Political Econ of Growth

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Paul A. Baran. Political Econ of Growth

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THE POLITICAL ECONOMY OF GROWTH

Paul A. Baran

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Stemming from the same basic cause, in one word poverty, is the second category of troubles besetting the socialist camp: the relations among socialist countries. These relations have obviously not been as harmonious as a socialist would have liked them to be; but while giving rise to legitimate concern, they must be subjected to a dispassionate analysis and put into a proper historical perspective. Although nothing that might resemble adequate information is at my disposal, from what little I have been able to learn it would seem that the causes of the existing tensions relate to several closely interdependent issues.

One has to do with the allocation of economic resources within the socialist camp, and stems essentially from the vast differences in the degree of economic development attained by the individual socialist countries. To put it in its simplest terms, the question is, how much aid should the economically most advanced members of the socialist camp—primarily the Soviet Union but also Czechoslovakia, the German Democratic Republic, and Poland—give other less (and very much less) developed socialist countries? Clearly, no such problem would exist, if all socialist societies were about equally rich or if all were about equally poor. It should also be clear that at the present time an even proximate equalization of per capita incomes between the haves and the have-nots in the socialist camp is entirely impossible. It would drastically reduce the living standards of the, say, 250 million people living in the better-off parts of the socialist world, and even if such a move could substantially accelerate the growth of the worse-off parts inhabited by over 700 million people, it would be politically and socially wholly unfeasible, would be, indeed, suicidal to socialism in the more fortunate nations.

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