2 - Great Britain

Summary

The Soviets deployed a performative politics of the market everywhere they went, but they used with particular insistence in Great Britain. The British economy had performed well in the postwar period, but its industry was losing out to competitors in continental Europe and Japan. This was something the Soviets liked to point out, and often. But Great Britain had a unique advantage: a still international currency with relatively deep captial markets. It is in this ambit that the British sought, in 1964, a competitive edge over its allies for Soviet business. In order to counter rising competition – and against strong American pressure – the British offered to liberalize parts of its national economy and to offer better and temporally longer finance for Soviet purchases of British industrial products. In doing so, they breached financing practices from the 1930s. The Soviets then used these new terms to pressure other European countries into better financial arrangements for their deal-making. The promotion of market practices of competition, the Soviets understood, could be achieved through financial competition in the absence of integrated global markets for industrial commodities. British financiers would be the bearers of the political transformation the Soviets sought and strove for in the world economy.