Communist “Common Market” NEW EMPHASIS ON JOINT PLANNING

Press, Volume XCVIII, Issue 28936, 2 July 1959, Page 10

Communist “Common Market” NEW EMPHASIS ON JOINT PLANNING

IBV

ISAAC DEUTSCHER]

London, June 12.—The s< *' lct news agency, Tass, an ®°J* nc * d recently that in May “?* called Council of Mutual Assistance (C.EJAAJhdd its eleventh session in Tirana, Albania, and took a number of decisions concerning “co-ordina-tion and specialization of economic activity in the countries of the Soviet bloc. The «nno ui » c ®: ment was both dry-as-dust and full of propagandist overtones, it could not arouse ipuch iateryt in the non-Communist world, and probably it did great stir in the Communist countries either. Yet the activities of the council are undoubtedly of great consequence, and the council itself potentially Perhaps the most important intentional institution functioning within the Soviet bloc. Here are a few facts about the Council. It consists of representatives of the governments of the U.S.S.R. and of all the Comm-unist-ruled countries of Eastern Europe. Delegates ot China, North Korea, North Vietnam, Outer Mongolia also attend the meetings, not as full members hut ae(observers. The council was formed in January, 1949, and its title reflects its origin rather than its present functions. The origin of the council was rather incongruous and grotesque. In a sense, the American secretary of state. General Marshall, was its unwitting begetter, for the council was Stalin’s reply to Marshall Aid. Having at the time forbidden the Poles ®pd the Czechs to get Marshall Aid, which they were only too eager to obtain, Stalin had to make a gesture to compensate them, at least symbolically. He invited his European satellites, with the exception of the East Germans and Albanians, to constitute the council as counterpart to the Western European international organisations which were being set up under General Marshall s auspices. Into Deep Freese Heralded by propagandist flourishes, the council held its first three sessions within a few months; but then, in 1950, it was put into deep freeze and forgotten for many years. Stalin, of course, had no use for any Council of Economic Mutual Assistance. He held no council with anyone, least of all with his satellites; and in 1949-1950, when the U.S.S.R. still laboured under the effects of war, he was in no position to give assistance to anyone, even if he had wished to. To speed up Soviet recovery, he squeezed his satellites as much as he could; and for this he had no need of any “mutual aid” institution. As during the two decades of the U.S.S.R.’s pre-war isolation, Russian self-sufficiency and “sacred egoism” were still Stalin’s' guiding principles. The isolation was now a matter ot the past; but Stalin;” dominating the new and vast Soviet bloc, behaved like a. driver who had changed ever from a horse-drawn cab to a motor-car and remained convinced that the car would run better and faster if he went on cracking his old whip. Only a full year after Stalin’* death was the by now forgotten council brought* back to life and assembled for a session in Moscow in March 1954. Stalin’s successors, aware of the burden of liabilities he had left them in Eastern Europe, were about to disband the various Soviet-Hun-garian, Soviet-Rumanian, SovietGerman mixed companies, and to renounce other economic privileges Stalin had secured; and they were anxious to associate the Eastern European Communists with the clearing of the Stalinist legacy It began to dawn on Moscow’s new leaders that the policy of Russian self-sufficiency and sacred egoism not merely aroused intense resentment in Eastern Europe, but produced tremendous wastage and economic chaos; this was indeed the most inefficient of all conceivable Soviet economic policies. Stalin had killed off all too many geese for whose eggs the Soviet Union might have had some use. Worse still, his economic policies had been zealously copied by every one of the satellites; each Eastern European government aimed at national self-suf-ficiency, until, Eastern Europe could boast of “building” simultaneously seven or eight “socialisms in a single country.” Poland. Hungary, Rumania etc., tried each to build up within its own boundaries the basic branches of heavy industry (including heavy engineering) and to duplicate,- each on its own scale, the Soviet economic structure. The result was a severe over-all crisis of over-investment in heavy industry and under-investment in primary production, light industry, and farming.

Revival in Crisis

It was to deal with that crisis that the Council of Economic Mutual Assistance was convened in March 1954. The crisis was to remain on the council’s agenda for the next three or four years. • Not until several years after Stalin's death were the Communist governments of Asia Invited to join the council as observers: China in 1956, North Korea in 1957, and North Vietnam and Mongolia only last year.) Already in 1954 some Soviet officials and economists favoured the idea that the council should be used as a sort of a clearing office for the economic planners of all Communist countries and that it should, in due time, be transferred into an international planning authority for all the countries of the Soviet bloc. During the post-Stalinist ferment of ideas new notions were making their appearance, or, rather, were re-emerging from the . limbo of condemned heresies. A few eco-

nomists began to speak, very

cautiously at first, of the advantages of “international division of labour.*' The idea, though stemming from good old Adam Smith, had a Trotskyist flavour and been anathema tn Stalinist Russia.

Nobody knew, however, how to translate the abstract notion into practical terms. Several schemes tor the economic overhaul of Eastern Europe were canvassed; One of these, vaguely associated with the “Malenkov line,” advised the Eastern European governments to give up their ambition to develop heavy indus-

try and to concentrate instead on light industry and farming, to export consumer goods to the U.S.S.R.. and to rely mainly on the U.S.S.R. for their imports of producer goods. Another scheme, which came to be regarded as the “Khrushchev line,” sought to maintain some priority for heavy industry in Eastern Europe as well as in the U.S.S.R., but to cope with the crisis of overinvestment by curtailing quite a few of the heavy industrial projects. This latter scheme underlay many hasty shifts carried out in the years 1954-1956 and was at the basis of the various East European five-year plans for the years 1956-1960. However, the immediate effect of the remedies was to agravate the illness. It was not enough to stop some of the biggest heavy industrial projects in order to do away with or even to mitigate the scarcity of food, fuel, and consumer goods in Eastern Europe; the stoppage, freezing enormous resources, only intensified the economic chaos. Unprecedented Step In May, 1956, the Council for Economic Mutual Assistance met in East Berlin for a session of crucial importance. It reached the conclusion that the five year plans adopted in 1954-55 were unworkable. AU these plans (covering the period 1956-1960) yere scrapped, as was also their model, the Soviet Plan; and the council recommended the broad principles of a new economic poUcy. Henceforth—this was the gist of its recommendations the Eastern European governments should avoid investing in parallel Unes of business and building extremely costly engineering plants in small countries, and they should seek to complement and integrate their development schemes. The Soviet members of the council came forward with a specific project for .“industrial specialisation and co-ordination.” The project provided for the distribution, or redistribution, of the production centres of not fewer than 600 groups of engineering manufacturers all over Eastern Europe. ■ The Russians thus took the first long step towards international planning, a quite unprecedented step. At the same crucial session they also urged the council to expand greatly its machinery and to set up permanent “branch commissions,” whose job it should be \to co-ordinate similarly the work of the various national industries within the respective branches.

, This daring initiative had. at first, few, if any practical consequences, 'Hie Eastern European voted for the Soviet recommendations but went home and ignored them. True, they had more urgent business to cope with, at the moment: the goods famines and the growing unrest in their own countries. Barely a month 1956; in October the Poles moved to the brink of armed insurrection and the Hungarians went beyond it. Throughout Eastern Europe the distrust of all things Russian was at its fiercest. Paradoxically, the nationalists and anti-Communists and the most hide-bound of Stalinists found .themselves as if united in opposition to Moscow’s new economic policy. To the Stalinist all that was coming from Moscow since the Twentieth Congress, the curtailment of heavy industry, the liberalisation, and the new talk about “international division of labour” reeked ot heresy and treason. To the anti-Communist, and the anti-Russian at large, Moscow’s new talk of “international division of labour” was utterly suspect; he scented a neu{ Muscovite design to despoil the subject nations. Supra-National Powers?

In this situation, while discipline was on the decline throughout the Communist camp, the Council of Economic Mutual Assistance could do nothing. More than a year passed before it assembled again, thia time in Warsaw in June, 1957. A protracted crisis in the Polish coal industry overshadowed the session. In 1956-57 the output of the Polish miners was extremely low; and this threatened to bring to a standstill Polish, Czech, and East German industries, which are all as much dependent on Silesian coal as Western European industry is on the coal of the Ruhr.

Pragmatically, to meet a need of the moment, the council made a further step towards international co-ordination and planning. To avert the recurrent coal shortages it was decided to re-equip and modernize the Polish mines; and, as the Poles alone could not undertake it, the re-equip-ment was to be the joint responsibility of Polish. Czech, and East German producers of mining equipment At this session, too. the Russians came out with a definite proposal that the council should at last begin to tackle long-term over-all planning for the whole of Eastern Europe. The Russians spoke of a "Perspective Plan” covering 10 to 15 years.

This was evidently a critical point in the council’s career. Its Russian members pressed for something like a supra-national planning authority. The others replied, in effect, that the council being merely a consultative body on which sovereign national governments were represented, had no authority to engage in international planning and could not claim supra-national prerogatives. A debate of this kind would of course, not have been possible in Stalin’s days; but now there was a genuine conflict of views. Implicitly, this was a matter of nation-state versus “International division of labour.” The council had to refer the conflict to the chiefs of the Communist parties; and the issue figured prominently on the agenda of the Moscow conference of the Communist leaders In May. 1958. World Copyright Reserved.