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p The long-term trends in the movement of world prices considered above are making themselves felt through all kinds of fluctuations of the current state of the world capitalist market. Steep, continuous rises and falls of prices for the various commodities entering world trade have always been an inherent aspect of capitalism’s world business relations. It is through them that the law of value ultimately affects the forming of world prices in accordance with the international price of production. Explanation of the patterns and specific features of these fluctuations over a long period at 314 any stage of world capitalism’s evolution is therefore objectively an inevitable component of the study of this process.

p With capitalism’s transition from free competition to monopoly the amplitude of short-term price changes on the world market, especially for primary commodities, widened noticeably. At the beginning of the 50s UN experts made a study of this problem for the first half of the century that gives a very clear idea of the scale and dynamics of the swings of world prices.

p The amplitude of the movement of annual prices alone (from the highest to the lowest average percentage fluctuations per year) was about 11 per cent for 25 commodities during 1901 to 1913, 15 per cent during 1920 to 1939, and 18 per cent during 1946 to 1951.  [314•1  For many commodities (cotton, rubber, copra, tin, etc.) it was 20 to 25 per cent: the average figures, moreover, hid even more substantial changes within a year.

p In the period 1901-50 as a whole, for instance, the average range of within-year fluctuations (from maximum to minimum) was roughly 30 per cent for 15 commodities. From that it follows that the scale of these fluctuations from the high of one year to the low of another could exceed 40-45 per cent for these commodities. As a rule the prices of primary commodities had a tendency to marked growth during upswings and to a marked fall during downswings.  [314•2 

p How, then, did events develop in this respect on the postwar capitalist market? Steep fluctuations of world commodity prices continued to be characteristic of most of the capitalist commodity markets with a general tendency for them to fall in the 50s and GOs. The range of prices between the highest and lowest annual averages for all commodities was around 28 per cent in those years, and for fuels around 10 per cent.  [314•3 

p At the same time there was a specific feature in the fluctuations of annual commodity prices in the first postwar decades compared with the preceding ‘peacetime’ periods of 315 the development of world capitalist economy. Above all, the fact that there was no i-ignilicant rise in commodity prices for nearly 20 years to the end of the GOs after their precipitous rise at the start of the 50s is worth noting. Even in separate years of high business activity commodity prices remained comparatively low, the prices of fuels, moreover, displaying great stability. The synchronism quite clearly manifested earlier in the movement of the annual prices of separate commodities during the first half of the century weakened.

p The subsequent shakiness of the whole capitalist price machinery in the 70s was marked by an extraordinary strengthening of the spasmodic character of the amplitude of price fluctuations in the international trade in manufactures as well as raw materials. The gap between the highest and lowest annunl average changes in the prices of commodities exported by developing countries (except fuels), for instance, ranged from +36 per cent (1974) and +15 per cent (1980) to—14 per cent (1975) and—7 percent (1981). The corresponding figures for the manufactured goods exported by capitalist countries ranged from +15 per cent (1979) ami +11 per cent (1980) to—5 (1981).  [315•1 

p UN statistics characterise the main postwar trends in the fluctuations of average annual commodity prices on the capitalist world market. In the postwar period, for example, as before, the state of commodity prices changed more often and much more extensively than that of manufactured goods. That was due not simply to the long-term patterns of pricing on the world market but also to a host of short-term tactical measures by the various monopoly groups in the course of their competition for maximum profits at any particular moment.

p The international corporations consistently endeavour to shift the burdens associated with price fluctuations onto the economically less developed countries by affecting commodity prices through temporary cancellations or reductions of orders, by building up immense ‘buffers’ or strategic stockpiles of many of the most important commodities, and by resorting to various speculative operations and other methods of ‘regulating’ supply and demand for commodities in world trade.

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p This policy in relation to the commodity-producing periphery, as pursued after the war above all by American monopoly capital, was quite frankly described by Clarence B. Randall in the early 50s:

p In times of business recession we cut off our foreign buying almost overnight, thus bringing unemployment and distress to areas that may depend for their sole support on the commodity in question. Then when prices begin to go down under these pressures, we drive home our advantage mercilessly and buy all that we can at the bottom of the price dip. However, when converse conditions prevail and our demand greatly exceeds world supply and prices begin to skyrocket, as they always do under wartime conditions, we immediately impose price controls.  [316•1 

p All these measures inevitably reduce the export receipts of the producing countries and systematically deprive them of means that could be an important additional source for improving their national economies and the living standards of their people. Both the falls in world commodity prices, and the rises, have their most serious effect mainly on the economies of these countries.

p Fig. 25 also indicates an essential feature of price formation in world trade in recent decades, viz., the existence of a quite marked synchronism between the annual fluctuations of world prices and the cyclic development of capitalist production. This connection was traceable throughout the preceding history of world business cycles, as was convincingly confirmed by the studies made in their day by E. S. Varga and L. A. Mendelssohn.  [316•2 

p During the greater part of the postwar period there has clearly been a relatively close dependence of the dynamics of world prices on the cyclic movement of production. The crisis decline in production growth rates at the end of the 50s, for instance, went hand in hand with a marked tendency for prices to fall on the world market, especially those for fuels and many other primary commodities. The upswing that began then caused a growth, albeit moderate, of world prices. A new slowing of production growth rates in the second half of the 60s also led to a certain lowering of the level of world prices.

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p Later, however, the imbalance in the dynamics of world price movements and the physical volume of production increased. It is clear from the figures adduced above that world prices continued to rise in 1970-71 and in 1974, when there was a marked lowering of economic growth rates in the industrial centres. What the prospects will be for a further development of this unusual phenomenon can only be judged, needless to say, from further study of the course of events. At the present time, however, it would be wrong to reduce its analysis to the separate factors of the current market situation. Its genesis was logically linked with both the rapidly developing inflation on the home markets of the world capitalist economy and the start of an active struggle by many developing countries for economic independence from the domination of their economies by Western capital.

p At the same time it is impossible to disregard the singleminded policy of monopoly capital on the world market. During the earlier postwar years it stuck to a line of artificially lowering commodity prices. Since the beginning of the 70s this long-term line has been undergoing changes. As ‘galloping’ inflation developed, the international commodity monopolies, including the leading Western ones, began more and more obviously to take the road of raising commodity prices in every way in both home and international trade.  [317•1 

p All these factors, in their interaction and opposition, inevitably, determined the concrete market situation that underlay the price explosion noted in the early 70s and so the essential changes in the terms of trade that we have noted between primary commodities and manufactured goods. Because of the spontaneous action of the objective laws of the formation of international prices of production in international trade, however, these shifts could not develop steadily. The influence of opposing trends also strengthened, primarily those associated with the continuing crisis lowering of production growth rates in the industrial centres. A marked slowing of the growth rates of world prices began to be noted, and there was a fall in many items 318 (particularly primary commodities) in 1975 below the level previously reached, which was later succeeded by a new rise, especially in 1977-80, and a new fall in 1981.  [318•1  All that encouraged a marked extension of the range, and heightened the rate of the fluctuations of world prices, and consequently growth of their instability as well, which was brought about in no small way by the crisis phenomena that were continuing to mature in the whole monetary and financial sphere.

p A drive, employing the machinery of monopoly prices and stock exchange speculation, to shift the burden of cyclic crises onto the shoulders of the people of other countries, above all of economically less developed ones, has always been typical of the foreign economic policy of capitalist countiios. The authors of one of the United Nation’s world economic surveys once gave a quite instructive description of this policy. Analysing the results of the world crisis of 1958 they wrote:

p It is necessary to boar in mind that however valid may be the national considerations governing the tariff and tax policy of the industrial countries, it still remains true that, to the extent that the burden of such measures falls on under-developed countries, they constitute a tax by high-income countries upon those with low income. The world has come to recognise not only the futility but also the international impropriety of cyclical ’ beggar-my-noighbour’ policies.  [318•2 

p The course of the economic crisis of the mid-70s was visible confirmation that this policy has not been abandoned. In implementing it, however, the capitalist powers are now forced to allow for the incontestable fact that their monopoly positions in the area of pricing have been weakened, while the mounting fight of the developing countries against their discriminatory policy and for the fixing of fairer prices on a long-term basis for the commodities exported by developing countries is creating new knots of explosive contradictions between the two groups of countries. At the same time the increasing dependence of the economies of the industrial countries on external supplies of fuels and other commodities due to the accelerated internationalisation of their production is making for a contraction of their old 319 opportunities for following an unrestricted policy of diktat in the area of world commodity prices.

p The struggle against this policy is one of the aims of the ever increasing anti-monopoly movement in developing countries to establish a new international economic order. The 26th Congress of the CPSU gave a principled evaluation of this movement. The report of the Central Committee noted:

p In the mid-seventies the former colonial countries raised the question of a new international economic order. Restructuring international economic relations on a democratic foundation, along lines of equality, is natural from tho point of view of history. Much can and must be done in this respect. And, certainly, the issue must not bo reduced, as this is sometimes done, simply to distinctions between ’rich North’ and ’poor South’. We are prepared to contribute, and are indeed contributing, to the establisnment of equitable international economic relations.  [319•1 

p So far we have been considering world price fluctuations on the basis of annual averages, bnt these, as we have already remarked, are only a sort of statistical result summarising many changes of prices throughout the year. The estimates used in Fig. 26 indicate tho scale of these changes by separate quarters, and graphically illustrate the growing instability of world prices in the 70s for all the main commodities, especially for farm products and fuels.

p The quarterly fluctuations are built np in turn from monthly, weekly and daily average prices for the commodities concerned. They are the consequence not only of spontaneously formed relations of supply and demand on the world market but also of the selfish, deliberate policy of various monopoly capital groupings gambling now on a rise now on a fall in prices. As the internationalising process deepens this policy has a more and more disastrous effect on the economies of both the industrially backward and industrially advanced countries. It is no accident therefore that the search for ways of dealing with the problem of stabilising world prices undertaken simultaneously, though from different standpoints, by both the commodity-producing countries and the developed capitalist ones has become more active in recent years.

p The broad trends considered in this chapter call for a more concrete study of the features of the price movements of 320 separate commodities, but their analysis already allows us to pose the following questions about the future directions of the dynamics of commodity prices. Needless to say it only makes sense to project them into the future in connection with the shifts in the present-day structure of the international division of labour examined above.

p The steep fluctuations of prices in the world capitalist economy, which reflect the deepening of the crisis of the whole system of imperialism’s international economic relations, will probably increase in coming years. But we cannol conclude from this that there are no practical prospects of fighting to stabilise world prices. Common efforts to create conditions preventing the monopolies’ uncontrolled operations can yield definite positive results corresponding Lo the urgent interests of the peoples of all countries. At the same time one can scarcely expect a return of world prices to the level of the first postwar decades. The price trends examined have a long-term character at bottom and stem from shifts in the structure of production and international economic connections of modern capitalism that are governed by the operation of objective economic laws. They are also consequences of the precipitous growth of inflation, which is becoming an inseparable feature of the crisis development of capitalist economy in our day.

p It is inevitable that there will be a contraction in the future of the area of operation of the monopoly-low price mechanism for primary commodities as the developing countries’ fight for economic independence grows in intensity. In that connection there are good grounds for suggesting that the new phenomena noted in relation to the price level for primary commodities and manufactured goods may also J)e more or less irreversible tendencies. It is quite probable in the long run that the leading capitalist countries will become more dependent on imports of primary resources that are in short supply.

Developing countries’ achievement of effective control over their natural wealth, and the establishment of a fair and mutually advantageous ratio of prices for primary products and manufactured goods in international trade, should help improve the world economic situation. The USSR and the other countries of the socialist community are doing everything they can in this respect to support the emancipation struggle of the countries of imperialism’s 321 former colonial periphery, to support the legitimate strivings and determination of the new slates to get rid of imperialist exploitation, to dispose themselves of their national wealth, and to take part without discrimination of any kind in the solution of pressing international economic problems.

p The postwar aggravation of the contradictions of the modern world capitalist economy is one of the most important trends in the natural process of the deepening of the general crisis of capitalism. Analysis of the structural changes that have taken place in it in recent decades clearly confirms the need to strengthen the anti- imperialist struggle of mankind’s progressive forces to create a world economic system based on equality, and truly mutually beneficial international economic and political co- operation. The drive to build such a system corresponds to the objective needs of the present historical situation and the national interests of all the peoples of the world.

p Real progress toward the development of such co- operation, within which the objective conditions will be moulded to guarantee lasting peace on earth, avert a new world war, and cope with other vitally important matters, can only be made on Leninist principles of the peaceful coexistence of countries with different social systems. In his speech on the GOth anniversary of the October Socialist Revolution in Russia, Leonid Brezhnev said, speaking of the urgent need for all nations to fight for a solution of these global problems:

p Our world today is socially heterogeneous—it is made up of states with different social systems. This is an objective fact. By its internal development and by its approach to international relations the socialist part of the world is setting a good example of how the major problems facing mankind can best be solved. But, needless to say, it cannot solve them for the whole of humanity. What is needed is purposeful effort by the people of every country, broad and constructive cooperation by all countries, all peoples. The Soviet Union is wholehearted in its desire for such co-operation. In this—if one looks deeper—lies the essence of the foreign policy course that we refer to as the policy of peaceful coexistence.  [321•1 

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p The global problems that are now engaging all mankind’s attention include the following: the need to provide food, raw materials, and energy sources for the world’s growing population; overcoming of the economic backwardness of Asian, African, and Latin American countries caused by colonialism; maintenance of the environment and protection of man from the many perils that further uncontrolled technical development threatens him with. All this calls for a rational, collective approach to the search for ways of coping with the tasks of establishing systematic international co-operation and really progressive world economic relations today.

p That, however, necessitates safeguarding peace on earth. As it was stressed at the 26th Congress of the CPSU

If there is peace, the creative energy of the peoples backed by the achievements of science and technology is certain to solve the problems that are now troubling people. To be sure, new, still loftier tasks will then arise before our descendants. But that is the dialectics of progress, the dialectics of life.  [322•1