c47f5491   
   XPost: soc.culture.baltics, soc.culture.czecho-slovak, soc.culture.russian   
   From: holman@mappi.helsinki.fi   
      
   In article , James A. Donald   
    wrote:   
      
   > David Friedman:   
   > > In defense of James' view, Finland did pay tribute to   
   > > the USSR at the beginning of the period in the form of   
   > > large scale reparations. And the USSR was arguably in   
   > > a position to threaten Finland, hence to extort   
   > > tribute.   
   > >   
   > > The alternative view requires more explanation. One   
   > > possibility is that the Russians traded at a loss   
   > > because the Finns were smarter than they were, or at   
   > > least better at trading. Given that the loss was, on   
   > > that account, entirely obvious, and the transactions   
   > > went on for decades, that strikes me as unlikely.   
      
   The answer is more obvious. The Finns were trading as capitalists, with   
   profit in the monetary sense as the ultimate criterion for judging whether   
   what they were doing was rational or not. The Soviet were trading as   
   idelologically committed communists trying to make a point to the world:   
   countries with different socio-economic systems can coexist and mutually   
   benefit from their relationship. Taking (clearing) dollar losses was   
   regarded as but one part of a far larger construct that produced positive   
   propaganda. When the ideological basis for the trade collapsed, the Finns   
   came out as the clear winners, not because they were smarter, but rather   
   because they had never allowed themselves to be encumbered in the   
   ideological aspect and just wanted to regain the money, with a handsome   
   profit, that they had been forced to pay in reparations.   
      
   > > A second explanation is that the USSR was somehow a   
   > > captive market--that it had nobody else to sell its   
   > > raw materials to or buy manufactured goods from. That   
   > > again is implausible, since the western allies never   
   > > attempted a trade embargo.   
      
   However, the Soviets imposed their own version of a trade embargo: they   
   preferred to trade with a country such as Finland, that was willing to   
   swop on a barter basis according to long-term trade agreements, rather   
   than deal cash-on-the line on a transaction-by-transaction basis. Anyone   
   with even an elementary understanding of Soviet economic planning can see   
   why they favored the model that was the basis for trade with Finland. To   
   put it crudely, it was the difference between marital sex and occasional   
   trysts with ladies of pleasure.   
      
   > > The least implausible   
   > > version of it has the Soviets imposing an embargo on   
   > > themselves, refusing to trade with evil capitalists   
   > > other than their Finnish friends. I can't see any   
   > > particular reason why they would have done so, or   
   > > evidence that they did.   
      
   See the response above. Soviet-Finnish trade was based on five-year trade   
   agreements with annual revisions. From the Soviet standpoint it was finely   
   coordiated with the rest on their economy in terms of supply and demand,   
   in addition to which it gave the Finns the advantage of prediuctability   
   and guaranteed prices. For as long as it was sustainable it served as a   
   sterling example of the "advantages of socialist economic planning".   
      
   >   
   > All of these mutually contradictory accounts are true,   
   > each in a different sense:  When the commissar held the   
   > peasant's child in the fire to force child's mother to   
   > reveal where the seed corn was buried, he did not   
   > perceive himself has extorting tribute from the peasant.   
   > He believed with complete sincerity that he was raising   
   > the peasants to his own elevated level of rationality,   
   > teaching them sharing, generosity, and interdependence.   
   > This belief was sincere - sincerely deluded and   
   > sincerely self serving.   
   >   
   > The communists cut themselves off from trade because   
   > they viewed voluntary exchange, value for value, as   
   > oppressive and destructive, as subtracting rather than   
   > creating value, which viewpoint we have seen Eugene   
   > Holman express in this thread. But this implies that   
   > what was happening with Finland was *not* voluntary   
   > exchange, value for value, but Russian commands and   
   > Finnish obedience.  Had it been otherwise, they would   
   > have faced the same spiritual and emotional problems   
   > with trading with Finland as they faced trading with   
   > independent communist states.   
      
   The Finns and Soviets were able to trade on terms that served their   
   economic interests. Finland, which had acquired a gigantic industrial   
   infrastructure that it did not need when it was forced to pay war   
   reparations, would have had to dismantle it if they could not find a   
   market. The Soviet Union, which it had orginally built to serve anyway,   
   provided the most natural future market, but, for a country and economy as   
   small as Finland, such a large volume of trade could not be managed   
   without long-term trade agreements. The USSR, wary of capitalism and   
   unwilling to trade in scarce foreign corrency for consumer goods regarded   
   as questionable ideologically, was willing to trade natural resources with   
   the Finns for Finnish-produced consumer products, because the political   
   good will hat this generated was regarded as more important than the   
   ideological pollution that came with supplying its consumers with good   
   quality nylon stockings, galoshes, and baggy men's suits.   
      
   > It is probable that they did not intend to oppress the   
   > Finns, at least did not intend to oppress them after   
   > 1952.  It is likely that they sincerely believed they   
   > were not oppressing the Finns.  But commands and   
   > obedience are oppressive in themselves, and tend to   
   > produce an oppressive and unequal economic relationship,   
   > no matter what he who gives the commands believes   
   > himself to be doing.   
      
   The Finns also had their commands and concerns: either dismantle the   
   oversized industrial infrastructure at the cost of hundreds of thousands   
   of jobs, or keep it going and sell it to the market it was originally   
   intended to serve: the Soviet market.   
      
   The Soviets did not impose a solution on Finland. Rather the two sides   
   came to an agreement that benefitted both of them for as long as it was   
   sustainable. When it eventually collapsed, both sides suffered, but the   
   Russians arguably far more than the Finns. The Finns did wind up having to   
   dismantle part of their industrial infrastructure when the Soviet market   
   disappeared, with the loss of its primary market and hundreds of thousands   
   of jobs. What remained was downsized, retooled, and redirected towards the   
   global marketplace. Thus, Finland today competes in more hi-tech markets,   
   information techology, ship-building, lifts, escalators, and   
   people-movers, paper-making technologies, than one might expect such a   
   small country to be involved in. The Russians wound up cut off from a   
   reliable supplier of mediocre-to-good quality consumer goods designed to   
      
   [continued in next message]   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)