If we examine the traditional factors of production (labour force, capital, land and technology) in Eastern Europe in the inter-war period, we have to modify the previous approaches regarding manpower utilization. Extensive use of manpower is basically a negative factor in economic life, and this was so during that period too. On the other hand, this very excess made a more intensive economy possible in certain places under the conditions then prevailing in Eastern Europe, which were clearly not those conducive to capitalist development.
Little progress can be observed in the modernization of the structure of production, for example, in the cultivation of plants requiring intensive labour. In the area of industrial development, the authors examine mainly those factors in the world economy after world war one which determined its slow pace between the two world wars, particularly the economic and political factors which brought industrialization to the forefront of economic policy. This industrialization aimed at import-substitution, a policy which, however, proved detrimental to economic growth.
Traffic, transport, and the other social services developed very slowly in the inter-war period, owing partly to continual budgetary deficits, and partly to the smaller volume of foreign loans and their inefficient utilization. Foreign capital did not fulfill its role in stimulating development; indeed, its impact was less than in the years before 1914. And foreign trade was hampered by relatively serious difficulties owing to the terms of trade, the lack of markets, and the one-sidedness of the export structure. There were a few signs of modernization in economic life (for example, the greater share of industry in the national income); but, all things considered, backwardness became deeper in many respects, and the inner contradictions between the developing and the stagnating sectors became still sharper.
