JPRS ID: 8994 USSR REPORT ECONOMIC AFFAIRS

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~1 MRRCH 1980 t FOUO 6r80 ) 1 OF 1

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~ JPRS L/8994
21 I~arch 1980
USSR Re ort .
p
- ECONOMIC AFFAIRS -
' (FOl~O 6/80)
Fgs~ FOREIGN BROADCAST INFORMATION SERVICE
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JPRS I~/8994 -
- 21 March 1980
~ USSR REPORT
, ECONOMIC AFFAIRS
(FOUO 6/80)
CONTENTS PAGE .
~CONOMIC POLICY, ORGANIZATION, AND MANAGEMENT
Methodology of ForecaGting National Economic Development ~
~ (A. Anchishkin; VOPROSY ERONOMIKI, Jan 80) 1
Net Output Indicators Discussed in Detail
(R. Gavrilov; VOPROSY EKONOMIKI, Dec 79) 15
ECONOMIC MODELING AND COMPUTER TECHNOLOGY APPLICATION
Book on Modeling Deployment of Economic Branches Reviewed
(M. Vilenskiy: VOPROSY EKONIMIKI, Jan 80) 30 i
REGIONAL DEVELOPMENT ~
;
~ Forthcoming Changes in Rural Develepment ~
(V. Stern; VOPROSY EKONOMIKI, Jan 80) 34 ,
Territorial Aspects of Overall Economic Development Plan
Analyzed '
(Yu. Dmitriyev, A. Zenkovich; VOPROSY EKONOMIKI,
Jan 80) 50 :
ERRATUM: In JPRS L/8911, 8 February 1980 (FOUO 3/80) of this series,
on Table of Contents and p 1 of article "Military Budgets: ~
Soviet and U.S. Budgets Contrasted" please change source to
read EKONOMICHESKIYE NAUKI.
- ~
- a - [III - US5R - 3 FOUO]
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ECONOMIC POLICY, ORGANIZATION, AND MANAGEMENT
METHODOLOGY OF FORECASTING NATIONAL ECONOMIC DEVELOPMENT
Moscow VOPROSY EKONOMIKI in Russian No l, Jan 80 pp 15-26
[Article by A. Anchishkin, corresponding member of the USSR Academy of
Sciences: "Methodology of Forecasting of the Development of the National
Economy"]
[Text] One of the e__ements of the system of managing and planning the
socialist economy is ~he forecasting of the development of the national
economy. In this system, forecasting performs an independent role as a
form of comprehending and foreseeing objective processes of development
of the national economy in concrete, quantitatively determined form.
- Forecasting is based on the progress the social and natural sciences have
made in discovering the patterns of development of nature and society and
on these sciences' perception of trends of socio~conomic and scientific-
technical progress under the conditions of deveioped soc:ialism.
The theory and prac~ice of forecasting form in the process of improvement
of the system of planning ar.d development of economic theory and in its
~ i,nterrel3tions:~ip with other field~ of scientific knowledge. There are
systematic medium-range and long-range forecasts of development of the
national economy and its individual branches and scientific-technical and
demographic forecasts. On the whole it is obviously still to early to speak
of forecasting as an existing system. However, analysis of existing
experience makes it possible to formulate certain methodological problems
of the furfiher development of this sphere of scientific and practic~.l
activity.
As a component part of the socialist planning system, forecasting together
with its functions and in some measure with its subject, whicr~ consists =
in identifying and predicting objective trends in the development of the
national economy, occupies a special place in the system. Not all objective
processes are amenable to planning. This depends both on the nature of
the processes proper and on the level of development of the planning system.
For example, notwithstanding the fact that demographic processes are amenable
to planned influence, they cannot be the direct object of social planning.
The population's current demand for consumer goods, even though it can be
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regulated under the influence of planning in the realm of production, incomes,
and prices, is primarily occasioned by unplanned consumer behavior. The
development of forei~n economic relatior,s depends inter alia on the state of
th~ world capitalist market. Consequently, there are various types ~f -
objec*ive process~s that can and should be forecast but that cannot be viewed
as the object of direct planned management.
The degree to which planning encompasses processes in the national economy
also depends on the level of development of the planning system proper. The
- formation of the planning system is not a one-time act but is the process of
expansion of the sphere of planned elements of social development. 'I'hus, ,
only in the stage of ma~ture socialism does social and scientific-technical
development full.y become the object of planning. At the same time, there is
continuous change in actual conditions. This change finds reflection in the
improvement of the system of management and planning after a certain lapse
of time. For example, ecological processes acquire special urgency given a
certain level of development of tlie productive forces, which determines the
objective need for their planning. The same can be said regarding urbaniz-
ation and certain other objective processes. The expansion of the planning .
sphere in the given directions will obviousJ_y be inevitable in the future as
well. But even given the absence or insufficient development of individual
parts of the planning system, it is possible to forecast the various proc-
esses; moreover, the advent of these dii~ections of forecasting is a necessary
condition to the formation of new elements of planning.
In addition to the noncoincidence of the subject matter, differences between
forecasting and planning underlie the differences in their functions. The
essence of these differences is that planning is the process of making and
implementing planning decisions, whereas the goal of forecasting is to form
the scientific prerequisites for making these decisions. The following can
be listed among these prerequisites and among the functions of forecasting:
the quantitative and qualita~ive analysis of trends in the development of
the national economy, of existing problems and of new phenomena; the probab-
ilistic, alternate prediction of the future development of the national
economy which takes into account both existing trends and the goals that ;
are set; the evaluation of the possibilities and consequences of exerting
an active influence on predictable processes and trends; and the substant-
iation of the main directions of socioeconomic and scientific-technical policy.
Based on the results of forecasting, planning in the narrow sense of the
word as the economic decision-making process consists first and foremost
in the planned distribution of limited resources and the creation of economic _
conditions for the realization of the given plan targets. The unity of
forecasting and planning consists in the fact that forecasting is a necessary
prerequisite to scientifically substantiated planning and is an integral
element of such planning. The plan and the forecast are not two alternate
approaches to determining the perspectives of socioeconomic and scientific-
technical development bufi are complementary stages in the development of '
_ nationaJ. ec.onomic plans given the unconditionally decisive role of the plan
as the principal instrument in managing the socialist economy and in
implemer_ting the party's economic strategy.
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- Taking the general differences of the subject and functions of planning and
forecasting into account, we can formulate some of their concrete features. -
They consist first of all in the fact that the system of plan indicators
must corrQspond to the demands of management, to the need to make directive-
type, address-type planning decisions whereas the forecast even thougYi it
must consider the tasks of management is for the most part structurally
determined by the content of the forecast processes. In other words, the
planned indicators must maximally correspond to the structure and requirements
of managemer.t while the forecast indicators must correspond to the demands af
- cognition of objective processes. At the same time, it is necessary to _
secure the transition from forecast indicators to planned indicators. Seconc,
the directive nature of planning presupposes its address nature whereas _
- forecasting cannot correspond to the existing org~nizational structure of
the economy and does not have a specific administrative address. Third, the -
plan differs from the forecast by virtue of its significantl~ greater determ- -
inacy. The very nature of planning is determined by the strivir.~ for the
. determinacy of future development, for overcoming the objectively extant
probabilistic character of development of the national economy. The fore-
cast, on the other hand, is based on probabilistic prediction. Fourth, -
while the development of the plan means the development of different var- ,
iants of the plan, the plan proper is the already selected variant of
= development which is slated for practical implementation. The forecast, on
the other hand, is a variant and an alternative not only as the techniqt~e -
of preparation but also as the end result. ~
Thus, as plrt of the planning system forecasting performs its own specific
functiens within this system: the probabilistic, variant (alternative)
prediction of the future on the basis of tne concrete identification and
_ measurement of objective patterns of socioeconomic and scientific-technical
development.
As we examine the place of forecasting in the general planning system, -
, we should note the particular role of long-range forecasts and their
relationship with the comprehensive 20-year program for scientific-technical
progress, with the basic directions of economic and social deveiopment for -
a 10-year period, and with special-purpose programs. The decree of the
CPSU Central Committee and the USSR Council of Ministers '~On the Improvement
of ~lanning and Increasing the Influence of the Economic Mechanism on -
Enhancing Production Efficiency and the Ouality of [dork"
notes that these elaborations are part of the unified lon~-range planning
system. Calculations for the extended future obviously include the comp-
' ilation of appropriate partial and comprehensive forecasts to ensure that
full consideration be given to predictable patterns of scientific-technical
and socioeconomic development. In particular, the comprehensive 20-year
program of scientific-technical progress, which is oriented toward the
substantiation of the main elements, results and techniques of implementation -
of a unified technical policy, must incorporate the entire wealth of i.nform-
ation that is supplied by the numerous ~cientific-technical and socioeconomic
forecasts made in our country.
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The forecasting of the development of the national economy is comprehensive:
~ it encompasses all aspects and levels of development of the national economy;
it is interconnected with social, demographic, and scientific-technical fore-
casting, with the forecasting of natural resource utilization and of the
dc~velopm~nt of international relations. Each of the in~iicated directions
_ h~~:. indr.J~endent sip,nific:~nce and can in some measure be elabor~ated inde~~endent
of other~ciirections; the same can also be said of some more particular
problems that are of a branch and regional character. In the anal~rsis of
methodological problems involved in the comprehensive forecasting of the
development of the natir:nal economy, all basic directions and aspects of -
forecasting must be examined in their unity.
forecast of
forecast living standard
uf nat-
i ion's forecast of
economy reproduction o ;
= in genera fir.ed ca ital .
~ and capi~al
investments
forecast of -
reproduction of
' labor resources .
forecast employment, ~
of devel- manpower trng.
opment of comprehensiv
nat.-eco national ~ ~
complexes economic ,
forecast of
forecast socioeconomic
prerequisi~tes ~
' cons quenc of
forecast of ~
- ' � ~ economic use o
- natural ~
resources ~
. forecast �
- of major
branches ~ fQrecast of
- and , financia~. rel-
ations, incomes
regions . ~ rices
~ ~ fore~ast of
. forei~n econom'
. , '
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The structure of the national economic forecast (see chart on preceding page)
includes both various levels of aggregation of the national economy and
various aspects of its development. With regard to levels of aggregation
in the national economic forecast, we can single out macroeconomic and
structural (interregional, intraregional) forecasts, forecasts of development
- of national econamic complexes (fuel-energy, a~ro-industrial, investment,
and production infrastructure, consumer service sphere) and forecasts of
m~7jor branches and regions.
- In accordance with various aspects of reproduction, we can single cut -
forecasts of: the living standard, employment and labor inputs, the repro-
duction of fixed capital and capital investment, the economic use of natural
resources, socioeconomic prerequisites and consequences of scientific-
technical progress, and foreign economic relations. These divisions o~ the
national economic forecast have their own content, are cooz~dinated with one
another, and opera�~e in unity in national economic forecasting on the whole.
The sequence of forecasts of the development of the national economy depends _
on the forecasting horizon, the basic conditions of economic development, and
the concrete tasks of national economic forecasting. On the whole, the
compilation of a comprehensive forecast of the development of the national
~ economy is iterative; however it contains a number of counter-directions which
must ultimately be coordinated within the framework of a unified comprehensive _
forecast. For example, the national economic forecast can be made starting
. with ~eneral (m~icroeconomic) indicators of economic development and endin~
with indic~tors of the structure of production and development of individual
ir~terbr~lnch complexes and branches and simultaneously starting with
E~roduction and structural constraints in the development of material produc-~ -
tion, it~ branches and facilities producing individual types of products and
- ending with general indicators of reproduction. On the other hand, it is
possible to proceed from socioeconomic tasks to the forecast of productior,~. -
resources and their effectiveness and simultaneously from the forecast of
production resources to the forecast of the solution of socioeconomic tasks.
- It is specifically such a two-way process of comprehensive forecasting of
the development of the national economy that makes it possible to identify
both the main sources and basic problems of further development. In partic-
ular, the elaboration of the Comprehensive Program of Scientific-Technical -
Progress and Its Socioeconomic Consequences in the Long Run showed that the
principal long-range directions of development of science and technology
can be substantiated on the basis of two counter-approaches the ider.cifi-
cation of existing trends of scientific-technical progress and the results
of their incorporation in the national economy and, simultaneously, the
determination of objective demands on the directions and rates of scientific-
technical progress.stemming from th~ need to resolve the principal long-range
tasks of development of the national economy. As a result of the interaction -
- of these counter-approaches, it is possible to substantiate the need for
fundamentally new technical solutions and to effect the appropriate
redistribution of scientific-technical resources.
,
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The coordination of individual divisions and aspects of the national economic
forecast is carriec? out for variants in accordance with which each alternative
approach to the development of the national economy must be characterized by _
a system of coordinated forecasting indicators. The basic difficulty in _
such coordination consists in determining for each alternative indicators
conforming to the nature of a given alternative. It is especially important
to make this determination in the c~se of the intensification of production
_ and in improving the quality of goods and services. Thes~. conditions amplify
the multidirectionality of economic indicators corresponding to one and the =
same alternative in the development of the natioiial economy. The reference ~
is to indicators characterizing the dynamics of the volume of production
resources and the effectiveness of their use, the growth of output, the
improvement of product quality, change in the scale of production, and
- structural modifications. -
The structure of the national economic forecast is also associated with ,
forecasting horizons. It is conditionally possible to single out the
short-range forecast (up to 2-3 years), the medium-range forecast (up to 5-7
years), and long-range foreca~ts (up to 15-20 years). The conter.t of fore-
. casts with different time horizons is deter~nined by the nature of the forecast ;
processes. The greater the stability of forecast processes and trends, the '
wider the forecasting horizon can be. The various reproductive processes
have different rates and different time cycles. Thus, the reproduction of
fixed capital is determined by service life while the reproduction of.labor
resources is determined by the duration of demographic processes and the
time it takes to train personnel; the time of renovation of machine buildin~
products is determined by the dynamics of the technical level of the
implements of labor, ~tc. Therefore there are different time horizons of
~~~~~+ecasting for various aspects of devzlopment of the national economy and
- for the content cf forecasts of varying duration.
The forecast of the course fulfillment of one-year and five-year plans,
of current national economic processes associated with the movement of
financial flows and prices, with changes in the structure of the effective !
demand of the population, with the influence of fluctuations in agricultural ~
production on economic development, etc., is most in keeping with the nature ~
of the long-range forecast. Medium-range forecasting consists first and
foremost in the forecasting of the rates, factors and structure of economic ~
development, and in the forecasting of investment processes.s'~ The long-
range forecast must above all take into account the aspects of national
economic development that are associated with demographic processes, with
the func~,amental solution of lar.ge-scale social tasks, with scientific-teehnical
_ progress, and with the utilization of natural resources.
-'~The investment cycle (from the investment decision to the activation of n~w
capacities), which on the average runs 5-8 years, is the principal material _
factor in forming the rates and proportions of economic development and
thereby determines the basic content of the medium-range forecast.
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~
The realization of forecasting principles ensures the methodological uni,ty
of various techniques and models of comprehensive forecasting of national
economic development and its component parts. The isolation of individual
forecasting principles does not mean that they exist independently of one
another and that they can be used selectively. At the same time that they
reflect various aspects of scientifically substantiated forecasts, these
principles must be viewed as a single whole.
Marxist-Leninist economic theory is the general theoretical basis of fore-
casting of the development of the national economy. The objectiveness and
cognizability of economic development serve as the theoretical basis of ,
forecasting. Understanding of the objective character and at the same time
the cognizability of the laws of Pconomic development determine the basic ~
cuntent of forecasting: the qualitative and quantitative analysis of actual
economic processes and the identification of the objective conditions,
factors and trends in development. Marxist-Leninist theory of expanded
~ reproduction is of paramount impartance in the forecasting of national
economic development. At the same time that it encompasses all basic
elements of reproducti~n of the productive f~rces and production relations,
the rates and factors of economic growth, and the criterion and mechanism of
proportional, balanced economic development the theory of reproduction creates
_ the methodological basis for the formulation of concrete principles of
national economic forecasting.
- The systems principle of forecasting means on the one hand ~that the national
economy is viewed as a single object and on the other hand that it is viewed
as an aggregate of relatively independent directions (blocks) of forecasting.
The practical compilation of comprehensive forecasts on the bas~s of the
systems principle presupposes the creation of techniques and models that
would correspond to the content of each individual block and would simul-
taneously make it possible to construct a whole picture of potential develop-
ment of the national economy. The realization of such reqairements is
associated with considerable difficulty with regard to method. Wholeness
necessitates the standardization of models, information, and computational
methods whereas the specifics of individual economic objects can be adequately
expressed only if they maximally approximate individual forecasting blocks. _
- The first demand is in line with the striving to construct a single "super-
model" of forecasting, which inevitably leads to the creation of an
externally rigid construction, to the impoverishment of the content of
forecast economic processes, the se~ond ~lemand can be realized only with the
elaboration of a system of particular techniques and models, which complicates
the construction of a single and internally consistent forecast.
~ In order to realize the systems principle while maintaining the priority of -
economic content, it is expedient to use the "block" method of comprehensive
iorecasting. This requires the establishment of exogenous indicators for
the entire fcrecast of the national economy as a whole, the determination of
the sequence of forecasting calculations, the determination of input and
output indicators (for each block) corresponding to this sequence, and
. the sequence of iterative adjustment of intermediate results.
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The principle of e quivalence of the forecast to objective patterns. The
realization of this principle presupposes the identification and quantitative
measurement of stable trends and interrelations in the development of the
national economy above all and accor~~ingly thz creation of a theoretical
~ina.lo~ of ,3ctua] economic processes. The sufficiently complete and E~rc~ci.se
sirtiul~ition of tf~~se processes is the maiii condition to the scienti~ic validity
of the forecasts. Here the theoretical model of the analysis and forecasting -
of the development of the national economy refers to a practically realized
model which is the form of scientific depiction of reality.
The given principle presupposes consideration of the probabilistic, stochastic
character of actual processes. This necessitates the evaluation of existing -
and possible deviar.ions from dominant trends and the determination of possible
areas of their divergence, i. e., the evaluation of the probability of
realization of the elicited t.rend. As the forecast period increases, the
- scatter area increases and ultimately the magnitude of possible area may
be comparable with the magnitude of the forecasting indicator which contra-
dicts the equivalence principle and compels us to abandon the compilation of
such a forecast. The raising of the level of aggregation of forecasting
processes and the search for longer develop~*,ental trends improve the quality
of the forecasts.
The use of the given principle in the elaboration of forecasts presupposes .
the testing of forecasting techniques and models from the standpoint of
their ability to s imulate the already existing trends. Before these techniques '
and models can be the instrument of prediction, they must become the instru- _
ment of cognition. T'~.e given demand must be performed solely on the basis
of numerous experimental calculations that ensure the continuous correspondence
of theoretical principles, the system uf indicators, mathematical models,
basic data, and computacional techniques to the content of analyzed
processes. _
When the transition is made from the simulation of existing processes and `
trends to the prediction of their future development, it becomes necessary _
to construct alternatives, i. e., to specify possible avenues of national
economic development. Alternative fe~ecasting is associated with the possible
development of the national economy and its individual elements for various
trajectories, in different interrelations and in structural correlations. '
The probabilistic character of forecasting reflects the existence of random
processes and deviations in the face of qualitative homogeneity and the �
stability of forecast trends; the alternative principle, on the other hand, _
is based on the assumption of the possibility of qualitatively different'
variants,,of economic development.
The principal task of practical realization of this principle c~nsists in
separating variants of development from variants that cannot be realized
under existing and foreseeable conditions. This presupposes the different- -
iation of individual alternatives (variants) in terms of the probability _
of their practical realization. Among all variants, the one with the greatest -
probabiiity of rea lization is usually the extrapolation variant since it -
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stems from the preservation of existing stable co~ditions and trends. How-
- ever, this does not mean that th.e extrapolation variant is preferable.
- In order to overcome certain existing trends, it is essential to use nan-
~ extrapolation altarnatives substantiated from the standpoint of propo~~tion-
ality, resources and their effectiveness, the possibility of resolvin~ the
- problems that arise, etc. The realization of non-extrapolation alternativF~s
requires the application of purposeful influences the intensiveness of which
must lae all the more powerful in proportion to the degree that the given
- alternative diverges from the extrapolation alternative.
The basic technique used to determine the practicability of individual
alternatives of development of the national economy is to verify their -
proportionality in all basic aspects. At the same time, it is essential
to take into account the real constraints (resource constraints, structural
constraints, constrains based o~~ indicators of effectiveness) within whose
- framework proportional alternatives of economic development must be elabor-
ated. -
- bottlenecks and focal points of imbalance may be elicited in the process of
national economic forecasting. Without dwe~ling on the origin of such
elements of imbalance, we should ncte their constructive function. The
disparity between certain elements of projected national pconomic develop-
ment~~ reflects objective nonantagonistic contradic~tions that are possible
for a given variant of development. Such dispai^ities and "discontinuity
points" advance certain problems that are dynamic factors. The sol.ution
- of these problems creates the objective need for qualitative change in
_ the structure and effectiveness of production resources, for the search for
- fundamentally new technical solutions, and for improvement in the economic
' mechanism.
Eacn alternative approach to the development of the national economy has its
own aggregate of problems that are difficult to solve in the face of
exist.ing trends. It may be that one or another alternative does not as yet
have a balanced solution. In such a case, it is essential to determine
additional conditions~'~%� the fulfillment of whicn will make it possib le to
realize a given alternative. The degree to which these conditions are
pr�acticable may ultimately be determined only after the elaboration of the
- plan proper. However, in any case the scale, time limits and results of
solution of the corresponding probl~ms must be determined within the framework
of the forecast. ~
~'~If this disparity is not merely the result of the low level of balancz sheet
calculations.
~~~~Such conditions cannot be determined from the standpoint of formal proport-
ionality. For example, interbranch forecast~ that proceed from the autonomy
_ of the final social product and the gross social product cannot reveal the
= actual conditions of bal~nced development. i'his requires consideration of
resource constraints, the possibility of restructuring the economy, and
_ foreseeable changes in indicators of the effectiveness of production.
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potenti~zl ~~uantit~tive r_hange in the conditions of re~>roductian, e. when
the tran~ition is made from primarily extensive to primarily intensive methods _
oE ~xE~anded reprocluction are. above all the source of alternative national
economic development. Assumptions rega.rding its conerete purposes influence
~li~~ formrition oF devclo}~ment alternatives. These ~oals are det�ermined by _
existing patterns of development of social requirements and by the need to
resolve concrete national economic problems. The alternative principle
thereby reacts with the purposefulness principle of forecasting.
T'~e transition from existing trends to trends that maximally correspond to
the goals of long-range development determines the active character of _
soc~alist economic forer.asting. The national economic forecast and its
component parts are structured with regard to the elements, individual
parameters and variables through which a controlling influence can be =
exerted on the course of economic development. Of course, it is hardly
possible, e. g., to envisage the direct regulation of the output-capital
ratio. However, through the modification of the economic mechanism (rent
payments), technologies and the organization of production it is possible
to substantiate actual possibilities for ir.fluencing the output-capital
ratio too. The active character of forecasting also presupposes the
evaluation of the interaction of the intensiveness of the controlling
influence and its results. The more significant the deviation of the
substantiated alternative from the extrapolation alternative, the more _
in~tensive must be the corresponding influence expressed first and foremost
in exper_ditures of resources and in changes in the economic mechanism.
The aforementioned national economic forecasting principles, which strike
us as the main even if not the only principles, underlie the system of
concrete forecasting techniques and mo3els. The diversity of the existing =
techniques and models of forecasting is determined by the particulars of
' individual processes in the national economy, by the avail.abi~ity of~.inform-
ation, by the potential of ~omputer technology, by existing practical
knowhow, and by other circumstances. Considering this diversity in fore-
casting, it is possible to single out two universal approaches genetic
and special which combine more particular techniques and models.
The genetic approach reflects the existence of stable trends in the fore-
casting process that impart an inertial character to the development of the -
national economy in some degree. Any foreseeable phenomenon or process :
has its sources in the present and in the past. No matter how the future
state differs from the present and the past, it is always associated with
them; it forms from already known elements albeit in other correlations, ~
in a system of new relationships.
The normative (goal - oriented) approach characterizes another aspect of
forecasting processes already noted above their controllable nature,
their dependence on the objectives of development of socia~ist society.
. The goal may be fixed in the form of some normative state (level of attain-
ment of the goal and structure of the forecast object) and in the form of
the desirable trajectory of the transition from the existing state to the
normative state. 10
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The genetic and goal-oriented approaches complement one another since future
national economic processes are conditioned both by already existing relations
and trends and by projected social goals and requirements. ~r'hat is more, the
- goal-oriented approach can be scientifically substantiated anly to the degree
that it corresponds to the actual potential ~f deliberate regulation of
objective processes. At the same time, the genetic approach does nat
incorporatE~ a11 the prerequisites required for the construction of a
scientifically substantiated foreeast siizce the development of socialist
:~~ciety is of a controlled character. In any event, a purely genetic or
2~urely ~;oal-oriented approach is imposs:ble. _
The correlation between genetic and goal-oriented approaches changes
depending on the period and object of forecasting. When the forecasting -
period is longer, there is less relationship between resources in the
already existing structure of the national economy and planning decisions; -
this increases the possibility of distributing resources in accordance with
' the goals of future development and the sphere of utilization of the goal-
oriented approach is expanded. With a shorter forecasting period, there
_ is a closer relationship with regard to resources, there is less opportunity
to use the goal-oriented approach, and the sphere for applying gene~ic
forecasting techniques is expanded.
The correlation between the genetic and goal-oriented approac}Ies also
depends on the specifics of the object of forecasting. As already noted,
t}~cre are various objective possibilities for the planned regulation of
i.ndividual aspects of socioeconomic development (demographic processes, -
for example, are less amenable to regulation than the dynamics and structure
of ~~roduction), The higher the degree of controllability of the forecast
Processes, the greater the degree of applicability of goal-oriented methods.
The potentialities of the genetic approach are correspondingly greater when
- the forecast processes are relatively less controllable.
Since the forecasting of the development of the socialist economy is a stage
- in the compilation of the plan, the correlation between the genetic and goal-
oriented approaches must also be viewed from these positions. Genetic
methods are designed to direct work on the plan into the channel of actual -
_ trends and potentialities while goal-oriented methods are intended to ~
- substantiate the transition from existing trends to socially necessary trends.
Forecasts must thereby maximally promote the elaboration of practicable
and purposeful plans. In this regard, it must be noted that economic fore- `
casting rnethods in capitalist countries are primarily genetic. The reason
is that capitalism lacks state planning and hence there is no clearly
pronounced need for a goal-oriented approach based on social interests. -
The genetic approach is realized primarily through a system of econometric
mathematical-economic models. Econometric models are based on statistical
data ~~elating to the past and on expert assessments of individual variables
_ and their parameters which are included in the models. Without dwelling on
the conerete form of such models and the mEthods used in their construction,
Y we can single out two types of these models factor ~nd structural models
which can also be combined to form factor-structural models. At the same
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time, one and the same type of model can be applied to economic objects at
various levels of aggregation of indicators of the national economy (macro-
economic, interbranch, interregional, branch, and regional), and to the fore-
~~1:;ting oF various aspects of development of the national economy (the repro-
duc~tion of fixed capit~l and labor resources, finances and prices, the
}~opulation's consumption).
Econometric models are the main but not the sole form of realization of the
genetic approach since the possibilities for quantitative measurement in
the analysis and forecasting of socioeconomic processes are very limited.
These limitations are associated not only with the existence of statistical -
information, computational methods,, and technical means but also with the
- very nature of na~ional economic processes that can by no means always be
_ expressed in quantitative form. For example, the motives for labor activity _
(the level and form of wages, moral incentives, etc.) influence the level
_ and dynamics of labor productivity, but it is very difficult to measure this
influence in quantita~ive terms. At the same time, only the processes and
phenomena that can be measured are considered in the forecasting process.
Hence the need arises to use expert methods, i. e., methods based on the
collection and processing of quantitative and qualitative evaluations by
individual scientists and specialists. Such methods, which are for the most
part used in scientific-technical forecasts, can be viewed as universal
forecasting methods. Essentially, they are genetic methods: here objective
patterns and trends are analyzed and forecast through their reflection in _
the process of scientific cognition. ~
Expert methods as species of heuristic methods make it pUSSible to reflect in
forecasts processes that are still in the embryonic state and to take into
account possible changes in conditions of development and in trends that
cannot be measured by any existing quantitative methods. A particularly ~
significant role can be played by the application of expert methods in long-
range forecasting since herA the potential of econometric models becomes
minimal. Expert methods make it possible to introduce into long--range
forecasting assumptions on qualitative change in the trends o~ scientific- ;
technical and socioeconomic development for which there can be no direct ~
econometric substantiation. ;
Goal-oriented forecasting methods play an important part even though they
are developed to a significantly lesser extent than genetic and especially
econometric methods. The essence of these methods consists in the ident-
ification of patterns of development of social goals, needs, and the ;
normative state in which these goals can be attained in a certain hierarchy
corresponding to the hierarchy of social goals and requirements. The '
development and introduction of goal-oriented forecasting methods presuppose
the creation of the theory of development of social needs and methods for ~
measuring these needs. Since the goals of deve]_opment can also be formed
on the basis of the need to resolve large national economic problems, the '
- methods of goai-oriented forecasting must ensure the identification of these
problems and the elaboration of alternate solutions to them. !
~
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The main socioeconomic goals of long~xange dev~elopment elaborated by the
CPSU with regard to the features of a specific stage of social development
- are the basis of goal-oriented forecasting. Th.e use of these goals as the
point of departure in a forecast p.resupposes their expression in a system
of ineasurable social norms characterizing certain qualit~tive stages, in the
~ttainment of the goal. The social norm is designed to reflect existing
social ideas regarding the 1eve1 of realization of a concrete social task
which ensures the transition to a qualitatively higher degree of satisfaction
of socia.l requirements. For example, the solution of the housing px+oblem
in the existin~; ~iew means the attainment of a certain per capital housing
with a high level of amenities and a rational system of settlement. Social
a>;:
norms cannot be regarded as the result of speculative, subjectivistic
constructs. They must reflect the actual level and dynamics of social needs
that can be satisfied in the forecast period in accordance with the actual
potentialities for the development of material production. -
The goal-oriented forecast, which is based on the main social goals and
norms, is designed to construct the hierarchy of social needs in the form
of a tree of goals or another hierarchical structure. In this system of -
goals, complementary needs may originate side by side with suhstitutable.
needs. For example, the rationalization of the structure of th.e.population's
current consumption may include the search not only for the optimum correl-
ation of the consumption of food, outergarments and footwear, but also for
the optimum correlation between individual substitutable foodstuffs that caa
satisfy one and the same need (for ~xample, the need for fats~. The construc-
tion of a rational consumption budget widely used in the elaboration of
long-range forecasts is the most highly developed method used in the goal-
oriented forecasting of the system of social needs.
Coal-oriented forecasting methods in combination with gene.tic methods are
intended to identify long-range problems whose solution is a necessary
condition,to attaining given goals on the basis of the Iaalanced and effective -
development of the entire economy and its various parts. The problem proper
and the scale of the problem can be ascertained by analyzing th.e disparity
between the normative state stemming from th.e forecast of soci.al needs and
dominant trends. The greater this disparity, the more considerahle.the ~
problem and the more difficult the avenues to its solution. Thus, comparison
of the avenues to the solution of th.e food problem with trends toward higher
effectiveness of agricultural production indi~ates the need for the.substantial
acceleration of its growth rates, for raising labor producti.vity, for inereas-.
ing the yield of agricultural crops~ for increa~ing the. productivity of animal
husbandry, etc.
The forecast of resources and their effectiveness in the. construction of a
goal-oriented forecast is a derivative forecast designed to suhstantiate th.e
possibility of overcoming the disparity between the normative Cdesired~ state
and the dominant trend. In a number of cases, the elimination of this
- disparity requires change in the given trends. This in turn re.quires the
revision of the scale and structure of resource distribution, the substantia-
tion of fundamentally different trends in th.e realm of their effective use,
the adjustment of goals and normative states (both. in terms of level and
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time of attainment~. Al1 the i.ndicated ways of cooxdi.nating goals and trends ,
of development can be substantiated simultaneously. At the same time, the
more c~onsider~~bl~ the deviation of the trajec:tory of transition from the
existing state to the normative state, the greater must be the change ici tY~e
distribution of resources and their effectiveness and in the technical level
and organization of production. From this it follows that in normative
methods the forecast af goals precedes the forecast of resources.
- The goal-oriented forecast must ultimately be coordinated with the genetic
forecast. This presupposes the development of a genetic forecast from the ~
closer to the rnore distant future anc't the development of the goal-ori.ented
forecast in the reverse temporal direction. The adjustment of forecasts of
reserves, their~ effectiveness, goals, and social requirements makes it
possible to attain the gradual coincidence of the trajectories of genetic
and goal-oriented forecasts. -
- Forecasting methods based both on quantitative measurements and on qualitative _
- evaluations help to reveal objective patterns of socioeconomic development
and thus strengthen the scientific basis of socialist planning.
COPYRIGHT: Izdatel'stvo "Pravda", "Voprosy ekonomiki", 1980 _
5013
CSO: 1820 ~
- ~
i
;
;
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ECONOMIC POLICY, ORGANIZATION, AND MANAGF~fENT
NET OUTPUT INDICATORS DISCUSSED IN DETAIL
Moacow VOPROSY EKONOMIKI in Russian No 12,Dec 79 pp 12-23
[Article by R. Gavrilov: "Normative Net Ontput in the System of Economic
Indicatora of the Enterprise"]
[Text] The economic cost-acconnting indicators that measure results
against input and resources are of great importance for the efficient func-
tioning of the economic mechanism. In the swmaary report delivered at the
~ 25th Party Congress, L.I. Brezhnev pointed out that "it is neceasary to
improve the whole system of indicatora underlying the evaluation of the
operations of ministries, associ$tiona and enterprises. These indicators
are supposed to bring together the interests of the worker and those of the _
enterpriae, the interests of the eaterprise and those of the state, helpin6
to formulate (and of courae fulfill~) atepped-up plans, to econoc~i2e on re-
sources and to reduce production cogta
A constructive solution to this problem i~ provided by the Decree of the
CPSU Central Co~nittee and the USSR Council of Ministers, which is entitled:
~ "On the Improvement of Planning and the Intensification of the Effect of
the Economic Mechanism on Increasing the Efficiency of Production and the _
Quality of Work." The Decree stipulates that beginniag in 1980 the five-
year and annual plans of the ministries, associations and enterpriaea speci-
fy targeta concerning the growth of (normative) net output and the increase -
in labor productivi.tq--calculated on the basis of normative net output--
. and a fixed standard of wages per ruble of normative net output.
Thus in the large and complex system of cost-accounting indicators, there
is a transition from gross indices (groas output, gross turnover, tonnage,
estimated cost) to indicators free from multiple accounting of capital
goods input.
The System of Cost-Accounting Indicators
Table 1 shows a list of physical production indicators measuring the
results of economic opezations againat the diverse quantities of irput and
resourcea. The table is set up ae follaws. The rows show the reaults of -
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economic operations: Groas output (c~ + v+ m), net output (v + m) and
profit (m). The columns show input and resources: Living labor (v), total
input of living and embodied labor (ci + v) and the calculation of re-
sources ~c + v). Thus the table contains nine groups of indicators.
Groups 1, 2 and 3 reflect the productivity of living labor; groups 4, 5
and 6 reflect labor efficiency, and groups 7, 8 and 9, reeource yield.
Each group has its economic character, ite practical purpose and conae- _
quently, its advantagea and ahortcominga in accordance with the time, con- -
ditions and place of application. In our view, the opinion that in this -
large aqstem there must be a"universal" indicator is incorrect, eince each
of them was created for specific ob~ectives and since each functions well
at t~e cor.crete developmental stage of the national economy, in the ind:.-
vidual sector, subsector, and enterprise. Thus group 6 contains the indi-
cators of type m- that represent the profit-production cost ratio which
_ before the econom#c~reform was calculated as a whole for the enterprise,
but which preaently is used in fixing the p~rices of individual articles.
Group 2 contains the indicators of tqpe ~ m which represent the economic ;
elaboration of net output per worker and per unit of time. Beginning in
the llth Five-Year Plan, this group of indicators becomes directive and
is uaed side by side with the in~icatora of Group 1.
_ Table 1. The System of the Enterprise's Cost-Accounting Indicators Com-
_ paring Results, Input and Resources
N~:1 y JI 4 T Y t W (~O11H~N IIPOAyK4NN: 0~J10� m8KTN4CClf~11. yCJIOtl�' ,
s~q, TODU NOA, ~1COAH]0� IIYM~ 1{OpMOTH0110M VNC� nPN6WAL banniicuuuw:
. ''~5~ ~ ~ R TBN npoaYKUxx (S NUl'4MI~YN N A~~
uwx. eeeoroll o6oPo* ( 6., IIAT c m
3 a s e r w n PY6., vocax, Narypc) PY YD 1
p~c: nc~a ~i-I-a-~-m u-1-~n
- ~(~ieoi~ Tpyu: vacW; 1 2 3
4l'JI.-40CW lhtIKTN4CCKNl' I~hON700/~NTC~II,IIOCTb TIpUN:lU9/IHTCJl4� I'IO~MB (IrH~N1110'1�
N flO~MaTN011WC. p~� rpyn� ~~~paGorKa 1131 IIOCT~ T~YI18, odpa- uoro n~~ouyKT~, I1~1H-
- GUTIINKH N ~):lGU4Hl'. r~~OTItNNB, p~~6o4cro GOTKB 4HCTOr1 Il~)(>� GWJIb Ilil p~bu~�uFiK;i :
l'IIHI'U4111,I1' N SIDUQIIWI`. ~U 4:11'., 4l'JI.�~IJC.~ uyKiuw uu poGirr~w� i
NUk1A UI111uTW 1'NyAa C~ V-{- Nt K(f ~U 4v CF m V
v. - I
o !
v
l 13) 5 14) 6
Bad'HQfira nonHdx aa- 12~ 4 ~
TQBT MCNBOfO N fIQOW� 3~(~10KTHBHOCT6 Tpyua ~lp~1CKTNBHOCTb PeHra6enbxocTb K
noro Tpyua: ce6erro~+- ~iepe3 sanoHyw npouYK� TpyQa yepes yHCrya' ce6ecTOenorrx
MOCTL, 1 4HI0 OPOqYK4Nl0
ci + EK (s
plyG.) -i- v-{- m m ~ c~ v
c, EK A (e PY6 ) .
(~i v) c~ -f- v ci ~
18) ~ 19) y' ~
ou15) i,�yi?r~~~: 17) ~
~16~Cuci~ "~'~u6'~' ~ ~U Nl'CY~CUOTAA4Fl ycpc~ PecypcooTAn4u 4C� I~l'IITLGI'JI~IIUCTI. K
, Pya,~ nonuyw npouyKUNw ~C3 NNCfylO :1POAYK' ~)l'CYNC:lM
L'c c~e Kv c~ -r v-~- i?? uew n+
(d PY~�1 v v-}- m - .
c -f- u c u
c v .
~ 16
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Key:
1. Results
2. Total production: Gross, comraodi- 10. Variants of total input of
ty, eales, grose turnover (in living and embodied labor:
rublea, hours, kind) Production coets
3. Actual, atandard, na~native net 11. In rubles
output (in rubles, kind) 12. Labor efficiency over grose
~ 4. Profit: Balance-sheet, accounting output
= and athers 13. L3bor efficiency over net
5. Input and resources output
6. Living labor: Hours, man-hours-- 14. Profitability-production cost
actual and normative. Workers r.atio
and employees--staff sr.d tempo- 15. Calculation of resources
rary. Wage fund 16. cbBSic + caggr~ + v(in rubl.)
7. Labor productivity, to output 17. Resourc~ yield over total -
per worker, employee (in hours, output ~
_ man-hours) 18. Resource yield over net out- "
8. Labor productivity, of net output put
per worker (in hours) 19. Profitability-resource ratio
9. Surplus product norm, profit per
worker ~
An indicator analysis by row (Table 1) shows that the indicators' common -
characteriatics are determined by the invariability of the common denomina-
tor, while the=differences are determtned by the employment of diverse in-
dices for the assesament of the results of economic management. The indi-
- cator analysis by column reveals the converse relation: The groups' �ommon _
charact~eristics reault from an identical numerator., and the differences--
from the diversit;? in the accounting of input and resource~. On the basis
of the analysis of Table 1, it ia possible to predict the characteristic
advantagea and shortcomings of the various indicators for the different
forms of production and typea of econoraic operation in accordance witli~
- their arrangement in one of the group~. Thus, in view of the fact that
_ normative net output becomea the directive indicator, the,calculation Of
- the outpu~-capital ratio (capital-output ratio) will� be subject.to regular- -
ities characteristic of the indicators of Group 8, not Group 7. ~
r.
With the introduction of the wage norm per ruble of,net-output in place of
the presently used norm per ruble of gross output (transition of the indi-
cator from Group 1 to Group 2), an advantage is obtained: It will ~no long-
_ er be possible to reduce the relative wage share of:~a ru~~ile of;;output by
virtue of overproduction of heavy, large-acale, raw_ma,ter.ial-~apd matQrials-
intensive products. , . . .
_ . ~ t s;;i.';a' ?~i
Thus,' indi:cators based on net output will be of .crucial..,importance ;the _
~ evalutation of .the.~�economic operations of the:,minisT.ries� assor~t~,tians,; -
and enter�prises. ~:�fHowever, insofar as for a nunpber of sectors cotmnodityt
,
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production will remain the directive indicator, the other groups of indica-
tora will continue to be operative as well.
The Types and the Economic Character of Net Output
During the period from 1969 to 1971, 106 enterprises in the country used
the actual net output indicator which was calculated by excluding the phys-
ical input from the actual (gross) commoditq output ~production method) or
by totaling up wagea and profit (accounting method). Experience has shown
that in principle it is possible to use this indicator. But it goes with-
out saying that in regard to implementation, there were difficulties as
well. Specificatly, this indicator has been cr{;:icized for ite poor practi-
cality: It is onZy after 18 to 20 days in the month following that under
review that the data become known. Presently, thia situation has essenti-
ally been remedied, since the data concerning the quantity of actual net
output can be had at the same time at which are also obtained the profit
and wage data that are an integral part of net output. The real difficulty
lies in the fact that in those enterprises in whose commodity output in-
dustrial, assembly and other operations and services account for up:�to 8 to ~
10 percent, and complex prime cost items, for up to 6 to 8 percent, there -
arose difficulties in regaxd to allocating these elements to physical input ~
and wages. In the calculations, ~here cropped up relativities and inaccu-
racies; in regard to a number of general pJlant and shop outlays, it was not
clear what they should be put down to--to net output or to physical input.
~ However, this difficulty has now been overcome as well.
Along with actual net output, there has been tested and~substantiated the
standard net output indicator, i.e. actual net autput angmented by the de-
preciation value. -
In an experiment conducted in 1973, the volume of net output came to be
calculated on the basis of norms (v + m) representing that part of the
Wholesale price that remains after deduction of physical input (c~). During
the period from 1973 tc 1975, thi~ approach was employed for individual
eitterprises, while from 1976 to 197g it was used for individual ministries
as a whole'. Provision was made for two variants of norms: The variant
'including the individual profit (i.e. to ~he extent to which it is deter-
mined i~ the wholesale price) and the variant adding to v the averaged
- profit. The ministries have been granted the right of selecting the norm. _
~ Thu's, the Ministryrbf Shipbuilding Induatry right away uaed the averaged ~
profit ,norms. 4 ' ' ' ~
~ . . . ~ ~
~Normative ~net autpirt `is a swrm~ary valuation of living labor input in which
the'~norni~~is `~lie`l~~i~el of the socfally necessary input of living labor per _
unit of output, which is worked out on the basis of the wholesale pr.fce -
reflecting the level of the socially necessary input of living and past
" `"j2ab4r: ~'''In~~the''cost-accounting categories of the enterprise,, it �.consists of
basi'~iar~ii�supplementar~fwages, social insurance deductions, profi.t and net ;
o~~p~~iri co~l'eX itema Fgeneral plant and shop outl�ays, current outlays
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on the maintenance and operation of equipment, expenditures on production
preparation, and other complex items). This valuation of living labor ia
intended for the enterprise's internal use and does not affect the whole-
- sale and retail prices, and the net output norm based on it is not con-
nected with the norms of the entarprises of suppliers and customers. In
the base year, there is almost no quantitative difference betwe~n actual
and normative output. Eventuallq, their numerical valuea begin to differ
and this circumstance i,s taken into account bq special methode of calcula-
- tion. Like any nor~native valuation, normative net output is characterized
by merits and shortcominga. Hovrever, there are many enterprises in which
it is more correct to carry out the calculation of production volume and
labor productfvitq and the control of wage fund expenditures on the basis
of narmative net output, not of cou~odity output, insofar ae in such enter-
priaea emploqment of this indicator helps to increase labor and production
efficiency.
The diversity of net output indfcators is shown in Figure 1.
Figure 1
Nucttia apon~~KUnw (u+m)
1/ Illlplll. CQ7AtlI111AN l'TOIIN/NTh
11cuC,xunnuu4 h upuG�rnuvuuw n~~oayKT
\
mAKtINICCK:II1~~l11CTt1li. H0~1M0TII~IMA ~IICT011 ~ YCAOOIIAII 411fTaq
upu.~~~tiiuu nponytiuua npony~~ww
Partaurunncicx ~:aK pniuocri~ P~~t4OT1J~0CTCN IIO N0~1?IATII� PJff911T61e111�Tl'N N~K ~~KTN4N
MCiNAy ,~,~;~n~~�r~ II~fUQy'Nlllll�II ~OM~ npcRCTaovainutnw CO~NIII CIfON ~wcraH npnnyti~u~~ e AoGin-
_ u u~Tr~111:1.11.1111Mi1. 871~Ii1TJ\III ~incn umoiwii ueuu MIIII~C M:1� ACltlll�N ewopn~~niuii4 Y411 ~
(npuuiooncTm~nwuii ~ictun) IL711 teyiWnruwc u~Acp;ain~ ~urnpunn upoayKiuix - wnm� -
, ~aK cy~~u wNmu ipyna u upn. puanwnue 11l1{C~11NKM ~F OWQ~ITIb
Guan (pa.~icinuu, u~~o.~) aauuM nnnnrn r~rynn i~ npu-
Gun~~ i� uM~~pniyuiuiN �
- 5~ 7~
LIYC7~N npoay~uNa, p~CFV1ITYNlMdA ~ncraa nposyKrtH~, POCGVIITM07~4ip
110 MY,~M~MAy~LMYY IWpYaTll~ifl p0 yCPt~NlMMYM IIOQMYTOYiY , ~ _
NIIAlIY113Y7A411YG HOrMdTlls yM110� YCplpIIM1UyII NOpMATIN yY11071t~CT��
71f~fTfN 00 411C70 ~qAlAll~ 7iTQN Ofi� ~[A 1?J ~IIGIp IU,4lAll{I~ J~iC/1 00~lA!� .
Pt~CA0CTC11 fV4Md 411CT01~ ppOp~'NLLitll 111CT1'N CyMMi ~I(tTOII II(lUpy'KLLIIII 00 -
' r~,~. i t. . p4'Ofl4 IIS QlIN11N:
A ~CCM 113AlAi1NM:
6~H4[i=G~(ci-f-m~)~+t $~H4fi~~lditN�vA~h ,
~ w
t .
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K~y:
1. Net output (v + m) 5. Net output calculated on the
Newly created value basis of individual norms.
Necessary and surplus product The individual norm is aug- -
2. Actual net output mnnted by the number of pro-
Calculuted as the difference ducta, upon which the total
between commodity output and net output in regard to all
physical input (production products is determined
method) or as the aum of wages 6. Normative net output
and profit (accounting method) 7. Net output calculated on the
3. Normative net output basis of averaged norms.
Calculated on the basis of norms The averaged norm is aug-
repre4enta.ng part of the whole- mented by the number of pro-
sale price minus physical input ducts, upon which the total
4. Standard net output net output in regard to all
Calculated as actual net output products is determined
with depreciation added. 8. Normative net output
Standard net output = comQnodity
output - physical inPut + de- ~
preciation = wages + profit + ;
depreciation
~
By and large, the production volume and labor productivity indicators ,
based on actual, standard, and t?orcaative net output are based on the rule
of the correlation of input and reaults: The product of living and past ~
labor must be compared with the total inpu!G, while the input of living
labor must be compared only with the "net paxt" of output.2 Productive
is only the living labor, to which corresponds--in the cost calculation of
output--the sum (v + m); its average magnitude per worker must be computed
alac~ for the productivity of living labor, which is not inflated at the _
cost of the transfer valu~ of the means of production.
Strictly speaking, it is inaccurate to asswne that the product of living ~
labor is the positive aifference between results and physical input. What
' ia to be done in those cases, in which, for example, the wholesale prices j
for various articles are fixed at the prime cost level or even lower? The ~
result of living labor is the total output (c~ + v+ m), in which the in- ~
put of past labor compensates c, while the newly created value (v + m) ~
corresponds to the input of living labor. Characteristically, in practice
it is impossible to indicate precisely which set of articles of physical
outg~it--consisting, for example, of 10,000 dresses, 5,000 men~s suits,
and 2,000 children~s article:;--is exclusively the product of living labor.
For this reason, members of the enterprises' economic $ervices hold that
in terms of value a certain part of theae articles compensates the input
of producer goods, while the remainder corapensates the input of living
labor. When only a single unit of an article is produced (blast furnace,
- papermaking machine, ocean liner), it is difficult to make even such a
breakdown. Thus it is only in terms of value that the ~utput is divided
into a compensatory and a net part. In thia respect,,it is important to
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keep in mind that in regard to the value equaling the compensatory part,
every unit of a set of products on its part consiats--just like any unit
of n~t output--of input of living and past labor.
Elaboration of the Net Output Norms
The net output norm is regarded ae a coat-accounting valuation of the so- _
cially necessary input of living labor. Practically, its~elaboration at
the time of the experiment meant the calculation of a new wholesale price
(without regard for ph~ysical input) for the product or type of operation.
These norms were for the most part worked out at the enterpriaes, coordi~
nated and endorsed at the main adminiatration and the sectoral institute,
and confirmed by the minietry.
- Beginning in 1980, as the final elaboration of the association (enterprise)
norms takes place, all-union wholesale price lfsts will be used, with the
= corresponding norms being assigned. By decree of the CPSU Cenfi~ral Commit-
tee and the USSR Council of Ministers, this work has been entrusted to the
USSR S tate Price Couimittee. The ministries (departments) that have been
charged with working out the plans for the new wholesale price lists to be
introduced on 1 January 1982 calculate at the aame time the net output
norme and aubmit them for confirmation to the State Price Committee. The
organizations drafting the plans for the new ~rholesale prices calculate
the net output norms for the whole range of products of the given price :
list, regardleas of the respective departmental aubordination of the manu- ,
facturer of these products. The norms are formed on the basis of ~the .
"Systematic Directives Concerning the Order of Elaboration and Application
in the Planning of the (Norm~ztive) Net Output Indicator" that were con- ;
firmed by the USSR State Planning Commission, the USSR State Price Com-
mittee, the USSR Ministry of Finance and the USSR State Labor Comanittee ~
and coordinated with the USSR Central Standardization Administration on ~
12 September 1979.3
In the elaboration of the new wholesale prices, all constituent parts of
couunodity production will be taken into account: Finished products and
semimanufactures sold on the side; major repairs of equipment and meana
of tranaportation; aingle orders, industri,al operations, and other out-
put. For the products and types of work that are planned and taken into
account only in terms of cost (production of spare parts, nonstandard and -
technological equipment, and accessories; industrial operations), the _
norms will be calculated as a quota (in kopecks) per ruble of output.
It is stipulated that the planned rates of increase of labor productivity
be calculated on the basis of the normatine.net outpnt volume and the -
number of industrial workers engaged directly in production--as these
- elements are specified in th~ plan--while the actual rates will be cal-
culated on the basis of real implementation. The enterprises will re-
ceive the wage fund fn accordance.with the degree of fulfillment of the -
normative net output quotas. The control of wage expenditures should be
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a carried out by comparing the rates of increase in output according to the -
normative net output and the rates of increase in average wages. The
plannir.g and evaluation of the utilization of producer goods will be car-
ried out through the output-capital ratio on the basis of normative net
output. The norms should be permanent for the entire planning period
(5 years). _
The principles underlying the elaboration of the individual and averaged
norms for produc ts and typea of work are ahown in Table 2.
Tab1E 2. Elaboration of Individual and Averaged Net Output Norms (in rubl.)
- 1) oo:..aaH ueun 6)nw~ban~
crpyKrypu Nu1u~u~~Yanmiuc Ycp S~~vnu+c
- nbcu� noVMaTHew Nopwosnnu ~
~ 2) nar� I p+ m p~.. J~l � ~ .
nwll m maNr� nore-
p�� c~ I u nww pn
weP �h
2 006 I 256 300 450 300 450 = 750 3U0 360 = 660
1 494 994 200 300 200 300 a 500 200 240 ~ 440 -60
- 978 648 I 50 180 I 50 I80 = 330 I50 180 a 330 -
G72 472 l(l0 IW IOU -I- 100 200 100 l20 220 -I-20 ,
5U7 387 GU f,0 GO GU = 120 GO 7'l = 1'3'l -F I'l =
IU8 53 55 55 55 55 G6 = 121 +66
1 G4 64 50 50 50 50 ~ 100 50 60 1 I 0 0
68 35 35 35 35 35 42 = 77 +42
123 60 30 33 30 -F 33 = 63 30 3G ~ GG + 3 -
77 30 20 27 20 -E- 27 = 47 20 24 = 44 - 3
I 000 l 200 2200 ~ � I 2200 . I-~- I 53I - I 53
l I i I .
Key:
1. Wholesale price 5. Averaged norms
2. Absolute quantity 6. Profit
3. Structure 7. Gaina
4. Individual norms 8. Losses
The result of the division of the total profit (1,200 rubles) by the total
living labor costs (1,000 rubles)--which represents the surplus product-- '
is 1.2 (N = m: v). The net output according to individual norms equals !
2,200 rubles. Applying the coefficient 1.2 to the wages--separately for _
each product and type of operation--one obtains the same aum, insofar as -
the profit losse s(- 153) in regard to profitable products are compensated
by the pxofit 153) on unprofitable products and products of low pro- ,
fitability. The volume of net output according to individual norms con-
forms precisely with the volume of net output according to averaged norms,
even if the prof itability-wage ratio is calculated not on the basis of the
wholesale prices, but directly from the actual commodity output. Thus, if
the output struc ture is 78c + lOv + 12m, then'N = 12 : lU = 1.2 will be
the seme as if i t had been calculated on the basis of the wholesale price
of articles that are part of the commodity output.
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The Advantages of Normative Net Output in Cost Accounting
- Noranative net output subatantially reduces the enterprises' intereat in
the production of material-intensive and heavy products; it cnotivates the
collectives to economize on all types of physical input, helpe to increase -
the output of prc~ducts of higher quality, of complementary articles, epare
parte, goods for cultural-pereonal and houeehold nse, and to increase the
- volume of industrial operationa, gpecifically in regard to current repair,~
major overhauls and modernizatior~ of equipment. _
The averaged norms substantially limit the enterprises' possibilities of
increaaing net output at the axpense of articles and operationa for ~~-hich
higher individual norms were established. In thia case, the differences
in advantage between the products and operations are reduced, since tile
averaging of profit reduces the differences in the profitability of the
goods produced. But this does not signifq total elimination of the struc- _
tural shifts: That which was unpsofitable on the basis of individual
norms becomes profitable on the basis of averaged norms. Strictly speak- -
_ ing, in itself net output with averaged profit doea not s~lve the problems
of the given products list, since, as is well known, one or another of its
advantages sho~,rs up in any cost calculation of output. In both the indi- ~
vidual and the averaged norms, the tendency toward "big" wholesale pricea
_ is maintained. Experience has shown that the enterprises are interested
in producing articlea, in the pricea of which the profit share is high,
and that they then uphold prices containing a large amount of profit. In -
a price structure of 40c + 25v + 35m and 70c + 15v + 15m, the first price
(35 : 25 a 1.4, not 15 : 15 = 1.0) turns out to be preferable; in a struc-
ture of 60c + 20v + 2Qm and 600c + 200v + 200m, the aecond article becomes
profitable.
As a rule, the planned volume of net output according to averaged norms
~ differa from the net output volume that would have been stipulated for
individual norms. This difference will be greater, if more products are
planned whose averaged norms exceed the individual ones, and conversely, -
the enterprise loses part of the net output, if the plan providea for an
increase in products, the averaged norms of which fall short of the in-
dividual ones. However, this difference, which is caused by g structural
shift, is considerably smaller than that which would arise with an abso-
lute increase in highly pzofitable products and an absolute decrease in
the output of products of low profitability.
The experience gained in its introduction by many enterprises con�irms
that it is economically expedient to use the normative net output indica-
tor.4 Thus, the "Elektrostal'montazh" [Electro-Steel Assembly] Production -
Association has been using the net output indicator since the middle of
1977, which has enabled the association to reduce the input of materials,
fuel and electric energy; producti~n has become leas materials-intensive.
In the Glavmospromstroymaterial [Moacow Main Administration f~r Industrial
and Construction Materfals], the employment of the net outpu~ indicator
~
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has had a poaitive effect in regarci to fulfillment of the products list
targets: Of 23 enterprises, 20 fully met the product output quotas in
accordance with the products list. The enterprises showed great interest
- in the development of progressive designs.
At the Leningrad Chemical-Pharmaceutical Plant, at the Leningrad "Rusaian
Diesel" Plant, at the Penza Diesel Plant and at tb.e Kiev Printing Machine
Plant, the experiment has ahown that in the calculation of labor producti-
vity on the basis of net output with averaged norma, the basic products
turn out to be those that require professional expertise and creative work.
'Ln the "Sevzapmebel"' [Northweet Furniture] Production Asaociation, where
the indicator of net output with averaged noxTas has been used for several
years, mater_al :eaource economy has been intensified and the output of
, products has been increased in accordance with the product assortment p~.an.
The indicator of net output with averaged norms should be introduced in !
- the enterprises of those industrial sectors, in which its advantages over ~
- the indicator of (grosa) comm~oditq output will be very apparant. Speci-
fically, theae sectors inclr.de the mac:hine building industry, which is !
characterized by a diversi�ied product mi:: and structural ahifts offering I~
diverse advantages, the metalworking in3ustry, which manufactures products
to be used in machine building (metal stripa and wir~ producte, forgings,
diea for stamping, fsateninga), the enterprises of the conatruction in-
dustry~ in which the "output of tonnage" ia large. This method could well I
be used in rolling mills; here the introduction of net output will stimu-
_ late the output of rolled metal of dimensions most approximate to thoae
aeeded by the machine building industry (sectional rolled steel, shaped
wire rods, thin-walled ptpea, eurface-treated sheet metal, and other pro- ;
ducts). The method could well be used in foundries, where it would help
to avoid overetating the weight of ingots, etc.
The Material-Output and C4~,ita1-Output Ratios in Normative Net Output
In regard to the normative net output indicator, the economic concepts of _
"material-output ratio" and "capital-output ratio" should be used in a
different sense than in regard t4 commodity or gross output, since in con-
traet Co the latter the input elements ctotal and cbasic gimply do not _
exist in normative net output. This also applies to the indicator of
actual net output, although the volume of actual net output changes in
accordance with the changes in physical input.
In present practice, the role of Che production cost indicator fa some- _
what depreciated. Neverthelesa, for enterpriaes that use the indicator ;
of normative net output the production cvsts are not an intermediate, but
the final indicator of the actual use of embodied labor resources. The
- argument that there is no point in calculating production costs, if the
- enterprise"is profit-ariented, is inappropriate in the present case, since
of importar~ce to the enterprise is not only the growth of m, but also an
increase ot v+ m. In the attempt to increase the volume of normative n~t
~ ,
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output, one can lose control over the reduction of working capital inpu~:.
Thus it is necessary simultaneously to calculate and analyze the changea
in capital goods input.
In our view, the current opinion concerning immediate coordination of the
_ incentive fund allowancea with the "net yield on capi .l" ia erroneous.
The new equipment introducad in the enterprise is ae a rule 2 to 3 timea
as expensive (or c~?en more than that) es similar old equipment, while ita
technological productivity is only 1.5 to 2 times ea great. For this -
reason, the yield on capital, whicn is calculated as the ratio between net
output and the value of the basic equipment on the balance sheet, naturally
decreases. It is likewise natural that operation of new fi.xed capital re-
duces (relatively and absolutely) the labor-intensivene:ss of the produc-
tion programs, which in turn is manifested as a tendency toward a lower
coat calculation of net output. In those enterprises, in which the net
output increases more rapidly than the gross output, the yield on capital
- declines more slowly. Thus, processing an ever-growing quantiL�y of raw
maCerial and materials by means of new tools of labor and substantially re-
- , ducing the labor-intensiveness of production and the overall input of
living and past labor per unit of output, the enterprises turn out to be
in unfavorable conditions for the entire period during which the new re- -
sources are put in operation. It appears that for the period of the eriter-
prises~ .transition to operations evaluation on the basis of net ou~put,
the indicator of yield on capital should be used as an accounting indi.ca-
tor.
Wages According to Normative Net Output
- In order correctly to coordinate the dynamics of normative net output with
the wage dynamics, the wage norms per ruble of net output h~ve been intro-
duced. For this purpose, the associations (enterprises) have been granted _
. the right to pay--by virtue of wage fund savinga achieved over against the
established norm--salary and wage rate increases.
In the application of the method of normative wage expenditures and, based
on it, of providing the induetrial workers with incentives, experience has
been gained. This method has produced good results in enterprises in which
the volume of commodity output was not overstated at the expense of favor-
able structural shifts. Application of the method in regard to normative net
output is free from such a drawback. Here, in the planned wage fund its
savings in comparison to the normative outlays can be achieved only if there , -
is an increase in the output of products. Automatically, this meana that ~
savings over against the normative wage ex~s~r.ditures can be achieved, pro-
vided that the ratea of production increase exceed the grawth rate of the
- planned wage fund (including wage fund bonuses).
Presently, there have become apparent the shortcomings of a recent motiva-
tion practice, a serioua flaw of which is the enterprises~ lack of inter-
est in reducing the number of workers. There are hidden as well ae overt _
b
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surpluaes of manpowg~r. In many enterprises, the labor aurplus at timea
reachee 10 percent. Following the normative approach to the planning of
wege expenditures, thie shortcoming can be eliminated, especielly in com-
bination with the applicution of the S1~cl~eki.ilo Method of regulating Llie
permanent work force.
Improvement of the Normative Net Output Indicator .
Attention ahould be directed to the constructive proposal by S. Voyenushkin,
~ L. Valentinov, E. Belov and Yu. Mironov concerning the calculation of an
accounting net output obtained by excluding from the net output payments
for produ~er goods, loan paymenta, pensions, and also fines, sanctiona and '
forfeits. The sbove authors propose that this indicator be calculated on ,
- the basis of actual net output, but this approach is applicable to norma-
tive net output as well. Acco:ding to prevailing regulationa, the payments
for producer goods and the fixed pasaaents are budgeted from the enterprise~s
profit; consequently, when the total fines are excluded, the remaining part
is the accounting net output. Reducing the normative net output by the
amount of fines, sanctions and forfeits paid to a customer for the breach ;
of an economic agreement, or increasing ir by the amount received from ~
suppliers in compensation for damage caused allows to reflect in the pro-
i posed indicator the extent to.whi~h the collective has met ite obligations '
vis-a-vis the associated producera. ~
In the application of the normative net output indicator, the payments for
reaourcea, the interest on loana, the fixed paymenta and the pension pay- i
ments ~'form" that part of it which is not directly attributable to the
enterprise--it is an additional part resulting from better management con-
ditions. The economic purpose of reducing the normative net output by the !
emount of payments for resources, interest on loane, and fixed payments, j
and of reducing (increasing) it by the total amount of fines is to provide '
an incentive for a better utilizatiors of natural, financial and production ~
resources. As the utilization of equipment, state loans, and natural �re- ~
" sources improves, the enterprise's payments for these items are reduced '
and the volume of accounting net output increases. This indicator can be
used in a differentiated way for economic as well as technical-economic
analysis.
i
- The dialectics of the use of the normative net outpst indicator coneist
in the fact that on the one hand the indicator does not reflect the year-
ly change in producer goods input, while on the other hand it is itself
_ not free.from the influence of embodied labor input. For part of the ~
normative net output is the profit which ia fixec~ in the wholesale price,
with the material assets expended teken into account. For thfs reason, it
_ is proposed to establ~ish the profitabiTity of an article not on thz basis
of the formula m:(c, + v), but in the form of (m : v), i.e. in propor-
- tion not to the sum total of the resources expended, but only to that part
of them which corresponds to the living labor costs. In this case, one '
- obtains a more accurate expression, without any "admixtures," of the
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value of the newly created output.~ This approach is acceptable for ana- '
lytical purposes. However, this raethod is highly labor-intensive, since
for the entire liet of wholesale prices used at the enterprise it is neces-
sary first to correct m in pr.oportion only to v and then to do additional
work in regnrd to elaboration of more precise norms. By and large, asaese-
ment of the organic structure of production (v : c) ia prerequisite to
_ correct price fixing.
Along with the proposal concerning elimination of the effect of the volume
of physical input on the value of ra in the net output norms, the opinion -
has been advanced that the latter should be determined by a single method�~~
by gxcluding not only the value of physical input, but also the profit add-
ed.t~ Such an approach can be employed as well, but in terms of econoynic
- substance it represents an indicator similar to that of normative process-
ing cost.
Unsolved Problems
The economic characteristics, the principles of utilization and the pz~acti- _
cal application of the normative net output indicator are sufficiently
clear. Substantial theoretical studies have been carried out and the indi~
cator has undergone practical testing for almost 10 years. The experiment
has shown the indicator's advantages, but at the same time it has bequeath-
ed to the practitioners a number of unsolved problems. Its introduction
as a new directive indicator can give riae to difficulties, vaguenesses
and conditiunalities. -
In thie connection, it is important firat of all to formulate a correct F
theoretical-methodological conception of the nox~m as the level of socially
- necessary input of living labor. In the political economy of socialism,
the socially necessary input is determined in conformity with the total
input of living and embodied labor. Insofar as the variables C~ and
(v + m) forming part of the socially necessary input differ for various
products and in various enterprises, the norm worked out on the basis of
the average sectorial wholesale r�-i.^~ ~~f.ll. ~�ffPr from the norm formed on
the basis of individual input. Apparently, the norms will frequently di- ~
verge from the socially necessary level of 1'."ving labor input, since the
" real dynamics of the latter decline, while the norm remains constant for
several years. By and large, this means that already at the stage at
which the norms are drawn up, it is necessary to approximate them as much
as possible to the socially necessary level of living labor input.
It is contrary to expectations, for example, that a number of chemical-
pharmaceutical snd furniture firms producing finished products do not have
- wholesale prices. Their output is calculated in sales prices or i,n retail
' pr~ces including turnover tax and other price elements. In such cases,
what are the norms to be b3sed on? At preaent, there is no single approach;
both sales prices and planned prodi.~ction cost calculations are used.
.
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In the scientific literature, there has been no elaboration of the pr~blem
as to how the review of the output norms will affect the volume of net out- -
put. If there are no corrections providing for the lowering (raising) of
estimates, the norma established will after a while no longer correspond to
the real labor input.
Instructional materials recocmnend to work out the norms on the basis of
nveruge sectorial, regional and zonal pricea. However, the individual dif- _
- ferences in living labor input are so substantial that this requires special
consideration, or else the norms will not atimulate any reduction in input, -
if they are overstated, or, if they are understated, they will be too dis-
advantageous. It appears that in practice the principle of working out the ~
norms on the basis of the average aectorial wholesale prices should each
time be corrected on the basis of the enterprises~ individual characteris-
. tics that determine their actual input of living labor.
The averaged norms are considered to be preferable, but for enterprises ;
that are not in a position to change the product assortment individual prof-
it norms are more advantageo~is. In cases of this kind, the association
management should meet halfway even a sin~le enterprise, in apite of the ;
fact that the other enterprisea operate in accordance with averaged no:.ms.
Moreover, enterprises that do not tolerate increased physical input and
that are restricted by a rigidly set product assortment generally require
neither individual nor averaged norms. We feel that in such casea it is !
advisable to uae the indicator of actual net output. ;
Both scientists and practical experte are agreed that the big and complex
_ ,job of working out the norms will be succeaefully carried out. However,
there are arising specific sector-related difficulties--e.~. in the machine- -
tool and inatrument plants that produce hundreds of thousands of components
and spare parts. In these plants, it is very difficult to work out norms
for the entire products lisc; consequently, the proposal to establish a
norm for R 1,000 of related, homogeneous products appears to be correct.
If the averaging coefficient (m : v) is calculated on the basis of commodi- ~
tq output with a large share of products of low profitability, the averaged ,
norms can put too low the profit in the following year. And conversely,
calculation of the averaging coefficient on the basis of a large share of
profitable products overstates most of the profit. We feel that thia
circumstance calls for elaboration of special statistical methods of equal-
ization. Some economists are alarmed by the fact that a number of norms
exceed the wholesale price, when the profit is averaged. Other economists '
who see that there are parallel profit losses in regard.to other producte
are not disturbed by the fact that the averaged norm exceeds the wholesale
price by a factor of 1.2 to 1.5. Opinions differ as well in regard to the
- establishment of norms for unprofitable articles. Many economiats hold
that addition of profit to unprofitable products does not motivate the -
production collectives to reduce the production costs of articles for which
the production expenditures exceed--through the enterprise~s tault--the
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average sectarial outlays. We feel that this problem can be solved in the
following way: For products for which the wholesale prices have been fixed
_ below prime cost, the diffusion of averaged profit ia entirely permissible.
- As regards articles, the production expenditurea for which conaiderably
exceed the uverage sectorial wholesale price, one should not employ profit
averaging, since here there really ie potential for reducing the total in-~
put per unit of output. _
In the transition to the normative net output indicator, the labor producti-
vity ~rowth ratea increase sqmewhat more rapidly. For thia increase, sup-
plementary wages are paid. In the scientific literature, discussion re-
volves around the question whether these supplementary wages are ,justified
by material economy. Introduction of the wage norm per ruble of normative
net output and the supplementary payments based on wage savings over a-
gainst this norm eliminate this problem; however, here too it is essential
to know the volume of material savings: An .enterprise can achieve savings
over against the norm, while allowing excess input of embodied labor. Such .
cases will be solved by special methods of bonus reduction.
Thus, in the enterprise's economic cost accounting system, there has ap-
- peared a new conclusive indicator--normatfve net output. Its principal
- advantage is the fact that it has become possible more correctly to meas-
ure living labor efficiency undistorted by gross evaluations. The �act
_ that normative net output has been placed into the foreground does not
mean that the other economic indicators have become less important. They
_ will continue to operate in the gen~ral system of indicators tested in
50 years of practical utilization.
FOOTNOTES
1. See VOPROSY EKONOMIKI Ho 2, 1977, p 126.
PLANOVOYE KHOZYAYSTVO No 1, 1978, pp 54-55.
2. See V.V. Novozhilov, "Developmental Trends in Regard to the Measure-
ment of Labor Productivity in the USSR," in: "Trudy Leningradskogo
Inzhenerno-Ekonomicheskogo Instituta" [Transactions of the Leningrad
Institute of Engineering Economics], No 44, Leningrad, 1963, p 35.
3. See EKONOMICHESKAYA GAZETA No 4Q, 41, 1979.
4. On 1 Jtly 1979, over 830 enterprises used the normative net output -
indicator. _
5. See PRAVDA 26 Apr 77.
~ 6. See PRAVDA 7 Jan 78.
7. See V. Belyakov, "The Lessons of the Experiment," PRAVDA 3 Feb 78.
_ 8. Ibid.
~
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ECONOMIC MODELING AND COMPUTER TECHNOLOGY APPLICATION
_ i
BOOK ON MODELIN~ DEPLOYMENT OF ECONOMIC BRANCHES REVIEWED
Moscow VOYROSY EKONIMIKI in Russian No 1, Jan 80 pp 140-142
[Review by M. Vilenskiy of the book, "Osnovnyye metodicheskiye polozheniya
optimizatsii razvitiya i razmeshcheniya proizvodstva" [Basic Procedural ~
Rules for Optimizing the Development and Siting of Production Facilities],'
which was edited by A. G. A~anbegyan and N. P. Fedorenko, Izdatel'stvo ;
- Nauka, 1978, 271 pages]. _
[TextJ The combining of an analysis of the underlying ~theoretical prob-
lems of optimizing the development and siting of production facilities ,
with a statement of concrete procedural rules that can be used in design
and planning practice to resolve the tasks of improving the regional or-
ganization of production is characteristic of this book. It is this ele-
ment that determines the practical orientatifln of the research performed,
and the procedural rules for optiraizing the development and siting of pro-
duction facilities emerges in the work as a result of serious theoretical
~ generalizing. ~
The monograph's strv^ture ls good. In the first part, which consists of ~
three chapters, the bases for a Standard Procedure for Optimizing and Sit-
ing Production Facilit~es is laid down, the purpose of making these analy-
ses is formulated precisely and the prerequisites for its achievement ~
are described. Among them, aside from such purely economic prerequisites
as the demand for the product and the availability of the resources, the
_ role of social and economic factors is disclosed.
The authors indicated the main stages of optimization of analyses for de-
velopment and siting (there were 11 of them), which make up a single sys-
tem, and not one of them can be omitted without harm to the completeness ~
- and authenticity of the analyses being performed. Especially great sig-
nificance is attached to determining the tasks or purposes of developing
the sector, preparing baseline information for the correct formulation
and solution of the task, making an economic analysis of the results of
solving the task, and formulating recommendations for the adoption of the
planned solutions.
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Raising the question of optimization criteria is, in our view, extremely -
fruitful. The authors consider that the criteri3 can be changed as a func-
tion of the specific purpose of the task. This can be both a minimization
of the aggregate expenditures and a maximizatior~ of the savings from the
production and use of the sector's product in the national economy, and
- also the maximal output of a highly effective product that is scarce.
liowever, t;he last of Lhe criteria named can provoke objections. In a bal--
anced economy with an optimal structure, there should be no scarce prod- _
ucts. A shortage in and of itself cannot be an economic criterion. A
shortage is an expression of a lack of balance and errors in planning.
It seems to us also that a combining of the concepts of "highly effective'~
and "scarce" products (page 9) is not legitimate. If a product is highly
effective, then the volume of its output should preclude a shortage. It
is desirable to compensate for a possible raw material shortage through
imports. "
The book classifies optimization tasks in accordance with a number of in-
dicators: in accordance with a selected optimization criterion, the nat-
ure of the production facility being optimized, the time scale, and so
= on. In so doing, the type of task depends upon combining therein the
enumerated indicators. Therefore, it is impossible to propose i.n the
Standard Procedure a single model from mathematical economics that will
describe the whole set of combinations of classificational indicators.
And the authors correctly recommend that specific models be developed,
bascd upon said Standard Procedures, for taking into account the specifics
of' cc~r.cre~;e tasks. The monograph examines only three examples of task
models that are resolved in accordance with the criterion of minimwn ex-
penditure. These are a production and multiple-product statistical task
with discrete variables, and~of the same type, a dynamic task and a
transport-operations and multiple-product statistical task with discrete
variables. The choice of these tasks was good, for they are highly typi-
cal. The value of these models is their simplicity and precision, which
_ makes them acceptable for planning workers. A number of the general
propositions of the first chapter are spelled out in detail here, and
methods for computing capital costs with all their components~are recom-
mended. In so doing, the authors propose formulas for the computation of
weighted-average expenditures for single-product and multiple-product
output, for adjusted expenditures that take the time factor into account,
and for the indicator of overall expenditures that is used in formulat-
ing the dynamic task.
The recommendations for preparing baseline information for solving opti-
mization tasks are useful,in our view. There is no need to prove to what
_ extent the volume and, the main thing, the quality of such information
affect the authenticity of the solution. The book not only indicated what
information is necessary but it also characterize~ the sources for obtain-
ing it and the workings of its preparati.on for inclusion in the model.
The makeup of the ~aseline information is determined by the content of the
- task and the type of model that is chosen for it from mathematical
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economics. But the listing of data cited by the authors for the task for
a minimum o~' expenditures for a static ~;ransport operations model is so
detailed that it can also be used, with some supplementation, for solving
tasks of another type. -
it should be noted, however, that in addition to what the authors propose,
it would be desirable also to include the indicators of technical progress
in the information on production methods. To restrict the inclusion of
this factor only to particular or special procedures, as is recommended on
page 20, is, in our opinion, unwarranted. It also seems to us that the
question of evaluating natural resources is not covered in the work in due
measure. Thus, the book proposes to consider the expenditures connected
with the use of natural resources (land, useful minerals, water and others)
in accordance wii;h their appraisals,~provided that such appraisals exist. ,
And what if such appraisals do not exist? Moreover, the authors determine
expenditures for raw materials, fuel and energy in accordance with the
assessments of the optimal plan of the corresponding sectors. Consequent-
ly, if there are assessments of deposits of, let's say, coal, then it must ;
be assessed in the optimization tasks in accordance with those assessments
and, moreover, in accordancc; with the assessments of the coal industry's
optimal plans for development. Is there an argument for such a recommen- -
dation? -
- The authors paid much attention to analyzing the makeup of capital invest-
ment; this reflected the capital expenditures for protecting the environ- .
ment, which usually are not considered in the procedures. The structure ,
of current expenditures also are deciphered in detail. It is true that
the authors have not answered the question of whether the outlays associ- ~
ated with the operation of equipment for protecting the environment, par- i
ticularly purification structures, are to be included in the current expen- ~
ditures of the activity being sited. As for the methods recommended by
the authors for adjusting expendituresfor a single moment in time, these
are well known in ec.onomic; theory and practice. ~
Recommendations for anaJ.yzing the results of sol~~ing optimization tasks
occupy an important place in the monograph. Such an analysis can be
viewed as a concluding stage of the optimization process, which serves as
a basis for the adoptic,n of final decisions by the control organ. As the j-
authors correctly propose, this is a singular repetition of the whole pro-
cess of compiling a model and solving the task, which is performed in the '
reverse direction, that is, it ignores the results obtained during the
solution.
However, in our view, when analyzing the soltztion, such an important fac- '
tor as the socio-political conditions for implementing one variant or
another for developing and deploying production facilities also should be ,
considered. Althaugh it is among the factors that, the authors say, in-
fluence the formulation of the plan for developing and siting, neverthe-- -
less it obviously is not considered in the models they propose because ;
- of the complexity of its quantitative evaluation.
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The second part of the book consists of nine chapters, each of which is
devoted to optimizing the development and deployment of a definite sectar:
the coal, petroleum-recovery and electrical-equipment industries, ferrous -
metallurgy, electric power, the forest-industry complex and agriculture.
.The book proposes models frora mathematical economics that will enable de-
velopment of the enumerated sectors to be optimized, taking into account
their specific characteristics, with regard both to the prerequisites for
developing the national economy's requirements for a given product and
to the raw materials resources and their distribution about the country's
expanse. Each of these chapters implements, relative to the specified
sectors, the basic procedural rules that are laid down in the book's first
, three chapters.
It is important to emphasize that the sector procedural rules laid down -
in the book being reviewed have already been taken into the armamentarium
of our economic practice. The head NII's [scientific-research institutes]
of the appropriate sectors, jointly with TsEMI [Central Institute of
Mathematical Economics] of the AN SSR [USSR Academy of Sciences], and also
the Institute for the Economics and Organization of Industrial Production
of th~ SO [Siberian Division] of the AN SSSR has performed concrete anal-
yses of the development and deployment of a number of sectors. Thus, the
results of optimized analyses for development and deployment of the mining
and preparation of steam coal were made the basis of a plan for developing
the sector during 1980 and of long-range plans for 1985 and 1990 that USSR
- Ministry of the Coal Industry has worked out. An optimized model for the _
development and deployment of facilities for producing ferrous metals (pig _
iron, steel and rolled metal) for the country as a whole has been used in
practice. Similar analyses are being made by IEiOPP [Institute for the -
- Gconomics and Organization of Industrial Production] of SO AN SSSR at the
regional level for Siberia and the Far East. An optimized multiple-prod-
uct model for the forestry complex was made the basis for working out a
plan for developing the USSR's forestry complex.
- These examples do not by far exhaust the positive results that have been
obtained in various sectors through the use of the procedural rules that -
are contained in the book being examined while plans for developing and
deploying the appropriate production facilities were being worked out.
But even the cited examples are adequate to appreciate the merits of the
monograph's practical orientation.
This book is remarkable in still another aspect. It indicates how fruit-
_ ful joint work under a single plan can be for a number of institutes and
scientific institutions that study urgent national-economic problems.
_ While the book being reviewed is evaluated positively, it should be
noted, at the same time, that the optimization models cited in the mono-
graph embrace only a small part of the task to be solved and the book does
not by far exhaust the problem of the rational placement of production fa-
= cilities as a whole. These models for development and deployment should
be improved even more. An important virtue of the monogxaph is that the
~ authors have manged to mark out paths for such improvement.
COPYRIGHT: Izdatel'stvo "Pravda", "Voprosy ekonomiki", 1980
11409 ' -
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- REGIONAL DEVELOPMENT
FORTHCOMING CHANGES IN RURAL DEVELOPMENT
Moscow VOPROSY ~,KONOMIKI in Russian No 1, Jan 80 pp 78-89
- [Article by V. Stern: "Prospects for Rebuilding the Countryside"]
[Text] The development of rural construction is an important link in
the party's agrarian policy, which is counting on a rise in agriculture's ~
role in raising the people's welfare. Because of the NTR [scientific and
technical revolution] and t'~e dynamic development of the country's econo- ,
my, a considerable uplift in agricultural production is occurring at a ,
time when labor resources are leaving this sector and agricultural land is ~
timi.ted.l In July 1978 the CPSU Central Committee plenum emphasized the
need to maintain in the future a substantial increase in capital invest-
ment aimed at developing the country's agricultural-industry complex and I`
al.so i;he countryside's social sphere. Now a system of ineasures is being _
implemented that will provide for solution of the economic and social ~
tasks that the party has posed in the CPSU Program. Since 1965 the state -
and kolkhozes have invested more than 40 billiori rubles in facilities for
nonproduction purposes, or three-fourths of all investment in the rural
social sphere during the whole history of the Soviet state.
~
Reconstruction is a compo,.ent part of the program for transforming the
countryside, which involves both the protluction and the nonproduction ;
spheres and the system of social relationships. Reconstruction tasks are
- concretized in the form of specific normatives: social standards, con- ~
struction norms an3 regulations, and sanitary-hygienic and other special i
requirements. ~
The front;iers of social development are not static. Social requirements
are occasioned by the potential of the economy; as K. Marx noted, "man-
~ kind sets for itself only those tasks that it can resolve.tz Purposeful
control of reconstruction of the village is being realized by legislative ~
enactments, plans, standards and economic stimuli (privileges, payments
and credits) and also on the basis of the formation of a social psychology -
(interests, aims, orientation and preferences). The effectiveness of man-
- aging the reconstruction depends greatly upon an analysis of the existing
situation, an evaluation of. the alternatives for solving the problems that
arise during development, and optimization of these solutions.
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Practical considerations pose the task of settling people in promising
places. The development of sovkhoz and kolkhoz settlements does not do
away with the problem of involving the residents of small settlements in
the spherc of services and of intensive production and social contacts.
About half the rural populace lives in such places, and fixed capital run-~
ning into tens of millions of rubles has been concentrated in them. The
overwhelming majority of such settlements are cut off from modern roads,
and the creation of small services enterprises for isolated settlements
would lead to low effectiveness of their operation, high costs for build- -
ing and operating the enterprises, and an increase in servicing-personnel
manpower. Consequently, a differentiated approach and the development of
rational ways of improving the settling of people are necessary here. -
The desirability of the further use of small settlements was emphasized
in V. Shcherbitskiy's report to the April 1979 plenum of the KPU [Commu-
nist Party of the UkraineJ Central Committee.
Reconstruction of the countryside requires an expansion of housing con-
struction. Right now the housing inventory per rural resident is, on the
average, as great as that of the city resident. In most cases this hous-
ing has insufficient amenities, even with full electrification (99 per-
cent). Of the available inventory, 1 billion square meters of the total
area, or more than 80 percent of it, are inindividual homes,which are the -
personal property of the population. Design practice, as a rule, aims at
a radical change in the existing proportions in favor of the social in~en-
tory (master plans for villages often allocate 70-80 percent). Realiza-
tion of such a program would require that 6-7 billion rubles be spent an-
nually for rural housing construction during coming decades. Suffice it
to say that this exceeds the annual program of all the construction and
installing work of Minsel'stroy [Ministry of Rural Construction] (5.2 bil-
lion rubles under general contract in 1978). Expenditures for operating
the village's housing inventory and municipal services would grow propor-
ti~nately. Because of this, the problem of choosing courses for develop-
ing the rural housing buildup, with a determination of both financing
sources (or form of ownership) and three-dimensional layout and con-
structional solutions of the buildings, is urgent. _
Building up the countryside involves a withdrawal of land and the subse-
quent use thereof. The opinion that a conversion of the extensive type of
buildup that exists in the countryside to the construction of housing of
more stories will enable land that is used for agriculture to be saved has
become a well-known stereotype. It is not considered here that the norms
for private-plot allotments are governed by law (or by the kolkhoz char-
ter), regardless of the number of stories of the housing or where the
families reside.
A solution of the problems of settling people, formulating a buildup of
housing, and making use of the land will enable the areas of capital
investment and the priority thereof to be refined and the construction -
- policy for the countryside to be improved. These problems should be re-
viewed in the light of the overall long-range tasks of transforming the
- ~ countryside, otherwise the necessity for additional expenditures for
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eliminatin~ the consequences of palliative solutions will arise. There-
fore, before proceeding to determine the way to solve these problems, a
number of fundamental assumptions should be refined and the policies for -
developing the countY�yside defined. In particular, these questions must
be answered: what changes will occur in the content and forms of rural
habitation, how will the number of the rural population be changed, and in ~
what way will the influence of overall social factors be reflected in the
lifestyle of the rural population?
An improvement it~ settling the r�ural population reflects the effecL of _
the economic laws of socialism. It is aimed at improving the use of pro-
ductive forces, raising the productivity of social labor, and providing
the widest accessibility of workers to the material and cultural values of
society that exi~t both in the city and the countryside (natural parks,
bathhouse~, historical spots, sanctuaries, game refuges, recreation areas .
~ and so on).
The planned placement of production facilities and of the population does
not mean the aboli.tion of small settlements, curtailment of the existing
settlement network in inhabited regions, and the organization of consoli- .
dated urban-type settlements alone. The ~tatus of rural communities is .
determined by the activity of the population, a peculiarity of which con- ~
sists in the use of land (as the main means for production in agriculture)
and of the biological resources (and subj ects) of labor, the dispersed
state of the work sections, the known dependence of the results of labor
on nonreproducible local conditions, and so on. The NTR is expanding the
- functions of rural settlements and their economic, social and cultural in-
- teraction. The development of the communications of the communities with-
in a system of settlements provides for an effective division of labor,
joint participation of the population in the regional organization of pro-
duction and consumption, and an exchange of material benefits and services. '
A combining of the labor various economic sectorsis expressed not only in
the creation of agricultural-industry enterprises but also in the siting
within the village of industrial facilities that technologically are not ;
associated with agriculture. The nonagricultural functions of the village
will be determined by the multifaceted role of the environment: the or-
ganization in the rural locality of large-scale recreational, tourist,
therapeutic and health-promoting and sports activities, work on reproduc-
tion in the plant and animal kingdoms and the maintenance of the environ-
ment's ecological equilibrium, and so on.
The numbers of the rural population will be determined to a great extent
by the circumstances for developing this branch of the economy. The in-
dustrialization of agriculture enables labor productivity to grow to a
greater extent through a reduction in labor expenditure than through a
growth in gross product per unit of area. Thus, during the years of the
five-year plans (since 1929), labor productivity in agriculture rose more
than 5.9-fold, while the gross product rose only 3.4-fold.3 According to
one forecast, by the year 2000 the requirement for labor resources for ;
agriculture will be cut to less than half, to 8-10 percent of all labor ~
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resources, the share of the rural population in this case being reduced
only oii::-third, to 27 percent of the corresponding indicator for the
country as a whole" The latter is connected with an expansion of nonag-
ricultural forms of activity by the populace.
The migration process must be regulated by a system of ineasures ar~d,in so
doing,the regional distribution of labor resources ("labor reserves") must
be considered and the movement of peop~e into labor-short regions must be
st.imulated. Where.there is a work-force sl~?ortage, for example, its re- -
, cruitment should be combined with an accelerated pace in the construction -
. of housing and of cultural and personal-services facilities, and, where it =
is in excess, by measures that provide employment for the population or
that stimulate an outflow of people Q~y transplantational or balancing
� migrati~n) s
Alterations in the lifestyle of the rural population occur because of
changes in the nature of the work, social shifts, the development of
informational media and increased social contacts. In particular, the -
industrialization of agriculture effects not only a reduction in exten- -
sive-type work places in the countryside but also rises in the level of
special and general-education training of personnel, the content of the ~
labor, ihe vocational composition of the population, and the regulation of
_ intersector and interregional migration. The urbanization process is man-
ifested in change in social standards, in socio-psyehological trends
and in the requirements that the rural population presents on working and
living conditions, recreation and travel, and on the use of free time 6
Integration in the area of social relations, a further convergence of the
living conditions of the rural and urban populations and so on are oc-
curring. Such are the general trends that should be considered when sol- _
ving problems of building up the countryside. The task consists in pro-
viding the best conditions for organizing people's vital activity, that `
is, work, household affairs, recreation and travel. It is these points
that are being examined for the system that is being optimized. The cri- -
terion o~ optimality is minimized expenditures of social resources~(the
economic effect) with a reduction in the loss of off-work time in the pro-
duction and nonproduction spheres while specific standards (the socia'
effect) are being achieved. It is desirable to view the task of optimi-
zation by separate units (improvement of population distribution, the
development of housing construction, and the expenditure of land on the
buildup), using the above-named criterion and considering the consequen-
ces of the adopted solutions on the "cumulative" indicators of the sy:,tem _
- . as a whole.
Under the systems approach the influence on the system being examined
of factors that are exogenic,+_.o it (the development of interdependent
activities and possible struccural advances therein as a consequence of
the NTR in the period being examined) must be considered. In particular,
it can be concluded, on the basis of a number of background forecasts,
that in the next 20-25 years the traditional design and technolgoical
solutions and the principal materials and methods for construction will -
; prevail in the sphere of large-scale rural construction, with a gradual
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reduct-ion in materials intensiveness, labor inter_siveness and the weight
c~f structural items.
tihi ('i.~ in the lcvcl uC transport experidi.tures that; ~rc ~ssociated wit,h -
change in types of fuel and the large-scale development of new types of
transport equipment will appear in the remote long term. Changes in the
� level of expenditures on fuel and power resources will affect the terms -
for price-setting not just in construction. The existing price scales
may be used in a comparative analysis of both current and future expendi-
tures during reconstruction of the village.
In evaluating variants for population distribution, the adopted procedurc,
' under which losGes from tearing down the housing inventory (during the _
relocation oi small villages) is unjustifiably understated, should be re-
jected. The reason for this is that losses are computed according to
the residual value of the housing, against which is counterposed, as the
alternative, the capital construction of roads to these villages. A seri-
- ous procedural error is concealed here. In the first place, losses from
tearing down public housing of reparable age is 40-60 percent of the cost
of restoring the buildings (depending upon the degree of their physical
wear and the permanency of their construction). If it is considered that
individual homes will be reproduced as they are amortized through the re-
sources of the population, then thelossc;s from replacing them with commu-
~�al housing is practically equivalent to the costs of.restoring these
buildings. In the second place, by virtue of differences in the dates of
erec~;ion, the degree of permanency of construction and the dates that
repairs were made, the operating condition of the buildings even within
one community are not identica.l_, a,nd the process of reproducing them is
uncea~ing. This means that the periods for "self liquidation" of a vil- -
- lage are figured unfairly, in accordance with an averaged degree of amor-
tization of the existing housing inventory alone. And, finally, in eval-
ua~:ing expenditures for the construction of roads, their twofold role is _
considered--in the sphere uf pro~3uction and the sphere of services. Ex-
penditures for road constructior.` thus should be applied to one sphere or
another in proportion +o the volumes of freight hauling and oz passenger ;
hauling: ,
The settling af the population in promising settlements should be exam-
ined in the context of the specialization, concentration and spatial or-
ganization of production. The development and siting of production facil-
- ities.up to 1990 arid in the longer term is determined by the appropr~ate
_ sector scheme. From the standpoint of the land, the integrated, mutually ,
coordiiiated siting of productive forces is decided by rayon layout plans _
and also by the on-site land-management plans of various enterprises, and
- promising communities are established. The conditions for settling the '
pop~:lation are determined here by the historic, economic and natural pe- -
culiarities of the regions.
"Split-up" forms of rural settlement are characteristic of the Central
- Gconomic Region of the Nonchernozem Zone of the RSFSR. By way of example
in problem-solving, let us examine these conditions. Here, the
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specialization of agriculi:ure (flax and livestor,k production wii,h milk
production on the side, and the raising of vegetables and potatoes) calJ.s
_ for the wide use of small plots of plowland and of land wi~:h natural feed.
And ~he historically prevailing pattern of settlement of the rural popula-
tion is subordinate to the dispersed nature of' ti~e lands: there a.re
small-scale settlements, small-group and large-group settlements, as well
as dispersed settlements. One farm with an area of 10,000 hectares (45
percent of which is productive land) can include 15-20 small villages -
_ which are 2-5 kilometers apart. As research indicates, in many cases it
is desirable to rebuild and expand e~xisting livestock deparLments and i;o -
reequip them with machinery, including those located outside the pr~omisii~g
settlements, and to organize feed production and preparation there.
The tra:~sportation ties of the communities with the workplaces and -the
services centers have been greatly complicated (no more than 15 percent of
- the settlements are closer than 10 kilometers to improved highwaysl. The -
existing housing inventory of the small villages is represented mainly by
individual house~s, mostly by log huts in various stages of wear.
In many rural regions a workforce shortage and a relative aging of the
_ population are being felt. The level of migration of the able-bodi~d popu-
lation here greatly exceeds the average for the RSFSR. However, t}~e size
;iild ".l ack of promise" of a village has practically no effec~; on the level
af migration from it if it has convenient communications with the ser- '
vices centers. The external ties of such a village seemingly extend be-
yond the framework of its social microcosm, eliminating thereby the 1;radi-
tional motives for migration. Sociological inquiries indicate that the -
longer a person has lived in a community, the less he is inclined to
change his place of residence. Questioning of the able-bodied popula-
tion of unpromising villages does not, as a rule, show a desire to relo-
cate to a settlement if a higher level of cultural, domestic and ,~iunicipal
services for the village is proposed as an alternative.
Pertinent to the conditions described, the following courses for im-
proving on-farm settlements are being examined: the relocation of "un-
promising" communities (by stages, and also by faci~ities, that is, the
settl~ement as a whole); the preservation of such communities with a
strengthening of the amenities and the construction of roads t�o them; and
the forming of regional structures of communities with the construction of
roads to the structural centers,,differentiated according to the prerequi-
sites for production and services.
In the interests of saving resources and time (the criterion of optimali-
ty), a substantiated combination of these courses is desirable for typ- -
ical conditions for relocation and production specialization of farms of
~ the region being examined. The first course can be effected to al.imited de-
gree only where there are separation and isolation of the smallest settle-
~ ments, which cannot effecti.ve~y participate in the economic process and -
are characterized by an unfavorable demagraphic situation. In this ease,
_ th~ expenditures per person relocated at the initiative of the kolkhoz or
_ ~ sovkhoz and the organization of the necessary services in the settlement
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consist;s on the average of 5,000 rubles. The second direci;ion is ration-
al where the costs for laying roads are relatively low (for example, for a
I i.~~l~ 1;~~ the production section) . The last way proves to be not only the
- l~:ast capital intensive (a reduction of expenditures by 40-50 percent) but
will ailow questions of production concentration to be solved responsively
as the appropriate prerequisites come into being, and it provides for adap-
tivity of ~:he system being created to be relevant to the conditions of
. its functioning.
This eourse calls for the discovery of additional support points (from '
among the "nonpromising" communities) that possess the greatest produc- ,
tion potential: personnel, livestock activities, building sites, land
area, water sour~es and economic ties. "Clusters" of the remaining small- ~
est settlements within a radius of 20-30 minutes' accessibility will be
- "plugged into" such support points, which play a structure-shaping role,
depending upon the "pattern" of the population settlement and ties with
- the central settlement. In developing the road net and means of control ,
and communication (which will provide for the modernization of production
buildings, the manipulation of resources, responsive monitoring and ac - ;
_ counting), production concentration begins to depend less upon a concentra- ,
tion of the population e Thus, the principle of a group system of popula- i
tion distribution (by the production-region criterion) that is formulated ,
- at the lowest hierarchical level has been laid down that will enable each
- small settlement to be examined not as an autonomous object but as a part ~
of a"cluster," where services are brought to a structural center. The
choice of additional support points, the use of nonstationary buildings ~
and mobile types of servicing, and the development of the on-farm road
net are called upon to bring workers closer to production, to provide the .
I population with the necessary types of services, to intensify contacts _
both in the production and in the nonproduction spheres, and to strengthen
these contacts and increase their regularity.
It is economically advantageous to produce some faeilities, including
those for production purposes, in a unified collapsible design: frame- ,
and-panel struct;ure ~~r box module made of light, effective materials. ;
Domestic and foreign practice testify to the desirability of using such ~
buildings in pioneering and base settlements that are erected during the
construction of l.inear-type structures (railroa~s, canals, pipelines and i
other structures), the assimilation of new lands, the exploitation of min- ~
eral deposits with short periods before depletion, and so on. Let us note
that, with the still inadequate development of the services sphere in the ;
village (in some places the population is supported by only one-half to
two-thirds of the standard), the capacity of various servicing enterprises
is underused as a result of the demographic situation that prevails lo-
cally. Therefore, a'long with an increase in the appropriate resources, ~
there is the task of raising the level of their use. The use of such
typc;s of servicing that would consider the characteristics of the popula-
tion distribution and the conditions, place, time and formsfor presenting
~ the services is required. The organizational forms here are varied. In ,
particular, a system of school instruction can be constructed on the basis
of the daily delivery of students from each "cluster" formed to the sovkhoz
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or kolkho~ sct~lemen~, (wii.h frec transportation) or ~he organization
l:hereat of a school boarding house;' for children of the youngest age (the
nursery or preschool groups), an existing building can be reequipped dur-
ing field-work periods, and so on.
.In cons iderin~; that, at scrvicing enterprises, t;he p~pulatiun i. i.;;c; l f' ~.s
l,hc object of a singular technological process, the consumers' time can be
- saved and operating costs of some serviaes of selective demand can be re-
duced by offering these services to the home by the use of mobile means.
- Included here are: the delivery of commodities in accordance with orders
and samples, preventive medical assistance "on wheels," motorized stores,
mobile cinemas, library vans, dry-cleaning drops, KBO's [personal services
combines] and others. In the first stages, where there are no road~, the
maneuverability of these resources can be increased by using motor vehi-
cles with high off-the-road capability. The household-services industry
- already is introducing new forms of service.to the village. In particu- _
lar, experience in Nechernozem'ye [Nonchernozem Zone of the RSFSR] vil-
lages in organizing integrated receiving points (KPP's) that go out to
the field to take orders in accordance with a schedule a~Nroved by the
rayon executive committee (the mix of services embraces more than 200
types) has proved itself well. The orders are carried out at specialized -
enterprises within the rayon production administration system (and also
the interrayon association system) and are delivered to clients with a
- guarantee of the date and the quality of the service carried out. A slow
pace in creating such a system in conformity with the theory of large -
scale servicing can lead to losses not only of waiting time (a critex~ion
of optimality) but also to "client" refusals of the services and to
unplanned migration of the rural population. .
In the nonchernozem zone of the Central Economic Region the preparation
and delivery to rayons of at least 2,000 complete units of automotive
transport equipment, organization' of the appropriate subdivisions, and
- expansion of road construction at the Tenth Five-Year Plan pace until -
1990 and a certain reduction later (in connection with a substantial aug-
mentation of the physical volume of growth) are required. Differentiation
of the on-farm road net in accordance with the importance of the roads and
their traffic load and the seasonality of ~se should determine the content
of the work, including a shaping of the roadbed and the construction of a
simplified road surface. This will enable the density of the on-farm ve-
hicle roads to be inereased 4-fold to 5-fold, bringing it up to 250-300
kilometers per 1,000 square kilometers of territory. The total amount of
construction of on-farm roads and of trunk highways will, in so doing, be
about 100,000 kilometers--30,000 of it by 1990. This strenuous program
_ requires an outstripping pace of development of the supply and equipment
base for road construction and of the interdependent sectors, and a mobi-
~ lization of local resources. These include: the surveying and develop- -
ment of quarried materials, the use of initiative in road construction in
conformity with the master scheme for developing the road net by the
forces of sovkhozes and kolkhozes, with the ballast, binding materials,
prefabricated reinforced concrete and machinery being delivered to them:�
,
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It is probable that the process of unplanned population migration from
small villages will die off in the future because c~f the li.nkup with the
unified transport network and development of the more intensive use of mo-
tor vehicles. The relocation of such seLtlements at the initiative af sov-
khozes and kolkhozes should be accomplished within a short time and, as a
rulc, should cover the community as a whole. Upon relocating the:^esi-
dents, well-prescrved log huts and paving-block hc~mes should be h~uled to
- the new place of settlement and, when necessary, overhauled an~.i modernized
with the installation of plumbing facilities. Where there are no roads,
!:he buildings can be moved on a special sled trailer. The service life of ;
log huts (and paving-block buildings) where the upkeep has been good
exceeds the computed period 1.6-fold to 1.8-fold, enabling their useful
life expectancy to be equated to similar indices for stone buildingsl'
In determining the structure of the rural housing buildup, the character-
istics of buth the housing to be built and the construction process should
be considered. Fiousing characteristics are associated with the develop-
ment of a socio-typological standard for rural housing and for the housing ;
environment as a whole. Construction is governed by the spatial dis- ~
persion of the facilities, their remoteness from construction bases, the '
relatively small amounts of construction at each community, and the execu-
tion of many types of operations by the in-house method and by the efforts i
af the populace (or of individual builders). This will involve substan-
tial regional fluctuations of socially necessary expenditures and the _
budget-estimated cost of housing construction. The task is reduced to an -
integrated consideration of three-dimensional layout and design solutions ;
and of inethods for erecting and operating housing while observing the re-
- quirements of the socio-typological standards and for reducing the ,
- time spent on the conduct of household processes and LPKh [personal sub-
sidiary economic activity].'~ -
_ Demographic and socio-economic conditions influence the choice of type of ,
housing. This depends up~n the specifics of the household processes and
~ upon the fact that an increased demographic load per worker is not compen-
sated for by the differentiated distribution of the combined product
through public funds f~r consumption. The proceeds from personal subsidi-
- ary economic activity consists of an average of 24.9 percent (1977) of the ,
- combined budget of the family of the kolkhoz members, while for blue- -
collar and white-collar workers of sovkhozes, it is somewhat less. The ,
residence of a family in one type of housing or another affects the amount
of labor spent in LPKh and, as a consequence, the yield of the latter. In
the future, the requirement for involvement of components of the natural
environment in the family's household activity will be retained. This is
manifest even today in the striving of families that live in sectional
houses in the village to have an additional sununer cottage at the garden
plot (the "second residence" problem).
Rural construction should be correlated to the maximum with the economy's ~
potential: with the resources and with the mastery of engineering solu- '
tions for the production of materials and for the construction work appli- ;
cable to the housing typology and local conditions. In evaluating the
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economic feasibility of a housing buildup, the requirement for compara- -
bility in the constructional solutions for types of housing being compared,
while satisfying equally with these homes the population's requirements
and demands (the condition of equivalent satisfaction),should be dispensed
with. Here 1;he problem is posed of finding savings of resources that
arise from the very specifics themselves of construction that has few
J stories: small building loads, structure cross-sections and building
weight, the simplest of erection methods, and others. When evaluating the
consumgtion of resources in construction having few stories, the reduction
in the energy-intensiveness of producing the structural items should be
. considered.19 It is customary to consider that sectional housing is the
_ most economical. Actually, when using identical structure, the budget- -
estimated cost.of housing is 25 percent lower, for example, in four-story
housing than in single,-story housirig. However, ari integrated considera-
tion of the factors that embrace even the interdependent spheres testify _
to the effectiveness of wide construction in the countryside of housing of
few stories and with private plots.
The use in such housing of simplified footings, lightweight materials for -
load-bearing walls, aerated concretes, multilayer panels and large-dimen- _
sion wooden, plywood and asbestos-cement members with efrective therr~oin-
sulating layers, and a reduction in transport costs by reducing the weight
of the buildings will enable budget-estimated costs to be greatly reduced. _
A known reserve is the use in housing of few stories of local (autonomous
aTid c:lustered) systems of sewerage and of heating apartments from auto-
matic water hea~;ers. This will yield a saving in the "startup" sums of
capital investment in settlement-wide mains, boiler installations, aera-
tion tanks and other head structures, without which a buildup of housing
of three or four stories cannot be executed.
The advantages of construction having few stories should include the wider
potential for using local building materials and for reducing the metals
intensiveness and capital intensiveness of the construction product. This
becomes possible with the use of small-scale mechanization equipment and _
the simplest of machines, which make it possible to dispense with lifting -
cranes and excavators.l" A definite benefit can be obtained by combining
tractor and in-house work methods at the construction site. Thus, earth-
moving operations, the laying of footings, the procurement of materials
and auxiliary and subsidiary operations can be accomplished by using an
' unskilled work force of the developer itself (the sovkhoz or kolkhoz),
especially in the seasonal interval betwen work in the fields.15 The im-
portance of such an organization of affairs is especially important where
rutal construction projects are dispersed, the work front at the site is
small, and labor resources (particularly for rural construction) are
scarce.
The socio-economic aspects also are governing in choosing the type of
housing. Because of the difficulties in performing LPKh, the amounts done
_ by families that live in sectional housing pi~ove to be 20-30 percent less
than that of residents in houses with private plots (given an identical
- A number and age composition, income level, social status and education of
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members of the family). Losses of output are probable here, the operating -
- costs of which in the social sector amount to 240 rubles per year, and
this, per estimated square meter of housing space, exceeds the saving that
could be achieved by building sectional housing. Finally, when a family
resides in a house with a plot, the demand for a"second residence" does
not arise. This lcads tc~ a reduction in expenditure far developing i.hc
corresponding supply and equipment base for construction, and a saving of _
. land resources and of the time spent traveling. Naturally, the demands
- of rural residents are not ident.ical. Therefore, where there is a con-
struc~ion base, sectional housing can be stipulated for small-familes that
do not perform LPKh and have no requirement for it.
The development of individual and cooperative construction requires spe-
cial attention. The working out and improveraent of stimuli for promol;ing
it, a maximal combining of state, economic-accountability and personal in- -
_ terests, and the formulation by rural residents of the appropriate aims, -
orientation and preferences are necessary. The individual house with a
plot not only meets more completely the specifics of the countryside but
it has advantages over the city that cannot be compensated for in any way--
it satisfies the requiremen~.s for living once expressed by Le Corbusier:
"Air, sound and light." The advantage is that such a house can "grow" as ~
the family grows and its opportunities and requirements expand. In this
case, the prerequisites are created for a large kinship family to live
under one roof, for which separate apartments would be required under
other circumstances.
The terms for granting credit and for providing supplies and equipment
for builders obviously must be differentiated for various farms, depending
upon the economic tasks (including the stimulation of resettlement), the
requirement for personnel, opportunities for the use of local resources,
and the organization loeally of the production of construction materials
and structure. Experience that has been gained in the country in organiz-
ing individual constructio~~ in sovkhozes and kolkhozes should be utilized.
Its results should legitimately be viewed as the results of a social ex-
periment already perfo~^}^ed. The effectiveness of propagating the appropri- -
ate experience depends upon the comparability of the original and the re-
produced conditions. In particular, very few log huts are being moved
into settlements from nonpromising villages.
In accordance with the CPSU Central Committee and USSR Council of Mini- -
sters decree, "Further Development of the Construction of Individual ;
~ Housing and the Retention of Personnel in the Village," that was adopted
19 July 1978, preferential terms for granting credit have been estab- _
lished everywhere for demobilized soldiers, newlyweds and young special-
ists, for farms that are experiencing severe work-force shortages,
and for work.ers of widely practiced trades who have transferred to these
farms for work. Credit is issued on the basis of 0.5 percent per year '
with liquidation in 20 years. In so doing, half the sum of the credit is
repaid by the sovkhozes or other enterprises. Countrywide, an increase in
the volume of individual construction by just 20 percent annually would
save a billion rubles.
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In order to develop a rural buildup based upon housing having few stories,
c