Antitrust for USSR Industrial Monopolies Impede Growth in the Republics

Article excerpt

MONOPOLY, said Lenin, is the last stage of capitalism. Today, the communist system he founded has bequeathed to its reformers the most monopolistic industrial economy in the world.

This means that the people who are now trying to build nations in place of the old union are trapped by their past. Their republics industrialized in the service of the USSR, not for themselves. Because Soviet central planners favored extremely large enterprises, every republic depends on crucial goods produced by monopolies in other republics.

This combination of monopoly and interdependence worked while the Soviet Union was whole and its authority was unquestioned. Now, the mechanisms of inter-republic trade have collapsed. Central planning and the ruble are both discredited, leaving factories to barter when they trade at all. The economic system of a superpower has been reduced to using prehistoric methods of exchange.

The rise of ethnic nationalism from the ashes of the communist system has complicated trade still further. Azerbaijan has blocked trade out of Armenia. Armenia, Kazakhstan, Uzbekistan, the Ukraine, and other republics have banned exports. Workers in Azerbaijan oil equipment monopolies and Ukrainian coal mining equipment plants know the importance of their position, and have threatened to strike.

The consequences can be minor, as when Muscovites rioted last year because cigarettes (the filter tips of which are produced only in war-plagued Armenia) were unavailable. That example is less amusing than it seems, though. The Armenia-Azerbaijan dispute has also prevented oil equipment monopolies in Azerbaijan from sending needed machinery to Siberian oil fields.

If a monopoly producer is removed from trade between the republics, the consequences will ripple throughout the economy. The possibilities for such disruptions are staggering, because the number of monopoly producers is so high. A full third of the Soviet production was based on monopolists; thousands of products are made at only one site. Some telling examples:

A plant in Armenia is the only source of a part that is needed in every power station in all the republics. The world's largest polyester factory, in Byelorussia, produces 90 percent of Soviet output. …