LEO CHERNE REMARKS AIRLIE HOUSE CONFERENCE NOVEMBER 12, 1986 - THE INFORMATION REVOLUTION AND THE SOVIET UNION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88B00443R000903690004-4
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 7
• Document Creation Date: December 22, 2016
• Document Release Date: June 17, 2011
• Sequence Number: 4
• Publication Date: November 12, 1986
• Content Type: MISC

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Leo Cherne Remarks
Airlie House Conference
November 12, 1986
The Information Revolution and the Soviet Union
The opening remarks by Bill Casey, the detailed and excellent
content provided by the Issues Papers make vivid indeed the
with
enormity of the challenge/which the Information Revolution con-
fronts the Soviet Union. These more recent challenges are
super-imposed on what had been long intractable problems the
Soviet Union has found difficulty solving.
The structural changes associated with the Information
Revolution are profoundly different from other aspects of moderni-
zation which have occurred during the post-World War period.
"Structural change" occurs infrequently in human history
and is a particularly bloodless phrase for transformations that
can change the destiny of nations, the welfare of peoples,
and even the course of civilization.
Structural changes irreversibly affect power -- economic,
political, and military power. There are virtually no struc-
tural changes which do not have a disruptive effect on the stability
of a society's political and economic system. Most structural
changes inherently alter the distribution of power among states,
and the distribution of*power and expectations within individual
states.
Structural change is always introduced by a new invention
or new technology or conception. The invention of movable type
is an illustration of an essentially technological development
which left virtually nothing unchanged thereafter.
Genuine structural change obsoletes a considerable portion
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of previous human knowledge and has a most destructive effect
upon the prevailing disciplines and doctrines which have served
nations well until the structural change occurred.
The following two quotations are illuminating:
Hans-Dietrich Genscher on December 13, 1983 said the
following: "The international economy Is in the throes of
sweeping structural change that Is transforming the world into
an information society based on high technology. The Federal
Republi.c.of Germany and Western Europe can only maintain their
prosperity by keeping, up with the third'Industrial revolution
emanating from America and Japan,,,
A perception of different character was made by Peter
Drucker In the Spring 1986 issue,of'Foreign Affairs. This is what
Drucker had. to say:
"The talk today is of the 'changing world economy.'
wish to argue that the world economy is not 'changing'; it has
already changed -- in its foundations and in its structure and in all probability the change Is irreversible.
"Within the last decade or so, three fundamental changes have
occurred in the very fabric of the world economy:
"--The primary-products economy has come''uncoupled' from the
industrial economy.
"--In the Industrial economy itself, production has come
'uncoupled' from employment,
"--Capital movements rather than trade (in both goods and
services) nave become the driving force of the world
economy. The two have not quite come uncoupled, but the
link has become loose, and worse, unpredictable. "These
changes are permanent rather than cyclical."
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If the uniqueness of the structural change introduced by
the Information Revolution does not shape our understanding of
the Soviet dilemma and indeed the dilemma which confronts all
of us in what is now a globalized economy, we may well be led
astray in our understanding of possible Soviet responses as
well as of the policy options which confront Western nations
in their relationship to the Soviet Union.
The pre-Information Age problems which have bedeviled the
Soviet Union have led to certain assumptions about their effect
upon the Soviet political economy which. in certain circles of
the United States have reached the level of dogma. It is very
clear that the Soviet Union faces serious and growing economic,
demographic, technological, and managerial problems, I don't
question the reality of those problems, yet I will --be u rg e
that there be a fresh and agnostic analytic effort to reexamine
certain of the conclusions. which have previously been reached.
At the extreme, these conclusions contain the following
elements: The essentiality of total political control will disable
the Soviet Union from-making an adequte adjustment to the Impera-
tives of the Information 44ge and the technological advances which
are assumed to require the injection of significant intellectual
and scientific freedom.
It is assumed that the problems will prove so unmanageable
as to progressively disadvantage the Soviet's industrial and
military capability. It is at the extreme assumed that if sufficient
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time passes, these problems will do the Soviet Union in,
It Is Possible, if not likely, that these judgments are
correct. The absolutely central nature of these Judgments is of
such critical importance, as are the policy options which flow
from them, that it is indispensable that they be subjected to the
most determined expert examination. What makes this particularly
important is that In certain circles the conviction that the
Soviets' very..real problems will in time lead them to self-destruct
has taken on an almost theological and unquestioned immutability.
It Is likely that the information Revolution will make even
more difficult substantial progress;,by the Soviet Union in dealing
with the combination of its chronic and new problems' The sheer
magnitude of the demographic difficulties the USSR faces as the
population of Great Russia declines and that. of Its ethnic
Republics; particularly those which are Moslem, increases, together
with the decline in Soviet GNP, the acute deficiencies in its
agriculture and transportation, its serious health and environmental
problems, the Soviets'.shortage,of hard currency, and the absence
of sufficient consumer goods and housing which make motivated work
and quality difficult to achieve.
There is, however, the possibility that the enormity of the
new difficulties which the Information Age Presents Gorbachev
and the Central Committee may lead to changes previously unlikely.
The assumptions which have been ba$ed on these very real
difficulties may too readily have led us to assume that they would,
in time, and not necessarily a very long period of time, seriously
Impede the Soviet union in its major objectives. Now add to these
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the consequences of the Information Age and the belief is reinforced
that much as.Gorbachev may wish it, there simply cannot be a
relaxation to accomplish. what are called the necessary economic
reforms without sacrificing political control.
In my own personal yiew, several misunderstandings are involved
in this proposition, I think, we misunderstand where the real
restraint on Gorbachev may lie.
We assume a burning desire
for freedom in the Soviet Union. and equate the very real courage
of the dissidents, the refuseniks and other dissenters whose human
rights are curtailed, as the source'which the Soviet Union cannot
let loose, Ju
g-tng simply from the experience I have had with
Russian P tical refug s including t very substantial--number
of J who went a er to Israel the United St s when they
group, n one, whiZhh been willing risk Its life order to
find ancuarY els which ha reater diffi ty with freedom
than do the Russians, either in Israel or the United States, In
my opinion, it is not the fear of a political convulsion mounted
by the Orlovs or Sakharovs which restrain5# Soviet Policy. Whatever
retraint, and it Is substantial, comes from its own nomenclatura the bureaucrats, the elite, the Party members, who not only hold
managerial power and Jealousy guard their advantages, but especially
value the privileges which go with that managerial eminence,
But there is a more powerful force at work, in my opinion,
than even the managerial and political elite. It is the imperative
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of the Information ^A The some structural changes which are
finding us with a serious loss of competitiveness in the freest
society in the world will not find the Soviet Union immune.
And history is not rich with the experience of nations which have
voluntarily committed suicide. States which have long enjoyed
a culture which emphasizes discipline, in which power brings
together effectively. its government purposes, its political policies
and its economic imperatives, have thus far best managed to-meet-
the challenges-which are central in today's competitive world.
I am thinking particularly of Japan. May there not, however, be
some relevance to the Soviet Union in this fact,
solve their'problems.of competition simply by selling to each other.
There are other factors at work: The industrial nations cannot
u,6 . V.
and for -Europe this raises the spectre of the natural affinity
and complementary nature, not only of Germany and the Soviet Union,
but of other nations in Western Europe and the allure, even if
illusory, of the Soviet market,
And there is the critical element of will. We are not the
best example of its existence, The Soviet Union may be, We are
the most advanced in the instruments of communication; the Soviet
Union is often better at achieving the results it seeks. Even the
telecommunications instruments which have been opened up by the
Information Age are more politically productive in the hands of
the Soviet Union than they are in the United States and Western
Europe,
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There must be a reassessment of our central conviction that
the Soviet Union's inability to solve its economic problems
may prove lethal to the Soviet Union, It well may be that that is
the case. If it is, the Soviet Union will probably know that
sooner than we will, and if it is, there is a greater hazard since,
as I said, nations do not commit suicide voluntarily, Will the
Soviet Union seek to break out of its current and growing impotence
by means which are mach more dangerous? The dogma which is
comforting'to us must be challenged by the best brains we have
available, if only to convert dogma 'into, estimates one can responsibly
rely on.
Henry Rowen, now Professor of Public Management at Stamford
University, who. immediately priorwas director of the top analytic
instrument of the CIA, the National intelligence Council, has come
to the view which I summarize all too simply that the Soviet Union '
is.likely to seek to solve its problems with a significant shift
-in its foreign policy intended to attract "relief and help from the
West.
I close with one observation. '
As we examine the difficulties which the Soviet Union is likely
to have in an effective adaptation to the Information Revolution,
let us keep in mind that at least thus far we have not been
spectacularly successful in meeting the some challenges,
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