What Russian trade?
MAY 01, 1959 by HENRY HAZLITT
In past articles I have called attention to some of the fictions and fallacies in recent hysterical comparisons between Soviet Russia’s alleged “rate of economic growth” and our own. But supposedly responsible American publicists, in and out of government, continue not only to swallow the Soviet boasts without adding even a grain of salt, but to draw conclusions that would be flagrantly fallacious even if the boasts were reliable.
One of the latest developments to arouse these viewers-with-alarm has been “the Soviet challenge in foreign trade.” In their front-page anxiety about this they are merely acting as megaphones for official communist propaganda, as illustrated, for example, in Mikoyan’s statement in
It should not be too difficult to answer that question, at least in approximate terms. The official figures are available. It is merely necessary to have sufficient enterprise and industry (like Alice Widener, for instance, in
According to the U.S.S.R.’s own official figures, it had total exports of 17.5 billion rubles in 1957 and 15.8 billion of imports. If we accept these figures at face value, the next question is how to convert them into dollars for purposes of comparison. The official rate of the ruble is 4 to the dollar. The U.N. tables solemnly convert it at that rate. Even at that rate, we find that the
But the official 4-to-1 rate for the Russian ruble is a flagrant fiction. Foreign-currency dealers in
A Negligible Factor
About 73 per cent of Soviet exports go to other communist countries. But even if we convert the U.S.S.R.’s total exports in 1957 of 17.5 billion rubles at the tourist rate of 10 to the dollar, we get only $1.8 billion. This is not only less than one-tenth of U.S. exports of $20.6 billion; it is only one-fifth of the 1957 exports of West Germany ($9 billion), and it is about equal to the exports of little Switzerland ($1.6 billion) with a population 1/40th as large as the Soviet Union. And it is by no means certain that a conversion rate of 20 or 25 to 1 for rubles into dollars would not be more realistic than the tourist rate of 10 to 1.
Nor can these ridiculously small exports be attributed to American “discrimination” against
Finally, as the Russian satellites and such reluctant victims as