PROPOSED ECONOMIC DEFENSE RESEARCH AND ANALYSIS PROGRAM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01203A000100100003-1
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 3
• Document Creation Date: December 9, 2016
• Document Release Date: March 16, 2000
• Sequence Number: 3
• Publication Date: October 7, 1954
• Content Type: MEMO

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ED/EC D-7i
October 7, 195
MKECU TIME COMMI TTEE OF THE
ECONOMMUT + N:~ A. ::S RY C IT?IEEE
MEMORANDUM
From;. Kenneth R. Hansen
Chairman
Subject., Proposed Economic Defense Research and Analysis Program
Appended hereto is the report on "Soviet Economic Trends and
Their Implications for East-West Trade9s submitted by Thomas C. ichelling.,
Associate Professor, Yale University., and consultant to MDAC0 As noted
in Mr, Schelling0s memorandum of transmittal., this report is intended to
help orient systematic research in the field of East-West trade and to
provide an analytical preamble to an organized and systematic research pro-
gram to develop a comprehensive and accurate appraisal of Soviet economic
trends and policies.
On the basis of informal discussions and comment,it is evident
that this report has provided a most useful and provocative approach to
this problem and that the thesis developed has serious implications in terms
of future economic relationships between the free world and the Soviet bloc0
The report, in my view, represents a major contribution to the forward
thinking in not only the economic defense field., but the entire foreign
economic policy of our Government,
In the evolution of our economic defense policy since the adoption
of NSC 152 by the National Security Council and throughout the period of imm
plemention of that policy, it has been evident that there has been a change
of circumstances with regard to the strategic importance of specific commodi-
ties to the Soviet bloc., changed attitudes and approaches by our Allies and
major economic developments greatly affecting the scope and role of East-West
trade in the total world trade picture. During this period, however., it has
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become increasingly apparent that the nature, extent and potential of free
world economic relationships with the Soviet bloc would emerge as a major
area of concern from the economic defense point of view,,
Accordingly, as a necessary counterpart to the development of
the "long-haul" approach from the military and strategic point of view, there
must be developed a "long-haul" approach from the economic point of view.
Moreover, this "long?haulVQ approach must take increased cognizance. of the
economic plans, industrial and agricultural development and demographic
changes within the Soviet bloc economy itself,, Certain premises with regard
to Soviet capabilities and intentions, weaknesses and strength must be re-
examined in a new light and within a much more systematic framework tailored
to economic defense requirements,, This image of Soviet economic capabilities
and probabilities must be analyzed in relation to (a) current and long-term
'Soviet objectives, (b) the probable effects of these developments on'Soviet
relationships with the free world, (c) the impact upon the free world and
the obstacles presented to attainment of S. political, economic and stra-
tegic objectives? A program for continued scrutiny of all observable mani-
festations of Soviet economic and trade policy and tactics is required in
order that not only may current situations be met with courses of action
based upon sound research and analysis but also in order that our own objec-
tives may be framed in the light of an appreciation of Soviet capabilities
and limitations,, and so that the United States and the free world countries
may take the necessary initiative to accomplish our long-term objectives.
Accordingly, a second rarer has been prepared by the MDAC staff
which outlines the research and analytical framework within which are identi-
fied the requirements for research ar .,.analys s necessary to the current and
future development of economic policy and programs vis?amvi~ the Soviet bloc,,
This paper is a draft and intended only to serve as a basis for discussion
and as a possible springboard to the development ofa program to which EDAC
resources might be devoted(, This outline attempts to provide, in part, a
framework within which Mr, Schelling?s thesis may be "confirmed, modified
or ref\.ted,04 but also to broaden the scope of that inquiry,, It would be
intended that once there was agreement as to the essential nature and scope
of a research and analysis program consistent with that program
projects and individual requests for the collection, collation,, and analysis
of given aspects of Soviet economic and trade trends and tactics, free world
economic developments, attitudes and actions would be developed. The pro-
gram would serve largely as a means of focusing and orienting current or
contemplated research efforts towards economic defense needs, and maxim@IIu
adaptation and use of existing materials and studies would be made,
The following procedure for developing this program is recommended
for consideration by the Executive Committee;
a) Review and revision of the attached "research framework"
under Executive Committee direction,,
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b) Assignment of given aspects of this program to the
various working groups as appropriate, and to indivi-
dual agencies and to the field in the form of continuing
requirements, projects and. individual requests for
analysis and estimates, (This would encompass an evalu-
ation of available resources, relation to other related
activities in the field of foreign economic policy and,
research and the determination of the end-use of the
products,)
c) Assessment by agreement in the Executive Committee of
the priories renuirements for given features of the re-
search program in tcZmms of policy review requirements.,
CG/COCOM/CHINCDM agenda and related problems,
d) Administrative,, organizational) and budgetary realignments
to carry out the research projects.
Attachment A; Report by Thomas Cp Schelling on "Soviet Economic Trends
and Their Implications for East-Tiest Trade,"
Attachment B; A Draft Framework of Research and Analysis on Soviet Bloc
and `.r^ee World Economic '!.Developments and Their Implications
for Economic Defense
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