What Russian Trade?

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 Jan. 31 in favor of “peaceful competition in cooperation with other countries in developing the economies of the underdeveloped nations,” etc. 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 Feb. 13) to dig them up and interpret them. They are to be found among the 777 pages of the United Nations Yearbook of International TradeStatistics.

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 percent 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 percent of the total exports of $20.6 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 percent 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.