JPRS ID: 10083 USSR REPORT CONSUMER GOODS AND DOMESTIC TRADE

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• Sequence Number: 60
• Content Type: REPORTS

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JPRS L/ 10083
29 October 198 ~
_ USSR ~e ort
p
CONSUMER GOODS AND DOMESTIC TRADE
CFOUO 5/81~
r
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JI~Ru L/1f1083
29 Uctober 1981
USSR REPORT
CONSUMER GOdDS AND DOMESTIC TRADE
(FOUO 5/81)
CONTENTS
~ CONSUMER GOODS PRODUCTION AND DISTRIBUTION
Food Program, Organizational Structure of Food Complex Reviewed ~
(Vladimir P~:itapovich Mozhin, E1'mira Nikolayevna Kryl.atykh;
~ VOPROSY EKONOMIKI, Jul 81) 1
; CONSUI~TION TRENDS AND POLICIES
I Supporting Economic Calculations for New Consumer Technology Urged
I (I. Rakhlin; VOPROSY EKONOMIKI, Jul 81) 13
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- _ a _ [III - USSR - 38b FOUO]
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CONSUMER GOODS PRODUCTION AND DISTRIBUTI~JN
FOOD PROGRAM, ORGANIZATIONAL STRUCTURE OP FOOD COMPLEX REVIEWED
Moscow VOPROSY EKONOMIKI in Russian No 7, Jul 81 pp 20-30
[Article* by illadi.mir Potapovich Mozhin, corresponding member of VASKhNIL and
director of the Central Scientific Research Institute of Economics of RSFSR
Cosplan, E1'm~ra Nikolayevna Krylatykh, doctvr of economic sctences and professor
~ at Moscow State University imeni M. V. Lomonr~sov, and Anatoliy Nikitovich
Lifanchikov, candidate of economic sciences and department head at the Central
Scientific Research Institute of Economics of RSFSR Gosplan: "The Food Program
, and the Structure of the USSR Food Cc~mplex"]
[Text] The Accountability Report of thz CPSU Central Committee to the 26th
party congress goints out that "the party is advanctng a broad program for
further improvement in the well-being of the people in the llth Five-Year Plan anc~
the 19$0's as a whole." Paramount importance in this is assigned to reliably
providing the population with a broad assortment of riigh-quality food products..
The production and consumption of food products has risen steadily in recent five-
year plans. In the last five-year plan, however, the growth rate of production of
agricultural output slowed down and difficulties arose with supplying animal
husbandry nroduc*_s to the population. This was related to unfavorable weather
conditions. To achieve a fundamental solution to the problem of uninterrupted
- supply of food products to the population, it has been recognized as necessary
ta de~elop a special food program which should serve as the basis for planning,
financing, and roanaging the unified agroindustrial food complex. The program
- measures outlined for the current five-year plan are an organic part of the State
Plan of Economic and Social Development of the USSR for 1981-1985.
- A large volume of technical-economic and socioeconomic substantiation and calcula-
- tion must be done during development of the food program. Many scientific
= institutions and planning agencies are working on the food program, so it is
essential to develop a methodological foundation for their ~oint work.
The food program is ene of the special-purpose comprehensive national economic
programs. The ultimate goal of the special food program is full satisfaction
* The article is offered as a formulation of the problem.
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of public need for all types of food products in conformity witfi scientifically
recommended dtets. The i~ediate objective ts to insure a stable food supply to
the population in all parts of the country, t~ create reliable reserves, and to
increase the quality of products. When establisfiing the goa~ls of the food pro-
gram we should envision lessening dependence on importing food products wfiich
can be efficiently produced in the country.
Because the goal ts stated as satisfying tfie n~ed for food products, the ques-
tion of how to calculate this need arises. There are a number of inethodological
approaches to estimating this figure, incluciing tfie normative method which in-
volves determining physiological needs for food substances and worktng out
balanced diets on this basis, as well as the method based on an estimate of
solvent demand for food products. In this case demands can be viewed as a func-
tion of personal monetary income with different elasticitie~ of demand for
particular products depending on the growth rate of income. It seems to us that
both approachES must be i~sed to frame the quantitative indicators of the food
program.
The norms of a balanced diet should be the basis f~~r esrablishi_ng the strategic
goal ar.d long-term developmental trends in the productiot~ of the most important
_ food products. Estimates of solvent demand may be used to work out guidlines
fa.r development in medium-range planning and to supplement the dietary norms.
The main goal should be bro~en down into a number of sub-goals and particular
tasks in order to obtain quantitative estimates of needs and to determine the
' structure of the food program.
Various foods are needed to maintain normal metabolism, form the tiss�:~s of the
organism, and regulate the pracess of supplying ~nergy to the person. The most
important result of scientific research in recent years has been the theory
of the balanced diet, from which it follows that optimal functioning of the
organism requires not only adequate amoeints of energy and protein, but also
observance of definite proportions among many ingredients of the diet, each of
which has a specific role in metabolism. Despite their great diversity, it is
customary in economic calculations to eonaider five basic food groups, wh:~ch
are the basis of the di~t: proteins, including both proteins of agricultural
(animal and plant) origin and the proteins in the meat of fish and sea animals;
fats, including animaly fish, and vegetable fats; carbohydrates, including
sim~le sugars (fructose, glucose, and others), disaccharides (saccharose,
maltose, and lactose), and polysaccharides (starch, cellulose, and others);
vitanins; minerals, other substances, and water. In conformity with this the
overall goal of ineeting public needs for food products can be broken down into a
series of detailed sub-goals which includes satisfaction of public needs for the
basic foods: proteins, fats, carhohydrates, vttamins, and mineral and other
substances.
An orientation to satisfying human needs for food substances greatly expands
the possibilities in searching for alternate ways to satisfy a parttcular need. ~
For example, the animal protein requirement can be met with different variations
of consumption of ineat, meat product~, fish, fish products, and dairy products
on the condition that the diet is balanced in terms of essential amino acids.
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P~oblems of maximum receipt of protein or minim~.im expenditures of public lafior
can also be solved with different combinations of consumption of the meat of
cattle, hogs, sheep, and poultry. Furthermore, it is possible to work out al-
ternatives for usin� different types of raw materials to produce the same food
_ products. For exampley starch can be obtained from potatoes or from grain.
- Each of these alternatives, while so~ving the problem of ineeting a certain need,
h~~.:?. different levels of expenditures and effict.ency.
The set of goals involved in providing the populatton with the most important
dietary elements and food products should, in our opinion, be tfie basis of
- special first-level sub-programs. We suggest the following basic sub-programs:
supplying public needs for proteins, fats, sugar and other carbohydrate--
con~aining foods, fruits, berries, and vegetables and rationalizing the structure
of production and consumption of drinks.
The question of the priority of particular sub-programs is difficult. During the
last five-year plan the growth in per capita consumption of a number of food
products slowed down, and for some it practically stabilized. The dietary level
now attained does not fully provide the population with animal protein, vege-
tables, fruit, and berries. At the same time, the consumption of grain products,
sugar, and potatoes, which means food products containing large amounts of
carbohydrates, exceeds rational norms. And altfiough the total caloric value of
- the actual diet provides for the energy needs of tfie population, its imbalance
' in terms of basi.c food substances prevents us from considering it fully satis-
factory at the present time.
I Carrying out all the sub-programs will demand enormous. capital investment and
other types of resources, most of which are in limited, supply. Therefore,
we must identify the programs that are most important and concentrate our efforts
j on them. In the first stage of working out the food program it seems wise to
; give preference to two special-purpose sub-~ rograms: to supply tfie population
~ with meat and dairy goods, and to supply fruit and vegetables.
~
i We must also taice up the question of the consumption of alcoholic beverages.
I Significant resources of agricultural raw material, labor, and the like are
j taken for the production of alcohol. Despite a number of ineasures the con-
i sumption of alcohol has not dropped in recent years. In the future the struc-
' ture of consumption of alcohalic beverages must be modified in the direction
; of a significant increase in the proportion of grape wine, above all champagne
and high-quality dry and semidry wine. This will require further development of
viticulture, an expansion of lands given to vineyards, a rise in their yield, a~?d
an increase in capital investment for the development of vit~culture and wine-
making. This is not only a major economic problem, but also a social problem.
Within the food program this problem should be reflected in a special sub-prograr~
to rationalize the consumption of alcoholic beverages.
In addition to the special sub-program the structure of thn special--purpose com-
prehensive food program should also sirgle out what are called '~service" sub-
programs. The most important ef the coffinon s�b--programs should be, in our
opinion, the following: raising soil fertility and improving the use of Iand
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resources; full mechanization and electrification; development of the non~
production infrastructure and solving soci~l problems in the countryside; de--
velopment of scientific research ~in ttue fields of agriculture and tha sectors
that serve it) and raising its efficiency; developing soci.alist e~onomic inte-
- gration and cooperation in the production of food products; and, f~reign trade
in agricultural raw material and foodstuffs.
Combining special-purpose programs ~ith assignments to supply them with re-
sources makes the food program a special purpose (tselevoy) and compreh~ensive
; program. Within the framework of tfie food program priority elements should be
~ identified and distribution of resources must be organized in such a way that it
is possible to carry out the necessary structural cfianges in the entire food
complex.
_ The food comglex, for which the food program is Fiecoming the basis of develop-
ment, is a part of the national agroindustrial complex. In terms of gross
output the food complex accounts for 74-75 percent of the agroindustrial com-
plex. The food complex should alsa include production, not related to the
agroindustrial complex, which uses tTie wealth of the world ocean and internal
bodies of water for food and fodder needs. According to rough est3mates, the
total volume of gross output of the food complex was 260-280 billion rubles in
1979, and about 15U-I70 billion rubles in final output.
= Three spheres can be identified within the structures of the fnod complex that
define its functional structure. The first sphere is th~ production of ineans of
production for all the sectors. It includes tractor and agricultural machine
building, macfiine building for animal hushandry and feed productton, the pro-
duction of e~uipment for land improvement work, the production of equipment for
the food industry, trade, and public catering, the production of specialized
motor vehicle transportation, shipbuilding (for the fishing industry), the pro-
duction of agricultural and other accessories, the production of containers,
- the sectors of basic chemistry (for production of mineral fertilizer and
chemi.cal plant protection means), construction for all spheres of the food com-
piex, the mixed feed and microbiological induetry, and thz production of special
equipment and instruments for the sectors of the food complex. The second
sphere is the production of agricultural (crop farming and animal husbandry)
output, fishing and fish culture, salt mining, raising pedigreed. stock, nursery
plantations, raising seed material for pond culture, and various other types of
activities. The third sphere com~rises the processing of agrir_ultural and
other output of plant and animal origin and production of the final output
of the complex. The sectors of food (with the exceptton of the perfume-
cosmetir_s and tobacco sector), meat an.d dairy, fis~i processing~ and flour--
bran industries should be classified with the tfiird spTiere.
- As the food complex develops there is an increase in the role of infrastruc-
tural elements that affect primary production and its efficiency as they
gradually become independent sectors. Tfierefore, it is useful to single out
one more structural element in the food complex. This ts tfie production
infrastructure of the complex, or the fourth sphere. It includes'systems for
production-technical support and service to agriculture; material--tecfinical
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supply to the industrial sectors of the food complex, procurement of agricul-
tural output and the elevator system; storage of output; transportation and the
road system; specialized retail trade; co~unications and information-computer
services; and, applied scientif~c researcfi and deaign for all splieres of the
food complex.
The product structure of the food com~lex is a set of vertically integrated sec-
tors, the produc'c sulicomplexes. Each vertical ?ink connects *_ecfinologically and
economically int:errelated types of activity of the food complex spheres and
infrastructural elements that are integrated to achieve the final ob~ective of
meetin~ needs fc~r particular types of food products. Product subcomplexes must
be sing,led out within the structure of the food complex tn order to substantiate
the economic proportions which are defined by technologically interrelated sec-
tors, subsectors, and types of activity in the process of producing and selling
the final output.
Each special sub-�program is a tool for managing a set of tntersectorial product
complexes, particular sectors, and types of activity. The set of sub-programs,
subcomplexes, and sectors that insure achievement of the established goals may
appear as follows: sub-program to supply protein~rich products to the popula-
tion, including programs for the development of the mea~--dairy and fish sub-
complexes; su~program for developmer.t of tfie subcomplex to produce and process
vegetable oils and animal fats; sub-program to supply the population with carbo-
h~drate-containing foods, including sub-programs for the development of the
grain product subcnmplex, the sugar beet subcomplex, and the potato products sub-
complex; sub-program for the development of the fruit--veaetable subcomplex;
sulrprogram to rationalize the production and consumption of beverages, including
the program to develop th~ vineyard-winemaking subcomplex, the beer and non-
alcoholic beverage subcomplex, and the tea subcomplex.
.
But what should be the structure of the product subcomplexes, which in this case
are considered to be objects of planning? In the opinton of some economists,
it is best to include all the sectors of the first, second, and tfiird spheres
and the production infrastructure of the food complex in tfie product subcomplex.
The most highly debated point is the issue of including the sectors that produce
means of prnduction for the second and third spheres of the food complex in the
product subcomplexes. In our opinion, we should onl.y deal with narrowly spe-
cialized sectors that produce means of production for a definite subcomplex.
For this reason it seems advisable to include the sectors of the second and
third spheres of the food complex in the product subcomplexes, but from the sec--
tors of the first sphere to take only the narrowly specialized su~sectors that
are especially important for the development of the subcomplexes. For example,
mechanization of harvesting and, accordingly, the problem of designing and
series production of machines to harvest fruit, vegetables, and berries are impar-
tant for the fruit-vegetable subcomplex. Another, equally tmportar.t program
is development of the producti~n of containers for storing and transporting
fresh produce (glass containers, tin cans, and aluminum containers) as well as
polymer films and materials for preserved and quick-frozen products. The em--
phasis here should be on determining the need for the oufput of sectors of the
first sphere and their requirements with respect to its quality, productivity,
and other technical-economic parameters.
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The main advantage of switching to comprehensive planning of the development of
the sectors that make up the product subcomplexes is that it permits the possi-
~ bility of balancing the development of the particular sectors belonging to a
subcomplex, eliminating disproportions, and on tFiis basis shaping an effective
structure and achieving a sign.ificant reduction in losses, more rational use of
raw materials, and an increase in production efficiency. The comprehensive ap-
proach makes it possible to identify "bottlenecks'~ in the functioning of the
enti.re chatn from production (extraction) of the original output tu sale of the
final output. Ir. helps overcome the narrowly departmental approa~h to the uni-
form process of planning and coordinating different sectors involved in the
production, processing, and delivery to the customer of the actt:al products,
and tfiis results in optimal distribution of capital investment.
As the meat-dairy subcomplex takes shape and develops still-exiszing inter-
sectorial disproportions will be eliminated. The most pressing problem now is
to balance available feed and the number of stock. A protein imbalance at the
15-17 percent level is the cause of failure to receive animal husbandry output
worth 9-11 billion rubles. This shortfall can be el.iminated by increasing the
production of protein-rich feed crops such as peas, alfalfa, clover, soybean,
rape, and the like. The document Basic Directions of Economic and Social
Deveyopment of the USSR for 1981-1985 and the Period Until 1990" poses the
~ challenge of raising the average annual production of legume crops to 12-13
million tons (the average crop in the: lOth Five-Year Plan was 6.8 million tone).
~,nother way to overcome the protein shortage in ~eeds is accelerated development
of the microbiological industry. It is common kn~wledge tfiat protein-vitamin
concentrates obtained from liquid paraffin con~tain 5(~ percent protein and using
one ton of them in animal husbandry produces a gain in output of 700--900 rubles
(for an expenditure of 80-90 rubles per ton of liquid paraffin in the micro-
bl.ological industry). Chemical hydrolysis of wr~od has even better prospects in
this respect. Output in the microbiological industry is to increase 1.8-1.9
times in the llth Five-Year Plan. The development of a comprehensive program to
establish a reliable, balanced feed base in the country, an important part of
the overall fee3 program, must be completed in the near future, as envisioned
in the document "Basic Directions."
One Af the main areas of imbalance is in production capacities, their technical
level, and the amount of ineat and dairy raw materials arriving for processing.
This is the reason that all the useful components are not extracted from raw
material and that the assortment of output is not expanding rapidly. Milk
serum, for example, is a valuable raw material that is only 10--12 percent used
at present. For technological reasons 8-12 percent of the slaughtered meat
remains on the bones turned over for further prvicessing; this is 20,000-
25,000 tons af a valuable product. Large losses of raw material occur during
intensive periods of large-scale processing because production capacities can-
r~ot keep up with the flow of raw materials. Sometimes excessive concentration
of industrial production and the establisFiment of very large enterprises in-
creases the radius o~ delivery for livestock and m~lk so much tfiat the in-
evitably resulting losses nullify the benefit from concentration. There�ore,
the question of the rational size of ineat-dairy industry capacittes should be
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decided together with development of plans for specialization and concentration
of animal husbandry, provision of s~ecial means of transportation, and estab-
lishment of a reltahle road ne:twork. This entire set of questions appltcable
to particular regions should be reflected in the food program. Balance among
all elements of a subcomplex is an important condition for raising the efficiency
- of ineat ar_d milk production.
At the present time significant disproportions have occurred in the process of
production because of failure to coordinate tlie economic interests of the sectors
that belong to the fruit-vegetable subcamplex and owing to departmental conflicts.
These disproportions cause significant losses of output and an inadequate level of
production efficien..y. Failure to coordinate interests lead~ to a situation where
many farms try to fulfill the plan with higher-yielding and less labor-intensive
crops, which are more advantageous to the producers. Therefore, cabbage, table
beets, and carrots, which have limited use in the canning industry, take up some
45 percent of the planted area designated for vegetables in the RSFSR, far example.
At trie same time, crops which are valuabl~e for processing such as green vetch,
, pepper, marrow squash, and eggpls.nt make up just five percent of the gross harvest
of vegetables (including just 1.3 percent for green ve*_ch) and very small amounts
of early cucumbers and tomatoes, sweet peppers, bush scallop, spinach, garlic,
lettuce, and various other crops are raised.
The same factors cause the unsatisfactory structure of perennial plantings. For
example, in tr~e RSFSR fruits with 3eeds occupy 77 percent of the area, pitted
fruits are 16 percent, and berry patches are seven percent. Among the seed-type
fruits the prnportion of winter-keeping varieties is extremely low, while summer
varieties of apples which are ill-suited for processing predominate. There are
not enough mazzard cherries, apricots, and pears in the structure of pitted fruit
orchards. In many regions, for example the North Caucasus, the area planted in .
pitted fruit trees is decreasing.
The level of specialization and conc~entration of production in orchard farming
and vegetable and potato raising is still low in many parts of the country.
Industrial methods of production are being introduced very slowly. The low level
of concentration and specialization in the production of fruit and vegetable out-
put with a concurrent increas~ in the level of concentration of production in
: the canning industry leads to a significant increase in the number of supplier
farms and the radius of delivery of raw materials. For example~ the Adygey
canning plant in Krasnodarskiy Kray receives raw material from 48 farms with an
average delivery radius of 160 kilometers. When the shipping length for
tomatoes, for example, is increased from 25 kilometers to 80-100 kilometers, the
proportion of first-grade tomatoes is cut in half; increasing the shipping
radius by 10 kilometers raises expenditures by two percent.
Existing disproportions in price formation and narrowly sectorial and depart-
mental interests hinder rational use of fruit and berry raw materials. For
example, while overall consumption of fruit is inadequate a growing amount of
fr~uit and berries is used ta produce fruit and berry wine because its product~on
is more profitable than c.anning. In the RSFSR in 1979, about 70 percent of the
fruit and berries sent for processing was uaed to produce wine.
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Lack of coordination of departmental interests leads to c~rtair+ elements of the
fruit-vegetable subcomplex lagging ~harply behind. At the pres~e~t time, the
labor-intensiveness of producing vegetables on open aotl is four tfines greater
than the labor-intensiveness of producing grain crops, while for potatoes it
is 2.3 times the figure for grain crops. The laFior-~intensivenes~ of raising
grapes, fruit, and berries is even higher. Harvest work aceounts fo~ a large
part of the labor expenditures. Mechanization of harvesting is o~e of the
_ key problems of further development of vegetable and potato growing, orchard
farming, and grape growing.
Expenditures to harvest the grapes today reach 20--35 per~cent o� labor expendi-
tures for raising the grapes. With an average harvest norm (3-3.5 quintals per
person per day), more than 500,000 persons are already effiployed for a month in
the grapa harvest~ and by 1990 the number of persons employed in the manual
grape harvest should exceed 1 million. Therefore, it is essential to switch
to combined methods of harvesting industrial grape varie~fes. A number of
successful designs have already been developed, including the Kuban*-1 combine
which is bein.g tested in the vineyards of the Nerth Caucasus and Crimea. But
lack of departmental coordination makes it impossible ~oday to concentrate the
efforts of the design organizations of the interested miiiistries on development
and series production of a grape-harvesting combine.
Significant disproportions have developed between agricttltural produ.:tion and
storage capacities for fruit and vegetables. The material-technical base for
storing fruit and vegetables does not matck~ the c~nrrent s.cale of fruit and
vegetable procuremene. The 60 percent increase in capital investment to improve
the storage of agricultural raw material, whicti is planned for the llth Five-
Year Plan, will make it possible to significantly reduce losses of output.�
t-prog
Systems management and planning of the subcomplex on the basfs of targ.: ra
methods wilof~roducti.onsaflfruiteandivegetablesXandicapacities~for~processin~
the volume p
and storing it, thus insuring balanced development.
The question of the s~stem of planning indicators is an important one. The over-
all system of indicators of the food program should be worked out with due
regard for the f~llowing principles: correspondence between the system of food
program indicators and the structure of the food complex itself; orientation of
all indicators in the program to final goals; integrated systems of program mea-
sures and development of the entire food complex as a whole; reflection in the
system of indicators of intersectorial links and ways to improve them for the
purpose of intensifying the production of the entire food complex; delivery of
program indicat~rs and assignments to specific accountable performers in
directi~~e form; co.:rdination of the system of indicators of tFie program with the
overall system of national economic plan indicators.
The main target indicator of the program is final output. The calculation of
final output must be based on balances of the output of agriculture and the food
industry. By itself, howe~er, the indicator of final output does not fully re-
flect the goals of the complex, even though it is very important. It is
necessary to introducnoT~iand rredictedltrendsdin solventgdemandaforgfoo~ounThef
rational consumption P
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most significant fiarvest evaluati.on indicator of the food program sfiould be
the ratio between the volume of output going for personal consumption and the
volume of public needs. An indi.~ator established in the program that reflects
the degree of attainment of rational norms of per capita consumption can play
the same role. The target indicator should be represented in natural terms
by the consolidated groups of groducts adopted in the USSR S~ate Plan of
Economic and Social Development.
- It is useful to recalculate and give indicators of needs for the bastc m~tri-
tional elements (proteins, fats, carbofiydrates, and vitamins) in reference form
and to introduce indicators of the degree of satisfaction of these needs by the
stages in which the comprehensive food program is heing developed. The intro-
- duct_ion of this kind of indicator will make it possi.ble to coordinate the
summary section of tfie program more closely witli.the indicators of the sub-
programs for satisfaction of requirements for the basic nutritional elements.
In addition to the target indicators the summary section of the program must
represent resource indicators, above all those which can be allocated for the
entire food complex and distributed amasng ita product suhcomp2exes, sectors,
and subsectors. The distribution of capital investment should be done from
the standpoint of the priority of the prohlems. Thus, t~ the present time the
proportion of capital investment in the production infrastructure and for
storage and processing of agricultural output should be increased, which will
permit a significant decrease in losses of output.
Among the generalizing cost indicators that can 6e used. are the indicators of
final and net output (normative) for the enttre food complex and per employee
in material production in the food complex, return on capital, rate of repayment
of capital investment, the indicators of relative savings of production re-
sources, and many o*hers. The indicators of the food complex should correspond
to the indicators of the state plan of economic and social development, and the
structural cross-section of the programs should be an organtc part of the struc-
ture of the nationa_l economic plan.
The sub-programs of the second level~ related to creation and development of
the material-technical base of the food complex, should have indicators for
production of program output (agricultural machinery, fertilizer, equipment,
means of transportation, and the like) and development of its capacities
through reconstruction, technical re-equipping, and new construction in the
actual sectors that produce means of production.
For the suli-programs that aim at meeting public needs for food products it is
necessary to introduce the indicators of final and gross output in a group
assortment and the introduction of capacities in agriculture and the processing
sectors and to set a limit on capital investment for the development of each
product sulicomplex for it to fulf il.l its assignments to deliver final program
output. These sub-programs should define tTie requtrements of i:he product sub-
complexes for material, labor, and financial resources and the sources or ways
to provide these resources. It is very important to achieve a realistic
balance between the total requirement of the product subcomplexes for production
resources and the volumea of production and delivery of these resources in the
sub-programs for development of the material-technical bas~e.
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_ In the sub-program for foreign economic links it is essential to represent ~
indicat~rs on the volume and structure of export and import of foodstuffs. This
sub-program should include indicators and assignments from long-term special-
purpose (target~ comprehensive programs concluded within the CEMA framework.
Preplanning and planning materials can onlp Fae ~rorked out with.Firoad application
of mathematical economic metfiods and computers~. We believe that the best re-
sults can be obtained where systems of matfiematical economic models of develop-
ment of the food complex are employed. Different variations of balance models
of production and distribution of the output of the food complex with blocks
- for distritiution of fixed capital (capactties}, capital investment, and labor
can be used as a summary model. Such models are designed to correlate the in-
dicators of production volume of the sectors, determine consumption within the
complex given an assigned final product, and to identify needs for fixed capital,
capital investment, labor, and most important output from agriculture and
fishing. The cost versions of tfiese models, covering the sectors of the food
complex in consolidated form, will permit a full calculation of expenditures for
the production of the basic types of output of the food comglex and determination
- of total expenditures per unit of final output from the complex.
- The development of optimization models will help substantiate the most rational
structure for the food complex with maximum production of final output in an
assortment ttcat corresponds to a rati~nal putilic consumption structure. The
constraints in these models are land and labor resources, production capacities
in the industrial sectors, fixed productive capital, and capital investment.
Another type of model is designated to optimize the development of the most
important product subcomplexes of the food complex. The purpose of these models
is to define balanced development of all the main vertically integrated areas of
production. Unlike the consolidated models of tfie entire food complex, there
should be a much greater degree of detail in the variables and constraints
here. The most important in them is to choose the best technological procedures
in each element of the technological chain from production of tr~ means of pro-
duction and raw m~.~terials to receiying th~ .f.inal output.
All these models are framed as a whole accordirig to the national economic food
complex and its sectors and product subcomplExes. They are supplemented by an
optimization model of the coucposite location of production with the number of
blocks in the largest territorial-production subsystems of tfie food complex.
Because location is based on zonal specialtzation and concentration of agricul-
tural production, during development of this model experience witfi construction
- of the model of location of agriculture must be used as much as possible. Ex-
perience from optimization of the location of food industry sectors is also
useful. The general comprehensive model of territorial location of the food
complex should be supplemented by more detailed models of tfie development and
~ location of regtonal food complexes and the mos.t important product subcomplexes.
Considering the stochastic nature of agricultural production, probablistic and
simulation models should find broader application.
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The special-~urpose comprehensive program is becoming a realistic management
tool when reliable systems for controlling its use have ~.een creatzd. The es-
tablished departmental sectorial structure of control is not adequate to tfie
- target program approach which must be followed in the food program. The docu-
ment "Basic Directions" formulates the cfiallenge as follows: "Establish and
use efficient systems in control programs.'~
It seems to us tfiat we must fiave an agency that coordinates tfie actiVities of
the many ministries and departments that produce food products. Within such
an agency it would be possible to gradually cfiange the structure of management,
carrying out a transition from the sectorial principle tfiat is now prevalent
to the prlnciple of managing intersectorial product subcomplexes of the food
complex. Management forms of this type fiave already been established, for
example by the USSR Ministry of Fruit and Vegetable Industry and the correspond-
ing republic agroindustrial committees such as tfie RSFSR State Committee
for Wine Industry and other agroindustrial formations,
_ But this transition sfiould not be limited to the sphere of planning and estab-
lishing coordinating management bodies aloz~e. It is equally important to work
out a new kind of relations between partner-sectors. The general principle of
this reorganization is accountability of each element for final results, wfiich
will strengthen plan discipline and contract relations. The time has already
arrived to switch to concrete forms of this. One of the forms is evaluating
the results of work by sectors considering not only the sectorial impact but also
the impact from the use of output of this sector in other sectors of the food
complex. The unreliability of material-technical supply makes it difficult to
employ such evaluations. For example, the sectors that produc~ agricultural
machinery cannot be accountable for its effic~ent use in the fields and at live-
stock units because it is produced from low-grade metal. Therefore, we cannot
fundamentally improve the economic mechanism of management of the agro-
- industrial complex without making profound ahanges in the system of inter~
_ sectorial relations of the national economy as a whole.
Nonetheless, a great deal can be done at the lower levels, in particular with
respect to the relattons among enterprises tfiat ~elong to different sectors of
the food complex. Thus, the ~decree of the CPSU Central Committee and USSR
Cou.ncil of I~inisters entitled "Improving Planni:ng and Economic Stimulati~n of
the Production and Procurement of Ag~'i~ �ltural Output" contains a number of
impartant ways to improve the economic mechanism. Procurtng ministries and
enterprises are given responsibility for accepting all the output~delivered by
- agricultural enterprises. They can now accept above-plan nonstandard output at
prices set by agreement of the party. This will make it possible to reduce
direct or concealed (used for livestock feed) losses of output.. It is also
important to switch to receiving a11 output at the place of production and
hauling it from the farms in vehicles belonging to the procurement agency.
Along with centralization of receiving, transporting, storing~ and processing
agricultural output, we muat develop decentralized systems of different sizes
for storing and processing output, which will ma:ce it possible to reduce p~ak
loads in technological chains and to reduce losses. A procedure must be
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_ established by which output is counted in the procurement plan for tfie year in
which it is actually marketed. The general conditions of material--technical
supply for containers, fuel, and other resnurces that apply to enterprises of
the food industry must also apply to the industrial enterprises of the kolkhoze~
and sovkhozes.
The role of state and cooperative trade in the entire structure of the economic
mechanism should be strengthened. The operational influence of trade on shaping
the assortment of industrial output, its quality, preparatton and packaging,
should be based on a study of pulilic demand in each region by seasons of the
year.
While strengthening the centralized principle tn planning, above all in de-
fining the structure of the food complex, we should gtve the farms greater
opportunities to show initiative, to maneuver, and to employ healthy socialist
entrepreneurship in resolving ongotng management problems. Tfiis will make it
possible to receive a signiftcant benefit while carrying out the food program.
COPYRIGHT: Izdatel'stvo "Pravda", "Voprosy ekonomiki", 1981
11,176
CSO: 1827/100

~ .
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- CONSUNIPTION TRENDS AND POLICIES
i
SUPP~RTING ECONdMIC CALCULATIONS FOR NEW CONSUMER TECHNOLOGY URGED
Moscow VOPROSY EKONOMIKI in Ri~srian No 7, Jul 81 pp 84~93
[Article by I. Rakhlin: "New Technology and P~rsonal Consumption"]
[Text] The problem of raising the material and nonmaterfal standard of li.ving
received a great deal of attention at the 26t~e CPSU ConQress. As L. I.
Brezhnev observed, for the lltfi Ftve-Year Plan and the 1980's as a whole the
Communist Party is advancing ,a Broad program of further improvement in public
well-being, a program that covers all aspects of Lhe life of Soviet people:
- consumption and housing, culture and leisure acttvities, and working and living
conditions. The document "Basic Directions of Economic and Social Development
of the USSR for 1981-1935 and the Period IIntil 1990" envisions implementation
of a system of ineasures to consistently raise public well~"ieing. Among them
are improving housiizg conditions, medical services, working conditions, and
supply of consumer goods and solving a numbe~~ of otF?er social problems. It is
contemplated that special purpose comprehensive programs will be developed and
carried out in stages for the most important socioeconomic problems. Foremost
among these programs are the food program and tfie program for development of
- consumer goods production.
The growing role of scientific--technical progress and its social consequences
in fundamentally solvin~; the problems of raising publi~, well being has r.aised
, a new economic problem in recent years, one tFiat fias n~t yet been treated
thoroughly in thp lit.eratuTe. I am referring to tTie ~ethodology and techniques
of determining the socioeconomic efficiency of new technology (new products and
services) in the sphere of personal consumption. Tbe gr~ater social orientation
of scientific-technical progress means that the many different variations of
developing, incorporating, and introducing neGr technology should not be carried
out without a competent and detailed consideration of their socioeconomic conse-
quence~.
In design and planning practice (Iaegtnning from tFie achtev~d level of developmen~
- of efficiency theory), economic evaluations are given primarily for measures
that accelerate scientific-techntcal progress in the sphere of material produc~-
tion. The steady rise in public well-being, the saturati:on of everyday li=e
with new goods and services, and the rapid growtfi in expenditures to achieve
social goals ob~ectively demand a transition to evaluations that encompass the
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social consequences of the introduction af nec~ tecfinology in~material produc-
tion, the nonproduction spfiere, and everpday~livL:g.
In the personal consumption sphere new tecfinology is used in the form of new
goods and services. The new consumer Fienefits and services nffered to people
through the use af scientific-tecfinical advances fn production can be condition-
_ ally put in three groups: (1) new technologp for private use (cars, electric
refrigerators, washing machines, television sets, and the like); (2) new perish-
able products (food products, clothing, footwear, household chemicals, medi-
cines, toys, and the like) and durable goods (furniture, floor coverings and
wall finishing material in apartments, cultural-domestic and household goods)
or products with improved qualities produced on the basis of new machinery and
technology or using contemporary materials; (3} new tqpes of paid and free ser--
vices rendered using new types of equi~ment, materials, or technological
processes.
Widespread electrification, mechanization and automation, cliemicalization, and
cybernetization under current conditions have fundamentally transformed the
principal types of everyday hvman activities: preparing and storing food
(gasification and electrification of tfie processes, new types of kttchen equip-
ment, electric refrigerators, and the like); cleaning and maintaining comfort-
~ able apartments (electric vacuum cleaners, electric floor polisfiers, air
conditioners, electric fireplaces, and s~ on); maintaining the wardrobe (sewing
machines, domestic chemicals, and the like); wasfiing lau nd ry (wasfiing
machines, synthetic detergents, and tfie like); maintaining bealtfi (medicine and
sports equipment); cultural use of leisure time (television sets, tape re-
corders, rad:ios, and other cultural-domestic goods); travel (caXS, motorcycles,
and bicycles), and so on.
Each year the vol~e of domestic, municipal-~iiousing, transportation, medical,
and other servi~es increases, the assortment 6roadens, and tfie qualitp of the
services rfses. For example, our country now produces more tlian 80 types of
� machinery and equipment for everyday livtng. We fiave incorporated tfie production
(in some cases without proper substantiation, it is true) of many models of
goods: bicycles - 89; el~ectric shavers 34; television sets - 56; tape
recorders - 38; radios and victrolas 51. About 1 billion domestic machines
and appliane.es are used by the population.l In the period between 1965 and 1979
the number of durable cultural-domestic articles per 100 urban and rural
families rose as follows (number of articles at the end of the year): television
sets, fron~ 24 to 83; refrigerators, from 11 to 82; wasfiing machines, from 21 to
70; electric vacuum clear,ers, from 7 to 2b, and so on.2
As public well-being rises there is a corresponding rise in the level and change
in the structure of the material and nonmaterial needs of the people which are
satisfied. The intensity af satisfaction of tfiese needs can be ~udged by the
fact that each 15 years the socialist society moves to a qualitatively new
level of consumption.3 In the last 15 years tfie sectorial structure of the con-
sim~ption fund (without considering wear on ftxed nonproductive capital) has
changed significantly: the share of food products fias dropped from 62.0 to 53.6
percent while nonfood goods have risen from 38.0 to 46.4 percent (including a
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rise from 4.9 to 10.0 percent for output from macI~ne building and from 0.8
to 2.3 percent for chemtcals).4 Tfiis- same trend is confirmed by cfianges in the
. ratio between food and nonfood goods in tfie total volume of commodity turnover
in state and cooperative trade, including public catering (see table below, in
percentages},5
Type of Goods 1940 1970 1979
Food Goods 63.0 55.5 51.6
Nonfood ~oods 37.0 44.5 48.4
~ In the structure of use of the aggregate ~icome of worker and kolkhoz member
families (according to data from a sample surveq of t~ie bud~ets of 62,000
families), there is intensive growtfi in the sfiare of expenditures for the pur-
chase of furniture and cultural-domestic and housefiold goods, fabrics,
clothing and footwear, and savings (growtfi in casfi and savings deposits), in
_ addition to a rise in the share of free services from puBlie consnmption funds
f~r education, medical care, and the like~ At tfie same time, there is a sharp
decrease in the share of exgenditures for food.
These data on actual changes in the structure of consumiption of material go~ds
and services, in particuZar the rise in t~"ie sfiare of nonfood goods and expen-
= ditures for tfie purchase of cultural-domestic and fiousefiold goods and new
everyday services testify to the growing influence of scientific-tecfinical
, progress on the process of satisfying public needs.
A more detailed outline of the problem of the impact of tfie socioeconomic
~:ificiency of new technology on the personal consumption spfiere can be done, in
our opinion, by formulating the most important social components according to
- similar types of consumer goods and material services. T~ie folluwing basic
social components of human life, with a material character, can be identified
on the basis of data on puhlic well-being: food products, property, fiealtfi,
13ving conditions (manmade and natural), the consumption budget, and free time.
The material foundation for the production of foodstuffs (food products) and non-
food goods (property) is the group B sectors as well as tfie sectors of heavy
industry (the latter account for more tfian fialf of the nonfood goods that are
produced). Hs noted at the 26tfi CPS'U Congress, ne~r tecfinolegy and Bo~stering
the scient:fic and design bases have a decisive role in renewing the assortment
and raising the quality of various consumer goods and in technical ~re-~quipping
of group B sectors.
Let us look at the role of new technology in changing the social components of
_ life in more detail using the example of human fi~altfi. Tfie quesCion of the
negative consequences of accelerating scientific-technical progress, which must
be identified and eliminated in time, deserves special attention here.
The intensification of production, urbanization, psychological stress,~pollution
of the biosphere, and other factors fiave a negative effect on human health.
These consequences may lead to enormous losses w~ien they are underestimated.
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Thus, more than 600,000 various chemicals are dumped in the environment in the
- contemporary world each year; 12 billion tons of carbon monoxide is put into the
atmosphere and thousands of tons of petroleum prodacts and otfier waste are dis-
carded into the oceans and seas. The human race has exterminated 150 animal
species in various ways, one of which is environmental pollution, and some 1,000
species are threatened with extermination or have tiecome rare.6 The negative ef-
fect of noise reduces human longzvity in the cities by 8-12 years.~
Effective steps are being taken in our country to improve human working and living
conditions from the standpoint of establishing medical norms for permissible en-
vironmental effects on the human organism. In recent years medical norms have been
developed and introduced in public health practice for approximately 1,000 chem-
ical compounds that are potential envtror?mental pollutants. In otfier words, the
negative consequences of accelerating sctentific-technical progress can and must
be averted in time.
At the same time scientific-technical progress has a direct and beneficial effect
on human health through medicines and new medical procedures. Thus, Soviet
medical practice uses some 3,000 drugs that have ~een authorized by public health
agencies. The list of products of the domestic medical industry covers more than
6,000 items, including about 1,600 medicines. _
_ ~
There are three contemporary methods of treating malignant tumors: surgical, !
radiation (based on ionizing radtation before and after surgical eradication ~
~ of the tumors), and medicinal (hormone preparations and about 60 types nf chemo-
therapy substances). Among the techniques for early diagnosis of cancer are
= endoscopy using fiberoptics, examination of tumor cells under the microscope,
x-ray examination, ultrasound "transluscence," and otfiers. Thanks to effective
use of anticancer procedures (including early prevention}, the standardized indi-
cators for mortality from cancer for men in the USSR have not increased in the
last 10-15 years and for women show a clear trend to decrease. Therefore, the
country today has more than SOO,OQO persons who completed treatment for onco-
logical diseases 10 or more years ago.
- New principles of treating eye diseases (glaucoma, cataracts, and the like) are
based on microsurgery, laser and ultr~sound technology, and the use of new
medicines, artificial crystalline lenses, new tools (for example the tubular
probe), and the like.
The meaning and orientation of economic measurements in the area of new tech-
nology should be defined by the purpose of socialist production. The main
criterion of the socioeconomic efficiency of production ~s the extent to which the
requirements of the basic law are met. Tilere is reason to thtnk that the socisl
orieutation of production takes on the role of the primary criterion for optimi-
zation of social and economic proportions in the national economy. It follows
from this that now, even thaugh it is a very important indicator for formation of
the consumption fund, national income cannot be either the initial or the primary
expression of the socioeconomic impact of socialtst production. The socio-
economic result of production is this impact.e
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The socioeconomtc national economic impact has tc~o facets: as a goal it 3.s a
. certain socioeconomic result in the form of a mas-s of output and services af the
appropriate structure and quality produced; as a means, a source for achieving
this goal it represents cost economtes (ratsing tfie aggregate productivity of live
, and embodied labor calculated for a given socially useful result).9
The main difficulties in working out tfie methodological foundations for deter-
mining the socioeconomic efficiency of new output and services in the personal
- consumption sphere are related chiefly to the fact that the concept of the $o--
cial result is much 6roader than the concept of the economic result and certain
parameters of social efficiency cannot be adequately described in terms of eco-
nomic efficiency. In the opinion of Academician T. Khachaturov, we must not
restrict ourselves to attempts to reduce the entire impact of tfie nonproduction
sphere to an economic effect expressed in rubles, especially where sucfi calcu-
lations are in many cases extremely crude and unconvincing.l~ One must also
- agree with the opinion of Corresponding Member of tfie USSR Academy of Sciences
L. Gatovskiy that "the human being, human life and health, and satisfying human
- needs are goals-in-themselves and cannot, certainly, be reduced to tlie savings
of resource expenditures which occux~ as the result of the inverse impact of
- social factors on economic factors."11
It is evident that a partial, local approach to solving the problem of the
socioeconomic efficiency of the sphere of final personal consumption is
inevitable. The first sub~ect of economic evaluation can tie tlie basic social
components of human life wh~cfi have a material cfiaracter. But even with such a
limited consideration of this problem, the spfiere of calculattons of socio-
economic efficiency will include sucfi extremely important ob~ects as the impact
of new products and services on the human diet, property, health, living condi-
tions, consumer budget, and free time. These social components, which have
- their own values that are not measurable in economic categories, unquestionably
influence the economy indirectly. As we see, eliminating the economic evalua-
tion of other social components, especially nonmaterial ones, does not at all
mean refusing to determine the socioer.onomic efficiency of the sphere of final
personal consumption in the "narrow" sense.
Let us consider the problem of determin~ng tTie socioeconomic efficiency of new
tectuiology in the gersonal consumptinn sphere from the standpoint of two inter-
related factors: the socioeconomic result, and the cost savings.
The socioeconomic result as a category of public reproduction through production
_ and nonproduction (public and personal) consumption is an inalienable condition
of human and product reproduction. Determining the socioeconomic result may be
considered a new class of problems~ in tTie field of the socioeconomic efficiency
of new technology, one which has not been adequately treated in the literature
and methodological writings. Specifically, ttze "Methodology (Basic Principles)"
for det~.ermining the economic efficiency of use of new tecfinology, inventions,
and efficiency proposal~s in the national economy (pu6lished in 1977) does not
disclose the essential f~atures and content of the socioeconomic results.
The social factors of production and ~~se of output (including the environmental
impact) are mentioned in paragrapfi nine in connection witfi insuring the com-
patibility of variations of new and tiase teciinology lieing compared for national
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economic efficiency. The influence of the socfal factors of introducing new tech-
nology is not revealed in the indicaf.ors af cost accounting efftctency either.
As a result, no techniques are provided far economic evaluation of the social
factors of tfie use of new teclinology in material production, tha nonproduction
sphere, and personal consumption.
The appearance of public and personal needs under the influence of scientific- .
technical progress is an objective process t~iat reflects the interaction of
production and consumption. At the same time, ~fie extent of satisfaction of the
people's material an~3 nonmaterial needs, wiiicli means tfie socioecanomic result,
is assigned by society ahead of time in the plans for economic and social de-
velopmer,t of tfie national economy as a reflection of the requirements of ob-
jective economic laws.12 Therefore, we helieve that applied to tfie sphere
of gersonal consumption it is advisable to use a preassigned socioeconomic re-
sult of the corresponding structure and qualit;~ for calculations. In a number
of cases this result may assume more concrete forms related, for example, to
preservation of health; buying, prepartng, and stortng food; buying, using, and
preparing clothing, footwear, and domestic appliances; washing and ironing
white goods; cleaning the apartment, and the like.
The novelty of the problem of the socioeconomic result lies not only in the
framing of its structure, but also in tfie economic evaluation of social com-
ponents that ha~e grown. The heterogeneity of the social components included in
the socioeconomic result should ~e noted. Appltcable to the sphere of personal
consumption socially useful socioeconomic results of the use of material goods
and services are divided into two parts: tfiose which have immediate economic
content (growth and the volume of public consumption of material goods and
services as the final result of material production); those which do not have
immediate economic content, but do influence the magnitude of this result
(working and leisure conditions, human health, environmental protection, and
the like).
An economic evaluation of the social components wit:~ immediate economic conCent,
for exa~mple, food products and property, can be done (depending on the purpose
of the calculations) on the basis of wholesale prices and rates, narmative net
~utput, and retail prices and rates. The situatton ia more complex with a~n
economic evaluation of the social components that do not have immediate economic
- content. To solve this problem it is necessary to f~rmulate the socioeconomic
- resu~t in natural physical terms for these components on the basis of ai: elahor-
ate system of social norms and standards that cover all the processes of vital
human activity with some degree of completeneas. For example, the sanitary-
health conditions of human life and labor (size of rooms, sound levels, air
exchange, lighting, temperature conditions, and the like) can be standardized
in terms of norms. The central question of a healtt~ evaluation of materials
and articles is controlling harmful sutastances released into the environment.
From the standpoint of the esthetic aspects (new output) it is necessary to
control colors and various other design parameters. For the ecological aspect
the central problem is to establish the maximum permissible concentrations of
- harmful substances in the natural environment (water, air, soil, and the like).
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The social norms serve as b.oth standards. and limitatians on variation in par-
ticular parameters of the process of vital human activity. In the broad sense,
- we are speakin~ of the need to define tfie lfst and quantitative values of the
social norms that regulate compliance with tfie requtrements for creating normal
human living conditions.
As the sphere of personal consumptiou is saturated wtth new goods and services,
all the variations of their introduction being worked out should meet compulsory
~ normative requirements for so~ioeconomic results. If this is not true, the vari-
ations will not be comparable in terms of socioeconomic results, which will make
it impossib].e to compare them in cost terms. If correspondence to mandatory
normative requirements is obaervPd, tfie socioeconomic result can be determined
for variation in natural physical form. Tfiis is quite a complex problem because
it covers a multitude of tnitial social norms.
Comparing the socioeconomic results for tfie variations of conditional and new
technology makes it possible to determine the increment of growth for the new
technology variatton in natural phyaical form. We propose that the economic
evaluation of the increased sociaY results for the most important social com-
ponents be based on a set of varied, tnterrelated, and interdependent factors,
some of which are given in the section Fielow. [Social components are under-
lined, followed by factors that generate the savings.]
Food Products. Increase in the length and improvement in the
conditions of storage and also preparation of food products
by the population as the result of the use of new refriger-- .
ators, polymer packing materials, and fresh-frozen dishes and
intermediate produ~cts; decrease in losses of food products from
a worsening of their properties based on organoleptic and
other evaluations; increase in the proportion of fiigh-quality
food products by preservation of tfieir nutritional and taste
properties.
' Property. Expansion of the assortment and improvem~nt in the
quality of new material goods and s~rvices; rise in tT~e ar-
tistic and design level of new putput; reduction in expendi-
tures for storage and use of new material goods and for new
- services.
Health. Improvement in the quality of inedical services, a re-
sulting decrease tn the length of therapeutic, diagnostic, and
preventive procedures, time spent fiy patients in the hospital,
and expenditures for repair of inedical equipment; an expansion
on this basts of the contingent of persons employed in material
production and the nonproduction spfiere and an increase in the
additional volume of output produced and services rendered by
them, a decrease in expenditures to pay for disability cer-
tificates and the like; higher sanitary~healtfi specifications ~
for medical equipment, medical instruments, medicines, and
food and industrial goods and for sanitary conditions in the
fflod industry, retail trade, and public catering.
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Living Conditions (Manmade and Natural}. Improvement in the
quality, comfort, and convenience of Fiousing and tn fiousing-~
municipal services; reducing t~ie level of sofl, air, and
water pc:llution witti domestic waste, womout arttcles, and
packaging materials; otitaining an additional savi~ags from re--
cycling material resources.
Consumer Budget. Improvement in tfie quality (.technical--economic,
use, esthetic, and otfier properties) of new goods and matertal
services; decrease in tfis labor intensiveness, prime cost, and
capital expenditures for tfie manufacture, maintenance, and re--
pair of goods and r.endering of matertal services; savings of
resources in connection witfi refusal to buy goods because their
qualities have been made available tn t~ie domestic services
sphere; lowering of retail prices for goods and rates for ser-
vices and the related savtngs of resources in personal con-
sumption.
- Free Time. Reduction in labor expenditures, ltghteniug of work-
ing conditions, and cfiange in tfie nature of lalior; increase in
the number and improvement in tlie qualitg of new types of machines,
equipment, tnstruments, and mechanized devices used to render
material services in pufilic healtfi, retail trade, public catering,
the domestic services sphere, fiousing and municipal services,
passenger transportation, the public communications sector, and
in the home.
Let us note specially that the economic evaluation of tfie increased socia'1 re-
sults must be based not on an economic evaluation of tTie enumerated component
as such, buC on an economic evaluation of the impact of scientific-technical
- progress on change (growth) in these components. For example, we are far from
- the idea of evaluating human fiealth.in ecotiomi.t terms; we are posing a com-
_ pletely different problem, to evaluate the savings from maintaining health at
the proFer level by the use of nekr medications, new treatment procedures, and
other means. Therefore, we are talising a~out ar ec;onrmic eva'luation of social
components by an indirect, riot direct;, method, through change in costs for the
differeni: aiten~atives before and after tfie uae of new technolagy. Therefore,
the social companent sfiould i~ave c~rresponding quantitative measures which can
be adec~uately described in economic terms. Tfie other quantita~ive measures
that are now subject to economic evaluation can be described by their dis-
tinctive natural indicators.
In the sphere of final personal consumption, the following cost indtcators can
be used for an economic evaluation of tfie social components that do not have
immediate economic content: growtli in the volume of normative net output in
- material production and the nonproduction spfieres; capital savings in th.e budgets
of social security, public healtli, and state aad personal insurance; capital
savings in the personal consumer budget for medical treatment, purchase of food
products and medicines, purchases, maintenance, and repair of articles of
clothing and cultural-domestic and houseTiold goods, and acquisition of housing;
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personal time savings resulting from using the services of tfie service sphare
and in tfie performance of fiouse~ork.
The different goods and services are comparable in terms of t~ieir ability to
- meet public and personal needs. Tt can Tie assumed from tfiis that tTie social
components listed above, despite tfieir differences, are similar and comprise a
unified complex that aims at realization of the supreme goal in socialist
society. It becomes possilile to add togetfier the results of an economic evalu-
ation of the factors of different social components and obtain an overall
evaluation of the increased social result in cost form. .
The savings from the increased social results plainly is different in natuxe from
the savings of costs, for example, calculated costs. In the first place, these
economic indicators are designed to solve different problems. A savings of calcu-
lated cos~s (a category of comparative efficiency) is, of course, determined in
a calculation to obtain the identtcal (assigned) socieconomic result. As for a
savings from an increased social resu~.t, it manifests itself tn the process of
an economic evaluation of different svcioeconomic results, tfie base result and
the new result. This tncrease is caused by the dtfferent possibilities of at-
taining technical-economic and social norms using traditional and new technology.
In the second place, the savings of calculated costs reflects a savings of pri-
mary resources in the sphere of material productton, while the savings from an
increased social result has a different basis, a social basis, and reflects a
decrease in expenditures from sources (above all the consumption fund) formed
on the basis of the mechanism for distribution and redistribution of primalcy
income. A savings on such expenditures is more likely to be evidence of more
eff icient use of the consumption fund (national income) than growth in the fund.
We believe that the savings from an increase in social results cannot be com-
pared at all, in any form, with a cost savings (comparative or absolute). It
- must be used as an independent indicator to substantiate the socioeconomic result
of new technology (in cost form), social norms and the order of their introduction,
technical policy in the field of the development of production and use of tiew
' technology fc~r ~ocial purposes, new co~sumer goods and service3, and the like.
The second component of the f.inal sociueconamic impact of new technology is the
cost savings calculated for a given socially useful result. This is linked t~o
- production efficiency and the level of rational use of resources. When de--
tPrmining the socioeconomic impact of new good3 aud services in the spher,e of
final personal consumption, the expenditures necessary for this may have two
evaluations: from the national economic standpoint (calculated costs �or
development, production, transportation, use, and repair), and from the stand-
point of tfie personal consumption sphere (personal expenditures for purchase,
delivery, use, and repair of goods and enjoyment of services). These evaluatien~
are 3:nterrelated. Thus, goods and services in ~fie spfiere of final personal con--
sumption are a concrete expression of the proportions invested earlier at tl?e
national economic level. In other words, tfie consumption of goods and services
signifies realization of the national econonic socioeconomic impact, its conver�-
sion into a personal use effect.
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Because national economic impact is widely used to select tfie ~st efficient
alternatives of new technology, it is important tfiat at the same time the socio-
economic result itself ts formed because the amount of tfie iscrease in thts
result depends on the technical-economic and social parameters of the new
technology. This is an irerar_ive nroc2ss and sfiould reflect tfie inverse effect
of expenditures to form the socioeconomic result.
A number of problems in the methodologp of determining tfie national economic
socioeconowic effect of new consumer goods fiave been worked out in the sector
on efficiency of scientific-technical progress 3t the Lnstitute of Econ~mics
of the USSR Academy of Sciences.13 Tfie essential feature of the metfiodology is
that such new elements as additional calcula~ed expenZitures for measures to
attain the normative socioeconom~c result with the use of the traditional con-
sumptior. goods and expenditures for measures to eliminate or compensate for a
certain negative social result must be included in the spfiere of calculations
of the socioeconomic impact (in comparison with tfie economic impact). This
makes e~enditures in the stages of tfie manufacture and use of new and tradi-
tional goods comparable in terms of socioeconomic result.
The amount of the socioeconomic use effect as a savings of personal expendi-
tures for the purchase, trans~ortation, storage, use and repair of all
possible consumption goods and en~oyment of services depends, on the one hand,
on the technical-PCOnomic parameters and properties of these goods (dura-
bility, reliability, electricity consumption, and the like), and on the other
hand, on the level of retail prices and rates.
The impact of scientific-technical progress on the persanal consumption sphere
naturally appears as a systematic decrease in costs in all stages of the manu-
facture, purchase, and use of consumption goods and services. At the same
time, the real changes in retail prices and r.ates must be ta~Cen into accaunt.
Despite the level and the changes in retail prices (rates) however, they are
an essential indicator for determining the use affecting the sphere of final
_ personal consumption.
The transition to substantiating the socioecanomic efficiency of new tech-
_ nology not only in material praductiorn, which is en~viaioned in existing
methodologies and done extensively at t~ie present time, but also in ~the sphere
of personal consumption creates a basis for: using efficiency calculations to
study variations of new consumption technologq~ goods, and services more com-
pletely; formulating uniform technical policy for the development of material
production, the nonproduction sphere, and tfie sphere of f inal personal con-
sumption; raising the efficiency of capital expenditures to broaden and renew
the assortment ~f consumption goods and tfie service sphere.
The 26th CPSU Con.gress identified the socioeconomic problems of scientific-
technical progress as one of tfie researcfi areas in whicfi social scientists
should concentrate their efforts. One of the research areas within the field
of the socioeconomic impact in tfie spfiere of personal consumption should be
development of norms of cost savings for similar types (groups) of new con-
s~ption goods and services. Tfiis ts essential to substantiate an optimal as-
sortment of consumption goods and services.
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Work on the questions of determining tfie soc~oeconomtc effici.ency of new
products and services in the personal consumption spTiere is a further and
more concrete step towards solving these profilems and will promote work to carry
out the policy of tfie Communist Partp witfi respect to solving the problems of
raising tfie well-lieing of the Soviet people.
FOOTNOTES
1. See L. A. Kostin, "Proizvodstvo Tovarov Narodnogo Potrebleniya (Sotsial'no-
ekonomicheskty Aapekt)" [The Production of Consumer Goods (The Socioeconomic
Aspect)], Izdatel'stvo "Elconomika", 1980, pp 189, 208.
2. See the statistical yearbook "Narodnoye Ktiozyaystvo SSSR v 1979 g." [The
USSR National Economq in 1979], Izdatel'stvo "Statistika", 1980, p 433.
3. See "Materialy XXV S"yezda KPSS" [Materials of. tfie 25th CPSU Congress],
Politizdat, 1976, p Z14.
4. See Kostin, op. cit., p 52.
5. See "Narodnoye...," op. cit., p 457.
6. See A. M. Izuktin and G. I. Tsa~egorodtsev, "Sotsialitisticheskiy Obraz
Zhizni i Zdorov'ye Naseleniya v Svete Resfieniy XXV S"yezda KPSS" [The
Socialist Way of Life and Public Health in Ligfit of the Decisions of the
25th CPSU Congress], Izdatel'stvo "Meditsina", 1977, p 173.
7. See "Nauchno-Tekhnicheskaya Revolyutsiya i Chelovek" [The Scientific-
Technical Revolution and Human Seings], Izdatel'stvo "Nautca", 1977, p 114.
8. For greater detail, see "Ekonomika Razvitogo Sotsialisticheskogo
Obshchestva (Osnovnyye Cherty, Zakonomernosti Razvitiya)" [The Economy of a
_ Developed Socialist Society (Basic Fzatuz�es and Developmential Patterns],
Izdai:.el'stvo "Ekonomik.a", 1977~ pp 277-278; "Osn~vnny Ekonomicheskiy Zakon
5otsializ~a" [The Basic Economic Law of Socialism], ed3te~' by V. N.
Cherkovets, Izdatel'stvo "Nauka", 1978, pp 174-175, 179.
9. See L. M. Gatovskiy, "Voprosy Razviti}ra Politicheskoy Ekonomii
Sotsializma" [Issues of the Development of tfie Polttical Economy of
Socialism], Izdatel'stvo "Nauka", 1979, pp 465-466.
10. See T. S. Khachaturov, "Effektivnost' Kapital'nykh Vlozheniy" [The Efficiency
' of Capital Investment], Izdatel''stvo "Ekonomika", 1979, p 183.
11. Gatovskiy, op. cit., p 373.
12. We do not consider here the question of the formation of personal needs under
the influence of individual tastes, preferences, motivations, and the ltke.
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13. See "MethodologicheskiyeVoprosy Opredeleniya Sotsial~no-~konomicheskoy
Effektivnosti Novoy Tekhniki" [Methodologi.cal Issues of Determining the
Socioeconomic Efficiency of New Technologp~, Izdatel'stvo "Nauka", 1977;
"Osnovnyye MetodichQSkiyePolozfieniya Opredeleniya Sotsial*no--
Ekonvmicheskoy Effektivnosti Novoq Tekfinikf" [Basic Methodological
Principles of Determining the Socioeconomic Efficiencp of New TecI~nology],
draft version, Institute of Economics of the USSR Academy of Sciences, �
1980 (rotaprint).
COPYRIGHT: Izdatel'stvo "Pravda", "Voprosy ekonomiki", 1981
11,176
CSO: 1827/101 END
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