PRINCETON CONSULTANTS' MEETING 23-24 JANUARY 1957

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02619592
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January 30, 1957
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Approved for Release: 2018/07/24 CO2619592 %1�00 II CENTRAL INTELLIGENCE AGENCY OFFICE OF NATIONAL ESTIMATES 30 January 1957 STAFF MEMORANDUM NO. 8-57 SUBJECT: Princeton Consultants' Meeting 23-24 January 1957 The Consultants taking part for both days wee Messrs. Armstrong, Black, Hoover, Knorr, Langer, Lincoln, Linder, Milliken, Mosely, Reitzel, and Strayer. Participating on 23 January only-0as Young. From ONE, Messrs. Cooley, R. J. Smith, Harris, and Billington. were present for both days, and Admiral Schuirmann and Mr. Matthias for 24 January* The Consultants felt that the economic factor was particularly Important in deterydning the prospects for national Communism, and that emphasis should be placed on the role of Yugoslavia and China in the current Soviet-Satllite crisis and on the broadened range of alternative possibilities in the present situation. The.Consultents felt the Soviet position was strong and would almost certainly gr.: rw stronger in the Middle East, and that Saudi Arabia was a critical focal point in the current situation. The Consultants thought that emphasis should be placed on the growing strength of Communist China both internally and internationally although reservations were expressed about actual Chinese accomplishments in agriculture. They felt that greater allowance should be made fot the possibility of a return to a hard line in Asia. The Consultants considered the prospects of either neutralism or extremism in Western Europe not alarming at present. They thought that Europe was showing some signs of slowly moving toward a more unified and realistic position in world affairs, but agreed that the psychological and political problems of adjusting to new relationships would be formidable, 4=1E1 DOCUMLNTNO. NO CHANGE IN CLASS. ,ri t I DECLASsinED CLASS. CHANGED TO: IS S 0 NEXT REVIEW DATE: 15110 AUTH: HR 71-2 DATE:3126 10 REVIEWER Approved for Release: 2018/07/24 CO2619592 Approved for Release: 2018/07/24 CO2619592 mirpe STABILITY AND COHESION IN THE SOVIET SATELLITES: (NIE 12-57) 1. In discussing the basic factors affecting stability and cohesion, LINCOLN and ARMSTRONG felt that the attitudes of the free world should be included, and that the demonstration of unwillingness to accept risks in aiding a UN member appealing for aid would have profound repercussions in the area. MILLIKAN suggested that the influence of nationalism and of anti-Communism should be separately considered, though it might be impossible to assign a relative weight to each. HOOVER felt that nationalism was only the garb and rallying banner for anti-Communism, and that this anti-Communism in Eastern Europe had remained undiminished. He considered the lack of a larger protest vote in the Polish election explainable only in terms of the regime's use of intimidation and repression. However, most of the Consultants agreed with ARMSTRONG that the Poles simply thought Gomulka was the best they could get in the wake of the Hungarian experience. LANGER thought that fear of Germany was an important factor in producing the rally behind Gomulka. 2. Economic factor: KNORR questioned the relative lack of emphasis in the paper on economic factor) which he considered the critical one in terms of future prospects for the area and possible US courses of action. The Consultants generally agreed with the argument advanced by MILLIKAN that the degree to which a national Communist solution of the Polish type proves viable may depend on its ability to solve economic problems) and that solving these problems may require destruction of some of the guts of the Communist system. MILLIKAN and BLACK felt that as the image of the Hungarian experience wanes) it will be a diminishing force for inducing stability and conformity in the area and that economic conditions will become increasingly determining. MILLIKAN thought that a special paper should be written analyzing the economic debate in Poland and the implications and political overtones of the reorganization of the Polish economy. BLACK felt that attention should be paid to the non- Communist liberals and modernizers in some of the Satellites who might be able to work for a phased liberalization from within. 3. MOSELY thought that the possibilities of improvements in Poland's economic situation were better than implied in the estimate. He thought that increased incentive to work for an independent regime among the workers and the substantial pktential of Poland's managerial class might bring about considerable progress. He pointed out that Poland has a' higher productivity in coal per worker than England and France, and that it had a basically rich and balanced national economy. Many of its Approved for Release: 2018/07/24 CO2619592 Approved for Release: 2018/07/24 CO2619592 'Noe problems might be solved by Western aid and lowering of military expenditures. HOOVER and KNORR were more pessimiotic about Polish economic prospects. HOOVER pointed to continued inabilities to increase production under Gomulka; KNORR doubted that steps such as wage concessions would prove even as successful as Stalin's more repressive methods in effecting economic improvement. L. WithdrawaLl_prospectss Although the Consultants generally agreed with the basic estimate that the USSR is not now genuinely seeking a formula for pulling out of Eastern Europe, they felt that the paper ruled out too summarily the possibility that the USSR would give more serious consideration to some kind of offer. LINDER and LANGER suggested that the Soviets would probably pull out of Eastern Europe if we pulled out of Weetern Europe; STRAYER thought the USSR might even look with favor on Poland getting grants from the US to help it out of its current economic situation. MILLIKAN felt that the categorical estimate about Soviet doterminabion to retain conteol in Eastern Europe (last sAttence of paragraph 19) oversimplified the picture and gave insufficient weight to tha tremendous costs the USSR faced in maintaining that control. He felt that although a flat withr'rawal proposal would not be accepted, stress should be placed on the fact that a new context had been created in which the range of alternatives had necessarily broadened. 5. Yugoslavia and China: There was general agreemont that more mention should be made of the rile of Yugoslavia and Communist China. ARMSTRONG thought that the palitical considerations which were paramount in inducing the USSR to reject, reaccept, and then re-reject Tito must also be operative in their policies toward Poland. LANGER agreed that prestige was a critical Soviet consideration and thought it degrading for the East Europeans and unparalleled for the USSR to call in Chou En-lai to smooth things over in the Satellites. BLACK felt the use of China as intercessor was not resented and was probably an effective way of convincing in the Satellites that despite temporary problems they Aro part of a much larger bloc which is still the wave of the future. BLACK suggested Finland might prove a better example of an eventual outcome in some of the more troublesome Satellites than Yugoslavia. In some respects, a Finnish solution was preferable to a Titoist one since, despite its non-Communist government, Finland was more subject to Soviet dictation on foreign policy than Yugoslavia. STRAYER thought that Soviet relations with Communist China might be the pattern that the Soviets had in mind for future dealings with the East European Satellites. - 3 - E`re,K Approved for Release: 2018/07/24 CO2619592 Approved for Release: 2018/07/24 CO2619592 Nise SE 6. Permissible variation; On the question of what and how much variation the USSR will be able to tolerate in its Satellite empire, there were three positions put forward by the Consultants. a. ARMSTRONG tented to think that Soviet policy had to be toward the area as a whole, and that the same considerations of prestige and political power will have to stiffen Soviet attitudes toward the region as a whole. ARMSTRONG pointed out that the Bloc has been almost as uniform in its pattern of rehabilitation and partial reexcommunication of Tito as it was in its original denunciation and purges of 1948-49. MOSELY tended to support this position by suggesting that the Soviets suffered no real hesitation, only a necessary tactical pause waiting for reinforcements before crashing the Hungarian uprising. Most of the Consultants agreed with the estimate that any defection from the Bloc except by Albania would be unacceptable to the USSR. b. STRAYER felt that the USSR would have to continue to insist on uniform responses to the outside world, but can and will allow for considerable and increasing variations in domestic policy. c. BLACK felt that the USSR would Allow for general divergence between countries, wherever unavoidable, rather than attempt to distinguish between domestic and foreign policies, which would be difficult in key issues such as foreign trade and aid. LINDER and LINCOLN favored. sore discussion of the Satellites as individuals. LINCOLN got little support for his idea that a soft neutral area to the South might be sanctioned by the USSR; but there was considerable sympathy for the idea that the USSR might fell that it could continue to sanction divergences in some of the Satellites, because of the national interest of countries like Bulgaria and Czechoslovakia in maintaining close contact with the USSR and the inability or disinclination of most Satellites to follow the Polish example at present. 7. Military Significance: On the military importance of the area to the Bloc, MILLIKAN thought that while the ussil continued to value Eastern Europe for defensive purposes, it must have written off the area for possible offensive use against Western Europe. LINCOLN thought the area was still considered usable as a base even if local forces could not be trusted, and MOSELY thought the technological strength of Soviet forces had so increased that the Satellite forces had lost much of their impNrtance in Soviet planning anyhow. LINCOLN thought that the 4 Approved for Release: 2018/07/24 CO2619592 Approved for Release: 2018/07/24 CO2619592 \A" building up of Satellite military forces had probably contributed to nationalism in the area -- and would probably inevitably do so if (1) conscription was used and (b) high professional standards were attained. 8. Attraction of West: The Consultants thought some mention should be made of the attractive force of Western Europe in both the economic and ciultural realms to many of the Eastern European Satellites. MOSELY said that the Polish government has urged the Rockefeller and.Ford foundations to open contact and that exploratory missions have already been sent to Poland by both foundations. (A fact still being kept secret.) He thought that the experience of Yugoslavia in 1950 (when 90% chose English and only 2% chose Russian as their second foreign language after the choice was made elective in Croatia) would probably be repeated in other Eastern European Satellites if a choice was permitted. There was general agreement not to expect much from the Czechs, however, who were thought to be faring well economically under the current arrangements and enjoy about as much contact with the West as they probably wanted. MIZE EAST 9. Soviet strengths: In answer to COOLEY's introductory question on the strength and weakneeses of the Soviet position in the Middle East, the Consultants agreed that the Soviet position was strong and would probably become stronger. MOSELY related Soviet stvength in the area to the fact that they are interested at present in getting the West out rather than getting themselves in. He .suggested that the USSR did not intend to send in volunteers, but that they were thrown off base by the US censure of the UK and France and felt they had to establish for future propaganda purposes the fact that they were willing to go even farther in supporting the victim. MOSELY thought the situation was somewhat analogous to that of 1938 in Czechoslovakia where the Soviets built up much credit by implanting in the minds of the people that only the USSR was willing to help them militarily when the chips were down. YOUNG agreed with MOSELY that the USSR had succeeded in establibhing this distinction in the eyes of the people of the area, and that in pressing for any kind of a reasonable settlement the US will necessarily become aligned even more with the UK, France, and Israel. Most Consultants agreed with MOSELY that the USSR was not being strained economically by aid to the Middle East, and that they were getting disproportionate psychological returns for their obsolete arms and unsaleable surpluses. 10. Against LANGER's suggestion that the Soviets might exploit the =mint Middle Eastern situation to better their position in the 5 - h'st5.13 Approved for Release: 2018/07/24 CO2619592 Approved for Release: 2018/07/24 CO2619592 'slow Turkish straits, MOSELY and YOUNG pointed out that Soviet acceptance of the principle of national soverignty in the Suez crisis would handicap any such efforts. MOSELY thought the USSR would prefer bilateral dealings with the Turks in any case. He speculated that the USSR would probably fly large numbers of speoialists to Syria if Jordan were attacked. ARMSTRONG Amentioned that Nun i was not urging US adherence to the Baghdad Pact in December, but rather increased US aid, particu- larly to Iran, which Nun i considered the weakest link in the Baghdad Alliance. MOSELY speculated that Nun i might have taken this position because the Baghdad powers preferred not to be inhibited by direct ties to the ES if they decided to initiate action against Syria in collusion with the Turks. 11. Saudi Arabia: There was general agreement to STRAYERrs assertion that Saudi Arabia was a critical fecal point in the present situation. YOUNG commInted that Saud was playing up to Nasser to check Iraq, but that he doesvrt want to be completely committed to Nasser and has been hurt by the closure of the canal. Saud is dependent on opportunistic Palestiniars for administration; and they support Saud bucause they feel that he alone has the financial potential to help them get. Palestine back. Saud deesnrt realize that he is building up a class that might eventually overthrow him; he seeks to solve everything by spreading his wealoh around a little more thinly. In answer to YOUNGrs speculation that some groups in Saudi Arabia might eventually try to call in the Russians to run Aramco, LINDER pointed out that the problem was marketing the oil; and that so long as petroleum Was available from Iran and Kuwait a shut-off of Arabian oil would not seriously hurt the West. 12. Settlement Prospects: The Consultants agreed that there was no other practical way but through the UN to take the first steps toward an Arab-Israeli settlement. YOUNG thought that, with world attention focussed on the area, now was a good time to press for some sort of settlement, or at least to create a context in which final settlement could ultimately be worked out. ARMSTRONG felt that a settlement could be achieved if the US was willing to apply pressure on all parties. STRAYER thought that the value of a settlement ohould not be exaggerated, since the Arabs would almost certainly believe they had been cheated and become further alienated from the US. HOOV1d thought that a substantial quid pro quo would have to be arranged for the Arabs, since any settlement would seem to have improved the Israeli position as a result of their military action. MILLIKAN thought no solution to the problems of the area was feasible unless the focus and frame of reference for a solution were broadened and the impression countered in the area that the US was seeking to buy people off on a short-term basis. 6 - Approved for Release: 2018/07/24 CO2619592 Approved for Release: 2018/07/24 CO2619592 COMMUNIST CHINA (NIE 13-57) 13. International Posture: There was general concurrence with MOSELY's suggestion that a five-year estimate should emphasize that the Chinese may suddenly revert to a hard line once they have neu- tralized international opposition, consolidated their position at home, and built up mass support abroad. MOSELY thought they might revive guerilla fighting in Southeast Asia, try setting up a Yunnan in India, or attempt to capitalize on political confusion in Indonesia. He felt that having switched to a soft line, the Chinese Communists have to hold it for a while to consolidate their gains, but that a straight push for power night take place in the Far East once a genuine atomic stalemate has been reached in Europe. 14. Taiwan and UN: There was a general desire for more and better intelligence on the sf:ivation in Taiwan. ARMSTRUCT thought the mainland population was large13, reconciled to life in Taiwan and against a return to the mainland. MOSELY thought the Soviet pattern of playing on the Sine-American talks to show that Chiang was throeEh and at the same time offering comfortable posts to nationalist officials was bound to have increasing effect, particularly in making the succession problem dif- ficult. The Consultants agreed that the USSR did genuinely want Com- munist China in the UN at present, that admission to the UN was of great importance to the Chinese Communists, and that they could count on growing Afro-Asian support for admission. LANGEd thought the Chinese would make concessions on issues like the American prisoners and the status of the Chinese in Southeast Asia in order to gain admission, but would make no concessions on Taiwan or the issue of renouncing force. REITZEL thought that the Chinese would make no important concessions, believing that the Afro-Asian bloc will eventually get them into the UN. 15. The Consultants agreed with BLACK that the effect of the Hungarian situation has been to increase markedly the importance of Communist China to the USSR. MOSELY thought that the estimate should develop the line that the call for different roads to socialism and popular front tactics was primarily directed to Asia. Attention should be paid to the use of local Communist parties to influence non- Communist governments even without a popular front -- as in Japan where a small Communist party has forced the left socialists to accept issues popularized by the Communists and the left socialists in turn have created pressure on the conservative government over these issues. MOSELY felt that nationalism and socialism were being increasingly paired together in Asia, and that the constant prodding of the Com- munist Parties was combining with the surprisingly effective co-existence 410 SE - Approved for Release: 2018/07/24 CO2619592 Approved for Release: 2018/07/24 CO2619592 Nkat" 'Nevi propaganda of China to induce increasingly favorable attitudes toward the Bloc. He considered the decline of Western-type socialists in India and Indonesia a serious development contributing to this outcome. 16. Agriculture: MILLIKAN urged that the anlaysis of the Chinese agricultural situation be sharpened to explain (a) the degree to which productivity changes have been explainable solely by the weather, (b) the kinds of investment being made in agriculture, and (c) the effect of collectivization on productivity. MOSELY said that, except in the Northeast, farming methods had not changed much, and wondered if the displacement of small wholesalers has caused the inefficiencies that resulted from this step in Russia, and what the Chinese will be able to do to overcome the ap[arent decline in livestock production. He suspected that the increase in consumer goods referred to in para. 9 of the draft estimate did not take account of the decrease in handicraft industries, HOOVER thought there was frequently a tendency in the estimate to impart a "God-like quality to the decisions and purposes of the regime." WESTERN EUROPE 17. Neutralism: SLItIMI.t an' LANGER. began the discussion on the memorandum "Thoughts on Europe" by commenting that we appear to be at the beginning of the period of "atomic blackmail" and may expect a series of threats aimed at weakening our base structure. KNORR felt that the European powers would increasingly insist on having their own atomic stockpiles to avoid the necessity of involvement in a US-USSR conflict. LANGER said that the Germans are unlikely to press seriously for a position of :neutrality which would practically rule them out as a great power; and LINDER thought it oven less likely that England and France would seek neutrality. ARMSTRONG thought that the example of India which has become a great power without atomic weapons might have a seductive effect on Europeans reappraising their role in the world today. MOSELY also thought that, since Europe would presumably not be needed by the US to deliver nuclear weapons to the USSR in five or ten years, European counties might feel able to explore policies at some divergence from the US in the confidence that we would not let them collapse. 18. Germany: The Consultants generally agreed that Germany was rIlikely to, give up much to attain reunification. KNORR felt the West Germans were wrapped up in their own prosperity and anxious to avoid rocking the boat. He said that the socialists in private were surprisingly uninterested in the reunification issue and planned to concentrate on the rearmament question in the forthcomine elections, 8 IMP Approved for Release: 2018/07/24 CO2619592 Approved for Release: 2018/07/24 CO2619592 .*ss? NNW SE and that the political position of the CDU had not declined sharply although Adenauerts personal position had. He pointed our that the Germans might rely on developing imtermediate range missiles for retaliatory power against the USSR, by-passing altogether the plane delivery stage. LANGER thought that the Germans, by developing a military establishment of hiehly trained specialists using missiles and atomic artillery, could do as well as they did after 1920. 19. Economic Prospects: The Consultants generally thought that economic problems would not be a major source of difficulty in Western Europe unless the Suez Canal stays closed. They agreed that the growth rate was flattening out, but that actual growth and expansion was surprisingly vigorous. MOSELY suggested that in getting rid of over- extended obligations around the world, the economic position of Western European countries could actually be placed on a sounder basis. ARMSTRONG cited Italy end Holland as examples of countries whose trading positions have actually improved with the loss of colonies. LANGER cited post World War II Germany as an example of economic prosperity without extensive political control. There was general agreement that the loss of political control would matter greatly psychologically, however, and that the problem of coming to terms with the new situation eelitJellly would be acute, paeacuaarly in the case of France. LINDER felt lekat the case of England, where wages are outstripping produivity, any government - administering the necessary economic corrective would be likely to fall. REITZEL suggested that the Labor Party was not interested in coming to peJer at present. There was a general agreement that growth of extremism was unlikely in European politics, but ARMSTRONG and REITZEL were anxious that the possibility of some new form of nationalist extremism not be written off. 20. European intelzation: There was a general agreement that further steps toward European integration were likely, but that this would only be possible to the extent that colonial positions and policies were gracefully abandoned. BLACK sug,ested that Western Europ& in some degree recoup its economic position by cooperating in developing Africa; but it was thought that divisions among the European powers and the French position in Algeria would make any such development unfeasible. MOSELY thought that the Africans would, in any case, prefer to deal unilaterally with the West European powers. 21. Against the general proposition that the peoples of Western Europe have run out of steam and lost their desire to find new answers and move toward integration, the following arguments were made: MOSELY and LANGER: The rising generation in Western Europe is non-nationalistic in focus, and its interest in efficiency and 9 SE Approved for Release: 2018/07/24 CO2619592 Approved for Release: 2018/07/24 CO2619592 Now/ , � - streamlining may lead it to desire to overhaul many divisive and out- moded practices in Western Europe. KNORR: Civil servants in their forties and fifties have now begun for the first time to push integration. ARMSTRONG: The recent choice for NATO secretary-general of Speak, who is known as a proponent of closer intra-European co- operation willing to step on people's toes, may be an indication of the way Western Europe may want to move. 22. There was a general agreement that, in the words of KNORR, "the hankering after tile old world will be the biggest obstacle in the way of the new" in harope. The Consultants agreed that individual countries had lost mew% of the psychological incentive to continue playing a big role, but felt that Europe as a whole could play a role of great and increasing importance and would probably feel it had to in the light of economic necessity and the political reminder of Soviet hostility contained in the Hungarian experience. 10 tWMET- TIAL Approved for Release: 2018/07/24 CO2619592