Scissors prices - what is it? Scissors prices in 1923: the causes, nature and ways out
The economy of the Soviet Union has experienced manycomplex periods that led to both positive results and negative ones. For example, at the time of the new economic policy, such a notion as price scissors appeared. Its essence lies in the imbalance of pricing between the output of the industrial sector and the agrarian sector. Let's take a closer look at the essence of this term and what are the reasons for its appearance, as well as what are the ways out of this situation.
What does it mean?
Everyone who studied economics and internationaleconomic development, the expression "price scissors" is familiar. What it is? In general, this term means the difference in prices for different groups of goods in markets of international importance. The runaway in value is due to the fact that there are different economic benefits that are obtained from the release and sale of certain goods. Despite the fact that it is impossible to compare the prices of different products, there is an opinion that the price for manufactured goods is much more profitable for the seller than for fuel and raw materials. Often, the scissors of prices explain the unjustified exchange of goods between rural areas and cities, as well as between economically developed and developing powers.
The appearance of the term in the USSR
Under the Soviet Union, the term "price scissors" waswas introduced by Lev Trotsky specially to characterize the situation at that time with the prices of industrial and agricultural goods. The crisis of sales, which had already become apparent in the autumn of 1923, showed that the population did not have the opportunity to purchase industrial products of dubious quality. Although it is just zatarivali people, to quickly sell the product and make a profit. All this was done to bring the industry to a new level and at the same time raise the rating of the state as a whole. According to economists, this method does not always yield positive results, but it takes place in many countries of the world.
The Essence of the Crisis of 1923
In the distant 1923 industrial production beganto realize at an overpriced price, despite the fact that the quality left much to be desired. So, in October of 23rd year of the last century prices for manufactured goods accounted for more than 270 percent of the established cost for the same products in 1913. Simultaneously with this huge increase in prices for agricultural products increased by only 89 percent. This phenomenon of imbalance Trotsky appropriated a new term - "price scissors". The situation turned out to be unpredictable, as the state faced a real threat - another food crisis. Peasants were not profitable to sell their goods in large quantities. Sold only the volume that allowed you to pay taxes. In addition, the authorities increased the market price of grain, although the purchase price for purchasing grain in the villages remained in place and sometimes declined.
Causes of crisis phenomena
To understand such a phenomenon as "price scissors"1923, the reasons, the essence of the crisis, it is necessary to study its prerequisites in more detail. In the Soviet Union, during the period described, the process of industrialization began, in particular agriculture. In addition, the country was at the stage of the initial accumulation of capital, and the main share of the total national income fell precisely on the agrarian sector. And in order to raise the level of industrial production, funds were needed that were "pumped out" from agriculture.
In other words, there was a redistributionfinancial flow, and price scissors at this time just expanded. There was a tendency of price movement for products sold by agrarian business executives on the one hand, and on goods that they themselves bought from industrialists for a particular consumption - on the other.
The authorities did their best to solve theproblems in the economy, which led to price scissors (1923). The reasons and ways out, which the Soviet government proposed, included several points. First, it was decided to reduce costs in the industrial production sector. This was achieved in several ways, the most important of which are staff reduction, optimization of the production process, control of the wages of workers in the industrial sector, and the diminishing role of intermediaries. The last moment was achieved by creating a large network of consumer cooperatives. How was it useful? Its main tasks were to reduce the cost of manufactured goods for ordinary consumers, to simplify the supply of markets, and to accelerate trade.
All anti-crisis actions of the government ledto a positive result: literally a year later, namely in April 1924, prices for agricultural goods rose slightly, and industrial products fell to 130 percent. Scissors prices in 1923 lost their force (that is, narrowed), and began to observe a balanced pricing in both areas. In particular, a positive impact was placed on industrial production. Compared with the past years, when the agricultural sector was the most important financial source in the country, the industry grew into an independent source of accumulation. This made it possible to narrow the price scissors, thereby increasing the purchase price for agricultural products.
Price Scissors in Western Countries
Not only in the USSR, but also in Western Europeand the USA used price scissors. This phenomenon largely contributed to the exclusion of small farms from production. For example, after the Second World War, in some capitalist powers (Great Britain, France, the United States, etc.), large trade, finance and industrial capital gradually penetrated the agricultural sphere. Began to create agrarian-industrial associations, in the work of which it was decided to apply the latest scientific and technical developments. In addition, the agrarians were subjected to strict state control and regulation. All this led to the fact that small farms, many of which were a family business, simply could not stand competition and went bankrupt. These small farms, despite state support, did not have the opportunity to purchase expensive agricultural equipment produced by industrial monopolies.
Thus, farmers had to choose: or go into full submission to influential industrial organizations and lose their independence, or abandon agriculture altogether. At the same time, large farms, thanks to the formation of the agro-industrial complex, rebuilt and acquired features similar to modern corporations. Such kind of farm-factories due to price scissors found themselves in the usual competitive struggle for the buyer.