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The Triumph of Broken Promises: The End of the Cold War and the Rise of Neoliberalism
A powerful case that the economic shocks of the 1970s hastened both the end of the Cold War and the rise of neoliberalism by forcing governments to impose austerity on their own people.
Why did the Cold War come to a peaceful end? And why did neoliberal economics sweep across the world in the late twentieth century? In this pathbreaking study, Fritz Bartel argues that the answer to these questions is one and the same. The Cold War began as a competition between capitalist and communist governments to expand their social contracts as they raced to deliver their people a better life. But the economic shocks of the 1970s made promises of better living untenable on both sides of the Iron Curtain. Energy and financial markets placed immense pressure on governments to discipline their social contracts. Rather than make promises, political leaders were forced to break them.
In a sweeping narrative, The Triumph of Broken Promises tells the story of how the pressure to break promises spurred the end of the Cold War. In the West, neoliberalism provided Western leaders like Ronald Reagan and Margaret Thatcher with the political and ideological tools to shut down industries, impose austerity, and favor the interests of capital over labor. But in Eastern Europe, revolutionaries like Lech Walesa in Poland resisted any attempt at imposing market discipline. Mikhail Gorbachev tried in vain to reform the Soviet system, but the necessary changes ultimately presented too great a challenge.
Faced with imposing economic discipline antithetical to communist ideals, Soviet-style governments found their legitimacy irreparably damaged. But in the West, politicians could promote austerity as an antidote to the excesses of ideological opponents, setting the stage for the rise of the neoliberal global economy.
Why did the Cold War come to a peaceful end? And why did neoliberal economics sweep across the world in the late twentieth century? In this pathbreaking study, Fritz Bartel argues that the answer to these questions is one and the same. The Cold War began as a competition between capitalist and communist governments to expand their social contracts as they raced to deliver their people a better life. But the economic shocks of the 1970s made promises of better living untenable on both sides of the Iron Curtain. Energy and financial markets placed immense pressure on governments to discipline their social contracts. Rather than make promises, political leaders were forced to break them.
In a sweeping narrative, The Triumph of Broken Promises tells the story of how the pressure to break promises spurred the end of the Cold War. In the West, neoliberalism provided Western leaders like Ronald Reagan and Margaret Thatcher with the political and ideological tools to shut down industries, impose austerity, and favor the interests of capital over labor. But in Eastern Europe, revolutionaries like Lech Walesa in Poland resisted any attempt at imposing market discipline. Mikhail Gorbachev tried in vain to reform the Soviet system, but the necessary changes ultimately presented too great a challenge.
Faced with imposing economic discipline antithetical to communist ideals, Soviet-style governments found their legitimacy irreparably damaged. But in the West, politicians could promote austerity as an antidote to the excesses of ideological opponents, setting the stage for the rise of the neoliberal global economy.
440 pages, Hardcover
First published June 28, 2022
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August 17, 2023
Sublime. A magisterial death sentence.
I haven't read a book this powerful in a while. Bartel turns the reader into a fly on the walls of central banks, ministerial offices and diplomatic conferences to follow the decisive discussions that were to determine the global turn to neoliberalism.
I'll collect my thoughts soon — the book's conclusions are epochal — but chiefly:
— Bartel demonstrates how the scene's big player often failed or succeeded in spite of themselves, perpendicular to their own plans. Reagan set out to "starve the beast" but ended up committing to the greatest deficit spending in history; Volcker's shock succeeded, not due to the expected productivity gains, but on account of foreign capital fleeing into the American fiscal black hole, historically unprecedented. The US couldn't coerce their European allies into withholding credit from the East Bloc, but Volcker's credit witchcraft unexpectedly had the same result. Western liberals and sclerotic communists alike projected unto Gorbachev the image of a democratic capitalist reformer, which wasn't a priority of his, but his attempts to reform the Union's economic engine resulted the unequivocal capitalist restoration. Reagan's tax cuts in a time of inflation on average ended up pushing incomes into higher tax brackets, before the abrupt halt in inflation smothered that fiscal good luck.
Politics is an endless trek through the jungle. Theory and ideology can guide your first three steps, but after those you're groping in the darkness. If someone ends up in a specific spot, don't assume it's because it was their conscious goal — oftentimes circumstances force your step, regardless of ideology. The Polish Communist Party and Solidarnosc both attempted to force austerity onto the Polish workers, neither were ideologically disposed to this, only one managed to see it through.
— "There is no alternative" wasn't just a slogan; it was an accurate observation repeated by committed communists across the curtain. The oil crises and the Volcker shock globally, and lagging productivity for the socialist countries in particular, forced governments around the world to confront the "politics of breaking promises": popular consumption would have to be curbed to free up capital for investment and productivity purposes, labour would have to be disciplined and forced to do more with less, moribund industries allowed to collapse and the labour force tied up in it take it on the chin. For the socialist countries, productivity stagnation forced an early dependence on credit financing (from the West) and cheap resources (from the East). Propping up consumption with these created a social buffer but also an economic tumor.
Social democracy in times of slower growth must necessarily be expressed as neoliberalism. Communism, as the Chinese model... Or, failing to take that route, the post-soviet wastelands. Economic realities created the neoliberal response, which created the neoliberal beneficiaries — not, as conspiracism or vulgar marxism would have it, the other way around.
— the discussion on cybernetics and socialist calculation is a red herring. A hypothetical supercomputer would have done nothing for a socialism dependent on external inputs with fluctuating and uncontrollable prices. The deadlock that broke socialism was political (the incapacity of the soviet state to reform the economy and the unwillingness of the working class to accept a lower standard of living, even temporarily), not technical.
— Fukuyama was close to the mark. Milanovic, in limiting civilizational options to liberal capitalism or political capitalism, even closer. The autonomy of politics from economic classes is underestimated, the autonomy of politics from economics, overestimated. Some liberal economics are apologetics for an elite, but in general it reflects a sincere engagement with real challenges that any system, liberal or not, must confront.
If I recall correctly, in the late 70s, Italian communist and later president Giorgio Napolitano called for unions to limit their demands and drop the 'trade-unionist' particularism in the name of proper communist austerity. The party soon collapsed and the discussion was buried; if anything, the dissolution was blamed on the party's rightward drift. But Bartel shows that he had the finger on the pulse. For the only other option, an exit from economic rationality, we should expand Lenin's dictum, that the proletariat cannot simply seize the state but must smash it, to the the world market itself. Samir Amin's delinking vindicated at last.
I haven't read a book this powerful in a while. Bartel turns the reader into a fly on the walls of central banks, ministerial offices and diplomatic conferences to follow the decisive discussions that were to determine the global turn to neoliberalism.
I'll collect my thoughts soon — the book's conclusions are epochal — but chiefly:
— Bartel demonstrates how the scene's big player often failed or succeeded in spite of themselves, perpendicular to their own plans. Reagan set out to "starve the beast" but ended up committing to the greatest deficit spending in history; Volcker's shock succeeded, not due to the expected productivity gains, but on account of foreign capital fleeing into the American fiscal black hole, historically unprecedented. The US couldn't coerce their European allies into withholding credit from the East Bloc, but Volcker's credit witchcraft unexpectedly had the same result. Western liberals and sclerotic communists alike projected unto Gorbachev the image of a democratic capitalist reformer, which wasn't a priority of his, but his attempts to reform the Union's economic engine resulted the unequivocal capitalist restoration. Reagan's tax cuts in a time of inflation on average ended up pushing incomes into higher tax brackets, before the abrupt halt in inflation smothered that fiscal good luck.
Politics is an endless trek through the jungle. Theory and ideology can guide your first three steps, but after those you're groping in the darkness. If someone ends up in a specific spot, don't assume it's because it was their conscious goal — oftentimes circumstances force your step, regardless of ideology. The Polish Communist Party and Solidarnosc both attempted to force austerity onto the Polish workers, neither were ideologically disposed to this, only one managed to see it through.
— "There is no alternative" wasn't just a slogan; it was an accurate observation repeated by committed communists across the curtain. The oil crises and the Volcker shock globally, and lagging productivity for the socialist countries in particular, forced governments around the world to confront the "politics of breaking promises": popular consumption would have to be curbed to free up capital for investment and productivity purposes, labour would have to be disciplined and forced to do more with less, moribund industries allowed to collapse and the labour force tied up in it take it on the chin. For the socialist countries, productivity stagnation forced an early dependence on credit financing (from the West) and cheap resources (from the East). Propping up consumption with these created a social buffer but also an economic tumor.
Social democracy in times of slower growth must necessarily be expressed as neoliberalism. Communism, as the Chinese model... Or, failing to take that route, the post-soviet wastelands. Economic realities created the neoliberal response, which created the neoliberal beneficiaries — not, as conspiracism or vulgar marxism would have it, the other way around.
— the discussion on cybernetics and socialist calculation is a red herring. A hypothetical supercomputer would have done nothing for a socialism dependent on external inputs with fluctuating and uncontrollable prices. The deadlock that broke socialism was political (the incapacity of the soviet state to reform the economy and the unwillingness of the working class to accept a lower standard of living, even temporarily), not technical.
— Fukuyama was close to the mark. Milanovic, in limiting civilizational options to liberal capitalism or political capitalism, even closer. The autonomy of politics from economic classes is underestimated, the autonomy of politics from economics, overestimated. Some liberal economics are apologetics for an elite, but in general it reflects a sincere engagement with real challenges that any system, liberal or not, must confront.
If I recall correctly, in the late 70s, Italian communist and later president Giorgio Napolitano called for unions to limit their demands and drop the 'trade-unionist' particularism in the name of proper communist austerity. The party soon collapsed and the discussion was buried; if anything, the dissolution was blamed on the party's rightward drift. But Bartel shows that he had the finger on the pulse. For the only other option, an exit from economic rationality, we should expand Lenin's dictum, that the proletariat cannot simply seize the state but must smash it, to the the world market itself. Samir Amin's delinking vindicated at last.
October 20, 2024
Basic thesis is strong. It argues that capitalism survived the crisis during the so called market turn because it was better at breaking promises for a better life than socialism, the latter being predicated upon delivering them.
The author overstates the importance of the so called democratic character of the capitalist countries in comparison to socialist ones, when explaining why people in capitalist countries were willing to suffer through austerity without much political upheaval. It seems to me that the main reason capitalist societies could break promises is because capitalist ideology was and is predicated on “individual responsibility” for one’s well being , with the state only serving to establish the rules of the game, unlike in the Socialist states.
Full review might come in eventually.
The author overstates the importance of the so called democratic character of the capitalist countries in comparison to socialist ones, when explaining why people in capitalist countries were willing to suffer through austerity without much political upheaval. It seems to me that the main reason capitalist societies could break promises is because capitalist ideology was and is predicated on “individual responsibility” for one’s well being , with the state only serving to establish the rules of the game, unlike in the Socialist states.
Full review might come in eventually.
October 13, 2025
Superb reinterpretation of the end of the Cold War as being basically driven by the dislocations caused by oil price shocks and subsequent inflations, combined with a greater willingness of the capitalist class and its political servants in the West to sell their working classes down the river. Basically, the capitalist ruling class was more ruthless than the socialist one with respect to the fate of its workers — a point first made by Maier in Dissolution. The Soviets became willing to give up their empire once it became clear that sustaining it would require endless subsidies. Though the book is focused on Europe, it pairs well with Weber’s How China Avoided Shock Therapy and Feygin’s Building a Ruin as an account of the Cold War’s final phase, and the restructurings that followed in its wake. In essence, the restructuring Europe had to do was to deindustrialize, whereas the one China did was to industrialize. In this sense the book also helps tells the greatest economic story of the last half century, namely how the global manufacturing center of gravity moved from the North Atlantic to China.
It’s silly to reproach books for what they don’t do, but given how focused it is on the imperatives of debt service as the driver of change, I was surprised Bartels has little to say about the 1983 Peso Crisis and the Third World debt crisis more generally as a salutary lesson for the Eastern Europeans of the consequences of debt repudiation.
It’s silly to reproach books for what they don’t do, but given how focused it is on the imperatives of debt service as the driver of change, I was surprised Bartels has little to say about the 1983 Peso Crisis and the Third World debt crisis more generally as a salutary lesson for the Eastern Europeans of the consequences of debt repudiation.
February 12, 2023
He explains how economics determined the fate of the Cold War. This is a welcome theme replacing the antagonistic political power struggle with specific transactions, an interplay of economics and political power. But his good story bogs down in bureaucratese and overloaded words.
By the late 70s, neither West nor East could sustain post-WWII prosperity. Populations in the West (USA and UK) accepted their economies' boom and bust cycles, as well as Govt intervention. But Communist countries expected steady prices and affordable lives. He argues that Volcker's economics were a bigger factor than Reagan's politics.
His themes are solid: economics trumps politics. States delivered what populations expected for prosperity using influence based on rhetoric from their government leadership.
His style makes it difficult: long sentences dense with detail and ornate socio-political jargon. He does helpfully circle back to summarize events but those summaries bring more unexplained abstract concepts "trade union pluralism", "welfare states of the West", "conditions of bipolar political paralysis", "significant price of racial and gender hierarchy in the West". His rhetoric is not helpful.
Missing from his argument is the Vietnam War. For more than a decade, why didn't the USA break the promise that our military would act as the world's policemen? People did recognize the penalty of buying both guns and butter. Maybe his theme is consistent because in this case again "American policy makers could and would ultimately protect the interests of capital over the interests of labor".
By the late 70s, neither West nor East could sustain post-WWII prosperity. Populations in the West (USA and UK) accepted their economies' boom and bust cycles, as well as Govt intervention. But Communist countries expected steady prices and affordable lives. He argues that Volcker's economics were a bigger factor than Reagan's politics.
His themes are solid: economics trumps politics. States delivered what populations expected for prosperity using influence based on rhetoric from their government leadership.
His style makes it difficult: long sentences dense with detail and ornate socio-political jargon. He does helpfully circle back to summarize events but those summaries bring more unexplained abstract concepts "trade union pluralism", "welfare states of the West", "conditions of bipolar political paralysis", "significant price of racial and gender hierarchy in the West". His rhetoric is not helpful.
Missing from his argument is the Vietnam War. For more than a decade, why didn't the USA break the promise that our military would act as the world's policemen? People did recognize the penalty of buying both guns and butter. Maybe his theme is consistent because in this case again "American policy makers could and would ultimately protect the interests of capital over the interests of labor".
May 21, 2024
Fascinating read that tracks the evolutionary steps and effects of neoliberalism on the population of the East and West, through its austerity-driven seed phase during the 1970s, to its eventual blossoming with the elections of both Reagan and Thatcher, and the slow crumbling of the Soviet bloc.
March 4, 2025
An alternative view of the Cold War which emphasises the economic reasons for which the West “won” it.
Bartel takes the oil crisis of 1973 as the beginning of the end of the Cold War, when the subsidised oil that the Soviet Union provided to Comecon countries suddenly became far more valuable. Realising the potential losses which would’ve been incurred by continuing to fix oil prices in five year plans, Comecon lose out and begin to borrow from Western countries and banks to compensate and pay for more imports.
They do this to avoid breaking promises, the key theme of the book. If Comecon nations had carried on with less oil and therefore less consumption, living standards would have declined for their populations. This would’ve been unthinkable for communist leaders driven by ideology and so their decline begins with their borrowing.
This is compared to processes of change in Western nations, with reference particularly made to Thatcher’s Britain and Reagan’s America. Both these leaders make “capitalist perestroikas” which disrupt the worker-focused and unionised economies of the post-war West. Where these leaders succeed in democratically pushing through change which would negatively affect their citizens, communist leaders continue to borrow and live beyond their means.
In short, the Comecon countries relinquish authoritarian rule as they can no longer borrow to maintain living standards and the political price of declining living standards is too high. This is also the driver of Soviet retreat from the Cold War, with West Germany providing billions of deutsche marks for the Soviet Union to leave East Germany - the leverage to do so being the Soviets also coming from indebtedness on the part of the Soviets.
The book is a very interesting examination of why the Cold War ended, putting aside usual narratives about the people of Eastern Europe or Gorbachev being the key actors. Bartel is able to articulate the primacy of economic / financial reasons that drove decision-making and the comparison to a capitalist perestroika is effective to show how the West was able to change politically through democracy.
It explains well how the US became such a financial hegemon in the early 80s, almost by mistake (similar in a sense to Christopher Clark’s Sleepwalkers) - then used this to press an advantage in the Cold War. It doesn’t shy away from assigning responsibility to the USA / IMF as damaging sovereignty of nations (in the wider world as well as Comecon) and specifically mentions their power to force market-oriented reforms in various nations.
The use of primary sources also strengthens the argument. To know that economic concerns were foremost in the minds of so many at the time of these events, demonstrates that economics was at the heart of events we may only think of politically.
E.g. East Germany’s lack of creditworthiness was so severe in the late 80s, from previous borrowing, that they relied on Western finance completely. This began to hamstring their political flexibility, as continued repression may have led to Western creditors withdrawing their offers of loans.
Bartel is able to explain this chain of events from 1973 to 1990 in a concise way, with the logic following through from start to finish. Would recommend for anyone interested in Cold War history.
My minor criticisms of the book are:
- Leaning heavily on memoirs of a few individuals (mostly these are insightful however)
- Not examining in much depth how declining living standards would have been a challenge to legitimacy in Comecon nations
- Not analysing similarities to present day international relations or finance
- Not analysing the finite / precarious aspect of natural resources in economics despite much being said about the importance of energy and oil (and to be even more picky, the economic side of that was led by political choices in 1973 which challenges the book’s overall tone of politics following economics)
But these are very minor!
Bartel takes the oil crisis of 1973 as the beginning of the end of the Cold War, when the subsidised oil that the Soviet Union provided to Comecon countries suddenly became far more valuable. Realising the potential losses which would’ve been incurred by continuing to fix oil prices in five year plans, Comecon lose out and begin to borrow from Western countries and banks to compensate and pay for more imports.
They do this to avoid breaking promises, the key theme of the book. If Comecon nations had carried on with less oil and therefore less consumption, living standards would have declined for their populations. This would’ve been unthinkable for communist leaders driven by ideology and so their decline begins with their borrowing.
This is compared to processes of change in Western nations, with reference particularly made to Thatcher’s Britain and Reagan’s America. Both these leaders make “capitalist perestroikas” which disrupt the worker-focused and unionised economies of the post-war West. Where these leaders succeed in democratically pushing through change which would negatively affect their citizens, communist leaders continue to borrow and live beyond their means.
In short, the Comecon countries relinquish authoritarian rule as they can no longer borrow to maintain living standards and the political price of declining living standards is too high. This is also the driver of Soviet retreat from the Cold War, with West Germany providing billions of deutsche marks for the Soviet Union to leave East Germany - the leverage to do so being the Soviets also coming from indebtedness on the part of the Soviets.
The book is a very interesting examination of why the Cold War ended, putting aside usual narratives about the people of Eastern Europe or Gorbachev being the key actors. Bartel is able to articulate the primacy of economic / financial reasons that drove decision-making and the comparison to a capitalist perestroika is effective to show how the West was able to change politically through democracy.
It explains well how the US became such a financial hegemon in the early 80s, almost by mistake (similar in a sense to Christopher Clark’s Sleepwalkers) - then used this to press an advantage in the Cold War. It doesn’t shy away from assigning responsibility to the USA / IMF as damaging sovereignty of nations (in the wider world as well as Comecon) and specifically mentions their power to force market-oriented reforms in various nations.
The use of primary sources also strengthens the argument. To know that economic concerns were foremost in the minds of so many at the time of these events, demonstrates that economics was at the heart of events we may only think of politically.
E.g. East Germany’s lack of creditworthiness was so severe in the late 80s, from previous borrowing, that they relied on Western finance completely. This began to hamstring their political flexibility, as continued repression may have led to Western creditors withdrawing their offers of loans.
Bartel is able to explain this chain of events from 1973 to 1990 in a concise way, with the logic following through from start to finish. Would recommend for anyone interested in Cold War history.
My minor criticisms of the book are:
- Leaning heavily on memoirs of a few individuals (mostly these are insightful however)
- Not examining in much depth how declining living standards would have been a challenge to legitimacy in Comecon nations
- Not analysing similarities to present day international relations or finance
- Not analysing the finite / precarious aspect of natural resources in economics despite much being said about the importance of energy and oil (and to be even more picky, the economic side of that was led by political choices in 1973 which challenges the book’s overall tone of politics following economics)
But these are very minor!
August 3, 2024
"Neoliberalism - the governing ideology of capital, if nothing else - rose in the late twentieth century because nation-states' dependence on finance capital to fulfill their social contracts rose as well."
The inevitable crises of the West and the Soviet empire come to a head in the 70s with the oil crisis. Bartel doesn't frame this as a battle of ideology so much as economic explanation for the end of the cold war. The "Volcker Shock" in the US, along with tax cuts and the largest peacetime military build-up, made America the "world's largest debtor nation" as it funneled in global financial capital. Due to the transitory nature of liberal democracy, the West was able to "break the promises" (the reoccurring motif for Bartel) set forth by the post-war New Deal state. This was not the same for the Soviet Union and the Eastern Bloc. The ossified nature of the government structure did not allow for changes in the welfare state in the form of austerity needed to handle it's economic crises. A perfect example outlined in Chapter 3: A Tale of Two Crises. Bartel shows how Thatcher was able crush the coal miners strike with the approval of the English citizenry while the rise of Solidarity in Poland was met mass arrests and martial law. This was the big revelation for me from this book. Democracy was able to use its transient and sometimes illusory nature to perform economic discipline on its subjects while the communist bloc could not.
The inevitable crises of the West and the Soviet empire come to a head in the 70s with the oil crisis. Bartel doesn't frame this as a battle of ideology so much as economic explanation for the end of the cold war. The "Volcker Shock" in the US, along with tax cuts and the largest peacetime military build-up, made America the "world's largest debtor nation" as it funneled in global financial capital. Due to the transitory nature of liberal democracy, the West was able to "break the promises" (the reoccurring motif for Bartel) set forth by the post-war New Deal state. This was not the same for the Soviet Union and the Eastern Bloc. The ossified nature of the government structure did not allow for changes in the welfare state in the form of austerity needed to handle it's economic crises. A perfect example outlined in Chapter 3: A Tale of Two Crises. Bartel shows how Thatcher was able crush the coal miners strike with the approval of the English citizenry while the rise of Solidarity in Poland was met mass arrests and martial law. This was the big revelation for me from this book. Democracy was able to use its transient and sometimes illusory nature to perform economic discipline on its subjects while the communist bloc could not.
October 27, 2023
For decades since the end of the Cold War we've been told a certain mythology about the USSR's collapse. That it was the diplomacy of Reagan, the failings of Marxism, the idealogical strength of free market capitalism that overwhelmed the Berlin Wall.
Bartel's analysis reaches further, into the beginnings of the American-led, post WWII system of credit-lending that arose in Europe after the dollar became the world's currency benchmark. This system came to dominate finance even in the Soviet Bloc.
For years, Russia (the imperial seat of the USSR) was able to maintain control and influence over the bloc countries with a crude materials-first system of trade. Russia sold oil and gas at extreme discounts (based on capitalist world pricing per barrel) to its satellite states in return for somewhat shoddily-built goods from those nations. This helped keep things in equilibrium, more or less, and allowed the Soviet nations to guarantee a certain standard of welfare to their people. Their ability to guarantee this standard was, in fact, the primary basis for their legitimacy.
But when the price of oil skyrocketed in the West, Russia wasn't able to sell at such a heavy discount anymore without inviting insolvency in its own nation. The Eastern countries started borrowing escalating amounts of credit from Western banks. To the point where by the 70s some of those nations were almost entirely kept afloat by foreign capitalists. When the bills came due, it was just a matter of time before it all collapsed, and along with it the Soviet Union's main basis for popular legitimacy.
Bartel's most brilliant observation was that this rug-pulling happened at the same time in the West but, due to different idealogical underpinnings, the US and the UK were able to avoid revolt and revolution in a way that the Soviet world was not. In the US, Reagan discovered he could cut welfare while increasing military spending. That exploded the deficit - ironically something he pledged to pay off - but to his administration's surprise, the policy changes resulted in a flood of foreign credit rushing into the country, laying the basis for the credit economy that continues to disassociate US consumer spending from the Treasury's deficit. In the UK, Margaret Thatcher successfully pinned her nation's ailing economy on unions, demonizing organized labor among the electorate (this also happened in the US). In both nations, neoliberals successfully framed issues of social welfare as matters of individual responsibility. Cuts to housing, healthcare, and a slew of other social programs were facilitated with this ideological justification.
By contrast, the Soviets could not perform this idealogical sleight of hand, because their entire reason for being, as Marxist-Leninst communist nations, was to provide for the common welfare. When the money started running out in East Germany and Poland, and political opposition to the ruling elites gathered momentum, the primary response from Soviet-backed regimes was repressive and militaristic. This of course made them seem even more illegitimate, and set in motion grand events. Through it all, the Soviet Union increasingly found itself hard up, unable to keep up the military race against the US that it had sustained for four decades. Bartel's revelations about Gorbachev ditching the military program to save cash - as opposed to the lofty humanitarian vision he proclaimed in public - was exactly the kind of clear eyed and rigorous revisionism you'd want from a book like this.
Bartel's analysis reaches further, into the beginnings of the American-led, post WWII system of credit-lending that arose in Europe after the dollar became the world's currency benchmark. This system came to dominate finance even in the Soviet Bloc.
For years, Russia (the imperial seat of the USSR) was able to maintain control and influence over the bloc countries with a crude materials-first system of trade. Russia sold oil and gas at extreme discounts (based on capitalist world pricing per barrel) to its satellite states in return for somewhat shoddily-built goods from those nations. This helped keep things in equilibrium, more or less, and allowed the Soviet nations to guarantee a certain standard of welfare to their people. Their ability to guarantee this standard was, in fact, the primary basis for their legitimacy.
But when the price of oil skyrocketed in the West, Russia wasn't able to sell at such a heavy discount anymore without inviting insolvency in its own nation. The Eastern countries started borrowing escalating amounts of credit from Western banks. To the point where by the 70s some of those nations were almost entirely kept afloat by foreign capitalists. When the bills came due, it was just a matter of time before it all collapsed, and along with it the Soviet Union's main basis for popular legitimacy.
Bartel's most brilliant observation was that this rug-pulling happened at the same time in the West but, due to different idealogical underpinnings, the US and the UK were able to avoid revolt and revolution in a way that the Soviet world was not. In the US, Reagan discovered he could cut welfare while increasing military spending. That exploded the deficit - ironically something he pledged to pay off - but to his administration's surprise, the policy changes resulted in a flood of foreign credit rushing into the country, laying the basis for the credit economy that continues to disassociate US consumer spending from the Treasury's deficit. In the UK, Margaret Thatcher successfully pinned her nation's ailing economy on unions, demonizing organized labor among the electorate (this also happened in the US). In both nations, neoliberals successfully framed issues of social welfare as matters of individual responsibility. Cuts to housing, healthcare, and a slew of other social programs were facilitated with this ideological justification.
By contrast, the Soviets could not perform this idealogical sleight of hand, because their entire reason for being, as Marxist-Leninst communist nations, was to provide for the common welfare. When the money started running out in East Germany and Poland, and political opposition to the ruling elites gathered momentum, the primary response from Soviet-backed regimes was repressive and militaristic. This of course made them seem even more illegitimate, and set in motion grand events. Through it all, the Soviet Union increasingly found itself hard up, unable to keep up the military race against the US that it had sustained for four decades. Bartel's revelations about Gorbachev ditching the military program to save cash - as opposed to the lofty humanitarian vision he proclaimed in public - was exactly the kind of clear eyed and rigorous revisionism you'd want from a book like this.
October 5, 2023
Decoding the Cold War's End
Discounting new books because of perceived bias often leads to missed opportunities to challenge our political and economic preconceptions and grow intellectually. An example is not critically reading Fritz Bartel’s new book The Trip of Broken Promises: The End of the Cold War and the Rise of Neoliberalism. Bartel’s monograph will enlighten those of all political persuasions, deepening the understanding of the Cold War’s end and the fall of the Iron Curtain.
The author asserts that broken governmental promises to its citizens were endemic to democratic capitalist and communist societies in the 1970’s. The two oil crises disrupted all global economies by dramatically increasing energy prices and reducing supply. As a result, Bartel argues that both Western and communist countries went through perestroika periods to restructure their economies. The democratic capitalist societies responded by instituting fiscal and monetary austerity, which citizens understood and supported. However, the communist governments chose not to go down this path as they believed they would lose popular support. Instead, the Eastern European countries behind the Iron Current responded with calls to Moscow to increase their energy subsidies. However, the Soviet Union faced its energy crisis and reduced its Eastern bloc subsidies.
Eastern European countries sought loans from Western Banks and governments to fill the deficit. They depended highly on Western loans to fund their social contract in the next two decades. As the dependency increased, western lenders demanded increased political democratization and economic liberalization. The Eastern Bloc faced a dilemma – either incurring the wrath of the Soviet Union for straying from communist orthodoxy or retaining popular support. Increasingly, countries like Poland, Czechoslovakia, and Hungary chose to give in to Western lenders’ demands. The Soviet Union realized it did not possess the economic power to wage war to retain the Warsaw Pact and let the democratization and economic liberalization processes unfold.
Based upon extensive archival research, Bartel’s description of coincident German unification is fascinating. The East German government faced similar choices as the Eastern Bloc. West German Chancellor Helmut Kohl masterfully played his economic advantages into peaceful reunification. The German negotiations and agreement with the Soviet Union to remove their 370,000 troops are the book highlights.
Lastly, Bartel offers a controversial rationale for the fall of the Soviet Union. He argues that Reagan’s Star Wars and military build-up played only a minor part in the Soviet Union’s demise. Alternatively, he argues that the Soviet Union could not keep its promises to its citizens due to the energy crisis and the resulting economic malaise, losing popular support.
While focused on the end of the Cold War period, Bartel’s work illustrates essential contemporary lessons. Politicians who undermine citizen support by pitting factions against each other or advocate breaking promises are dangerous to society. A vigilant citizenry must hold politicians accountable to democratic principles and just policies. Breaking promises is a perilous business.
Discounting new books because of perceived bias often leads to missed opportunities to challenge our political and economic preconceptions and grow intellectually. An example is not critically reading Fritz Bartel’s new book The Trip of Broken Promises: The End of the Cold War and the Rise of Neoliberalism. Bartel’s monograph will enlighten those of all political persuasions, deepening the understanding of the Cold War’s end and the fall of the Iron Curtain.
The author asserts that broken governmental promises to its citizens were endemic to democratic capitalist and communist societies in the 1970’s. The two oil crises disrupted all global economies by dramatically increasing energy prices and reducing supply. As a result, Bartel argues that both Western and communist countries went through perestroika periods to restructure their economies. The democratic capitalist societies responded by instituting fiscal and monetary austerity, which citizens understood and supported. However, the communist governments chose not to go down this path as they believed they would lose popular support. Instead, the Eastern European countries behind the Iron Current responded with calls to Moscow to increase their energy subsidies. However, the Soviet Union faced its energy crisis and reduced its Eastern bloc subsidies.
Eastern European countries sought loans from Western Banks and governments to fill the deficit. They depended highly on Western loans to fund their social contract in the next two decades. As the dependency increased, western lenders demanded increased political democratization and economic liberalization. The Eastern Bloc faced a dilemma – either incurring the wrath of the Soviet Union for straying from communist orthodoxy or retaining popular support. Increasingly, countries like Poland, Czechoslovakia, and Hungary chose to give in to Western lenders’ demands. The Soviet Union realized it did not possess the economic power to wage war to retain the Warsaw Pact and let the democratization and economic liberalization processes unfold.
Based upon extensive archival research, Bartel’s description of coincident German unification is fascinating. The East German government faced similar choices as the Eastern Bloc. West German Chancellor Helmut Kohl masterfully played his economic advantages into peaceful reunification. The German negotiations and agreement with the Soviet Union to remove their 370,000 troops are the book highlights.
Lastly, Bartel offers a controversial rationale for the fall of the Soviet Union. He argues that Reagan’s Star Wars and military build-up played only a minor part in the Soviet Union’s demise. Alternatively, he argues that the Soviet Union could not keep its promises to its citizens due to the energy crisis and the resulting economic malaise, losing popular support.
While focused on the end of the Cold War period, Bartel’s work illustrates essential contemporary lessons. Politicians who undermine citizen support by pitting factions against each other or advocate breaking promises are dangerous to society. A vigilant citizenry must hold politicians accountable to democratic principles and just policies. Breaking promises is a perilous business.
February 10, 2025
This year, I've made an effort to understand Soviet history because I feared all I knew was American propaganda. I've read Gulag Archipelago by Solzhenitsyn, A People's Tragedy (The Russian Revolution) by Figues and now this by Bartel. My understanding of what happened in the past 100 years in Russia feels adequate now for a foreign nonspecialist. I heartily recommend this trifecta if you feel like I did.
This book specifically taught me that most people don't have any idea what's going on in the world. We are worried about the price of eggs while international financiers are making multi billion dollar loans. Also, I realized that communism really sought to give people a better life. The system is fundamentally flawed because it relies on excessive concentration of power and in practice there's no reward for making an effort as a worker/entrepreneur. History is written by the winners and you'll see how and why neo-liberalism defeated socialism, for better or for worse.
Although I enjoyed reading this book each day, I felt a little bogged down with details near the end. Bartel has amazing knowledge on the subject and this analysis is a treasure. He repeats "breaking promises" a little too often, but that doesn't satisfy the function of unifying the disparate stories. (It actually feels a little heavy handed sometimes.) Historical analyses can often feel heavy on details, especially when the author is so well informed. Bartel didn't find a way to escape that. In this case, basically each chapter is how a different country handled breaking the extravagant promises of the post WW2 era.
Nonetheless, it's a minor criticism. This book is totally worth reading.
This book specifically taught me that most people don't have any idea what's going on in the world. We are worried about the price of eggs while international financiers are making multi billion dollar loans. Also, I realized that communism really sought to give people a better life. The system is fundamentally flawed because it relies on excessive concentration of power and in practice there's no reward for making an effort as a worker/entrepreneur. History is written by the winners and you'll see how and why neo-liberalism defeated socialism, for better or for worse.
Although I enjoyed reading this book each day, I felt a little bogged down with details near the end. Bartel has amazing knowledge on the subject and this analysis is a treasure. He repeats "breaking promises" a little too often, but that doesn't satisfy the function of unifying the disparate stories. (It actually feels a little heavy handed sometimes.) Historical analyses can often feel heavy on details, especially when the author is so well informed. Bartel didn't find a way to escape that. In this case, basically each chapter is how a different country handled breaking the extravagant promises of the post WW2 era.
Nonetheless, it's a minor criticism. This book is totally worth reading.
March 19, 2023
Makes a strong, clear yet detailed and convincing case about how the oil crises of the 70s created a new set of economic circumstances which ultimately led to the collapse of communism.
I hesitated between 4 and 5 stars, for two reasons.
The first is that some passages are maybe a bit too detailed or, rather, repetitive. This is mainly due to the choice made to describe what happened in Poland, Hungary and East Germany separately, despite the many similarities. With that said, the approach does help bring to light the nuances and differences.
The second is that, by sticking close to what actually happened and the decisions that were actually made rather than exploring possible alternatives, one is left with the impression that the neoliberal turn was really the only viable option available. It is not clear to what extent this is intentional on the part of the author. I decided to give him the benefit of the doubt as, ultimately, the book is more about the interplay between economics and politics than it is about whether the rise of neoliberalism was inevitable.
I hesitated between 4 and 5 stars, for two reasons.
The first is that some passages are maybe a bit too detailed or, rather, repetitive. This is mainly due to the choice made to describe what happened in Poland, Hungary and East Germany separately, despite the many similarities. With that said, the approach does help bring to light the nuances and differences.
The second is that, by sticking close to what actually happened and the decisions that were actually made rather than exploring possible alternatives, one is left with the impression that the neoliberal turn was really the only viable option available. It is not clear to what extent this is intentional on the part of the author. I decided to give him the benefit of the doubt as, ultimately, the book is more about the interplay between economics and politics than it is about whether the rise of neoliberalism was inevitable.
December 30, 2025
With some impressive archival research, argues for a narrative at the 1973 oil crisis forcing austerity - but also shifting politics to be about access to capital markets (and energy). Yet the narrative does not hold up as much, as for Eastern Europe the transformation of debt-dependence emerged before 73 already even if the year would prove to extend and deepen this trend with the growth of capital markets due to the issues of their command economics; and the argument that austerity was unavoidable and liberalism & democracy provides the unique difference for why austerity worked in the West and not East has some large faults.
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September 20, 2025Great book. Argues that the U.S. won the Cold War because it was easier for the U.S. government than for the Soviet Union to push austerity during the economic downtown. In the U.S., citizens feel they have a hand in their government, whereas citizens in the Soviet bloc expected leadership to provide the social benefits. When it didn't, they got angry. The Soviet Union gave up, and gave in to the neoliberal economic order. Meanwhile, the U.S. already had, having convinced the citizens there is no alternative.
February 7, 2024
A really incredible study of the economic factors underpinning the final decades of the Cold War. While most books dealing with the period treat the collapse of the Eastern European socialist bloc with triumphalism, this book doesn’t shy away from the harsh implications of the end of socialism for the people who lived it.
July 31, 2025
Fantastic book. Capital markets and oil volatility helped bring down the communist bloc, which couldn’t project legitimacy. they couldn’t reform without breaking their social contract. I suspect China has taken that lesson seriously…maybe too seriously…because it’s terrified of rebalancing its economy. Genuine rebalancing would mean confronting a new struggle for legitimacy.
November 4, 2024
Chicas lo leí para el cole pero me ha encantado! Relato no triunfalista y que no cae en una explicación teleológica sobre por qué el bloque socialista se descompone a finales del s. XX y a la vez no recurre a una explicación basada en "incompetencia".
November 20, 2025
Fantastic look at the economic trouble both superpowers faced going into the 1980s and how their reactions led to the end of the Cold War.
September 12, 2025
The central thesis, of (successfully) making broken promises is a perspective I’ve not come across. It’s pretty convincing, especially as “Western” states were able to. I’d be interested in this framework in a non-Cold War framing (maybe Napoleonic period..?).
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