The Council for Mutual Economic Assistance and the failed Coordination of Planning in the Socialist Bloc in the 1960s

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Simon Godard
The Councilf or Mutual Economic Assistancea nd the failed Coordination of Planning in the Socialist Bloc in the 1960s Planning has long been deeplya ssociatedw ith socialist economies,a lthough capitalist countries have been influenced by this idea and have experimented, to different degrees,g overnment interventionism in the economyo vert he short twentieth century.¹Thus planning the economyisnot aspecificallysocialist idea, and even though central planning was as hared characteristic of most Eastern European countries duringt he ColdW ar,t he entanglement between planning and socialism can stillb eq uestioned.Alreadyi nt he 1960s, Polish economist Wlodzimierz Brus considered the association of economic planning and socialism "not as adefinitive solution, but as achoice among possiblealternatives."²Even though the Gosplan was established in the USSR soon after the October Revolution, the first five-yearplan was onlyadopted in 1928.Amodel of socialist planning was indubitably shaped in the USSR,b ut never remained unchal-lenged³ nor incapable of evolution.⁴The persistenceo fm arket-likei nstitutions in the Stalin era, analyzed by Paul Gregory and Mark Harrison,⁵ or the Yugoslav path to economic development after1948, show how misleading and inaccurate as trongo pposition between centrallyp lannede conomies and markets would be.Indeed, the functioning of the economic system started to be challenged again in the German Democratic Republic (GDR) in 1956 and in the USSR in 1957.⁶The centrallyp lanned economy, which had been considered am onolithic model by the Western European countries and the USA, proved to be more flexible in the 1960st han had been assumed.Following the liberalizationi nitiated by the USSR,m osto ft he people'sd emocracies in Eastern Europe engagedi n economic reforms.Central planningw as strengthened but limited to the establishmento fm ajor macro-economic indicators,w hereas basic economic actors -such as the enterprises -were givenm orer oom for manoeuvre, in order to allow them to implement the plan at their level and to coordinate themselves with other economic actorsi nvolvedi nt he production process.⁷Defining ac ommon model for the socialist economyi nt he 1960s proves to be mored ifficult,a sm arket incentivesw ereb eing reintroduced in the planned economybythese nationaleconomic reforms.⁸However,under the combined influenceo fd estalinization and Western European integration, the USSR and the people'sd emocraciesengaged in redefiningt heir international cooperation in a more multilateral wayduringthis decade, in order to tackle the decline of development strategies based on extensive growth.Thus the 1960s at the Councilf or Mutual Economic Assistance( COMECON) start and end with two major debates over attemptingtocreatearegional economic integration that could have shaped atransnationalsocialist economic model.This contribution analyzes how the socialist countries members of the COMECON, who officiallys hared ac ommon economic model, dealt with the specific issue of the international coordination of their economic plans.In spite of the adoption of the "basic principles of the international socialist division of labor" in 1962, and the setting of the "integration" of the national economies as the Council'sm ain goal in 1971,⁹ various economic and political actors in the socialist world doubted that ac ommon international plan and regional integration would be the most promisingw ay to develop theirn ationale conomies.Eventually, parallel evolutions towards planning the economyatn ational level led neither to ac onvergence of these econo- Helmut Steiner, "Das Akademie-Institut für Wirtschaftswissenschaften im Widerstreit wissenschaftlicher,ideologischer und politischerA useinandersetzungen," Sitzungsberichte der Leibniz-Sozietät 36,no. 1(2000): 89 -109 ;Peter C. Caldwell, "Productivity,Value and Plan: Fritz Behrens and the Economics of Revisionism in the German Democratic Republic," Historyo fP olitical Economy 32, no. 1( 2000): 103 -137. Michael Kaser, The EconomicH istoryo fE astern Europe. 1919-1975,volumeI II (Oxford: Clarendon Press,1986). BernardC havance, "La théorie de l'économie socialisted ans les pays de l'Est entre 1917e t 1989," in Nouvelle histoiredelapensée économique,vol.2, ed.Alain Béraud and GilbertF accarello (Paris:L aD écouverte,1993), 235-262. JozefV an Brabant, Economic Integration in Eastern Europe.AH andbook (New York, London, Toronto: Harvester Wheatsheaf, 1989), 63 -102.mies, nor to the international coordination of their development within the framework of the COMECON.There the transnationalapproach and international comparison allow to challengePaulGregory'shypothesis about Stalin'seconomic policy,accordingtowhich political dictatorship was intrinsically rooted in the structure of planned economies since the system could onlyb ef unctional with political coercion over the economy.¹⁰What might have been true for Soviet eco-nomicsunderStalinmay be interpreted differentlyw hile looking at the international coordination of planned economies.
Most of the historiographyo nt he international organization focuses on its failuret od evelop at eleological argument.S ince the international coordination of planninga tt he COMECONi ndeedf ailed, it would be the sign thats ocialist economies wereu nable to promote an attractive development model at international level.¹¹Thus the organization would be deemed amere emptyshell established by the Soviet Union to ensure its power over the bloc.The following analysis argues thatt he COMECON was not am ere transmission belt for the USSR, aiming at transferring its economic model to the socialist countries in Eastern Europe.¹²Rather thanconcentratingonthe meager resultsofthe multilateral attempts at coordinating economic planning within the COMECON, in order to disclose structural weaknesses of the system and explain the allegedlyi mpossible enforcement of economic common planning in the socialist world, Iwill consider the reasons whyt he COMECONf ailed, while looking at how the coordination processo ft he national plans of its member states took place.Following the international negotiation process in its different steps allows ar einterpretation of the so-called "failure" of the Council.Indeed, planning cannot be reduced to its economic dimension in the socialist world, nor exclusively be considered atechnical process intended to rationallyallocate scare resources.¹³It is also apolitical statement of sovereignty.Beyond the apparent economic failure of the COME-CON,apolitical process of constant negotiation ought to be highlighted, during The Council for Mutual Economic Assistance which the governments of the people'sd emocracies needed the failureo fi nternational cooperation in order to promoteaparadoxical discourse on the necessity to reform and empower the Council.Thus failurew as manipulatedi no rder to shift the balance of power within the Eastern bloc and to favort he people's democracies.¹⁴The multilateral forum established by the COMECON was ashowcase of socialist solidarity and efficiency duringt he Cold Warc ompetition, and constituted ac onfiguration of international relations much more beneficial to the smaller states thanthe bilateral negotiations with the Soviet Union, allowing the former to safeguard some room for manoeuvreinshapingtheir economic development.
Eventually, the failed coordination of economic planninga tt he COMECON seems to have had an economic, as well as apolitical interestf or several actors in the socialist world.¹⁵In order to analyze this strategic manipulation of failure, Iwill explain how the debate on supranational planningatthe COMECON failed in the first half of the 1960s, before going on to analyze the parallel transnational economic networks that emergedo ut of this failure.Lastly, Iwill show how the "economicization" of international relations, as well as other concepts borrowed from the Western European regional integration process wereintroduced, before being circulated through the East,a sameans to depoliticize av ery political game playedbythe people'sdemocracies in order to control their own economic development.

The failed supranational turn of the COMECON
After the establishment of the communist regimes in Eastern Europe, all countries of the socialist bloc had turned to ap lanned model of economic development.Inthe second half of the 1940s and in the 1950s,planningwas not specific to the socialist world, and neither did sharing the same model favorinternational co-operation among socialist countries.E ach communist government understood planning as atool for aglobaltransformation of the new socialist society: it had to promotet he industrialization of mostlya gricultural countries,a nd to  Fora na nalysiso fp ower relations between the USSR and the people'sd emocracies within COMECON,see also:Suvi Kansikas, "Room to manoeuvre?Nationalinterests and coalition-building in the CMEA, 1969CMEA, -1974," ," in Reassessing Cold WarE urope,ed.Sari Autio-Sarasmo and Katalin Miklossy (London: Routledge,2 011), 193 -209. Natacha Coquery and Matthieu de Oliveira, L'échec a-t-il des vertus économiques (Paris:Comité pour l'histoire économique et financièred el aF rance,2 015).createthe proletarian basisneeded by the regime to legitimate its policy.¹⁶Under these circumstances,c o-operation in the field of economic planning could only be understood, at first,asanunacceptable loss of sovereignty by the COMECON members tates.Even though the people'sd emocracies stood, after 1945, under the strongi nfluenceo ft he Soviet economic model of the 1920s¹⁷ and of its evolution into aplannede conomic system in the 1930s, plansr emained elaborated in anational framework.Theadoption of asocialist regime, economic planning, and forced industrialization werec onsidered am agic tool that would equalize the development levels of the different COMECON members tates.A ccording to the less developed countries,s uch as Romania, ad iscourse on the economic irrationality of the parallel development of industrial capacities at national levels was unacceptable.Despite the diffusion of the Soviet planning model, anyplancoordination had to take into account the political rationale of national development strategies,until each memberstate had reached an equal level of development.I nJ uly1 966,N icolae Ceaușescu still stated that "mission is givent ot he socialist world-system to develop interstater elations based on mutual respect, and on the preservation of the reciprocal interests.The socialist world-system develops as as ystem of national economies."¹⁸Besides, the organization was founded in January 1949 as adirect answer to the Marshall Plan.It represented ap olitical answer to the OEEC and had not been initiallyc onceiveda sa na lternative and integratede conomic area.The first topic on the agenda duringthe formativeyears of the COMECON wasthe coordination of its memberstates' foreign trade toward the West,inorder to foster East-West economic relations.¹⁹However,i ns pite of the original rejection of anyp lan coordination by the Polish representativea tt he bureauo ft he Councili n1 950,M oscow managed to transform it into the main goal of the organization after 1954.Thisi ndicates how economic cooperation among socialist countries was progressively regarded as apossible stimulus for economic development.Its members never considered  Peter Rutland, TheM yth of the Plan (London: Hutchinson, 1985). Lars Haga, "Imaginer la démocratie populaire: l'Institut de l'économie mondiale et la carte mentale soviétiqued el ' Europe de l 'Est (1944'Est ( -1948)) the COMECON an exclusivea nd alternative economic area in Europe, and the Council started with the sole ex-post coordination of foreign trade plans.Yet its importance grew strongerf or the socialist countries in the second half of the 1950s.T hankst ot he implementation of am ultilateral clearing agreement, the elaboration of model contracts for foreign trade, the institutionalization of multilateral co-operation with the creation of standing commissions responsible for different fieldsofthe production or dealing with transversal issues -such as currencies,f oreign trade, etc. -the COMECONa chieved ar eal reorientation of trade flows in Europe until the mid-1960s.East-West trade still represented 49 %o ft he foreign trade of the people'sd emocracies in 1948, before East-East trade became dominant in the foreign trade balances of the COMECONmember states.I ta ccounted for two-third of their exports in 1953, 55 %i n1 956,before it stabilized at al ittle over 60 %.²⁰In parallel, the Council'si nstitutions increased their role in the international co-ordination of economic planning.From 1955 onwards,t he COMECON was indeed givent he task of coordinating the five-year plans of its member countries.²¹Economic historians have explained whyt his co-operation was doomed to fail from an economic point of view.²²The differences in the levels of economic development of the member countries weretoo pronounced, and the most industrialized members, such as the GDR or Czechoslovakia, werer eluctant to subsidize the industrial development of future competitors within the bloc, while acceptinglow quality products in return.The USSR was not willingtosubsidize the development of its allies at its own costs,e speciallyf rom the 1970so nwards.²³Eventually, the coordination remained mostly limited to foreign trade plans and did not promotet he elaborationo ft ransnational production cycles.Due to the state monopolyonf oreign trade and to the lack of real economic competition induced by the missing convertibility of prices and currencies,the COME-CON was thus unable to shape ar egional model and to integrate the national economies of its members the wayt he EEC did.
This analysis,which mainlyfocuses on the late 1960s and on the 1970s, overshadows the vivid debates about the goals and the methods of multilateral eco- Wlodzimierz Brus, Histoireé conomiqued el ' Europe de l 'Est (1945'Est ( -1985) )  nomic co-operation, which regularlya nimated the COMECON.Most of these debates mirrored the discussions on the evolution of the EEC in the West,a nd ended up with no practical and measurable outcome at the COMECON.²⁴Leaving the field of the sole quantitative measurement of the success or the failureo f multilateral economic co-operation, we can raise other issues.Which theoretical and political contents werea tt he coreoft hese economic debates?I si tpossible to identify failureasalogical outcome, intended by some actorsp ursuing apolitical goal, rather than an economic rationale through economic discourses?This contribution is not looking for the economic explanation of the failureo f plan coordination, but for the strategic process of negotiation, which led to this failure, as well as its impact on shapingi nternational relations within the socialist bloc.
In the early1 960s, the construction of the Berlin Wall and the missile crisis in Cuba led to aclosing off of the socialist bloc.Confronted with this evolution of the international context,which affected their economic relationship with capitalist countries,the members of the COMECONwereforced to close ranks and to commit to the organization in order to find new impulses, which would sustain their economic growth.This diplomatic framework, as well as the new spirit of multilateral co-operation with the allies following the destalinization in the USSR,w ered ecisive in the adoption by the Council'sm embers in 1961/1962o f the "basic principles of the international socialist division of labor",w hich had been discussed since 1957.²⁵Accordingt ot he "basicp rinciples," the USSR and its partners would engagei nt he so-called "specialization" of their productions and progress towarda ne conomicallyr ational division of labor at bloc scale.Khrushchev used this important turn, and the deepening of multilateral co-operation it promoted, in order to formulate,inaspeech delivered to the Central Committee of the Communist Party of the Soviet Union in November1962, a concept for the evolution of the COMECON.
While discussing the Soviet economic reformsi mplemented since 1957, alongside their implications in terms of international co-operation, the Soviet leader mentioned his project to turn the COMECON into what he called a "unified The Council forM utual Economic Assistance planning organ."²⁶Khrushchev sawh is proposal as at wofold opportunity.The transformation of the COMECONi nto a "unified planning organ" would lead to the strengtheningo ft he Council and its institutions.Thus, the international organization would be appropriately staffed and able to conduct its own economic expertize, without having to subcontract it to the Gosplan.Thisw ould dismiss direct criticism against any "imperial" influenceo fS oviet planning over the other member states.Instead, the Soviet Union would keep an indirect influence through the quantitative domination of Soviet expertsi nt he international staff, as well as through its tradition to educatethe elites of other member states,some of whom were delegated to work for the COMECON.
Foramoment,b etween 1962a nd 1964/1966,t he coordination of economic planning within the socialist bloc was genuinely ap riority on the COMECON's agenda.However,e vent hough the people'sd emocracies, except for Romania, officiallye ndorsed the Soviet proposal, the debate immediatelye scalated at the cost of the USSR itself.Ford ifferent reasons,b ut using the samem ethods, Bucharest and the other Eastern European countries manipulated the debate, and managed to shift the balance of power within the bloc in theirf avor, while playing on the failureo fc ommon economic planning.The Romanian delegation in the Council voluntarilyrephrased Khrushchev'sproposal as an evolution toward "supranational planning."Even though Khrushchev himself participated in the Executive Committee meetingofthe COMECONinF ebruary 1963, in order to clarify what he meant by "unified planning organ," the actors would discuss for the next two years the opportunity of empoweringt he COMECON to organizes upranational planning.
The semantics usedbythe Romanians and otherEastern European countries transformed the issue of plan coordination from at echnicalone, related to economic rationality, into ap olitical one.Since the COMECON was as howcase for socialist international solidarity in the Cold Warcompetition, the USSR could not afford to imposeits will to the organization, as long as its partners wereputting the whole legitimacy of the socialist world at stake in the debate.As ameans to pre-empt the transformation of the Council into as upranational plan commission, Romania adopted the opposite strategyt othe one that France chose, confronted with the strengthening of the EEC Commission'spowers in the mid-1960s.While De Gaulle openedt he "empty chair" crisis to resist the evolution of the  StiftungA rchiv der Parteien und Massenorganisationen der DDR (Foundation for the archiveso ft he parties and mass organizations of the GDR,h ereafterS APMO-BArch)D Y3 0 -3407, Protokoll und Anlagend er XVII.T agung des RGW, "Bericht über die wichtigsten Fragen der XVII.Tagung,der 3. Sitzungdes Exekutivkomitees und der 3. Sitzungdes Büros des Exekutivkomitees," 12.1. 1963, f. 95 -96.EEC,R omaniae ngaged in av ery legal guerrilla warfare and participated in as much co-operation projects as it could, in order to bloc them.Bucharest'srepresentativesr eferred to all COMECON legal documents:m ostlyt he foundingcommuniqué of 1949 and the charter adopted in 1959, to highlight the recognition of each members tate'ss overeignty,g uaranteed by the USSR since 1949.Underlining the equality of all partners proclaimed by the charter,R omania made great use of the so-called "principle of interest" which governed the negotiations at the COMECON.A ccordingt ot his rule, no country could be obliged by its partners to participate in acommon project.However,when it had proclaimed its interest in participating, anya greement had to be achieved unanimously.In declaring its interesti na ll projects dealingw ith common planning,R omania de facto gained the right to veto all decisions agreed upon by its partners.
Transformingt he economic issue of international plan coordination at the COMECON into apolitical game playedagreat role in shapingroom for manoeuvre for Romania in its "national communist" course in the 1960s.²⁷Significantly, Ceaușescu used the same strategytoveto the evolution of the WarsawPact into a more integrated and formalized alliance in the second half of the decade.²⁸Bucharest used the socialist international organizations duringthe Cold Wart oinstrumentalize theirconstant failuretoits ownbenefit,while officiallyadvocating the respect of the COMECON and the WarsawPact'sprocedures²⁹.The USSR,who needed to present socialist solidarity in public discourses on the international stage, could uneasilyd enounce the Romanian legalist strategy.
Confronted with ad ebate which revealedd iverging opinions on supranational planning and the rationale -economic or political -to be put forward in the cooperation taking place at the COMECON, Moscow was risking disqualifying the legitimacy of the socialist alliance with the failureofthe organization.Consequently, the USSR soon withdrewfrom the supranational planning debate, to the great dissatisfaction of its closest allies, such as the GDR and Poland.As earlyas1963, East-Germans experts of the COMECONwroteaconfidential report on the situation at the Council accordingt ow hich, The Council forM utual Economic Assistance no stepsh aveb een taken towards common planning, proposals for the establishment of interstateu nions [of production] ...h aven ot been adopted ...The Soviet party always tries to conciliatet he other parties and not to contradict anyone ...A ftert he communist parties' meetingofJ uly1963, the Soviet representativeswere very cautious ...The greatest confrontations happen between the representativeso ft he people'sd emocracies, without anya ctive support from the Soviet comrades.³⁰ The East-German deputy secretary of the COMECONevenstated that, if the USSR had such ap assive attitude in the debate, it was because the Soviets "probably had no concept for the improvement of the work at the Council."³¹Eventually, Moscow officiallyr enounced its proposal in 1964,b ut in the meantime other countries,especiallyt he GDR and Poland,h ad engaged in the conflict with Romania.Berlin and Warsawu sedt he sames trategya sB ucharest and inclined to use legal arguments in theirs tatements.They insisted on defining more clearly the "principle of interest."In 1966,Gomulka referred to article four of the statute of the COMECON in front of its counterparts from the USSR and the people'sdemocracies, in order to denyany country aveto right.³²He directlytackled Romania and even officiouslyt hreatened the USSR with awithdrawal of Poland from the COMECON,i ft he organization "did not satisfy the legitimate interesto ft he majority of its countries."³³Ford ifferent reasons,but with the same methods, all people'sd emocracies playedthe failureofcommon planning at the COMECON against the superpower of the Soviet Union within the bloc in the first half of the 1960s.They manipulated the debate on the international coordination of economic planning,n ot while aiming at its failurei nt he short term, but in the longue durée.An immediate break with the COMECONc ould have caused the exclusion of ac ountry from the bloc, which was an outcome that neither the people'sd emocracies, nor the USSR could afford shortlyafter the Sino-Soviet split in 1961.On the contrary,the long debate on supranational planning and its organized failurehad an economic and political interest.It helped the smaller allies develop alegal strategy thatwould challengethe solidarity of the socialist bloc, while officiallyseeking its strengthening.Thus fighting for the failure of supranational planning was not provingincompatible with adiscourse advocating more planning,but refusing the dominant influenceofthe Soviet model, while remainingwithin the CO-MECON framework.The USSR had to make compromises in order to maintain its role as ag lobal ColdW ar player, which was partlyl egitimized by the cohesive imageo ft he socialist bloc that the COMECON wase mbodying.³⁴

Scales and spaces of transnational economic planning in the socialistw orldi nt he 1960s
In order to legitimate their criticism about supranational planning,w ithout being accusedo fc ausing the failureo ft he socialist model of development, the governments of the COMECONm ember states agreed upon strengthening the organization'si nstitutional structure and its staff of international civil servants.Between 1962and 1968, the secretariat'sstaff increased from less than 100 to al ittle more than 600 international civil servants.The great majority of these specialistsw erer ecruited for their technical expertize in planning, in different industrial fields, in finance, and their knowledge of Russian,t he workingl anguageo ft he Council.They weren ot rained diplomats and formed, in the technical divisions of the secretariat,aseries of epistemic communities.³⁵Until the international secretariat was appropriatelys taffed,S oviet institutions clearlyi nfluenced the practice of plan coordination within the organization.In 1957,the ambassador of the Polish governmenta tt he Council, Piotr Jarozsewicz, still expressed ac ritical opinion about the workinga rrangementso f the COMECON.Accordingtohim, "in view of formal considerations, the completion of the work on the coordination of the national economic plansbythe Gosplan of the USSR,a nd not by the apparatuso ft he COMECON, was not entirely appropriate."³⁶What has been the real impact of this major criticism, not onlyonthe planning practice but also on the planning cultureo ft he Council, as well as on the  Asimilar process characterizesthe contemporary evolution of the WarsawPact,see Crump, TheW arsaw Pact Reconsidered. Simon Godard, "Le Conseil d'aide économique mutuelle et la construction d'une diplomatie économique parallèle dans l'Europe socialiste ," in Réinventer la diplomatie.Sociabilités,réseaux et pratiques diplomatiques en Europe depuis 1919,ed.Vincent Genin, Mattieu Osmont,a nd Thomas Raineau( Brussels:P eter Lang, 2016), 171-187. BArchD E1 -21257, Arbeitsweise der Ratsorganeu nd wissenschaftlich-technische Zusammenarbeit 1956 -1959, "Brief vonP .J aroszewicza nA .A .P awlow,S ekretär des RGW, " 12.04.1957,f. 5.
The Council forM utual Economic Assistance ultimatem eaningo ft he success or the failureo fi ts coordination of national plans?The fact that the secretariat of the Councilinternalized sufficient economic expertize in the first half of the 1960sh elped the international organization movea wayf rom its practical dependency on the technical support of Soviet institutions.However,aquestion stillr emained partiallyunanswered: What about the influenceofnational planning cultures in the work of the COMECON?Could the project of plan coordination onlyb es uccessful under the condition that a new transnationalp lanning culturew ould be established in the Council?T o what extent did the international organization actuallyf avor the re-branding of the Soviet planning model as ac ommon model for the whole socialist camp and in whose interest?
From the 1960s onwards, most expertsd elegated by the people'sd emocracies to work for the COMECON in Moscow belonged to asmall elite of former foreign exchangestudents, who had studied in the Soviet Union.³⁷This international socialization acquired prior to the delegation at the COMECONe xplains why the majorityofthe experts, comingfrom different national spaces with their own specificityindefining planning and in planning economic development,had no difficulties workingt ogetheri nthe framework of the international organization.Whether in the permanentr epresentations of the member states at the COME-CON or in the technical divisions of the secretariat, "one knew each other," as aformerEast-German specialist said.Peter H., one of the most importantbrokers between the GDR and the COMECON,who was in charge of the cooperation of his country with the international organization between 1962a nd 1990,e vent alks about the milieu of international civil servants as a "mafia."This socialization, as well as the common workingand living experience in Moscow,proved crucial in shapingatransnational culture among the COMECONe xperts.In the 1960s, these claimed public recognition by their governments of some room for manoeuvref or the international secretariat and the permanent representations, which would allow them to develop transnationalp rojects involving plan coordination.In 1963, the leaders of the basiso rganization of the East-German experts at the COMECONw rotei nt heir reporto np asta ctivities that "the permanent representation of the GDR at the COMECONc annot be considered as a mere 'posto ffice' ...b ut should be [considered as] an international office of  Simon Godard, "Une seule façond ' être communiste?L ' internationalisme dans les parcours biographiques au Conseil d'aide économique mutuelle," Critique internationale 66,no.1(2015): 69 -83.
the GDR,active in the field of economic policy,which has to completeimportant political and economic tasks."³⁸This statement,which can be considered adirect criticism of the wayCOME-CON experts were treated by their nationala uthorities, advocatedm orea utonomy for the international civil servants and the recognition of the importance of their job.Twoyears later,the Polish ambassador at the COMECON,Piotr Jaroszewicz, emphasized this analysis in stating in front of its counterparts: "We do not delegateo ur comrades to the secretariat so that they defend the interests of our country,but in order for them to analyze objectively the issues raised by our cooperation."³⁹Most of the international civil servants workingf or the COMECON'si nstitutions in Moscow werereallyeager to coordinate economic planning in their field of expertize and to elaborate multilateral co-operation projects.They enjoyeda form of "autonomyb ya bandonment."Regular and up to date inputsf rom the members tates' planning organs and governments were rare.COMECON agents repeatedlym entioned their disappointment with the fact thatt hey often had to act without knowing what the position of their country would be on ac o-operation project.Accordingtothe sameJaroszewicz, "most of the time, the collaborators of the secretariat are not aware of the actual opinions of the member countries,p articularlyh ow far they can go to bear compromises.Eventually, they more or less defend their personal opinion, hoping that it will match the official opinion of the country concerned."⁴⁰However,t his situation of abandonment,i nw hich the governments anticipated at best no positive outcomeo fp lanning coordination at the COMECON, and consequentlycared very little about it,gavethe opportunitytothe Council's expertst oe ngagei nt he relatively autonomous elaborationo fs uch projects for common planning.
The "basis organization" is aparty organ that unitedall party members in the workplaceto organize and control their political and social life.In 1961, the group of East German experts at the COMECON (working for the permanentr epresentation as well as in the international secretariat) split from the "basis organization" of the GDR embassy in the USSR to found an autonomous basis organization, acknowledginga nd defendingt he specificity of their worki nM oscow. BArchD E1 -51766, Schriftwechsel betreffend Rat fürg egenseitigeW irtschaftshilfe, "Bericht über die Tätigkeit des Sekretariats des RGWi nM oskau," 25.5.1965. Ibid.

The Council for Mutual Economic Assistance
Although they wereabletoreflect on the economic rationale of plan coordination at bloc scale, COMECONexpertswerenever able to transfer their transnational acculturation to the planning organs at national levels.There, international plan coordination was always being considered an extraa mounto fw ork.⁴¹International planninga greements, which, until 1966,w ereo nlyc oordinated ex-post by the COMECONa fter the completion and the adoption of the different national plans⁴² -not to speak of supranational planning -were perceivedb y the national planning organs as having ad isturbing and restrictivei nfluence on the smooth execution of the plan at national level.This attitude did not favort he development, over the years, of ac ommon planning culture among the socialist countries members of the Council.The brigade commissioned by the Central Committee of the UnifiedSocialist Party of the GDR (SED)toevaluate the activity of the basis organization at the COMECONnoted in its reportin1964 that "the reports,analyses,etc. senttoBerlin [byCOMECON experts] to the plan commission, the council of the national economyorthe ministry for foreign and intra-German trade find virtuallyn or esonance."⁴³All in all, debates about the necessity and opportunity of am ultilateral coordination of economic planning weren ot completelye vacuateda tt he COME-CON.E vent hough this coordination failed because of ap olitical strategyp ursued by several people'sd emocracies' governments and aimed at manipulating the international organization, in order to shape room for manoeuvre allowing them to control their owne conomic development, plan coordination wasd iscussed at the Council.Onlyt he micro-level analysis of the debates held by its servants allows us to describe at ransnationalp ublic space, where the convergence of nationalp lansw as conceived.
In the strategic field of nuclear energy for example, mutualized investments and acoordination of the production plans of severalnational industries would have been economicallyrationalatCOMECONlevel.However,common planning in the nuclear industry always remained limited, despite the establishment in 1960 of as tanding commission on the peaceful use of the atomic energy and  An actor-based description -from the factories' chief planners to the Kremlin'sa dministration -of the planningprocess in the USSR,unwrappingthe intertwiningofits political and economic rationale and the difficulty of articulatingnational planningand international plan coordination is provided in the fascinatingh istorical novel by Francis Spufford:F rancis Spufford, RedP lenty (London: Faber and Faber,2 010). Françoise Lemoine, Le COMECON (Paris:P UF,1982), 103. SAPMO-BArch DY 3023 -81, Untersuchungen des ZK der SED in den SED-GOinder UdSSR und im RGWi nM oskau, "Bericht über den Einsatz einer Brigade des ZK in der PO der SED im RGW und in den Vertretungen der DDR in Moskau in der Zeit vom1 0.-2 0. 12.1963," f. 35. the relative success of common investmentprojects organized by the COMECON in the late 1970si nt wo nuclear plants in Ukraine,i ntended to share their production between the participating countries.⁴⁴The participation in these technical projects often required massive investments in developing an industrial sector in the people'sdemocracies and was obtained under Soviet pressure, since it disturbed the global architecture of national development plans.Nevertheless, HeideloreK ., who worked as an expert for nuclear energy in the secretariat of the Council in the 1980s, explained how her general direction developedo n its own initiative ap roject for the common planningo ft he decommissioning of nuclear plants.Since nationalg overnments wereo nlyi nterested in building an industry on their own territory,COMECON expertsi dentified the field of decommissioningthese production units as an opportunityfor the international organization to conceive ac ommon plan at the level of the socialist bloc, without being challenged by the governments of its member countries.
In the end, COMECONexpertslacked the necessary networks of influencein their own countries,which would have allowed them to enforcethe idea of planning coordination at bloc scale and to promotet he role of the international organization in this process.However,i ft he Council failed to establish itself as the legitimate actor who would define acommon and European model of socialist economic development,i td id not completelyf ail to createatransnational economic space.
Focusing on the fiasco of the supranational planning debate or the resistance of the national planning organs to engagei nt he "integration" of their economies under the auspiceso ft he COMECON,r ecent historiography⁴⁵ on the organization overshadowed the necessary analysis of the moving and blurry borders of the COMECONs ystem.In 1963, confronted with the Romanian obstruction to anys upranational coordination of plans at the COMECON,the ambassadors to the Council proposed to the first secretaries and heads of government of the memberc ountries the creation of "industrial production unions" or "joint companies."⁴⁶Even though the principle of joint companies was soon rejected, the idea of transnationalp roduction networks at the level of the socialist enterprises, associated to the COMECONb ut not integratedi nto the organization as  Sonja D. Schmid, "Nuclear Colonization?: Soviet Technopolitics in the Second World," in Entangled Geographies.Empireand Technopolitics in the Global Cold War,ed.Gabrielle Hecht (Cambridge:M IT Press, 2011), 125 -154. Steiner, "The Council of Mutual Economic Assistance";A hrens, "Spezialisierungsinteresse und Integrationsaversion."  BArchD C2 0-19575, Entwicklung der Arbeit im Rat fürg egenseitigeW irtschaftshilfe.1964 -1968, "Kurze Information über die Tagung des Exekutivkomitees," f. 10 -13.
The Council for Mutual Economic Assistance workingbodies, livedo n.This decentralized form of international co-operation, based on an economic rationale and on the coordination of the production between enterprises workingi nt he samei ndustrial field, matched the spirit of the national economic reforms of the 1960s in the socialist countries.
In 1964,H ungary,C zechoslovakia, Poland, the GDR,a nd Bulgaria, soon joined by the USSR,c reated the first Economic International Organization (EIO), whose aim was to coordinate the production of rolling bearings.Af ew months later,the same members extended theirc o-operation and created Intermetall.⁴⁷This time, the EIO did not deal with as ingle product but with issues related to the whole sector of the steel industry.In1967, all COMECON countries, except Romania, started to discuss the creation of an EIO in the field of chemical industry,Interchim, which was finallyfounded in 1970.Inthe second half of the 1970s, the EIOs had become influent purchasing organizations, steeringt he foreign trade of their partners and entrusted with the duty to improvethe supplyof their industrial sector,which would promotethe equitable sharing of modernization efforts, in order to increase the production and to reduce the dependency on Western markets,while also promotinge xchanges with Western Europe.⁴⁸Even though they dealt essentiallyw ith the coordination of foreign trade, as well as research and development,b ut not directlyw ith the production plans, the EIOs became successfulc ompetitors of the COMECON standing commissions.They mirrored the international organization'ss tructure and sometimes even hired members of its staff.Yett hey werep ositively considered by the national governments, whereas multilateral coordination of planning within the COME-CON made little progress.Confronted with the possible overlappingofthe Council'sand the EIOs' activities, the Soviet deputy ambassador at the COMECONacknowledgedagreat autonomyf or the latter: "The Council'so rgans should use the results achieved by the EIOs for their own work.As far as the EIOs are concerned, it is sufficient for them to make use of the Council in workingunder its general principles."⁴⁹Eventually, during the debate on the creation of Interchim in the late 1960s, the leader of the East-German delegation clearlye xplained the difference between plan coordination at the COMECONa nd in the EIOs:  On the impact of the EIOs in networking the socialist bloc, see Dagmara Jajesniak-Quast, "'Hidden Integration'.R GW-Wirtschaftsexperten in europäischen Netzwerken," Jahrbuch für Wirtschaftsgeschichte 1( 2014): 179 -195 (specifically1 86 -190). BArchD G1 1-1261, Gründungsmaterialien Interchim, "Analyse der Tätigkeit des Intermetalls und Entwurf über die Verstärkungder Arbeit der DDR innerhalb der Organisation," 10 Oct.1966. BArchDG11-217, Interchim,Teil 1, "Niederschrift über den Meinungsaustausch zur Tätigkeit und zur weiteren Richtungd er Arbeit der internationalen Industriezweigsorganisationen."

Simon Godard
Brought to you by | institut d'etudes politiques (IEP) Authenticated Download Date | 10/18/18 6:14 PM With the concept economic organization, as opposed to the usual designation as 'international organization',wewant to express what is new in the forms and methods[of international co-operation].The innovation must consist,a mongst others,i nt hat we succeed in solvinga ll questions and problems first of all with economic methods...which does not mean that we should waive the principle of socialist internationalism or the comradely mutual assistance.⁵⁰Thus, putting forward an economic rationale in advocating the coordination of economic planningi nt he socialist bloc was not impossiblei nt he 1960s.Even though they rapidlyevolved to embrace entire industrial sectors,EIOs wereoriginallycreated to deal with as pecific product and kept this focus on micro-level coordination.This resonated with the spirit of the economic reforms implemented at the national levels by the Soviet Union, the GDR,Czechoslovakia, and later Poland and Hungary.However,the COMECON was too exposed to constitutethe adequate forumwherethis form of coordination could be implemented.The people'sd emocracies sawt he economic interest of such an international co-operation in planning,but they engagedi napolitical manipulation of the COMECON at the intergovernmental level, using its showcase position in the Cold War.The EIOs were not as exposed as the Council and delegated the international coordination of plans to representativeso fs ocialist enterprises themselves, who enjoyed more flexibility than the governments to develop an economic analysis.
Atransnational space for ap artial coordination of economic planning, still limited to foreign trade, was eventuallyshaped in parallel to the COMECON and as anecessary diversion, consideringthe failureofthe Counciltoplaythis role.If the COMECON failed, it is also because its members found ways to reach the positive economic outcomes of plan coordination without having to realize it within the Council'si nstitutionals ystem.

Circulation of regionali ntegration models: the paradoxical 'economicization' of internationalr elations in the socialistw orld
During the 1960s, the terms of the debate on the international coordination of planning in Eastern Europe borrowed alot from the semantics used to character- BArchDG11-1261, Gründungsmaterialien Interchim, "Thesen und Argumentezum Statut von 'Interchim.'"Emphasis givenb yt he original report.
The Council forM utual Economic Assistance ize the evolution of the European Communities in the West.⁵¹Twom ain goals weres uccessively attributed to the COMECON.The international organization had to promotet he "specialization" of its member states' national economies in the first part of the decade, then to achievet heir "integration" in the 1970s.In both cases, progress towardt he establishment of as ocialist economic model and the creation of growth incentivesw ithin the COMECON areaw ere to be achievedt hrough international planning coordination.However,ac rucial institution of Western economic theory,w hich is the free market,w as never openlym entioned within the framework of the COMECON.⁵²If destalinization and the Soviet willingness to establish amore multilateral system within the bloc playedarole in shapingafavorable environment for this transformation of the COMECON,t he strategic evolutions of the Council nevertheless have to be considered in the light of the EEC'sc ontemporary evolutions.Indeed, the latter circulated through the iron curtain and werep ut forward and manipulatedbythe governments of second rank economic powers in the East,in order to preservetheir sovereignty over the elaboration of national economic policies.The discussions on the International Socialist Division of Labor (ISDL) started in 1957,w hen the Common Market was created in Brussels, and led to the adoptionofthe "basic principles" of the ISDLin1962, when the EEC started to implement its first common policy,the CommonA griculturalP olicy.With the ISDL,the socialist countries members of the COMECONexpectedapositive economic effect of international co-operation based on economies of scale and increased productivity of national industries.Each country would have specialized in the production of several specific products, which it could have traded with its partners.Economists expected an improvement in the quality of industrial products and decreasingproduction costs.This analysis shared with the model of regionale conomic integration elaborated by the EEC the idea that the promotion of cross-border circulation of industrial goods would have ap ositive impact on the modernization of the nationale conomies, which werem embers of this trade area.However,unliket he market-based ex-post adjustment of the interna- This circulation of knowledge about economics owes alot to the good relations established by the COMECON'ssecretariat with its counterpart at the United Nations Economic Commission for Europe, whose role as ab ridge between East and West is well analyzedb yD aniel Stinsky's contribution in this volume.See also Daniel Stinsky, "ABridge Between East and West?Gunnar Myrdal and the UN Economic Commission for Europe, 1947Europe, -1957." The reflection on markets is not absent from Eastern European debates at the national levels and in other frameworks than the COMECON,see Johanna Bockman, Markets in the Name of Socialism: TheL eft-wing Origins of Neoliberalism (Stanford: StanfordU niversity Press,2 011).
tional division of labor that existed in the EEC,t he members of the COMECON believed to be able to achievet he ISDL with ex-ante plan coordination.
Despite economic measures promotingthe international circulation of goods between the COMECON countries,such as the adoption of acommon unit of account (the transferableruble) in 1963ormassive efforts to elaborate common industrial standards duringt he 1960s, intra-COMECONt rade lacked ac ommon price-basis and convertible currencies,which would have allowed it expand in proportions similar to the increase of the intra-EEC trade.Implementing the ISDL without marketm echanisms, in at ime when socialist enterprises were givenm orer oom for manoeuvrei no rganizingt heir own process of production, but never fullyc ontrolled foreign trade, was unrealistic.⁵³This discrepancy between the new practice of planning the economyatnational and at international level also explains the economic failureofthe Council.Nevertheless, the COME-CON took over the spirit of the economic reformsi mplemented in its member countries,which was to "catch up and overtake" capitalist countries in developing asocialist model of development mirroringthe Western model, but suited to the specific framework of planned economies.⁵⁴ In its attempt at copyingW estern European economic integration, the COME-CON relied on several legitimate or illegitimate models.Created as an answer to the Marshall Plan in 1949,the COMECONwas supposedt oc hallenget he OEEC/ OECD,m ore than the European Coal and Steel Community or the EEC,tow hich establishment it did not react at first.H owever,C OMECON documents almost never mention the OEEC/OECDa nd focus until the late 1960so ns trengthening the organization'sc ontacts with the United Nations Economic Commission for Europe in Geneva (ECE), in order to achievei nternational recognition with the help of the UN regional commission.This strategy pursuedadiplomatic goal defined by the Soviet superpower and did not takei nto account the economic interests of the people'sdemocracies, which developedagrowinginterest for trade with EEC members in the 1960s, rather thanfor the deepening of atechnical cooperation with the ECE.Thus the unofficial declaration by the EEC and the CO-MECON of their interest in opening reciprocal recognition negotiations in 1971, followed by the official recognition of the EEC by the socialist countries in  R. Selucky, "The impact of the economic reforms on the foreign economic relations of the socialist countries," Soviet and Eastern European Foreign Trade 4, no. 3( 1968): 72-86. Forthe reverse case studyofthe influence of socialist economic knowledge on Western European countries,s ee the contribution by Isabelle Gouarné in this volume: Isabelle Gouarné, "Mandatory planningv ersus Indicative planning.Eastern Itinerary of French planners (1960s-1970s)".
The Council forM utual Economic Assistance 1972,⁵⁵ led to twodifferent sets of East-West dialogue.While the EEC Commission started bilateral commercial negotiations with each COMECON member state in 1974,enforcingi ts own official recognition and fosteringbilateraltrade, the CO-MECON secretariat openedafirst round of negotiations with the EEC Commission in 1975,w hich was interrupted by Brusselsi n1 980.T he COMECON was then forced to unilaterallyr ecognize the EEC,which alreadyd ealt directlyw ith its member states' governments.It managed later to reopen negotiations with Brussels, leading to mutual recognition of both international organizations in June 1988, when the COMECONw as alreadyc rumbling down.⁵⁶Eventually, the long diplomatic and largely unsuccessful process of mutual recognition cannot hide ar eal circulation of goods between the East and the West,b ut also of conceptsa bout regional economic integration.Particularly after 1968, at atime when Soviet opening towards the EEC had made public debate possible, the EEC model worked as the main reference in the discourse on the necessary evolution of the COMECON.⁵⁷Polish and Hungarian representativesi np articular analyzedt he evolution of market coordination within the EEC and used the perspective of the completion of the custom union by 1968 to urge their partners at the COMECONt op rogress towardastrongerc oordination of their economies.As the Hungarian ambassador at the COMECON, Rezsö Nyers, said in 1968, "the integration that is happeningi no ther parts of the world -especiallyi nW estern Europe -is so powerful, that the smaller socialist countries can demonstrate an equivalent economic potential onlyi ft hey co-operate closer among each othera nd with the Soviet Union than has previouslyb eent he case."⁵⁸Thus the COMECON, like other international organizations,a ppeared more and more as "ar esource-place for political leaders,who werea ware of the economic vulnerability of their country."⁵⁹The strategyofthe Polish and Hungarian governments wastwofold.⁶⁰Since they wereincreasingtheir economic relations with the West at that time, they needed astronger integration of the socialist economic area in order to export theirproducts in the East.This would have helped them finance the acquisition of Western technologies to modernize their national economies.Hungary for example took advantage of aCOMECON-agreement achieved in 1963, making the Hungarian factory Ikarus responsible for the production of large buses for the whole bloc, to develop its mechanicalc onstructions' sector and became one of the world'sgreatestb us producer.⁶¹Besides, in pushing the international organization to endorse their reformist interpretation of the socialist economic model (includingt he development of new foreign trade relations, more autonomyg iven to the enterprises and the development of market incentivesw ithin the socialist economies), they weres eeking protection against peer pressurea imeda tf orcingt hem to revoke theirn ational economic reforms, which had been implementeda fter 1968.In the context following the Prague Spring,t he USSR and its most conservative partners werei ndeed willing to block anye volution towardm arket socialism.While playing the EEC-threat at the COMECONa nd the urgent necessity to mirror Western European integration in the East,Warsawa nd Budapest could paradoxicallyl egitimize their national economic course in presentingitasadeclination of multilaterallyagreed COME-CON goals.
Indeed, in 1971,the USSR and its partners engaged the COMECON in the socalled "global program",i ncludingt he task to achievet he "integration" of its members tates' national economies.The term "integration," directlyb orrowed from the Western European regional model, was deeplyc ontroversial and the agreementp urelyf ormal.The members of the COMECONn ever did managet o positively define what socialist economic integration should be.Alexei Kosygin gave avery vagued efinition of the term in his defense of this new goal of planning coordination at the 23rd Session of the COMECON in 1971: "Thesocialist integration will not be accompanied by the creation of supranational organs ...We do not interfere [in national planning], no supranational organs ...Thus it is The Council for Mutual Economic Assistance different from the integration thatiscarried out nowadaysinthe capitalist countries".⁶² In associatingthe memory of the supranational debate with the idea of economic integration, in order to distinguish these two more clearly, the Soviet government tried to overcome the failureo ft he coordination of economic planning at the COMECON, which had characterized the 1960s.However,t he concept of "integration" remained alien to the socialist world.According to Mikhaïl Lipkin: "The term 'integration' itself, which was before something like as wear word, in the official Soviet lexicon at least,associatedwith NATO,arms race and monopolistic markets,now became amajor tool in the ideological struggle between the two systems in the environment of détente."⁶³Diverging interests converged to imposean'economicisation' of international relations within the COMECON in the 1960s.The Council, which was created as ap olitical answer to Western European integration, finally tried to adopt Jean Monnet'slogic putting forward economic rationalityasameans towardsenforcing political integration.However,i nabloc wheret he partners were not politicallyequal, dysfunctional economic co-operation and the failureofplanning coordination werec rucial to the people'sd emocracies, as they weres triving to shape some room for manoeuvrevis-à-vis Moscow in their national development strategies.T he imitationo ft he Western European model of economic integration, which was stronglyp romotedb yt he Hungarian and the Polish governments -seeking the modernization of theirn ational economies through regional integration and the establishment of as ocialist market, eventuallya ggravated the tensions between socialist economies at the COMECON in the long run and at the same time promoted their international autonomyi nt he short term.

Conclusion
It seems evident that the COMECONwas structurallyu nable to organize an economicallyrational planning coordination among the socialist countries,inorder to elaborate ac ommon plannedm odel of development at bloc scale.Not only because of internal problems specific to the socialist economic system did it  SAPMO-BArch DY 30 -3415, Protokoll der XXIII.S onder-Tagung des Rates fürG egenseitige Wirtschaftshilfe, "Protokollarische Niederschrift der Leiterder Delegationen der 23.RGW-Tagung am 26.A pril in Moskau," f. 55.  Mikhaïl Lipkin, "The Soviet Union, CMEA and the Question of First EEC Enlargement" (paper presented at the XIV International Economic History Congress, Helsinki, 2006).fail, but also because the organization was pushed by its members to mirror more and more the evolutions of the EEC'sr egional economic integration in the 1960s.
However,t he Councilw as not doomed to fail because socialist economic planning was irrational in itself,⁶⁴ or unable to be coordinateda tb loc scale.It failed because the COMECONwas created as -and always remained -apolitical organization, while officiallyp ursuing economic goals.Oscar Sanchez-Sibony has shown how Soviet economics has to be analyzed in aglobalframework, taking into account the influenceo fp arallel evolutions in the capitalist system.⁶⁵We have stressed out in asimilar wayhow the Cold Warheld swayoverthe shaping of the socialist world-economya fter 1949.C onsideringC OMECON'su nique showcase position in the Cold War, it becomes evident that the USSR,p laying its superpower role, could not afford to let the organization fail.A ccordingt o the official equality of all members tates, Moscow had to bear compromises with its partners within the framework of the COMECON, were it to maintain the imageo fs ocialist solidarity on the international stage.
Eventually, the failureo fp lanning coordination at the COMECONw as neither accidental nor structural, but intended and instrumentalized by the people'sdemocracies, in order to createa"dynamics of dissent"⁶⁶ that shaped, within the bloc, political room for manoeuvrefor the smaller statesagainst the Soviet superpower.Romania, the GDR,Poland, Hungary or Czechoslovakia had an economic and political interest in nurturing the failureo fp lanning coordination in the Council, in order to bargain long-term empty agreements against short-term real bilateral compromises from the Soviet Union.Lookingatt he learning process at stake in international economic cooperation among socialist countries,as has been done here, helps answer in anew waythe question whythe COMECON failed.Considering how international and nationalagents involved in the COME-CON co-operation shaped common planning projects,i tb ecomes clear that the structurallyw eaki nterest of economic co-operation does not explain alone the failureo ft he Council.Rather,c ommon economic failurea nd political success of separate national development strategies weret wo sides of the samec oin.
 Foranoverview of the debate, see Peter Boettke, Socialism and the Market: The SocialistCalculation Debate Revisited,vol. 5(London: Routledge,2000).Acritical discussionofthe strategic academic use of this debatei nt he capitalist world is provided in Johanna Bockman and Gil Eyal, "Eastern Europe as aLaboratory for Economic Knowledge:The Transnational Roots of Neoliberalism," TheA merican Journal of Sociology 108, no.