Central Planning in Czechoslovakia: Organization for Growth in a Mature Economy

By Jan M. Michal | Go to book overview

Chapter 6
EXTERNAL TRADE

1. Czechoslovakia's Dependence on External Trade

The Czechoslovak economy always has been heavily dependent on exports, especially of manufactured goods, and on imports, especially of raw materials. In 1937 total exports amounted to 20 per cent and total imports1 to 18 per cent of the current national income. (This ratio does not, of course, reflect the real contribution of foreign trade toward the formation of national income.) The corresponding prewar figures for such a "classical" world-trade country as the United Kingdom were only 11 per cent and 19 per cent for exports and imports, respectively. In 1948, Czechoslovak exports amounted to 18 per cent and imports1 also to 18 per cent of the current national income, while the corresponding figures for the United Kingdom were 17 per cent and 21 per cent. The ratio of external trade to national income of Czechoslovakia, however, would be misleading from 1948 on because, since the introduction of comprehensive central planning and a state monopoly of external trade, export-import prices have been completely divorced from internal price structure, and the Marxist method of calculating national income is different from the Western method.2 Per capita exports and imports in current dollars, in

____________________
1
Imports excluded UNRRA supplies.
2
Assuming that the author's estimate of the Czechoslovak national income, analogous to the Western definition "at market prices" (see Chapter 10) is not far from reality, and under the rather arbitrary but perhaps not unrealistic assumption that the foreign trade net subsidy (as described in Section 6 of this chapter) equals export subsidy (surplus receipts from imports of food and finished products roughly equaling surplus expenditure on imports of raw materials), the following ratios can be obtained: in 1957 exports were 12-14 per cent of national income at market prices and imports were 7-8 per cent. From this angle, the ratio of foreign trade to national income in 1957 appears to be below the increasing ratios in the developed market economies, as well as below the corresponding Czechoslovak ratio in 1948, especially in imports. One serious qualification in the above estimates is that they allow only for the gap between the internal and external price levels (foreign trade subsidy) and not for the dissimilar internal price structure in Czechoslovakia (underpricing of basic raw materials and heavy industry products; see Chapter 7, Section 3). It also should be mentioned that the ratio of exports/imports to national income rather than to gross national product was used, because of uncertainty about the magnitude of GNP in Czechoslovakia in prewar as well as in postwar times.

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Central Planning in Czechoslovakia: Organization for Growth in a Mature Economy
Table of contents

Table of contents

  • Title Page iii
  • Acknowledgments v
  • Contents vii
  • List of Tables ix
  • Abbreviations and Symbols xiii
  • Introduction 1
  • Chapter 1 Population and Manpower 6
  • Chapter 2 Industry 26
  • Chapter 3 Construction 58
  • Chapter 4 Agriculture 64
  • Chapter 5 Transportation 91
  • Chapter 6 External Trade 96
  • Chapter 7 Money and Prices 139
  • Chapter 8 State Budget and Investments 165
  • Chapter 9 Income of the Population and Standard of Living 188
  • Chapter 10 National Income, Gross Product, and Expenditure Aggregates 211
  • Conclusion 238
  • Appendix Results of the 1959 Plan; Plan for 1960 and Targets for 1965 Under the Third Five-Year Plan 245
  • Summary 253
  • Bibliography of Works Cited 265
  • Subject Index 269
  • Name Index 274
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