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    KORNAI, 1992 - The Socialist Economy. The Political Economy of Communism-180-193

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    KORNAI, 1992 - The Socialist Economy. The Political Economy of Communism-180-193

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    KORNAI, 1992 - The Socialist Economy. The Political Economy of Communism-180-193

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    of 14
    tendencies, the latter isthe stronger. ikimately, if one considers all Inensions of material welfare in te whole of soe) uncer the clascl ‘esi aye, the ingyen tis ander he presen capitalist 14 External Economic Relations “Ti ANALYSIS of the cls socials economy in chapters 3-13 has (wit references. Once classi sciaim has coment eng (itera slot and/or extra in lence) and tabi i ase tebe, ke ‘extra envionment, So the ani the various problems has eed fn the simpltsingastumpon that a closed economy was bein ea Ine, Having reviewed the basic endogenous atebutes es ime on Uodestanding ofthe phenomena discussed 0 a The exteral economic felons of all counties ae greatly affected fpaphial poston, and natural resources, This chapter conforms he book's approach ofa in ignoring mos ofthese aerenss and pacing to the fore the characteris common to all soils counties external ‘onemic relations. Most atestion i pl to those that are spi fo the stem, conseguent ont nner loge a 0 ened oe ith the phenomena examinel isthe previous chapters I il emerge tht aay imporan alts nexterel economic lations an be expla In terms ofthe min endogenous featres dics in chapes 3-13. ‘Some tales ate ges by Wa of tateduction. Tale 14) abd 14.2 show now the Socialis counts" expors and imports dive up accord Ing to their mai destinations apd sources. Tabs 143 apd 144 shed table 14. uses an inden of forlgtade nei to eae the stu {ure of foreign rade, broken doa by main proaps of products and by Sestioatiogs and sources The greater the value ofthe ines dex how the more some export or mpor lw exceeds the verse, "nor tna” bw found in international ade, and vice versa Comments fe ade on these ables a several pots late i the capt ‘Srey Inparing Cr perce) Deion? Delong Se Bewoped eos Expovting Comes Soxsn ‘Cpt Cana Ingotng Couns Scan Capt “Caper imo BO a mS ced Bs im ay Bs wi ses bh Soviet Union! 988 ns wr Sov Unio ns nas a SS 14.1 The External Political Environment (One vry important clement in the enogy of the classiest the notion that soils is surrounded by enemies intent on desing it [45] Adherent of socalien havea duty to puard asin! the Rote Tenders were suffering, since i supported, a least im prt, by atl Neral experience. Prom th moment the Soviet Urion mas bora i svar ringd by shone pola! environment. Daring the ears ofc ‘ar th ores nie the county intent on overbowing the system ‘ved orig backing ia money, as, abd even malta might Siar TID REPRE Pa cents k pl ath ely ry svt si connie hens and peste eet i gt ‘sind ro sane om spe rina an ‘ar fo cba sao of son ens ee olan oe edna say yb coma el fou wf te he capa oe wer Simla spre per ad ow fs xpee ‘Steely Zens mean ea ag’ A ove apy cera por hy nat on ae anes ted sulci wi ppeive mene Th mth ene eth thet of aa at ae obs kaon ae Cl War ne es ive Un seam te mn cs pea may, ad Sno nr an hr roy st ins he tet son ee ue ei ns Dbl epicure fam sno i hasnt np et tne of fn ter Sonia the cle econ oon. tr ene 9 froma su, Wh Sv Une ominl eo saa Sanh openy spt rsee oth Sve Uae Teuton eS alo ei ae tgs coed ued ae Sen ou cpt won nr cod ope tary Sons st eee Tr sma yoann “heme cope yi a cour i a8 sadn Sena ls he ea Pt asin pee ny wn Te wee ps sats fn oem ec a pa ‘Epes nan ery sed pn nyt he irs th hoon port yh fiche one | Se erat ae wencenea esas Develop Mansa G Comins Dewsioed er Deveoie cipal counter ag | scant tay aga to a antsy rtd modo ‘Serve ope te dr py sro ha rb ‘eens pens i Se Bed en Saclat Developed capa count time the pote, economic, and clr isolation makes ie casie for ‘ons, vantages and drawbacks of socal sod captain afi 2 Desopingceptalist countries. What as just ben sid appt prt oeltions nth ober wel is wor ang thatthe 0 ‘ements of soca counts (lke chose of developed capitals cou tes) ie song conseation in thse relations as wel to the Foi Poy obectvet. Tey re reared octet conomisly disadvan. fageous ransitons with developing counts that they wish 0 support {or poll or mutay purpose, and convrsy, they at prepared fo forgo economic opportunities whete pica and mir tlatos te no being pursed. about the poticl background 1 the economic relations among the a Ted seis counees. On the one hand, the fea statements mph ‘ire that they concer solisrity and mate asistanse- On the other Ind representatives ofeach government ys fr ab pote Lo ph {or wat they consider ther cout plial and economic eet ‘mands. Other domestic and frcgnpaicyconserations also exert & ‘rane inflvenceon the allied count esnomi elton, “Othe socialist counties Conis smong socal coun arse carious res, for iastance, the spit with Yugsava by the Soviet Union and is aster European ales, and the ner Sio Soviet and So-Velnmese dispute Wen elation ae sine, each count sovenment subordinates economies withthe seals country ‘vith whch it haba disput tos domestic an foreign plies abetves It foxes be expen, sales down relations, apes an embare, recalls experts, of makes othe eps” “To sam up, i domestic and foreign policy of the sate affect external conor reations under any sem. The sstemspce feature in he onidetations. They ae the pre citeon fr containg the eral economic eatin, and economic considerations nthe narower sense {subordinated them. The primacy of pla omsiderations swell ‘juaifed a socialist in 1986 had been placing any 11 percent of thet cxgors on ech other's markets in 1938, but the proportion ba grown to. percent two dec Iter Cleary, the explanation for hi aie hinge 16 be found ot io their amos Seuss Buf te leation in hel domestic and foreign plc stations. 142 The Institutional System of External Economic Relations lations ia socialist country begins with te sastttions of foceien ade [Ream offially Scared principle of sical soca tht al Kinds of foreign trading stvity tre a tate monopo. Closer examination i ‘A ood starting plat to lok sta state-owned production firm, some of whose material are imported and some of whose prcton festned for export 0 that it has Hinks with he outside wert an toch ric forbidden to have direc elton witht parte abroad, The ‘chiseright fo condo import and expo trations and maintain Fektons with foreign raters belongs speciizd rganizations. In ‘post cous the freien wade Tyas The chose of ret fore Sie or purchase, the Dateining ove pies delet tems, abi dat lines, and in eet all the para dessonsinveled ina foreige racing tutmately aes its atv. This very dvson of ight opens gull teen hore predution and foreign markets ‘Noval eh foci ade frm has Gea pole. For insane, specials ina spec product or goup of product, oF performs all ‘he forin trading teanmctins fort specie proscton seston. Some ‘eal excsiey with ether exports or spor. But however the opera tonal spheres te define, each has nonopey in sown ll the Tegal ese the foreign ade organzaons functions fas, Buc as hey products, they possess many of the vghs of a auton. 1 ‘mote appropriate to conser the set of Toren trade fms a a ranch ofthe barencray than at erp of eevine fis cot retusa ii oi a pt, Th SS rerun icy to Fs ego the foreln trade firms is clearer sili one Took at pies. The pe a orsign ade fim pay 4 foreie elle fora pt or eee from procs pays or ries fom he foreign ade ft. Dorset pecs “te noenuly frozen fr long pis, ab even i hey ale from eo fn the domese market maybe au the work-maret prc of Oe Impored produc ln question, the oppose may equally be the ase: he lometc price may beet uoehanged despite a ie inte import price this being presented in effi propaganda as one advantage of cael fice conto It a grat achicvemn uns the argent, tat Oe Sa Diy ofthe domes pce system Is unafeted by the whins of the “The serestton of domestic prise rom the fort an export ses pa apd veeted onthe Torin markt rates sl tothe absence of ‘uniform rate of exchange between te domestic currency und ea or But in fat his exhange ates modi Wy various multiplets (rater for leer than). ‘These mltiprs vry from soanty to county and ‘riod operio, but nal entries ans periods thre ta wide pera ‘oF them acoing to the foreign mart and product concerned ‘A tuter influence onthe effective conversion accompanying fo sign rae transaction comes fom fates and sabes A angle tes hes intervenes between the pice paid oe reveved on foreign market andthe pice at home Uninatelycheres po way of ling what a abi Ssworthin dallas. The domestic cost of earning a doll by one export ‘dary matter of final tecaalty what special caused the a ‘epancy between the two conversion rates nthe example: fret fxchange rte mir, fret postive or neptve a ate, er apr combination of toch Theat! fare the sont complete Aivore ofthe domestic price ofthe product constitring an em o Foe ‘The dre is tuh a fer ofthe tangle of takes al suiies and ‘cause of tT conn the previous example, suppose tat he inpee pee ofa mater has ren ad the peice authori, on he inate oF firm feels stould be compensa for i loses, a cat lai hey tose trough no faut of sow. Some method of stning the bode ‘ome ober way The situation just described explains the fy of any foreign ex (he foragn exchange rates, or in ceil contri by ental conta. The ‘sl couse taken Ifthe debt i considered foo high sto devale he Aomentc correc, shone effet wil soner or ltr contribute othe ‘lion of imports nd tothe create of exports Ina lasical sca nem this metho fas fo work because of weak cOs- and price fespoosivenes. Whichever way tbe exchange rate moves, the effet ‘bvorbed bythe web of toner nd subin and the snes ofthe bape “desde they want to reduce imports and rase exports on any market ‘whatever, the only method aval is diet bueaurati contr “Tey rece tempor quotas drastically and force exports yearling dometi detnd fr both coniner ad intermediate pods moves fy han ever? Ifthe autorites manage to manipulate the wade and fatten ascoun balaess tal it onl By bureaucratic ean ‘Menton as been made in conection with foren exchange rats of more closes. Currency i not conver under claakal socal, in other wards, domestic cutency cant be converted ey ite frcan pestesing foreign curenc are obliged to lito the "moaobank Every conversion & made ae exchange ated down bythe ceil "The foreign exchange manage ithe central bank I may asi pe cscs areas to some focal separate asttuioso other for xa ple foreign te inncing to the sate foreign trae bank, o out “hon inion ly by vei cyst ke el foreign exchange ransctons othe bank soplyng ref the general ‘ble. ot these inetations ae realy arm ofthe manok (= “stuictly centralized. The existence of the foreign rade firms and thei rmovopoly overall foreign wading activites consitues the fst ayer of Insulation from foreign infuenee around demesticpredotion. This ‘yer surrounded hen BY another ilo: not even te fovea rad ing apprats hs independent control over the finan rations of| the fori trades, all financial transaction are conducted the ‘reniatonally separate and very power) monobank stem, ote change authority, nota real bank pecforming business serves at al ‘What hs ben said far demonstrates tat the etre esonomi ‘hot market, coordination. The official dea i thatthe foreign trade and Intereanl aance sector should bein sna postion to the oer sSevors, operating according these principles of planing ap ‘luton (7. The icators for foreign ade and international fsa fi elatlons wake up one chuper ofthe pan and must be enfored ‘roash commands pen tothe frien tae Fis, tthe other firms ‘ng syste. But in eal Me a contradictory situation arises. Although the foreign ading sper beat the mk of bueautatecocrdinaton and so that extent resets the oer spheres soo ine with them. Tt Jas been sen wha a ange of problems derive rom siination of he ‘omy isasumedto be closed. The contradictions are compounded inthis sphere, where the couse of eves depends 0a large extent on the fr to take order fom the domestic planning office oe mini, and hey anette prosecuted fr owing plan dsepine. Understandably inthe ‘Seumsances,thete develops assem of istutions that arial Plea! consdeaionsmeatinod inthe previous section and because they shi the nternat system of hecommand economy Frome dist Tmo prt ofthe stem here a prfst hierarchy [-¥6.3- Al sao sinateshavemore ha one supeie eganzation abovethon Ths ver- Tapping ad ten mutually conadstory intervention bythe various {orcign trading. The responsibil primar on the ministry of fr ‘pn rae, bt tbe party appara minity of freien afar, the police ‘Shange suitors, the miners contling production, andthe tks tion eusomt ad piceconrl autores ll have ay a5 wel. Clever ‘th another. Often a single dein is rete by lengthy segtations among tbe authors concerned. Mote ateaton spa to arginine ‘tin the bureaucracy than withthe orsian be, eller, or bank, The Fut of orig trading ap ret slit. Is more important oe {he producer a fregn deft for aeanactin to win the apron ‘tthe serio orgaieation than for oleae freien core a fed, or for an export or import del fo make the maxima Finan Profi The production setter Is no Obie, lt soe enouraged, to {djs sel and speedy to the situation on foreign markets. Foren Utade is spore tht demands particulary sue sped, and acute djsiment even f shades of change. The ony sytem capable ff Ima ordination, which ests sent fo pris. The read fee {Ung cam be doe wich he sluggish cumbersome range of methods ‘lb to direct rears coordination, Despite the Bit in fenders and liye of insolation, the unplanned chang taking pls on foreign markets do have an fence on Sc ome ets at home, and they often upset the plans abd prevent them baby applied. Uiumately, one cannot ior he foreign pute!’s ingest oF unwilingnes eo sll he procs the country Wan (0 buy, buy what mans to sell or extend cre So some aptation to xtra sakes takes place, albeit after long delays and a te cas of any kinds of Loses. 143 Capitalist Relations: Import Hunger, Export Aversion, and Propensity to indebtedness ‘The two paral sections that follow dese the pariiant Behavior 4nd ecoorscwends in foreign teade and nan ren st 9h ‘pita countes apd then with othe soil count, Tn theca of relatos th capitals countries, the dsusion is arrowed down ad ‘ome simplifistion remade for reson of pace, (popularly known as hard eusencsy, which canbe fely exchanged Ino her currence. For simply sake, "foreign tae for conser thle hard) eutency" and foreign wade with capitis countries ae taken as synonyms in this econ." counter aa single gars sac the poll datinetons retiooed fer long ith the capitalist partacrounty’s eonomie develop ren an ley related osha level sl havea pat ta. Anim From highly developed sed moore backward capitalist counts, jut exporter tele adifernce twcen a mors heh developed counts ‘deans ope product he offers abd those of ales developed coun, T. Inport, Ove integral element of vestment hanger (91) an he Ioarding tendency [1.5 12.7] simport mee, parently Menge foe products fom develope capa counti "| ‘Breryone hungry for vestnent, [On the highest leaders down 19 factory foremen long above allo bean top-quality, uptodate me thine and euipent Engineers who kep an yon profesional td icsabroad and vis modern factories sady ips have god argent fo tack tein appiation The demand for uptodate machines ad gupmen from developed capil counis is fueled by profesional biog y endsvore to moderie, and By a dese fr the smoatber Drsicton that rll, rastrehy tock of machinery provides. THs feoency in osrated by table 14, which shows that the salle Eur fram socialist counties impor the tines as many investment goods ‘om the developed capitalist countries as hey cm export them, ad ‘the Soviet Union imports wenty mes a many Tmports are abo encouraged by chrome shortage. A easomay, no. nal inten of Shertage develops in production aps and consumer les lk. I thre sa bigger shortage than poral in some produet ‘or oter, tbe handet and quickest ay of obtaining assaf lrpor i from a expt county.” Planners ors etree) argent le tmnt te rene nt besa eye pc ‘eli oy Teo ow opt OFC Car Re aga BARA asery sa as a a one a as 27 aa “The Orzo or Bom Co operation ad Deelopment (OECD) wasp aces, mangers) do not consider beer the subatuon of domestic Podecton mth imports wil be profitable. The pros aks place ab @ Feaction 9 aongric sens, not onthe ba of price and est sma" ‘Ofcourse he top polical and economic rgaiztons,the puts Palical Commitee thepie mnie, ad he head of thecentel bank ate nt niffrent the otal co's of ipors, oF uhimately to the bl ‘Ser thse one of hei eeatest concerns. Bul ab sn he cases of eter pyoblens of ehac (sre decison on the proprtons of consumption nd accumulation (9.3), they sannot dental ther problems by fhtegting them to tower level ofthe haarchy and tray to the producing as. sin the ltrs of everyone excep those athe peak Df the pyramid for capital imports o be as large as posible hee no intra inducement to limi the demand voluntary. Thi sisson Impore quotas and the practice of requing& spac permit foreach teansction. So thee tera effect: port hunger son actor end bareserstc contol, wie besser control enhanc emport npr ince each wer it to asinine Rs quota daring the plat ba {Binoy and bal stocks of imports fom the apa marke 2 Exports. Here quite he opps behavior found. Wheeas a hun- Sry; no voluntary enbusasm emerges for expe to capa ae ‘te, Why bother one's had with orig buyer when one ae at home ‘comfortable sere’ market in whch qcuine buyers ae rere fo targeted, the more demanding th npote there will be about aly fd dlvry dealings" A peste fm competing with is vals in pial economy is dlghed to fing a foreign market, Not 50a state past market an shows an export eesion at ts suprion ogi tons must combat ith administative compulsion. The practic offre Ing export develops. Futilment of expore assignments becomes one of fone lst of plasmin suction fol ade im fron soli county entering a capital ma ‘finds a ina buyers! markets srk bythe wealth and arty ‘thie tecnnot compete om the market a an exper wth the domes {nd foreign capa ims in tems of quay, modernity, o eae ‘Eves. An economic sytem cannot have two completely erent faces, one pointing to the sles? market at home andthe other othe ‘yes market abfoad. I there asl marke at home, it ges used to dictating to he Bayer and doesnot careaout gual reusements” ‘Ths Kn of stuishness aod nonchalant aecessarly mes iel fio rduction for export aswell Song asthe coumey' domestic economy Tacks the simul tha blige fs to improve gual, develop tcl, supply quik and velably and adapt to buyers requirements, wl a sets encouater grave dius with exporting for bard exzen. "Under the crcumstance, te only means fr iereasing the aration of the prods is price reduction, or in the las eo dumping. Many fos of por aly can be sol or convertible curecy I the pice 8 the foreign buyer. A cutounnepative pricey of expr poy ‘velop ince the soit county« prpore ito Oban» ceri reaton apps when the export plan fst grester vue mast te Caporte I the aan export price lames, but i i gh. Sales export volume sich ny case the plesetng proses lionel before Te publi and often the economic leadership, have no ea what domestic sacrifices iavelvd in obtaining & dalla pound. ‘Tey donot know how muck more cheaply «prod told compared srt che pice offered by forlgn competitors. Nor do the) kw Bow ‘much domestic input wen into making The interest, socal enviroment, a Deavir of tose Mawding in port and expt wansactons argely expan the ecopomic tendencies re ented in tbls 143 and 14.42" 1 The trade and caren-accoune balance As sown eal, the 30- omic Breaeracy at ever eve, nludng the manage of predue- ti fms, ineested in impor es much as posible from the cape {ivan number of maces rom sca ounere Dna yea our enna Sopdet lalist market. The opps side has io bean show he deus a ‘Sci county encounters when it want fo expr ose mae ee There it ler 9 sro tendency for port exenitore £0 ‘Dict por of capil tat is, business nese by capi is inthe scat county mith few exeptions, forbidden. This alone Iopaly from the polly motivated woatinism disused athe be by toats, extended bythe exporting capitals fons or by tanks, coveted in cetain cases by government guarantees. An inclination (0 indebted rests emerges in relton with capa counts, teuy. On the one hand sts hd for the o resis great pesure fn them to ncreate pots anit is tempting to sleep some of {he problem inthe shor term by sing hard cutensy cet On the bter hand the policl considerations cused secon 11 gue Sronely ain indeiedness, which ares Perhaps eageraed ut ‘ot pounds sense ofthe per of dependence, Which ofthe to nfo ics Suonger, and by Row much, vars by coun) and period” Ev hereto tempadon oa crit opposed nee, con siderations relating tothe balance the current account play & very Strong par inthe management ofthe economy. An indeed coun serie tdebi (is obgalion copay the interes and yep mens hat fll ic) ad ts mentions of reducing ts stock of debe. county that has ote ito debt would ly Hie to Sooumulte sme hrd-urency ‘On the basi of the eof argument here Secomes comprehensible why the els ssia ster always turing to mpor substation ‘ot escesuly developing exports. Inport subatutin can be decreed brbureaveratic mean, Inthe shot term one spl ha ob etn impor ransetons and prescribe the we of cera domestic manfac (ares fe te long tem, the same bureaucratic eas mast be ed To pesrbe te Kind of domes ivestbnts hat wil subse Tor ke bors meh ure Moreover, this in ell wth the otal obietves of bolaian and the strategy of sue. On the oer Band thre sno ereanatceomoe estationd as way ofcmsuring the succs of harcurteey exports by ving intro ‘ee doubt “The subj of forced exporting eds, bythe way, toon ofthe vcous circles that develo in a chronic shortage scons. Dometic shortage ‘nd tensions arouse umport hunger. To compensate fo the impr (and ay back the debts tat mount up a «consequence of the import) as Puch had utrency as posible st be obtained at all costs. AS pointed the price incu far enough. In hg tution the Foran trading sstors ‘Sooand fr products salable om capitalist markets amos ssabe ‘Since the Secor appears on the domestic market a a aver of hese ood iti practi insnave to thr domes cows ad prices However high the domestic cos nd prc, the ea between the dometic san he Torin ec can be Wide by some etngue fer soeing he Dadget consi So, understandably the almost sale dea fe experts among the fore that case techni excess demand on the ‘acto fevel [127], The Forcing of export forthe capita market estos, Export Preferences, iota Zero Balance Imports end exports To begin wih, a isinetion usally drawn be ‘ween hard and 0 goods. Such “hardness” of “softest 49m applying only for @ specific period in a specific relation between (WO cones. Whether te ate forming the subs of epoation Hard bor soft depends onthe prevalng cicumsances nthe to counties. In (Upitcould be sold without much rable on x aptali arket fr bard ‘urenc. or (2) the buyer cours current domestic economic station ‘ny eer socal cout, ands oly obaiabe ial, on xp. SS marker for hard currency ats cat of grat dfclly and scriice ‘The wo cra of coined, bu pot alvays. Sa. for example sel county is nepotating a foodexpor, Protections tarts may make it Nard currency on the capitalist market forthe food they fee to smake up the shortage, the seller county’ fod exports “arden by the porting county's ness “A good sols tare surplus oft in these county (hich s therfore competed to export snd wou be impose a ey ci ‘to wil ton the capital market A goods sso sot the potential foci Boyersounty can without omparstivey es “The concepts Having been clan. the Fit question o adres i the Lindo sohavir representatives ofthe government of a usc socal ‘stem pay when they negotiate an ntergvernentl agreement pe ‘erg the quantity and composition of experts andimports with ae reenatv of another soca country. (The see here te ee ‘oF effics hgh in tbe economic o foreign tad hatch. Thebeheviar Of lomerevel offal covered ater) ‘en costes hard expt god atthe areining chips" By offering them they want to aeheve a nunter of tings: (2c obtain 38 much of ther partners had goods as posible (2) 1 sell as nich of thee owe soft good a pl; snd (3) 0 ass il oftheir artnet foods ss pole When all aid and done, the nepotations are aot primasy about the pice at whic the deal shade, tou hats {paras well Much move prominent is he question of what the "bas et of rood exchanged between the two sountis shoal contain. ‘What proportion of bar sn ot sonds shoal there e inthe basket? ‘The more oftheir country's som goods the representatives manage 0 pas off on thelr opie numbers and te less. of the other counts Soft gods they ate obliged to accept, the ore sucessful hey ate he negotiations. Unimatey the proses aking place at govemetal ls Tess worth returning for a amen to what was ai inthe ast 190 capers abet the concurrent appearance of shrtage and surplus 08 the domestic market, since the above statements provide an adil Explanation for th phenomenon. While there is shortage of hard ‘nods there are usa stocks of goo! he county bas Ben unable to get dof is om surpls atthe oveign ade negations apd may a ih a it bres erm net these cena tft Smmeon cr fn ee ys Cin fins ah es cco {ee ath nya ews prc poss by heme sw ‘ren have been forced 1 accept some of is pan’ sft gods asthe ‘only way of obtaining the partner's hard soa. Let ut nolo st the behav om the mle and ower level ofthe ft hard goods, wich meas iecanno ake tough demande about qua Uy mera and deiner dats 1 therefore slate easy for he ‘Oder Lome goods which are conslered hard by sociast ding Darter Simo. iis rae easy fr the foreign wade fins In ‘hare of enpors to ell ich goods te soil market. With oft foods the poston rather sifferent, as emo eat ere seep ing country has undertaken to accep them neither the producer nor ‘he fosan rae firm has any mare problems here cher. Ar from he ‘rosducr andthe foreign eae Fm thc long pei tha ntergovern Dental spreoments cove, whch nceses th one of eu. AMoE tsvantage forthe state-owned producer fim is the nose that I {cer ler’ markt i he poring socials eeonomy. For al thse reasons, behavior coward the social external market party te opposite of Theres import hunger or the ard 0055, ul ‘here fala iport aversion to the sof gods. In gener hee 0 aversion onthe export sid, on the conta, he aver level of he pro Shction and foreign trading bureaucracy expesy prefer the comfort tnd seeuty of soils 0 eaptalit markets "Trea resmably more har prods aman the materials han mong the manfacores It this assumption ie right, the eff of the fendency outlined above i feflecied i fale 1.8. The ites of the ‘he intensity of trae in mnnafactaesBewcen the scat coon i ‘her than the ites of ter export of manofactares fo capitalist counties Among the ater concTsions to be drawn fro these ier Sic in ata ie pen owe ‘impose their manufetures on each other, whetes eel exprs of them to capitalist markets remain far baow the norma exer proportions foreign wade faethe quston of which country expats the oe. there a concealed ey o subs inthe forelgn ang relations etwcen them?" Thi book takt no positon on this dette. Noteworthy thoush ‘he aston g concern nthe lt resort with x spec problem ‘docs comparatively weland wh dos lee wll ut Of parla tane ‘ton. The troubles hat this isnot ero-sum game, one se wining {emch a the her Ines. Why i thee fseny of proton and or foreign trade among themselves, the socialist countries rob themselves fan each xe ofthe incentive force and imperative to quaiatve deve ‘pment ofthe economies whic he hh aly standards oF the exter. ‘i market coud provide Bulence of wade ard ofthe current acount. Inthe absence of cn verti, a defen one aera elation cannot beset agaist a sur It one aegis certain exceptions (which ae mentioned in & mo see, sols countis donot vet cach thes enor 80 the Ualnceon the curen account depends very age on the balance of trade. Andasa surplus cannot beconveted onapother market, no

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