Not Just Another Recession
Why the Global Economy May Never Be the Same
The achievement of a common Soviet-American position on the nonproliferation of nuclear weapons is of major international importance. Whether or not it leads to a treaty obtaining a large number of signatures, the two countries have now formally recognized one of their strongest common interests. What impact this will have on their ability to work together over a wider range of security problems remains to be seen and depends on many other factors. For the moment, the central question is what influence the great powers generally can exert on the non-nuclear powers to refrain from constructing nuclear forces. Once the Soviet, American and British Governments have discovered, as they will, that 125 or more governments cannot and will not bind themselves and their successors to renounce unconditionally weapons which five major powers possess, the hard struggle to resist proliferation can begin in earnest. It starts with the substantial advantage that no non-nuclear country seems at present to be close to a decision to acquire a nuclear force.
With or without a nonproliferation treaty, therefore, we face a substantial task. In the immediate future, as in the immediate past, the significant countries will be those which are capable of taking a decision to develop nuclear forces. A reasonable estimate is that this number now stands at three-Germany, Japan and Canada-with Sweden, Italy and India close behind. To discourage this small but growing group of industrial, non-nuclear countries from developing nuclear weapons is essentially a political problem. In the course of the next fifteen years or so, Australia, the Netherlands, Belgium, Czechoslovakia, Israel, Brazil, Switzerland, the German Democratic Republic and Poland will be among those who might achieve the necessary technical and financial capacity.
In any event, we know that the number of countries able to take the decision to produce nuclear explosives will steadily increase. One factor more than any other will determine the number of governments which will be in a position to make an affirmative choice: that is the extent to which they acquire stocks of plutonium as a by-product of the use of atomic power for producing electricity or for such things as de-salting sea water. These stocks are already being built up in non-nuclear countries like India and Italy (subject in most cases to what are known as international safeguards). If the present cost estimates for the production of nuclear power are accurate, we face a vast increase in these facilities over the coming decades.
The interesting thing about this, however, is that very few non-nuclear countries have any real prospect of developing a nuclear power program on a self-sufficient basis. For the vast majority of countries, the technology is too demanding and too expensive without continuing outside help. While a few countries, like Germany and Japan, may be able to build the facilities, even they rely on foreign sources for their uranium fuel. It may well be that the only non-nuclear country which is wholly self-sufficient both in technology and uranium is Canada-though Sweden has vast uranium reserves, and India, which has moderate uranium reserves, is moving steadily toward self-sufficiency in the construction of nuclear facilities. However this may be, there can be no doubt that for at least 115 of the approximately 130 independent states in the world, the capacity to produce nuclear weapons in this century can be achieved only if others provide them with the essential materials. And as things stand at present, the decisive material is likely to be plutonium-the material from which the bomb dropped on Nagasaki was manufactured.
The production of plutonium for weapons purposes has been carried on in most, if not all, cases in reactors specially designed for weapons programs. But all nuclear reactors produce greater or lesser quantities of plutonium. Just how valuable it is for weapons depends mainly on how the reactor is operated. Official estimates of how rapidly nuclear power stations will be built are notoriously unreliable; but if the U.S. Atomic Energy Commission figure of 100,000 megawatts (electrical) of capacity in the United States in 1980 is remotely near the mark, this would mean a plutonium production of at least 20,000 kilograms, which should be enough for well over 2,000 bombs annually. The figures for the rest of the non- communist world could exceed this by a considerable margin.
Less speculatively, one relatively small nuclear power station which has been built by the British at Latina, in Italy, will provide about 1,000 kilograms of plutonium over ten years. The plutonium is being extracted by Britain (under contract to the Italian authorities) and returned to Italy. This one facility is therefore producing enough plutonium in Italian hands on Italian soil to make between ten and twenty nuclear weapons a year. The United States, Britain, France, Canada, Sweden and West Germany are all hoping to be chosen to build such facilities in many parts of the world. Canada is building comparable installations in India and Pakistan; Britain has done so in Japan; the United States has constructed or is constructing major nuclear power stations in Germany, Belgium, Japan, Italy, the Netherlands and India; and the Soviet Union has built a power station in East Germany and is building a major facility in Czechoslovakia. But these, we are assured, are a mere foretaste. In another generation, immense quantities of plutonium will be coming out of the power stations which are now being planned; and if the promise of fast breeder reactors is fulfilled, they will be put to work in the production of more power and still more plutonium.
The concern of the international community with safeguards against the diversion of plutonium to weapons goes back many years. Complex systems of inspection have been established, bilaterally by such countries as the United States, Britain and Canada; multilaterally by the world community as a whole in the International Atomic Energy Agency; and by six West European countries in Euratom. All these safeguards systems are based on the same principle: inspection to see that materials which might be used for weapons have not been diverted. There has been understandable concern, when dealing with such incredibly powerful substances, that small amounts should not be steadily diverted to a secret stock for weapons. Much skill and intelligence have been devoted to the problem of monitoring "special materials" in the constantly changing technology of nuclear reactors. On the whole, there seems to be some feeling that the problem has not been completely solved and that small diversions remain possible.
Admirable as this work is, there must be the most serious doubts about whether it is relevant. There are cases-Israel, for example-where any nuclear weapons program would probably be clandestine, at least until it was far advanced. But generally speaking, governments which decide to develop these weapons are likely to do so openly. Testing is a particularly public activity; and weapons which are intended to deter must be known to exist.
The real danger with growing stockpiles of plutonium is not diversion but the denunciation of international obligations. This fundamental political reality has been ignored by those who have been giving their minds to the detailed problem of diversion. A decision to produce nuclear weapons is a major choice for any government. Even if it has no other implications, it will certainly cost large sums of money. Such a decision will be taken only because there is a strong conviction that it is necessary. A safeguards system which rests on the premise that governments possessing this conviction will nevertheless abandon their plans because of an inspection agreement made ten, twenty or thirty years before is out of touch with political reality. Unless there is a direct military threat backing it up, this is far too great a load for a treaty to be expected to bear. We are repeating the sort of legalism which led to the supply of arms to Pakistan on the specific understanding that they would not be used against India and to India on the understanding that they would not be used against Pakistan. The United States eventually discovered that this could not work and stopped arms supplies to both. It is likely that before the first government denounces safeguards agreements and employs its plutonium stockpile in a weapons program[i] there will be many thousands of kilograms of plutonium in the possession and ownership of dozens of countries. It will be too late then to start looking at these technological and military facts in realistic political terms. Even without a decision to build nuclear weapons, governments with substantial stockpiles may decide to free them from inspection. Had Britain, for example, built a Latina-type reactor in Egypt in, say, 1952 under agreements made with King Farouk's government, what would be the status of these agreements now? What would have been the attitude of the Nasser régime (especially after Suez) to such a colonialist arrangement? How long would it have taken to create conditions in which it would be impossible for the inspectors to carry out their functions? Suppose the United States had done the same thing in Cuba in 1952 or in Indonesia in 1960. Even without a decision to produce nuclear weapons, the inspection arrangements in cases like these would almost certainly have become a dead letter by now. Through decades of political change, plutonium is unchanging: it remains a substance of potentially immense explosive power. Its diffusion around the world cannot therefore be made politically tolerable by agreements to inspect. Those who feel the need for converting stockpiles into nuclear weapons will denounce the agreements; and many of those who are unsure are likely to find ways of ridding themselves of the inspection.
If this is the central element in the problem of proliferation, it is one which demands urgent action. Many countries are likely to follow Italy in the coming years and be presented with a growing stock of plutonium acquired as a by-product of nuclear reactors built for other reasons. The country seeking electric power or increased supplies of fresh water finds itself investing heavily in plutonium. Although it is a valuable substance because of its possible future as a fuel in fast breeder reactors, few governments (especially in the less developed countries) would consciously invest large sums of foreign exchange in stocks of a fuel which is unlikely to be used for many years. It is important, too, that because they are obliged to buy plutonium as well as power the cost of electric power generation is considerably increased. This only makes sense to the government which is consciously buying an option to build nuclear weapons or one which is wealthy and considers a plutonium stockpile useful insurance for a fast breeder program. For the vast majority of receiving countries it is without justification.
What about the interests of the major industrial powers? If they accept the argument that inspection is not enough, they must soon reëxamine the notion of safeguards. They must ask quite simply what minimum conditions are necessary to justify the transfer of uranium metal or plutonium-producing reactors to others. It is possible, of course, that they will reach the conclusion that the military and political dangers are so great that the construction of these facilities on the soil of other countries or the sale of uranium cannot be justified. Such a sober conclusion would force a most difficult range of decisions on the industrial powers of the world. If nuclear power finally fulfills its promise, it would have to be denied to those who could not develop and build the facilities themselves, nor find uranium of their own. It is hard to imagine any security considerations resisting such powerful economic pressures, at least until the tragic results became so obvious that no one could ignore them.
The political imagination of the international community must recognize that the diffusion of plutonium around the world can have consequences of the utmost importance. It can revolutionize the facts of power, even if only potentially. The potential will be permanently present. So striking a range of physical facts justifies major political action. The creation of the minimum reasonable conditions on which to base reactor diffusion and the sale of uranium will be a major undertaking: if the powers are unwilling to face the implications of this, they should abandon all plans to build reactors in foreign countries or to export uranium.
The minimum reasonable condition is surely to prevent the accumulation of plutonium in the hands of those who import the necessary facilities. At the heart of the problem are the stockpiles of the type now growing in Italy and India. To meet the minimum reasonable political conditions for building reactors or selling uranium, it must surely be agreed that the plutonium coming out of the reactors will pass out of the hands of the receiving country. The simplest and most straightforward way to do this is to have it bought up at an appropriate price as it is produced. This will mean that the agreement be so designed that the recipient country buys power but does not buy plutonium. The investment thereby becomes smaller and the foreign exchange burden is lightened. The government in question-presumably in most cases one with serious problems of poverty-is simply denied the non- military option of speculating in the stockpiling of plutonium and the military option of nuclear explosives. The justification for providing nuclear power plants and their uranium fuel is the production of heat. There is no reason in equity or fair dealing why it should not be confined to that.
But who would buy up the plutonium? There can be little doubt that by far the best system would be an international agency which owned the fuel from the start. It would lease uranium for reactors and therefore own the fuel throughout the process. On taking back the plutonium, it would make the appropriate financial adjustment. Over a period of years, such an agency would certainly acquire vast assets. Equally, however, it would have enormous revenue-earning capacity in its stocks of nuclear fuel. Assuming that prices were set intelligently, it would have assets equal to the substantial resources which had been put into it.
The scope of such an operation should not be underrated. If the enthusiasts turn out to be right, the world could be producing more than fifty tons of plutonium a year in fifteen to twenty years. At present prices, this would be worth more than $1.5 billion. But plutonium would still be in short supply to satisfy the steadily growing demand for power. In any case, we face a preliminary period in which production will not be on this scale and demand will be still less. During this time an investment will have to be made in plutonium, and a buy-back arrangement will shift this investment from those receiving reactors either to the supplying countries or to those who would finance the international agency. When plutonium production reaches the very large scale that many expect, it will, in effect, be financed by those who require it for fast breeder reactors.
These figures would, of course, be considerably reduced if the proposed agency bought up only materials entering international trade. A third or more of the total would be accounted for by the United States alone. An enduring international agency owning, separating, leasing and controlling these materials can presumably be achieved only if the nuclear powers agree that this is the way they, too, must arrange their non-military nuclear activities. It would seem reasonable, however, to justify reactor and uranium exports on a bilateral basis if buy-back arrangements exist for international agreements alone. In the immediate future, the buy-back could be by the exporting country. The idea that this would be an unacceptable burden to the exporting countries is belied by the efforts which are being made to acquire plutonium in the major industrial nations. There is now widespread fear of a shortage when the fast breeders come into their own. The United States has been acquiring plutonium from Britain in exchange for enriched uranium for the British weapons program. And Britain gave the Italian authorities the option of selling back the plutonium produced by Latina, an option which the Italians have not taken up; clearly it would have been no less acceptable to Britain to have had a compulsory buy-back clause. In the present circumstances, at least, we may conclude that there is no evidence that buying back would be unacceptable to the exporting powers.
It is obvious that such an arrangement will be exceptionally difficult to work unless the main exporting powers are in it. Yet even if, say, France refuses to participate, arrangements of this kind will be workable. There are undoubtedly contracts to be had by those who offer the weakest possible safeguards: there is evidence, for example, that the Canadian penetration of India was to some extent influenced by Indian dislike of all forms of safeguards. But all that is needed to make a buy-back arrangement effective is the agreement of the countries which have the best and most economical power stations for export (the United States, Britain, Canada, possibly Germany) and those with the largest supplies of uranium (the United States, Canada, South Africa, later Sweden). A club of these powers can be formed. The Soviet Union and France would have no good reason to resist it. The experience of both Canada and France suggests that countries soon lose their stomach for trying to undersell the United States on safeguards.
Even in the presence of a successful international agency owning ultimately many billions of dollars' worth of nuclear fuel, there would still be serious dangers. The fuel will be spread out around the world in reactors, and a single fast breeder could contain enough plutonium for about 500 bombs (a large part of which would be of particularly good grade for weapons). A government might decide to seize this. All that can be said is that this would mean the loss of the expensive power-generating facility which they had built: the lights, in effect, would go out. And they would be seizing something which unambiguously was not theirs. Many thousands of nuclear weapons are on the soil of the Federal Republic of Germany, and yet the Soviets, in spite of their statements, clearly do not regard these as a danger in any way comparable to even a small German national nuclear weapons force. Ownership is important.
The proposed nonproliferation treaty must be judged primarily for its effect on the growing threat of a worldwide diffusion of plutonium. If it reinforces the false security of the safeguards system by persuading the legalists that no country which has signed is ever capable of building nuclear weapons, it will do a grave disservice to the cause of nonproliferation. It could provide the cover under which the plutonium silently spreads, as it is now spreading to Italy and India. Like a fine row of Georgian houses condemned to come down, everything would be gradually let go. When the houses are finally bulldozed away they have usually become so ramshackle that no one minds. Equally, under the placid rule of safeguards as they are now understood, the plutonium will spread far and wide. When the collapse comes, no one will remember how easy it might have been to hold a narrow ring.
[i] The statements of the then Prime Minister of India, Mr. Nehru, in 1961 that India could make nuclear weapons (but would not because of its anti- nuclear policy) is a good illustration of the realities. He was referring to plutonium derived from the Canada-India Reactor, which is in fact subject to a "peaceful purposes" agreement. The head of the Indian atomic energy program, the late Dr. Homi Bhabha, subsequently said on a number of occasions that at Indian bomb could be built in eighteen months. He was referring to the same plutonium.