JPRS ID: 9021 JAPAN REPORT

• Document Type: CREST
• Collection: JPRS
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00850R000200040014-0
• Release Decision: RIF
• Original Classification: U
• Document Page Count: 102
• Document Creation Date: November 1, 2016
• Sequence Number: 14
• Content Type: REPORTS

APPROVE~ FOR RELEASE: 2007/02/08: CIA-R~P82-00850R0002000400'14-0

~ NE ~ . _ , OF A
~-8 JANUARY 1980 UNION REPUBLIC 1 OF 2
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
FOR OFFICiAL USE ONLY
JPRS L/8848 ~
8 January 1~980
Tr~~1S~~ltiOn
f~~et P~roduct and N~ativnal Income o~f a
~ Union R~epublic
Fg~$ FOREIGN BROADCAST INFORMATION SERVICE
FOR OFFICIAL USE ONLY
.
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
NOTE
JPRS publications contain information primarily from foreign
newspapers, periodicals and books, but also from news agency -
transmissions and broadcasts. Materials frocr, foreign-language
sources are translated; those fr~m English-language aources
are transcribed or reprinted, with the original phrasing and
other characteristics retained.
Headlines, editorial reports, and material enclosed in brackets
are supplied by .7PRS. Processing indicators such as [Text]
or [Excerpt] in the first line of each item, or following the
last line of a brief, indicate how the original information was
processed. Where no processing indic~tor is given, the infor-
- mation was summarized or extracted.
~
Unfamiliar names rendered phonetically or transliterated are .
enclosed in parentheses. Words or names preceded by a ques-
tion mark and enclosed in parentheses were not clear in the
original but have been supplied as appropriate in context. ~
Other unattributed parenthetical notes within the body of an
item originate with thz source. Times within items are as
given by source.
The contents of this publication in no way represent the goli-
cies, views or attitudes of the U.S. Government.
For f:.irther information on report content
call (703) 351-2938 (economic); 346~3
(political, sociological, military); 2726
(life sciences); 2725 (physical sciences).
GOPYRIGHT LAWS AND REGULATIONS GOVERNING OWNERSHIP OF
MATERIALS REPRODUCED HEREIN R~:QUIRE THAT DISSEMINATION
QF THIS PUBLICATION BE RESTRICTED FOR OFFICIAL USE OiVLY.
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
FOR OFFICIAL USE ONLY
..i..
- JPRS L/8848
8 January 1980
~~JL
i
NET PR6DUGT AND NATIONAL INCOME OF A UNION REPUBLIC
Riga CHISTYY PRODUKT I NARODNYY DOKHOD SOYUZNOY RESPUBLIKI in -
Russian 1977 signed to press 6 Oct 77 pp 1-108
Book by G. Ya. Grantyn', "Zinatne" Publishing House, 1000 copies
CONTENTS PAGE
Brief Annotation . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
CHAPTER l: The Essence of Net Product in a Socialist Society and
Its Particular Features in Union Republics 4
1. The Material Content and Value Form of Net Product 4
2. Particular Features of the Net Product of a Union
Republic . . . . . . . . . . . . . . . . . . . . . . . 19
CHAPTER 2: The Balancing of the Material Content and Value Form of
Net Product in National Economic Accounting 34
CHAPTER 3: Certain Methodological Problems in the Accounting and
Analysis of National Income . . . . . . . . . . . . . . . 50
1. The Production oi National Income and the Factors of
Its Growth . . . . . . . . . . . . . . . . . . . . . . 50
2. The Formation of End Income in the Process of the
Distribution and Redistribution of National Income 65
3. Problems of Coordinating the Consumption Fund and
the Real Income of the Population with Net Product 78
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
- a - [II - USSR ]
- (III - USSR - 3]
FOR OFFICIAL USE C1NLY `
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
FOR OFFICIAL USE ONLY
- PUBLICATION DATA .
_ English title ; NET PRODUCT AND NATIONAL INCOME ~
~F A iTNION REPUBLIC
Russian title ; CHISTYY PRODUKT I NARODNYY ~
DOKHOD SaYUZNOY RESPUBLIKI i
i
Author (s) ; G. Ya. Grantyn' ~
i
Ed:ttor (s) ;
Publishing House ; Zinatne I_
i
place of Publication . ~Sa ;
i
i
Date of Publication . 1977 ;
Signed to press , 6 Oct i7
i
~
Copies . 1,000 ~
COPYRIGHT Latviyskiy gosudarstvennyy universitet
~ imeni P. Stuchki, 1977
- - b -
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
FOR OFFICIAL USE ONLY
. [Brief Annotation]
[Text] The monograph reviews the theoretical and methodological problems
related to an analysis of net product in an Union republic and its balanc-
ing with national income. The use of the method of aggregate natiorial eco-
nomic accounts is established, and these provide for the creation of an in-
tegrated s;,~stem of balances. Particular attention has been given to the
stage of the distribution and redistribution of national income in an Union
republic. The theoretical provisions are illustrated by an analysis of
statistical data for Latvia.
~
The book is designed for scientists, graduate students, specialists in the
area of political economy, statistics and national economic planning, as
well as for students of the economic specialties in the WZes. `
1
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
FOR OFFICIAL USE ONLY
FOREWORD
The proportions of social reproduction have always been at the center of
attention for Soviet economic science. In the stage of developed socialism,
when the enormous scale of production, rapid scientific and technical prog- -
ress and the deepening of international economic integration between the ,
socialist countries make the national economic proportions even more dy-
namic, economic science and planning practices are confronted with the cru- ;
cial tasks of increas~na the balancing of the econoiqy. Dynamic and pro-
portional development tlere termed by the 25th CPSU Congress a prerequisite ;
_ for carrying out the mf~.in economic task of the Tenth Five-YP~,r Plan for the ,
development of the USSA n~itional economy, and for consistently implementing ,
the policy of the Co~nur,~~t Party to raise the material and cultural stand-
ard of living of the people.
Al1 the Union republics of the USSR interact in c~.rrying out this basic
task, and with a greater division of labor between them and a rise in pro-
duction specialization, the combining of sectorial and territorial propor- ~
tions becomes more complex, and this necessitates an improvement in the
methodolog,y and procedures for working out the national economic balance
of the Union republics. ~
~
I
The author considers the basis for the proportional development of the econ- ~
orr~y of an Union republic to be the balancing of net product and its value ~
form, the republic's income. The monograph discloses the essence of the
category of net product and the methodological problems of its calculation ;
and analysis. The use is established of a system of accounting and plan- ;
ning following a scheme of national economic accounts and an aggregate
material and financial balance as worked out by the TsEMI [Central Mathe-
matical Economics Institute] of the USSE Academy of Sciences and tested out
exFerimentally in Estonia. The designated scheme reflects all national
economic turnover of gross and net product in the form of the monetary and
commodity flows, and provides for the elaboration of an integrated system _
of the national econo:nic balance. In our view, such a system has advan-
tages over the present~jrused one, and should be introduced into practice
in the further elaboration of automated systems for state statistics and
planning calculations.
2 -
FOR OFFICIAL USE ONLY .
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
FOR OFF:CCTaL USE ONLY
The balancing of the development of a socialist national econo~y is tested
out in the,si.ngle process of Froduction, distribution, circulation, con-
sumption ana;accumulation. T'ne book examines statistical data on the
national income of La.tvia for 1960-1975 in terms of the individual stages
of this process. The analysis made on the basis of L-he information pub-
lished by the Latvian TsSU [Central Statistice,l Administration] does not
claim to be~complete, and is carried out primarily fo~ the purpose of il-
lustratin~~the theoretical provisions. The balance of social product and
national income in the Union republics at present does not reflect the
processes of distribution and redistribution. At this stage, the statisti-
cal information is incomplete, and in a number of instances the figures
given ~n the book represent an assessment bf the author himself on the
basis of available statistical data.
~Proposals on individual debatable problems, far example, on the place of
science as well as the apparatus of economi~ management and the financial
and credit system in social production and in the national economic balance,
have been raised as a point of depaz~ture for further debate.
Author
- ~
~ 3
FOR OFFIC:CAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
FOR OFFICIAL USE ONLY '
CHAPTER l: THE ESSENCE OF PlET PRODUCT IN A SOCIALIST SO~IETY AND ITS !
PARTICULAR FEATURES IN UNION REPUBLTCS
1. The Material Content and Value Form of Net Product i
The basis of the well being of the people is social wealth, that is, the -
aggregate of goads which satisf~ the diverse need~ o~ man and all society.
1
For the existence of society it is essential to have the constant reproduc- !
tion of the consumed elements of social wealth. But the very production ~
prucess, as is ~nown, is simultaneously a consumption process. The means ;
- of production which are productively consumed in this pro~ess are also -
elements of social wealth. In order that the produr.tion process be
continuous, the means consumed in it should be cor_tinuously compensated fo,r I
out of social product. In viewing social production as a whole, we see
that the portion of aggregate product which replaces the consumed means of _
production in essence does not go out of the pr~duction process. For non-
production consumption, or, as K. Marx wrote, "consumption per se," it i~ ~
possible to use only the second part of soc3.a1 product which exceeds the '
replacement f~uid, and this comprises the net outpu~ of the production proc- ;
ess and is added to the previously acc~ulated wealtlz. I
~
In order to satisfy the demand for development and improvement which is ~
naturally inherent to each person (and at the same time, to all of soci..ety), ~
it is essential to carry oni: not simple but rather expanded reproduction, I
that is, to accumulate wealth, in adding to it more product than has been
' consumed in the given period. Only the portion oP product which exceeds ~
the replacement fund can be used for acctunulation as well as Por consump- ~
tion.
, i
Thus, the end result of soclal production is not the aggregate product but j.-
_ rather the net product, the portion of social product which remains after ~
- replacing in kind the n:aterial production factors which have been withdrawn ,
from social wealth. Net product is the mass of useful goods created by i-
aggregate labor which over a certain period is added to social wealth and :
used for nonproductive consumption or is accumulated. In other words, this '
is the ccnsumption fund and the acc~ulation fund in their natural matErial
form. -
4
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
,
, . FOR OFFICTAL USE ONLY
f
- The replacement fund for the material production expenditures replaces not
only the consumption of the previously accumulated reserve of the means of
production. Social production knows a multiplicity of levels in the social
' divi,i.on of labor, the products of which (the raw materials and semi-
Cini ,hed (roocl;:, fuel and energy, transportation and other production serv-
.ice:~, can over a certain period of time repeated'ly enter inta the material
_ expenditure"s of several production element's or levels. From the standpoint
of all society, the processed portion of the product is only an ~nter-
medi.ate ax~d not an end result of production. The portion of aggregate
product which in the seme year undergoes f~.irther processing or is em-
bodied in o~~her products (for example, a transport produ~t) is termed in-
termediate product. If one subtracts from aggregate product the replace-
_ ment of the production stocks existing at the beginning of the year and
which were processed during the given year as well as the intermediate
product, then the remaining part will be the end product.
The concept of end product is close to the concept of net product, but dc~es
' not coincide with it. End product includes all the created means of labar,
inclu3ing accumulation an~ replacement of withdrawn fixed capital, while
net product includes only the means which are accumiilated.
� The indicator of aggrpgate social product contains double counting of the
intermediate product, the amount of which depends upon the social division
of labor and the turnover rate of the means between its units, the sectors
and the enterprises.
The problem of double counting, like the presence of end and net product,
- is caused by the varying periods of the turnover of the different parts of
the product. If producuion is viewed over a rather short term during
which intermediate turnovers are not completed between its elements, then
- the replacement fund covers only tbe expended stocks of previous periods
and there is no double counting. Tn viewing production over a rather long
time during which all the means cf labor existing at the start of a spe-
cific period were consumed and actually replaced, we will est~,blish that
~ only net product is the end result of the production process. Precisely
thes~ were the abstract premises accepted by K. Marx in working out the
_ schemes for the realization ~~.nd reproduction of social product. Marx pro-
ceeded from the assumption that all product and its parts complete one
turnover durir_g a year, an~ all the elements of permanent capital, both
working and fixed, are completely consumed and should be replaced.
For example, let us recall the scheme of simple reproduction:
~~000 cI + 1000 vI + 1000 mI = 6000 PI,
_ 2000 cII + 500 vII + 500 mTI = 3000 PiI.
Here there is no intermediate and end prcduct, but only the replacement
fund and net prr,duct. There is no double counting, as all exchange should
. be carried out in ,just 1 year. ~
5
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
FOR OFFICIAL USE ONLY ~
Let us assume that with the same amount of annual product, it makes two
turnovers in a year:
for the first 6 months 2000 cI + 500 vI + 500 mI = 3000 PI, ~
1000 cII + 250 v~I+ 250 mII = 1500 PII~
for the second 6 months 2000 cI + 5Q0 vI + 50o mI = 300o PI,
1000 cII + 250 vII + 250 mII = 1500 PII.
The product created in subdivision I for the first 6 months is fully con-
sumed in the second 6 months, and has become part of the new product, hence
it can be considered intermediate product.
In the ~iven scheme no d~stinction is drawn between the fixed and working
~ parts of permanent capital. In conditionally equating all permanent capi-
tal to fixed capital, in the first instance (with one turnover) we have a
coincidence of end product with aggregate product (9000); in the second
instance, end product would be 1500 PII + 15~0 PII + 3000 PI = 6000. If all ,
the permanent capital is considered working capital, and this corresponds ~
to the premise accepted in the scheme of the complete c4nstunption and re- '
~
placement of the permanent capital, then the end product in both the first ,
and second instance will be equal to the net procuct (3000).
The net product in either variation of the scheme is the same, 3000 PII.
Tn distinction to the other indicators of the product, i.t reflects the end
result of production regardless of the duration of the turnover, and re-
gardless of the number of turnovers between the subdivisions and within
them. Net product is created above the goods consumed in the production '
process, regardless of when these goods were created, in the past or pres-
ent period.
Certain economists, for example V. Ageyev [15], instead of the term "net ;
product" used the term "newly created product," having in mind the product
created by the necessary and surplus labor, the total of necessary and sur- !
plus product. Such usage emphasizes the value form of net product in which i
it is measured and whi~h can be maximized. But the designated formulation ;
makes a confusion in the concept of newly created value which is the re- '
sult of abstract labor, in reflecting the concept of a product as the re-~ i
sult of specific labor. As is known, the value of the commodity is divided
into the carried over and newly created parts, but there is no such divi-
sion in the product itself. The term "newly created product," in our view, ,
is unsuccessful, since from the viewpoint of the specific physical form of
- the product, all aggregate product is created "anew" in the concrete period.
The dividing of value into newly created and carried over cannot be direct- ~
ly applied to the product. '
we ,.iew net product primarily as a portion of the product in its physical '
form, as a certain nass of consumer values. Within net product, also in a
physical form, ~he necessary and surplus products are formed and the amount
_ 6
- FOR OF~ICIAL USE QNLY ~
- _ ;
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
FOR OFFICIAL USE ONLY
of them at~a given moment is ob,~ectively determined by the needs o,nd capa-
bilities of.production. Net groduct is the material basis for satisfying
~ all nonprodiictive needs, it is a so~rce of consumption and accumulation,
and in this sense, a source of the well being of society and its on-going
developmen~.
The question arises of whether the concepts of aggregate, end and social
product are to be considered as concepts conunon to all the methods of pro-
duction whereby, as K. Marx rightly pointed out, it is impossible to ex-
plain any historically specific stage of production. The answer is both
yes and no. Yes since material production is an universal condition for
the existence of human society. No, for social product and its component
parts with the different methods of production embody qualitatively differ-
ent pro~uction relations. We axe speaking not of a genpral concept of a
product, but rather of net product as an economic category which has its
place in the system of the categories of socialism.
Each method of production poses its ob3ective goal, it formulates a basic
zconomic law, and works out its own forms for the material expression of
this goal. The aim of production in the inferior stages of the historical
development of society was expressed in the natural form of the product.
However, one can scarcely distinguish between aggregate and net products
� in a primitive society. The isolating of the different parts of the prod-
uct occurred upon achieving a higher labor productivity and with the rise
of private ownership. At the same time surplus prod~zct became established,
becoming the aim and motivating force of production in the exploiting for-
mations. Instead of a natural or material form, a value or monetary form
gradually ass~ned predominant significance, and in a capitalist society
this has become an universal form of wealth. Material or other goods in
the designated society represented wealth not in and of itself but only~ to
the degree that they could be sold: "The wealth of societies in which the
capitalist method of produc~ion prevails operates as an enormous accumula-
tion of goods, but the individual commodity is viewed as an elementary form
of this wealth" [l, p ~+3]. '
From the viewpoint of capi+,al, not the groduct itself but rather income is
the result of production. In refuting G. Storch who endeavored to overcome
the confusion in the concepts of value and income by proposing to view
nations.l income not as value but rather as the mass of products satisfying
the demand of a nation, K. Marx wrote: "In the first place, this is ~
false abstraction to view a nation the method of production of which is
based on value which furthermor~ is organized ca~italistically, as an in- ,
tegral organism [GesamtktSrper] working only to satisfy national needs" [3,
paxt 2, p ~+21].
This refutation by Marx is fully applicable to the modern views of bour-
geois theory concerning national income. At present, in bourgeois science
the "Smith dogma" has long been overcome; the indicator of gross product
~ (gross national product or GNP) calculated in ~he statistics of capitalist
countries corresponds to the concept of end product, and the net product
7
' FOR OFFICIAL USE ONLY
~
i
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02/48: CIA-RDP82-00850R000200044414-0
~
FOR OFFICIAL USE ONLY
indicator to the concept of national income in the bourgeois interpreta-
tion of these concepts. �
Net product is interpreted by bourgeois science, on the one hand, as the
total of the end purchases of goods and services not related to current
commercial outlays, and on the other, as the ~otal income from various fac-
tors (usually from capital, land and labor) which is identified with the
value supposedly created by these factors.
An exhaustive view of the various interpretations and indicators for the
bourgeois statistics of national income has been given by the American
- economist P. Studenski [62, pp 245, 263, 318]. The indica+ors ef national
product are actually calculated in both the stage of distribution and use
as well as in the sta~e of production. But Studenski himself considers
the calculation of national income "by factorial value" or the value of the
current "servicPs" of capital and labor to be the most correct and corres-
ponding to t~e "true purpose" of national income.
Thus, in bourgeois statistics the value aspect of th~ product is the ini-
tial and determining one, and not the net product itself. The total of the -
factorial incomes calculated by these statistics in actuality in no ~ray
corresponds either to the net product or the newly i:reatad value. In the
first piace, this total includes significant double counting of income in
the sphere of services and finances. Secondly, individual elements in-
cluded in the net product calculated in bourgeois statistics generally
have nothing in common either with material or spiritual production, for ~
example, the outlays on the support of the state apparatus and the army -
which are included in the product as services provided by the state. Some
income and respectively the "services" included in the calculation are a
simple fiction. For example, the hypothetical rent which is given to own-
ers for the use of private dwellings, and the hypothetical interest given
by statisticians above the actual total of bank interest as an evaluation
of the product of loan capital.
However even now certain theoreticians (as G. 5torch proposed in the pre-
vious century) prefer to ir.terpret na.tional income in ~the capitalist coun-
tries as the total of "utilities," that is goods and services which are the
result of economic activity and serve to satisfy the needs of ~ociety.
These "utilities" include also the "services" of the government, private
- colleges, the churCh and so forth, as well as the "services" of land or
buildings the value of which can be measured by rent. Such an interpreta-
~ +,ion of net product is not only scientifically unsound, but also serves
apologetic purposes, in justifying any activity of the capitalist state -
since this activity supposedly increases the total of "utilities." It
turns out that the support of the state apparatus, the army and the police,
like the growth of the profits of the monopolies, is a contribution to
general prosperity, while the rise in taxes paid by the workers changes
nothing in the prosperity of society, since the state budget also is spent
on "social" needs.
8
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02108: CIA-RDP82-00850R000200040014-0
- ~ FOR OFF]:CIAL USE ONLY
' '1'h~~ f'~law in such an interpretation of net product under capitalism i s th~,t
t,hc ne~d:, of thr workers are contradictory to ttie needs of ca.pital; the
- state rPpresents the interests of the ruling class, and primarily the in-
terests of the monopolies. In a society divided into antagonistic classes,
- in actuality there are no needs of the entire society as a single whole.
Any attempts to interpret net product or the nationa'1 income of the capi-
talist coun~ries as a contribution to satisf"ying the needs of society are
- groundless.
Net product, as an expression of the result of production, is inherent only
to socialism and communism. The needs of society, as a single whole,
_ really occur only on the basis of the direct corrununity of all the people
as an association of workers, that is, with the elimination of private
_ ownership and the establishing of public ownership of the means of produc-
tion. The basic economic law of socialism, in expressing the new essential
relationship of production, consumption and the development of the indi-
vidual, at the same time also determines the means for satisfying social
needs, the production of net product and the form of its expression, pY~ysi-
cal and ma.terial, and into which product it goes directly from the produc-
tion process and is incorporated by society. In this sense net product is -
- a category of directly social or communist production.
In Soviet economic literature the thesis has been repeatedly proposed and
_ established that the basic production relationship of socialism is shaped
by the issue of the directly social product as a consumer value and no~t
_ by the issue of value or any portion of it. A profound analysis and de-
velopment of this thesis can be found in the works of A. K. Pokrytan [50,
PP 64-111; 59~ PA 3-27].
Directly social production and the assimiiation of the product for satis-
fying the needs of society comprise the general essence of the comraunist
- method of production and all its phases. This essence determines the plan-
ned organization of social producti~n, the national control of the aggre- -
~ate labor force and, as the highest aim of society, the full and aTl-
- round development of man himself. The natural and material form in which
the needs for specific goods are measured and satisfied corresponds to
this essence. The production structure of these goods is regulated direct-
ly by society and not through value forms.
- It must be recognized that the common essence of the communist method of
production also characterizes its first phase, socialism, However this
is far from sufficient for defining socialism and elucidating the specif ic
economic categories of it which still to one degree or another are linked
to the presence of commodity and monetary relationships. There are essen-
_ tial differences between socialism and corrm?unism as the inferior and sup-
erior phases of a method of production, and because of these differences
the growth of one into the other is a protracted and complicated process.
In addition to the common coimnunist essence, one must also see the spe-
cific essence of socialism. It is manifested in the commodity production
9
FOR OFFICIAL USE OI3I,Y
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
FOR OFFICIAL USE ONLY
which is ob,jectively inherent to socislism, and in the existence of the
value forms of economic ties along with the directly social fortns. Exten-
sive literature has been devoted to an analysis of the relationship and
dialectical interaction between the two aspects of the economic relation-
stiip; of socir~,lism, that is, planning and production for ttie market, but
the questions of the nature of co~odity production and its place in the
system of production relationships under socialism remain acutely disputed.
Without ~oing into the analysis of the existing concepts, it may be pointed
out that a one-sided approach, either an exaggeration or, on the contrary,
a negation of the fact that under socialism production remains for the
market not only in terms of form but also in essence, is useless. Thus,
if the problem is to provide a congruity of the m~.terial-physical and
value proportions, then a one-sided approach which gives preference to L
one or another side from the start opens the way to voluntarism or the _
permitting of spontaneous control by the market.
In order to determine the relationship of the two designated aspects of a
product, it is essential to elucidate the reasons for the existence of
commodity-monetary relationships and the historic trend of their develop-
ment.
Various opinions have been voiced on the reasons for the existence of com- !
i
modity [market] production under socia,liam. In our view, the explanation _
of commodity production by the presence of the two forms of public owner- I-
ship is unsatisfactory, since the sphere of cottunodity relationships is sig- i
nificantly broader. Commodity relationships are explained., obviously, not ;
by the presence of the two similar forms of ownership, but rather by the i
level of socialization which is characteristic for both forms, and which
is lower in comparison with full communist socialization. It is generally
recognized that under socialism the directly social nature of labor has ~
still not been fully developed. This is apparent in the relative economic
separateness of the primary units of social production, the socialist en- i
terprises and associations. It is possible to argue against the term ~
"separateness" which, in the opinion of certain authors, could be inter- i_
_ preted as the separateness of ownership. However it is not a question of
absolute separateness of the producers as private owners. The socialist ~
state enterprises are not separate owners but are elements of th~ corrQnon C
ownership of all the people. The material separateness of the enterprises
to a certain degree is also characteristic for kolkhoz and cooperative owri-
ership, although this separateness is also not absolute.
There is the opinion that the separateness of the socialist enterprises ~
consists in the partial appropriation af the value created by them, in the _
_ portion allocated according to labor among the members of the given collec-
tive. However, this does not solve the problem. Separateness cannot be
explained by the distribution of the created value or by its appropria-
tion, since a certain separateness also exists in the very process of pro-
duction, and for this reason alone tlie labor expenditures assume a separate
social form, that is, value.
10
FOR OFFICIAL US~' ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
FOR OFFICIAL USE ONLY
The relative economic separateness of the enterp:�ises, in our view, is in-
separably linked to the separateness of the personal appropriation of
social product by the workers and to priva~e ownersha:p under socialism.
The separatehess of personal ownersfiip is a specific trait of ownership
relations under socialism the role of wliich h~,s still not been fully ana-
lyzed from the scientific viewpoint, but which underlies the sepaxateness
of the enterprises, since through the enterprises individual labor is in-
corporated in aggregate social labor, and on beha].f of society the enter-
prises exercise control over labor and distribution by labor. The aggre-
gate labor of each collective is directly social, but at the same time
maintains the traits of socioeconomic heterogeneity inherent to individu~,l
labor, and this requires indirect equalizing ~.nd the reduction of it to
- socially necessary labor in the form of value.
The contradiction between the directly social nature of production and the -
~ indirectly personal appropriation of the product is the basic contradiction
of socialism. TYiis thesis which in various formulations has been proposed _
_ and analyzed in the works of M. S. Kukushkin [35, P 200] and N. D. Kolesov -
~33, p 89], makes it possible to explain the contradictions in the system
of interests under socialism and the contradictions of socialist corrm?odity
production. This is of essential significance also in analyzing net prod-
~ uct.
Net product, as a category of directly social production, expresses the
relations of directly social appropriation, but it can be viewed in this
quality only on a scale of all society. The product of each individual
element in the social division of labor naturally cannot ensure in kind
either the compensation for the means of production consumed in it or the
satisfying of the diverse needs of the given unit. Foi� this reason the
product is appropriated not by each enterprise, association or national
economic sector, but rather is received by society and on a planned basis
is channeled to other production elements. Thus, the needs of each ele-
ment are satisfied from the pro~iuct of the ottier elements of social pro-
duction. This occurs (if one disregards kolkhoz-cooperative ownership)
within the framework of national appropriation or appropriation by all the
people. The amount of the persona.l appropriation of the product by each
worker depends upon his individual labor contribution, and all labor is
the condition for appropriation and not ,just the necessary labor, as well _
as a certain share of surplus labor which is expended within the limits
of the socially normal working day. Consequently, the labor expenditures
and the labor results of each worker collective also should keep within the
confines of the socially necessary expenditures and results. The exchange
of activities which is presupposed by the social division of labor under
the specific conditions of socialism is mediated by the exchange of prod-
ucts as commodities. Precisely in this is the sense of the relative eco-
nomic separateness of the producers, a separateness not as owners but
rather as the cells of social production united by the appropriation of
all the people.
,
lI
FOR OFFICIAL USE ON'LY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
FOR OFFICIAL USE ONLY
To the degree that the socialist product is produced in the form of a com-
modity, the directly social socialist labor has a~istinct dual nature and
is embodied in the form of value. Hence net produ~t as well under social-
ism cannct be viewed solely as a category of directly social production; -
~ it also has a value aspect. ,
Net product under the conditions of coummodity productic;n can be defined as
the portion of product measured by the value which has been newly created
in the production process. It reflects not only the relationships of a
- society of producers as a unified association operating to satisfy their ,
needs, but also as relations between the individuAl cells of this social
production the product of which embodies the value and is measured by it.
While in terms of material content the concept of net product is applicable
only for all social production, in the value form, it is also applicable to
the product of each element (the sector, economic region, the production
association and enterprise) and conditionally as well to the product of
the individual enterprise subdivisions. Newly created value ~an be em- ~
bodied in any material or physical form, and not only in the end product ~
of society, but also as raw materials; not only in newly built pro,jects, ~
but also in incomplete construction, that is, in that form in which produc-
_ tive labor is embodied in the specific production process. The portion of
- the product measured by the newly created value is designated by the term
"net product." But this is not the product itself but only its value equiv- '
alent. !
Let~ us designate the value of the replacement fund, the value of necessary I
product and the value of surplus product by the symbols c, v and m which,
considering their new content, axe widely employed in the political economy
of socialism. ~
j
Corresponding to the net product of society in these designations is the
total product of the second subdivision PII and the accumulated portion of ~
the product of the first subdivision which in terms of amount equals the
difference of vI + mI - cII. Let us designate the latter by m~. Then the '
net product in terms of physical content will be Y= PII +(m~/PI)PI. How- i
_ ever, the material carrier of the value of net product is the product of ~
each individual production element within the amount of the newly created
value in it v+ m. Expressed in relative shares of the product of each sub-
division, net product equals
_ Y _ VII~II P + VI~I ~ , -
PII ~ II pI PI~
From these two equations, the equalities are derived vI + mI - m~ = cII, or
v2 + mI = cII + m~ which are the conditions Por the sale of the product for
expanded reproduction. Consequently, the value ~orm of net product pre-
supposes a sale or the turning of the newly created value into income and
- the turning of income into co~oditi:es, that is, it presupposes a balanc- `
ing of the material and value proportions in the national economy.
12
FOR OFFICIAL USE OTrL`I
~ ~
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
~
FOR OFFICIAL USE ONLY
~c "
Under the conditions of socialism, with the presence of commodity-monetary
_ relation;;hips, net product operates in a transformed form, in the form o~
nat:i annl i ri~ome. Onl,y value operate3 in t:he form of income, and income -
pcrf ~~rm,1 f t~ furir..tion~.1 purpose only in i:he sta~e oP use, when value i u
r~:ernbc~d ir~i iri ptiysicnl elements of net ~~roduct, the,t i:3 :tn the conswnc:ci nrui ~
accumulated ~oods. Here the result of production operates as a result of
the distribution of income and commodity circulation.
Net product under socialist conditions is measured in a monetary form not
only on the~level of the individual enterprise or sector, but also on a
scale of the entire society, since money is a universal measure of labor
and a universal equivalent of the commodities. With the level of socializa-
tion achieved in a socialist society, labor, as is known, maintains the
traits of socioeconor~ic heterogeniety and as a quality of social labor it
cannot be expressed ciirectly in units of working time. For this reason
the indicators of national income assume exceptional importance.
The term "income of a nation" first employed by the English economist
William Petty (1623-1687) has been widely spread in the classic bourgeois ~
political economy and statistics. In the "Capital" of K. Marx it is men-
tioned only in relation to a cr.itique of bourgeois political economy. K.
Marx spoke simply of gross income. In the works of V. I. Lenin, national
income is mentioned in an analysis of the theory of Sismondi, and it is put
in quotes [8, p 53]. Later V. I. Lenin used the term "national income," in
ana.lyzing the materials of bourgeois statistics. In Lenin's own text the
term "people's income"'~ is encountered [4, p 1+03; 6, p 263]. In Soviet eco-
nomic literature and statistics prior to 1948, the term "people's income"
was used [58, p 82], and this subsequently was replaced by the term "na-
. tional income." In actuality income does not have national traits or
national affiliation: the contents of the term asstunes belonging to a
definite state and not a nation. For this reason we feel that the use of
the designated term makes sense only under the conditions of nation states,
while the gross income of multinational states is termed "national" purely _
conditionally, and particul.arly so in the USSR. In terms of +he national
Union republics of the Soviet Union, natio~al income does not indicate any
national relationships for the production and appropriation of the income.
The formation of net product and its value occurs on a scale of all social
reproduction, and each republic is merely an element of the tTSSR national
economy. The term "national income" designates only the gross income of
a country or republic. Considering what has been said, in our view, we
must return to the Leninist terminology, as has been repeatedly proposed
in modern economic literature [18, p 71; 19, p 27; 26, p 2~+; 35, p 78~�
Below we will use the term "narodnyy dokhod."
~[Translator's Note: To avoi.d the unfamiliar term "people's income"
(narodnyy dokhod), the more readily accepted "national income" is employed
in this translation. After this explanatary paragraph the term "national
income" is used throughout, bearing in mind that the author consistently
employs "narodnyy dokhod."]
13
FOR OFFICIAL US~ ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
FOR OFFICI~;L USE ONLY -
In theoretical terms what is national income? Ordinarily by national in-
_ come one understands the value which has been newly created during thE
year. Such a notion is correct but is insufficient, as it does not make
it ~ossible to fully understand the essence of national income and its
role in socialist reproduction. Ve1ue, as is known, is the social.labor `
embodied in commodities. The aim of socialist production is not the ap-
propri~tion o� value, but rather the ever fuller satisfaction of the need, ~
of society and all its members, and the consumer value of goods serves this
purpose.
No matter what the amount of the created value, society could not satisfy '
its diverse needs without producing the essential consumer val~~es. This
speaks of a qualitative discrepancy between the newly created value and the
aims of socialist production. _
Let us assume that the newly created value has been embodied in a certain
range of consumer and production goods corresponding to the needs of socie-
ty. Then the designated range of goods satisfies the given needs regard-
less of what its value is. For example, if an opportunity were provided
to reduce the socially necessary labor expenditures per unit of product by `
one-half, then a socialist society could double the volume of consumption
and accumulation with the former amount of value, or halve the duration of
labor in production, maintaining the former level of satisfying the materi-
al needs, or within a certain proportion produce more product with a lower
value, in reducing working time in so doing. The value embodied in com-
modities does not express the efficiency of socialist production. As a
result of the growth of social labor productivity, the labor-created value
_ does not increase, but rather the value of each unit of corrmiodity is re-
duced in an inverse proportion, and this shows a quantitative discrepancy
of the newly created value to the aims of socialist production.
A measuring of the result of social production by the national income in-
dicators is based upon a calculation of them in comparable prices. And if
the movement of the prices for all commodities precisely followed the
changes in their value, then the national income as calculated in "value"
- prices would not increase as a result of the growth of labor productivity. ~
- The relative stability ot prices in a socialist econo~y gives rise to the ~
appearance that the newly created value grows directly proportionally to '
the quantity of created material goods. But the calculating ~f the indi�- ~
cators of aggregate product and national income in comparable prices is
aimed at excluding the influence of price changes on these supposedly
value indicators. But the indicators calculated in fixed prices at the ~
same time lose their value content and only the ossified monetary form re-
mains as a standard making it possible to uniformly express and total di-
verse products and measure the growth of their physical volume. In actu- _
ality there is neither a~quantitative nor qualitative congruity between
value and consumer value. The important significance of riational income
_ under socialist conditions consists not in the fact that this is an in-
dicator of the newly created value, but rather that it reflects the net _
1~+
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
f ,
FOR OFFICIAL USE ONLY
product of society. The value or more precisely the monetary form of
_ measuring it is the only possible form under socialism. It not only con- _
; siders social labor. Al1 the movement of labor is ob~ectively mediated
by it and it expresses the growth of the prosperity of the people and
sac~i.a1. mafierial wealtYt. For this reason the national income indicators must
not be set in opposition to the physical indicators, in endeavoring to ex-
press "social utility" or the satisfaction of needs in any other units.
Without considering the designated more profound essence of national in-
come, certain autnors have interpreted it only as a value category unsuit-
able for expressing the aim of socialism [22, p 73; 64, p 102]. The ~m-
~ perfection of a monetary evaluation of each individual product and the
shortcomings of price formation do not exclude the fact that the income of
~ society as a whole as well as of the enterprises and public are formed in
! the same prices in which the goods are valued and sold. An improvement in
price formation, in ensuring a more complete and correct coordination of
the labor and physical-material proportions, should ensure the even wider
~ use of the gross income indicators. However this does not mean that with
I the present level of price formation these indicator�s are inapplicable.
Thus, determining national income by newly created value does not reflect
. the entire essence of this concept. The value form conceals its more pro-
found essence which is net product. National income can be defined as the
portion of aggregate value (the newly created value) by whi~h net product
^I is measured, or as the portion of aggregate product which is measurable by
newly created value.
The dua~.ity of national income was cl~arly expressed in the classic defini-
tion of K. Marx: "Gross income is that portion of value and the part of
gross product measured by it [Bruttoprodukts oder Rohprodukts] which re-
mains after subtracting the portion of value or the part measured by it of
all produced product which replaces the permanent c~.pital invested for pro-
duction and consumed in it" [ 3, part 2, p~+09
Naturally, in a capitalist society, the value aspect moves to the forefront,
and net product operates as a value-derived amount which is quantitatively
determinable by the newly created value. Under socialist conditions, when
consumer value moves to the forefront and not tr~e value of the cammodity,
national income must be determined p~oceedin~ from the value of the ne~t
product as a qualitatively determined part of aggregate product.
The indicators employed in statistics for the produced and utilized nation-. ,
al income and the procedure for calculating them correspond +o the Marxist
' definition. These indicators characterize the same ne~ product as a unit;,r
_ of the two aspects of a co~no3ity, and for this reason, being calculated
in the same prices (actual or comparable), they theoretically should be =
equal. In the published statistical data, the designated indicators differ
in the amount of the balance of the ~xternal economic ties and the recovery
of losses in the national economy. This diFference, in our view, is
15
FOR OFFICIAL USE ONL�Y
i ~
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
FOR OFFICIAL USE ONLY
theoretically not ~ustified. National income in fact should be reduced
by the amount of the losses, since from the viewpoint; of the entire na-
tional economy, the product repaying the losses of social wealth can be
equated to compensation for production expenditures; in fact this product
doe~ not ~;o beyond the production sphere as its result. The total of loss-
es consists of the losses of agricultural products in storage, the death
of livestock, from halted construction, and so forth. It is small both
relatively and absolutely.
The balance of foreign economic ties comprise~ the basic portion of the
difference between produced and utilized national income. An excess of
exports over imports undoubtedly represents a pcrtion of the net product
of a nation not only in terms of value but also in physical and material -
forms. In its economic essence, this is equivalent to acclunulation (the
difference of the granted foreign credits and the received repayment of
Soviet credits) or cons~ption overseas (for sxample, deliveries as gratis
aid to other nations). However, if the consumption of foreign tourists,
state institutions or prirate firms in aur country exceeds Soviet consump- .
tion abroad, then in this portion the consumption fund of the Soviet union
can be somewhat overstated and the accLUnulation fund understated. In such
an instance the incomplete amount of the real accumulation abroad is re-
_ flected in the balance of foreign economic ties. The corresponding por- ,
tion of net product must be equated to exports, and not considered as con-
sumed inside the country.
The produced national income of the USSR exceeded the income utilized in
the national economy by 3�0 billion rubles in 1965, by 4.~+ billion in 1970,
and 0.4 billion in 1975 (Table 1).
Table 1
_ Grcwth of Produced and Utilized National Income of the USSR,
billion rubles j
I7noxseeAettx~q IlapoANblp ,�oxoA NcnoabaoeaxHS:B HapOAIIWR i ~
2 3 noxo~ i
I'oA B 4e!+ax ~ e Renax Po=T (e conocraeN-
1 cooraer� a uexax Pocr e npo4exrax K coo~eer- ~ af~ix Rettax) e npo-
crayxutxx 1905 r. - cTeyK utxx _ 4eurax K
ner 19G'1 (1965 I1970 ~eT 19u0 II965 I1970 I
I
1960 I 145,0 141,2 lOC I 192,8 100
1Q65 193.5 193,5 137 100 ~ t90.5 132 100 ~
1970 289,9 280,6 199 l95 100 280,5 186 141 100
1975 362,8 369,6 262 I9i 13? I 362,4 239 lE2 126
- Sources: [44, p 533, 535; ~+5, pp ~+9, 51, 565, 566].
_ Key: 1--Year; 2--Produced national income; 3--Used national income; I
4--In prices of corresponding years; S--In 1965 prices; 6--Growth
in percent over; 7--Growth (in compaxable prices) in percent of.
16
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
~
= FOR OFFICIAL USE ONLY
~
The correcting of the indicators for produced national income by the
_ amount of losses in production and the including of the foreign investment
balance in the utilizable national income would equalize these indicators.
Aft2r the correcting they woiald express the net product of the nation in ~
actual prices. `
One must note the discrepancy between the produced and utilized national
income in comparable prices. The dynamics of these indicato.rs have dif-
fered by 4=5 percen~ over each five-year plan. The growth rate of produced
~ national income over ~he last 10 yeaxs has exceeded the growth rate of .
utilized national income by 9 percent, and over i5 years by 23 percent.
Here the pr~portional amount of the balaiice of foreign economic ties has
become insignificant, and cannot have a substantial impact on the national
income indicators. The discrepancy in the dynamics of these indicators re-
quires special explanation.
As is seen from Table l, since 1965, produced national income in actual
prices has increased by a]inost the same amount as ir. comparable prices.
At the same time, utilized income in actual prices rose by 171.9 billion
rubles, while in 1965 prices, its increase would have been figured at 156.2
billion rubles. The difference of 15.7 billion rubles is 9 percent of the
~ actual increase. There was a rise of 1+.5 percent in the average prices of
~ the entire aggregate of goods comprising net product. The fact that the
change in prices was not reflected in a corresponding increase in the pro-
duced national income is ordinatily explained by the difference in the
structure of one or the other indicator [~+5, p 779; ~+9, p 86]. -
_ As is known, over tY~e designated period wholesale prices were increased for
many means for production, as well as the state purchasing prices for agri-
- cultural product. With a fixed share of accumulation, this should have
had a uniform influence on the indicators of produced and utilized national
income. The change in the shar�e of accumulation was not so significant
that its evaluation could have substantially altere~ the amount of national
income as a whole. 2hus, during 1972 consumer goods (the product of the
, second subdivision) were 83.5 percznt of the utilized national income, and
means of production were 16.5 percent. The share of the latter, in compar-
ison with 1966, declined by 3.1 percent. In terms of the consumption fund,
the price change could have significantly influenced the evaluation of the
agricultural product which was consumed in kind. But the basic portion of
the individual consamption fund was made up of goods acquired in state and
cooperative +rade. The over.all state retail price index from 1965 through
1975 did not change.
The growth of retail commodi+y turnover in comparable prices also reflects
the growth of the ghysical volume ~f constmipti:on and the change in its
structure. The appearance of new co~nodities, like the replacing of old
goods with more modern and expensive ones, is not reflected in the retail
price indexes. Here the consumption fund in monetary terms grows more
' rapidly than the physical volume. A change in assortment should also
raise the evaluation of the produced national income, and for this reason
17 -
FOR OFFICIAi~ USE UNT..Y
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
FOR OFFICIAL USE ONLY
it does not explain the designated discr.epancy in the indicators. The
reasons for this discrepancy lie in the very concept of national income .
r~nd in the opposition of its material and value aspects. The procedure
for calculat:ing produced national income in comparable prices should be
coristructeci considering this.
'I'he indicator of produced national income, in contrast to utilized income, ~
characterizes not the material content oY net product in the given price
scale, but rather its value equivalent, that is, the total of the net
product of the sectors. The produced national income in comparable prices -
_ is calculated as the difference between the gross product of the ma,jor
sectors and the material expenditures on production which are evaluated in
the same prices. But this evaluation, particularly as concerns material
expenditures, is not related to the evaluation of net product, and can dis-
tort an ob,jective equivalence of national income to net product. -
In industry gross product at each enterprise is accounted for both in cur- ~
rent and in comparable prices. In agriculture, gross product is ,judged on ~
the basis of t}:Q balances for the individual product types. In the remain-
in~ sector the estimate of produc+ in comparable pri:.es is conditi~nal. j
E;ren less accurate is the revaluation of material expenditures, since, in
the first place, there ~s no direct accounting for current exper.ilitures in
terms of the types of raw products and materials, and, seconclly, material '
expenditures include fixed capital amortiza~ion and this depends both upon
_ its evaluation and upon the amortization rate. The fixed capital received ~
in the period between the revaluation oz the fixed capital is accounted for
at its initial value, so that over time the expenditures on amortization ;
become, strictly speaking, incamparable. In addition, in the aggregate
calculations the material expend~tures would include the unamortized por- ;
tion of the value of liquidated fixed capital.
Due to the impossibility of direct calculation, material expenditures are
recalculated in comparable prices by dividing by the indexes calculated on '
a centralized basis at the USSR TsSU for the production sectors on the
basis of price indexes for individual materials. C~earl;~ this recalcula- '
tion cannot provide complete comparability of the na.tional income indi- i
cators. i
~
In the national income calculations thpre are also other conditional fac-
tors, for example, i.n t,he delimitation of freight and passenger transport,
in the dividing of co~nunications into those serving production and those ~
serving the public, as well as in determining material expenditures as part
of the comprehensive expeiiditure items, and so forth. The li.sted condi-
tional factors can lead to an overstated evaluation of national income in
~ the production stage. For ad~usting ~he calculations cr~rried out for the ~
production stage, it would be possible to calculate national income in the
stages of distribution and use [26, p 65; 57, p lI; 70, p~+8].
As B. P. Plyshevskiy [~+9, p 88], for matcfiing the dynaTnic series for pro~ '
duced and utilized national income, it would be essential to calculate
18
FOR OFFICIAL USE ONLY '
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
FOR OFFICIAL USE ONLY
growth indexes for consumption and accumulation according to the structure
of the base'~period, and make the corresponding correction in the amount
of used na~ional income.
In having sufficient statistical information, of course it would be pos-
sible to isolate the grovrth of the production volume iii a pure form, in
calculating~indexes for the permanent composition, as this would exclude
the influenCe'of structural changes. However such an exclusion would ~
scarcely be ,justified, since the growth oi the actual product volume is
intertwined with its qualitative cha.:~ges. The proportions of social prod-
uct become particularly dynamic un.der the conditions of the scientific and
technical revolution. The clianges in net product caused by structural
shifts become a very iznportant ~haracteristic of economic deve.lop�nent.
They cannot simply be disregarded as factors which distort the growth of
the physical volume of net product. There is no ,justification for con-
. sidering the indexes for the growth of u+ilized national income in compar-
able prices as understated, if they reflect a real change in the volume and
stru~ture of personal and social consumption and tr~e accumulation of social
wealth.
The above-given proposal of B. P. Plyshevskiy is related to the fact that
, he considers produced nationaZ income as an indicator of net product. But
if as net product one uses not the produced but precisely the utilized
national income, then the proposed correction is inapplicable. In our
view, it must be raade into the amount of produced national income, in
order to reflect in it the re~.l growth of the pY~yaical volume of net
product in the structure of the report period. This is essential to coor-
dinate the indic~,tors of produced national income with the real income of
the populatinn ar.d rsal accumulation in the unified and balanced system of
indicators.
� The theoretical elucidatio~i of the essence of net product and its dual ex-
pression in the physical-material and monetary forms is the basis for anal-
yzing the regional aspect of reproduction and a correct understanding of
- the r.iational i:~com.e in the Union socialist republics.
2. Particular Features of the Net Product of a Union Republic
The essence of net product, as the aggregate of consumed and accumulated
material goods created in the production process, is fully manifested only
in the system of social reproduction taken as a whole, on a nationwide
scale. T.he link between production and consumption is mediated by exchange
(under socialist conditions, by the sale of the products). In viewing the
~ system of social reproduction as a whole, ~re Propose that all aspects of
exchange are carried out within the s~stem itself, so that the quantitative
conformity of net product in physical and value terms cannot be disrupted.
It is assumed that foreign exchange (~'oreign trade) is equivalent, since
_ the operations related to the importing and exporting of goods partially
overlap, and only the ne~ export of goods oper~.tes as the net product of
. the nation.
19
FOR OFFICIAL LTSE ONLY
�
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
FOR OFFICIAL USE ONLY
In examinin~ the individual parts of the system, that is, the economic
regions of the nation of the Union republics interrelated by the territor-
ial division o~ labor, but united by the co~non social appropriation of
th~~ T~roduct �.nd functi oning for the achieving of the corrunon goals of the
;;y:;tem, tt~e I~rerequisite, of :~elf-contair?ed internal exchange fall away. _
The link between production, on the on~ hand, and accumulation and con-
sumption, on the other, is also carried out through the medium of exchange.
But this excYiarige is to a greater or lesser degree external in relation to
the given subsystem. At the sa.me time, the territorial unit exists as an
economic region precisely because the relationships between production, ~
consumption and acc~;mulation are carried out by the medium of domestic ex-
change within the given territory. The ratio of internal and external ex- -
change depends upon the relative size of the region and the territorial
division of labor, and the latter, in turn, depends upon the availability
- of natural resources and the level of special production. But internal
excha.nge should remain predominant in the economic turnover of the region. .
To the degree to which the economic ties are self-contained within the re- ~
gion, the net product of a region maintains its sense as the end result ;
of production, upon which depend the satisfying of its social needs and ~
the growth of social wealth. !
The relationship between production an3 consumption within a region is
expressed in the existence of particular territorial (regional) economic ~
interests. National interests under socialist conditions, with the elim-
ination of the inequality of nations, lose their economic content, since :
the economic interests of the socialist nations of the USSR merge with the
interests of all the people. The existence of distinct national interests ~
is related solely to the survival of national particular features in the '
development of culture and the other spY~eres of the superstructure. For ~
realizing these national interests, of essential significance is the real-
ization of territorial interests which at the same time act as national
ones. ~
The full accounting and reconciling of territorial, national and the common
interests of all the people are ensured by the state system of the Soviet ~
Union, where each national Union as well as autonomous republic has a rela- I
tively independent economy which to a significant degree is managed by the ;
republic economic bodies, and are relatively independent elements in the i
system of planning, co~noditY circulation and finances. The relative in- ,
dependence of social production in the Union republics is also manifested
in tne fact that the net product and newly c.reated value asstune the form ,
of nt~tional income.
Prior to 1957, in the USSR the national income of the Union republics was
not calculated. In keeping with the strengthening of the economy, the de-
velopment of commodity circulation, and the growth of the prosperity of
the people, the role of the republic bodies grew in the mazagement of the
national economy and in ensuring tfie territorial proportions. In 1958,
after the reorganization of the management of industry and construction
along territorial lines, the need to measure the results o~ production
20
FOR OFFICIAL TJS~ ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
. FOR OFFICIAL USE ONLY
y, :
and to balance the development c~ the republic economies grew stronger,
and at the same time the informa~tional support was improved. Since 1958,
all the Unibn republics have calculated aggregate social product and na-
tional income, and since 1960, data have also been calculated ~n the use
- of national income fcr consumption and accumulation. Since the ^alcula-
tions of the republic statistical bodies are carried out accordir.~g to a
standard procedure and at the USSR TsSU are corrected and supplemented by
individual~'elements of product and income calculated on a centralized
level, the{total of the national income of all the republics corresponds
to the national income of the country as a whole.
The procedure for calculating the nationsl income of the Union republics
has been widely examined in the literature [17, 20, 37, 39, 51, 53, 57,
70]. It is calculated both in the actual prices of each year as well as
in comparable prices, as the total net product of the na~ional economic
sectors. The net product of the sectors does not show the product volume
as such; this is calculated in comparable prices anly for measuring the
growth dynamics with a comparable evaluation of material expenditures of
the given sector. The growth of the actual product volume is measured by
the indicator of the gross product of the sector and not by net product.
~ The national income of Latvia and its sectorial structure are shown in ,
Table 2.
Table 2
- Gross and Net Product of the Sectors of the Latvian Economy,
- million rublesl
(in rices of corres ondin ears)
1965 1975 ~+et product
of 1975 in
Sectors q of 1965
a b c a b c in compar-
able prices
Industry 3,900 1,~+98 58.1 7,45a 2,593 5~+�6 230
Construction 400 169 5. a97- ~+29 9. 0 214
Agriculture 1,100 642 22.5 1,766 813 17.1 71
Transportation and com- 436
~ r~unications 200 104 3. 9 7~+4 260 5� 5 248
Trade and etc. 300 280 10.1 657 13.8 207
Total 5,900 2,693 lo0 11,29 1+,7~2 lo0 192
1Sources: [36, pp 44-1~5; 69, PP 36-37~.
Key: a--Gross product; b--Net product; c--Proportional amount of
sector in economy,
I ~ ~
~ 21
FOR OFFICIAL USE ~AP Y
~I
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-00850R040240040014-0
FOR OFFICIAL USE ONLY
The sectorial structure of the production of ne~ product in Latvia differs
somewhat from its structure for the nation as a whole: the proportional
amount of industry is 1.9 percent higher, while the proportional amount of
construction, transportation and co~unications is 3.2 percent lower. Th~
share of agriculture has gradually been declining and is approaching the
USSR average [ 1+5, p 56~
In compaxing the growth of net product in comparablP prices and in the
prices of corresponding ;~ears, we will see that in all the sectors, with
the exception of industry, the growth in actual prices was higher. In in-
dustry, net product in comparable prices increased significantly more rapid-
- ly. In the given instance this is explained not by the decline in the
wholesale prices of the industry, but rat?~er by the amount of the ~urnover '
tax which as included in the net product of industry. This amount differs
significantly in the ac~ual and comparable prices, and is due both to the _
revision of the turnover tax rates as well as to the payments from the
state budget which compensate for the difference between the purchasing and
calculated prices for agricultural raw materials. Payments from the state
budget to adjust the difference in prices in calculating the income of the ,
- republic are excluded ~rom the total of the turnover tax. Over the desig-
- nated period these payments grew significantly, and correspondingoy the ~
share of the turnover tax in the income of Latvia declined relatively. ~
The net nroduct of republic agriculture in comparable prices d~clined by !
29 percer,t, while in actual prices it rose by 27 perce:~t. Thi.s gap also ~
mus't not L~~ explained solely by prices. Gross agricultural product in ac- ~
- tual prices increased by 61 percent, and in comparable prices by 16 per-
cent, and the product of the nationalized sector in terms of the physical
volume rose by 35 percent, while the product of the private farms declined ;
~~3, p 171]. Obviously, this shift in the production structure also caused i-
a~eneral decline.in net product due to the particular features of evaluat- I
- ing the product of the private farms. ~
The indicators for the income of the Union republics are widely used in ~
economic calculations for analyzing the structure and the dynamics of the ~
grpwth of material production, for establishing the plans for the develop-
ment of production and the prosperity of the people, and for assessing '
production efficiency. For comparing the economic development of the I
Union republics, the indicators of per capita income and income per average
annual employee (including workers, white collar personnel and kolkhoz mem-
bers) can be employed. The national or republic income per employee in
material production is an indicator for the productivity of social labor.
This is one of the basic indicators of production efficiency. It reflects
both the savings of live and embodied labor as well as the changes in the
production structure related to this economy.
Let us examine these indicators for the Baltic republics in comparison
with the average Union level (Table 3).
22
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02108: CIA-RDP82-00850R000200040014-0
FOR OFFICIAL USE ONLY
_ ~
q ~
^ N O f+
e w y c: ~ N n ~ v~ tn � ~ ~ u ~ri ~
m 'a~i~~� c'~ ~d~ ~`....+c~a~ ~ N I~ N O c~d ~
N t-, a~ O1 ~'1 N N~~ a C7
~ s~`!~:~ uyi a t~~ ~:~w ^'0�~ l~ ~ O N~ ~
i a~d
H = a = -4- -f- -f- t~-+ 1-i- t N~--I P+ ~d a~ P+ ~
4 k ~o o a o ~ c~ ~
~-1 ~ F = ~ L ~ ~ -
~ cao u a
U Q o~ o ~ ~ pointed out that a,,-nong the consumer goods there is always a certain quan-
tity of services w}~ich increase the overall total of consumption. Since
then the volume of services consumed by the population has increased many
fold and their importance has risen. With the present-day demands of pro-
duction and society on man and on the development of his personality, the
satisfying of vital needs in no way is restricted to material consiunption.
A number of services in ~he system of education, public health, the hous-
ing and utility system and transportation have become absolutely essential
elements in the reproduction of the labor force. The demands satisfied by
va.rious sF;rvices, in keeping with the growth of the prosperity of the
people, are holding an ever larger place in the system of social demands.
Life has required a broadening of the deeply-r~oted notions of consiunption
' and a corresponding broadening of the real income indicators.
82 -
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
~ FOR OFFICIAL USE ONLY
An indicator of the total volume o~ the consumption of material goods and
= services is used in the planning procedures for the standard of living oP
the population. In the literature, a more suitable term has been proposed,
"expanded cbnsumption" [55, pp 95--96~� The authors, relying on ,joint in-
ternational research involv~ing scientists Prom Hungary, the GDR, Italy,
Poland, France and Czechoslovakia, have linked the use of this indicator
with a broadening of the concept of national income. The article by V.
N. Cherkovets proposes using the volume of expanded consiunption as an in-
dicator for the material expression of the goal of socialist production
providing a quantitative definition for the basic economic law of social-
ism [66, pp 8-11].
Naturally, the growing consumption of services should be reflected in the
real income of the population. The present-day indicator of real income is
limited to the consumption of material goods and is viewed as a part of
national income. This notion has been established and defended by V. F.
Mayyer in arguing against attempts to include services in the concept of
- real income as this supposedly would mean a concession to vulgar political
econoir~y.
In our view, the expanded volume of consumption can be used in the calcu-
lation and analysis of real income even now, without broadening the con-
cepts of material production, net product and national income. The net
product of material production has always been and will be the material
base for spiritual production and the production of services. The effi-
ciency of labor in material production determines the limits of the ex-
pansion and functioning of the service sphere. But it is essential to
bear in mind the duality of net product and its value form. Net product
in the form of material consumer goods embodying the basic portion of
social labor is also used by the workers in nonmaterial production. At
the same time, another part of social labor in the form of services is
used to satisfy the needs of the workers in the material production sphere.
- Regardless of whether these services are paid for by each consumer or by
society as a whole, a portion of the value of social net product is used
to support the service sphere. This value does not disappear without a
trace, but rather is returned to the population in the form of services.
Hence the consumption fund of net product, like va1Lt~, is embodied both
in material goods and in services, and this together camprises the value
of the necessary fund of ineans of life for the product.'.on workers. At
the same time, the consLUnption fund of net product, as an aggregate of
material goo.is, is utilized not only by the workers of m~,terial produc-
_ tion, but also by the entire pop~ilation. If only material i3oods are con-
sidered real income, then this i~ldicator should be calculated not on a
per capita basis t~ut rather in terms of the workers of material production
who create the physical basis of the very fund of the means of life. Such
an indicator would describe necessary product from the viewpoint of its
production. But if the real income of the entire population is calculated,
_ then it is essential to use the concept of an expanded voltune of consump-
tion. Such an indicator ~or real income would characterize the necessary
product from the viewpoint of consumption, and would respectively reflect
83
FOR C'F'FICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
FOR OFFICIAL USE ONLY
material goods and services in the co~iposition o~ the fund of the means
of life.
The::c are certain problems related to personal consumption. The material
expenditures of the scientific institutior_s, the financial-credit system
and the state administration comprise a separate group in the classifica-
tion of the consumption fund.
Common to the designated group of expenditures is merely the fact that thE~~
axe related to the nonproduction sphere, but, in contrast to the consump-
tion fund, axe aimed at satisfying the needs of all society directly. All
these expenditures differ fundamentally in terms of their purpose, the
- ~mpact on the production process and the development trends. These would
include those expenditures which cannot indisputably be termed nonproduc-
tive, for exa.mple, the expenditures on science.
In the data published in comparable prices on the use of national income by '
functional purpose [45, p 566], a different classification is used with the
allocations for science and expenditures on defense being put into separ-
ate groups, but the expenditures on administration are shown along with
the public consumption funds.
Under the conditions of the on-going scientific and technical revolution,
- special attention must be paid to the expenditures on science. The role ,
of science and its place in the system of social production ar.e changing, ~
~nd .~cience is becoming a direct productive force. Attention should be
pai.d to the proposals voiced in the literatuz�e to broaden the notion of
material production, including in this sphere as well the scientific re-
- search institutions and organizations directly related to production [49,
p 82]. This problem is becoming particularly urgent in line with the cre-
ation with the scientific-production associations and the introduction of
the elements of economic accountability at the industrial associations.
In the opinion of B. N. Plyshevskiy, the possibility of direct~~r transfer-
. ould serve as the cri-
rin~ expenditures to the cost of material products c
terion for delimiting productive and nonproductive activities in the scien-
tific sphere. With such a solution to the problem, the cost of the product
from the corresponding sectors would not change, but the cost nf the net ,
~ product would have to be reduced by the amount of the material expenditures ;
of the scientific organizations. Such a proposal, in our view, is incon- ;
sistent. If scientific activities are recognized as productive, then
their product must also be equated to a material product. This product,
that is, the developed and experimentally tested new articles, new produc-
tion methods and other innovations embodied in scientific reports, in ,
technical specifications, calculations, bl.ueprints, and so forth, is no
less real and material than, for example, books, recordings or films the
creation of which is included in the material production sphere.
The incorporation of "applied" scientific works within the production
sphere would increase the aggregate product in the amount of the actual
84
FOR OFFICIAL USE ONLY
~
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
FOR OFFICIAL USE ONLY
~~v~.:lur~t.ion of the ccientific product ~.nd would require thc~ calculatin~; o�
the net product of the scientific sphere (ininus the mr~.teri~ll expenditu.res).
l~urthermore, in calculating the net. producr of t}'ie pradizction spheres in
which the results of scientific research a1�e utilized, the corresponding
portion of the evaluation of the scientifi~~ product would have to be classi- _
fied in the material expenditures, thereby reducing the net product of
productic~n per se. The increase in the total amount of net product in the
national economy as a whole would depend upon the effectiveness of the sci-
entific developments and upon the scale of their introduction.
All. the expenditures of the scientific research organizations ca.nnot and
should not immediately be considered as part of current expenditures, as
B. N. Plyshevskiy has proposed. In our opinion they should be equated to
the expenditures of future periods and accounted for in the acclunulation
fund. In this regard, complicated problems arise in the area of accounting,
writing off and distributing the expenditures on scientific research, but
these, however, must not be considered insoluble. For working them out
it is essential first of all to improve the accounting of expenditures on
science and the introduction of its results. These expenditures shou7.d be
more fully shown in the statistics, in particular in terms of the scien-
tific sectors, the elements of expenditures, and the financing sources.
- For the humanities, where the resear�ch results are not directly introduced
into production, the expenditures should be considered in the correspond- _
ing sectors of sociocultural expenses, that is, education, culture and pub-
lic health. Only the expenditures on the social sciences should be ac-
counted for with the expen~iitures on the state administration.
In tYie system of socialist relationsh~ips, a special place is held by the
�in~.ncial and credit institutions such as the Gosbank, Stroybat:k.and USSR
Gosstrakh [Main Administrat_ion of State Insurance], which carry cut the
economic organizational functions of the state. However the desi~;nated
institutions cannot be considered as part of the superstructure. Finan-
cial relations are a component part of the system of socialist production
relations. The movement of financial resources and monetary circulation,
in acting as the intermediates for production and the distribution of
goods, comprise a necessary part of socialist social production, and re-
quire definite expenditures of socially necessary labor. The separating
of financial activities from production directly, and the isolating of
them in a separate sphere does not change the basic, reproduction funetion
- of finances. In the same manner that the financial personnel of each
. sacialist enterprise is a portion of the aggregate worker and is consider-
. ed as among the production personnel, on a scale of the entire society,
the financial institutions should also be considered in the production
sphere. They partially serve both the population as well as the purely
~ political bodies of the state, however their basic purpose comes down
to the serving of production. The activities of the financial bodies
~ under socialism are productive to no less degree than the activities o.f
the sectors of commodity circulation which out of the considerations of
~ the predominance of production functions are considered completely in the
85
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
FOR OFFICIAL USE ONLY
production sphere. It would also be logical to consider the financial in-
stitutions as part of production.
`['}ie ":~ervice:," of the financial instit~it~ians cannot re equated to n m~,-
~:eri~.l ~ro~3lzcf. r~.n~i th~� r~.mount of nati~n~.l income inerc~~.ser3 corre,p~ndin~*-
ly, is done in bour~eois theory and statistics. Financi~.l ~,ctivities
increase neither the ~ross nor the net product. In recognizing the par-
ticipation of these activities in social production, we should recognize ~
their embodiment in that volume of product from material production which
is produced in a specific period. For fin~.nces, in our view, it is pos-
sible to apply the proposal made by B. N. Plyshevskiy about the scientific
institutions, that is, the net product is accounted for in terms of the
sectors of material production, but the expenditures of the financial
sphere are included in national economic product costs. In this instance '
_ the material expenditures of the financial institutions would additional-
ly be excluded from the volume of gross product, that is, the net product
would be somewr.at reduced. Correspondingly, the consumption fund would
be reduced by the same amount. ~
~
In supporting the broader interpretation proposed by certain authors for
labor productivity under socialism [23, pp 6-10 and elsewhere], we assume
th~.t the economic administrative appaxatus should also Ue included in the
p1�oduction sphere. The planning of the national economy, the collection
a.nd processin{; of information, and control and opera:ional re~ulation ~,re
mana~;ement functions without which social production di~Pctly could not be
carried out. Hence, the necessary management expenditures in essence are ;
_ also a portion of the socially necessary production outlays, and are not
purely unproductive expenditures which society should simply cover out of
the production results. Expenditures on productior, management should in-
clude the outlays of such bodies as the Gosplan and the TsSU, the state
committees for material-technical supply and construction, the sectorial
ministries and departments, as well as the corresponding middle-management ~
- bodies. The excluding of the material expenditures of this portion of the '
state bodies in calculating net product would also somewhat reduce the
total of national income, and respectively, the constunption fund.
According to the current accounting methods, expenditures on state admin-
istration include, in our opinion incorrectly, the expenditures of the road
system, that is: the maintenance, current and medium repairs on roads
and bridges; a significant amount of amortization is added to the current
material expenditures. In Latvia, the expenditures and amortization of
the road system comprise 88 percent of all material expenditures on admin- -
istration. In actuality, the listed expenditures comprise directly the
expenditures of the national economy itself and not the a~iministration (in
terms their purpose, these are a portion of the expenditures of motor
transport). Incidentally, in labor statistics the employ.ees o.f the road
system are accounted for in the transport sector. The including of the
material expenditures of the read system as part of the management and
administrative expenses has come, obviously, from the obsolete classifica-
tion of the expenditures of the state budget, and is, in our view, an
86
FOR OFFICIAL USE ONLX
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
FOR OFFICIAL USE ONLY '
anacronysm which must be eliminated. The material expenditures of the road
system should be excluded from both the state consumption #'und and from
the gross product of transportation, and this would correspondingly reduce
the amount of net product. The proposed changes would also bring the eval-
uation of net product and national ir.come closer to the real amount.
The consumption fund of the state should account only for those expendi-
tures of the state apparatus which are related to the elements of the super-
^tructure of a society, that is, political and legal functions, the main-
taining of public order, and defense.
At present, the problems of improving ti,e classification of the state bud-
get are being discussed, and a new scheme for accounting for budget income
and expenditures is being prepared. This should provide complete coordina-
tion with the aggregate national economic financial plan and the national
economic balance. At the same time it is esser~tial to alter the classifica-
tion of consumption in the national economic balance in order to provide
a complete unity of the system of balances which reflect the creation and _
movement of the value of net product from all social production, and at the
same time, the net product of the Union republics.
87
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
FOR OFFICIAL USE ONLY
CONCLUSJ:ON
The analysis of net product as a category of social production directly and
as a part of aggre~ate social product which under socialist conditions as-
sumes a commodi~y form and is measured by value, shows the unity and in-
- ternal contradictoriness of the physical content of net product and its
value form, national income. The balancing of these twc aspects of net ~
product under soc~alism is not achieved automatically and cannot be turned
over to spontaneous .regulation by a market mechanism. Their balancing
should be permanent and achieved by conscious regulation of the national
- economic proportions. This applies fully to both the net product and the
national income of the Union socialist republics. The regulation of the ;
economic relationships of tn~ Union republics, the placement of the pro-
ductive forces and the evening out of differences in their economic de-
velopment level should ensure a full reconciliation of national and te:-
ritorial economic interests. The system of national economic accountin~;
~houl~l serve these tasks.
The described method of aggregate national economic accounting which em-
ploys a system of accounts and the principle of clouble entry of an opera-
tion would provide a more profound analysis of economic growth, in con- ~
tributing to the soundness and complete coordination of the aggregate
national economic plans and balanc;::s. This method can be employed for
further improving the natiorial economic balance of the Union republics in
using it in close unity with the intersectorial balances.
The unified national economic system of accounting and reporting is one of
the most important advant~ges of socialism, and thi~ should be used for
the good of the Soviet people under the conditions of developed socialism.
- The 2kth CPSU Congress posed a task of historical importance, that is, to
organically combine the achievements of the scientific and technical revo-
luti.on with the advan+ages of the socialist econo:~ic system. In terms of
national economic r~,ccounting and plani;ing, the scientific and technical
revolution is manif�~sted in a dual manner. On the one hand, the present-
day conditions requir�e the plan development of science and the accelerated
introduction of its achievements into production. On the other, sci.en-
tific and technical progress is also being :introduced into the ver,y sphere
of ~ccountin~; and management, making profour:d qualitative changes in the
mar~agement system on the basis of modern electronic computers. The
88
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
FOR OFFICIAL USE ONLY
iacreased technical capabilities and the greater demands of ~~oc:iety on
plan elaboration determine the direction for the development of the auto-
mated planning and ma.nagement sxstems, and these are already being cre-
ated. The national economic balance of each Union republic comprises a
subsystem in the unified and integrated system of the USSR national eco-
nomic balance.
~ .
- 8Q
FOR OFFICIAL USE ONLY
~
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
FOR OFFICIAL USE ONLY
BIBLIOGRAPHY
1. Maxx ~ K. ~ "Ca.pital Vol 1 ~ Maz'x ~ K. , Engels, F. ~ ~~So~h." [WoY'ks ~ ~ 2d
_ ed., Vol 23, 907 pp�
2. Max'x ~ K. ,"Capital," VOl 2~ Max'x ~ K. , Engels, F. ~"So~h.~' Vol 2~4, 648 pp.
3� Maxx ~ K. ~"Capital Vol 3, Marx, K. ~ ETlgels ~ F. ~"SoCh. Vol 25 ~ pex't ~
1~ 5~+5 PP~ P~ 2~ 51~ Pp� ~
4. Lenin, V. I., "Imperialism as the Higher Stage of Capitalism," "Poln. ~
Sobr. Soch."(Complete Collected Works], 5th ed., Vol 27, Chapter 8"The
Parasitism and Rottenness of Capitalism," pp 396-406.
5� Lenin, V. I.,`''Or.. t?~~ Characteristics of Economic Romanti:.i'sm.� Sismondi
and Our Compatriot Sismandists," "Poln. Sobr. Soch.," Vol 2, pp 119-262.
6. Lenin, V. I., "On the Issue of the State Schedule," "Poln. Sob r. Soch.,"
Vol 6, pp 257-263.
7. Lenin, V. I., "On the Issue of the So-Called Question of Maxkets," "Poln.
Sobr. Soch.," Vol 1, pp 62-122.
8. Lenin, V. I., "The Development of Capitalism in Russia," "Poln. Sobr. i
Soch.," Vol 3, Chapter 1"Theoretical Errors of the Populist Economists," ~
pp 21-60.
9. Brezhnev, L. I., "Report of the CPSU Central Committee and the Next Tasks ~
of tY:e Party in the Area of Domestic and Foreign Policy," in the book:
"P4aterialy XXV S"yezda KPSS" [Materials of the 25th CPSU Congress],
Moscow, Politizdat, 1976, pp 3-8~.
10. ?3rezhnev, L. I., "Accountability Report of the CPSU Central Committee to
the 25th CPSU Congress," in the book: "Materialy XXIV S"yezda KPSS"
[Materials of the 24th CPSU Con~ress], Moscow, Politizdat, 1971, pp 3-106.
1.1. Kosygin, A. N., "Directives of the 24th CPSU Congress on the Five-Year
Plan for the Development of the USSR National Economy in 1971-1975,~~
90
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000200044414-4
FOR OFFICIAL USE ONLY
- : . j, .
in the book: "Materialy XXIV S"yezda KPSS," pp 125-187.
12. Kosygin;''A. N., "Basic Directions inthe Development of the Soviet
NationaY Fconoa~y for 1976-1980," in the book: "Materialy XXV S"yezda
KPSS,~~ pp. 109-155.
13. "Basic Directions in the Development of the Soviet National Econo~yy
in 1976-1980," in the book: "Materialy xJ~V S"yezda KPSS," pp 159-238.
1~+. Aganbegyan, A< G., Granberg, A. G., "Ekonomiko-Matematicheskiy Analiz
Mezhotraslevogo Balansa SSSR" [Mathematical Economics Analysis of the
USSR Intersectorial Balance], Moscow,N~ysl', 1968, 357 pp�
15. Ageyev,-V. M., "Metodologicheskiye i Teoreticheskiye Proble~}r Osnovnogo
Fkonomicheskogo Zakona Sotsializma" [Methodological and Theoretical
' Problems of the Basic Economic Law of Socialism], Moscow Izd-vo Mosk.
Un-ta, 1973, 208 pp.
16. Adirim, I. G., Yanov, Ya. A., Pochs, R. Ys., "Sistema Modeley Prognozi-
rovaniya Rosta Naxodnogo Khozyaystva Respubliki" [A System of Models
for Forecasting the Growth of a Republic Economy], Riga= Zinatne, 1975,
> 191 pp. .
17. Akhunov, I. I., "Proizvodstvo Natsional'nogo Dokhoda v Tadzhikskoy SSR"
[The Production oP National Income in Tadzhikistan], Dushanbe, Irfon,
1967, 116 pp.
18. Vaynsht ey-n, A. L., "Narodnoye Bogatstvo i Narodnokhozyaystvennoye Nakop-
leniye Predrevolyutsionnoy Rossii" [National Wealth and National Eco-
nomic Accumulation in Prerevolutionary Russie,], Moscow, Gosstatizdat,
1960, 4 $3 PP�
19. Vaynshteyn, A. L., "Naxodnyy Dokhod Rossii i SSSR. Istoriya, Metodolo-
giya Ischisleniya, Dinamika" [National Income of Russia and the USSR.
History, Calculation Methodology and Uynamics], Moscow, Nauka, 1969,
168 pp.
20. "Vopresy Planirovaniya i Ucheta Proizvodst~?a, Raspredeleniya i Ispol'-
zavaniya Natsional'noga Dokhoda Soyuznykh Respublik. (Materialy Konfe-
rentsii)" [Questions of the Planning and Accounting of Production, Dis- -
tribution and Use of the National Income of the Union Republics. (Con-
ference P~aterial.s)], Yerevan, Izd-vo AN ArmSSR, 1962, 2~6 pp.
21. "Gosudarstvennyy Pyatiletniy Plan Ftazvitiya Narodnogo Khozyaystva SSSR
na 1971-1975 Gody" [The State Five-Year Plan for the Development of the
Soviet National Econom,y in 1971-19751, Moscow, Politizdat, 1972, k53 pp.
~ .
91
FOR OFFICIAL USE ONLY .
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007102/08: CIA-RDP82-00850R000200040014-0
FOR OFFICIAL USE ONLY
2~. Dade.yan, V. S., "Ekonomicheskiye Zakony Sotsializma i Optimal'nyye ,
Resheniya" [The Economic Laws of Socialism and Optimum Decisions],
Moscow, Nfysl', 1970, 325 pp.
23. Dzarasov, o. S., "Ekonomicheskiye Metody Upravleniya" [Economic Manage-
ment Methods], Moscow, Izd-vo Mosk. Un-ta, 1969, 263 pp.
21+. "Dinamika Mezhotraslevykh i Mezhrespublikanskikh Ekonomicheskikh Svyazey
Latviyskoy SSR. Sb. Stat. Materialov" [Dynamics of Intersectorial and
Interrepublic Economic Ties of Latvia. Collection of Statistical
Materials~, Riga, 1971, 285 pp (LQtvian TsSU).
25. "Dinamicheskiye Modeli Territorial'nogo Planirovaniya" [Dynamic Models
of Territorial Planning], Moscow, Nauka, 1972, 311 pp.
26. Averev, A. G., "Natsional'nyy Dokhod i Finansy" [National Income and
Finances), 2d ed., Moscow, Finansy, 1970, 312 pp.
27. Ivanov, Yu. PJ., "Mezhdunarodnyye Sravneniya Natsional'ngo Dokhoda"
~ [International Comparisons of National Income], Moscow Statistika,
1974~ 127 PP�
28. Isayev, B. L., "Balansy Mezhotraslevykh Fir ansovykh Svyazey" [Balances '
of Intersectorial Financial Ties], Moscow, Nauka, 1973, 278 pp�
29. Isayev, B. L., "Integrirovannyye Belansovyye Siste~y v Analize i Plani-
rovanii Ekonomiki" [Integrated Balance Systems in the Analysis and
Planning of the Econo~y], Moscow,Nauka, 1969, 336 pp.
30. Kats, A. I., "Stimulirovaniye EfPektivnoy Raboty Predpriyatiy. (Chelovek-
Fondo-Produktsiya)" [Stimulating The Efficient Opere.tion of Enterprises.
(Man-Capital-Product)~, Moscow, Ekonomika, 196~+, 158 pp�
31. Kvas.za, Ya. B., "On the Limits of Material Production," "Uchen. Zap.
po Statisti.ke" [Scientific Notes on Statistics], USSR Acade~y of Sciences.
Department of Economic, Philosophical and Le~a'1 Sciences, Vol 6, Moscow,
1961, pp 141-156.
32. Kolganov, M. V., "Natsional'nyy Dokhod. (Ocherki po Istorii i Teorii
Voprosa)" [National Income. ;Essays on the History and Theory of the
Questions)], Moscow, Gospolitizdat, 1959, 374 pp.
33� Kolesov, N. D., "Zakon Sootvetstviya Proizvoditel'nykh Sil i Proizvod-
stvennykh ;tnosheniy pri Sotsializme" [The Law of th~ Congruence of
the Productive Forces and Production Relations Under Socialism], Lenin-
grad, Izd-vo Leningr. Un-ta, 1973, 159 pp�
34. Kossov, V. V., "Mezhotraslevoy Balans" [The Intersectorial Balance],
- Moscow, Ekonomika, 1966, 223 pp.
92
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVE~ FOR RELEASE: 2007/02/08: CIA-R~P82-00850R0002000400'14-0
NE ~ . _ , OF R

8 JRNURRY 1980 UNION REPUBLIC 2 OF 2
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007/02108: CIA-RDP82-00850R000200040014-0
~ FOR OFFICIAL USE ONLY
35. Kul:ushkin, M. S., "Plarodnyv Dokhod. K Voprosy ob Osnovnom Ekonomicheskom
7akone Sotsializma" [National Income. On the Question of the Basic -
Economic'Law of Socialism], Leningrad, Lenizdat, 1965, 239 pP�
36. "Latviyskaya SSR v Tsifrakh v 1976, kratkiy Stat. Sbornik" [The Latvian
- SSR in Figures in 1.976. A Concise Statistical Collection], Riga, 1977,
315 pp (Latvi.sn TsSU).
37. Matevosov, E. D., "Natsional'nyy Dokhod i Yego Ispol'zovaniye v Armyar,-
skoy SSR" [National Income and its Use in Armenia], Yerevan, Izd-vo
- AN ArmssR, 1968, 193 pp.
38. "Mezhotraslevyye Balansy v Analize Territoriat'nykr Progortsiy SSSR"
~ [Intersectorial Balances in the Analysis of Territorial Proportions of ~
_ the USSR], Novosibirsk, SO Nauka, 1975, 303 pg.
39� Melkadze, V. I.y "Za.konomernosti Vosproizvodstva Natsional'nogo Dokhoda
v Gruzinskoy SuR. Proizvodstvo i Raspredeleniye. Voprosy Teorii i
Metodologii Analiza" [patterns in the Reprodizction of National Income
in Georgis. Froduction and Distribution. Questions of the Theory and
Methodology of Analysis], Tbilisi, Sabchota Sakartvelo, 1975, 382 pp.
40. "Metodolo~icheskiye Problemy Finansovogo Balansa SSSR, Balansa Natsio-
nal'nogo Dokhoda i Denezhnykh Dokhodov i Raskhodov Naseleniya. Ma,terialy
Vsesoyuznoy Konferentsii" [Methodological Problems of the USSR Financiai
Balance, the Balance of National Income and Money Income and Expenditures
of the Population. Materials of a.n All-Union Conference], Moscow, 1974,
part 1, 104 pp, part 2, 130 pp (Moscow Economic Statistic~ Institute).
41. "Narodnoye I~.hozyaystvo Latviyskoy ~SR v 1970 Godu. Stat. Sbornik" ~The
Latvian National Economy in 1970. Statistical Collection], R3ga, Latv.
Otdelen. Izd-va Statistika, 1~72, 607 pp.
_ 42. "Narodnoye Khozyaystvo Latviyskoy SSR v 1973 Godu. Stat. Yezhegodnik"
[The Latvian Nationa:l Economy in 1973. Statistical Annual], R~ga,
- Liyesma, 1974, 59~ PP�
43. "Narodnoye F:hozyaystvo Latviyskoy S5R v 1975 Godu. Stat. Yezhegodnik" -
[The Latvian National Economy in 1975. Statistical l~nnual], Riga,
Liyesma, 1976, 560 pp.
44. "Na.rodnoye Khozyaystvo SSSR v 1970 g. Stat. Yezhgodnik" [The Soviet
National Economy in 197U. Statistical Annualj, Moscow, Statistika,
1971, 823 pp.
45� "Narodnoye Khozyaystvo SSSR v 1975 g� Stat. Yezhegodnik" [The Soviet
National Economy in 1975. Stat~stical Annual], Moscow, Statistika,
1.976, 84~ pp.
93
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007102/08: CIA-RDP82-00850R000200040014-0
I
FOR OFFICIAL USE ONL~Y
46. "Narodnoye Khozyaystvo Estonskoy SSR v 1975 Godu. Ste,t. Yezhegodnik"
[The Estonian National Econo~}r in 1975� Statistical Annual], Tallin, -
Festi Raamat, 1976, 418 pp.
_ 47. Nemchinov, V. S., "Mathematical Economics Methods and Models," "Izbr.
Proizvedeni.,y~" [Selected Works], Vol 3, Moscow, Nauka., 1967, pp 138-476.
48. Notkin, A. I., "Accumulation and Its Role in Socialist Reproduction,"
in the book: "Sotsia]isticheskoye Nakopleniye. Voprosy Teorii i Plani-
rovaniya" [Socialist Accumulation. Problems of Theory and Planning], .
Moscow, Nau?ca, 1973, pp 7-61.
_ r-
i-
49� Plyshevskiy, B., "On Calculating National Income," VOPROSY EKONOMIKI
No lo~ 1970~ PP 79-90.
50. Pokryt~n, A. K., "Proizv~dstvennyye Otnosheniya i Ekonomicheskiye Zakony
Sotsializma. (Ocherki Metoda Analiza i Teorii)" [Production Relations
and the Econc~?ic Laws of Socialism. (Esseys on the Method of Analysis _
and Theory)], Moscow, Mysl', 1971, 2~+8 pp.
51. Popadyuk, K. N., "Natsional'nyy Dokhod Uzbekistana i Yego Raspredele-~ye"
[The National Income of Uzbekistan and its Distribution], Tashkent,
, Fan, 1968, 166 pp.
52. I~robst, A., "Voprosy Razmeshcheniya Sotsialisticheskoy Pro~}rshlennosti"
. [Questions of the Placement of Socialist Industry], Moscow, Nauka, 197~_, ~
379 pp.
~3. Ravun, I., "Natsional'nyy Dokhod Belorussii. Opyt Ischisleniya ~
Proizvodstva, Raspredeleniya i Ispol'zovaniya Natsional'nogo Dokhoda
Predrevolyutsionnoy i Sovetskoy Belor~zssii" [The National Income of
Belorussia. An Attempt to Calculate the Productian, Distribution a.nd
_ Use of National Income in Prerevolutionary and Soviet Belorussia],
Minsk, Plauka i Tekhnika, 1968, 1~+8 pp. _
5~+. "Regional Problems of Socialist Reproduction," "Uchen. Zap. Bashkirsk. _
Un-ta" [Scientific Notes of the Bashkir University], Social Sciences
Series, No 6, 1973, issue 71, 172 pp.
55� Rimashevskaya, N., Shatalin, S., "The Structure of Personal and Social
Consumption in the Socialist Countries," VOPROSY EKONOMIKI,No 12, 1975,
Pp 95-105.
56. Rutgayzer, V. M., "Regional'nyye Osobennosti Obshchestvennogo Vosproiz-
_ vodstva. (Territorial'nyye Aspekty Vzaimozamenyayemosti Proizvodstven-
- nykh Resursov)" [Regional Features of Social Reproduction. (Territorial
Aspects of Production Resource Interchangeability)], Mosco�a, Mysl',
197~, 19~ PP�
9~+
FOR OFFICIAL USE ONLY ~
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007102/08: CIA-RDP82-00850R000200040014-0
FOR OFFICIAL USE ONLY
57. Sitaryan, S. A., "Na~sional'nyy Dokhod Soyuznykh Respublik. (Nekotoryye
Voprosy Teorii i Praktiki)" [National Income of the Union Republics.
(Certain Question of Theory end Practice)], Moscow, Izd-vo Moskovsk.
Un-ta, 1961, 158 pp.
58. "Slovar'=Spravochnik po Sotsial'no-Ekonomciesh~oy Statistike" [Reference
Dictionary on Socioeconomic Statiatics], 2nd ed., revised and supple-
mented, A9oscow, Gosplanizdat, 1948, 486 pp (TsSU of the USSR Gosplan).
59� '~Sotsia,listicheskiy Produkt i Yego Formy" [Socialist Product and Its
Forms], Moscow, Ekonomika, 1975, 183 pp. -
60. "Statistika Narodnogo Bogatstva, Naxdonogo Dokhoda i Natsional'nyye
Scheta. Ocherki po Balansovoy Statistike" [Statistic~ of National
Wealth, Nationa.l Income and Nation~7. Accounts. Essays on Balance
- Statistics], Moscow, Nauka, ~967, 280 pp.
61. Stone, R., "Metod Zatraty--Vypusk i Natsional'nyye Scheta" [The
Fxpenditure--Output Method and National Accounts], tra.nslated from the
I;nglish, Moscow, Statistika, 1966, 205 pp.
62. ~tudenski, P., "Dok~od Natsiy. (Teoriye~, Izmereniya i Analiz: Proshloye
_ i Nastoyashcheye)" [The Income of Nations. (Theory; Measurement and
Analysis: Past and Present)], translated 'from the English, Moscow,
~ sta~tistika, 1968, 709 pp. .
.
63. Turchins, Ya. B., "Optimizatsiya Sotsialisticheskogo Proizvodstva"
, [The Optimization of Socialist Production], Riga,Zinatne, 1972, 340 pp.
~-7
64. Fedorenko, N., Shatalin, S., "On the Problem of Optimum Planning for a
Socialist Economy," VOPR. EKONOMIKI, No 6, 1969, pp 98-111.
65� Khachaturov, T., "On the Question of the Theory of Soci~list Reproduc-
~ tion, VOPR. EKONOMIKI, No 3, 1969, pp 3-14.
66. Cherkovets, V. N., "The Basic Economic Law and the Main Task of the New
Five-Yeax Plan," VOPR. EKONOMIKI, No 9, 1971, pp 3-14.
� 67, Eydel'man, M. R., "Mezhotraslevoy Bala.ns Obshchestvennogo Produkta. ~
(Teoriya i Pratika Yego Sostavleniya)" [The Intersectoria?_ Balance of
Social Product. (Theory and Prac~ice of its Compilation)], Moscow, -
statistika, 1966, 375 pp.
68. "Ekonomika i Kul'tura Litovskoy SSR v 19i5 Godu. Stat. Yezhegodnik"
[The Economy and Culture of Lithuania in 1975. Statistical Annual],
Vil'nyus, Mintis, 1g76, 344 pp.
- 69� "Fkonomika i Kul'tura Sovetskoy Latvii. Stat. Sbornik" [The Econorqy and
Culture of Soviet Latvia. Statistical Collection), Riga, Latv. Otd.
, Izd-va Statistika, 1.966, 508 pp. �
95
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0

APPROVED FOR RELEASE: 2007102/08: CIA-RDP82-00850R000200040014-0
FOR OFFICIAL USE ONLY
- 70. Svikis, A., "Padom,ju Latvi~as sabiedriskais kopprodukts un naciona'_'ais �
iena'~u~(1959-1965)," [in Latvian], Riga, Liesma, 1967, 238 pp. ~
COPYRIGHT: Latviyskiy gosudarstvennyy universitet im. P. Stuchki, 1977
10272
Cso: 8144/0339 ~
- ~rm _
,
!
.
96
FOR OFFICIAL USE ONLY
.
~
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200040014-0