Antony C. Sutton and Viktor Suvorov on Technology Transfer from the West to the Soviet Union

by Peter Myers

Date October 14, 2003; update July 8, 2019.

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The USSR's space technology was first-rate; but the Soviet space program was a development from the German V2.

The T-34 tank was an important Soviet weapon which helped turn the tide against Nazi Germany. It was not introduced until the German army was deep inside Russia.

Prior to the start of the Korean War, each side had talked of "liberating" the other. Stalin, at Kim Il-Sung's request, gave 100 T-34 tanks to North Korea; these formed the spearhead of its attack.

But the Soviet T-34 tank was a development from a Christie M 1931 tank chassis sold to the Soviet Union by the United States. "The Soviet T-34 and the American M3, both based on the Christie, had the same 12-cylinder aero engine: a V-type Liberty of 338 horsepower."

Exploring this theme:

volumes 3 and 2 of Antony C. Sutton's trilogy Western Technology and Soviet Economic Development

volume 3: 1945 to 1965

volume 2: 1930 to 1945

plus Viktor Suvorov, Icebreaker: Who Started the Second World War?

see item 4 "Case studies: Tanks and the Space Technology". UPDATED July 8, 2019: US still using Russian RD-180 rocket engines for Space launches

(1) Sutton's Conclusions to his Trilogy

(2) Sutton's summary of his trilogy in National Suicide: Military Aid to the Soviet Union

(3) Assessment of Sutton's Argument in his Trilogy

(4) Case studies: Tanks and the Space Technology . UPDATED July 8, 2019: US still using Russian RD-180 rocket engines for Space launches

(5) Sutton on the Bank for International Settlements

(6) Eustace Mullins interview on Sutton

(7) Soviet spies steal a Trojan Horse - causing a gas explosion; KGB Veteran Denies CIA Caused '82 Blast

(8) UPDATE 2010: the Stuxnet worm: relevance to Chernobyl or Gas Explosion?

(9) Antony Sutton on Red Symphony and Hitler's Secret Backers

(10) Sutton's Laissez-Faire Ideology

(11) Sutton infers Convergence / Synthesis

(12) Sutton on Rakovsky and Trotsky

(13) Sutton on "Sidney Warburg" and the authorship of Hitler's Secret Backers

(14) Antony C. Sutton on the state - the neutral/spectator view

(1) Sutton's Conclusions to his Trilogy

Antony C. Sutton, Western Technology and Soviet Economic Development 1945 to 1965 (Hoover Institution Press, Stanford University, Stanford Ca., 1973).

{p. 411} CHAPTER TWENTY-NINE

Conclusions

EMPIRICAL CONCLUSIONS: 1917 TO 1930

The first volume of this study concluded that the Soviets employed more than 350 foreign concessions during the 1920s. These concessions, introduced into the Soviet Union under Lenin's New Economic Policy, enabled foreign entrepreneurs to establish business operations in the Soviet Union without gaining property rights. The Soviet intent was to introduce foreign capital and skills, and the objective was to establish concessions in all sectors of the economy and thereby introduce Western techniques into the dormant postrevolutionary Russian economy. The foreign entrepreneur hoped to make a normal business profit in these operations.

Three types of concessions were isolated: Type I, pure concessions; Type II, mixed concessions; Type III, technical-assistance agreements. Information was acquired on about 70 percent of those actually placed in operation. It was found that concessions were employed within all sectors of the economy except one (furniture and fittings), although the largest single group of concessions was in raw materials development. In the Caucasus oil fields - then seen as the key to economic recovery by virtue of the foreign exchange that oil exports would generate - the International Barnsdall Corporation introduced American rotary drilling techniques and pumping technology. By the end of the 1920s 80 percent of Soviet oil drilling was conducted by the American rotary technique; there had been no rotary drilling at all in Russia at the time of the Revolution. International Barnsdall also introduced a technical revolution in oil pumping and electrification of oil fields. All refineries were built by foreign corporations, although only one, the Standard Oil lease at Batum, was under a concessionary arrangement - the remainder were built under contract. Numerous Type I and Type III technical-assistance concessions were granted in the coal, anthracite, and mining industries, including the largest concession, that of Lena Goldfields, Ltd., which operated some 13 distinct and widely separated industrial complexes by the late 1920s. In sectors such as iron and steel, and particularly in the machinery and electrical equipment manufacturing sectors, numerous agreements were made between trusts and larger individual Tsarist-era plants and Western companies to start ulp and reequip the plants with the latest in Western technology.

{p. 412}

A.E.G., General Electric. and Metropolitan-Vickers were the major operators in the machinery sectors. Only in the agricultural sector was the concession a failure.

After information had been acquired on as many such concessions and technical-assistance agreements as possible, the economy was divided into 44 sectors and the impact of concessions and foreign technical assistance in each sector was analyzed. It was found that about two-thirds of the sectors received Type I and Type 11 concessions, while over four-fitths received technical-assistance agreemnts with foreign companies. A summary statement of this assistance, irrespective of the types of concession, revealed that all sectors except one, i.e., 43 sectors of a total of 44, had received some form of concession agreement. In other words, in only one sector was there no evidence of Western technological assistance received at some point during the 1920s. The agreements were made either with dominant trusts or with larger individual plants, but as each sector at the outset comprised only a few large units bequeathed by the Tsarist industrial structure, it was found that the skills transferred were easily diffused within a sector and then supplemented by imported equipment. Examination of reports by Western engineers concerning individual plants confirmed that restarting after the Revolution and technical progress during the decade were dependent on Western assistance.

It was therefore concluded that the technical transfer aspect of the New Economic Policy was successful. It enabled foreign entrepreneurs and firms to enter the Soviet Union. From a production of almost zero in 1922 there was a recovery to pre-World War I production figures by 1928. There is no question that the turn-around in Soviet economic fortunes in 1922 is to be linked to German technical assistance, particularly that forthcoming after the Treaty of Rapallo in April 1922 (although this assistance was foreseeable as early as 1917 when the Germans financed the Revolution).

It was also determined that the forerunners of Soviet trading companies abroad - i.e., the joint trading firms - were largely established with the assistance of sympathetic Western businessmen. After the initial contacts were made, these joint trading firms disappeared, to be replaced by Soviet-operated units such as Amtorg in the United States and Arcos in the United Kingdom.

It was concluded that for the period 1917 to 1930 Western assistance in various forms was the single most important factor first in the sheer survival of the Soviet regime and secondly in industrial progress to prerevolutionary levels.

EMPIRICAL CONCLUSIONS: 1930 TO 1945

Most of the 350 foreign concessions ot the 1920s had been liquidated by 1930. Only those entrepreneurs with political significance for the Soviets received

{p. 413} compensation, but for those few that did (for example, Hammer and Harriman), the compensation was reasonable.

The concession was replaced by the technical-assistance agreement, which together with imports of foreign equipment and its subsequent standardization and duplication, constituted the principal means of development during the period 1930 to 1945.

The general design and supervision of construction, and much of the supply of equipment for the gigantic plants built between 1929 and 1933 was provided by Albert Kahn, Inc., of Detroit, the then most famous of U.S. industrial architectural firm. No large unit of the construction program in those years was without foreign technical assistance, and because Soviet machine tool production then was limited to the most elementary types, all production equipment in these plants was foreign. Soviet sources indicate that 300,000 high-quality foreign machine tools were imported between 1929 and 1940. These machine tools were supplemented by complete industrial plants: for example, the Soviet Union received three tractor plants (which also doubled as tank producers), two giant machine-building plants (Kramatorsk and Uralmash), three major automobile plants, numerous oil refining units, aircraft plants, and tube mills.

Published data on the Soviet "Plans" neglect to mention a fundamental feature of the Soviet industrial structure in this period: the giant units were built by foreign companies at the very beginning of the 1930s, and the remainder of the decade was devoted to bringing these giants into full production and building satellite assembly and input-supply plants. In sectors such as oil refining and aircraft, where further construction was undertaken at the end of the decade, We find a dozen top U.S. companies (McKee, Lummus, Universal Oil Products, etc.) aiding in the oil-refining sector and other top U.S. aircraft builders in the aircraft sector (Douglas, Vultee, Curtiss-Wright, etc.).

Only relatively insignificant Soviet innovation occurred in this period: SK-B synthetic rubber, dropped in favor of more useful foreign types after World War II; the Ramzin once-through boiler, confined to small sizes; the turbodrill; and a few aircraft and machine gun designs.

The Nazi-Soviet pact and Lend Lease ensured a continued flow of Western equipment up to 1945.

In sum, the Soviet industrial structure in 1945 consisted of large units producing uninterrupted runs of standardized models copied from foreign designs and manufactured with foreign equipment. Where industrial equipment was of elementary construction (e.g., roasters and furnaces in the chemical industry, turret lathes in the machine tool industry, wooden aircraft, and small ships), the Soviets in 1945 were able to take a foreign design and move into production. One prominent example (covered in detail in this volume) was the Caterpillar D-7 tractor. The original, sent under Lend Lease in 1943, was copied in metric form and became the Soviet S-80 and S-100. It was then adapted for dozens of other military and industrial uses.

{p. 414} Thus in the period 1930 to 1945 the Soviets generally no longer required foreign engineers as operators inside the U.S.S.R. as they had in the concessions of the 1920s, but they still required foreign designs, foreign machines (the machines to produce machines), and complete foreign plants in new technical areas. By 1945 the Soviet Union had "caught up" at least twice; once in the 1930s (it could also be argued that the assistance of the 1920s constituted the first catching-up) with the construction of the First Five Year Plan by foreign companies, and again in 1945 as a result of the massive flow of Western technology under Lend Lease. While the technical skills demonstrated by the Tsarist craftsmen had not quite been achieved, it may be said that in 1945 the nucleus of a skilled engineering force was once again available in Russia - for the first time since the Revolution.

EMPIRICAL CONCLUSIONS: 1945 TO 1965

In the immediate postwar period the Soviets transferred a large proportion of German industry to the Soviet Union - at least two-thirds of the German aircraft industry, the major part of the rocket production industry, probably two-thirds of the electrical industry, several automobile plants, several hundred large ships, and specialized plants to produce instruments, military equipment, armaments, and weapons systems. The stripping of East Germany was supplemented by a U.S. program (Operation RAP) to give the Soviets dismantled plants in the U.S. Zone. By the end of 1946 about 95 percent of dismantling in the U.S. Zone was for the U.S.S.R. (including the aircraft plants of Daimler-Benz, ball bearings facilities, and several munitions plants).

Manchuria and Rumania also supplied numerous plants. And as we have seen, Finnish reparations which supplemented the pulp and paper industries and ship construction were made possible by U.S. Export-lmport Bank credits to Finland.

In the late 1950s all this industrial capacity had been absorbed and the Soviets turned their attention to the deficient chemical, computer, shipbuilding, and consumer industries, for which German acquisitions had been relatively slight. A massive complete-plant purchasing program was begun in the late

{p. 415} 1950s - for example, the Soviets bought at least 50 complete chemical plants between 1959 and 1963 for chemicals not previously produced in the U.S.S.R. A gigantic ship-purchasing program was then instituted, so that by 1967 about two-thirds of the Soviet merchant fleet had been built in the West. More difficulty was met in the acquisition of computers and similar advanced technologies, but a gradual weakening of Western export control under persistent Western business and political pressures produced a situation by the end of the sixties whereby the Soviets were able to purchase almost the very largest and fastest of Western computers.

Soviet exports in the late sixties were still those of a backward, underdeveloped country. They consisted chiefly of raw materials and semimanufactured goods such as manganese, chrome, furs, foodstuffs, pig iron, glass blocks, and so on. When manufactured goods were exported they were simple machine tools and vehicles based on Western designs, and they were exported to underdeveloped areas. When foreign aid projects fell behind - although they had been given first priority on Soviet resources - they were brought back on schedule with the use of foreign equipment (e.g., British and Swedish equipment was used at the Aswan Dam). And while great efforts have been made to export to advanced Western markets Soviet goods with a technological component (i.e., watches, automobiles, tractors, and so on), a technical breakdown of these goods reveals in all cases examined either a Western origin or the substitution of Western parts where the products are assembled in the West.

As a further indicator of Soviet technical backwardness, it may be noted that some Western firms selling to the Soviet Union have found "so many gaps in the control schemes proposed" that a two-phase quotation format has been adopted: first a feasibility study is conducted (for which the Western company is paid), and then the actual quotation is determined for a complete system based on the feasibility study. In other words, technical inadequacy is such that the Soviets have not been able to specify exactly what is wanted. What this reflects is not a lack of scientific skill; it shows a lack of information on the technical constituents of a modern industrial system.

In the few areas where indigenous innovation was identified in the earlier period, we find a move back toward the use of Western technology. This is visible in the use of Western synthetic rubbers to replace SK-B, a renewed research effort on rotary drilling as a result of efficiency problems encountered in the use of the Soviet turbodrill, and instances of abandonment of the Ramzin boiler in favor ot Western designs. The research and development effort has continued, but its results in practical engineering terms have been near zero. From the technical viewpoint the Soviet Union at 1970 is a copy - a rather imperfect copy - of the West. Generally, initial units are still built by Western

{p. 416} companies and subsequent units built by Soviet engineers are based on the original Western model, and imported equipment is used in key process and control areas.

ORIGINAL WESTERN INTENT FOR TECHNICAL TRANSFER

It may be unwise to attempt to read into an historical sequence of events as important as those described, any rational objective on the part of Western statesmen. Although the policies concerning trade and technical transfers appear vague and often confused, there is one fundamental observation to be made: throughout the period of 50 years from 1917 to 1970 there was a persistent, powerful, and not clearly identifiable force in the West making for continuance of the transfers. Surely the political power and influence of the Soviets was not sufficient alone to bring about such favorable Western policies. Indeed, in view of the aggressive nature of declared Soviet world objectives, such policies seem incomprehensible if the West's objective is to survive as an alliance of independent, non-communist nations. What, then, are the wellsprings of this phenomenon?

In the years 1917-20 a variant of the modern "bridge-building" argument was influential within policymaking circles. The Bolsheviks were outlaws, so the argument went, and had to be brought into the civilized world. For example, in 1918 a statement by Edwin Gay, a member of the U.S. War Trade Board and former Dean of the Harvard Business School, was paraphrased in the board minutes as follows:

{quote} Mr. Gay stated the opinion that it was doubtful whether the policy of blockade and economic isolaton of these portions of Russia which were under Bolshevik control was the best policy lor bringing about the establishment of a stable and proper Government in Russia. Mr. Gay suggested to the [War Trade] Board that if the people in the Bolshevik sections of Russia were given the opportunity to enjoy improved economic conditions, they would themselves bring about the establishment of a moderate and stable social order. {endquote}

At about the same time American businessmen were instrumental in aiding the formation of the Soviet Bureau, and several hundred firms had their names on file in the bureau when it was raided in 1918. Hence there was Western business pressure through political channels to establish Soviet trade. No one appears to have foreseen the possibility of creating a powerful and threatening enemy to the Free World. There was widespread criticism of the Bolsheviks,

{p. 417} but this was not allowed to intefere with trade. In sum, there was no argument made against technical transfers while several influential political and business forces were working actively to open up trade.

The lack of clear policy formulation and foresight was compounded by the apparent efforts of some State Department officials in the 1930s to discourage collection of information on Soviet economic actions and problems. While the First Five Year Plan was under construction by Western companies, various internal State Department memoranda disputed the wisdom of collecting information on this construction. For example, a detailed report from the U.S. Embassy in Tokyo in 1933 (a report containing precisely the kind of information used in this study) was described in Washington as "not of great interest." It is therefore possible that no concerted effort to examine the roots of Soviet industrial development has ever been made within the U.S. State Department. Certainly internal State Department reports of the 1930s provide less information than the present study was able to develop. Such lack of ordered information would go far to account for many of the remarkably inaccurate statements made to Congress by officials of the State Department and its consultants in the 1950s and 1960s - statements sometimes so far removed from fact they might have been drawn from the pages of Alice in Wonderland rather than the testimony of senior U.S. Executive Department personnel and prominent academicians.

In brief, a possibility exists that there has been no real and pervasive knowledge of these technical transfers - even at the most "informed" levels of Western governments. Further, it has to be hypothesized that the training of Western government officials is woefully deficient in the area of technology and development of economic systems, and that researchers have been either unable to visualize the possibility of Soviet technical dependence or unwilling, by reason of the bureaucratic aversion to "rocking the boat," to put forward research proposals to examine that possibility. This does not however explain why some of the outside consultants who were hired by all Western governments

{p. 418} in such profusion, have not systematically explored the possibility. If it is argued, on the contrary, that Western Governments are aware of Soviet technical dependency, then how does one explain the national security problem, outlined in chapter 27?

An argument has been made that a policy of technical assistance to the U.S.S.R. before World War II was correct as it enabled the Soviets to withstand Hitler's attack of June 1941. This is ex post facto reasoning. The German Government financed the Bolshevik Revolution with the aim of removing an enemy (Tsarist Russia), but also with postwar trade and influence in mind. This German support was largely replaced in the late 1920s by American technical assistance, but until the mid-1930s the Germans were still arming the Soviets; it was only in 1939 that Hermann Goering began to protest the supply. Thus in the twenties and the early thirties it was not possible for anyone to foresee that Germany would attack the Soviet Union.

The Bolsheviks were assisted to power by a single Western government, Germany, and were maintained in power by all major Western governments. The result is that we have created and continue to maintain what appears to be a first-order threat to the survival of Western civilization. This was done because in the West the political pressures for trade were stronger than any countervailing argument.

This conclusion is supported by the observations that in both the 1930s and the 1960s the U.S. State Department pressed for the outright transfer of military technology to the U.S.S.R. over the protests of the War Department (in the thirties) and the Department of Defense (in the sixties). When in the 1930s the War Department pointed out that the proposed Dupont nitric acid plant had military potential, it was the State Department that allowed the Dupont contract to go ahead. A Hercules Powder proposal to build a nitrocellulose plant was approved when the State Department accepted the argument that the explosives produced were intended for peacetime use.

In the 1960s we have the extraordinary "ball bearing case" of 1961, which revealed that the U.S.S.R. was to receive 45 machines used to produce miniature ball bearings (in the United States almost all miniature ball bearings are used in missiles). That proposal was called a "tragic mistake" by the Department of Defense but supported by the State Department. In 1968 came the so-called "Fiat deal" under which the United States supplied three-quarters of the equipment for the Volgograd plant, the largest automobile plant in the U.S.S.R. This agreement ignored an earlier interagency committee finding that 330 military items can be produced by any civilian automobile industry and that the automobile industry is a key factor for war. It also ignores an argument particularly stressed

{p. 419} here - that any automobile plant can produce military vehicles. The supply of U.S. equipment for the Volgograd plant was diametrically opposed to an policy of denial of exports of stratetic goods to the Soviet Union, for under any definition of "strategic" the Volgograd plant has clear and significant military weapons capability. Yet the State Department was strongly in favor of the shipment of the plant equipment. The developing story of the Kama plant sugests history is repeating itself.

Under these conditions, where policy is so far removed from logical deduction, it would be imprudent to arrive at any conclusion concerning Western intentions. If logical intentions exist - and in chapter 27 it is suggested that our strategic policies are not logically derivable from observable fact - they are obscure indeed. The writer leans to the position that there IS gross incompetence in the policymaking and research sections of the State Department. Thee is probably no simple, logical explanation for the fact that we have constructed and maintain a first-order threat to Western society.

IMPLICATIONS FOR THE SOVIET UNION

The Soviet Union has a fundamental problem. In blunt terms, the Soviet economy. centrally planned under the guidance of the Communist Party, does not constitute a viable economic system. The system cannot develop technicaliy across a broad front without outside assistance; internal industrial capaclty can be expanded only in those sectors suitable for scaling-up innovation and duplication of foreign techniques.

Quite clearly a modern economy cannot be self-maintained, however skilled its planners and technicians, if technical adoptions in basic industries are limited to processes that lend themselves to scaling up or duplication. Further, the more developed the economy the greater its complexity; consequently the planning problems associated with the acquisition of information must surely increase in geometric ratio.

Logically, then, a system that is strictly centrally planned is not efficient either for rapid balanced growth or for any growth at all once the economy is past the primitive stage. Beyond that stage, the chief function of central planning, so far as the economy is concerned, becomes the retention of political control with the ruling group. There are few economic functions, and certainly no technical functions, that cannot be performed in a more efficient manner by a market economy.

How have the Russian Party member, the Politburo, Stalin, Khrushchev, and Brezhnev looked upon Western technology in relation to Soviet technology? This is indeed a fascinating question. Party injunctions, for example in Pravda, suggest that on many levels there has been a deep and continuing concern

{p. 420} with lagging Soviet technology. The general problem has long been recognized ever since Lenin's time. But Lenin thought it curable; the current Politburo must at least suspect it is incurable.

It is however unlikely that either the Party in Russia or the Communist parties in the West have fully probed the depths of the problem. First, their writings mirror a persistent confusion between science and technology, between invention and innovation. Second, it is unlikely that most Marxists appreciate how important an indigenous innovative process is to a nation's self-sufficiency (in contrast to their clear understanding of the value of scientific endeavor and invention). Even breakaways from Marxist dogma still find it difficult to absorb the notion that virtually all widely applied (i.e., innovated) technology in the Soviet Union today may have originated in the outside world. Third, Russian designers and engineers may have succeeded in deceiving the Party and even themselves. By claiming as indigenous Russian work designs which in fact originated in the West, they may have obscured the realities of Soviet technology.

The dilemma facing the Soviets in 1970 is stark and overwhelming, and periodic reorganization and adjustments have not identified the basic cause. Indeed, each reorganization either stops short of the point where it may have lasting effect or leads to yet further problems. This is because the Party continues to demand absolute political control while a viable economy increasingly demands the adaptability, the originality, and the motivation that result from individual responsibility and initiative. Attempted solutions through use of computers may temporarily ease the problem, but ultimately they too will result in confusion because accurate information still has to be acquired and analyzed. The computer is only as useful as its human operators are capable and as its data input is sound. In any event, who will supply the computers?

Moreover a communist regime cannot yield political power; doctrine demands continuance of power in the hands of the Party. The economy demands diffusion

{p. 421} of power. What will be the result? If Russian historical precedent is any indicator, then the outlook is gloomy indeed. The Russian Revoluton was a gigantic and violent upheaval. The first revolution achieved what had been attained by evolutionary means elsewhere, the substitution of relatively democratic control for autocracy. Then the briefly emergent democratic forces in Russia were caught between the autocracy of the right and the Bolsheviks of the left and were rendered impotent. A new absolutism took power. Today there is no question that a fundamental change has to come again; what is unknown is the form that change will take and whether it will be revolutionary or evolutionary .

It is also clear - and the writer makes this assertion only after considerable contemplation of the evidence - that whenever the Soviet economy has reached a crisis point, Western governments have come to its assistance. The financing of the Bolshevik Revolution by the German Foreign Ministry was followed by German assistance out of the abysmal trough of 1922. Examples of continuing Western assistance include the means to build the First Five Year Plan and the models for subsequent duplication; Nazi assistance in 1939-41 and U.S. assistance in 1941-45; the decline in export control in the fifties and sixties; and finally the French, German, and Italian credits of the sixties and the abandonment of controls over the shipment of advanced technology by the United States in 1969. All along, the survival of the Soviet Union has been in the hands of Western governments. History will record whether they made the correct decisions .

IMPLICATIONS FOR THE WESTERN BUSINESS FIRM

The Western business firm has been the main vehicle for the transfer process, and individual firms have, of course, an individual right to accept or reject Soviet business in response to their own estimation of the profitability of such sales. There is ample evidence in the files of the U.S. State Department, the German Foreign Ministry, and the British Foreign Office that Western firms have cooperated closely with their respective governments in negotiating for such sales.

Historically, sales to the Soviet Union must have been profitable, although the Russians are reputed to be hard bargainers and there have been numerous examples of bad faith and breaches of contract. Firms have accepted theft of blueprints and specifications, duplication of their equipment without permission or royalties, and similar unethical practices and still deemed it worthwhile to continue trade. This applies particularly to larger firms such as General

{p. 422} Electric, Radio Corporation of America, Ford Motor, Union Carbide, and Imperial Chemical Industries, Ltd. There is evidence that larger firms are able to demand and obtain somewhat more equitable treatment from the Soviets, partly by virtue of the fact that respective foreign offices are more willing to back them up and partly because the Soviets are aware of the relatively few sources for their new technologies. But less well-known firms such as Lummus, Universal Oil Products, and Vickers-Armstrongs (Engineers), Ltd., apparently also have found that Soviet business pays.

This profitability must be balanced against possible loss of domestic sales in the face of hostile domestic publicity. American Motors found itself in this trap in 1966, when it had no more than vaguely contemplated sales to the U.S.S.R. - and other firms have suffered boycotts. As long as these sales and the impact of such sales on Soviet capabilities were relatively unknown, however, the possibility of boycotts was not great. It appears that some reevaluation may be in order in the light of the findings of this study; i.e., the factors entering into the tradeoffs in considering such business may change. This applies certainly to s ales to Red China, where we now stand at a point equivalent to about 1921-22 with the Soviet Union . It is eminently clear that comparable sales over a period of 50 years could place Red China on an equal industrial footing with the U.S.S.R. The difference between the early seventies and the early twenties is that we now have the example of the U.S.S.R. before us: trade has built a formidable enemy, while hopes for a change in ideology and objectives not only have gone unfulfilled but are perhaps more distant than they were 50 years ago.

IMPLICATIONS FOR SOCIO-ECONOMIC SYSTEMS

The Soviet problem is not that the nation lacks theoretical or research capability or inventive genius. The problem is rather that there is a basic weakness in engineering skills, and the system's mechanisms for generating innovation are almost nonexistent.

Table 29-1 suggests the sparseness of Soviet innovation; engineering weaknesses are implicit in continuing plant purchases abroad - while such purchases continue the Soviets are not building plants using their own laboratory discoveries. Why does the Soviet system have such weaknesses?

There is certainly no choice among competing inventions using market criteria, but if more useful Soviet processes existed they would be adopted whether market-tested or not. Absence of the marketplace is not, then, sufficient

{p. 423} reason to explain the absence of innovation. There may be, as has been suggested elsewhere, no compelling pressures to develop innovation despite the fact that the Party is constantly exhorting technical progress. But the explanation that most adequately covers the problem is one that has been previously mentioned though not heretofore stressed - the "inability hypothesis." The spectrum of engineering skills required to build a complete polyester plant, a large truck plant, a fast large-capacity computer, and a modern marine diesel engine just does not exist in the Soviet Union. Sufficient engineering skills do exist for limited objectives - a military structure can be organized to select and marshal the technology of war, or a space program can be decreed and realized through top-priority assignment of resources. But the skills are not present to promote and maintain a complex, self-regenerative industrial structure.

The point to be stressed is that if there were adequate engineering ability some innovation would be forthcoming in the form of original new processes, and such innovation would appear in many sectors of the economy. This is generally not the case. In most sectors the West installs the initial plants and subsequent plants are duplicates based on that Western technology. Once the sector has been established, major new innovations within the sector tend to be either imported technologies or duplicates of imported technologies. Therefore pervasive "inability"' in engineering seems the most likely basic explanation. For some reason - and this study has not explored the diverse institutional factors within the system that might be responsible - Soviet central planning has not fostered an engineering capability to develop modern technologies from scratch, nor has it generated inputs (educational, motivational, and material) to achieve this objective.

The world is now presented with 50 years' history of industrial development in the most important of socialist experiments. and censorship can no longer hide the problem. Every new Soviet purchase of a major Western technology is pari passu evidence for a central lesson of this study: Soviet central planning is the Soviet Achilles' heel.

{end}

(2) Sutton's summary of his trilogy in National Suicide: Military Aid to the Soviet Union

Antony C. Sutton, National Suicide: Military Aid to the Soviet Union (Australian League of Rights, Melbourne, 1973) Appendix B, pp. 252-263

{The Australian League of Rights, publisher of this book, is the monarchist counterpart of the John Birch Society. In its publications spanning 50 years or so, it has consistently called for "limited decentralised government" with "reduce[d] taxation", without monopolies either "public or private". Australia had a socialist economy from the 1950s to the 1980s, since sold off to "foreign investors". The Trotskyists, on the Left, were promoting the Free Trade which destroyed that socialism (see xTrots.html), while, on the Right, the League of Rights played the same role: xLeague.html}

{p. 252} Appendix B

Testimony of the Author before Subcommittee VII of the Platform Committee of the Republican Party at Miami Beach, Florida, August 15, 1972, at 2:30 pm.

This appendix contains the testimony presented by the author before the Republican Party National Security Subcommittee at the 1972 Miami Beach convention. The author's appearance was made under the auspices of the American Conservative Union; the chairman of the subcommittee was Senator John Tower of Texas.

Edith Kermit Roosevelt subsequently used this testimony for her syndicated column in such newspapers as the Union Leader (Manchester, NH). Both major wire services received copies from the American Conservative Union; they were not distributed. Congressman John G. Schmitz then arranged for duplicate copies to be hand-delivered to both UPI and AP. The wire services would not carry the testimony although the author is an internationally known academic researcher with three

{p. 253} books published at Stanford University, and a forthcoming book from the U.S. Naval Institute.

The testimony was later reprinted in full in Human Events (under the title of "The Soviet Military-Industrial Complex") and Review of the News (under the total of "Suppressed Testimony of Anthony C. Sutton"). It was also reprinted and extensively distributed throughout the United States by both the American Party and the Libertarian Party during the 1972 election campaign.

The following is the text of this testimony as it was originally presented in Miami Beach and made available to UPI and AP.

The Soviet Military-Industrial Complex

The information that I am going to present to you this afternoon is known to the Administration. The information is probably not known to the Senator from South Dakota or his advisers. And in this instance ignorance may be a blessing in disguise.

I am not a politician. I am not going to tell you what you want to hear. My job is to give you facts. Whether you like or dislike what I say doesn't concern me. I am here because I believe - and Congressman Ashbrook believes - that the American public should have these facts.

I have spent ten years in research on Soviet technology. What it is - what it can do - and particularly where it came from. I have published three books and several articles summarizing the work. It was privately financed. But the results have been available to the Government. On the other hand I have had major difficulties with U.S. Government censorship.

I have about 15 minutes to tell you about this work.

In a few words: there is no such thing as Soviet technology.

Almost all - perhaps 90-95 percent - came directly or indirectly from the United States and its allies. In effect the United States and the NATO countries have built the Soviet

{p. 254} Union. Its industrial and its military capabilities. This massive construction job has taken 50 years. Since the Revolution in 1917. It has been carried out through trade and the sale of plants, equipment, and technical assistance.

Listening to Administration spokesman - or some newspaper pundits - you get the impression that trade with the Soviet Union is some new miracle cure for the world's problems.

That's not quite accurate.

The idea that trade with the Soviets might bring peace goes back to 1917. The earliest proposal is dated December 1917 - just a few weeks after the start of the Bolshevik Revolution. It was implemented in 1920 while the Bolsheviks were still trying to consolidate their hold on Russia. The result was to guarantee that the Bolsheviks held power: they needed foreign supplies to survive.

The history of our construction of the Soviet Union has been blacked out - much of the key information is still classified - along with the other mistakes of the Washington bureaucracy. Why has the history been blacked out - Because 50 years of dealings with the Soviets has been an economic success for the USSR and a political failure for the United States. It has not stopped war, it has not given us peace.

The United States is spending $80 billion a year on defense against an enemy built by the United States and West Europe. Even stranger, the U.S. apparently wants to make sure this enemy remains in the business of being an enemy.

Now at this point I've probably lost some of you. What I have said is contrary to everything you've heard from the intellectual elite, the Administration, and the business world, and numerous well-regarded Senators - just about everyone. Let me bring you back to earth.

First an authentic statement. It's authentic because it was part of a conversation between Stalin and W. Averell Harriman. Ambassador Harriman ha been prominent in Soviet trade since the 1930s and is an outspoken supporter of yet more trade. This is what Ambassador Harriman reported back to the State Department at the end of World War II:

{p. 255} "Stalin paid tribute to the assistance rendered by the United States to Soviet industry before and during the War. Stalin* {* He, in original} said that about two-thirds of all the large industrial enterprises in the Soviet Union has been built with the United States' help or technical assistance."

I repeat: "two-thirds of all the large industrial enterprises in the Soviet Union had been built with the United States help or technical assistance."

Two-thirds.

Two out of three.

Stalin could have said that the other one-third of large industrial enterprises were built by firms from Germany, France, Britain, and Italy. Stalin could have said also that the tank plants, the aircraft plants, the explosive and ammunition plants originated in the U.S. That was June 1944. The massive technical assistance continues right down to the present day.

Now the ability of the Soviet Union to create any kind of military machine, to ship missiles to Cuba, to supply arms to North Vietnam, to supply arms for use against Israel ? all this depends on its domestic industry. In the Soviet Union about three-quarters of the military budget goes on purchases from Soviet factories.

This expenditure in Soviet industry makes sense. No army has a machine that churns out tanks. Tanks are made from alloy steel, plastics, rubber, and so forth. The alloy steel, plastics and rubber are made in Soviet factories to military specifications. Just like in the United States. Missiles are not produced on missile-making machines. Missiles are fabricated from aluminum alloys, stainless steel, electrical wiring, pumps, and so forth. The aluminum, steel, copper wire and pumps are also made in Soviet factories.

In other words the Soviet military gets its parts and materials

{p. 256} from Soviet industry. There is a Soviet military-industrial complex just a there is an American military-industrial complex. This kind of reasoning makes sense to the man in the street. But the policy makes in Washington do not accept this kind of common sense reasoning, and never have done [so].

So let's take a look at the Soviet industry that provides the parts and the materials for Soviet armaments: the guns, tanks, aircraft.

The Soviets have the largest iron and steel plant in the world. It was built by McKee Corporation. It is a copy of the U.S. Steel plant in Gary, Indiana. All Soviet iron and steel technology comes from the U.S. and its allies. The Soviets use open hearth, American electric furnaces, American wide strip mills, Sendzimir mills and so on - all developed in the West and shipped in as peaceful trade.

The Soviets have the largest tube and pipe mill in Europe - one million tons a year. The equipment is Fretz-Moon, Salem, Aetna Standard, Mannesman, etc. Those are not Russian names. All Soviet tube and pipe making technology come from the U.S. and its allies. If you know anyone in the space business ask them how many miles of tubes and pipes go into a missile.

The Soviets have the largest merchant marine in the world - about 6,000 ships. I have the specifications for each ship. About two-thirds were built outside the Soviet Union. About four-fifths of the engines for these ships were also built outside the Soviet Union.

There are no ship engines of Soviet design. Those built inside the USSR are built with foreign technical assistance. The Bryansk plant makes the largest marine diesels. In 1959, the Bryansk plant made a technical assistance agreement with Burmeister & Wain of Copenhagen, Denmark, (a NATO ally), approved as peaceful trade by the State Dept. The ships that carried Soviet missiles to Cuba ten years ago used these same Burmeister and Wain engines. The ships were in the POLTAVA

{p. 257} class. Some have Danish engines made in Denmark and some have Danish engines made at Bryansk in the Soviet Union.

About 100 Soviet ships are used on the Haiphong run to carry Soviet weapons and supplies for Hanoi's annual aggression. I was able to identify 84 of these ships. None of the main engines in these ships was designed and manufactured inside the USSR.

All the larger and faster vessels on the Haiphong run were built outside the USSR.

All shipbuilding technology in the USSR comes directly or indirectly from the U.S. or its NATO allies.

Let's take one industry in more detail: motor vehicles.

All Soviet automobile, truck, and engine technology comes from the West: chiefly the United States. In my books I have listed each Soviet plant, its equipment and who supplied the equipment. The Soviet military has over 300,000 trucks - all from these U.S. built plants.

Up to 1968 the largest motor vehicle plant in the USSR was at Gorki. Gorki produces many of the trucks American pilots see on the Ho Chi Minh trail. Gorki produces the chassis for the GAZ-69 rocket launcher used against Israel. Gorki produces the Soviet jeep and half a dozen other military vehicles. And Gorki was built by the Ford Motor Company and the Austin Company - as peaceful trade. In 1968 while Gorki was building vehicles to be used in Vietnam and Israel further equipment for Gorki was ordered and shipped from the U.S.

Also in 1968 we had the so-called "FIAT deal" - to build a plant at Volgograd three times bigger than Gorki. Dean Rusk and Walt Rostow told Congress and the American public this was peaceful trade - the FIAT plant could not produce military vehicles.

Don't let's kid ourselves. Any automobile manufacturing plant can produce military vehicles. I can show anyone who is interested the technical specification of a proven military vehicle (with cross-country capability) using the same capacity engine as the Russian FIAT plant produces.

{p. 258} The term "FIAT deal" is misleading. FIAT in Italy doesn't make automobile manufacturing equipment - FIAT plants in Italy have U.S. equipment. FIAT did send 1,000 men to Russia for erection of the plant - but over half, perhaps well over half, of the equipment came from the United States. From Gleason, TRW of Cleveland and New Britain Machine Co.

So in the middle of a war that has killed 46,000 Americans (so far) and countless Vietnamese with Soviet weapons and supplies, the Johnson Administration doubled Soviet auto output. And supplied false information to Congress and the American public.

Finally, we get to 1972 under President Nixon.

The Soviets are receiving now - today, equipment and technology for the largest heavy truck plant in the world: known as the Kama plant. It will produce 100,000 heavy ten-ton trucks per year - that's more than ALL U.S. manufacturers put together.

This will also be the largest plant in the world, period. It will occupy 36 square miles. Will the Kama truck plant have military potential?

The Soviets themselves have answered this one. The Kama truck will be 50 per cent more productive that the ZIL-130 truck. Well, that's nice, because the ZIL series trucks are standard Soviet army trucks used in Vietnam and the Middle East.

Who built the ZIL plant? It was built by the Arthur J. Brandt Company of Detroit, Michigan.

Who's building the Kama truck plant? That's classified "secret" by the Washington policy makers. I don't have to tell you why.

The Soviet T-54 tank is in Vietnam. It was in operation at Kontum, An Loc, and Hue a few weeks ago. It is in use today in Vietnam. It has been used against Israel.

According to the tank handbooks the T-54 has a Christie type suspension. Christie was an American inventor. Where did the Soviets get a Christie suspension? Did they steal it?

{p. 259} No, sir! They bought it. They bought it from the U.S. Wheel Track Layer Corporation.

However, this Administration is apparently slightly more honest than the previous Administration.

Last December I asked Assistant Secretary Kenneth Davis of the Commerce Department (who is a mechanical engineer by training) whether the Kama trucks would have military capability. In fact I quoted one of the Government's own inter-agency reports. Mr. Davis didn't bother to answer but I did get a letter from the Department and it was right to the point. Yes! We know the Kama truck plant has military capability, we take this into account when we issue export licenses.

I passed these letters on to the press and Congress. They were published.

Unfortunately for my research project, I also had pending with the Department of Defense an application for declassification of certain files about our military assistance to the Soviets.

This application was then abruptly denied by DOD.

It will supply military technology to the Soviets but gets a little uptight about the public finding out.

I can understand that.

Of course, it takes a great deal of self-confidence to admit you are sending factories to produce weapons and supplies to a country providing weapons and supplies to kill Americans, Israelis, and Vietnamese. In writing. In an election year, yet.

More to the point - by what authority does this Administration undertake such policies?

Many people - as individuals - have protested our suicidal policies. What happens? Well, if you are in Congress - you probably get the strong arm put on you. The Congressman who inserted my research findings into the Congressional Record suddenly found himself with primary opposition. He won't be in Congress next year.

If you are in the academic world - you soon find it's OK to protest U.S. assistance to the South Vietnamese but never, never protest U.S. assistance to the Soviets. Forget about the Russian academics being persecuted - we mustn't say unkind things about the Soviets.

{p. 260} If you press for an explanation, what do they tell you?

First, you get the Fulbright line. This is peaceful trade. The Soviets are powerful. They have their own technology. It's a way to build friendship. It's a way to a new world order.

This is demonstrably false.

The Soviet tanks in An Loc are not refugees from the Pasadena Rose Bowl Parade.

The "Soviet" ships that carry arms to Haiphong are not peaceful. They have weapons on board, not flower children or Russian tourists.

Second, if you don't buy that line, you are told, "The Soviets are mellowing." This is equally false. The killing in Israel and Vietnam with Soviet weapons doesn't suggest mellowing, it suggests premeditated genocide. Today - now - the Soviets are readying more arms to go to Syria. For what purpose? To put in a museum?

No one has ever presented evidence, hard evidence, that trade leads to peace. Why not? Because there is no such evidence. It's an illusion. It is true that peace leads to trade. But that's not the same thing. You first need peace, then you trade. That does not mean [that] if you trade you will get peace.

But that's too logical for the Washington policy makers and it's not what the politicians and their backers want anyway.

Trade with Germany doubled before World War II. Did it stop World War II? Trade with Japan increased before World War II. Did it stop World War II?

What was in this German and Japanese trade? The same means for war that we are now supplying the Soviets. The Japanese Air Force after 1934 depended on U.S. technology. And much of the pushing for Soviet trade today comes from the same groups that were pushing for trade with Hitler and Tojo 35 years ago.

The Russian Communist Party is not mellowing. Concentrations camps are still there. The mental hospitals take the overload. Persecutions of the Baptists continues. Harassment of Jews continues, as it did under the Tsars.

{p. 261} The only mellowing is when a Harriman and a Rockefeller get together with the bosses in the Kremlin. That's good for business but not much help if you are a G.I. at the other end of a Soviet rocket in Vietnam.

I've learned something about our military assistance to the Soviets. It's just not enough to have the facts - these are ignored by the policy makers. It's just not enough to make a common sense case - the answers you get defy reason.

Only one institution has been clearsighted on this question. From the early 1920s to the present day only one institution has spoken out. That is the AFL-CIO. From Samuel Gompers in 1920 down to George Meany today, the major unions have consistently protested the trade policies that built the Soviet Union. Because union members in Russia lost their freedom and unions members in the United States have died in Korea and Vietnam. The unions know - and apparently care.

No one else cares. Not Washington. Not big business. Not the Republican Party. And 100,000 Americans have been killed in Korea and Vietnam - by our own technology.

The only response from Washington and the Nixon Administration is the effort to hush up the scandal. These are things not to be talked about. And the professional smokescreen about peaceful trade continues.

The plain fact - if you want it - is that irresponsible policies have built us an enemy and maintain that enemy in the business of totalitarian rule and world conquest. And the tragedy is that intelligent people have bought the political double talk about world peace, a new world order and mellowing Soviets.

I suggest that the man in the street, the average taxpayer-voter thinks more or less as I do. You do not subsidize an enemy.

And when this story gets out and about in the United States, it's going to translate into a shift of votes. I haven't met one

{p. 262} man in the street so far (from New York to California) who goes along with a policy of subsidizing the killing of his fellow Americans. People are usually stunned and disgusted.

What about the argument that trade will lead to peace? Well, we've had U.S.-Soviet trade for 52 years. The 1st and 2nd Five Year Plans were built by American companies. To continue a policy that is a total failure is to gamble with the lives of several million Americans and countless allies.

You can't stoke up the Soviet military machine at one end and then complain that the other end came back and bit you. Unfortunately, the human price for our immoral policies is not paid by the policy maker in Washington. The human price is paid by the farmers, the students and working and middle classes of America. The citizen who pays the piper is not calling the tune ? he doesn't even know the name of the tune.

Let me summarize my conclusions:

One: trade with the USSR was started over 50 years ago under President Woodrow Wilson with the declared intention of mellowing the Bolsheviks. The policy has been a total and costly failure. It has proven to be impractical ? this is what I would expect from an immoral policy.

Two: we have built ourselves an enemy. We keep that self-declared enemy in business. This information has been blacked out by successive Administrations. Misleading and untruthful statements have been made by the Executive Branch to Congress and the American people.

Three: our policy of subsidizing self-declared enemies is neither rational nor moral. I have drawn attention to the intellectual myopia of the group that influences and draws up foreign policy. I suggest these policies have no authority.

Four: the annual attacks in Vietnam and the war in the Middle East were made possible only by Russian armaments and our past assistance to the Soviets.

{p. 263} Five: this worldwide Soviet activity is consistent with Communist theory. Mikhail Suslov, the party theoretician, recently stated that the current détente with the United States, is temporary. The purpose of the détente, according to Suslov, is to give the Soviets sufficient strength for a renewed assault on the West. In other words, when you've finished building the Kama plant and the trucks come rolling off ? watch out for another Vietnam.

Six: internal Soviet repression continues - against Baptists, against Jews, against national groups and against dissident academics.

Seven: Soviet technical dependence is a powerful instrument for world peace if we want to use it. So far it's been used as an aid-to-dependent Soviets welfare program. With about as much success as the domestic welfare program. Why should they stop supplying Hanoi? The more they stoke up the war, the more they get from the United States.

One final thought. Why has the war in Vietnam continued for four long years under this Administration? With 15,000 killed under the Nixon Administration? We can stop the Soviets and their friends in Hanoi any time we want to. Without using a single gun or anything more dangerous than a piece of paper or a telephone call.

We have Soviet technical dependence as an instrument of world peace. The most human weapon that can be conceived. We have always had that option. We have never used it.

{end}

(3) Assessment of Sutton's Argument in his Trilogy

3.1 Although Sutton provides much material, his bias is towards a laissez-faire position - the very economic orthodoxy which has de-industrialized the United States, to the extent that it now is largely an exporter of the same sort of products the USSR once was: raw materials, processed primary products, and military equipment.

The much-vaunted US computer industry relies heavily on Japanese hardware components; and the software side is rapidly losing out to India and other overseas suppliers.

The non-Communist countries Sutton refers to as the "Free World" are now known as the "International Community". Since the fall of the USSR, they have launched numerous wars, and are now seen as "the threat", as the Soviet Union once was.

After the fall of the Soviet Union, the successor states adopted the laissez-faire advice of people like Sutton, as a result of which their economies shrank disastrously. The ruble plummeted in value; populations shrank by millions; women advertised overseas as "mail-order brides", and many emigrated as prostitutes.

Chalmers Johnson, author of MITI and the Japanese Miracle, rightly said that the Cold War was won by Japan: johnson.html. Its nationalist-socialist economics combined planning and public ownership of part of the economy, with corpoorate ownership of the rest. China has moved towards this model.

3.2 Phil Eversoul wrote, of Sutton's summary in National Suicide:

Date: Fri, 12 Sep 2003 05:56:16 -0700 From: Phil Eversoul <Philev@e-znet.com>

I think this is a very important piece by Anthony Sutton, for two reasons. First, it describes in detail the Hegelian dialectic used by the treasonous political leaders in Washington to create a fake communist enemy, the Soviet Union. Second, now that the Soviet Union is gone, it raises by implication the question if the same treasonous strategy has not been used in the creation of Communist China.

Let me illustrate what I mean. First, the official doctrine of the Chinese Communist Party is that America is the number one enemy, just as in the old Soviet doctrine.

Second, Sutton points out: "In a few words: there is no such thing as Soviet technology." Is the same true of Communist China, or have Chinese engineers actually produced their own designs for engines, vehicles, computer chips, alloys, missiles, nuclear plants, etc?

Third, Sutton points out, "The history of our construction of the Soviet Union has been blacked out - much of the key information is still classified." Is this also not true of the history of the West's contruction of Communist China?

Fourth, we are told, in relation to Communist China just what we were told in relation to the Soviet Union, namely, that trade between hostile powers produces peace. Sutton says, "No one has ever presented evidence, hard evidence, that trade leads to peace. Why not? Because there IS no such evidence. It's an illusion. It is true that peace leads to trade. But that's not the same thing. You first need peace, then you trade. That does not mean [that] if you trade you will get peace."

So, are we not being fed the same nonsensical propaganda regarding Communist China? In other words, if you trade with a declared enemy on the grounds (which you sincerely believe) that the enemy will mellow toward you, then the enemy, particularly a communist enemy, will simply see you as fool. However, Western policy toward communism is actually not based on a sincere belief in converting the enemy, but in using the threat of this supposed enemy as an excuse for globalist policies of "convergence."

To sum up, is not Communist China the same sort of Hegelian-dialectic bogeyman that the Soviet Union was, and created for the same purpose, namely, a tyrannical world government?

3.3 Reply to Phil Eversoul

One must bear several qualifications in mind:

Sutton also wrote about US investment in Nazi Germany, in Wall Street and the Rise of Hitler.

Eustace Mullins (author of Secrets of the Federal Reserve), interviewed, said that Sutton was employed, at the Hoover Institution, by the Rothschilds, and "I always considered Tony to be British Intelligence." http://www.rense.com/general39/EUSTACE.htm

The Soviet Government contracted foreign companies to build factories, and as consultants and specialists, much as the US Government or the Australian Government might contract the very same companies.

But can the USSR be blamed for this? When one compares the post-Soviet economies with the Soviet one, surely the Soviet system deserves some credit. Let's not forget the Sputnik, the manned space missions, the missions to Venus etc. Even though foreign technology was copied, they did develop their own as well.

Sutton does not say how the USSR paid for these foreign orders; presumably by exporting raw materials and primary products ... pretty much what Australia & the US are exporting today.

Today, we in the West are driving Japanese cars; even those not made in Japanese factories, are much influenced by Japanese design. The Ford F100, for example - a Yank Tank - is much inferior to the new Ford F250 - manufactured in Brazil, compact and efficient in the Japanese style.

So, "the West" at present is relying heavily on foreign technology, just as the USSR was some decades ago. But Wall Street "produces" the dollars which the producers take as payment.

3.4 Rejoinder from Phil Eversoul

Date: Fri, 12 Sep 2003 05:56:16 -0700 From: Phil Eversoul <Philev@e-znet.com>

There's a very important difference, Peter. The doctrine of the Soviet Union was Marxist-Leninist, which declares that capitalism, in particular as developed by the United States, is the chief enemy of mankind and must be destroyed. So the issue is: why are you trading with your supposed enemy who is out to destroy you according to his official declaration of purposes?

The issue is not one of blaming the USSR. Certainly, the communists wanted to take advantage of western technology for their own purposes. The issue is: why did capitalist West want to fund and support their publicly declared worst enemy? In other words, why did the capitalist West fund and support communist purposes?

Sutton destroys the standard answer to this question, in my opinion. The standard answer is that trade promotes peace, but I agree with Sutton that this is not true, particularly when you are trading with a society whose basic aim is to destroy you. I agree that first you must establish peace, i.e., a basis of understanding and mutual respect and tolerance, and only then can trade be mutually beneficial. In regard to communism, the communists would have to renounce their own basic doctrines about the inherent conflict between capitalism and socialism in order to have a peaceful attitude towards the world. And then they would not be communists. So that wasn't about to happen.

We must remember that under Lenin and Stalin, communism was always striving for war against the West. It never allowed the possibility of mutual coexistence, except as a delaying tactic. One of the great proofs of this is in Viktor Suvorov's Icebreaker, in which Suvorov details Stalin's enormous preparations for war against the West to begin in 1941. Hitler attacked first only because Stalin was about to attack the West within a matter of weeks with the largest armies ever assembled in history.

In other words, the huge contributions of Western technology to the USSR in the 20s and 30s, which Sutton details better than anyone else, had the deliberate purpose (unless you assume extreme stupidity on the part of Western leaders) of allowing Stalin to make war on the West for the purpose of a total communist conquest of Europe, and only Hitler's pre-emptive strike prevented this from happening and forced Stalin, in the end, to get only half of Europe, which is what caused the Cold War. According to the capitalist-communist plan, Stalin was supposed to get all of Europe, thus demonstrating the inevitable victory of communism. That's what all that Western industry and technology packed into the Urals was supposed to accomplish. And that's what would have happened if Hitler had not dared, against all the careful calculations of Stalin, to attack first.

Later, under Khrushchev, the doctrine of "peaceful coexistence" under the nuclear threat was only intended as a tactic, not a final solution.

"Sutton does not say how the USSR paid for these foreign orders; presumably by exporting raw materials and primary products ... pretty much what Australia & the US are exporting today."

"Today, we in the West are driving Japanese cars; even those not made in Japanese factories, are much influenced by Japanese design. The Ford F100, for example - a Yank Tank - is much inferior to the new Ford F250 - manufactured in Brazil, compact and efficient in the Japanese style."

Phil: Yes, but again this misses the point of the total and absolute hostility to capitalism embodied in communist doctrine. The idea of going ahead with trade with a society that says it wants to destroy you is incredibly stupid, or incredibly sinister. If you discount the stupidity factor, then what you see is a profoundly malevolent agenda. And that's what I see.

"So, 'the West' at present is relying heavily on foreign technology, just as the USSR was some decades ago. But Wall Street 'produces' the dollars which the producers take as payment."

Phil: Yes, but the technology comes from countries who are not out to destroy the West. The economic difference between the USSR and Communist China is that the latter is able to turn out an enormous quantity of acceptably produced consumer goods. But I am not aware that Communist China is able, or willing, to create or contribute high-tech, state of the art products to the world. Show me a computer chip, made by Communist Chinese scientists, that is in advance of anything that Western scientists have produced.

Communist China's doctrine, originating in its ruling class, is that it must destroy Western capitalism. This is the same old stuff that justified the original communists, basically the same old Marxism-Leninism with a Chinese twist. And yes, maybe very few in China believe it, but it is the official justification of the state. It is a doctrine of hostility, hate, and unending conflict. Maybe you recall that a few years ago, one of Communist China's highest generals made a veiled threat that if the United States intervened in the Taiwan dispute, Los Angeles would be nuked.

One more point I should add to what I said below: the Soviet communist ideology proclaimed itself to be a society superior in every way to that of capitalism. Millions of liberals, socialists, and communists across the world hailed the advent of Soviet communism as the dawn of a new age for mankind. The inevitability of socialist progress became the correct, "progressive" doctrine for all forward-thinking people. And yet this supposedly superior society was utterly dependent on the "inferior" capitalist West for its very existence. Quite a joke, eh? {end}

3.5 Reply to Phil Eversoul:

Carroll Quigley wrote in his book Tragedy and Hope (Macmillan, New York, 1966):

"... societies such as Soviet Russia which have, because of lack of the tradition of scientific method, shown little inventiveness in technology are nevertheless able to threaten Western Civilization by the use, on a gigantic scale, of a technology almost entirely imported from Western Civilization" (p. 15): tragedy.html.

But if Wall Street were so pro-Soviet, why did they also invest in Nazi Germany? Perhaps they invest in any and all regimes, regardless of "ethical" considerations.

Ronald Reagan put an end to Technology Transfer to the Soviet Union. He imposed sanctions on Toshiba, and on the Norwegian firm Kongsberg, for exporting hi-tech products to the USSR.

Phil Eversoul wrote, "Anthony Sutton ... shows clearly that the Soviet Union was created and sustained ENTIRELY by Western technology, engineering, and capital investments".

Phil argues that only privately-owned companies can produce goods and services. Phil pushes the anti-Communist argument to excess, ending up with a justification for selfishness.

During the 1950s & 60s much of Australia's economy was publicly owned & operated ... and those were our "golden years" of relative equality, full employment, and secure family life: xLeague.html.

As for Sutton's argument about Technology Transfer, one must not conclude falsely from it. Sutton never denied that the Russian Communists developed any of their own technology. Instead, they reverse-engineered imported technology to save development time. Japan did the same; and now China is doing it.

The USSR's space technology was first-rate; that's why the Atlas-Centaur rocket now uses a Russian engine, the RD-180, by licence: it was found better than American engines: http://www.spaceline.org/rocketsum/Atlas-IIIa.html

Russian-Powered Atlas To Challenge Ariane: http://www.aviationnow.com/content/publication/awst/19991122/aw52.htm

ATLAS III LIFTS OFF WITH RUSSIAN ENGINES: http://www.flug-revue.rotor.com/FRheft/FRH0008/FR0008d.htm

The Incredible Soyuz Launcher "Soyuz is the worlds oldest and most reliable space launcher": http://www.interspacenews.net/russia's%20soyuz%20booster.htm

3.6 Technology Transfer to Japan, China and Israel

Look around your home - how many devices are made in Japan, or designed in Japan, or have critical components made only in Japan?

During the port strike on the West Coast of the US, car plants in the US were shut down because they depended on supplies of critical components arriving "just in time" from Japan: http://money.cnn.com/2002/10/01/news/economy/port_impact/

also see http://www.sacbee.com/content/business/v-print/story/4619776p-5637955c.html

Many products exported from China also contain key components made only in Japan.

Technology Transfer to Israel - the case of the Lavi: lavi.html.

Chalmers Johnson on Technology Transfer to Japan and China:

Breaching the Great Wall - by Chalmers Johnson, American Prospect, Volume 8, Issue 30

http://www.emayzine.com/lectures/breachin.htm:

"... Nor has China abandoned its strategy of swapping market access for technology transfers from other nations. ..."

Chalmers Johnson on Japan and The Economics of the American Empire

This is from chapter 8 of his book Blowback: The Costs and Consequences of American Empire (Henry Holt, 2000)

http://www.thirdworldtraveler.com/Blowback_CJohnson/Japan_BCJ.html

{quote} p177 From approximately 1950 to 1975, the United States treated Japan a beloved ward, indulging its every economic need and proudly patronizing it as a star capitalist pupil. ... It also transferred crucial technologies to the Japanese on virtually concessionary terms and opened its markets to Japanese products while tolerating Japan's protection of its own domestic market. ...

p192 As the Cold War receded into history, the United States, rather than dissolving its Cold War arrangements, insisted on strengthening them as part of a renewed commitment to global hegemony. Japan was supposed to remain a satellite of the United States, whether anyone dared use that term or not. Meanwhile, annual American trade deficits with Japan soared. American manufacturing continued to be hollowed out, while a vast manufacturing overcapacity was generated in Japan and its Southeast Asian subsidiaries. Capital transfers from Japan to the United States generated huge gains for financiers and produced an illusion of prosperity in the United States, but in 1997, it all started to unravel. {endquote}

(4) Case studies: Tanks and the Space Technology UPDATED July 8, 2019: US still using Russian RD-180 rocket engines for Space launches

The USSR's space technology was first-rate; but the Soviet space program was a development from German research.

Shortly before the start of the Korean War, Stalin, at Kim Il-Sung's request, gave 100 T-34 tanks to North Korea; these formed the spearhead of its attack. But the Soviet T-34 tank was a development from a Christie tank sold to the Soviet Union by the United States.

4.0 US still using Russian RD-180 rocket engines for Space launches

https://www.rt.com/news/463401-us-russia-rocket-engines/

Strings attached: Why US canÕt stop using ÔtoxicÕ Russian RD-180 rocket engines

Published time: 4 Jul, 2019 18:59

The US has recently got another shipment of RD-180s, even as politicians in Washington continue to demand a halt to space cooperation with Moscow. Why have their efforts, so far, amounted to nothing?

Officially, Washington is tireless in its pursuit to "save" its European allies from Russian fossil fuels by giving them US "molecules of freedom." Yet, when it comes to sending stuff into space, the US itself continues to be dependent on the Big Bad ÔRusskies.Õ

Three new Russian RD-180s were sent to the US last week by NPO Energomash, to be used in Atlas 3 and Atlas 5 rockets. The deal is part of the Russian manufacturerÕs contract with the United Launch Alliance (ULA) ­ a company jointly owned by US aerospace giants Boeing and Lockheed Martin, and which has, so far, been the major contractor of the US Air Force and NASA in the field of space launches.

Since the long-term contract between Energomash and ULA was signed back in the 1990s, the Russian engines have been used in more than 80 US space launches and were used in rockets that carried American spy and military satellites into orbit as well as facilitated NASAÕs missions to Mars, Pluto and Jupiter.

So, how did RD-180s become an indispensable part of the US space program that many in Washington are now so eager to get rid of?

Back in the late 1980s, while US scientists considered the oxygen-rich staged combustion engine too complicated and unreliable, the Soviets ended up creating an operational model of it.

Unlike the gas-generator engines used in the US Space Shuttle program and the Apollo Moon landings, the Soviet ones did not let the exhaust from the rocket fuel go to waste. Instead, the exhaust from the so-called pre-burners (used to send fuel and oxygen into the main combustion chamber under high pressure to burn them there and generate thrust) was re-injected into the main combustion chamber, giving the engine more power.

The Soviet RD-170 and its successor RD-180, developed in Russia, are both oxygen-rich. Just years before the collapse of the USSR, when Washington saw that the Soviet scientists did manage to create a functioning engine, it decided to simply buy them from the Russians.

The idea behind this deal was that "down the road, the US would manufacture the same Russian engine" domestically after getting acquainted with its technology, as former Senator Bill Nelson (D-Florida) put it. The US indeed bought the key technologies as part of the deal but developing a new rocket engine "takes too much time and is too expensive," a senior fellow at the Space Research Institute of the Russian Academy of Sciences, Natan Aysmont, told RT.

There were attempts to use [Russian] blueprints that were provided [to the US] but they failed. Eventually, it turned out to be more difficult than they expected.

Development of such a sophisticated mechanism requires a great deal of experience as well as "intuition," military expert Mikhail Khodarenok explains. "One cannot just copy an engine ­ either a rocket one or an aircraft one ­ even if one has it in possession. To create something similar [to RD-180], one would need at least 10 years and a billion dollars."

"That intention was never carried out and that leads us to where we are today," Nelson admitted back in 2016.

The US has continued to buy complete RD-180s. The Russian tech has since gained recognition in America for its high quality. Nelson himself called it "an excellent engine thatÉ got the Atlas 5, which is our most reliable rocket for military launches as well as future NASA launches and commercial launchesÉ to orbit."

The US does not rely solely on the Atlas 5 rockets. Falcon Heavy and Falcon 9 developed by MuskÕs SpaceX are already operational but cannot fully replace it. "United Launch AllianceÕs Atlas 5 continues to be very popular in both the civil and commercial markets," Jessica Rye, the director of external communications at ULA, told RT. She added that the Atlas 5 has flown more than 70 missions with 100 percent success.

Seeking a way out

In 2014, anti-Russia hawks in Washington insisted the RD-180 engines be banned amid the souring relationship with Moscow over the conflict in Ukraine. The ban was short-lived, however, as the ULA successfully argued that such a prohibition would mean a halt to US space launches until a feasible domestic alternative could be found.

In 2016, hawks led by the late Senate Armed Services chairman John McCain (R-Arizona) reached a deal with the Pentagon that involved phasing out the use of the RD-180 by 2022. The Pentagon confirmed in April that it intended to meet that deadline, leaving the ULA desperately scrambling for an alternative.

Four companies are now competing to build a new, domestic US rocket engine: Elon MuskÕs SpaceX, Jeff BezosÕ Blue Origin, the ULA and Northrop Grumman. SpaceX and Blue Origin already announced that they are developing and testing their own engines, based on technologies similar to those used in RD-180.

ALSO ON RT.COM Russia shows off upgraded worldÕs most powerful rocket engine meant for Soyuz-5

https://www.rt.com/russia/453617-new-russian-rocket-engine/

4.1 Antony C. Sutton, Western Technology and Soviet Economic Development 1945 to 1965 (Hoover Institution Press, Stanford University, Stanford Ca., 1973).

{p. 270} In sum, about two-thirds of the German aircraft industry with its top designers and many technicians and engineers established the postwar Soviet aircraft industry. Attention was focused first on designs for military use and these then were adapted, sometimes rather crudely, for civilian use; in fact some Russian civilian aircraft have complete military subassemblies.

Gradually, by the 1960s, the Soviets attained some design independence ...

THE SOVIET SPACE PROGRAM

Historically, the Russians have had a great interest in rockets. ...

{p. 271} German Rocket Technology At The End of World War II

The major assistance to Soviet rocket ambitions undoubtedly came from Germany at the end of World War II. This assistance may be summarized as follows:

1. The testing sites at Blizna and Peenemunde were captured intact (except for Peenemunde documents) and removed to the U.S.S.R. 2. Extensive production facilities for the V-1 and V-2 at Nordhausen and Prague were removed to the U.S.S.R. 3. The reliability tests from some 6900 German V-2s were available to the Soviets - a major prize. 4. A total of 6000 German technicians (but not the top theoretical men) were transported to Russia and most were not released until 1957-58.

The German weapons program was in an advanced state of development in 1945. ... The Germans undertook two and one-half years of experimental work and statistical flight and reliability evaluation on the V-2 before the end of the war. There were 264 developmental launchings from Peenemunde alone. ...

{p. 273} Many German rocket technicians (as distinct from the top theoreticians in German rocketry) went or were taken to the Soviet Union. ...

{p. 274} In sum, the Soviets got production facilities and the technical level of personnel. The West got the theoretical work in the documents and the top-level German scientists and theoretical workers.

With true Bolshevik determination the Soviets concentrated talent and resources into a rocket program; the result was Sputnik - which came to fruition in 1957, just at a time when it was essential for strategic reasons for the U.S.S.R. to convince the world of its prowess and technical ability. ...

German Origins Of Soviet Rockets And Missiles

It is not surprising in view of these technical acquisitions that the postwar rocket and missile industry in the Soviet Union had strong roots in and orientation toward German developments.

The most important Soviet missile developments have taken place with respect to intermediate- and intercontinental-range missiles. In essential features these have been developed from the German V-2, and up to 1959 the developments were attained with German assistance.

{p. 361} INDIGENOUS INNOVATION IN WEAPONS TECHNOLOGY

Soviet innovation presents a paradox: an extraordinary lack of effective indigenous innovation in industrial sectors is offset - so far as can be determined within the limits of open information - by effective innovation in the weapons sectors, although some weapons development is akin to "scaling-up" Innovatlon (see pp. 362-64). As far back as the 1930s some indigenous innovation was achieved in such weapons as machine guns and tanks. Such development has become much more noticeable in recent years. A recent weapons innovation in which Russlan engineers appear to have conquered a problem unsolved in the U.S. Navy is that of ship-borne radar. Although the U.S. Navy has done a great deal of work in radar control of ship-launched or shore-launched missiles, it remained for the Soviet Styx missile, in the fall of 1967, to sink the Israeli destroyer Elath at a distance of more than 12 miles with three shots, thus demonstratlng dramatically the effectiveness of a radar-guided surface-launched anti-ship misssile. ...

{p. 362} By contrast, economic innovation has no such clearcut technical objectives, and it does not lend itself to such pretesting. Effective innovation in industrial sectors results from the positive interaction of a myriad of complex forces; it can be realistically tested only in a market situation wherein the market itself determines its success or failure. Soviet central planning cannot anticipate key variables because it lacks the information network of a free market. Moreover the system provides little incentive to explore the unknown: central planning necessarily places its emphasis on known technology, not on revolutionary technology. Therefore innovation in the nonmilitary sectors is likely to be imported from market economies.

Thus the Soviets can achieve adequate weapons innovation - given the existence of a reasonably effective back-up industrial structure - while failing miserably in the economic area of industrial innovation.

Western creation of a viable Soviet industrial structure is therefore also a Western guarantee of a viable Soviet weapons system. This Western economic support ensures that weapons systems may be developed and brought into production because the output of the industrial sector is the input of the military sector, which, unlike the industrial sector, has a proved capacity for self-generated innovation.

SCALING-UP INNOVATION

Review and analysis of Soviet technical achievements outside those offered for export and weapons systems leads to the conclusion that many such other achievements are better described as technical progress attained by means of scaling up Western technologies. This conclusion may be best explained by considering in broad outline the categories in which the Soviets have made indigenous achievements and the relationships between these superficially dissimilar technologies.

Soviet indigenous technical progress is concentrated in three industrial sectors: iron- and steelmaking (but not steel rolling), electricity generation and high-voltage transmission, and rocket technology. It may be noteworthy that each of these three technologies was at one time or another pushed by dominant party personalities: Stalin, as his name implies, favored the iron and steel industry; Lenin of course was the force for the electrification of Russia, and Khrushchev was a force behind the development of rocket and space technology.

Soviet work on blast furnaces has been toward the development of larger volume furnaces and the application of new techniques to the classic process. In open-hearth steelmaking the lines of technical progress are somewhat more complex. In the words of one commentator: "Many things have contributed to the good results obtained by the Soviets on their open hearths, but I feel

{p. 363} that the hot-metal spout and the basic roof setup are unique, and probably very important." Soviet advances in electricity generation have impressed many observers. In 1960 a subcommittee of the U.S. Senate noted that the Soviet power program produced the largest hydroelectric stations in the world - yielding the greatest amounts of electricity from the largest generators connected by the longest transmission lines operating at the highest voltage. It was also noted that while in 1960 the heaviest U.S. transmission lines were 345 kv, the Russians then operated 400-kv lines. These were being stepped up to 500 kv and plans called for use of alternating-current transmission up to 1000 kv and direct-current transmission at 800 kv. The subcommittee concluded:

{quote} It is to the Russians' credit that, building on the experience in technology acquired, they have now caught up with the rest of the world in the general field of hydroelectric development. In fact they are actually pre-eminent in certain specific aspects of slch development. {endquote}

In point of fact, this Senate assessment was somewhat overstated. It was based on only a few observations, in themselves accurate but not sufficiently extensive to warrant the broad conclusions reached. In rocket technology the Soviets first absorbed the German technology and then, after about 1960, went ahead on their own with more powerful rockets, in effect a scaling up of the original German rockets. There is a common denominator in each of these seemingly unrelated industrial sectors where the Soviets have made indigenous advance. In each case the Soviets started with a basic Western technology - indeed a classic technology - that was well established and had a strong technical literature. The blast furnace dates from the eighteenth century, and the open-hearth furnace from the nineteenth century. In electricity generation the Soviets adopted the Kaplan and Francis runner systems, and of course long-distance electricity transmission was started in the 1920s. In rockets the Russians have a strong historical interest, but in practical technology they started with the relatively advanced German technology of World War II, and above all they had the reliability trial data from 5700 German tests.

Therefore the essence of each case in which the Soviets have made indigenous advance is that they first acquired and mastered a known and classic technology. In each case the considerable power of the Communist Party chose the industrial

{p. 364} sector for allocation of resources, and indigenous technical progress in each case has been in effect a logical scaling up of an original classic Western technology.

In each case the process technology has a precise technical framework and is capable of expansion in size. For example, in blast furnaces Soviet designers concentrated on increase in cubic volume or on specific developments, such as high top pressure, to increase output from a given volume. The same applies to open-hearth steel furnaces, which at a very early date the Soviets expanded in size to 500 square meters. In electrical generators we find the Soviet effort concentrated on an increase in generation capacity, and in transmission lines we find effort concentrated on increase in voltage transmitted.

Not all Soviet scaling-up efforts are so logically conceived as those cited above. Sometimes they are neither technically nor economically practical; sometimes size for its own sake seems to be the desired goal. For example, Moscow has the tallest television tower in the world. With a full height of 1722 feet this structure comprises a prestressed concrete base 1260 feet high topped by a 462-foot antenna. Conic in profile, it is 196 feet in diameter at the base tapering to 26.5 feet at the top. Construction, which took ten years, was interrupted by a debate as to whether high winds would induce oscillations that would create a safety hazard. The tower is designed to withstand winds of 141 mph, although winds of that velocity occur only about once in 50 years in Moscow. In such a wind the tower will oscillate 32.8 to 36 feet, while it is designed for oscillations up to 42.6 feet. What is the end result of this project? The tower increases television range in Moscow from 30 to 50 miles; hence the incremental benefit is an increase of 20 miles in range, a benefit that hardly seems to justify the costs and risks of the effort. On the other hand, Moscow does have the tallest TV tower in the world.

In a similar vein, at a 1960 chemical exhibition in Europe the Soviets introduced "what must have been the largest model of a chemical plant ever to appear at a European exhibition." There was nothing novel about the plant itself; the model represented a well-established process for making synthetic rubber. But it was the largest model, and that constituted its novelty.

In each of the cases cited as representative of productive indigenous advance, there was an expansion in quantitative terms of a known classic technology. Consequently much Soviet advance actually falls within the category of technical progress acquired by the application of engineering and experimental resources to a given known technology. It is not innovation in the sense that innovation establishes new and formerly unknown technological horizons.

{p. 365} AN OVERVIEW OF TECHNOLOGICAL ORIGINS

We may conclude with empirical justification that Soviet indigenous industrial innovation is limited to two types: (a) scaling up, and (b) the miscellaneous category exemplified by the suture, welding, and minor industrial applications licensed for world marketing in 1967 (see Table 25-1).

Obviously, so far as the Soviet economy is concerned, the more important of these types is scaling-up innovation, whereby the Soviets take a classic Western process and proceed by dint of investment, research, and development work to increase the size or capacity of the productive unit. The results of such technical scaling up may or may not meet the test of the Western marketplace; there is no recorded case of its export to the West. Only the second category has led to attempts to export to the West. The returns from these exports are infinitesimal compared with the resources and talent available within the Soviet Union.

It now remains to bring together the overall picture from 1917 to 1965. Table 25-3 identifies origins for technology in 14 major Soviet industrial sectors in each of the periods examined in the three volumes of this study. Where Soviet innovation is the main process in use, it is noted in capitalized italics. Table 25-3 then, is a final summary of the conclusions from the empirical examination of technology in the U.S.S.R. over the course of 50 years.

Of necessity it is a broad examination. There are indeed many thousands of industrial processes; Table 25-3 includes only the most important and, for purposes of further illustration, a select number of lesser importance. There is no question, for example, that drilling technology is fundamental to oil production or that pig iron production is fundamental to iron and steel production; however, of necessity, numerous less important processes for each industry are omitted. {end}

4.2 Antony C. Sutton, Western Technology and Soviet Economic Development 1930 to 1945 (Hoover Institution Press, Stanford University, Stanford Ca., 1971).

{p. 238} NEW TRACTOR PLANTS AND TANK PRODUCTION

A plant for the erection of tractors is well suited to the production of tanks and self-propelled guns. The tractor plants at Stalingrad, Kharkov, and Chelyabinsk, erected with Western assistance and equipment, were used from the start to produce tanks, armored cars, and self-propelled guns. The enthusiasm with which this tank program was pursued and the diversion of the best Russian engineers and material priorities to this end were responsible for at least part of the problem of lagging tractor production.

As early as 1931 the Chain Belt Company representative at Stalingrad reported that the newly opened tractor plant was making 'small tanks.' In 1932 A. A. Wishnewsky, an American whose specialty - production methods - took him into many Soviet plants, reported that the principal emphasis in these plants was on production of munitions and military supplies. In all factories, he stated, at least one department was closed, and he would from time to time run across 'parts, materials, shells and acids' having no relation to normal production.

{quote} He stated that it was particularly true of Tractorostroy [sic] where emphasis is being placed on the production of tanks rather than tractors.

{p. 239} In his opinion, a least for the time being, the development of tractor production there has been designed to lead up to the production of tanks for military purposes. {endquote}

Such reports were confirmed a few years later by German intelligence, which concluded that in 1937-8 the Stalingrad Tractor Plant was producing a small three-ton armored car and a self-propelled gun at a rate of one per week, and the T-37 tank, patterned on the British A 4 EII, at the rate of one every four days. The 1937 Soviet War Mobilization Plan, of which the German Wehrmacht apparently had a copy, planned to double this output in case of war.

A similar report was made in late 1932 from the Kharkov Tractor Plant by Ingrarn D. Calhoun, an engineer for the Oilgear Company of Milwaukee who was servicing hydraulic presses and boring machines for cylinder blocks. The Kharkov Tractor Plant, Calhoun stated, was turning out 8 to 10 tanks a day which had a maximum speed of 30 kilometers per hour. Tank production took precedence over tractor production and operators for these were being trained 'night and day.' Calhoun added that 'they can fool the tourists but not the foreign engineers.'

According to the Wehrmacht, the Kharkov tractor plant (the Ordzhonikidze) was producing in 1938 a self-propelled gun at a rate of slightly less than one a week and an armored car at a rate of one every four days. Kharkov also produced the T-26 tank, patterned after the British Vickers-Armstrongs six-tonner. The Soviet War Mobilization Plan envisaged a wartime output tripling the self-propelled gun rate and doubling that of armored cars, but maintaining the same tank production rate.

In 1937 the Chelyabinsk Tractor Plant, known as the Stalin, was producing tanks of the BT series, patterned after the American Christie. Output in 1938 consisted of 32 of the 12-tonners and 1OO of the BT-38, a 16-tonner. Mobilization Plan output was double these figures.

Thus not only were all three of the new tractor plants producing tanks throughout the 1930s from the date of opening but they were by far the most important industrial units producing this type of weapon. As the projected War Mobilization output was only double the existant output, it can be

{p. 240} reasonably inferred that about one-half the productive capacity of these 'tractor' plants was being used for tank and armored car production from 1931 onwards. Thus the armaments program obviously reduced tractor production and adversely affected the agricultural program. There are also, in the State Department files and elsewhere, numerous reports confirming the adaptability of Soviet general-equipment plants for war use. For example: 'The heavy industry plants are fitted with special attachments and equipment held in reserve which in a few hours will convert the plants into munitions factories. ...'

THE DEVELOPMENT OF SOVIET TANK DESIGN PRIOR TO WORLD WAR II

Soviet tanks before World War II owed much to American, British, and, to a lesser extent, French and Italian design work. Little German design influence can be traced in the period before 1939, except through the German tank center at Kazan, although there were other Soviet-German military links. During the 1920s and 1930s the Soviets acquired prototype tanks from all producing countries and based their own development upon the most suitable of these foreign models. The 1932 Soviet tank stock is summarized in table 15-1.

{p. 241} From this early stock of Western models, together with technical-assistance agreements and the continuing purchase of foreign prototypes, we can trace the origins of Soviet tank models of the 1940s.

The Carden-Lloyd was a 1.69-ton machine-gun carrier (predecessor of the British Bren gun carrier of World War II) first produced by Vickers-Armstrongs, Ltd., in 1929. The Mark VI model sold to the Soviets had a Ford Model T 4-cylinder 22.5-horsepower water-cooled engine and a Ford planetary transmission. This became the Soviet T-27 light reconnaissance tank produced at the Bolshevik plant in Leningrad.

The Ordzhonikidze Tractor Plant at Kharkov started work on the T-26, based on the British Vickers-Armstrongs six-tonner (probably Alternative A), at about the same time. There were three versions - A, B, and C - of which B and C became the Soviet standard models produced until 1941. Similarly the Soviet T-37 and T-38 amphibious vehicles were based on the Carden-Lloyd Amphibian, known as the Model A4 E II in the British Army.

Walter Christie, well-known American inventor with nume