Prices of the Socialist World Market

the system of prices used in the reciprocal trade of socialist countries. Such prices are established on the basis of the international value of goods in the world market, objective economic conditions, and the planned nature of economic relations among the socialist countries.

In the case of member nations of the Council for Mutual Economic Assistance (COMECON), market prices are determined on a planned basis in conformity with reciprocal agreements, and they play an important part in strengthening economic cooperation for greater socialist economic integration. Trade between COMECON member nations before 1950 was based on prices that were in effect in the major world commodity markets at the time annual trade agreements were concluded. These agreements stipulated the quantity of goods to be delivered and their price in US dollars. The increased emphasis on the planned nature of reciprocal foreign trade relations, combined with unstable business conditions in the capitalist world economy, led to changes in pricing procedures between 1950 and 1956. Foreign trade prices on the socialist market during this period were based on world prices as of late 1949-earIy 1950; subsequently they were adjusted bilaterally. In 1957 the prices of the socialist world market were based on world prices for 1956, and from 1958 to 1964 they were based on 1957 world prices.

The principles governing the establishment of prices on the socialist world market were set forth in the resolutions of the ninth session of COMECON. In order to exclude the influence of the cyclical factors of the capitalist economic system, the member nations of COMECON agreed to base socialist world market prices on average world prices for the five-year period preceding the effective date of the foreign trade price agreements. The Comprehensive Program for the Further Extension and Promotion of Cooperation and Development of Socialist Economic Integration envisages the establishment of reciprocal trade prices on the basis of world prices “cleansed” of the influence of capitalist market trends and speculative factors.

In view of the significant long-range shifts in the levels and relationships of world prices, in January 1975 the Executive Committee of COMECON amended the effective principles that governed reciprocal trade prices, the amendment being meant to bridge the gap between socialist world market prices and current world prices. Between 1976 and 1980, reciprocal foreign trade prices are to be agreed on for each year on the basis of average world prices for the five-year period preceding the year during which the prices agreed on will be in effect. The corresponding price adjustment was already in effect in 1975. Work continues on the further improvement of the price system of the socialist world market.