ABSTRACT
Mikhail Gorbachev has radically restructured the Soviet foreign trade mechanism. In August 1986, he established a new State Foreign Economic Commission to oversee interministerial foreign trade activities. A year and a half later, this entity was amalgamated with the Ministry of Foreign Trade into another body, the Ministry of Foreign Economic Relations. The foreign trade mechanism Gorbachev seeks to reform was put in place immediately after the Bolshevik revolution. Lenin declared foreign commerce a state monopoly, thus prohibiting private transactions, including the purchase or sale of rubles. Over the years, these principles were translated into a centralized state trading system in which the Ministry of Foreign Trade and its administrative subdivisions, the specialized foreign trade organizations, controlled international commerce. The ultimate cause of the Soviet Union’s failure to develop competitive industrial products can be traced to the separation of demand from supply that pervades the economic mechanism.
