The economy of the Soviet Union experienced a lotdifficult periods that led to both positive and negative results. For example, in the days of the new economic policy, such a concept appeared as price scissors. Its essence lies in the imbalance of pricing between the products of the industrial sector and the agricultural sector. Let's take a closer look at what the essence of this term is and what are the reasons for its appearance, as well as the ways out of the current situation
What does mean?
Anyone who has 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. Examination of the cost due to the fact that there are different economic benefits that are obtained from the production and sale of certain goods. Despite the fact that it is impossible to compare prices for assorted goods, there is an opinion that the price of manufactured products is much more profitable for the seller than for fuel and raw materials. Often, price scissors explain the unjustified exchange of goods between rural areas and cities, as well as between economically developed and developing countries.
The emergence of the term in the USSR
Under the Soviet Union, the term "price scissors" wasintroduced by Leon Davidovich Trotsky specifically to characterize the situation at that time with the prices of industrial and agricultural products. The sales crisis, which had already become apparent in the fall of 1923, showed that the population was not able to acquire industrial products of questionable quality. Although it just zatarivali people in order to quickly sell the goods and make a profit. All this was done in order 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 bring positive results, but it occurs in many countries around the world.
The essence of the crisis of 1923
Back in 1923, industrial products begansell at an inflated price, despite the fact that the quality left much to be desired. So, in October of the 23rd year of the last century, prices for manufactured goods amounted to more than 270 percent of the established value for the same product in 1913. At the same time, the price increase for agricultural products increased by only 89 percent. Trotsky appropriated a new term for this phenomenon of imbalance - “price scissors”. The situation turned out to be unpredictable, since the state was facing a real threat - another food crisis. It was unprofitable for peasants to sell their goods in large quantities. They sold only the amount that allowed to pay taxes. In addition, the authorities raised the market price for grain, although the purchase price for buying grain in villages remained in place and sometimes declined.
Causes of crisis
To understand the phenomenon of "price scissors"1923, the reasons, the essence of the crisis that broke out, it is necessary to study its prerequisites in more detail. In the Soviet Union in the period described began the process of industrialization, in particular agriculture. In addition, the country was at the stage of the initial accumulation of capital, and the bulk of the total national income accounted for the agricultural 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 for the goods they also buy from industrialists for a particular consumption - on the other.
Solutions
The authorities have made every effort to solveproblems in the economy, which resulted in price scissors (1923). The reasons and ways out that were proposed by the Soviet government included several points. First, it was decided to reduce costs in the industrial sector. This was achieved in several ways, the most basic of which are reduction of staff, optimization of the production process, control of wages of workers in the industrial sector, reduction of the role of intermediaries. The last moment was achieved by creating a large network of consumer cooperation. How was she helpful? Its main tasks were to reduce the cost of manufactured goods for ordinary consumers, to simplify the supply of markets, and to accelerate trade.
Effort results
All government anti-crisis actions ledto a positive result: literally a year later, namely in April 1924, prices for agricultural goods rose slightly, and for industrial products fell to 130 percent. The price scissors of 1923 lost their power (that is, narrowed), and balanced pricing began to be observed in both areas. In particular, a positive impact was made on industrial production. Compared with previous years, when the agrarian 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 of scissors, thereby increasing the purchase price for the products of farmers.
Price scissors in western countries
Not only in the USSR, but also in Western Europeand the US used scissors prices. This phenomenon has largely contributed to the displacement of small farms from production. For example, after the Second World War in some capitalist powers (Great Britain, France, the USA, etc.), large commercial, financial and industrial capital gradually penetrated into the agricultural sphere. They began to create agro-industrial associations, in which it was decided to apply the latest scientific and technical developments. In addition, farmers were subjected to strict state control and regulation. All this led to the fact that small farms, many of which were family businesses, simply could not stand the 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:either go into complete submission to influential industrial organizations and lose independence, or even abandon agriculture altogether. At the same time, large-scale farms, thanks to the formation of the agro-industrial complex, restructured and acquired features similar to modern corporations. This kind of farm-factories, due to price scissors, turned out to be in the usual competitive struggle for the buyer.
