Improvements In the Wholesale Price System

The elaboration and introduction of new wholesale prices in 1967 were a prerequisite to, and an important stage in, implementation of the economic reform. The experience derived from their application indicates that, essentially, they accord with the requirements of the reform. Since the introduction of new wholesale prices, all branches of industry have operated on a profitable basis. There has been a sharp reduction in the number of enterprises operating at a planned lossâtheir share in overall industrial output is less than 3%. The branch levels of profitability have moved closer, and a single criterion has been adopted for determining the price level: profitability vis-à-vis the value of productive capital. These measures have made it possible to convert all industry to the new system of management. However, a further development of the economic reform imposes new demands on the wholesale price system and requires its improvement. The intensified role of prices in stimulating technical progress and in improving the technical level and quality of production is becoming the main factor in this direction. Prices must promote the most rapid development of models of new, advanced, and economically effective equipment, as well as the timely mastering of the production of this equipment and its introduction into the national economy. At the same time, the use of economically substantiated methods of price formation must curb the production of ineffective, obsolete equipment that merely bears the outward appearance of novelty. Finally, an arbitrary rise in the prices of new equipment must be averted, for this would retard the introduction of advanced machinery and materials.