3b730142   
   XPost: soc.culture.baltics, soc.culture.czecho-slovak, soc.culture.russian   
   XPost: soc.culture.nordic, soc.culture.baltics   
   From: holman@mappi.helsinki.fi   
      
   In article , David Friedman   
    wrote:   
      
      
      
   > 1. The argument that Eugene, and I think some others, have been making   
   > is that the foreign trade of the USSR was based largely on   
   > ideology--that one reason they traded with Finland on worse terms than   
   > they could have traded elsewhere, and did it in the form of barter, was   
   > their ideological opposition to ordinary capitalist exchange. Whether   
   > the claim is true I don't know.   
      
   Well, consider some of the implications. This trade enabled both parties   
   to bypass such basic principles of capitalist economics as interest,   
   profits, losses, financing, and middlemen. Additionally, it enabled them   
   to avoid such factors as fluctuating prices, business cycles,   
   cancellations, and fickle markets. Prices were set on a five-year basis,   
   and Finland supplied its goods, at prices that it set itself, more on the   
   basis of quantity than quality. Who would not lust for a guaranteed,   
   captive, competition-free market where you could sell ten million units   
   your product over the next five years with the concentration more on   
   quantity than quality?   
      
   > 2. The question that arises for me is why what you describe made more   
   > sense for the Finns than simply selling their products through whatever   
   > the usual channels were, and using the money to buy airplanes. Why set   
   > up a special (I'm guessing Finnish) agency to sell goods in order to buy   
   > airplanes?   
      
   The Finnish economy was ill-equipped to compete on a global scale. Wages   
   and prices were too high, and most of the goods that Finland produced   
   would have met with sharp competition particularly as concerns prices, in   
   an open marketplace. Neither does a country with a population of only five   
   million, still recovering from a series of disastrous wars, normally have   
   the financial resources to pay for expensive products such as jet   
   aircraft. Setting up a specific trading company for this purpose showed   
   that some lessons had been learned about the possible practical advantages   
   of doing business according to a model in which little actual cash chages   
   hands.   
      
   Regards,   
   Eugene Holman   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)