3b730142   
   XPost: soc.culture.baltics, soc.culture.czecho-slovak, soc.culture.russian   
   XPost: soc.culture.nordic, soc.culture.baltics   
   From: ddfr@daviddfriedman.nopsam.com   
      
   In article   
   ,   
    holman@mappi.helsinki.fi (Eugene Holman) wrote:   
      
   > 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.   
      
   Nonsense.   
      
   The "trading company" described in the earlier post was a middleman. So   
   were all the people, Finnish and Russian, engaged in arranging the   
   particular deals in the barter exchange. There were still profits and   
   losses, even if they didn't show up on the accounts. There was still   
   financing--the Finns had to pay the costs of producing the baggy suits   
   in advance, before getting oil in exchange that they could sell.   
      
   Or in other words, the things you regard as unnecessary difficulties   
   created by capitalism are a part of the costs of production and trade,   
   whether or not they are labeled as such.   
      
   You might want to think about why, if your view of capitalism as an   
   unnecessarily inefficient system is correct, not only the Soviet Union   
   but every other country that has tried to replace it with a socialist   
   system--government ownership and control of the means of production--has   
   done much worse than successful capitalist countries, instead of much   
   better.   
      
   One case you might put down to special circumstances, but all of them?   
      
   > Additionally, it enabled them   
   > to avoid such factors as fluctuating prices, business cycles,   
   > cancellations, and fickle markets.   
      
   Again no. Finns who accepted payment in oil they weren't going to use   
   themselves were taking the risk of fluctuating prices on the world oil   
   market.  Russians "firms" that had agreed to take a particular quantity   
   of Finnish goods were at risk of discovering that the other "firms" (all   
   governmental organizations, of course) they intended to trade those   
   goods to in exchange for things they wanted no longer wanted as much of   
   those goods as expected.   
      
   Firms in capitalist economies can make long term contracts too, and   
   often do. More often it turns out that the costs of doing business that   
   way are larger than the benefits, so they don't.   
      
   > 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?   
      
   Depends on the price you were getting for them.   
      
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    http://www.daviddfriedman.com/ http://daviddfriedman.blogspot.com/   
    Author of _Harald_, a fantasy without magic.   
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