NATO, Markets, and Russia

Despite the recent declarations, monetary and market glitches are still prolific in Russia. Perhaps the Russian Treasury should consider backing the ruble with gold reserves to ensure its purchasing power. This strategy was quite successful for the DM: When it was introduced in 1948, the DM was worthless. The German government temporarily backed the currency with gold to secure its value on world markets; when conditions improved, the DM abandoned the gold standard and remained a strong trading currency until its abolition in 2002. In 1945 Lord Keynes suggested the same policy to enhance the Pound Sterling, but the Attlee government rejected his advice and ended the Bank of England's dominant international trade role. The Attlee government then joined the IMF-conjured Special Drawing Rights system.

Yes, Russia has made much progress towards developing a free market economy, but it does not seem to have conquered the challenge completely. As Russian military experts and commanders grapple with the issues of restructuring the army, increasing pay from non-existent funds, acquiring new weapons systems, and all the other endless tasks they must solve, NATO may well find it prudent to take a more gradual approach. Dialogue is one aspect; how well Russia will be able to carry its weight in the event the "attack against one is an attack against all" basis of the organization should require Russian soldiers in actual combat is quite another thing. It is essential that Russia eventually be a full partner in NATO, but imposing the rigid requirements of member ship now - like the chemera of Russia's free market economy - at this time seem a bit of a brash rush towards the only partially open gates of a region that is now unable to conceive and apply its full resources.

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