Khrushchev's Economic Steamroller

...Communist purchases of foreign goods will be limited to those which bring short-term economic or political advantage, or which enable the bloc to reduce its dependence on external sources of supply...

...The U.S...

...But this in itself only increases the contribution which the Soviet economy makes to Soviet world power...

...Last May, the Soviet bloc held an economic conference in Moscow in which the satellite Five Year Plans were closely integrated with the Russian Five Year Plan, and steps were taken to produce a common market covering 300 million people...

...For example, long-term price agreements for raw materials would do more to help non-Communist Asia than large injections of foreign aid...

...Similarly Russia has taken rice from Burma which might otherwise have remained unsold, and is bidding for the date crop of some Arab countries...

...It is not, as Eden maintains, primarily a question of diverting resources from defense to economic development, though this may well be possible, but of organizing both defense and economic development internationally to satisfy agreed political aims...

...Quite apart from the military risks involved in surrender to these pressures, there is a real danger that Britain may seek economic salvation by trying to limit foreign competition through international devices for restraint of trade...

...India and Japan are eating into Britain's textile trade...

...Though millions of human beings still suffer from real hunger, Britain has tried to deal with the problem of America's agricultural surpluses by persuading the U.S...

...The problem is not just to maintain economic stability in the free world, but to maintain it at a rapidly rising level...

...Moreover, the present relaxation of Russian control over Eastern Europe in the cultural and political fields is accompanied by much tighter control of the satellite economies...

...What is the reality behind the phrase...

...Too much is made in the West of the political kudos which Russia gains from such exports...

...It was a central theme of Labor and Liberal as well as Conservative spokesmen in the last debate on domestic policy: and press reports agree that it took a leading place at the recent conference of Commonwealth Prime Ministers...

...But countries like Egypt and Burma are fully conscious of the danger they run by dependence on the Russian market...

...In the long run, this is the prospect which makes Khrushchev so certain of defeating the West in "peaceful competition...

...Its recent propaganda about the Russian economic steamroller is inspired mainly by such motives...

...No one now disputes that the Soviet Union is maintaining a rate of economic growth well in excess of the West...

...It is rumored that Shepilov offered to buy at least 40 per cent of Egypt's cotton crop when he was recently in Cairo ?Russia bought about 30 per cent of Egypt's cotton even last year...

...Britain has been too slow in adapating herself to more normal conditions of international trade...

...But a start must be made somewhere...

...Though in some cases she offers more generous loan and credit facilities than most Western countries, there is so far no sign that this is likely to divert a major part of Asian trade in her favor...

...Australia's import cuts have damaged the prospects of several British industries...

...It is difficult to avoid the suspicion that at present the British Government is using the specter of Soviet economic competition to justify policies which spring from quite other considerations...

...Of course, the Russian standard of living is most unlikely to catch up with that of Britain—still less of America...

...She has made a point of offering assistance without political strings, but fear of infiltration by Soviet experts and trade missions still discourages many Asian countries from too easy a welcome to her overtures...

...This should be made a high priority by all the Western governments...

...A more important novelty in Russia's trade policy is her willingness to buy large quantities of surplus raw materials from some Asian countries...

...The greatest obstacle to progress is the complex of 19th-century prejudices still infecting most Western governments, as a result of which economic development proceeds with little relation to the broad aims of national policy and with no relation at all to the collective interests of the international community...

...Russia has no interest in helping non-Communist countries to solve their economic problems by democratic means, so she will probably concentrate her capital exports on underdeveloped countries which are already inside her system, like China...

...Pakistan, for example, gave Russia's trade mission last month a very dusty answer...

...Indeed, it is fair to say that at present the threat of Russian economic competition is inconsiderable —though many Asian countries are naturally exploiting Soviet offers in order to obtain better terms from the West...

...Of course, it is true that Russia has begun to export capital equipment to non-Communist countries in Asia for the first time since the war...

...Given the existing diversity of cultures, attitudes and expectations in the nonCommunist countries, it is difficult to see this being achieved without a far more deliberate attempt at international economic planning than any Western regime now contemplates...

...The fact that the Soviet dictatorship permits a far smaller output of automobiles and houses than the American democracy means that Russia can support on 45 million tons of steel an engineering industry equal to that which America supports out of 65 or 70 million tons of steel...

...Fact and hysteria khrushchev's Economic Steamroller By Denis Healey London Ever since Prime Minister Eden first used the phrase a month ago, the idea that the West is now threatened by Khrushchev's "economic steamroller" has been a cliche in British politics...

...Calculations of cost and market advantage play very little part in determining Communist trade policy...

...For example, so long as the Western oil companies fight one another—or even agree with one another—free from political control, it will be difficult to construct any common Western policy for the Middle East...

...The balance of world power will shift in Russia's favor unless the Western countries can combine to achieve a comparable rate of growth by democratic means...

...The Burmese Prime Minister bluntly declared that Britain owed the 40-percent decline in her exports to Burma to economic inefficiency and commercial rigidity...

...Russia's economic growth will be reflected less in an expansion of her foreign trade than in the increasing confidence and aggressiveness of Soviet diplomacy...

...to reduce her grain production...

...Even so, Communist competition with the West is unlikely to take the form of a traditional commercial battle...

...Even the minimal reorganization of the international economy of the non-Communist world demands a type of government interference with market forces which many parliaments consider intolerable...

...The real answer to Khrushchev's economic steamroller lies in more vigorous pursuit of a collective foreign economic policy by the West as a whole...

...For though in the short run the West has little to fear from Soviet commercial competition, in the long run Communist economic expansion will present a challenge...

...Such policies would aggravate the very dangers they are ostensibly designed to avoid...

...And Russia is able to spend on defense a higher proportion of her national income than any Western country, without thereby reducing her capacity to produce or export capital equipment...

...and West Germany have robbed Britain of a large part of her foreign markets for automobiles and capital equipment...

...After monopolizing a seller's market for five years after the war...

...As far as Britain is concerned, the main commercial threat comes from her friends and allies rather than the Communist bloc...

...Pressed on one side by foreign competition, on the other b\ the demands of its supporters for lower taxes, the British Government inevitably seeks a justification for cutting its defense expenditure...

...Russia's readiness to absorb raw material surpluses from uncommitted countries presents a serious challenge to the West—there is no easier way of establishing political control of a small country than to provide an exclusive market for its major products, as Hitler showed in Eastern Europe before the war...

...But the total value of Soviet exports in the current year is unlikely to exceed half a billion dollars—a tiny fraction of Western exports to the same areas...

...Nor has she any intention of becoming dependent on foreign imports...

...If China remains a close ally of the Soviet bloc, the West will have to face an economy covering 900 million people planned to a single pattern...

...For the growing resources of the Communist bloc will be directed at all times to increase the political power of the Soviet state...

...The Soviet rate of investment is nearly double that of the most advanced Western countries, and it is concentrated mainly in fields like heavy industry which directly boost Russian influence in world affairs...

...It is impossible to maintain an alliance indefinitely if the economicbehavior of its members contradicts their political unity...

...In comparison, Russia has contributed hardly at all to the recent shrinking of British exports...