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Fugitive Leverage: Commercial Banks, Sovereign Debt, and Cold War Crisis in Poland, 1980–1982

Published online by Cambridge University Press:  14 June 2016

FRITZ BARTEL
FRITZ BARTEL*
Affiliation:
Fritz Bartel is a Ph.D. student at Cornell University, where he is completing his dissertation, titled The Privatization of the Cold War: Global Finance and the Fall of Communism. E-mail: [email protected]
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Abstract

This article examines a familiar Cold War event, the Polish Crisis of the early 1980s, but from an unfamiliar perspective: international financial history. Historians have yet to examine how the growing international activity of Western commercial banks and the Eastern Bloc’s heavy borrowing on international capital markets during the 1970s influenced the course of the late Cold War. This article covers the history of the Eastern Bloc’s largest borrower—Poland—and its road to sovereign default in 1981. It examines how financial diplomacy among banks, communist countries, and the U.S. government catalyzed the formation of the labor union Solidarność (Solidarity). Ultimately, this article speaks to an important theme in the history of U.S. capitalism since World War II; namely, how the construction of global finance influenced U.S. foreign policy. The end of the Cold War in the fall of 1989 was the result not only of communism’s loss of legitimacy among the peoples of Eastern Europe, but also its loss of creditworthiness on global financial markets.

Type
Articles
Information
Enterprise & Society , Volume 18 , Issue 1 , March 2017 , pp. 72 - 107
Copyright
Copyright © The Author 2016. Published by Cambridge University Press on behalf of the Business History Conference. All rights reserved. 

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References

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Boughton, James. Silent Revolution: The International Monetary Fund, 1979–1989. Washington, DC: The International Monetary Fund, 2001. www.imf.org/external/pubs/ft/history/2001.Google Scholar
Brinkley, Douglas, ed. The Reagan Diaries. New York: Harper Collins, 2007.Google Scholar
Cohen, Benjamin. In Whose Interest? International Banking and American Foreign Policy. New Haven, CT: Yale University Press, 1986.Google Scholar
Domber, Greg. Empowering Revolution: American, Poland, and the End of the Cold War. Chapel Hill: University of North Carolina Press, 2014.Google Scholar
Ferguson, Niall, Maier, Charles S., Manela, Erez, and Sargent, Daniel J., eds. The Shock of the Global: The 1970s in Perspective. Cambridge, MA: Harvard University Press, 2011.Google Scholar
Frieden, Jeffrey. Banking on the World: The Politics of American International Finance. New York: Harper & Row, 1987.Google Scholar
Garton Ash, Timothy. The Polish Revolution: Solidarity. New York: Scribner, 1983.Google Scholar
Halliday, Fred. The Making of the Second Cold War. London: Verso, 1983.Google Scholar
Helleiner, Eric. States and the Reemergence of Global Finance: From Bretton Woods to the 1990s. Ithaca, NY: Cornell University Press, 1994.Google Scholar
James, Harold. International Monetary Cooperation Since Bretton Woods. Washington, DC: International Monetary Fund, 1996.Google Scholar
Judt, Tony. Postwar: A History of Europe Since 1945. New York: Penguin Press, 2005.Google Scholar
Kirshner, Jonathan. Appeasing Bankers: Financial Caution on the Road to War. Princeton, NJ: Princeton University Press, 2007.Google Scholar
Kotkin, Stephen. Uncivil Society: 1989 and the Implosion of the Communist Establishment. New York: Modern Library, 2009.Google Scholar
Kramer, Mark, ed. Soviet Deliberations During the Polish Crisis, 1980–1981. Washington, DC: Cold War International History Project, 1999.Google Scholar
Krayenbuehl, Thomas. Country Risk: Assessment and Monitoring. 2nd ed. Cambridge: Woodhead-Faulkner, 1988.Google Scholar
Lissakers, Karin. Banks, Borrowers, and the Establishment: A Revisionist Account of the International Debt Crisis. New York: Basic Books, 1991.Google Scholar
MacEachin, Douglas. U.S. Intelligence and Confrontation in Poland. University Park: Pennsylvania State University Press, 2003.Google Scholar
Marer, Paul, and Siwiński, Włodzimierz, eds. Creditworthiness and Reform in Poland: Western and Polish Perspectives. Bloomington: Indiana University Press, 1988.Google Scholar
Maxwell, Robert, ed. and trans. Jaruzelski: Selected Speeches. New York: Pergamon Press, 1985.Google Scholar
Ouimet, Matthew. The Rise and Fall of the Brezhnev Doctrine in Soviet Foreign Policy. Chapel Hill: University of North Carolina Press, 2003.Google Scholar
Paczkowski, Andrzej. The Spring Will Be Ours. Translated by Cave, Jane. University Park: Pennsylvania State University Press, 2003.Google Scholar
Paczkowski, Andrzej, and Byrne, Malcom, eds. From Solidarity to Martial Law: A Documentary History. New York: Central European University Press, 2007.Google Scholar
Pautsch, Ilse Dorothe, Taschler, Daniela, Peter, Matthias, Michel, Judith, eds. Akten zur Auswärtigen Politik der Bundesrepublik Deutschland, 1981 III. Munich: Oldenbourg, 2012.Google Scholar
Reinhart, and Rogoff, . This Time is Different: Eight Centuries of Financial Folly. Princeton, NJ: Princeton University Press, 2009.Google Scholar
Sargent, Daniel. A Superpower Transformed: The Remaking of American Foreign Relations in the 1970s. Oxford: Oxford University Press, 2015.Google Scholar
Schmidt, Helmut. Men and Powers: A Political Retrospective. New York: Random House, 1989.Google Scholar
Schweizer, Peter. Victory: The Reagan Administration’s Secret Strategy That Hastened the Collapse of the Soviet Union. New York: Atlantic Monthly Press, 1994.Google Scholar
Spindler, J. Andrew. The Politics of International Credit: Private Finance and Foreign Policy in Germany and Japan. Washington, DC: Brookings Institution, 1984.Google Scholar
Suter, Christian. Debt Cycles in the World Economy: Foreign Loans, Financial Crises, and Debt Settlements, 1820–1990. Boulder: Westview Press, 1992.Google Scholar
Weinberger, Casper. Fighting for Peace. New York: Warner Books. 1990.Google Scholar
Zloch-Christy, Illiana. Debt Problems of Eastern Europe. Cambridge: Cambridge University Press, 1987.Google Scholar
Zloch-Christy, Illiana. East–West Financial Relations: Current Problems and Future Prospects. New York: Cambridge University Press, 1991.CrossRefGoogle Scholar
Zweig, Phillip. Wriston: Walter Wriston, Citibank, and the Rise and Fall of American Financial Supremacy. New York: Crown Publishers, 1995.Google Scholar
Eichengreen, Barry. “Historical Research on International Lending and Debt.” Journal of Economic Perspectives 5, no. 2 (1991): 149–169.Google Scholar
Eichler, Gabriel. “Country Risk Analysis and Bank Lending to Eastern Europe.” In Eastern European Economic Assessment: Part 2–Regional Assessments, pp. 759–775. Washington, DC: Government Printing Office, 1981.Google Scholar
Mastny, Vojtech. “Soviet Non-Invasion of Poland in 1980/81 and the End of the Cold War,” Cold War International History Project, Working Paper No. 23 (Sept. 1998).Google Scholar
Parpart Zoeter, Joan. “Eastern Europe: The Hard Currency Debt.” In Eastern European Economic Assessment: Part 2–Regional Assessments, pp. 716 –731. Washington, DC: Government Printing Office, 1981.Google Scholar
Rynarzewski, Tomasz. “The Debt Crisis in Poland: Causes, Consequences, Prospects.” Kiel Working Papers No. 257, 1986.Google Scholar
Schenk, Catherine. “The Origins of the Eurodollar Market in London: 1955–1963.” Explorations in Economic History 35, no. 2 (1998): 221–238.CrossRefGoogle Scholar
Tavani, Sara. “The Détente Crisis and the Emergence of a Common European Foreign Policy: The ‘Common European Polish Policy’ as a Case Study.” In Europe in a Globalising World: Global Challenges and European Responses in the “Long” 1970s, edited by Hiepel, Claudia, pp. 49–68. Baden-Baden, Germany: Nomos Verlagsgesellschaft, 2014.Google Scholar
Commentary Google Scholar
Economist Google Scholar
Euromoney Google Scholar
Los Angeles Times Google Scholar
New Republic Google Scholar
New York Times Google Scholar
Washington Post Google Scholar
Wall Street Journal Google Scholar
Bank of England (BoE) Archives, London, England.Google Scholar
International Monetary Fund (IMF) Archives, Washington, DC.Google Scholar
Jimmy Carter Presidential Library (JCPL), Atlanta, Georgia.Google Scholar
National Archives and Records Administration, Washington, DC.Google Scholar
National Security Archive (NSA) (Soviet Flashpoints Collection [SFC]), Washington, DC.Google Scholar
Ronald Reagan Presidential Library (RRPL) (National Security Council [NSC]) Simi Valley, California.Google Scholar
United Kingdom National Archives (UKNA), Kew, England.Google Scholar
United States Congress, Senate. Committee of Appropriations, Subcommittee on Foreign Operations. “Polish Debt Crisis.” Washington, DC: Government Printing Office, 1983.Google Scholar
The Reagan Files, www.thereaganfiles.com.Google Scholar
The International Monetary Fund (IMF), www.imf.org/external/index.htm.Google Scholar
Freedom of Information Act (FOIA) Electronic Reading Room, www.foia.cia.gov.Google Scholar
Phillip, Sherman, banker at Citicorp, Oct. 30, 2014.Google Scholar