price scissors

Unsurprisingly, the opening of the price scissors was especially hard on peasants.

Where the fragmentation of land reform had decreased agricultural efficiency, government response to the price scissors often exacerbated the problem.

The governments of Eastern Europe simply lacked the funds to mount an effective response to the price scissors.

The sharp deterioration of the terms of trade caused by the price scissors was devastating to Eastern European governments as well.

Although the Depression was not as severe in relatively industrialized Czechoslovakia, the price scissors had disruptive political ramifications even there.

Thus, the price scissors is most devastating to countries that are net agricultural exporters and net industrial importers.

To this end, the major mechanisms were the foreign trade monopoly held the state and price control in favor of industry (in effect, "price scissors")

Faced with few policy options and deteriorating political situations, the nations of Eastern Europe looked to the West for aid in fighting the price scissors.

The phenomenon is not exclusively of international scale: early Soviet Union had industry/agriculture price scissors internally, see Scissors Crisis.

Perhaps the most vivid illustration of the effects of the price scissors and its potential effects occurred in countries throughout Eastern Europe in the early 1930s.

Germany's assistance did legitimately help the Eastern European economies out of the crisis brought by the opening of the price scissors, and public sentiment was therefore swayed in favor of the Reich.

While policy responses such as taxing the peasantry and banning mechanization may seem horribly dysfunctional in hindsight, the price scissors had effectively tied the hands of the Eastern European governments, leaving them with few if any options.

The Scissors Crisis is the name for an incident in early Soviet history during the New Economic Policy (NEP), when there was a widening gap ("price scissors") between industrial and agricultural prices.

The onset of the price scissors in Eastern Europe, which began as a mere fluke of the international economic system, had played a heavy role in the disintegration and realignment of the Eastern European nations.

In practical terms what was at stake was the need to close the price scissors, as Trotsky termed it, that is, the disparity between the high prices for industrially produced consumer goods and means of production, compared to the prevailing world market prices, and the prices being paid for agricultural produce.

The price scissors is an economic phenomenon when for a certain group or sector of productive population the overall valuation from their production for sale outside this group drops below the valuation of the demand of this group for goods produced outside the group after a period of reasonable equilibrium.