The Economics Of Soviet Bloc Trade And Finance
Reflecting Professor Holzman's important work, this book deals with major issues relating to both East-West and intra-bloc trade. Professor Holzman explores the transition in Soviet bloc economies over the past fifteen years from balanced hard-currency trade to large deficits with the West and the consequent development of a huge hard-currency debt. He compares the causes and treatments of deficits in planned economies with those in market economies and explores the dramatic differences in foreign trade behavior exhibited by Eastern and Western nations and the difficulties that arise when these conflicting systems interact in world markets. He also assesses the impact of Western economic warfare on the Soviet Union and makes recommendations for future U.S. trade policy. The author next turns to the issue of intra-bloc trade. In its early years the USSR economically exploited the smaller East European nations, but many argue that the Soviet Union now subsidizes trade with its partners in the Council for Mutual Economic Assistance in exchange for political, military, and ideological support–an argument that Professor Holzman strongly challenges. He also contends that CMEA, when viewed as a preferential trade group or customs union, has been markedly unsuccessful. On another level, Professor Holzman assesses the causes and possible cures for the serious, chronic problems related to currency inconvertibility, rigid bilateralism, and inability to use exchange rates as tools of economic adjustment. In an international economy growing ever more interdependent, the issues raised in these previously uncollected essays will continue to gain in importance as East and West meet in trade.
Table of Contents
Introduction -- Balance-of-Payments Problems and Adjustment Mechanisms -- Some Theories of the Hard Currency Shortages of Centrally Planned Economies -- Creditworthiness and Balance-of-Payments Adjustment Mechanisms of Centrally Planned Economies -- Commentary on Richard Portes' "Internal and External Balance in a Centrally Planned Economy" -- Foreign Trade Behavior and Commercial Policy -- A Comparative View of Foreign Trade Behavior: Market Versus Centrally Planned Economies -- Trade, Technology, and Leverage: The Limits of Pressure -- Dumping by Centrally Planned Economies: The Polish Golf Cart Case -- Commentary on Jacob Dreyer's "Countervailing Foreign Use of Monopoly Power" -- Convertibility and Exchange Rates -- CMEA's Hard Currency Deficits and Rouble Convertibility1 -- Intrabloc Trade -- Comecon: A "Trade-Destroying" Customs Union? -- The Significance of Soviet Subsidies to Eastern Europe -- Further Thoughts on the Significance of Soviet Subsidies to Eastern Europe
Franklyn D. Holzman is professor of economics at Tufts University and a research associate at the Russian Research Center, Harvard University.