What Russian trade?

Newsweek, February 16, 1959

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 Moscow on January 31 in favor of “peaceful competi­tion in cooperation with other countries in developing the econo­mies of the underdeveloped na­tions,” and so forth. Before we ask how “peaceful” this “competi­tion” has been or is likely to be, we may begin by putting the sub­ject in factual perspective. Just how important, relatively, has Russian buying and selling been? How does Russia rank in inter­national trade?

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 U. S. A. magazine for February 13) to dig them up and interpret them. They are to be found among the 777 pages of the United Nations Year­book of International Trade Sta­tistics.

Soviet “Statistics”

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 Soviet Union did only 2 per cent of world trade in 1957. And we find that total U.S.S.R. ex­ports to the free world in 1957 (after deducting “trade” with the Russian satellites and Red China) amounted at that rate to only $966 million. This is less than 5 per cent of the total exports of $240.6 billion from the United States in that year.

But the official 4-to-1 rate for the Russian ruble is a flagrant fic­tion. Foreign-currency dealers in New York will sell you rubles at 25 or more to the dollar and will buy rubles at 50 to the dollar. If we are unkind enough (as Mrs. Widener is) to convert rubles into dollars at a rate of 24 to 1, we bring Russian exports to the free world in 1957 down to a value of only $161 million. This is less than the gross exports in that year of a single American company, like General Electric. If, generously, however, we convert rubles at the official tourist rate of 10 to the dollar, we get total 1957 exports to the free world of $386 million. This is less than the U.S. govern­ment spends every two days.

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 Russia since 1947. Soviet Russia has al­ways been a negligible factor in world trade. In 1938, the last full year before World War II, Ameri­can exports to the Soviet Union were valued at about $70 million, and our imports from the U.S.S.R. in the same year were valued at about $24 million.

Finally, as the Russian satellites and such reluctant victims as Fin­land have discovered, “trade” is something that Soviet Russia forces on weaker neighbors as a form of tribute or extortion. But that’s another story.