Ending the US war in Vietnam.He was accused of being soft of Communism and abandoning those people living under communism. Détente was therefore caused by individuals because of the relaxed approach taken by Kissinger and his initiatives to move away from ideological differences that were always going to be opposed.
Pressure for détente did not derive solely from the superpowers, development in Europe encouraged links across the ‘Iron Curtain’.
At the end of the 1960s there as instability in the East and West which was very dangerous.
Tension in the east after the soviets invaded Czechoslovakia in 1968.
Willy Brandt viewed reconciliation of being key so opened up channels through east and west. This encouraged other countries to link. By opening up the channels, Ostpolitik aided greatly the movement towards détente.
The USA viewed these developments as threatening their interests and influence in Europe therefore wanted to have a key role in negotiations and agreements.