Production Time And The Calculation Of The Value Structure Of Production

In their discussion of technical progress and its influence on the development of the national economy, economists are quick to invoke the category of the value structure of production. The category of organic structure of capital was formulated by Marx in the simplest terms: as the ratio of the constant part of advanced capital to its variable part.

Concentration of Production and Small-Scale Industry

For many years now research on the concentration of industry has been conducted unilaterally in our country; with rare exceptions, statisticians and economists have persistently argued the advantages of large-scale production over small-scale production. It is incomprehensible why it is necessary to argue that which is self-evident: in itself, the process of concentration in all countries and in all branches of the national economy is evidence of the decisive role of large-scale enterprises, wherever aggregated highly productive equipment is applicable and a wide market is available.

Comparison of Capital Investments and Fixed Assets of the USSR and the U. S.

In order to analyze the course of the USSR and U. S. economic competition, it is necessary to compare the dynamics and volume of capital investments and fixed assets of the two countries. For this purpose it is necessary to solve a number of methodological problems, and, in particular, to work out a technique for calculating the parity of purchasing power or currencies of the countries compared in the sphere of capital construction, to define differences in the understanding of the category of gross and net capital investments and fixed assets, to determine differences in national classifications of productions, in the range of accounts and in the observation units employed in the statistics of the countries compared.

Economic Effectiveness of Capital Investments

Raising the economic effectiveness of capital investments occupies an important place among the tasks set by the Draft Party Program.

Capital Construction and Accumulation

In our economics there is a clearly discernible underestimation of expenditures for the replacement of fixed assets and, in this connection, a certain exaggeration of the scale of production accumulation. In other words, the recorded magnitudes of accumulation contain a substantial share of concealed replacement.

Rates of Reproduction and the Structure of Capital Investment

The efficacy of the productive mechanism, its efficiency, is heightened with the expansion of its working component - machinery. Modern trends in technical progress are reducing the size of machinery per unit of its productive capacity and thereby are modifying the ratio of outlays for buildings to outlays for equipment. The economic significance of this change in the technological structure of capital investment (1) is that it helps to reduce thecapital- output ratio, which is one of the principal factors in increasing the rate of expansion of social production. Tentative estimates indicate that under modern conditions an increase of one point in the share of machinery and other equipment in the aggregate industrial investment in the USSR would raise the annual volume of industrial output by 5 to 6 billion rubles.

Capital Construction and the Problem of Replacement

The service life of means of labor and the consequent real scale of expenditures on replacement are by no means always taken into account when drawing up development plans for branches of the economy. But it is just as impermissible to ignore the age problem in building up the productive apparatus and in choosing the trend of capital investments as it is to compile a long-term balance of manpower resources without regard for longevity tables or a plan of school construction without drawing on birth statistics.

New Technology and the Planning of Capital Investments

The building of the material and technical base of communism requires important changes in the techniques of material production. Technical progress brings about substantial shifts in interbranch proportions which involve a reorganization of the complex pattern of related branches. The new Draft Program of the Party points out that intensive industrial development will require important progressive shifts in industrial structure. Under the circumstances, the planned estimates of production growth in any given branch must include magnitudes which reflect induced expenditures of various kinds. For example, the expansion of textile production requires approximately 5 kopecks of investment in textile mills for every meter of increment of capacity. But additional investment is also needed to expand capacities in the production of fiber, dyes and other materials. The amount of these induced investments is subject to sharp fluctuations depending on the selected raw material â for example, when natural fiber is replaced by synthetic fiber. In the first case additional expenditures are needed to expand cotton plantations and irrigation installations, potassium mines, factories manufacturing cotton-picking machines, cotton gins, etc. In the second instance, investment must be allocated to oil chemistry, output of gas and oil, expansion of power capacities and of the manufacture of pipes, compressors, pumps, measuring and regulating apparatus, etc. In metallurgy the partial replacement of steel and copper by aluminum requires an intensive expansion of electric power capacities, while the retention of the present ratio of steel to other metals involves a growth in the output of iron ore and coking coal.

Reproduction of Fixed Assets and Standardization of Capital Outlays

Implementation of the decision adopted on October 7, 1961 by the Central Committee of the CPSU and the USSR Council of Ministers, "Concerning Measures for More Effective Use of Capital Investments and Intensified Control of the Commissioning of Enterprises Under Construction," requires radical improvement of the whole system of planning. Of major significance in this respect is the switch from the unspecified planning of "utilization of capital investments" to planning the commissioning of concrete production capacities, roads, dwellings, and so forth. Such a turn in planning and, hence, in the accounting of capital investments will have a favorable effect on the use of the national economy's accumulations, and, first of all, on speeding up building work and reducing the share of unfinished construction, which, according to Central Statistical Administration data for 1961, amounted to about 70% of that year's volume of capital investments.