The True Cost Of The Cold War

The True Cost Of The Cold War

Published September 16, 2011

Born in the mid-seventies, I probably belong to the last generation to have a clear memory of the Cold War. As a child, I remember looking in the basement for a place to hide in the event of nuclear attack. This was more than just paranoia. After the collapse of the Soviet Union, it actually did come to light that the Russians had four nuclear missiles pointed at Reykjavík, ready to go off in the event of war.
Iceland in the 1980s, although firmly in the capitalist camp, had some noticeably Eastern bloc elements. It traded proportionately more with the Communist bloc than any other NATO country. Like most Icelanders my age, I grew up eating Polish chocolate, watching Czech cartoons and my parents drove a Lada. In return, the other side imported Icelandic fish to such an extent that the United States reportedly at one point considered buying up all of Iceland’s fish exports to stop it from trading with the enemy. 
The decline of the empires
In 1986, the leaders of the two superpowers met in Iceland to bring about an end to the Cold War. The Soviet Union was in serious economic trouble by then; the US seemed to be doing somewhat better. Some people took a different view. A little film from Canada, ‘The Decline of the American Empire,’ was nominated as best foreign language film, but did not win. It was not this decline that was on everyone’s minds.
In 2011, I find myself living in Canada. Some say it was an event that took place here, and not in Reykjavík, that marked the true beginning of the end of the Cold War. When Gorbachev, on a visit in 1983, walked into a Canadian supermarket and saw the variety of consumer products on offer for the general public and not just party apparatchiks, he knew the Cold War was lost.
The cost for the Russians
My girlfriend works in a créperie along with people from all over the former Soviet Union: Moldova, Kazakhstan, Ukraine and Russia itself. One is a brain surgeon, another a nutritionist, none can find suitable work in Canada but still feel they enjoy a better standard of living than in their native country. They are not political exiles as they might have been during Soviet times, but rather victims of a failed economic policy. 
Meanwhile, the wealth of the motherland has been divided between a handful of oligarchs and the political system has slipped back into authoritarianism, if not outright totalitarianism, under Putin. Gorbachev’s policies were a blessing for the people of Eastern Europe, but in Russia, the results are more mixed, which is why he is still generally idolised in most of Europe, but disliked at home.
The cost for the Americans

The bill for the end of the Cold War came later to America, but it was also high. Reagan argued that you could cut taxes and that this would stimulate the economy enough to not only make up for the tax cuts, but also provide additional revenue for military spending. This proved false, and a bad habit from the Reagan years was nonchalance towards public debt that is now costing the United States dearly.    
True, the debt was brought under control by Clinton, but George W. Bush, inspired by Reagan, thought that debt did not matter as long as you won the war. Bush did not win his wars, but managed to run up a huge bill nonetheless. Had the Soviet Union not collapsed and the Cold War not been won, Reagan’s presidency would most probably have been viewed as a failure and the dangers of Reaganomics would have come to light earlier. Instead, the bill has to be paid now.
25 Years on from Höfði
In Montreal, I recently saw a comedy show, hosted by the Daily Show’s John Oliver, called ‘The Decline of the American Empire.’ The idea of the United States being in decline has gone from art house cinema to mainstream comedy.
An apocryphal story tells of an Icelandic translator for a German TV crew at the time of the Höfði summit overhearing the Germans remark, upon seeing the state of the Soviet broadcasting equipment, that the Soviet Union had five years left, the United States, twenty-five.    
I would still be mildly surprised if the United States would collapse before Christmas. A more conservative estimate would probably give them another half century before they finally give way to the Chinese. On the other hand, the Soviet Union collapsed far quicker than anyone, outside of the German TV crew, could have predicted in 1986. Twenty-five years on from Höfði, the state of the superpower that survived the Cold War seems more perilous than ever.



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