The market speaks

August 23, 1991

An intriguing sideshow of this tumultuous week has been the wild gyrations in the stock market in reaction to the abortive coup in the Soviet Union. On Monday the Dow Jones Average dropped more than 70 points; on Wednesday the loss was erased by a gain of nearly 90 points. But when we look at the individual company listings in the fine print, we hear an intriguing message from the collective financial community.

Consider the performance of three stocks on the New York Stock Exchange on Wednesday, the day the right-wing coup in the Soviet Union collapsed. Archer Daniels Midland, a company which has extensive agricultural connections with the Soviet Union, saw a rise of 6 percent in the value of its stock on a single day. General Motors, America's largest automobile maker, also saw its stock go up 6 percent in one day of trading. Conversely, General Dynamics, one of the leading defense contractors, saw its stock fall by 6 percent in the same trading session.

The difference? Archer Daniels Midland wants to sell food to the Soviets. General Motors would dearly love to see a Chevrolet in every Russian garage. And General Dynamics sells the weapons of war. So the message of the market was clear: The outlook for the sale of food and cars is good; the outlook for the sale of ## armaments is dismal. Or put another way, it was a great day for the trade of peace, and a terrible day for the trade of war.

It is also noteworthy that on Monday, when it appeared that the hard-line right wing was back in control in the Soviet Union, the right wing in America was also crowing that the overthrow of Gorbachev had proved it was right. Among those who made himself available to every radio and TV talk show was Frank Gaffney, one of the unregenerate right of the Reagan defense establishment. Barely able to disguise his glee, Gaffney said the coup proved that his warnings were right, that America must forget about cutting the defense budget and speed up development of "Star Wars."

Well, needless to say, Gaffney and his ilk were nowhere to be found on Thursday. It was as if they had joined their fellow hard-liners in the Soviet Union and fled to some undisclosed location.

Democracy has spoken; the market has spoken. And they tell us that it's time to relegate the right wing, in both the Soviet Union and in America, to the ash heap of history, and get on with the competition of peace -- trade in food and consumer goods.

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