Soviet "imperialism"

Louis N Proyect lnp3 at columbia.edu
Thu Aug 1 10:46:18 MDT 1996


Although it is impossible precisely to evaluate the gains and losses in
intra-Comecon trade it is generally agreed that the USSR was
subsidizing Eastern Europe and that over time this subsidy was rising
largely because of the growing opportunity costs involved in supplying
the group with 'hard' commodities such as oil. Up to the mid-1970s the
Soviet Union was apparently willing to pay this price in return for
politically stable and loyal allies; up to the 1973 oil-price explosion the
only way in which the subsidy was reduced was the Soviet insistence
that East European countries contribute to the development of its
resources. During the 1970s, however, it became clear that the terms
of trade of 'hard' goods would continue to rise and that East European
countries would not be able to reduce the subsidy for the following two
reasons: first, because they incurred, in some cases considerable,
convertible currency debts so their ability to buy oil in non-Comecon
markets was severely restricted, and secondly, the imports of Western
technology initially undertaken in the hope that the 'softness' of East
European manufactures would be reduced did not result in a direct
improvement (and could, as in the case of Poland, lead to severe strain
and eventual collapse). On the other hand, the USSR is in no position
to continue to subsidize Eastern Europe indefinitely. There are several
reasons for this. First, the Soviet economic growth has declined to
unprecedently low rates; secondly, the oil industry is experiencing
difficulties in securing adequate supplies for the 1980s; thirdly, the
Soviet Union is forced to continue to spend substantial hard currency
outlays on the import of grain; and fourthly, it undertook to subsidize
the developing members of Comecon--Cuba, Mongolia and most
recently Vietnam.

(From "Red Markets" by Vladimir Sobell. The book evolved out of Dr.
Sobell's PhD thesis at Oxford University and is generally not available
in Trotskyist bookstores)

Louis Proyect



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