On Aug 8, 7:52 am, David Friedman <d...@[EMAIL PROTECTED]
>
wrote:
> In article <g7gs3p$64...@[EMAIL PROTECTED]
>,
>
>
>
> Anton <anton.use...@[EMAIL PROTECTED]
> wrote:
> > David Friedman kirjoitti:
> > > In article <5fnlk.44302$_03.22...@[EMAIL PROTECTED]
>,
> > > "J. Anderson" <anderso...@[EMAIL PROTECTED]
> wrote:
>
> > >> As far as values are concerned, Finland bought raw materials at
lower than
> > >> world market prices and sold manufactured goods and construction
projects
> > >> at
> > >> higher prices than it could get on the western markets.
>
> > > 1. Can you provide any sup****t for that claim? So far all we have
are
> > > claims on both sides.
>
> > > 2. Why would the Soviets choose to trade on those terms, instead of
> > > selling their raw materials on the world market and buying
manufactured
> > > goods on the world market?
>
> > It was politically questionable for both the western and eastern bloc
to
> > become "good buddies" in trade. If trade had flourished between the
USSR
> > and NATO west neither side could any longer have been able to demonize
> > one another, and their military machines in Europe could have been
hard
> > to justify. If they generally were very suspicious of each other it
> > makes sense that they did not want to get too much involved in trade
> > either.
>
> Individual western businessmen weren't interested in promoting the Cold
> War--they were interested in making money, as per the famous Marx quote.
> So your argument depends on western governments preventing their
> citizens from buying raw materials from the USSR or selling goods to the
> USSR. But that didn't happen, save for the special case of restrictions
> on military or military related technology ex****ts--and even then, such
> restrictions applied only to the particular countries that imposed them.
> On the contrary, western nations were happy to buy oil and chrome and
> other things from the Soviets, and sell stuff to them.
>
> > I also find it credible that ideology-driven communists weren't
> > that skilled at economics and trade in a way that they could act at
> > their own best interests, which makes the claim that Finns got the
> > longer straw from it credible. That's my 2 cents.
>
> That's possible. On the other hand, it doesn't take much skill to figure
> out that selling goods at below the market price and buying goods at
> above the market price is a losing game, economically speaking. The
> Soviets may have been ideology driven, but they weren't stupid.
>
> Which suggests that if the terms of trade really were as you and Eugene
> claim, it was probably a bribe by the Soviets to the Finns, in order to
> purchase political sup****t.
Seems the discussion is badly in need of information. Part of the
problem is that the trade was barter conducted between governments.
This has evidently made it hard to measure and *****s in retrospect.
Curious, I googled finland soviet trade. The best information I got so
far is this Time article from 1953:
http://www.time.com/time/magazine/article/0,9171,823142,00.html
Painful Reminder. The Kekkonen incident was a painful
reminder of Finland's dangerous dependence on Soviet
trade concessions. For eight years (1944-52), the Finns
worked like demons to pay the Soviet Union $570 million
in reparations. The effort cost them dear. To meet Soviet
demands for ****ps and machinery, Finland was forced to
double the capacity of its metal industry. It ended up
with an artificial industrial plant, geared not to its
own needs but to Russia's, and lacking alternative
(nonCommunist) markets to take care of the surplus. Wages
were allowed to rise to uneconomic levels because strikes
might have jeopardized regular deliveries, and thus given
the Kremlin an excuse to intervene. Result: Finland's
prices are far too high to compete in Western markets.
Its economy was riveted to the Russian market, and the
Kremlin was in a position to withhold purchases and
create mass unemployment in Finland, almost at will.
To escape the Bear's hug, Finland's new government hopes
for an opening of Western markets and a new trade pact
with Britain. Tuomioja's Cabinet could do most to help at
home by paring down wages and prices, and curtailing
social benefits which Finland cannot afford. But not even
Tuomioja's conservatives dare offend both the Soviet
Union and the Finnish trade unions, which are wedded to
the welfare state. The new Premier announced: "We shall
continue Finland's policy of friend****p with all nations,
especially with the Soviet Union."
Key lessons as of 1953:
1) The Soviets (unsurprisingly) had the upper hand following the
earlier conflict, since it was the Finns paying the Soviets
reparations.
2) The Finns were under, and considered themselves to be under, the
threat of Soviet attack (talk of the Kremlin "intervening" and the
Finns working hard to avoid that fate).
3) The Finns harmed their own economy in order to satisfy the
militarily threatening Soviet Union.
4) The Finns were deeply unhappy about their relation****p with the
Soviet Union. (see article for description of "shock" at Kekkonen's
dealings, which reminded them of this relation****p)
5) The Finns were desperate for a way out (of "the Bear's hug").
Here is an article written in 1992 (only beginning available without
fee):
http://www.foreignaffairs.org/19920901faessay5890/john-lukacs/finland-vindicated.html
Finland and Russia signed a friend****p treaty in Helsinki
on January 20, 1992, consisting of many clauses,
including commercial and financial ones. More significant
was the exchange of notes that same day. These certified
the cancellation of the Treaty of Friend****p, Cooperation
and Mutual Assistance signed in Moscow on April 6, 1948.
That treaty, the result of the Soviet victory in the
Second World War, established the limitations of an
independent Finnish foreign policy and, indeed, certain
conditions of Finnish independence itself. That those
limitations proved manageable and flexible was
principally due to the moderation and wisdom of
successive Finnish governments, including their
recognition that - especially for a small nation - an
untrammeled independence of foreign policy is a chimera.
Thus in 1992 the last outlines of the ominous shadow of
Russian domination of Finland disappeared - 75 years after
the establishment of an independent Finnish state. It
must not be thought that the present treaty was but
another by-product of the Russian retreat from central
and eastern Europe. Finland's independence was achieved
and secured, bit by bit, by its successive governments
over the last fifty years. Long before 1992 the exercise
of that kind of Finnish statesman****p was vindicated.
Lessons:
1) The 1948 treaty was not cancelled until 1992.
2) This treaty was the outline of an ominous shadow of Soviet
domination of Finland.
3) Finland avoided being invaded by the Soviet Union by staying within
limits imposed on it by the Soviet Union.
The above does not seem consistent with the view that the Soviet Union
was bribing Finland. The special relation****p with Finland was a
fairly direct outcome of the Soviet victory.
Here is an abstract, not about the subject directly, but about Finnish
perceptions:
http://www.informaworld.com/smpp/content~content=a770210400~db=all~tab=content~order=page
Until the end of 1990, Finland was the only developed
market economy to trade with the USSR on a bilateral
clearing basis. It was also, so it is widely believed in
Finland, the only one among the neighbours of the Soviet
Union to benefit greatly economically from this trade.
This article does not aim to clarify whether such beliefs
are well grounded in fact, but rather to look at the
beliefs themselves. To do that, we examine a large amount
of so-called grey literature: memoirs, biographies and
fiction, but not research proper in economics or economic
history. Belief in the benefits of Eastern Trade has been
widely held in Finland, but there have always been
sceptics as well. The materials used offer many insights,
for instance, into the character of Eastern Trade,
negotiations procedures, pricing and quality issues,
relations between the counterparts, as well as the
implications of COCOM restrictions of trade by a neutral
country.
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