In what is now Paraguay, in the 17th and 18th centuries, the Jesuits established a socialist society with a peak population of about 200,000 inhabitants. They showed military prowess, and there were persistent rumors of great wealth. But when the community finally collapsed, the storehouses were empty. Their economy had been completely unprofitable.
Now we have seen the collapse of a much larger socialist economy, that of the Soviet Union. Once again, estimates of its supposed prosperity have proved misleading. In the 1960s, the CIA claimed that the Soviet economy, said to be growing at the rate of 9% a year, would overtake ours in the 1980s. As recently as last November, Time magazine published CIA statistics claiming that the Soviet economy in 1990 ($2.66 trillion) was substantially larger than that of Japan ($2.115 trillion)--an absurdity.
In the last few months, estimates of the size of the Soviet gold reserve have likewise dwindled by a factor of 10 or more. A 1985 estimate of 2,500 tons of gold was reduced to 240 tons last month. No Westerner has yet seen this this putative reserve, however. Possibly, it never did exist outside the three ingots on display in the Kremlin Museum. (The Soviets mined gold, but they may have been so strapped for cash that every ingot was sold right away on world markets for hard currency.)
Now the Soviet nuclear arsenal is in the news. "Let's assume that they've got 25,000 to 30,000 warheads, that's a ballpark figure," Defense Secretary Dick Cheney said last month. Note the lack of precision. The figures always come with a large margin of error. I asked Richard Perle, who was assistant secretary of defense in charge of arms control in the Reagan years if it was possible that the Soviet warhead numbers will go the way of their GNP. "We have a better fix on the warheads," he said. "We spent a lot of money to count them right." Still, he went on, "you can't rule out the possibility that there were a lot of dummies."
Production lines were not observed directly; output was deduced by observing the manpower and resources allocated to the weapons. Sea-launched nuclear weapons were inferred by counting the number of submarines and then multiplying the number of missile tubes they held by the number of warheads each missile could carry. Possibly, Perle said, half of the tubes will turn out to have been empty. On the whole, though, he believes the numbers that we have been hearing about in recent weeks will prove to be accurate.
Kenneth Adelman, who was U.S. arms control director when Perle was at the Pentagon, also feels that the numbers will hold up. In his book "The Great Universal Embrace," Adelman reports that the United States may have actually underestimated the Soviet arsenal in the short-range category. But he told me something very peculiar about U.S.-Soviet arms-control negotiations in the mid-1980s: Estimates of the size of the Soviet arsenal were actually furnished by the CIA. Our side would show up at Geneva with the data about our missiles--and about theirs. Apparently these estimates were accepted without argument by the Soviets. This only reinforced a suspicion in my mind that all along we had been negotiating with ourselves.
The consensus among the experts is that communist governments divert resources to the military first and foremost. Thus a large nuclear arsenal is not only consistent with an impoverished economy, but also the cause of it. That may be true. I have no countervailing expertise. But I remain suspicious. Assembling nuclear weapons is expensive. It may turn out that they had enough weapons to scare us, enough to detonate in occasional, conspicuous tests, but not tens of thousands of them.
My guess is that the more we learn about the former Soviet Union, the more it will be shown to have been a Potemkin Village on a massive scale. A facade of bogus statistics concealed an unproductive tyranny that some Western intellectuals were disposed to believe in because it seemed, for a while, to be in the vanguard of progressivism. The left, vocal in its criticisms of the CIA, never objected to the agency's figures showing rapid Soviet economic growth. Notice also that the Soviet ruling class and our defense Establishment had their own reasons for accepting the false GNP numbers. They both reassured their leaders that their system worked more or less as their propaganda said it did, and established a rationale for a big defense Establishment here.
In the months ahead, then, if we hear reports that some of their nuclear warheads seem to be "missing," keep in mind the possibility that they never did exist in the first place.