640.6131/2–2849: Telegram
The Chargé in the Soviet Union ( Kohler ) to the Secretary of State
510. Reference (a) Deptel 82, February 15, quoting Paris telegram 473, February 4, 1949;1 (b) Embtel 3049, December 29, 1948;2 and (c) OIR No. 4800.3, February 1949, p. 8.3
Firm link between Commission charged with task satellite economic integration and Gosplan considered here as logical necessity. Embassy has no information confirming report that Kosygin heads group but regards such as more plausible responsibility for Politburo member than single task in light industry, therefore highly possible.
However, we feel obliged comment re divergence Embassy and Department’s opinion with regard consumption sector internal economy [Page 8] focused in references (b) and (c). This question has important bearing any current analysis Soviet intentions, and Embassy regards as perhaps incorrect and at least premature Department’s tendency discount possibility of current allocation additional resources to consumer goods output in Soviet economy.
We believe that Politburo confident its ability to call tune as regards critical sectors of international relations, i.e., precipitate, head-off, halt or in general choose time and place for the ultimate and inevitable military clash with Western capitalist world and with due observation Stalinist tenet advocating acceptance temporary weakness for future strength, it follows that such Western reactions to cold war as disproportionate rearmament, consumption sacrifices and long-term disruptive consequences for their economies as are involved would be viewed through Soviet rulers’ eyes as desirable, even worthy of calculated provocation. Within limits this argument the present “charged state of international relations” becomes a positive rather than negative consideration affecting the allocation of Soviet resources decision for coming year.
A second consideration involves the important internal economic implications of morale and productivity of the labor force if our estimate valid that Soviet planners increasingly conscious of impact improved material standards on national product and are to certain extent presently concerned with a labor discipline problem occasioned by adherence stringent post-war plans, considerable pressure for significant relief here seems probable. (This connection necessary stress point that “significant” not to be considered within Western focus but in terms of, say, program envisaging restoration Soviet pre-war living standard by some date 1950.)
Argument may also be extended to consideration impact US export control policy4 and prevailing general tight world demand situation affecting current availability capital and technical equipment, which, insofar as Soviet capital development program is obstructed, necessitates shift of Soviet internal resources with a comparable reallocation of earned foreign exchange externally bowing only to priority of a materials stock-piling program. In sum, Kosygin shift, evidenced Soviet intentions not to maintain but to expand inflow of consumer goods from satellites, present annual flurry in Soviet press, exceeding normal volume propaganda treatment accorded this subject and currently distinguished by evidently firm admonitions to certain heavy ministries to organize production certain durables, particularly washing machines and refrigerators—all comprise elements capable of neat fitting into thesis that serious move is already under way.
[Page 9]Embassy perhaps more eagerly than Soviet populace awaiting effectuation of second major readjustment consumer goods price schedule expecting its scope to prove indicator of plausibility above thesis, though naturally aware that full reflection of degree importance any shift would clarify itself only after necessary time-lag for implementation.
In our opinion, argument also obtains certain support from other major 1948 economic and political developments, and we would suggest holding firm conclusions in abeyance pending receipt further evidence.
- Neither printed. The original Paris telegram reported secret information to the effect that the Soviet Government had established a new commission to represent the economic interests of the Eastern European satellite states and to work toward the complete integration of the satellite and Soviet economies. The new commission, allegedly to be headed by Aleksei Nikolaevich Kosygin, Soviet Minister of Light Industry and Candidate Member of the Politburo of the Communist Party of the Soviet Union, would work under the general supervision of the Soviet State Planning Commission (Gosplan) (640.0131/2–449).↩
- Not printed; it reported the Soviet press announcement of the appointment of Kosygin, lately Minister of Finance, to his new post as Minister of Light Industry, and it commented that almost the entire story of the Soviet economy in 1948 could be written around the short tenure of Kosygin and his successful manipulation of the critical levers of Soviet finance (861.002/12–2949).↩
- Not printed.↩
- For documentation on United States policy with respect to trade with the Soviet Union and Eastern Europe, see pp. 61 ff.↩