What do you think?
Rate this book
Disruption: The Global Economic Shocks of the 1970s and the End of the Cold War
In
Disruption
, Michael De Groot argues that the global economic upheaval of the 1970s was decisive in ending the Cold War. Both the West and the Soviet bloc struggled with the slowdown of economic growth; chaos in the international monetary system; inflation; shocks in the commodities markets; and the emergence of offshore financial markets. The superpowers had previously disseminated resources to their allies to enhance their own national security, but the disappearance of postwar conditions during the 1970s forced Washington and Moscow to choose between promoting their own economic interests and supporting their partners in Europe and Asia.
De Groot shows that new unexpected macroeconomic imbalances in global capitalism sustained the West during the following decade. Rather than a creditor nation and net exporter, as it had been during the postwar period, the United States became a net importer of capital and goods during the 1980s that helped fund public spending, stimulated economic activity, and lubricated the private sector. The United States could now live beyond its means and continue waging the Cold War, and its allies benefited from access to the booming US market and the strengthened US military umbrella. As Disruption demonstrates, a new symbiotic economic architecture powered the West, but the Eastern European regimes increasingly became a burden to the Soviet Union. They were drowning in debt, and the Kremlin no longer had the resources to rescue them.
De Groot shows that new unexpected macroeconomic imbalances in global capitalism sustained the West during the following decade. Rather than a creditor nation and net exporter, as it had been during the postwar period, the United States became a net importer of capital and goods during the 1980s that helped fund public spending, stimulated economic activity, and lubricated the private sector. The United States could now live beyond its means and continue waging the Cold War, and its allies benefited from access to the booming US market and the strengthened US military umbrella. As Disruption demonstrates, a new symbiotic economic architecture powered the West, but the Eastern European regimes increasingly became a burden to the Soviet Union. They were drowning in debt, and the Kremlin no longer had the resources to rescue them.
324 pages, Hardcover
Published March 15, 2024
Ratings & Reviews
Friends & Following
Create a free account to discover what your friends think of this book!
Community Reviews
Displaying 1 - 1 of 1 review
September 19, 2026
Economic historians treat the late twentieth century as an era of upheaval, yet economics barely figures in the scholarship on how the Cold War ended. The triumphalist account of America's role has lost ground, since the archives don't support the claim that Reagan had a grand strategy that brought the Soviet bloc to its knees. The current historiographical consensus instead puts Gorbachev at the center: he wound down the arms race, cooled superpower tensions, opened room for political change behind the Iron Curtain, and pulled Soviet troops out of Afghanistan. Newer work grounded in the documentary record tells a more interesting story, in which Reagan's military buildup, economic statecraft, and diplomacy worked alongside Gorbachev's initiatives and shifts in the international system. An emergent historiographical camp looks elsewhere, to social movements and changing international norms as the forces that drove political change and halted the arms race.
De Groot’s book puts economics at the top of the causal hierarchy for the explanation of the end of Cold War, joining other recent scholarship in the same vein, like Yakov Feygin’s Building a Ruin. De Groot places, energy, debt, trade, finance, and monetary policy at the forefront of his explanation for the transformation of security architectures — in this sense it dovetails also with the current strong consensus, as promoted above all by Arne Westad, that the Global Cold War is best understood as rivalry between different developmental models — bringing this argument back from the Global South into the story about Eastern European communism.
What becomes really clear across de Groot’s narrative is that the central logic that drove decision-making across both sides of the Iron Curtain was the absolute priority of keeping capitalist creditors whole. This is the olden thread that runs through everything from the Eastern bloc’s balance of payments problems with western banks, the austerity politics in the west, the hard money policies of Volcker and the handling of the peso crisis — de Groot touches briefly on the third world debt crisis of 1982-3 and the Plaza Accords of 1985 as pivotal events. Shifts in policy from laissez-faire to interventionism, from austerity to stimulus, and so on were in each case guided by the imperative that creditors should never (or at least as rarely as possible) lose.
Comparing de Groot and Feygin’s analysis is also useful. For de Groot, the causal engine is external and imperial: the superpowers built welfare empires in which resources flowed to their allies, and the adaptability of those empires under economic shock decided the Cold War. Perestroika appears as an accelerant inside a crisis whose clock started with the 1970s shocks. By contrast, Feygin's thesis locates the fault line inside the Soviet state. He argues the decisive problem was a contradiction created by trying to move from Stalinist mass mobilization to a consumer society, with old-guard management cadres fighting reformers over central planning and the USSR's relation to the global economy, tensions policymakers never resolved. His hinge is Khrushchev and the Kosygin reforms. Gorbachev is the final round of a decades-old factional argument.
In other words, between Feygin and DeGroot, we have a classic Aussenpolitik-v-Innenpolitik debate, and as usual they both have merits — each one's gap is the other's strength, and in fact they share a lot. Both treat the Cold War as a contest judged by Western economic yardsticks, and both see Gorbachev as finishing a process rather than starting one. The difference is where they put the cause. De Groot asks why the bill came due when it did and why the bloc couldn't pay it; Feygin asks why the Soviet system couldn't reorganize itself to pay.
Small critique: “Many socialist elites in the 1970s believed that they held the initiative in the Cold War and did not realize that a financial sword of Damocles was rising over the bloc.” (8) and “The debt placed a financial noose around the neck of the regimes, and the Soviet leadership recognized already in the late 1970s and early 1980s. The Soviets did not have the ability to remove it.” (10) So which was it: in the late 1970s were they insouciant — or did they realize they were doomed?
“The West’s great achievement during the Cold War was mobilizing the combined power of the core capitalist countries and defying communist declarations that intracapitalist conflict would erupt. Memories of the 1930s and concerns about Soviet power provided incentives for the industrial democracies to stay together, and the inverted US welfare empire provided a new structural framework that sustained the west.” (10)
“Two essential factors caused the collapse of the Soviet bloc. First, the accumulation of debt behind the Iron Curtain in the 1970s and 1980s distinguished Eastern Europe from other communist countries. The Soviet bloc could sustain itself as a relatively closed system because the regimes had the ability to crack down on their populations without fear of reprisal from the West, as the Hungarian Revolution and the Prague Spring demonstrated. The situation changed when the Eastern European regimes turned to a strategy of debt-led development during the late 1960s and early 1970s. Eastern Europe effectively cast its die. As the twin energy crises in the mid-1970s hit, the regimes continued to draw on Western credits to finance imports instead of limiting consumption.
Western goods allowed the regimes to postpone a reckoning but did nothing to resolve the underlying problems. The Volcker shock reoriented global financial flows and precipitated a debt crisis behind the Iron Curtain, first erupting in Poland and then spreading to the other Eastern European countries. By this point, Soviet socialism not only lacked ideological appeal; it also depended on Western. life support to exist.” (214)
De Groot’s book puts economics at the top of the causal hierarchy for the explanation of the end of Cold War, joining other recent scholarship in the same vein, like Yakov Feygin’s Building a Ruin. De Groot places, energy, debt, trade, finance, and monetary policy at the forefront of his explanation for the transformation of security architectures — in this sense it dovetails also with the current strong consensus, as promoted above all by Arne Westad, that the Global Cold War is best understood as rivalry between different developmental models — bringing this argument back from the Global South into the story about Eastern European communism.
What becomes really clear across de Groot’s narrative is that the central logic that drove decision-making across both sides of the Iron Curtain was the absolute priority of keeping capitalist creditors whole. This is the olden thread that runs through everything from the Eastern bloc’s balance of payments problems with western banks, the austerity politics in the west, the hard money policies of Volcker and the handling of the peso crisis — de Groot touches briefly on the third world debt crisis of 1982-3 and the Plaza Accords of 1985 as pivotal events. Shifts in policy from laissez-faire to interventionism, from austerity to stimulus, and so on were in each case guided by the imperative that creditors should never (or at least as rarely as possible) lose.
Comparing de Groot and Feygin’s analysis is also useful. For de Groot, the causal engine is external and imperial: the superpowers built welfare empires in which resources flowed to their allies, and the adaptability of those empires under economic shock decided the Cold War. Perestroika appears as an accelerant inside a crisis whose clock started with the 1970s shocks. By contrast, Feygin's thesis locates the fault line inside the Soviet state. He argues the decisive problem was a contradiction created by trying to move from Stalinist mass mobilization to a consumer society, with old-guard management cadres fighting reformers over central planning and the USSR's relation to the global economy, tensions policymakers never resolved. His hinge is Khrushchev and the Kosygin reforms. Gorbachev is the final round of a decades-old factional argument.
In other words, between Feygin and DeGroot, we have a classic Aussenpolitik-v-Innenpolitik debate, and as usual they both have merits — each one's gap is the other's strength, and in fact they share a lot. Both treat the Cold War as a contest judged by Western economic yardsticks, and both see Gorbachev as finishing a process rather than starting one. The difference is where they put the cause. De Groot asks why the bill came due when it did and why the bloc couldn't pay it; Feygin asks why the Soviet system couldn't reorganize itself to pay.
Small critique: “Many socialist elites in the 1970s believed that they held the initiative in the Cold War and did not realize that a financial sword of Damocles was rising over the bloc.” (8) and “The debt placed a financial noose around the neck of the regimes, and the Soviet leadership recognized already in the late 1970s and early 1980s. The Soviets did not have the ability to remove it.” (10) So which was it: in the late 1970s were they insouciant — or did they realize they were doomed?
“The West’s great achievement during the Cold War was mobilizing the combined power of the core capitalist countries and defying communist declarations that intracapitalist conflict would erupt. Memories of the 1930s and concerns about Soviet power provided incentives for the industrial democracies to stay together, and the inverted US welfare empire provided a new structural framework that sustained the west.” (10)
“Two essential factors caused the collapse of the Soviet bloc. First, the accumulation of debt behind the Iron Curtain in the 1970s and 1980s distinguished Eastern Europe from other communist countries. The Soviet bloc could sustain itself as a relatively closed system because the regimes had the ability to crack down on their populations without fear of reprisal from the West, as the Hungarian Revolution and the Prague Spring demonstrated. The situation changed when the Eastern European regimes turned to a strategy of debt-led development during the late 1960s and early 1970s. Eastern Europe effectively cast its die. As the twin energy crises in the mid-1970s hit, the regimes continued to draw on Western credits to finance imports instead of limiting consumption.
Western goods allowed the regimes to postpone a reckoning but did nothing to resolve the underlying problems. The Volcker shock reoriented global financial flows and precipitated a debt crisis behind the Iron Curtain, first erupting in Poland and then spreading to the other Eastern European countries. By this point, Soviet socialism not only lacked ideological appeal; it also depended on Western. life support to exist.” (214)
Displaying 1 - 1 of 1 review