[lbo-talk] Great Whites

Wojtek Sokolowski sokol at jhu.edu
Mon Jul 18 09:53:09 PDT 2005


Chris:
> AFAIK they portray Russian as imperialist overlords (
> Woj of course knows better than I do.) In Russia,
> however, they remember the government sending food aid
> to Eastern Europe when there was famine in the USSR.
> My experience is that most Russians who have an
> opinion on the matter think that the former Comecon
> countries (and Cuba, etc.) were parasites.

Similar misconceptions were widely-spread among other Warsaw Pact countries i.e. that the lack of consumer goods, especially food items, was due to the fact that they were shipped off to x-USSR. Of course, this is all bollocks for two reasons: (i) central planning was the EE version of austerity measures, i.e. limiting consumption to boost investments, and (ii) since the 1960s the EE foreign debt increased and to keep up with the payments, these countries had to export more, mainly food stuff (since the world markets were already glutted with cheaply produce low-tech goods.

An additional element was hidden inflation, which due to administrative control of prices under central planning was very difficult to control by price adjustments - such efforts usually ended with riots. As a result, the nominal purchasing power of the population was increasing without corresponding increases in productivity, and consequently - supply (remember that central planning was also about import substitution measures, so most consumer goods were domestically produced). This resulted in runs on stores - people were hoarding goods whether they needed them or not because (i) the feared shortages and (ii) they had surplus purchasing power which could not be used (EE currency was not exchangeable for "hared" currency).

So the bottom line is that there are good and plausible economic explanation of the shortages in Comecon countries, none of which involves exploitation and parasitic behaviour of any of the member countries. However, since the knowledge of economic systems, even among the intelligentsia, was dismally low in EE - gossip and myths proved to be far more persuasive.

Wojtek



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