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Détente Economics Notes

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Détente Economics Revision

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Détente

03/03/2015

Economic Considerations for the USA:
-Détente would allow the influence of the Industrial-military complex to be reduced- resources had been going to the military, preventing social reform (E.g New Frontier and New Society)
-1968- Urban Riots, indicators of the problems facing US, needed to be dealt with
-Would allow US to focus resources on its commerce and financial services- W.Europe was becoming a rival
-1973 Oil Crisis-Yom Kippur War- Isreal won- Arab nations launched Oil embargo against Israel's allies- They were members of the OPEC- Fourfold increase in the price of oil within a year
-Recession and unemployment on both sides of the Atlantic
-Europe suffered more that USA, especially UK
-US feared economic strains would lead to social unrest in Europe, fracturing NATO
-Increased pressure towards Détente
-Military spending was unsustainable given the Oil Crisis'humiliated by a handful of small nations'- D.Yergin 'the US saw Détente as means of disciplining Soviet Powers'- Mason 'Détente was a means of updating and re-invigorating containment'J.L Gaddis Economic considerations for the USSR:
-Soviet Politburo needed to deliver improvements to living standards and that meant decreased military spending- Détente could provide a solution to this problem

-USSR economy was industrial in post-industrial age where computers were vital
-Soviet could gain access to much needed western technology and grain supplies
-The 8th Five-Year Plan (1966-70) tried to address technological weaknesses in USSR by importing technology
- USSR could help communist movements in the developing worldPlacate the USA
-Annual growth rate had fallen by 3%- Vast sums of money going to allies- ¾ of hard currency spent on aid for the allies- $4 billion Cuba &
Africa
-Rigid planning of the communist system meant it was easily disrupted by unforeseen events
-Poor quality technology
-Agriculture was inefficient
-Reduce strains of the Arms race so resources could raise living standards Fear of Nuclear War:
 Cuban Missile Crisis 1962 caused concern across the worldpublic pressure for nuclear disarmament
 1969- Situation of MAD had been developed- each capable of destroying each other
 Economies threatened by increasing cost
 But also it was a deterrent
 Improvements in weapons could destroy this balance at any time- ABM systems etc.

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