Postwar: A History of Europe Since 1945 (36 page)

In Romania, where tens of thousands of peasants were forcibly registered on collective farms in the autumn of 1950 and where the regime was uninhibited in its resort to force, it was not until 1962 that future President Nicolae Ceauşescu could proudly announce the completion of rural collectivization ‘three years ahead of schedule’. In Bulgaria, in the course of the first two Five-Year Plans beginning in 1949, viable agricultural land had been completely removed from private hands. In the Czech lands, where collectivization began quite late (in 1956 most arable land was still privately farmed), 95 percent of agricultural land would be taken over in the next ten years, rather less (85 percent) in backward and inaccessible regions of Slovakia. But here, as in Hungary and throughout the region, independent farmers survived only in name. The measures taken against them and the destruction of markets and distribution networks ensured their impoverishment and ruin.

The irrational, occasionally surreal quality of Soviet economic practice was faithfully reproduced throughout the bloc. On September 30th 1948, Gheorghe Gheorghiu-Dej of the Romanian Communist Party announced that ‘We want to achieve a socialist accumulation at the expense of the capitalist elements in the countryside’—in a country where ‘capitalist elements’ in the rural economy were conspicuously absent. In Slovakia, in the course of 1951, there were even efforts to send urban clerks and government functionaries out into the fields. ‘Operation 70,000 Must Be Productive’, as it was called, proved disastrous and was quickly abandoned; but this exercise in Maoism
avant l’heure
, just fifty miles east of Vienna, says much about the mood of the times. Meanwhile, as in the newly Sovietized Baltic lands, the consequence of Communist land reform was long-term institutionalized scarcity, in countries where food had hitherto been abundant and cheap.
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To address this palpable policy failure, the authorities introduced Soviet-style laws criminalizing ‘parasitism’, ‘speculation’ and ‘sabotage’. In the words of Dr Zdenka Patschová, judge and member of the Czechoslovak National Assembly, addressing her fellow legislators on March 27th 1952: ‘The unmasking of the true face of the village rich is the foremost task of criminal proceedings . . . Non-deliveries and non-fulfillment of the [agricultural] production plan must be severely punished as sabotage.’ As this faithful echo of Soviet rhetoric from the 1930s suggests, antipathy towards the peasant, and successful implementation of rural collectivization, were one of the chief tests of Stalinist orthodoxy.

In the short run, implementation of Soviet-inspired plans for
industry
was not so obviously a disaster: there are some things that command economies can manage quite well. Collectivisation of land and the destruction of small businesses released an abundant supply of men and women for work in mines and factories; the single-minded Communist emphasis upon investment in heavy goods production at the expense of consumer products and services ensured unprecedented increases in output. Five Year Plans were everywhere adopted, with wildly ambitious targets. In terms of gross production figures the growth rates in this first generation of industrialization were impressive, notably in countries like Bulgaria or Romania which started from virtually nothing.

The number of people employed in agriculture even in Czechoslovakia, the most urbanized state in the region, dropped by 18 percent between 1948 and 1952. In the Soviet Zone of Germany raw steel output rose from 120,000 tons in 1946 to over 2 million tons by 1953. Parts of Eastern Europe (south-west Poland, the industrial belt north-west of Bucharest) were transformed almost overnight: whole new cities were built, like Nowa Huta near Crakow, to house the thousands of workers turning out iron, steel and machine tools. On an appropriately smaller scale the semi-militarized, monolithic, first-generation industrialization of the interwar Soviet Union was being re-run throughout the Soviet bloc. Much as they had set out to do in Russia, the Communists in eastern Europe were reproducing a foreshortened and accelerated version of western Europe’s nineteenth-century industrial revolution.

Seen in this light, the economic history of eastern Europe after 1945 bears a passing resemblance to the pattern of West European recovery in the same years. In western Europe, too, investment in productivity and growth was given priority over the provision of consumer goods and services, though the Marshall Plan softenedthe pain of this strategy. In Western Europe, too, certain industrial sectors and regions took off from low starting points, and a dramatic transition from countryside to town took place in the course of the 1950s in Italy and France in particular. But there the similarity ends. The distinctive feature of the economic history of Communist eastern Europe is that, in addition to coal, steel, factories and apartment blocks, first-generation Soviet industrialization produced grotesque distortions and contradictions, more so even than in the USSR itself.

Following the establishment in January 1949 of Comecon (the Council for Mutual Economic Assistance
⁴⁸
), the rules for inter-state Communist trade were laid down. Each country was to trade bilaterally with the Soviet Union (another echo of Nazi-era requirements, with Moscow once again substituting for Berlin) and was assigned a non-negotiable role in the international Communist economy. Thus East Germany, Czechoslovakia and Hungary would supply finished industrial products to the USSR (at prices set by Moscow), while Poland and Romania were to specialize in producing and exporting food and primary industrial products. In return the Soviet Union would trade raw materials and fuel.

Except for the curious inversion we have already noted—with the imperial power furnishing raw materials and the colonies exporting finished goods—this structure is reminiscent of European overseas colonization. And as in the case of non-European colonies, so in eastern Europe: the indigenous economies suffered deformation and under-development. Some countries were prevented from manufacturing finished goods, others were instructed to make certain products in abundance (shoes in Czechoslovakia, trucks in Hungary) and sell them to the USSR. No attention was paid to the economics of comparative advantage.

The Soviet model of the thirties, improvised to address uniquely Soviet circumstances of vast distance, abundant raw materials and endless, cheap, unskilled labor, made no sense at all for tiny countries like Hungary or Czechoslovakia, lacking raw materials but with a skilled industrial labor force and long-established international markets for high-value-added products. The Czech case is a particularly striking one. Before World War Two, the Czech regions of Bohemia and Moravia (already the industrial heartland of the Austro-Hungarian Empire before 1914) had a higher per capita output than France, specializing in leather goods, motor vehicles, high-tech arms manufacture and a broad range of luxury goods. Measured by industrial skill levels, productivity, standard of living and share of foreign markets, pre-1938 Czechoslovakia was comparable to Belgium and well ahead of Austria and Italy.

By 1956, Communist Czechoslovakia had not only fallen behind Austria, Belgiumand the rest of Western Europe, but was far less efficient and much poorer than it had been twenty years earlier. In 1938, per capita car ownership in Czechoslovakia and Austria was at similar levels; by 1960 the ratio was 1:3. Even the products in which the country still had a competitive edge—notably small arms manufacture—no longer afforded Czechs any benefit, since they were constrained to direct their exports exclusively to their Soviet masters. As for the establishment of manufacturing mammoths like the Gottwald Steelworks in Ostrava, identical to steelworks in Poland, the German Democratic Republic, Hungary, Romania, Bulgaria and the USSR, these represented for the Czechs not rapid industrialization but enforced backwardness (crash programs of industrialization based on the manufacture of steel were pursued in spite of Czechoslovakia’s very limited resources in iron ore). Following the one-time start-up benefits from unprecedented growth in primary industries, the same was true for every other satellite state. By the mid-fifties, Soviet Eastern Europe was already beginning its steady decline into ‘planned’ obsolescence.

There are two partial exceptions to this brief account of the economies of the Soviet bloc. While primitive industrialization was undertaken just as enthusiastically in Poland as elsewhere, land collectivization was not. Stalin seems to have grasped the impracticality of forcing Polish peasants onto collective farms, but this consideration alone would hardly have caused him to hesitate. Soviet caution when dealing with Poland (we shall have occasion to meet it again) was strictly instrumental. In marked contrast to the other subject peoples of eastern Europe, there were a lot of Poles, their capacity and propensity to rebel against Russian servitude was familiar to generations of Russian officers and bureaucrats, and Soviet rule was more obviously resented in Poland than anywhere else.

From the Soviet point of view, Polish opposition was an annoyance—remnants of the Polish wartime underground carried on a guerilla war against the Communist regime until at least the end of the 1940s—and seemingly undeserved. Had not the Poles gained 40,000 square miles of rather good agricultural land in exchange for the 69,000 square miles of eastern marshes transferred to the USSR after the war? And was not Moscow the Poles’ (only) guarantee against a Germany whose revival everyone anticipated? Moreover Poland was now free of its pre-war minorities: the Jews had been murdered by the Germans, and the Germans and Ukrainians had been expelled by the Soviets. If Poland was now more ‘Polish’ than at any time in its complicated history, it had Moscow to thank.

But inter-state relations, above all in the Soviet bloc, did not hinge on gratitude or its absence. Poland’s use value to Moscow was above all as a buffer against German or Western aggression. It was desirable that Poland become socialist, but it was imperative that it remain stable and reliable. In return for Polish domestic calm Stalin was willing to tolerate a class of independent farmers, however inefficient and ideologically untidy, and a publicly active Catholic Church, in ways that would have been unimaginable further south or east. Polish universities were also left virtually intact, in contrast to the purges that stripped out the teaching staff of higher educational institutions in neighbouring Czechoslovakia and elsewhere.

The other exception, of course, was Yugoslavia. Until the Stalin-Tito split, Yugoslavia was, as we have seen, the most ‘advanced’ of all the east European states along the path to socialism. Tito’s first Five Year Plan outdid Stalin by aiming at a higher rate of industrial investment than anywhere else in the Soviet bloc. Seven thousand collective farms had been set up before collectivization had even begun in the other satellite states; and post-war Yugoslavia was well on the way to outdoing Moscow itself in the efficiency and ubiquity of its apparatus of repression. The partisans’ wartime security services were expanded into a full-scale police network whose task, in Tito’s words, was ‘to strike terror into the hearts of those who do not like this sort of Yugoslavia.’

Yugoslavia’s per capita income at the time of the break with Stalin was the lowest in Europe save for neighboring Albania; an already impoverished land had been beaten into penury in the course of four years of occupation and civil war. The bitter heritage of Yugoslavia’s war experience was further complicated by its ethnic composition, the last genuinely multi-national state in Europe: according to the 1946 census Yugoslavia’s 15.7 million people comprised 6.5 million Serbs, 3.8 million Croats, 1.4 million Slovenes, 800,000 Muslims (mostly in Bosnia), 800,000 Macedonians, 750,000 Albanians, 496,000 Hungarians, 400,000 Montenegrins, 100,000 Vlachs and an uncertain number of Bulgars, Czechs, Germans, Italians, Romanians, Russians, Greeks, Turks, Jews and Gypsies.

Of these only Serbs, Croats, Slovenes, Montenegrins and Macedonians were accorded separate recognition under the 1946 Constitution, though encouraged to see themselves, like all the others, as ‘Yugoslavs’.
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As Yugoslavs, their prospects seemed grim indeed. Writing from Belgrade to a Greek friend at the end of the 1940s, Lawrence Durrell had this to say of the country: ‘Conditions are rather gloomy here—almost mid-war conditions, overcrowding, poverty. As for Communism—my dear Theodore a short visit here is enough to make one decide that Capitalism is worth fighting for. Black as it may be, with all its bloodstains, it is less gloomy and arid and hopeless than this inert and ghastly police state.’

In the initial months following the split with Stalin, Tito actually became
more
radical, more ‘Bolshevik’, as if to prove the legitimacy of his claim and the mendacity of his Soviet critics. But the posture could never have been sustained very long. Without external help, and faced with the very real prospect of Soviet invasion, he turned to the West for aid. In September 1949 the US Export-Import Bank loaned Belgrade $20 million. The following month Yugoslavia borrowed $3 million from the International Monetary Fund, and in December of that same year signed a trade agreement with Great Britain and received $8 million in credits.

The Soviet threat forced Tito to increase his defense spending (as a share of Yugoslavia’s meager national income) from 9.4 percent in 1948 to 16.7 percent in 1950; the country’s munitions industries were moved for safety into the mountains of Bosnia (a matter of some consequence in the wars of the 1990s). In 1950 the US Congress, now convinced of Yugoslavia’s possible significance in the global Cold War, offered a further $50 million in aid under the Yugoslav Emergency Relief Act of 1950, and followed this in November 1951 with an accord that allowed Yugoslavia to receive military aid under the terms of the Mutual Security Act. By 1953 the Yugoslav national deficit on current account was fully covered by American aid; over the course of the years 1949-55 Tito’s aid from all Western sources amounted to $1.2 billion, of which just $55 million was repaid. The stand-off over Trieste, which had bedeviled Yugoslavia’s relations with Italy and the West since May 1945, was finally resolved in a Memorandum of Understanding signed by Yugoslavia, Italy, Britain and the US on October 5th 1954.