“Mutual assistance” was the notion used to define the essence of economic relations between the states of the socialist family. It is hard to find a more solidarity-based term, despite the fact that the disproportions in terms of development and size between individual countries called into question the credibility of the doctrine. That the big USSR could help Mongolia was beyond doubt. To what extent Mongolia was able to help, for example, industrial-advanced Czechoslovakia, one wondered. But “mutual assistance” sounded very noble.
The Council for Mutual Economic Assistance was established in January 1949 as a propaganda response to the Marshall Plan and to the USSR’s blocking of the possibility of Poland and Czechoslovakia participating in the Plan’s implementation. The Council was to help “with raw materials, food, machinery and equipment” and facilitate “exchange of experiences”. The idea of using the Council as a tool for the division of labour and integration emerged many years later. The founding members were the USSR, Poland, Czechoslovakia, Hungary, Romania and Bulgaria. Albania joined a month later (but stopped participating in the Council in 1961), and East Germany a year later.
There is no evidence in the documents that Stalin’s intentions assumed anything more than to build with Comecon an institutional wall of the Soviet external empire. And to maximize the benefits of controlling the satellites’ economies. One of the first decisions of Comecon was the introduction of the principle of open availability of technologies and patents within the organization on the terms of a symbolic fee (the so-called Sofia principle). As a result, countries with a high level of technological development, such as the GDR or Czechoslovakia, had to share technological achievements with the USSR on terms highly favourable to the USSR. When the USSR conquered space and developed strategic military technology, the Sofia principle was abandoned. It stopped paying the Soviets off.
Initially, in Moscow it was believed that it would be easier to control the socialist bloc by bilateral channels. So Stalin ordered the activities of Comecon to be slowed down when the first propaganda effect was achieved. The Council was supposed to deal with the facilitation of trade and the exchange of information on economic plans. A protocol on planning coordination was agreed (never ratified). But in practice, nothing happened there.
Revival came in the mid-1950s. Against the background of the events in Poland and Hungary, the hitherto non-equivalent nature of economic relations with the USSR was exposed. The ruling communists in Poland admitted that coal and other raw materials were exported to the USSR at reduced prices. The Khrushchev team decided to authenticate the format of multilateral cooperation. Standing committees in Comecon were set up and there was talk of the need to coordinate economic plans. The statute of the organization was agreed, and a common currency was introduced: the transfer ruble. In 1961, the principles of the socialist division of labour were established. However, Soviet pressure to bring about integrated economic planning for the Comecon states and close specialization brought little result. The resistance got to the point that in the mid-1960s, a principle began to emerge that any member of the organization could exclude itself from a joint project if it did not see any benefits in it. And trade with Western countries grew for most of the Comecon states much faster than trade within the community.
At the turn of the sixties and seventies, there was a paradigm shift in economic relations within the community. Mutual assistance and cooperation were replaced with the concept of “socialist integration”. For ideological reasons, emphasis was placed on its fundamental difference from the capitalist integration practiced for years. Socialist integration, as opposed to capitalist integration, was to lead to the levelling of development differences, elimination of shortages and optimization of production efforts. Whereas capitalist integration was to deepen the differences, strengthen the domination of the stronger, and monopolize the markets. Socialist integration within Comecon already covered Mongolia (since 1962), Vietnam (since 1978), and Cuba (since 1972). And Yugoslavia had a special association status since 1964. More than a dozen countries were observers or cooperating countries, including for example Finland. Comecon comprised nearly half a billion people living on three continents.
The 1970s made Comecon a convenient shield that protected most countries from the effects of soaring oil prices and other repercussions of the oil crisis. The pricing mechanism within the community was a solid shock absorber. And a few member states (such as Gierek’s Poland) opened up to Western credits and technologies, diversifying their economic ties. The role of trade within Comecon consistently declined, while maintaining the dominant position of the USSR as a trade partner in bilateral relations. Comecon was an increasingly anachronistic instrument separating socialist states from the world economy. This separation had its advantages in lowering the prices of raw materials and expanding barter exchanges, but it made their economies less and less competitive. And the state monopoly on foreign trade imbued the entire system with corruption and made it an absolute priority to protect one’s own market. The socialist division of labour gave a privileged position to e.g. Hungarian Ikarus buses, Czechoslovakian Tatra trams, Soviet metro cars, even though some other countries developed quite competitive, if not better vehicles, but only for the internal market.
The 1980s for several of them (especially for Poland and Romania) meant a deep economic collapse, tightening the growing debt loops. Gorbachev’s attempts to reform Comecon did not have time to take any real shape. The disintegration of the socialist camp made the dissolution of Comecon inevitable, which took place in mid-1991.
Comecon had an extensive internal structure with annual Council sessions at the level of heads of government as supreme authority. The Executive Committee ensured constant contact between member states, and sectoral problems were resolved by four Council committees (planning, scientific and technical cooperation, material and technical procurement, engineering), twenty-four standing committees, six intergovernmental conferences and other bodies. The secretariat was located in Moscow and was always headed by a representative of the USSR. But the Council had no supranational powers. And all decisions had to be made unanimously (from the 1960s, states usually chose the “opt-out” option instead of blocking initiatives). In practice, of course, the USSR had a decisive influence on the functioning of Comecon. The USSR accounted for two-thirds of the GDP of the entire group, 70 percent of the population, 90 percent of the territory and natural resources. And in trade, the role of the USSR fluctuated from 90 percent. in the first post-war years up to sixty percent in the 1980s for the majority of Comecon members. One-sided economic dependence on the USSR was an invariant defect of Comecon. But as time passed, individual members increasingly protected their own interests, resisted the idea of closer integration, and broke out of joint projects. This made the organization an increasingly costly bureaucratic shell.
The collapse of Comecon turned out to be quite manageable inconvenience for its members. It is true that even in Poland its catastrophic consequences were predicted. I myself remember one of the long-time diplomats of the Polish People’s Republic, who said goodbye to Comecon with tears in his eyes (after a parliamentary hearing as part of the process of taking over a certain East Asian post as an ambassador of the Republic of Poland) and announced that we would regret it deeply, which already (in 1991) was more like an oligophrenic than ideological spasm. In truth, entire factories producing for the Soviet and socialist markets collapsed, but the economies of Central European countries quickly shifted to trade with Western markets. There was no economic implosion.
The seat of Comecon was taken over by the city authorities of Moscow, and the contributions of individual member states to its construction have never been recovered from the Russians.
Comecon ghosts re-appear, however, when you start looking at the mechanisms of the Eurasian Economic Union. A completely different historical and economic context. But membership forced by geopolitics (the case of Armenia), a gigantic asymmetry of economic potentials, a clear tilt in benefits for one state, political control of economic processes – all this evokes seemingly forgotten associations.
Mutual assistance has disappeared from political lexicons. It was replaced by a much fairer “development aid”, which will be discussed further below. But also in this context the aid as a factor of equalizing the levels of development is not convincing. In the countries of Central and Eastern Europe, in the 1990s, “mutual assistance” was replaced by Phare and TACIS aid funds or US Aid.
