From Trotsky To Tito : The Great Contrast

FROM TROTSKY TO TITO . James Klugmann 1951

Chapter Seven: The Great Contrast

In all the mass of verbiage and slander turned out by the Titoite press, translated into every living language, and reproduced joyfully and in bulk by the capitalist press throughout the world, there is one principal slander, one great lie, that takes precedence over all others. Tito and his chief propagandists, Djilas, Dedijer and company, have learned their tactics from Hitler and Goebbels. Take a big lie and repeat it ad nauseam.

This big lie is that the Soviet Union is trying to colonise the countries of Eastern Europe to stop their industrial development, to keep their economies backward. It is that ‘heroic little Yugoslavia’, led by Tito, resisted colonisation by ‘red imperialism’ and now enjoys the economic aid of the generous West, whilst the People’s Democracies which have remained under ‘Soviet domination’ are unable to advance economically.

Take three typical Titoite pronouncements chosen at random from hundreds:

It is of course absurd to talk of economic and political cooperation as between equals, if one starts from the standpoint that the economy of smaller or less developed countries should be but an appendage to the economy of large and developed countries, and a source of super-profit to them, instead of from the standpoint of raising the economic strength and prosperity of every country.

This is Tito’s Foreign Minister Kardelj, attacking not British or American imperialism, but the Soviet Union, at the Fourth General Assembly of UNO in October 1949.

Through their pressure the Soviet leaders have prevented the construction of heavy industry in Bulgaria, thus holding the country at the level of an agrarian land, as a source of material for Soviet industry... the USSR harboured similar designs against Yugoslavia, but we would not agree with such undemocratic intentions.

The above is Tito’s miniature Goebbels, Dedijer, Chief of the Yugoslav Information Department, at the time of the Kostov trial.

The fundamental contradiction in the world is the unequal relations between Socialist countries – the ordering about, the political and economic subordination of small countries by the USSR.

That is Tito’s daily organ Borba early in June 1950, approvingly reproduced by the New York Herald Tribune.

In this chapter we shall examine this main line of Titoite slander, seeing first what has been the fate of Tito’s Yugoslavia ‘heroically set free from red imperialism’, and what [1] the fate of the People’s Democracies of Eastern Europe who have remained under ‘Soviet domination’.

Let facts and figures talk!

I: Soviet Aid and Western Generosity

When the Red Army and the Yugoslav National Liberation Forces drove the last Axis forces from Yugoslav soil in the first part of 1945, the country, after four years of Axis occupation and devastation, was in dire economic straits. In the winter of 1944-45 there was famine and starvation on the Dalmatian coast. The communications were wrecked and ravaged, bridges blown up, roads mined. When the Western military and civilian authorities were asked for food for the famine areas, rigorous conditions were imposed, and while bargaining continued, and whilst food-ships lay waiting in ports in Eastern Italy, men, women and children starved. This was the first postwar example of ‘generous’ Western aid. The food rotted, people died, yet it was not far across the Adriatic sea.

It was from the Soviet Union, itself devastated by the war, the Soviet Union whose army and people had borne the brunt of the war, that the first aid was despatched to the Yugoslav people. It was the Soviet Union that first rushed in supplies of food to the Yugoslav starvation areas, that sent fuel to restore transport and raw materials and equipment to rehabilitate industry.

It was the Soviet Union that first developed trade on a large scale with Yugoslavia at the end of the Second World War, delivering precisely the material that was most needed to revive industry. On the basis of the trade agreements of April 1945, June 1946 and July 1947, the USSR supplied Yugoslavia between 1945 and 1948 with goods to the value of 541.6 million roubles, besides goods on credit to the value of 795 million roubles. Ferrous metals, rubber, raw materials, machinery, locomotives, 5700 railway wagons poured into Yugoslavia, on credit, to help rehabilitation.

Moreover, before Tito had dragged Yugoslavia into the Western orbit and cut his relations of mutual aid and friendship with the USSR and the People’s Democracies, the Soviet government had undertaken to supply Yugoslavia with an iron and steel works of an annual capacity of 400,000 tons of pig-iron, 500,000 tons of steel, 300,000 tons of rolled steel and 600,000 tons of coke, as well as equipment for an oil refinery with an annual capacity of 300,000 tons, equipment for the oil and mining industries and for non-ferrous metallurgy, and sulphuric acid plants.

Indeed the whole basis of Soviet aid and trade with Yugoslavia after Liberation was precisely for the speediest industrial recovery and rapid further industrialisation of Yugoslavia.

During the first three years after the Second World War, the Titoites concealed their treachery from their people. So they had to voice in public their people’s gratitude to the people and the government of the Soviet Union.

A Yugoslav Department of Information official news release of mid-1946, entitled ‘Postwar Foreign Trade of the Federal People’s Republic of Yugoslavia’, stated:

The government of the Federal People’s Republic of Yugoslavia, since the early days after the liberation of the country, paid special attention to the re-establishment and development of commercial relations with the USSR. A commercial agreement was signed in Moscow as early as 13 April 1945.

It would be difficult to imagine what would have happened to our economy, during the past year, without the unselfish assistance of the USSR, consisting of fuel, raw materials, semi-finished products and spare parts most urgently needed by our industry and mines.

The USSR punctually fulfilled their obligations resulting from the agreement showing at the same time a complete understanding of our difficulties. The USSR today holds the first place in the statistics for our foreign trade for 1945 and the first two quarters of 1946...

Nikola Petrović , a leading Titoite, then the Yugoslav Minister of Foreign Trade (equally at that time concealing his real aims and therefore forced to reflect the feelings of the mass of the people) wrote in Trideset Dana of August-September 1946:

The USSR represented in the past and still represents today the one firm point in world economy. She is not subject to cyclical crises and shocks; she has vast wealth and economic strength, and unswerving economic possibilities and perspective.

And above all, the Soviet Union, in her economic and commercial relations with other countries, is not governed by selfish aims and has no intention of exploiting the riches of other lands and peoples.

Does it not follow from this that it is to the vital interests of small people, who want to protect themselves from the dangerous appetites of foreign imperialists, to seek cooperation and support and protection, equally in the political and economic and commercial fields, from the Soviet Union?

By 1947 it was perfectly clear to all that friendship with the Soviet Union and the People’s Democracies, that Soviet aid and trade, and the aid and trade of the People’s Democracies, would lay the basis for Yugoslav rehabilitation and industrialisation, the basis for an independent and prosperous Yugoslavia.

The UNO Report Economic Development in Selected Countries stated:

From Czechoslovakia, $150,000,000-worth of capital equipment is expected over the five years of the agreement [Czechoslovak-Yugoslav economic agreement]; this would make a substantial contribution to the [Yugoslav] Five-Year Plan targets.

Of special importance for the implementation of the Five-Year Plan is the conclusion of a trade agreement with the Soviet Union, officially reported on 30 July 1947. According to the terms of this agreement, Yugoslavia will receive metallurgical plants and equipment, both ferrous and non-ferrous, and plants for oil and chemical industries and for coalmining. Yugoslavia’s deliveries of goods will not take place until 1950...

The same contrast between the Soviet aim of helping Yugoslavia to rehabilitate its industry and the Western aim of using so-called ‘aid’ to reduce Yugoslavia to colonial status was fought behind the scenes of UNRRA, the United Nations Relief and Rehabilitation Administration.

UNRRA was established as an organ of international aid and rehabilitation to the states that had been victims of the Axis aggression. Its written aim was to allow these countries to stand on their own feet again, which meant in the first place, when the early famine relief stage was over, the rehabilitation of industry. But this was not the aim of the capitalist representatives who held the majority of positions in UNRRA, and above all it was not the aim of the United States government, which, throughout the whole UNRRA period, dominated the UNRRA machinery from its Washington office.

This was, however, the aim of the Soviet representatives in UNRRA, who fought consistently for the carrying out of international agreements, for the transformation of UNRRA into an organisation true to its own constitution, which would provide the goods necessary for the victims of Axis aggression to stand economically on their own feet again. This was the aim of the Soviet representatives in the UNRRA Yugoslav mission, including the head of that mission, who was a Soviet citizen.

The Soviet representatives in UNRRA and the Soviet officials in the UNRRA Yugoslav mission (backed by honest mission members from many Western countries) fought continuously, day in and day out, for the despatch by UNRRA to Yugoslavia of those materials needed for the rehabilitation of industry – materials to clear the harbours, to build roads, to reconstruct the mines, to set transport going again, to build factories. But very different was the Washington objective!

Washington, that is, American imperialism, saw UNRRA essentially as an organisation with two main purposes. The first was as an organisation to build up countries, not according to the degree of devastation they had suffered, but according to the degree of their subordination to US policy. This meant that every effort was made to favour Greece and Italy at the expense of the East European countries. And though Yugoslavia fared better than the other East European countries, for reasons that are now clear, Yugoslavia was not yet in the 1945-46 period considered as a safe satellite of the Greek type, for Tito and his clique had not yet succeeded in removing from office all genuine Yugoslav Communists. Yugoslav needs, therefore, were constantly side-tracked in favour of that most favoured nation – monarcho-fascist Greece. Secondly, Washington, that is, American imperialism, saw in UNRRA an instrument for the disposal of, for the dumping in vast quantities of their surplus and now unwanted second-rate and often second-hand military goods.

How many telegrams reached UNRRA, Belgrade, from UNRRA, Washington, and UNRRA, London, along these lines! ‘Have so many hundred thousand tons soya flour. Necessary dispose of. Explain Yugoslav authorities soya in bread tasty. Reply soonest specifying needs.’ Or: ‘Have so many hundred thousand US K-rations. Believe useful Yugoslav peasantry. Can you take so many hundred thousand?’ But the Yugoslav people needed not soya flour or K-rations or other surplus and often damaged US goods, but material to rehabilitate their industry. It was for this that, constantly and consistently, the Soviet representatives in UNRRA and the Soviet members of the UNRRA Yugoslav mission strove.

Such industrial goods as were finally obtained through UNRRA channels in Eastern Europe, Yugoslavia included, were wrung out of Washington and London by the ceaseless efforts of the Soviet representatives and officials in UNRRA, backed up by conscientious UNRRA officials of all countries including Britain and USA, who, despite very varying political outlook, wanted UNRRA to be true to its own constitution, to fulfil the mission for which it was originally intended.

The US government had other aims. It wanted colonial satellites industrially dependent on US economy. At the end of the Second World War it refused to return to Yugoslavia the Yugoslav Danube vessels which the Nazis had seized and brought up-stream to that part of Austria which was occupied by the West. It refused to release the Yugoslav gold held in America. It organised through the big oil companies periodic boycotts of the oil that Yugoslavia was trying to import through UNRRA. The Western capitalists were not yet sure of the victory of their Titoite puppets, so the Yugoslav people could pay in starvation. The New York Herald Tribune correspondent in Belgrade quoted on 13 November 1946 a Yugoslav foreign office official as saying in relation to the Yugoslav ships withheld by the US authorities in Austria:

We cannot evaluate the lives lost because of a lack of railroads at the beginning of last year, and ships were the only means of bringing food to the stricken areas of our country. And they were not available.

This was Western ‘generosity’ in action. Yugoslavia was denied its own ships stolen by the Nazis and now lying useless under US occupation. Even Tito himself, who could not yet, in those days, allow his betrayal openly to appear, had to reflect the feelings of the Yugoslav people towards the USA and the USSR. In his address to the Communist Youth Congress on 1 June 1946, he declared:

Of course we have received some help from abroad, namely from UNRRA, but the principal and most substantial aid came from our great ally, the Soviet Union.

So the first part of the answer, the Chapter One of the reply to the Titoite slander of ‘Soviet imperialism’, is the presentation of the facts in the early postwar period of 1945-46, when it is seen, in all clarity, that Western ‘generosity’ was a hollow mockery that played cynically with the lives of Yugoslav men and women and children, whilst it was from the USSR, despite its incredible war losses, that came the first aid to the Yugoslav people, and the consistent effort, in every way, to rehabilitate Yugoslav industry and to help to set it firmly on the road of postwar industrialisation.

II: Tito Yugoslavia Goes West

In the immediate years that followed on the end of the Second World War, it was the Soviet Union that first came to the aid of the Yugoslav state, and, despite its own great needs of reconstruction, made sacrifices to aid the reconstruction of Yugoslav economy. Moreover the People’s Democracies of Eastern Europe gave enormous help to Yugoslav reconstruction by establishing mutual aid agreements with Yugoslavia.

But long before the June 1948 resolution of the Communist Information Bureau, Yugoslavia, under the Tito regime, began to break the mutually established trade agreements, and to turn westwards. [2]

Tito Yugoslavia failed to deliver the goods agreed upon with her East European neighbours. In 1947, whilst trade agreements between Yugoslavia and the People’s Democracies provided for an equal exchange of goods, Yugoslav deliveries fell short by 18 per cent. Yugoslav deliveries to Czechoslovakia, the most important trading partner to Yugoslavia in Eastern Europe, fell short by 28 per cent. Even Tito and Kardelj had to admit this in their letter of 13 April 1948 to the Communist Party of the Soviet Union: ‘We do not deny, in connection with this, that on our part there were oversights in commercial affairs.’ ('Oversights’ in the English translation published by the Royal Institute of International Affairs is ‘negligence’ in the Belgrade edition.)

In this same letter Tito and Kardelj made no counter-charges against the Soviet Union or the People’s Democracies. There were no such ‘oversights’ on their part. But on the part of the Titoites the ‘oversights’ became more and more glaring, and these ‘oversights’ were a direct blow at the planned economies of the People’s Democracies. The Titoites, whilst accepting the regular deliveries of key materials like Polish coal and Czechoslovak machinery, more and more withheld deliveries of essential raw materials in exchange and either went into default or tried to replace essential goods that they were pledged to deliver with unessential luxuries.

The Soviet Union and the People’s Democracies were helping Yugoslavia in this period by mutual trade and by credits to build up her industry. With their aid the structure of Yugoslav trade was developing out of its old semi-colonial status. This was admitted by Yugoslav trade officials themselves. The Yugoslav communiqué on foreign trade in 1948 reported:

In 1948, Yugoslavia considerably altered the structure of her exports and imports. The structure of prewar Yugoslavia’s foreign trade had a typically agrarian raw material character in the exports, whilst final products constituted by far the greatest percentage of the imports. Thus, during the last two years of prewar Yugoslavia, 45 per cent of the total imports were textiles. In 1948, the changes in the structure of our foreign trade became particularly obvious. In that year 67.2 per cent of the whole imports were raw materials and other goods needed in current production. Means of investment amounted to 25.6 per cent, final consumer merchandise to 7.2 per cent of the total imports.

But in 1948 Yugoslav imports were coming essentially from the USSR and the People’s Democracies, which accounted for something like 60 per cent of all Yugoslav trade. It was the Soviet Union and the People’s Democracies that were helping Yugoslavia to shed her old semi-colonial economic status from which she had suffered so much between the wars.

The USSR sent more goods per head to Yugoslavia than to any of the People’s Democracies in the years 1945-48. Imports of Yugoslavia from the People’s Democracies as a group were higher than those of any of the individual People’s Democracies, amounting in 1948 to $6.20 per capita, compared to $6 in Hungary, $4.10 in Poland and Bulgaria and $2 in Rumania. Therefore no other country in the whole of Europe received as much help from the USSR and the People’s Democracies towards developing industry as Yugoslavia.

It was precisely in this situation, and in this period, long before the Communist Information Bureau resolution, that Tito deliberately turned his back on the People’s Democracies, openly betrayed the mutual trade agreements, and began to lead Yugoslavia right back into the Western imperialist economic orbit.

In 1947, 1948 and 1949 the Yugoslav default on agreed mutual exchange of goods with the People’s Democracies became more and more open. The Czechoslovak declaration of 11 June 1949 made this abundantly clear:

The most important problem in the commercial relations between the two countries is the fact that, owing to Yugoslavia’s intransigence, it has been impossible up to the present to arrange for Yugoslavia’s counter-deliveries for the next three years in return for investment plant, etc, supplied to Yugoslavia. According to the existing agreements these counter-deliveries for the next three years ought to have been fixed by the end of June 1949. This breach of agreement on the part of Yugoslavia is all the more detrimental to Czechoslovakia as all the contracts for the supply of this investment material have already been given to the Czechoslovak industries where work is proceeding upon them on an intensive scale.

It was only a whole year after the agreed deadline (and after the publication of the Information Bureau resolution) that the Czechoslovak government, after further fruitless efforts to get Yugoslavia to adhere to her agreed commitments, finally ordered its factories to cease producing the investment goods ordered by Yugoslavia.

In the relations of Tito Yugoslavia to Poland the identical story was repeated. In its note of 6 July 1949, the Polish government had to report that of the copper deliveries to Poland to which Yugoslavia was pledged, none had been delivered; only 35 per cent of the agreed quantity of lead concentrates was delivered by Yugoslavia; an order for timber, actually loaded for delivery to Poland, had been halted. Instead, in exchange for Polish coal and other essential goods, Yugoslavia had tried to palm off large quantities of wine, grapes, dried figs and tobacco.

Thus whilst the People’s Democracies, true to their pledges, were delivering to Yugoslavia the minerals for her to develop industrialisation, the industrialisation plans of the People’s Democracies were being sabotaged by the non-delivery of agreed supplies by the Titoites.

Nor was this the whole story. Closer examination of Yugoslav trade relations shows that these ‘oversights’ were completely deliberate. The Titoites were exporting westwards the very goods on which they were defaulting eastwards.

British statistics of foreign trade reveal a fourfold increase in the rate of imports from Yugoslavia beginning in 1948. During the twelve-months period ending in August 1949, Tito Yugoslavia sent to Britain goods to the value of $39 million (at pre-devaluation exchange rates) and received in return goods to the value of $14 million. Thus the Titoites, who could not find their way to meet their pledges to neighbours, based on mutual and equal exchange, could send to Britain three times what they received. During the first eight months of 1949 Britain received from Tito Yugoslavia timber to the value of $25 million. Tito, who could not find any timber to meet his pledges to Poland and to pay for his imports of Polish coal, etc, was able to send to Britain almost as much timber as the total value of Yugoslav exports to Poland in 1948. Moreover, the acceleration of Yugoslav timber deliveries to Britain began already in mid-1948.

With Yugoslav copper exports the same process was repeated. In 1947 Tito Yugoslavia sent some 20 million pounds of copper to the USA. In 1948 there was a sharp drop of copper exports to the USA, not in order to meet pledges to the People’s Democracies, but in order to make out that the copper was not available to meet these pledges. In actual fact, the copper was simply stored up for subsequent delivery to the USA. During the first two months of 1949, 10,500,000 pounds of Yugoslav copper were delivered to the USA, that is, more than twice as much as was delivered in the whole of 1948. On 16 January 1949, the New York Times, reporting on these deliveries, explained that they consisted of the 1948 production of the Serbian copper mines of Bor. During 1948, whilst Tito Yugoslavia was withholding pledged deliveries of copper to the People’s Democracies, countries like Poland and Czechoslovakia were forced to buy for dollars 10,975,000 pounds of copper from the USA, that is, nearly exactly the quantity that the Titoites withheld in that year for subsequent delivery to America.

Very much more could be written about the two-faced trade policy of the Titoites. What is the conclusion?

It is clear enough. The second part of the reply to the Titoite slander of ‘Soviet imperialism’ is that the economic break with the People’s Democracies was undertaken by the Titoites themselves, starting long before the resolution of June 1948 of the Communist Information Bureau. Tito and his confederates, with their planned ‘oversights’, broke the mutual economic relations with Eastern Europe that were so advantageous to the Yugoslav people and to Yugoslav industrialisation, and equally deliberately led their unfortunate country into the orbit of Western imperialism.

III: Back to Semi-Colonial Status

And what has been the result? What has been the effect on Yugoslavia and on the Yugoslav people of bringing the country into the orbit of Western imperialism?

The first result has been that Yugoslav trade, now based on the capitalist countries of the West, and above all on American monopoly capitalism, has returned to its old character of between the wars, that is, the export of raw materials in exchange for made-up industrial goods. Yugoslavia has returned to the typical trade relationship of a semi-colonial country with its imperialist masters.

What do the Western imperialists want economically from Yugoslavia? They want to buy cheap raw materials – timber, foodstuffs and above all non-ferrous metals, many of which are of key importance in their war preparations. They want Yugoslavia to remain industrially weak as a permanent market for their surplus goods. And in so far as they do want her industry to develop, they want it for their own purposes and not for the interests of the Yugoslav people – for their own interests and under their control. They see in Yugoslavia, finally, a profitable source for their capital investments, as it was once before, between the wars, to the great detriment of the Yugoslav people.

Look at the transformation of Yugoslav trade since Tito’s open surrender to the West. In 1948, Yugoslavia exported to the USA raw materials (mainly strategic) to the value of $5 million; in 1949 to the value of $16 million; in 1950 to the value of more than $30 million. During the first nine months of 1949 more than 80 per cent of US imports from Yugoslavia were composed of copper, lead, antimony, chrome and other strategic raw materials, whilst, in the same period, only 12 per cent of Yugoslav imports from the USA were machinery and transport. Yugoslavia received in this period less than one-quarter of the machinery from the USA that it received from the USSR in the first nine months of the previous year for the timber industry alone.

Nearly all Yugoslav copier now goes to the USA. To Britain go timber, lead, zinc, chrome and foodstuffs from amidst a half-starved people. In 1949 already 80 per cent of Yugoslav hemp was sold at extremely low prices to Britain and the USA.

Increasing quantities of Yugoslav raw materials are exported by the Titoites to the former Axis countries. To Austria goes meat, whilst in Yugoslavia the meat queues grow longer and the meat prices go up. To Italy go bauxite, lead, magnesite, chrome and other non-ferrous metals. The Titoites sell sugar to Italy at 6.5 dinars per kilo, for which they are charging their own people up to 500 dinars. They are selling maize to Western Germany at 4.0 dinars per kilo for which Yugoslav workers are paying over 40 dinars. Copper, antimony, magnesite and bauxite are sent to swell the war preparations in Western Germany. Whilst the Yugoslav people were suffering from hunger, whilst food rations went unhonoured and black market profiteers grew rich, the West German paper Der Kurier wrote (4 August 1950) that ‘100,000 tons of wheat, 300,000 tons of maize, and 60,000 tons of barley’ were to be exported from Yugoslavia to West Germany.

And what are the Yugoslav people receiving in return? The United States sends food to food-exporting Yugoslavia, at prices many times higher than Yugoslavia’s own food exports – it supplies lard, processed flour, dried milk, chemical specialities, bad films, and radio equipment for broadcasting slanders against the Soviet Union and the People’s Democracies. And when industrial equipment and machines are sent, they are directed specifically to those extracting industries which provide raw materials for the USA and West European capitalism – machinery to exhaust Yugoslav timber supplies and to drain the country of its non-ferrous metals; nothing is left behind for Yugoslav industry, so that the Yugoslav market remains wide open for Western products.

Thus the new trade relations of Yugoslavia with the West today are the old trade relations of Yugoslavia with the West between the wars. The Yugoslav people live in poverty in a rich country; surrounded by raw materials, their own industry is starved of them. Shoddy surpluses are dumped on them at high prices. And their wealth is drained away into the pockets of the Western capitalists.

The Western capitalist countries, proclaim the Titoites, have generously provided Yugoslavia with loans and credits. It is interesting to examine the character of this ‘generous assistance’. The Export-Import Bank granted Yugoslavia credits of $20 million followed by a further $20 million in April 1950 and $15 million in September 1950. The International Bank of Reconstruction gave a $2,700,000 loan in October 1949 and has since been negotiating further loans. Two loans ($3 million in October 1949 and $9 million in December 1949) have been provided by the International Monetary Fund. The British government gave credits of £8 million in December 1949 and a further £3 million in November 1950. The US Congress authorised $38 million in December 1950 for ‘famine relief’ and a further $29 million in April 1951 ‘to obtain critically needed raw materials for her armed forces’ (The Times, 17 April 1951).

The Economist on 23 June 1951 reckoned that in the previous eighteen months Tito Yugoslavia had received, in all, loans and credits amounting to £22 million from Britain and £53 million from the USA, plus a further £10 million mostly for food for the Army. On 5 July, Herbert Morrison, the British Secretary of State for Foreign Affairs, announced that the USA, Britain and France were considering a further joint programme of ‘aid’ to Tito, of which the British contribution might amount to the order of £10 million in the current financial year. But not one dollar or one £ sterling of this ‘generous’ aid was without its price – and a heavy price at that.

The New York Herald Tribune (15 November 1950), commenting on the second British credit to Yugoslavia, wrote:

Great Britain was said to be considering also a Yugoslav bid for additional longer-term aid with which the Belgrade government hopes to develop some of its natural resources. These resources include various non-ferrous metal deposits and large timber tracts. Their output would be made available to Western nations which could find use for them in their rearmament programmes. [My italics – JK]

The loans mean, therefore, according to the old colonial pattern, development of Yugoslav resources not for Yugoslav industry or for the Yugoslav people, but for Western imperialist profit and Western imperialist war.

Equally frank about its US ‘partner’, the British Times wrote on the same day (15 November 1950):

The United States government is known to have considered what further assistance can be given [to Yugoslavia], but is faced with the difficulty that Congress would hardly agree to a grant of credits without attaching some measure of control over the manner in which the moneys loaned were to be spent.

Still franker was the New York Herald Tribune correspondent, writing from Yugoslavia on 29 November 1950. Declaring that Tito’s ‘Communist Party’ and the Yugoslav people were ‘two mutually hostile groups’ which could only be held together by US ‘aid’, he admitted that if this aid were to be provided ‘Tito to some extent will become a prisoner of Washington as his dependence on the United States increases’. ‘Prisoner of Washington’ is an apt description of the present plight of the Yugoslav people, with Tito as a paid jailer of his own people.

The American and American-dominated banks and funds do not even trouble to disguise the strings and conditions attached to their ‘generous’ credits and ‘altruistic’ loans. When the Export-Import Bank made its first loan of $20 million to Yugoslavia, its representative publicly explained that 75 per cent was earmarked for the restoration of non-ferrous metal mines and of plants where the ores were to be smelted. This was being done, he said, so that Yugoslavia might increase her exports of bauxite, mercury, copper, lead and other strategic raw materials needed by the USA.

In December 1949, Kardelj announced that Yugoslavia was trying to negotiate further loans from the International Bank of Reconstruction and Development (whose funds are 87 per cent provided by the USA). The Bank sent to Yugoslavia an exploratory mission headed by the US businessman Hoar, who declared that if the loan were granted, the bank would reserve the right to control its spending in Yugoslavia. The bank, he explained, would concentrate its attention on the development of agriculture, transport and ore extraction, so that Yugoslavia could keep its role of exporting agricultural and industrial raw materials, above all strategic ones.

The officials of this bank have always been particularly brazen. In November 1949 the bank’s Chief Economist, Antonin Basch, wrote a long article in the US magazine International Conciliation in which he explained:

The bank is obviously directly interested in the general economy of the borrower... It therefore requires that the borrower, when requested, give full information with respect to significant economic and financial developments. This creates much closer and more permanent relations between the bank and its borrowers than has been usual between the creditor and the debtor in the international field.

The New York Herald Tribune (3 January 1950) described in these terms the Bank’s ‘standard requirements’ from borrowers:

1) That the borrower keep the bank informed on the goods bought with loan funds, on the progress of its project, on its general operations and financial conditions and recognises the bank’s right, if need be, to inspect, audit and make copies of its books and records.

2) That the bank have the right to inspect goods bought with its loan funds, and also inspect the use of the goods in its loan project.

3) That the borrower agree, with certain specified exceptions, to give the bank liens or security from its assets of equal priority and on a proportional scale to any maker of subsequent loans.

4) That the bank has the right to sell bonds given to it under the loan agreement as a security for its loan.

It should be noted here that even the British government found these ‘standard requirements’ too much to stomach, and that, on 2 January 1950, the British Colonial Development Corporation explained that it was withdrawing its application for a $5 million loan from the International Bank because the conditions were too ‘onerous’.

But, with all his empty demagogy about ‘independence’, these ‘standard requirements’ were not too ‘onerous’ for Tito. The New York Herald Tribune in its article quoted above explained that the two first ‘standard requirements’ would lead the bank ‘towards control or a veto power over the borrower’s activities’. It is to this control or veto power exercised by Wall Street that the Titoites have submitted the Yugoslav people and their country.

Thus Tito, dragging Yugoslavia into the orbit of Western imperialism, has reduced Yugoslav trade to its old semi-colonial status and put Yugoslav economy at the mercy of the great Western monopoly capitalists. Commenting on the Italo-Yugoslav trade agreement of August 1949, arranged under the ‘benevolent’ aegis of the USA, the New York Times Rome correspondent wrote: ‘It would again open up to Italy one of her traditional European markets and enable her to sell manufactured goods in return for raw materials of which she stands in need.’

Yugoslavia, therefore, is to be a junior colony of the USA standing in semi-colonial economic relationship even with those countries whose economies have already been subordinated to American imperialism.

Nor is that all.

We have already seen the character of Titoite nationalisation. Today the Titoites are using the power of their caste in the Titoite state to sell out whole sectors of the so-called ‘nationalised’ economy to Western imperialism. A regime of ‘concessions’ has been instituted by which a number of key economic sectors are subordinated to Western monopolies. In exchange for credits US monopolists have received the right to exploit Yugoslav bauxite mines, sections of the aluminium industry, copper and molybdenum mines. On 19 January 1950, the Tribune des Nations wrote that representatives of the American Bethlehem Steel were touring Yugoslavia. Concessions are reported to have been made to the Anaconda Copper Mining Company. At the end of 1949, representatives of the US Mackenzie Engineering Company were reported to be ‘visiting’ Yugoslavia. The Paris Monde reported that the Tito government ‘fully agrees that a special American Commission should control the distribution of products sent to Yugoslavia by the Americans’. The part that the Nazi ‘tourists’, ‘experts’ and trust representatives were playing in the late 1930s had been taken over fully by the envoys of Wall Street.

For their right to be colonised by US imperialism, which is the real definition of Tito’s conception of ‘independence’, the Yugoslav people have to pay – in hard cash. Tito has agreed to pay off all the old ‘debts’ of the Yugoslav monarchy to the USA amounting to some $385 million. He has undertaken to compensate foreign owners of ‘nationalised’ industries to the tune of $17 million to the USA, $18 million to Great Britain and $1,600,000 to France. Commenting on Tito’s promises to compensate the former French exploiters of the Yugoslav people, the Observer Paris correspondent wrote (5 November 1950): ‘It is the first time that the Yugoslavs have agreed to settle these obligations, which go back to the Serbian, Montenegrin and Austrian debts from before the First World War.’ Tito has assumed, therefore, the task of paying imperialism for its exploitation of the Yugoslav peoples even before Yugoslavia existed as a state.

The Yugoslav people have to pay for their enslavement, too, by the total renunciation of a planned economy and the harnessing of the weak Yugoslav economy to the anarchy of Western capitalism. All statements to the contrary are nothing but Titoite demagogy. Moša Pijade, Vice-President of the Presidium of Tito’s Parliament, boasted at a Foreign Press Association dinner in London on 15 March 1951: ‘As we in Yugoslavia hold all the key positions of industry ourselves, there is no danger whatsoever in its furtherance of its economic relations with other [Western capitalist – JK] countries.’

But this is nonsense! Not only because it is not the Yugoslav people but the Titoite caste acting for Western imperialism that controls Yugoslav industry today, but because this industry and the whole Yugoslav economy have become dependent upon the economies of the great imperialist states, above all the USA, and under such conditions planned economy would be impossible, even if the Titoites desired it.

And, in actual fact, even the whitewashed official Yugoslav figures reveal the complete collapse of Yugoslav planning, logical consequence of Tito’s betrayal.

The United Nations Report of 1947 comparing Yugoslav government import estimates with the requirements of the Yugoslav Plan, estimated that there was a gap of $383 million, and stated that:

Yugoslavia will need external credit or else the government import programme will have to be cut drastically... Any drastic cut in the import programme is, therefore, likely to have repercussions on the targets of the Five-Year Plan. (Economic Developments in Selected Countries, United Nations, Lake Success, 1947)

The 1948 survey at UNO’s Economic Commission for Europe (ECE), published in Geneva in 1948, reported that the Yugoslav investment plan for 1947 was only 87 per cent fulfilled and that no details were given of the individual industries.

In April 1949, Cyrus L Sulzberger, of the New York Times, wrote of Yugoslav economic development:

The nation’s planners have had to forestall food shortages and accommodate themselves to inflation and deterioration of plant and equipment. The Five-Year Plan has been modified... without new mining equipment, ore production is near its peak. Transport is strained and timber reserves are being drained by the need to find new export products.

By October 1949, the US News and World Report, always a faithful mirror of the outlook of US big business, was boasting (21 October 1949):

Ambitious plans for Yugoslav industrialisation will have to be shelved. Also Tito probably will have to make political or military concessions. Important fact now is that Tito must have dollars and must play ball.

And play ball he did with such effect that, a year later, the Yugoslav Hungarian-language paper Magyar Szó, organ of the Titoite People’s Front of the Vojvodina, had to admit that:

According to the plan, we should have exported maize to be able to buy machines and installations indispensable to the realisation of our Five-Year Plan. Instead, we have to import goods which we have never had to buy abroad before, so as to satisfy our most basic needs and to conserve our livestock.

By the end of 1950 the Yugoslav Five-Year Plan, which had been launched with such boastfulness by the Titoites, which had been drastically reduced in 1948, drastically reduced a second time in 1949, postponed a year in the early part of 1950, had almost ceased to be mentioned in the Yugoslav press. It had become a fiasco. The Five-Year Plan had miserably failed and no further long-term plan was even hinted at. Within the orbit of Western imperialism planned economy is an empty fiction!

By September 1951, the governments of the USA, Britain and France were circularising eighteen other ‘Western’ governments calling for a moratorium on Yugoslavia’s foreign debts reckoned as about £60 million (see The Times, 1 September 1951). Talk of ‘planning’ by the Titoite leaders decreased in direct proportion to the increase in their debts to imperialism.

About the same date, no other person than Boris Kidrič, head of the Yugoslav ‘Planning’ Commission, proclaimed against the dangers of planning:

Economic liberals will find comfort in a description of the Yugoslav Reds’ new move in a series of articles by Boris Kidrič. Too much planning is bad, Mr Kidrič said. He put it as follows: ‘The economic organisations have not paid much attention to the laws of supply and demand... No matter how much we tried to strangle these laws they always revenged themselves upon us by the appearance of illegal speculation, the disappearance of goods and other economic derangements...’ Accordingly the Tito regime will allow ‘a certain, or even a considerably large liberty to the operation of these laws’. (New York Herald Tribune correspondent from Belgrade, 4 September 1951)

Planning is dead, long live the free market! Tito’s ‘theoreticians’ have ‘developed’ Marxism way back to the earliest period of bourgeois economics.

Each ‘generous’ Western loan has meant still greater impoverishment, still greater debt. Each new debt has tied Tito Yugoslavia still more firmly to Western capitalist economy.

The fruits of dragging Yugoslavia into the orbit of Western imperialism have been to reduce her to colonial status. There is no such thing as imperialist ‘aid’ without imperialist strings.

Tito has endeavoured to disguise his quisling role by trying to achieve ‘Marshall status’ without, officially, entering into the Marshall bloc. As the New York Herald Tribune correspondent explained already in June 1949:

One thing that is not being considered is Yugoslav participation in the Marshall Plan. That would be politically embarrassing to Marshal Tito... [My italics – JK] In any case, help to Yugoslavia by small loans will be much simpler all around.

The American government and American Intelligence, for whom Tito’s special utility is his façade of left demagogy, were, at least for a period, quite willing to help him carry out this shallow manoeuvre:

What Tito is anxious to avoid – if he can – is asking for help which would necessitate a debate in Congress, for such help would inevitably be interpreted as ‘indirect Marshall aid’ – accompanied by political strings. The view prevalent among Americans in Belgrade, however, is that Tito will be spared that indignity, and that ways and means will be found to see him through. (Alexander Werth, ‘Tito Turns West’, New Statesman and Nation, 17 June 1950)

Yet, from the very outset, this manoeuvre has been peculiarly transparent, deceiving no one, least of all the imperialists themselves. Reception of Western ‘aid’ carries the same strings whether it is labelled Marshall or whether it is not, and formal membership of the Atlantic Pact is not necessary in order to carry out a foreign policy of capitulation to imperialism. The Spectator put it clearly enough (30 December 1949):

Yugoslav spokesmen have insisted with such emphasis that the trade and compensation agreements signed with the United Kingdom on Monday would have no influence on the home or foreign policy of Yugoslavia that they have almost convinced themselves that this is true. But how could it be true? The internal economic arrangements of Yugoslavia, as well as that country’s foreign relations, are so bound up with Marshal Tito’s quarrel with the Cominform, and with the steadily improving relations with the West which have followed it, that denials of a connection are hollow. [Yugoslavia]... occupies such a crucial position between East and West that her economic policies cannot be isolated from the balance of powers, and it is useless to pretend that they can.

As usual still clearer and franker is the uninhibited voice of American big business. Read, for instance, the United States Business Week (12 April 1950):

For the United States in particular and the West in general this encouragement of Tito has proved to be one of the cheapest ways yet of containing Russian Communism.

To date the West’s aid to Tito has come to $51.7 million. This is far less than the billion dollars or so that the United States has spent in Greece for the same purpose...

Yugoslavia has had to settle for a Western credit policy based on these two principles:

1) Priority assistance for industries having the best potential for volume exports readily marketable in the West: minimum of aid for basic industries... just enough to meet security needs and to facilitate exports.

2) Extension of credit in instalments. This would act as an incentive to the Yugoslavs to put their last efforts into foreign-aided projects. The better their efforts, the better their chances of getting favourable consideration on further dollar requests.

What does this mean? It means that with each instalment of ‘aid’ the strings are pulled tighter, each small credit means more abject surrender. It means that of all the quislings, Tito is the cheapest Judas of them all.

It means that Tito, the Tito clique, the whole Tito regime is a puppet of American imperialism. The country and the people have been put by the Titoites into the clutches of the great American Trusts. ‘The American Congress’, wrote Mr Gaston Coblentz, Belgrade correspondent of the New York Herald Tribune, on 29 November 1950, ‘has the fate of Marshal Tito in its hands.’

It means that Tito, who claims to have rescued Yugoslavia from ‘red imperialism’, has in fact broken off her friendly and mutually beneficial relationships with the countries of Socialism and People’s Democracy, and placed her, hands tied, into the orbit of imperialist exploitation.

The third part of the answer to the Titoite slander of ‘red imperialism’ is that the Titoites, rejecting the friendship and generous aid and trade of the Soviet Union and the People’s Democracies, have transformed Yugoslavia into a colony of Western imperialism. Yugoslavia has been led back to her colonial status of between the wars, but with more avaricious imperialist masters than ever before.

In the words of the November 1949 resolution of the Communist Information Bureau:

... the Yugoslav government is completely dependent on foreign imperialist circles and has become an instrument of their aggressive policy... the Tito – Ranković clique has created wide possibilities for the penetration of foreign capital into the economy of the country, and has placed the economy under the control of capitalist monopolies.

IV: The Other Road

But there is still a fourth part to the reply to the Titoite slanders of ‘red imperialism’. The Titoites proclaim that ‘heroic little Yugoslavia’ resisting ‘red imperialism’ has ‘maintained her independence’ by turning to the West. But facts and figures speak a different language. They reveal that a group of traitors have sold their country to Western monopoly capitalism, and that Yugoslavia, dragged by the Titoites into the Western orbit, has returned to its semi-colonial status of between the wars, but knowing even a greater exploitation than before.

The Titoites proclaim that the ‘satellite Cominform states of Eastern Europe’ have allowed themselves to become the ‘victims of Soviet imperialism’. Yugoslavia, ‘heroically led by Tito, has escaped from the red net’, while the other countries of Eastern Europe ‘groan under the Soviet yoke’. ‘The Soviet Union’, proclaim the Titoites, ‘tried to stop the industrialisation of Yugoslavia and of the satellite states.’ Let us now turn the light of facts and figures on to the countries of People’s Democracy, which have remained in peace, friendship and close economic relations with the USSR and with each other. We know what the Titoites claim, let us now seek the truth.

The People’s Democracies of Eastern Europe – Poland, Czechoslovakia, Hungary, Bulgaria, Rumania, Albania – existed in the two decades between the wars as semi-colonies of the Western capitalist states. They were deprived of heavy industry. They exported mainly foodstuffs and industrial raw materials. Their economies were unbalanced, lop-sided, developed according to the needs of Western capitalism and not to the needs of their own people. Foreign capital dominated their economies. The masses of their people – workers, peasants, professional people, those who did the useful work – lived in the most dire poverty in countries of great potential wealth, but whose resources were either untapped and undeveloped or developed in the interests of the rich of the Western capitalist world. Theirs, in those years between the wars, was the same hard fate as that of the peoples of Yugoslavia.

Western capitalism owned and controlled the material resources of these countries. In Poland, foreign capital (principally British, French and German), invested in the different branches of industry, made up from 50 to 85 per cent of the total invested capital according to the industry. More than half the industrial shares in Bulgaria were, before Liberation in 1944, held by foreign capitalists. British, French, German and American capital dominated the main industries of Czechoslovakia, Hungary and Rumania. In Albania the whole financial and credit system was controlled by a few Italian, British and American monopolies. An enormous tribute was extracted every year from these lands. Between 1922 and 1944 in Bulgaria, for instance, 1000 billion leva, or 20 per cent of the total national income during that period, went to capitalists abroad.

The PEP Report, Economic Development in South-East Europe, paints the following picture. The foreign loans were used:

... to accumulate private balances abroad and to pay for... essential imports... most foreign loans carried excessive interest charges... the service of the external debt in 1931-32 claimed... 48 per cent [of the total exports] of Hungary, 29 per cent of Yugoslav exports [service of public debt only], 28 per cent of Rumanian, 24 per cent of Polish... It should be added that these figures of interest charges represent percentages related to total exports, whereas the servicing of foreign loans called in fact for ‘strong currencies’ obtainable only from a limited range of exports. The actual strain on the balance of payments was therefore considerably heavier.

The whole economy of these countries was subordinated to Western imperialism. What industries were allowed to develop were mainly devoted to the extraction of the raw materials needed by the imperialists and in which their capital was invested.

Bulgaria, which has important reserves of iron and non-ferrous metals, had no national metallurgical industry, but a one-sided economy developed around the export of vegetable oils. In Rumania the oil industry, foreign controlled, was highly developed, but there was no engineering, no production of agricultural equipment. Hungary produced locomotives and railway wagons for export, but no machine-tools. Poland, with all its resources of coal and metal, had no engineering industry corresponding to the needs of the people. Czechoslovak industry was unbalanced, one-sided, specialising in textiles, ceramics and other light production while heavy industry was grossly lacking.

With economies of a semi-colonial type, the present People’s Democracies of Eastern Europe and also Yugoslavia, between the wars, exported foodstuffs, raw materials, a few products of light and luxury industries, but depended on Western capitalism for heavy industrial production and for a large part of all manufactured goods. Amidst all their wealth, the people lived in the deepest poverty.

Dr Doreen Warriner, in her recent study Revolution in Eastern Europe (Turnstile Press, 1950), described the prevailing position in these words:

Foreign capital did not relieve the shortages, because it was invested only in the raw materials needed by the West, such as Rumanian oil and Yugoslav minerals; it skimmed the cream and took both produce and profits out of the country, without putting the money back into projects for long-term development... the ruling class was a paralytic [3] network of interests resisting change, topped off by a monarchy or military dictatorship.

This description is valid for the position between the wars both of Yugoslavia and the countries that have now become the People’s Democracies. Then what is the difference?

Just simply this. Yugoslavia, the heroic struggles of its peoples betrayed, has been dragged back by the Titoites to its old position, whilst the People’s Democracies, in friendship and cooperation with the USSR and with each other, have advanced in such a way and at such a speed that the evil days of between the wars are being forgotten.

The devastation of Poland in the course of the Second World War was very terrible. Yet the industrial production of the new Poland, which in 1946 was still only 77 per cent of prewar, was by 1949, end of the Three-Year Plan, 75 per cent above prewar. This was due above all to the aid and trade of the Soviet Union.

In Hungary, despite the ravages of the war, industrial production reached at the end of 1949, with the completion of the Three-Year Plan (in two years and five months), 53.4 per cent above prewar. Heavy industrial production was 74 per cent above prewar. This was due above all to the aid and trade of the Soviet Union.

Bulgarian industrial production, which passed prewar production already in the course of 1947, was over 90 per cent above prewar by the end of 1949. This was due above all to the aid and trade of the Soviet Union.

The first Rumanian plan, the One-Year Plan, carried out in the course of 1949, saw an increase of 40 per cent in that one year alone. Czechoslovak industrial production had passed the prewar level already before the end of 1947. By the end of 1949, first year of the Albanian Two-Year Plan, industrial production reached 400 per cent of that of 1938.

All this enormous industrial advance, with its colossal tempo and constant acceleration, took place in countries that had suffered so terribly from war destruction, and developed, primarily, as a result of the aid and trade of the USSR.

In 1950 the development of industry in the six People’s Democracies of Eastern Europe went ahead still faster with continued Soviet aid and increased trade with the Soviet Union and with each other. Polish industrial output increased 30.8 per cent over 1949; Czechoslovak industrial output by 15.3 per cent in the same period; Hungarian by 35.1 per cent; Rumanian by 37.3 per cent; Bulgarian by 23.3 per cent and Albanian by 34 per cent.

By the end of 1950, year of economic misery for the Yugoslav people, of indefinite shelving of the Yugoslav Plan, Albanian industrial output, thanks to Soviet aid, reached over four times prewar; Bulgarian almost treble; Polish more than double; Czechoslovak per capita production almost double. Rumanian industrial output increased, in that one year of 1950, more than in the last quarter of a century of capitalist rule. Hungarian industry reached almost double prewar output and developed more than in twenty years of capitalist domination.

The period of 1949-50 was the period when it became clear that the Tito betrayal had turned Yugoslav planning into full fiasco. But in the People’s Democracies it was the triumphant period of changeover from short-term to long-term planning. Czechoslovakia and Bulgaria embarked on their Five-Year Plans in 1949. Poland started her Six-Year Plan and Hungary her Five-Year Plan in 1950. And, at the beginning of 1951, Rumania and Albania began the first years of their Five-Year Plans.

Whilst Yugoslavia was falling under colonial domination, new and undreamed-of perspectives opened before the eyes of the People’s Democratic peoples. Now they could plan mutually. Their main trading relations (with the USSR and with one another) were themselves subject to planning, were of a type qualitatively new. Their economic relationships were based on equality; the strength of one planned economy enhanced and reinforced the strength of the other. Each could count ahead on expanding economies, unbroken by crises, with growing volumes of mutually exchanged complementary goods.

The Polish Six-Year Plan (1950-55) forecast an industrial production which, by the end of 1955, would be 2.5 times that of 1949 and over four times prewar. Polish industry was to produce many heavy industrial machines for the first time – tractors, steam turbines, high-pressure crucibles, complex machine-tools. The Czechoslovak Five-Year Plan (1949-53) foreshadowed a 75 per cent increase in industrial production. With the development of the coal, metallurgical, engineering and power industries, the unbalanced one-sided character of Czechoslovak industry was to be ended. But even this bold perspective was quickly outrun by history. In February 1951, the long-term perspectives were radically revised – upwards. The successes in the first two years of the Czechoslovak Five-Year Plan made it possible to envisage the completion of the original plan in 3.5 years and to put forward an altogether more far-reaching vista for the full Five-Year Plan. It was decided that industrial output as a whole would increase 98 per cent over 1948 in the course of the plan instead of the original 75 per cent, that is, doubled in five years. Heavy industrial output was to reach by 1953, 2.3 times that of 1948. Dolanský, Chairman of the State Planning Administration, declared in February 1951:

We are able to fulfil the original Five-Year Plan in 3.5 years. The guarantee of this is the tremendous labour enthusiasm of the broad masses of the people, the development of Socialist emulation, the application of the advanced experience of the Soviet Union in industry and other branches of national economy, and the existence of great internal opportunities for this within Czechoslovakia. An important factor which helps to extend the tasks of our Five-Year Plan is the deepening and extension of economic cooperation between Czechoslovakia and the Soviet Union, which leads the camp of peace and Socialism, and also the cooperation between Czechoslovakia and the People’s Democracies.

The Bulgarian Five-Year Plan (1949-53) will ensure a gigantic step forward in industrial development. In 1953, the volume of industrial production (excluding artisan production) will reach about four times that of prewar. Rumania, in the course of the Five-Year Plan (1951-55), will not only surpass the highest prewar production of oil, but develop vast new industries in the field of power and engineering.

The Hungarian Five-Year Plan (1950-54) was planned to bring about an 86 per cent increase in industrial production over that of 1949 and an increase of heavy industrial production of 204 per cent during the same period. In five years the production of means of production was planned to increase 17 times. Hungarian industry, aided by the Soviet Union, will produce for the first time diesel engines, complex machine-tools and technically-developed mining equipment. But, once again, history has run ahead of even the boldest of perspectives. The first year of the Five-Year Plan exceeded all prevision and in the first months of 1951 the plan was radically revised – upwards. Mátyás Rákosi, General Secretary of the Hungarian Working People’s Party, explained the new and revised perspective when he addressed his party’s Second Congress on 25 February 1951:

What does the new, increased Five-Year Plan mean? First of all, that the new plan invests far more in heavy industry and within it, in the iron, steel, coal and electrical-energy production. In numerical terms, we wish to invest 37 to 38 milliards [of forints], into heavy industry, more than double the original plan. In 1949, we planned that our factory industry would increase by 86.4 per cent. According to the new plan, factory industry production will increase by approximately threefold, nearly 200 per cent, and within this, heavy industry by four times. Light industry, instead of the 72.9 per cent of the original plan, will increase by 150 per cent. Last year, the production of heavy industry was only 2.2 per cent higher than that of light industry, but by the end of the Five-Year Plan the proportion of heavy industry in production will be 70 per cent, that of light industry 30 per cent.

Never has any anti-Soviet slander been more false than the Titoite – Wall Street cry that the Soviet Union tries to prevent the industrialisation of the People’s Democracies of Eastern Europe! A study of the facts shows that exactly the reverse is true. The Titoite tactic, like that of Goebbels, is to turn truth on its head!

For it is precisely the friendly economic aid and trade of the Soviet Union that has enabled the People’s Democracies, treading the opposite road to that of Tito Yugoslavia, to make so triumphant and rapid an industrial advance, despite all the devastation of the war, and all the boycott efforts of Western imperialism. The economic policy of the USSR is exactly the opposite of that of imperialism. The Soviet Union, which was the principal factor in the liberation of the People’s Democracies from Axis domination, and which, the war ended, protected them from Western imperialist military intervention, permitted them, through its unselfish Socialist aid and trade, to rehabilitate their stricken economies and to advance rapidly on the road of Socialist industrialisation.

Such an industrialisation remained impossible under Western imperialist domination. Non-Communist economists who honestly examine the postwar developments in Eastern Europe are bound to admit this:

What Eastern Europe primarily needed was the industrial revolution, and without the shift in the European balance of power resulting from Soviet victory it would never have come. Western Europe, so far as it was interested in Eastern Europe at all, was interested in keeping it backward as a source of cheap food and cheap labour... Had the Western powers been able to influence the course of events [after the Second World War], they would have put back into power the same kind of governments which existed before, and whose failure led to fascism. (Dr Doreen Warriner, Lecturer at the London School of Slavonic Studies, Revolution in Eastern Europe, 1950)

But it was only in Yugoslavia that, with the aid of the Titoite betrayal, the ‘Western powers were able to influence the course of events’ and to keep ‘it backward as a source of cheap food and cheap labour’. Thanks to the USSR, the Western capitalist states have not been able to get their greedy hands on the six People’s Democracies. These countries had loyal Communists, good patriots, at the heads of their governments – Dimitrov, Kolarov, Chervenkov, Bierut, Gheorghiu-Dej, Gottwald, Rákosi, Gerő and Enver Hoxha, and not Tito, Kardelj, Ranković, Djilas and Moša Pijade. And the Western imperialists, who protest so vigorously at the trial and condemnation of this or that Titoite traitor in the People’s Democracies, are, in fact, behind the façade of their so very righteous indignation, protesting at their own failure to reduce these People’s Democracies to the same semi-colonial status as Tito Yugoslavia, that is, to their semi-colonial status of before the war.

Socialist aid and trade has no ‘Marshall strings’. It is based on mutual respect for national integrity and sovereignty, on equality, on mutual strengthening. This has been and remains the basis of Soviet aid and trade with the People’s Democracies. It is the Soviet Union that has supplied the heavy machinery, modern equipment, raw materials, that have permitted the so rapid industrialisation of the People’s Democracies and the so rapid rise in the living standards of their peoples. It is the USSR that has sent them Soviet technicians, not to spy on them in the old Western tradition, not to take over their economies like the Nazi and American ‘experts’, but to help them to train their own advanced technicians in the most modern techniques perfected in the Socialist Soviet Union.

It is Soviet aid and trade, based on Socialist principles, that have enabled the People’s Democracies to develop their bold long-term plans, and to open up before their peoples such grandiose perspectives.

Soviet long-term credits have been used by the People’s Democracies to obtain from the Soviet Union metallurgical, chemical, machine-building materials. The USSR has sent them whole large-scale modern industrial installations – machine-tool factories, power plants, hydro-electric stations. With the help of Soviet equipment, the People’s Democracies are now able, themselves, to produce heavy and complex industrial goods previously imported, to manufacture many machines for the first time in their history, including the machines that will lay the basis for the development of Socialist agriculture. These countries are no longer dependent on imperialism. They have shed, and for ever, their semi-colonial status. It is Soviet aid and trade and friendship that has permitted them to develop independent of Western imperialism, and has allowed them to know, for the first time, the real meaning of independence, for which their peoples fought so long and so bitterly, made such sacrifice and shed so much of their blood.

With Soviet aid and trade the Polish people are now constructing the Nowa Huta iron and steel works, which will double the capacity of that country’s iron and steel industry:

Industrial production [in Poland in 1955] is destined to soar 85 per cent above 1949, or more than four times the output per head of population in the prewar years. The new blast furnaces received from the Soviet Union are to make possible steel production twice as high as prewar... (Marguerite Higgins, in New York Herald Tribune, writing from Warsaw, 12 January 1950)

The Soviet Union has supplied Poland with the plans and materials for a giant cement works which will be amongst the largest and most modern in Europe – and this is only one of the dozens of such installations delivered by the USSR to Poland. All the machinery was already on the site and assembly had begun by the beginning of 1951. The Wierzbica cement works, unlike capitalist-built plants, will provide not only for the maximum mechanisation, but for the best hygienic conditions for the workers. Work will be done in clean air and dust-absorbers are no longer necessary. It will start production in 1952. Blocks of the most modern flats, schools, shops, cinemas, clinics and crèches, cultural centres, workers’ clubs, swimming pools and sports grounds are already under construction for the employees. On 26 January 1948, the Polish-Soviet long-term trade and credit agreement was signed. Since then trade turnover between Poland and the USSR has constantly grown. If it is taken as 100 in 1947, it increased to 153 in 1948 and 212 in 1950, and will go on increasing. Poland has received and will receive manganese and chromium ore, liquid fuel, fertilisers and raw materials for their production, ball-bearings, asbestos, tractors, agricultural machinery and whole completely equipped industrial installations of the type of the Nowa Huta iron and steel plant. Patents have been supplied free by the USSR. The Soviet Union has helped and is helping in planning the buildings and in the assembly of these huge projects and has trained Polish engineers and specialist workers.

The Bulgarian people, with Soviet aid and trade, are constructing industries never before dreamed of in Bulgaria – a nitrogen fertiliser plant, iron and steel works, automobile repair shops. Even hostile Western observers have had to admit this: ‘With the exception of Rumania, Bulgaria has adapted its policy most closely to that of the Soviet Union.’ Soviet exports to Bulgaria ‘consist primarily of materials and goods of key importance for Bulgaria’s industrialisation and for modernisation of its agriculture’ (Vernon Bartlett, East of the Iron Curtain).

Thanks to Soviet cotton deliveries, Bulgaria was able to revive and extend her textile industry. Soviet supplies of metals, building materials, machines and fittings permitted the development of a Bulgarian heavy industry. Without Soviet petrol and its derivatives, vehicles, road and rail transport, Bulgarian industry would not have been able to take on its new tempo of extension. Without Soviet tractors and other agricultural machinery, spare parts, fertilisers and the material to make such equipment and materials inside Bulgaria, Bulgaria could not have made its triumphant advance along the road of Socialist agriculture. Without the aid of Soviet experts, Bulgaria could never have tapped its mineral resources, not for export abroad, in the old imperialist manner, but for the achievement of her own industrialisation. In the course of 1951, with Soviet aid, the giant ‘Stalin’ nitrogen fertiliser plant, the Maritsa III and ‘Republic’ thermo-electric power stations, an ultramarine dye plant, two steel furnaces, the Nikopol-Belen irrigation scheme, oil extraction works and many others, will all have begun operation.

A decree of the Bulgarian Council of Ministers and the Central Committee of the Bulgarian Communist Party was published early in 1951 for the development of rural economy, water supply and electrification of the Dobrudja. The Dobrudja, under capitalism, was a symbol of peasant poverty. In the last fifty to sixty years of capitalist rule the forest areas were halved, the rivers dried up. Hot winds swept the tree-less land in summer and, in the winter months, blew off the snow from the soil, exposing it to the frost. A few wells, 200 to 250 feet deep, were the only source of water, but even these were used for profit by kulaks and landowners. Now electrification and irrigation have begun and by 1954 nature in the Dobrudja will have been transformed. By 1956, all the villages will have water supply, drainage systems and electricity, roads and railways. With Michurin methods the former semi-desert will begin to bloom.

To Rumania the USSR is sending metals, coke, cotton, machinery, automobiles, agricultural equipment of an advanced type. Using Soviet technique, the amount of coal mined in Rumania in 1950 was 38 per cent above that of 1938. In four years (1947-50), with Soviet aid, the network of natural gas pipes increased four times. Now, through Soviet aid and trade, Rumania, once deprived of an engineering industry, turns out its own tractors, steam engines, threshers, textile machinery, equipment for the oil industry. It has started to produce its own automobiles, locomotives, freight cars, oil tanks, coastal vessels and barges. In the course of the Five-Year Plan, thanks to Soviet aid, Rumania will produce 21,000 tractors in her own factories.

The Albanian people, with Soviet credits, aid and trade, are transforming their country out of all recognition. From the USSR they have received machinery and high-voltage cables for hydro-electric stations; equipment and piping for the oil industry; tractors and combines; transport; machinery for a textile plant in Tirana, for two large wood-working plants, for an oil refinery with an annual capacity of 150,000 tons. The construction of the new textile plants was, in the main, completed by the beginning of 1951, and these textile mills will have an annual capacity of 20 million metres of cotton fabrics. The Selitë hydro-electric station, built with Soviet equipment, was also nearing completion by the beginning of 1951.

Mátyás Rákosi, speaking in February 1951 at the Second Congress of the Hungarian Working People’s Party, explained the role of the USSR in Hungarian industrialisation:

The Soviet Union helps us in the building of our most modern factories, gives us its best machines, most up-to-date manufacturing processes and, what is no less important, puts its best scientists and ace workers at our disposal. The best engineers and technicians of the Soviet Union, led by Academician Bardin, the world-famous foundry expert, have visited us, people whose advice and guidance means a service to us which cannot be overestimated.

Comrade Bikov was here and passed on his experience in the field of fast cutting. Comrade Zuravlyov taught our foundry-men the method of quick smelting. Comrade Petrov, the chief foundry-man of the Stalin Automobile Factory, passed on his experience in the fields of casting and foundry-work. Comrade Dubyaga helped us to transfer to the multi-machine system in the textile industry. Comrade Annanyeva taught our spinning workers how to decrease scrap to the minimum in the spinning mills. Comrade Shavlyugin taught our bricklayers the fast bricklaying method. Comrades Maximenko, Kobe and Zuyev developed a whole team of Stakhanovites among our building workers. Comrade Panin taught the Hungarian engine drivers to increase the average speed of our railways. Filimonov, Padgarov and Logvinyenko gave help to our miners in acquiring methods of handling mining machinery, and so on. I will not continue this enumeration.

Between the role of the Soviet engineers and skilled workers and that of the US ‘experts’ who litter Yugoslavia is the difference between fraternal friendly advisers and FBI stooges, between those who come to help and those who come to spy, between those who want to aid the development of Hungarian Socialism and those who come to speed up the colonisation of Yugoslavia by Western imperialism.

And, whilst Western imperialism sucks Tito Yugoslavia dry of raw materials and dumps on her, with Tito’s connivance, made-up industrial goods (mainly secondary) – the traditional economic relationship of colony and coloniser – the USSR, in a new Socialist trading relationship, imports from the People’s Democracies not only raw materials but, more and more, industrial goods manufactured in People’s Democratic factories, often built with Soviet equipment and supplied with Soviet raw materials.

The Soviet Union, for instance, imports from Czechoslovakia 72 per cent manufactured goods. Even critical Western observers are forced to admit this new relationship:

It seems important to explode another favourite myth of our anti-Communist propagandists – that Czechoslovakia is being ‘mercilessly exploited’ by the Soviet Union. It is not. The clear purpose of Soviet policy is to make Czechoslovakia, economically, an outstanding success... of course, Czech hats, shoes and textiles go to the Soviet Union, and the Czechs I have talked to are only too delighted that they do. ('What else would our light industries do?’) In return, Czechoslovakia receives from the Soviet Union not only raw materials and large quantities of food, but as one Czech leader remarked to me, increasing amounts of elaborate heavy machinery... The favourite story that the Russians merely use Czechoslovakia for ‘turning their raw materials into shoes and textiles’, and that all these are sent back to Russia, is just another piece of bunkum. (Alexander Werth, New Statesman and Nation, 24 December 1949)

Bunkum, yes! But pernicious bunkum put out by the Tories, right-wing Labour leaders, Wall Street journalists and, above all, by the Titoites, to hide, on the one hand, the generous and genuine Socialist character of Soviet aid and trade, and, on the other, to conceal the exploiting imperialist character of American economic relationships with its colonies, semi-colonies and satellites, including not only Tito Yugoslavia but also Britain herself.

Socialist trade relationships are not confined to the relations of the Soviet Union with the People’s Democracies. They are at the basis of the Council of Mutual Economic Assistance, formed in January 1949, of which the members, at the beginning of 1951 were the USSR, Poland, Czechoslovakia, Hungary, Rumania, Bulgaria, Albania and the German Democratic Republic. The workings of this council are the reverse of the workings of the Marshall bloc. The council strengthens each of its members by mutual aid. The degree of specialisation does not warp the economies of its members. The strength of each adds to the strength of all. The Marshall bloc, which now, unofficially, includes Tito Yugoslavia, weakens the weaker members to the advantage of the stronger, above all to the advantage of the USA. The coordination and mutual aid of planned Socialist economies means that the sum of the individual countries that make up the Council of Mutual Assistance is greater than the simple addition of each of them; the whole is greater than the sum of the parts. With the Marshall bloc, greater production in the USA means greater curtailment of production in its satellites: the whole is less than the sum of the parts. A new tractor plant in the USA means death to the tractor industry in one of the Western satellites; a new tractor plant in the USSR means new advance to Socialist development throughout the countries of the council. The difference is the simple but complete difference between capitalism and Socialism at work!

The tremendous tempo of economic advance, of industrialisation, in the People’s Democracies, has brought about a corresponding rise in the living standards of their peoples. Whilst the peoples of Tito Yugoslavia have seen each of the last few years bring higher prices, reduced real wages, greater hunger and greater hardship, those of the People’s Democracies have known constantly rising wages, falling prices, increased consumption and developing social services.

In Poland, in 1950 output of pork was 44 per cent above that of 1949, of cotton textiles seven per cent, woollen fabrics 13 per cent, leather footwear 13 per cent. In Hungary, output of sugar in 1950 was 15 per cent above the previous year, cotton textiles eight per cent, footwear 50 per cent. In Rumania, in the same period, sugar output increased by 24 per cent, bakery products by 42 per cent. In Bulgaria 1950 was marked by a 27 per cent increase in the manufacture of cotton textiles, 37.3 per cent of woollen fabrics and 127.6 per cent of footwear. In Czechoslovakia, in the first half of 1950, there was a 15 per cent increase in output of cotton goods, 17 per cent more butter, 12 per cent more synthetic fats. Consumption of meat increased 45 per cent and of fat 100 per cent.

In all these countries there has been a consistent fall of prices contrasting in all sharpness with the steep price rise and increasing shortages of Tito Yugoslavia. In Czechoslovakia, since the establishment of special ‘commercial shops’ with controlled prices, prices of foodstuffs have dropped 10 to 50 per cent, textiles 39 to 61 per cent, shoes 58 per cent. In Rumania, commercial shop prices for underwear and textiles fell 20 per cent in the course of 1950. In Albania, the prices of meat and butter were reduced by 50 per cent and sugar 28 per cent at the beginning of 1950. In Poland a further series of price reductions were announced at the end of 1950, including a drop of 10 per cent in the price of sausages, pork, fats and laundry soap and five to 20 per cent in footwear.

In all these countries there has been a consistent rise of real wages, a consistent development of social services of every description, a consistent increase in the number of men and women employed in industry.

V: The Lesson

It would take a long book to chart the vast economic, cultural and political advances made in the People’s Democracies in the postwar years in their rapid and accelerating progress along the road to Socialism.

In every way and in every field their road and their achievements contrast with the retreat and sufferings of the Yugoslav peoples under conditions of the Titoite dictatorship and the Titoite betrayal.

On the one side, in the People’s Democracies, rapid economic advance; on the other, in Tito Yugoslavia, economic enslavement, colonisation. In the People’s Democracies rapidly advancing Socialist agriculture; in Tito Yugoslavia kulak domination even under the façade of phoney ‘collectives’. In the People’s Democracies, more and more participation by the working class and working people in every field of state administration from the ministers to the smallest village people’s council; in Tito Yugoslavia growing oppression of the people by the Titoite clique. In the People’s Democracies rapid advance to Socialism; in Tito Yugoslavia return to capitalism, in a more and more openly fascist form. In the People’s Democracies colossal advance of the peace movement, minimum war budget, maximum budget expenditure on social services; in Tito Yugoslavia rising war budget and attacks on even those social services introduced in the immediate postwar years. In the People’s Democracies, planning, security, confidence in the future; in Tito Yugoslavia planning abandoned, misery and hunger, insecurity, the future grim. In the People’s Democracies, cultural advance in giant strides, national in form and Socialist in content; in Tito Yugoslavia, cultural decay and Hollywood films. In the People’s Democracies – independence – political and economic; in Tito Yugoslavia colonisation, a return, on a lower level, to the semi-colonial status of between the wars.

And the key and the crux of this great contrast is that the People’s Democracies have leaned on the aid, the trade, the friendship of that first Socialist country, leader of the camp of peace – the Soviet Union, whilst Yugoslavia has been dragged by the Titoites, traitors to the national liberation struggles, to the sacrifices and aspirations of the Yugoslav peoples, into the camp of war, into the orbit of Anglo-American imperialism.

The moral was eloquently drawn in the words of Georgi Dimitrov when he declared:

Sincere friendship with the Soviet Union is as important for the national independence and prosperity of the Bulgarian people as are sunlight and air for every living being.

There is no third way! Turning away from the path of friendship with the Soviet Union, the Titoites have led their people along a bitter road of enslavement, hunger and war. Lacking the ‘sunlight and air’ of Soviet friendship, they are choked and stifled by imperialism.

* * *

We have dealt at length in this chapter with only one, but the essential, Titoite propaganda slander – the greatest of the ‘great lies’ put out by the Goebbels of Tito Yugoslavia. This is the lie that ‘Soviet imperialism’, ‘red imperialism’ has sought to stop the economic advance of its ‘East European satellites’, and that ‘under Tito’s heroic leadership, Yugoslavia resisted the threat of Soviet imperialism and took the road of independence and Socialist construction leaning on the generous aid of the West’.

What have we seen? We have seen that every word, every section of this main Titoite slander is not only utterly false, but that every phase of the argument is the exact reversal of the truth.

We have seen, firstly, that it was the Soviet Union that first gave aid to Yugoslavia at the end of the Second World War, despite its own vast losses, that it was Soviet citizens in UNRRA and Soviet representatives who fought for the rehabilitation of Yugoslav industry, that Soviet aid and trade, and the aid and trade of the People’s Democracies, laid the basis and offered the opportunity for the genuine advance of Yugoslavia to Socialism.

We have seen, secondly, that it was Tito Yugoslavia that, long before the 1948 resolution of the Communist Information Bureau, broke its contracts with the People’s Democracies who were honouring theirs, and turned westwards, to the Western capitalist states.

We have seen, thirdly, that by dragging Yugoslavia into the orbit of Western imperialism, and above all that of the USA, the Titoites have surrendered the economic and political independence of Yugoslavia, ended all Socialist planning, made their country into a semi-colony of the USA, returned it, on a lower level, to its semi-colonial status of between the wars, so that once again, surrounded by wealth, the Yugoslav people groan under dire poverty.

We have seen, fourthly and lastly, that the People’s Democracies, led by real internationalists, patriots and Communists of the Dimitrov stamp, enjoying the friendship of the USSR, receiving the genuine and generous Socialist aid and trade of the Soviet Union, have known an economic advance, a tempo of industrialisation, hitherto unknown, which even the boldest of their own bold people had hardly dared to dream of. We have seen that these people and these states, in friendly cooperation, one with another and all with the Soviet Union, are building Socialism, transforming nature and human nature, and at a colossal speed are building their future of prosperity, culture and peace.