WL: The political perception in those days, I think... and beginning of the sixties, was very much along those lines, far more realistic than it later became...

WL: (Interrupts) Along the lines that it was an evil empire and expansionist. Nobody used the term 'evil empire', but there still was a perception in political terms, it was an expansionist state on the make, that was widespread and by the mid-1960s, especially in CIA that was badly eroded away and lost. And along with that came the perception that we were responsible for the Cold War and not the Russians and so forth, that was endemic into a lot of the intelligence community again, especially CIA in that period. It reflected in the estimates and that they would not try to catch up with us in ICBMs or anything like that. The magic words were, they would not increase their ICBM program, because if they did, we would match, quote, match and over-match them and therefore they would not try. And besides, if all you wanted to do was kill people, a few hundred is more than enough.

WL: Well, you know, it's still a hard thing in history to pin down who was actually most responsible for the Cold War. I happen to believe the evidence continues to show that the biggest share of the responsibility clearly on the Russian shoulders. But it'll be debated for who knows how long, because unless you can exhume Molotov and Stalin and interrogate them, you'd have a very difficult time to get the final answer. We certainly did something's that undoubtedly caused them that aroused their suspicions, but they were so suspicious any way that it was very difficult, I think, for us to do anything that did not arouse their suspicions. so it's one of those things. But until the mid-1960s, very few people, least in the intelligence community, belonged to the school of thought, which arose mostly in the academic world, that it was the Americans who were primarily responsible and not the Russians.

WL: Oh, very much so.

WL: Well, it's not as simple as that. I can't...

WL: As that everybody would sit there and line up their Atori pieces and the Atori pieces would only shoot at each other counter-battery fire as it is called in Atori parlance. And actually that's the way the Russians did view it, primarily, that their objective was to destroy our missiles, our aircraft, and our essential industries, not all industry at all or anything like that... just enough to win the war, decisively. And that was what they wanted to do. At the same time, they wanted to limit damage to themselves, which is why they had to try to destroy as many of our missiles and aircraft as they could, on the ground, before we could launch them. Because that's called damage limiting in the trade.

WL: Who knows? There's no answer to that question. Everybody did it on computers, anybody can do it on computers. As to what would have happened in real life, who knows? Wars never go according to plan, but it is clear - at least in my view and I think the evidence is just piling up, piling up all the time - that the Russians viewed it that way, that a war, a nuclear war was like any other war. They were going to fight it and they were going to try to quote-unquote win it and that meant limiting damage to themselves, destroying our government and keeping their system, their nomenclature, their party officials and their system, keeping that viable and intact so they could inherit the post-war world. And that's the way they structured their forces and predictions for the forces, based on that, came true. Predictions for their forces based on other theories did not come true.

INTERRUPTION

WL: And I might also say that they were willing to pay the price, because when they adopted that strategy, they also adopted - and this the CIA still denies - they adopted the policy of preferential growth, the military expenditures, at the expense of the Soviet consumer the average So... the standard of living of the average Soviet citizen to pay for that policy and they followed that to the very end. From there on, military rose as the share of the GNP and consumption declined. In fact, a Soviet military person round '69, I can give you the exact date, told an American military that our view is that if people have meat, vegetables and potatoes to eat, that's fine. If they have to give up the vegetables and have to give up the meat in order to pay for defense and only eat potatoes, so be it. And that's the policy they followed and that was totally missed by all the US academics and by the Central Intelligence Agency. To this day, they deny it.

WL: Well, I have from two senior Soviet officials, one a professor and one an intelligence type that I was one of two people who understood this quote-unquote monstrous degree of militarisation of the Soviet economy, unquote, and even we underestimated it. There actually were three of us in a sense - and I did underestimate it - but to answer your question, I got the trend, I got the rate of growth right, but I did underestimate the magnitude until quite late in the game. The answer to your question is that around 1960, they were down to less than ten per cent of GNP going into the military, maybe ten to eleven per cent. By 1985, they were over twenty five per cent. By 1988, well, it's... they... the next to last chief of the General Staff of the old Soviet Union said the military share of GNP was one third or more and he was right. The CIA was then down to twelve per cent. I'd gotten up to twenty-five, twenty seven per cent. but that's what really happened and that is one of the principal reasons that the empire collapsed.

WL: They bankrupted themselves and we promoted that... their bankruptcy by our technological promise, is what it amounted to, 'cos the military was one area in the world that they had to try to remain competitive. In machine tools and, you know, anything else, they didn't have to try to be competitive and in their system, their managers and their designers and their producers of civilian things didn't have to try to be competitive to West, there was no real incentive, no reward, no demand for that. In the military, they really tried and they... it's how to say how competitive they really thought they succeeded in being. by somewhere around the late 1970s early 1s, the Chief of the General Staff, Marshal Aglakov, was convinced that were so far behind in the micro-electronic race, that we had won the Cold War simply on that ground alone. So we did it by a much smaller share of GNP, which we... naturally declined over time, and we did essentially by the promise of our technology. We contributed to it, but they started it by pursuing this goal of trying to acquire you need to fight and win a nuclear war and the resource demands of that strategy are just insatiable, just insatiable. There's no end to what... you always need something more to assure the leadership that, yes, we can do that. And they never quite made it, they never made the point when they could say that we really are ready and one of the big reasons in the military that they failed was when they fell behind, completely fell behind in the micro-electronics revolution, because that's what made Smart weapons, Smart bombs, all this stuff possible and they were... way behind.

WL: Oh very, very strong.

WL: Well, they repeatedly said and one of their very senior people admitted publicly, yes, we followed a strategy to fight and win a nuclear war and, as I say, the two best proofs of that, to my mind, are that prediction to the weapon systems, based on that strategy, came true, where predictions based on other versions of their strategy did not come true, were not even made in most cases, and to the extent they were made, they did not come true. And the other was the growth in the military burden, which Gorbachev never really reversed. He himself admitted he approved a forty five per cent increase in military expenditures in the five-year plan for 1986-1990, which again was completely overlooked here. And they admitted, he and Premier Richkov and others admitted they'd been following in this strategy of this policy of preferential growth for the military at the expense of the consumption. You would find that in a single academic publication that I know of, no recognition of that statement or its consequences. But the fact that they did that between 1960 and 1985 the military burden increased by a factor of roughly two and a half, maybe three, is to me the best single proof that they were following that strategy. You put your money where your mouth is and they did.

WL: Well, it was an economic war and to a large extent, we didn't recognize the degree to which they were waging an economic against us. one of the things they had to do to follow this preferential growth of the military, at the expense of the consumer they also had to follow a policy of preferential growth of weapons production at the expense of civilian machinery production of all types, not only for consumption, but for the capital investment program. Well, beginning around 1970, they began to compensate for that by exports, mostly energy, and gold and raw materials, to pay not only for grain imports, which most people focused on, but to pay for a large and increasing imports of machinery and equipment for their capital investment program, to make up, to some extent, for the diversion of resources within their own productive capacity to weaponry. We didn't recognize that that was what was going on. But fortunately under the Reagan administration, some people started doing the things that were necessary to put the pressure points on them, and we persuaded the Saudis to reduce the price of crude oil and that cut into their earnings very severely, their earnings from energy exports sort of leveled off by 1985 as a result of that. They had to then start really boring much more on a large scale to keep up the machinery imports, which Gorbachev did. Most of the debt that Yeltsin has was run up during that period in order to keep up that policy, when earnings had leveled off. And, of course, when he tried to block the pipeline and did, indeed, partially block it - they got a big national gas pipeline - that really put the pressure on 'em. But we never conceived of that as really as a coherent economic strategy, as a whole. Very few people had that idea, but it never was really coalesced into a national strategy across the board at all.