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The Council for Mutual Economic Assistance and the Failed Coordination of Planning in the Socialist Bloc in the 1960S Simon Godard

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The Council for Mutual Economic Assistance and the Failed Coordination of Planning in the Socialist Bloc in the 1960S Simon Godard The Council for Mutual Economic Assistance and the failed Coordination of Planning in the Socialist Bloc in the 1960s Simon Godard To cite this version: Simon Godard. The Council for Mutual Economic Assistance and the failed Coordination of Planning in the Socialist Bloc in the 1960s. Christian Michel, Kott Sandrine, Matejka Ondrej. Planning in Cold War Europe. Competition, Cooperation, Circulations (1950s-1970s), De Gruyter, pp.187-210, 2018, Rethinking the Cold War, 978-3-11-053469-6. 10.1515/9783110534696-010. halshs-01898794 HAL Id: halshs-01898794 https://halshs.archives-ouvertes.fr/halshs-01898794 Submitted on 24 Oct 2018 HAL is a multi-disciplinary open access L’archive ouverte pluridisciplinaire HAL, est archive for the deposit and dissemination of sci- destinée au dépôt et à la diffusion de documents entific research documents, whether they are pub- scientifiques de niveau recherche, publiés ou non, lished or not. The documents may come from émanant des établissements d’enseignement et de teaching and research institutions in France or recherche français ou étrangers, des laboratoires abroad, or from public or private research centers. publics ou privés. Simon Godard The Councilfor Mutual Economic Assistanceand the failed Coordination of Planning in the Socialist Bloc in the 1960s Planning has long been deeplyassociatedwith socialist economies,although capitalist countries have been influenced by this idea and have experimented, to different degrees,government interventionism in the economyoverthe short twentieth century.¹ Thus planning the economyisnot aspecificallysocial- ist idea, and even though central planning was ashared characteristic of most Eastern European countries duringthe ColdWar,the entanglement between planning and socialism can stillbequestioned. Alreadyinthe 1960s, Polish economist Wlodzimierz Brus considered the association of economic planning and socialism “not as adefinitive solution, but as achoice among possiblealter- natives.”² Even though the Gosplan was established in the USSR soon after the October Revolution, the first five-yearplan was onlyadopted in 1928.Amodel of socialist planning was indubitably shaped in the USSR,but never remained unchal- lenged³ nor incapable of evolution.⁴ The persistenceofmarket-likeinstitutions in the Stalin era, analyzed by Paul Gregory and Mark Harrison,⁵ or the Yugoslav path to economic development after1948, show how misleading and inaccurate astrongopposition between centrallyplannedeconomies and markets would be. Indeed, the functioning of the economic system started to be challenged again in the German Democratic Republic (GDR) in 1956 and in the USSR in Secrétariat général de l’ONU, Planification en vue du développement économique (New York: Nations Unies, 1963); JanTinbergen, La planification (Paris:Hachette, 1967), 220 –235; Claude Gruson, Origine et espoirs de la planification française (Paris:Dunod, 1968). Wlodzimierz Brus, “Rapports entre politique et économie en régime socialiste,” L’Homme et la société 6(1967): 70;see also Wlodzimierz Brus, Problèmes généraux du fonctionnement de l’éco- nomie socialiste (Paris:Maspéro, 1968), 36–46. Naum Jasny, Soviet Economists of the twenties. Names to be remembered (Cambridge:Cam- bridge University Press, 1972); AlessandroStanziani, L’économie en révolution. Le cas russe, 1870–1930 (Paris:Albin Michel, 1998). Jacques Sapir, “L’économie soviétique: origine, développement, fonctionnement,” in Retour sur l’URSS.Économie, société, histoire,ed. Jacques Sapir (Paris:L’Harmattan, 1997), 99–144. Paul Gregory and Mark Harrison, “Allocationunder Dictatorship:Research in Stalin’sAr- chives,” Journal of Economic Literature 43,no. 3(2005): 721–761. https://doi.org/10.1515/9783110534696-010 Brought to you by | institut d'etudes politiques (IEP) Authenticated Download Date | 10/18/18 6:14 PM 188 Simon Godard 1957.⁶ The centrallyplanned economy, which had been considered amonolithic model by the Western European countries and the USA, proved to be more flex- ible in the 1960sthan had been assumed. Following the liberalizationinitiated by the USSR,mostofthe people’sdemocracies in Eastern Europe engagedin economic reforms. Central planningwas strengthened but limited to the estab- lishmentofmajor macro-economic indicators,whereas basic economic actors – such as the enterprises – were givenmoreroom for manoeuvre, in order to allow them to implement the plan at their level and to coordinate themselves with other economic actorsinvolvedinthe production process.⁷ Defining acommon model for the socialist economyinthe 1960s proves to be moredifficult,asmarket incentiveswerebeing reintroduced in the planned economybythese nationaleconomic reforms.⁸ However,under the combined in- fluenceofdestalinization and Western European integration, the USSR and the people’sdemocraciesengaged in redefiningtheir international cooperation in a more multilateral wayduringthis decade, in order to tackle the decline of devel- opment strategies based on extensive growth. Thus the 1960s at the Councilfor Mutual Economic Assistance(COMECON) start and end with two major debates over attemptingtocreatearegional economic integration that could have shap- ed atransnationalsocialist economic model. This contribution analyzes how the socialist countries members of the COMECON, who officiallyshared acommon economic model, dealt with the specific issue of the international coordination of their economic plans. In spite of the adoption of the “basic principles of the international socialist division of labor” in 1962, and the setting of the “inte- gration” of the national economies as the Council’smain goal in 1971,⁹ various economic and political actors in the socialist world doubted that acommon in- ternational plan and regional integration would be the most promisingway to develop theirnationaleconomies. Eventually, parallel evolutions towards plan- ning the economyatnational level led neither to aconvergence of these econo- Helmut Steiner, “Das Akademie-Institut für Wirtschaftswissenschaften im Widerstreit wissen- schaftlicher,ideologischer und politischerAuseinandersetzungen,” Sitzungsberichte der Leibniz- Sozietät 36,no. 1(2000): 89–109 ;Peter C. Caldwell, “Productivity,Value and Plan: Fritz Behrens and the Economics of Revisionism in the German Democratic Republic,” HistoryofPolitical Economy 32, no. 1(2000): 103–137. Michael Kaser, The EconomicHistoryofEastern Europe. 1919–1975,volumeIII (Oxford: Clar- endon Press,1986). BernardChavance, “La théorie de l’économie socialistedans les pays de l’Est entre 1917et 1989,” in Nouvelle histoiredelapensée économique,vol. 2, ed. Alain Béraud and GilbertFaccar- ello (Paris:LaDécouverte,1993), 235–262. JozefVan Brabant, Economic Integration in Eastern Europe. AHandbook (New York, London, Toronto: Harvester Wheatsheaf, 1989), 63 – 102. Brought to you by | institut d'etudes politiques (IEP) Authenticated Download Date | 10/18/18 6:14 PM The Council for Mutual Economic Assistance 189 mies, nor to the international coordination of their development within the framework of the COMECON. There the transnationalapproach and international comparison allow to challengePaulGregory’shypothesis about Stalin’seconom- ic policy,accordingtowhich political dictatorship was intrinsically rooted in the structure of planned economies since the system could onlybefunctional with political coercion over the economy.¹⁰ What might have been true for Soviet eco- nomicsunderStalinmay be interpreted differentlywhile looking at the interna- tional coordination of planned economies. Most of the historiographyonthe international organization focuses on its failuretodevelop ateleological argument.Since the international coordination of planningatthe COMECONindeedfailed, it would be the sign thatsocialist economies wereunable to promote an attractive development model at interna- tional level.¹¹ Thus the organization would be deemed amere emptyshell estab- lished by the Soviet Union to ensure its power over the bloc. The following anal- ysis argues thatthe COMECON was not amere transmission belt for the USSR, aiming at transferring its economic model to the socialist countries in Eastern Europe.¹² Rather thanconcentratingonthe meager resultsofthe multilateral at- tempts at coordinating economic planning within the COMECON, in order to dis- close structural weaknesses of the system and explain the allegedlyimpossible enforcement of economic common planning in the socialist world, Iwill consider the reasons whythe COMECONfailed, while looking at how the coordination processofthe national plans of its member states took place. Following the in- ternational negotiation process in its different steps allows areinterpretation of the so-called “failure” of the Council. Indeed, planning cannot be reduced to its economic dimension in the socialist world, nor exclusively be considered atech- nical process intended to rationallyallocate scare resources.¹³ It is also apolitical statement of sovereignty. Beyond the apparent economic failure of the COME- CON,apolitical process of constant negotiation ought to be highlighted, during Paul Gregory, ThePolitical Economy of Stalinism (New York: Cambridge University Press, 2004). AndréSteiner, “The Council of Mutual Economic Assistance – An Example of Failed Eco- nomic Integration?,” Geschichte und Gesellschaft 39 (2013): 240 –258. Forthe first analysisofacomplex balanceofpower within COMECON,see Randall Stone, Satellites and commissars:Strategy and Conflict in the Politics of Soviet-Bloc Trade (Princeton:
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