16 - The Council for Mutual Economic Assistance

Summary

The socialist economic system in Eastern Europe—the Council for Mutual Economic Assistance—was established in 1949. Most of the countries there did not join the CMEA because they genuinely believed in its purpose of rivaling the capitalist half of Europe. Stalin forced in order to protect Soviet influence there. Yet even he seemed not to be convinced about the viability of the CMEA. Several socialist states opted out of the idea of an integrated socialist economic system within two decades—Yugoslavia, China, Albania, and Romania. Because the USSR was the dominant member, it initiated several rounds of reforms from the mid 1950s to the 1970s to provide the CMEA with greater purpose and direction in the competition with the capitalist West. But the structural and ideological foundations, which Stalin had put in place before 1953, remained remarkably resistant to change. Thus, within two decades of the end of Worl War II, Soviet-controlled Eastern Europe turned from a source of reparations into an economic liability for the USSR. By the late 1970s, virtually all CMEA members understood that the organization had failed to deliver it had set out to do.