Satellites in Purgatory
There was some hope that Stalin's death would be followed by greater freedom for Russia's closest satellites and greater humanity in Russia's domestic policies. The events in Czechoslovakia in the last two weeks suggest a different story. That country has just received an economic purgative similar to that which has in turn been given to Hungary, Poland, Rumania, Bulgaria and, immediately after the war, to Russia itself. The internal currency is being replaced at the rate of one new crown to five old crowns. Cash and savings balances, on the other hand, are to be exchanged at varying rates for various social groups,. the effect of which will be to reduce the financial assets of private concerns by ten times more than those of the nationalised companies. Simultaneously, rationing is ended; new fixed prices, above the old level for rationed goods (which were only available to employed labour) and below the old level for the free market (where all private employers had to buy), are introduced. At the new rate of exchange they will average one-third of the old prices as a whole. The new wage level, on the other hand, will average one-fifth of the old level. The effect of this will fall most heavily on the peasants whose earnings, in contrast with those of the industrial workers, will not increase. Three results will then have been achieved— a general deflation; a. penalising of private employers which must ultimately drive them out of business; and a penalising of the peasants designed to drive them from their small- holdings to the collective farms. The resentment which greeted the reforms was so loud and so widespread that even the Communist Government gave it public acknowledgment. It can make no difference to the programme, which will be pursued regardless. But it does help to clarify Mr. Malenkov's intentions. The central satellites are to be drawn closer into the ring; more uniform and more efficient, they are at any cost to fulfil their role in Russia's five year plan.
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