Balance of the National Economy of the Union of Soviet Socialist

the most general interrelated system of basic economic indexes describing the process of social reproduction (yosproizvodstvo). The balance of the national economy of the USSR is a synthesizing instrument for the scientific analysis of the following factors: the specific results of socialist reproduction; the condition and tendency of the development of internal economic relationships; the sector, territorial, and national economic proportions; and the scale and rate of reproduction. It serves as the chief method for working out the unified state plan for national economic development over the long run and the forthcoming year and, consequently, serves as the chief means of scientific planning. After the plan has been compiled, the balance of the national economy of the USSR, in the form of a system of consolidated indexes, acts as a generalizing economic section of the national economic plan.

The annual accounting balance of the national economy of the USSR is compiled regularly by the USSR Central Statistical Administration. The data of the balances for the previous year and for several past years are the source of economic information already reduced to a definite balance unity; these data make it possible to provide an economic analysis and estimate of the state of the national economy as a whole and in its most important economic relationships, rates, proportions, and development trends, and also to provide a description of all aspects of the reproduction process in their internal unity and movement.

The theory of socialist reproduction is the scientific basis for constructing the balance of the national economy of the USSR. The basic theses of this theory were elaborated by K. Marx, F. Engels, and V. I. Lenin. In the course of socialist construction, the Marxist-Leninist theory of reproduction has undergone further development. It has been actualized in terms of the particular features of building a socialist society in the USSR and the other socialist nations, and it has been enriched with new concepts based upon consideration of the new situation and the development conditions of the socialist economy.

The diagram of the balance of the national economy of the USSR includes four basic sections with an appropriate system of indexes (the balance of the production and utilization of social product; the balance of labor resources, their distribution and utilization; the balance of the production of national income, its distribution, redistribution, and utilization; the aggregate table). Along with this, the balance of the national economy of the USSR includes numerous complete individual physical and cost balances which make the summary balance more concrete and play an important independent role in elaborating the major economic problems and the sections of the national economic plan.

The entire comprehensive system of physical and material balances of the USSR, which in 1965 encompassed more than 500 types of products including the means of production and consumer goods, is related to the balance of aggregate social product, forming a single whole with it. The balance of intersector relationships for the production and distribution of product is also part of the balance of aggregate social product. The intersector balance plays an important role in the economic analysis and planning of intersector proportions in the national economy, particularly in industry. The balance of the monetary income and expenditure of the population and other cost balances play precisely the same independent role in planning the retail commodity turnover and monetary circulation. The balance of state income and expenditure (the state budget) is also completely interrelated with the national income balance and the balance of the national economy of the USSR. This entire diversified aggregate of balances is interrelated with the national economic balance and is its further actualization in terms of the various tasks and aspects (physical and cost) in planning the reproduction process.

The first and main section of the balance of the national economy of the USSR is the balance of aggregate social product and its utilization. This balance expresses the movement of social product in material and physical terms during the stage of production and its end utilization as consumption and accumulation funds, including the reserves and other national expenditures. Aggregate social product includes the output of all the sectors of material production in the nation (for the report and planning periods). This expresses the social division of labor which is also reflected in the territorial breakdown of the balance (in the form of the production and utilization of product in the economic regions and republics). The socioeconomic forms of the economy which exist in the nation are also shown. This makes it possible to describe not only the existing socioeconomic structure of production but also the changes occurring in it as a result of economic planning.

The production of social product is divided into two basic economic subdivisions, that is, into the production of the means of production (I) and the production of consumer goods (II). In turn, subdivision I is divided into the production of the means of production for the requirements of subdivision I itself (I¹) and the requirements of subdivision II (I²). The actual product is used for various purposes; for example, the means of production in its physical form can be utilized for further expanding production and for increasing consumption (grain for sowing, for feed to livestock, and for the personal consumption of the population; metal for the production of machinery for I¹ and I² and for household television sets, refrigerators, cars, and so forth). Consequently, the division of production into subdivisions I and II presents certain difficulties, and should be corrected by using the data for the actual end utilization. This goal, as practice has shown, is best achieved by utilizing the materials from the intersector balance of production and distribution of social product.

In statistical accounting and planning, a distinction within the industrial product is made in terms of group A (the production of the means of production) and group B (the production of consumer goods). The ratio of the means of production and consumer goods in the other sectors and for the entire national economy is determined by using calculations for the balance of the national economy of the USSR.

The use of social product provides above all for the formation of a replacement fund and the determining of the resources of national income. The latter is broken down into the fund on nonproductive consumption and the accumulation fund. The ratio between consumption and accumulation in national income of the country is a most important national economic proportion of reproduction. The balance of the national economy of the USSR makes it possible to find the optimum ratio between consumption and accumulation. Such a ratio should provide high and stable production development rates, a growth of the productivity of social labor, and, on this basis, a continuous improvement in the welfare of the people. The fund of nonproductive consumption consists of the following elements: consumer goods reaching the population and institutions as a result of their sales through state and cooperative trade; consumer goods received by the population through kolkhoz trade and by orders given to artisans and craftsmen; utilities (gas, electricity, water, and heating); the nonmarket consumption of products from the private farms of the population; and so forth. Moreover, this fund also includes such elements as the amount of wear in nationalized and privately owned housing and the material outlays of the institutions and enterprises in the nonproduction sphere. This sphere does not create national income but rather uses it for carrying out its useful social function.

The remaining portion of national income is used by society for accumulation and for covering other national requirements. The surplus product of socialist society is the source of the accumulation fund. This fund is made up in the balance from the increase in fixed productive capital and working assets, the increase in fixed nonproductive capital, and the increase in reserves and other expenditures. The materials for these calculations are obtained from an assessment of the value of all capital at the beginning and end of the planned period, the intended volumes and structure of capital investments into the production and nonproduction spheres (a special fixed capital balance is drawn up), and data on the change in the reserves over the planned period, the structure of the reserves, and other expenditures. The increase in working capital is expressed in the balance of the national economy as one of the important elements of the accumulation fund (along with the increase in fixed capital). It includes the increase in the stocks of raw products, fuel, materials, and other production elements; incomplete production and construction; finished products and goods en route; and the consumer stocks among the population.

Calculations in current prices indicate that approximately three-fourths of national income is utilized for the purpose of consumption by the population and that one-fourth forms the accumulation fund. This ratio in various periods and individual years does not remain fixed but has shown a tendency toward a certain increase in the share of accumulation. The balance of the national economy of the USSR is compiled in current prices, and in these prices the process of the movement of aggregate social product, its production and sales, and socialist reproduction are actually carried out. In actuality, the share of accumulation in the national income of the country is higher, since the planned prices for the means of production (of which the accumulation fund consists in material terms), in contrast to the prices for consumer goods, do not include the turnover tax to any significant degree. A rise in the efficiency of social production and production accumulation would make it possible to bring about a continuous increase in the fund of consumption and nonproductive accumulation in the national income of the country, simultaneously with achieving high and stable development rates for material production. This is a most important task for planning under present-day conditions.

The second section of the balance of the national economy of the USSR is the aggregate balance of labor resources and their utilization. By using this balance, the planned distribution and redistribution of the labor force are carried out and maintained within and between the sectors of the national economy, the economic regions, and the republics in the area of both social material production and the nonproduction sphere. The need for a skilled labor force and the sources for meeting this need are ascertained. Using the labor resource balance, measures are carried out to provide full employment for the able-bodied population of the country on the basis of high and steady growth rates of social production. Many other balance calculations which are of independent significance also have bearing on the aggregate balance of labor resources and their utilization. The data of the labor resource balance, in being compared with the data of the balance for aggregate social product, provide an opportunity to analyze thoroughly the developing internal relationships between them in terms of providing the necessary scale and rate of production for social product and national income, as well as to analyze the most important national economic proportions of reproduction.

The movement of social product in the stage of production and end utilization is expressed not only in terms of the physical and material composition but also in terms of value in the balance of national income and the movement of the income of the population and socialist enterprises—that is, the state, cooperative, and kolkhoz enterprises—and also the income of the population from private farms. The primary distribution of national income into the income of socialist enterprises and the income of the population employed in the sphere of social material production is expressed in the corresponding system of indexes of the balance of national income, with national income including the wages and bonuses of manual and white-collar workers in the production sphere, deductions for social security, money earnings of artisans in cooperatives, income of the kolkhoz peasantry, income from the private farms of the kolkhoz members as well as manual and white-collar workers, and income from the privately held farms of the noncollectivized peasantry and the artisans who are not members of cooperatives. The income of the state and the socialist enterprises and institutions includes the turnover tax, profit, interest on loans, income from timberlands and so forth, and deductions by kolkhozes into the social funds.

The total of the primary income of the population and the socialist enterprises should correspond to the total amount of the national income of the country. In a socialist society, there is also a planned redistribution of national income to favor the successful and balanced development of society. This redistribution is necessitated primarily by the existence of a nonproduction sphere which plays an important and ever-growing role in the life of a socialist society, ensuring the all-around physical and spiritual development of the working people. However, this circumstance does not change anything in the nature of the nonproduction sphere as an activity which, in contrast to the material production sphere, does not create national income and consequently relies on the planned redistribution of national income to carry out its functions.

The redistribution of national income is an objective necessity for accelerating the economic development rates, for speeding up industrialization, for evening out the overall level of economic development in the individual Union republics, and for raising the standard of living in accord with the principles of Lenin’s nationality policy. The redistribution of national income can encompass various production sectors; for example, redistribution can ensure the predominance of industry or, within industry, can benefit group A or group B. At the present stage of Soviet economic development, there has been a marked decline in the redistribution of national income from agriculture to industry, whereas, within industry, redistribution has been intensified in favor of the sectors which are the agents of modern scientific and technical progress (the chemical industry, electronics, the atomic industry, instrument building, and so forth). Redistribution can also encompass various social sectors (state and cooperative-kolkhoz), as well as classes and individual social groups. Finally, the redistribution of national income can be caused by the necessity of adjusting the ratio between accumulation and consumption in favor of one or the other. Planned prices, state taxes, profit deductions, and the credit system are used as levers of redistribution. The financial and credit system and its institutions regularly carry out the planned redistribution of national income and the income of the population and enterprises. Redistribution can also occur in the form of payment by the population for various services of the nonmaterial production sphere. The redistributive relationships have played and continue to play a major role as relationships which are objectively necessary for socialism and as an active instrument of the state’s economic policy, particularly in the capital investment area. The designated considerations underlie the actual structuring of the national income balance as one of the main sections of the balance of the national economy of the USSR. The total income from all the categories of the population and all the income of the enterprises and institutions which figure in this balance of course exceeds the actual amount of national income by the total amount of double counting of income.

Cost balances are also part of the overall system of the balance of the national economy of the USSR. The cost balances are the aggregate of individual balances in which all the indexes have been expressed in a monetary form. In a monetary form they characterize the movement of resources, the economic relationships and proportions of aggregate social product and national income in the process of production, sales, primary distribution, redistribution, and end utilization for consumption and accumulation. Compiling cost balances is necessary because the process of expanded reproduction occurs under socialism not only in the form of the planned creation and distribution of material goods in physical terms but also in terms of value; that is, since this process is carried out by means of money, a monetary expression emerges for the value of the produced goods. Among the most important cost balances are the balance of national income, the balance of the monetary income and expenditure of the population, the balance of enterprise income and expenditure, the credit plan, the cash plan of the Gosbank (State Bank), the state budget of the USSR and the state budgets of the Union republics, and the summary financial plan of the national economy. Many of these balances are compiled not only on the scale of the national economy of the USSR but also for the Union republics, and some of them are even drawn up for individual economic regions, krais, and oblasts (for example, balances of the monetary income and expenditures of the population).

The balance of the monetary income and expenditure of the population is a further actualization of the national income balance. The balance considers in detail all the monetary income of the population forming its effective demand, as well as all the possible channels for the population to spend its monetary income. This balance is important for studying the state of retail commodity turnover for the nation as a whole and for the republics and regions, the turnover structure, the development trends, and the dynamics of retail prices. It is also important for studying and planning supply and demand for consumer goods; for planning retail commodity turnover, retail prices, financial accumulation plans, and the monetary savings of the population (in savings banks); and for regulating the monetary circulation and the issue of money in the nation.

Together with the balance of the monetary income and expenditure of the population, the cash plan of the USSR Gosbank fulfills an important function. This plan serves as a means of current planning and regulation of monetary circulation. It encompasses the receipt of cash by the bank and the issuing of money from the bank. It is organized in the form of a balance; that is, its income portion shows all the receipts of cash by the offices of the Gosbank, and the expenditure portion reflects all payments made by the Gosbank in cash. The excess of expenditures over income for this balance means that money is being put into circulation; the inverse ratio means that money is being withdrawn from circulation.

The USSR state budget is the basic financial plan of the state. It describes the volume and structure of the state’s monetary income and expenditure as based upon the national economic development plans of the USSR and the Union republics. This is one of the important types of cost balance. In expressing the planned formation of centralized monetary resources and their movement and the distribution and redistribution of these resources between the republics and economic regions, the national economic sectors, and the enterprises, organizations, and institutions, as well as between the production and nonproduction spheres, the state budget plays an active role in promoting the growth rates envisaged in the national economic plan for aggregate social product and national income, in addition to providing the internal relationships and proportions necessary for expanded socialist reproduction.

In the process of elaborating the national economic plan, the necessity arises of compiling a summary financial plan (balance) along with the state budget. This financial plan reflects all the financial resources of the socialist state and the socialist enterprises and economic bodies, as well as all expenditures shown in terms of their chief purposes. The income section of the summary financial plan—the financial resources—includes the following income categories: the profit of all state enterprises and economic organizations, the turnover tax, revenue in the form of the payment for productive capital, income from foreign trade, income from forestry, deductions from the income section into the fund for state social security, deductions for scientific research and the training of personnel, amortization deductions and earnings from the sale of withdrawn fixed assets, the income tax paid by the kolkhozes and cooperative organizations, and the monetary revenue received from the population (taxes and fees, the increase in the balances of savings deposits, the sale of state loan bonds, and so forth). The expenditure section shows the direction of the financial resources: the financing of capital investments and major overhauls, increases in the rates of the enterprises’ own working capital, the provision of funds to banks, increases in state material reserves, deductions from the expenditure section into the enterprise fund, operating expenditures for individual sectors, expenditures for defense and for the running of the state administrative bodies, outlays on sociocultural measures, and expenditures on state loans and the formation of the reserve funds of the councils of ministers of the USSR and the Union republics. The compiling of the summary financial plan, as one of the synoptic cost balances internally linked with the balance of the monetary income and expenditure of the population and ultimately with the material balances, as well as with the labor force balance, makes it possible from the standpoint of finances to control the correctness of the rates, scales, and structures of the production of social product and national income and the major reproduction proportions as planned in the national economic plan.

The summary table of the balance of the national economy of the USSR in principle represents a further generalization of all three sections of the balance and their overall synthesis. Its organization should correlate the basic factors causing the movement of aggregate social product and national income (in terms of the industrial sectors, social sectors, and economic subdivisions) and the unity of the basic indexes of the balance in their physical-material and cost aspects. The basic relationships, proportions, rates, and scales of the most important reproduction elements in the summary table are reduced to this unity. This means that the basic elements of the national economic plan have achieved the highest state of equilibrium.

The planned national economic balance should provide the internal balancing of the basic elements of socialist reproduction on the basis of the growth of the efficiency of social production. This is a central problem for further improving the methodology of the balance of the national economy of the USSR.

In the preplanning period, when an overall concept is being worked out for the USSR national economic development plan, a preliminary balance of the national economy of the USSR is drawn up as a most general guide and basis for the possible and necessary rates, scales, and most important national economic reproduction proportions during the forthcoming development period. The compiling of the given balance is made for a very limited group of the most general indexes, according to parameters which have decisive significance for the growth of the national income and which describe the structure of social product, the ratio of accumulation and consumption, the volume and structure of capital investments, the growth rate of labor productivity for the national economy as a whole and for its major sectors, the rate of decrease for product costs, the growth rates of the population’s income, and retail commodity turnover. In addition, certain other indexes, including the preliminary targets for the production of individual major products in physical units, are compiled. These individual but internally interrelated indexes for national economic development are correlated in the balance, and they can be compiled in different variations. The preliminary balance helps to discover the best variation for solving the next economic and political tasks of the plan from the standpoint of reproduction as a whole.

The preliminary elaboration of the major indexes of the next national economic plan does not end with the compiling of the preliminary balance. Along with it, the intersector balance of production and distribution of social product plays an ever-growing role.

In the preplanning period, the method of long-term forecasting of national economic development is assuming ever greater significance for carrying out the synthesizing economic calculations. This forecasting is done by compiling the corresponding dynamic mathematical-economic models. This method is based upon studying and considering the actual results and the mechanism of action of the economic laws of socialism; the established patterns and trends of development for the major national economic sectors; the rate, structural changes, and different proportions of reproduction; and the most important directions of technical progress.

In the process of further work on the national economic plan, the balance of the national economy of the USSR is used for correlating the indexes for the development of the various sectors, for intercorrelating them, and for determining the development rate of the entire national economy and the general economic reproduction proportions. Here the balance of the national economy of the USSR is worked out following the complete and comprehensive system of its tables and indexes.