World Economy

the system of international division of labor and mutual economic relations among individual national economies. The world economy integrates all aspects and tendencies in commercial, economic, financial, and scientific and technological ties among nations. The main features and developmental tendencies of the world economy are determined by the objective laws of social production.

Historically, the world economy was formed around the capitalist mode of production. During the world economy’s prolonged formative period, capitalism displayed two main tendencies with respect to the national question. The first tendency encouraged the awakening of national life and the emergence of popular movements within each individual country and promoted a struggle by each people for the creation of a genuine national economy. The other tendency led to the consolidation of international relationships, to the breakdown of national barriers, and to the international integration of capital and of economic life in general, as well as to the integration of such additional factors as politics and science. If the first tendency prevailed in the early period of capitalist development, the second is more typical of the mature stage of capitalism. In particular, the increased influence of the second tendency during the stage of imperialism furthered the transformation of capitalism into a worldwide system based on a single international division of labor. This facilitated both the accelerated growth and the internationalization of social production but at the same time led to a sharp intensification of all the antagonistic contradictions inherent in the capitalist mode of production.

World War I represented the concentrated expression of these contradictions. First the war itself shook the economic and political supports of world capitalism to their foundations, and then the Great October Socialist Revolution in Russia tore away one of the main links in the overall chain of world capitalism. As the boundaries of the capitalist mode of production began to contract, the first country where socialism was victorious started to lay the foundations for economic relations based on the socialist mode of production.

But this did not lead to a breakaway from the already established international division of labor. With the consolidation of the new social system inside the country, a firmer basis was gradually created for the establishment and expansion of economic ties between the USSR and the countries of the capitalist world. During this first stage of the general crisis of capitalism, the new mode of production was already becoming part of the world economy, just as socialist forces of production were emerging as an integral component of world productive forces.

The role and influence of socialism in world economics and politics rose as the general crisis of capitalism intensified. World War II caused the sphere of domination of the capitalist mode of production once again to shrink significantly; socialist revolutions now enabled a number of other countries to break away from the capitalist system. Within the framework set by world economic relations, an entirely socialist world economic system emerged.

Under present-day conditions, the countries of both opposing social systems enter into world economic relations. The main tendency in the shaping and development of these relations is defined through the dialectical process of interaction and conflict between the two world socioeconomic systems. The further development of the international division of labor achieved by the socialist countries both among themselves and with the capitalist and developing countries plays an increasingly essential role in the world economy. Other major tendencies being expanded rapidly in international economic relations include mutually beneficial exchanges related to scientific and technological advance; friendly and comprehensive cooperation between the socialist and developing countries, along with consolidation of trade and economic ties among the latter; economic integration among groups of capitalist states; and international industrial cooperation. Scientific and technological progress exerts a growing influence on all aspects of the social life of humanity, including the internationalization of social production on a global scale.

One significant structural change taking place within the development of the present-day world economy pertains to the relatively rapid decline in the share taken by the capitalist mode of production. This is the result of accelerated growth in the comparative weight and role of the socialist mode of production in the world economy. When the new social system came into being, its share of world industrial production was less than 3 percent; late in the 1930’s it was a little less than 10 percent; in the early 1950’s this share had reached approximately one-fifth; and by the early 1970’s it had risen to two-fifths of world industrial production.

As the capitalist system of the world economy develops, the tendency of economic relations between countries to become fixed and the tendency toward general economic integration based on the internationalization of social production—tendencies that operate objectively under capitalism—increasingly enter into contradiction with the inner laws of capitalist development. This contradiction has reached its most acute phase just as the world socialist system and the unfolding scientific and technological revolution have opened fundamentally new possibilities for both rapid growth in the forces of production in society and for a truly all-inclusive, equitable, and mutually beneficial system of international economic cooperation. Peaceful coexistence and economic competition between the two systems do not eliminate the class and ideological contradictions between socialism and capitalism; these are irreconcilable. But such contradictions cannot become obstacles on the road to developing international economic cooperation between states with differing social systems.

The policy of peace that is pursued by the Soviet government proceeds from the necessity for broad, stable, and long-term economic ties linking the USSR and the other socialist countries with the countries of the capitalist system. This would constitute a vital contribution to a firm and lasting peace.