International Trade Under the Soviets: A Comedy of Errors

One of Ludwig von Mises’ great contributions to modern thought was his proof of the inability of economic calculation under socialism. This core truth should be recalled as many leftists seek to restore communism’s cachet. Perhaps nothing more vividly illustrates the mental paralysis that socialism begets than the foreign trade practices of East Bloc regimes.
In 1986, a Czech border guard stopped a Polish family leaving Czechoslovakia and ordered a Polish kid to take off his new Czech shoes “because taking children’s shoes out of the country is prohibited.” The Polish border guard watched passively – and then stopped a Czech car coming from Warsaw and ordered its new Polish tires stripped from the car, claiming that they had been illegally purchased in Poland.
Western trade wars were love fests compared to East Bloc trade fights. COMECON – the Council for Mutual Economic Cooperation – was derided by East Europeans as the “council for mutual exchange of inefficiency.” COMECON was the foreign trade organization of a group of nations that instinctively hated foreign trade.
In Budapest, the saying was “We deliver grain to the Czechs and they in turn deliver machinery to the Poles. The Poles then ship chemicals to the Soviet Union and as a final payment, we get a Russian folk dance ensemble in return.”

This post was published at Ludwig von Mises Institute on November 7, 2017.