Looking back over the year 1987
THIS has been the year that both the great superpowers of the world became generally conscious of the limits on their economic abilities and when this awareness began to influence their military policies. The specialists and the experts had long since pointed to serious economic difficulties in both the United States and the Soviet Union. Budget and trade deficits have been endemic in the US from the early years of the Reagan administration. Stagnation in the Soviet economy began during the Brezhnev era, not under Mikhail Gorbachev. But it was in 1987 that the awareness of these economic difficulties first became generalized and began to influence policy.
It is more than coincidence that the year which brought a downsliding dollar and the worst day ever on the New York stock exchanges (Oct. 19) was also the year in which the US President, Ronald Reagan, went seriously to the bargaining table with Soviet leader Mikhail Gorbachev and signed away some of the best weapons in the US arsenal for the sake of an actual elimination of one category of weapons - the intermediates - from the European theater.
And it is also more than coincidence that Mr. Gorbachev began his economic year on Jan. 27 with a passionate plea for modernization of the Soviet system and followed it up on Feb. 28 by dropping his condition for the treaty on intermediate-range nuclear forces. He had until then insisted that Mr. Reagan give up ``star wars'' before Russia would accept the INF option.
The US had learned from both the Korean and the Vietnam wars that there are limits on the effective range of its military power. The Soviets have been learning the same thing from their eight-year ordeal in Afghanistan, where they are no nearer pacifying and controlling the country today than they were when they first sent their troops in, back in 1979.
But it was not until this year of 1987 that Americans woke up to the realization that they had been living beyond their means and that the foundations of their once world-dominating economy were softening.
And it was in this year of 1987, on Jan. 27, that a new leader in the Kremlin dared to tell the entire assembled leadership of the Soviet Communist Party in a Central Committee plenum that their system was simply not working anymore and that the USSR was sliding dangerously behind the modern industrial countries of the outside world.
Down through the ages, men have known that a nation can sustain just so much armed strength. Different experts have used variations on the formula. Does it take nine men in productive jobs to sustain one under arms? Vary the formula to your own taste. But one thing is certain. Beyond a certain limit the weight of a military establishment can break the economic substructure. Have both the US and the USSR reached the danger point?
The fact is that both are feeling the strain of putting too much effort into armaments. Their national priorities have changed. The two have been engaged in an arms race almost from the end of World War II. Getting ahead of the other in weapons has been at the top of the agenda of both. This year, both moved economic repair work to the top of their respective agendas.
The awakening was more abrupt for Americans than for Russians. Stagnation in the Soviet economy had been recognized by leading economists and by some of the younger political figures during late Brezhnev years. They were more or less muffled while Leonid Brezhnev lived. His first successor, Yuri Andropov, let them speak out, starting in 1982.
Americans heard predictions of economic trouble beginning in the early Reagan years, but realization came only after two shocks of this year. During the first two weeks of 1987, the dollar's value dropped 5 percent. It has been sliding ever since. It has by now lost about 40 percent of its peak in February 1985.
And, first on Oct. 16 and then, more drastically, on Oct. 19, the stock markets were unable to find their footing. Ever since, both securities prices and the dollar have been floundering around trying to find their real values.
In other words, 1987 has identified the fact that the predominance the USSR and the US enjoyed in both military and economic stature during the early years after World War II has been eroded. They remain at year's end still the most powerful countries on earth. Both still enjoy some economic growth. But the West European countries and Japan have been moving ahead faster, and China as well - from a starting line much further behind.
The relative slowing down of the giants was noticeable in 1987, and had become the first anxiety of both by the end of the year.