p One of the economic consequences of World War II was an immense rise in the foreign trade prices of the main types of export goods. The general unit value index of exports in 1948 was more than 160 per cent above the 1938 level (roughly double for manufactured articles and 140 per cent for fuels and other primary commodities, including 220 per cent for food). The ratio of the prices of manufactured articles to primary commodities’tended markedly_tin favour of the latter. But later, for roughly two decades, pricing began to develop in another direction on the world capitalist market.

p After a certain decline at the beginning of the 50s the prices of manufactures began gradually to rise, while those for most primary commodities had a tendency to decline to the end of the 60s. The dominant, more favourable line of the movement of prices for manufactures in the earlier stages of capitalism’s development again largely gained the ascendancy, although it was not so pronounced as over most of the preceding decades (see Fig. 22).

p The terms of trade for primary commodities consequently deteriorated markedly at the end of the 60s compared with the end of the 40s. If we take the ratio of the unit value of exports of manufactures to the corresponding index for all types of primary commodity in 1948 as 100, it was 112 in 1959 and 127 in 1969. At the end of this period one and the same quantity of raw materials and food could buy roughly a quarter less manufactures (in value terms) through international trade than at the beginning.  [296•1 

p Still, the ratio established soon after the war between the current prices for the main commodity groups in international trade did not alter essentially in any way in this period. In any case it was rather more stable than in the interwar years. But it was in the first postwar decades that 297 the real shifts occurred in the structure of material production and in the system of modern capitalism’s international business connections that created the objective conditions
•
F i g. 22 Movement of prices on the world capitalist market by groups of goods (1938=100) * 1400 1300- 1200- IfiTO1000- 900- 800- (;OOD AND RAW MATf RIALS (OTHCR THAN FUtLI FUtL MANUt ACTUH^U GOODS 700- 600 500 400 300- 200- 100 ]M[-r-][—r-X-r-X......,-r-, , , , , . 1938 48 53 59 63 64 G5 66 G7 68 69 70 71 72 73 74 75 1976 * In export prices f.o.b. Sources; UN Statistical Yearbook and Monthly Bulletin of Statistics for the relevant years. 298
•
for consistent growth ot the deep-seated contradictions in the whole world capitalist pricing system.  [298•1 

p The fact that these changes were not quite adequately reflected in the structure of world commodity prices for a certain time was directly linked with the fact that monopoly capital, as before, held all the main levers in these years for affecting price formation in world capitalist economy, including those controlling the price level of the various types of primary commodity entering world trade. The best known example of this control was the long stabilisation of world prices for fossil fuels (above all oil) at a monopolylow level. The comparatively stable level of prices for raw materials for the basic metal industries and certain other products of the mining industry (in particular such a specific product as gold) is indicative in this respect.

p The operation of the state-monopoly price-control machinery, however, came more and more into contradiction with the actual processes taking place in world economy, which inevitably involved a danger of serious subsequent disturbances in the system of this machinery’s functioning. The contradictions piled up, while the former opportunities of the monopolies of the leading imperialist powers to dictate .their terms in trade with other countries were more and more reduced above all with socialist countries, but also with many developing countries.

p The significant sharpening of the crisis of capitalism’s monetary and financial system (based on the leading role of the U.S. dollar) at the end of the 60s and early 70s stimulated a further intensification of inflation.  [298•2  To combat it capitalist governments gave preference in their home prices policy, as a rule, to various fashionable theories of Western economists of the neo-Keynesian school, according to which an inflationary prices policy (and when necessary deflationary) should, if pursued by governments in regard to home prices within the separate countries or limited groups of countries, benefit capitalism in the long run. They did 299 not normally, however, allow either for the objective inevitability of a sharpening of old contradictions and rise of new ones on the world market, or for the inevitability of cyclic crises of all capitalist business. While some capitalist theoreticians did not ignore these processes, they, too, in any case, clearly underestimated them. The internal levers of state-monopoly control, in the view of most modern capitalist economists, would be quite adequate to achieve the goals of a national counter-crisis policy posed by them.  [299•1 

p The course of world capitalist economy in the 50s and 60s, it would seem, fed hopes of some success in the inflationary policy in regard to prices pursued by the main capitalist powers. ‘Creeping’ inflation, contained initially within certain limits, was accompanied with a certain quickening of their economic growth rates, and no, in any way long, farreaching disturbances of a cyclic character were experienced then. At the same time the level of world prices continued to remain relatively stable, in spite of inflation in separate countries, and the industrial centres acquired primary commodities as before at comparatively low prices.

p Between 1953 and 1969 the level of world export prices rose by only 7 per cent (14.9 per cent for finished goods), while it even declined by roughly 3 per cent for primary products, except fuels. Domestic wholesale prices rose much faster in the same period in most capitalist countries.  [299•2  This position, however, could not last long. A new major price explosion was maturing on the world market with objective inevitability.

p The graphs in Fig. 23, based on 1948, give a clearer idea of the character and determinant trends of the postwar movement of prices for the leading commodity groups in interna- 300 Emacs-File-stamp: "/home/ysverdlov/leninist.biz/en/1982/WCE326/20070620/326.tx" Fig. 23 Price movement o£ groups of goods on the world capitalist market (10^8=100) * * In export prices f.o.b. Sources: UN Statistical Yearbook and Monthly TSulletin of Statistics for the relevant years. 301
•
tional trade. They convincingly indicate that the early 70s were really marked by qualitatively new phenomena in the development of inflation on the world market. Inflation was markedly manifested from the late 60s and early 70s, and showed above all in an accelerating rise in the prices of "manufactures, and later of primary commodities. The 1970-71 economic crisis that swept many of the leading capitalist countries not only demonstrated the bankruptcy of counter-cyclic inflationary prices policy but also stressed with new force the failure of their ruling circles’ counting on the effectiveness of the capitalist economic recipes of state control of the main economic processes worked out in the postwar period.

p The chain reaction of rapid, unrestrained growth of domestic prices that developed in the industrial centres at the turn of the decade to the 70s (and also in many countries of the primary commodity periphery) could not help being ultimately reflected in world market prices. The general unit value index of world exports rose by 20 per cent in 1972 compared with 1969, which was almost four times its growth in the preceding fifteen years. At the same time, however, inflation increased even faster on the home markets of capitalist and many developing countries than on the world market, especially for manufactures.

Over the next few years a trend began on the world market that calls for close attention and study. The growth rates of international trade prices rose steeply. By the beginning of the 80s the general world price index was more than three times as high as in 1972. The dam in the price machinery of capitalist business that had held the level of world prices down for a long time, especially for primary commodities, was broken. These prices, which had had a stabilising effect on inflation over the two preceding decades, were converted in a very short lime into an essential factor stimulating inflation of the capitalist economy.