Liberman, E. G. (1971). Economic methods and the effectiveness of production A. Schultz & L. J. Kirsch, Trans. White Plains (N. Y.): International Arts and Sciences Press, inc.
Added by: Dominique Meeùs (2012-02-15 10:51:00) Last edited by: Dominique Meeùs (2012-02-21 14:39:50)
|Resource type: Book
ID no. (ISBN etc.): ISBN : 0010994270
BibTeX citation key: Liberman1971a
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|Categories: Économie, Marxisme
Keywords: marché, planification, socialisme
Creators: Kirsch, Liberman, Schultz
Publisher: International Arts and Sciences Press, inc. (White Plains (N. Y.))
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Popularity index: 11.25%
Foreword … v
Preface to American Edition … ix
Introduction … 3
Chapter 1. General Description of the Economic Reform of the USRR … 10
1. Most important features of the reform
2. First successes in the implementation of the reform
3. Shortcomings in the implementation of the reform
Chapter 2. Concerning the Operation of the Law of Value … 43
1. Commodity-monetary relations under socialism
2. Profit under socialism
Chapter 3. Concerning the Question of the Optimality of Centralized Planning … 64
1. The functions of centralized economic management
2. Plan, product-mix, and economic relations
3. The optimality of plans
4. Capital-intensiveness in production
5. Specialization of production an technological progress
Chapter 4. Economic Methods of Influencing Production … 130
1. Economic incentive
2. Certain problems in price formation
Glossary … 181
Added by: Dominique Meeùs
p.ix, Chapter Preface to American Edition
In this book I attempt to show why the concept of so-called “market socialism” is incompatible with technological progress and is unacceptable for socialism.
Added by: Dominique Meeùs
Keywords: progès technologique socialisme socialisme de marché
pp.11-12, Section More important features of the reform, Chapter 1. General Description of the Economic Reform in the USSR
As we know, the economic reform was elaborated in a rather extensive, specific form. First, there was a substantial reduction in the range of obligatory plan indices communicated to enterprises on a centralized basis, a number of indices were replaced, and the new profitability index was introduced.
Plan targets for the volume of output to be sold are being established for enterprises instead of the gross output index. This substitution is very substantial : it places production under the economic control of purchasers and creates prerequisites for the establishment of organic unity between planning and cost-accounting. The basic product-mix [nomenklatura] is also confirmed from above.
In addition to other indices, profit and profitability calculated as the ratio of profit to fixed productive capital and to normed working capital have been established as indices for evaluating the effectiveness of the work of enterprises. Thus, yardsticks of effectiveness which, although they have existed in our country for a long time, have not played a large part in planning, to say nothing of the evaluation of the work of enterprises, have been brought into economic circulation.
In our opinion, the plan should confront production with ultimate goals but should not directly regulate the means of their attainment within the enterprise, which would deprive the enterprise of the necessary maneuverability in finding optimal solutions for the fulfillment of plan targets.
Although they retain their importance as accounting indices within the branch, such indices as the number of personnel, the average wage, labor productivity, and enterprise cost of production are not included in the number of obligatory indices that are confirmed for each enterprise.
Even now, certain economists cannot see how such a very important index as labor productivity can be left outside the realm of obligatory centralized planning. But the reform in no way denies the fact that labor productivity is a most important index to the effectiveness of production. The task consists in monitoring the correspondence between the growth of wages (including bonuses from profits) and increases in labor productivity. Added by: Dominique Meeùs
Keywords: autonomie coût de production indice du plan objectif du plan planification productivité produit en volume profit réforme économique rentabilité
Je pense que la номенклату́ра traduite ici product-mix est la gamme de produits, l’assortiment d’une entreprise et que cela correspond à l’usage d’assortment dans (Liberman & Dobb, 1966).
Liberman, E. G., & Dobb, M. (1966). Theory of profit in socialist economy: A discussion on the recent economic reforms in the ussr. New Delhi: People’s Publishing House. Added by: Dominique Meeùs (2012-02-21 14:39:50)
Payments to the budget and allocations from the budget are established as obligatory plan targets. The volume of centralized capital investment is also confirmed, since this is absolutely necessary for securing the required proportions in the development of branches of production in keeping with centralized national economic plans. The basic targets pertaining to the installation of new equipment as well as the indices of material and technical supply are also planned. In discussing the indices of material and technical supply, it must be borne in mind that, in keeping with the decisions of the September (1965) Plenum of the Central Committee and the Twenty-Third Congress of the CPSU, there will be a gradual transition to the planned distribution of equipment, supplies, and semimanufactures through the wholesale trade system.
Naturally, the restriction of the number of plan indices confirmed by higher-echelon organizations considerably expands the economic autonomy of enterprises. In no small measure, this autonomy is also promoted by the Statute on the Socialist State Production Enterprise, which extends and legislatively confirms many rights to enterprise heads.
The September (1965) Plenum of the Central Committee of the CPSU outlined such a structure of the incentive system in order to arouse the enterprises’ interest in elaborating and fulfilling higher plan targets and in making fullest use of internal reserves and resources. This goal is realized through the unity of the system of planning and economic incentives for enterprise collectives, which serves to increase the country’s national income. In this instance, the interests of society and of enterprises are combined more harmoniously.
The development of production is financed by centralized sources as well as by the enterprises’ own resources. It is important to emphasize that provision is made for the broader utilization of the internal resources of enterprises and economic organizations as well as of bank loans, instead of nonreturnable budget financing of capital investment.
As a rule, the financing of capital investment and the augmentation of working capital at existing enterprises are done through the enterprise’s own financial resources and through Gosbank loans. This essentially alters the attitude of enterprises toward the reconstruction and expansion of production, requires the more thrifty and economically substantiated utilization of new equipment and production areas, and obliges management to give greater attention to increasing the effectiveness of capital investment.
In order to increase the effectiveness of production, payments for fixed and working productive capital have been introduced. In the future, this type of payment may become an important source of national centralized net income and may, to a certain degree, replace other types of payments, including the turnover tax. This is specifically the method of exerting economic influence on production which basically must counteract the squandering and mismanagement of social productive capital.
It is also important to note that normative payments for capital are established for a number of years so that a properly functioning enterprise will have a profit for offering incentives as well as for covering planned outlays. The more effective an enterprise’s operation, the more profit it receives and the larger the share of this profit (after fixed payments to the budget, payments for the use of capital, and loan interest payments) is left at the disposal of the enterprise.
There are also a number of other important innovations that promote the strengthening of cost-accounting and the imparting to it of the nature of a real rather than a formal method of exerting economic influence on production. The role of the economic contract and the material liability of parties for its fulfillment are being strengthened, even to the point of providing for the complete compensation of losses to the injured party by the injuring party.
Liability is being established both horizontally, i.e., between enterprises, and vertically. We allude here to the establishment of guarantees of material liability not only of enterprises to ministries and agencies but also the liability of these organs if they are responsible for losses incurred by the enterprises. The first step in this direction is the conversion of economic and production associations as well as main administrations of industrial ministries to cost-accounting.
The strengthening of the cost-accounting of enterprises is also promoted by the better formulated system of using internal working capital. In the event that this capital is in short supply due to unsatisfactory management, the shortage should not be made up by the budget. An enterprise should apply for a bank loan, and the interest on this loan should be higher. The interest payment diminishes that part of the profit which is used to form the enterprise’s economic incentive fund. This means the realization of the urgent demand that sanctions affect the personal incomes of those responsible for the losses and that these losses not be automatically transferred to the government, as frequently was the case in earlier times. This kind of undefined responsibility was specifically one of the chief features in the formal nature of cost-accounting.
Contractual relations between suppliers and purchasers play a basic part in strengthening cost-accounting and, simultaneously, in improving the planning process. At the same time, direct contractual relations are a way of making product-mix planning more specific. Naturally, direct relations make sense if they are backed up by sufficient legal and economic guarantees. Added by: Dominique Meeùs
Keywords: socialime planification plan investissement équipement autonomie objectif croissance développement banque emprunt amortissement responsabilisation
The system of economic incentives makes provision for the formation of a special source of incentive payments above and beyond centrally established wage rates. The profit created at an enterprise is this source. It has been recognized that the amount of deductions paid from profits into the incentive fund depends on the fulfillment of the plan for increased sales or profits and on the profitability level contemplated in the annual plan (provided that the prescribed mix of key products stipulated in the plan is observed). In those instances when an increase in sales volume is not advisable, the size of the material incentive fund is determined as a function of increased profit.
Three economic incentive funds are formed on this basis : the production development fund, the material incentive fund, and the fund for sociocultural measures and housing construction.
The production development fund serves as a supplement to centralized sources of capital investment. It is formed through deductions from profits as well as through the use of a certain amount of the amortization deductions earmarked for the total renovation of fixed capital.
The material incentive fund is created solely from profit. The size of the deductions from profits paid into the material incentive fund is determined according to norms depending on the increase in the sales volume (or the amount of profit) and the profitability level stipulated in the annual plan. Norms are established as percentages of the wage fund: for every percentage point of increase in sales volume in comparable prices (or amount of profit) stipulated in the plan for a given year as compared with the previous year ; for each percentage point of profitability stipulated in the annual plan.
Norms are envisaged as stable for a number of years and are differentiated by branch (and, where necessary, by groups of enterprises within a branch). Limits on deductions paid into the material incentive fund are not established.
Payments of an established amount are made to the material incentive fund when the enterprise fulfills the profit and sales plan for the product-mix stipulated in the plan. When an enterprise overfulfills the profit and sales plan, additional payments are made to the material incentive fund. When an enterprise fails to fulfill the profit and sales plan for the established product-mix, payments are made to the material incentive fund at a lower rate. The product-mix is assigned to enterprises by higher-echelon organs in the process of confirming the indices of the yearly plan, and, if it is not fulfilled, payments to the material incentive fund are reduced. Other restrictions on deductions to the material incentive fund are not established.
The formation of the incentive fund is connected with the quality of planning at the enterprise. In order to eliminate, or at least diminish, the striving to conceal reserves in the elaboration of plans at enterprises so as to make these plans easier to fulfill, resources are paid in full into the incentive fund only if the production growth plan is fulfilled. But in the event the plan is overfulfilled, the rates are reduced by approximately 30 % for that part of the increase in output which represents overfulfillment. The idea is to make the deliberate lowering of plans disadvantageous, since the enterprise will thereby lose one-third of the incentive it would otherwise receive for the increase in sales which is overfulfillment.
On the other hand, the plan should not be unduly high. Therefore, if the plan is not fulfilled, the incentive payment is also reduced by the same amount compared with the established normative rates. The procedure for reducing rates of payment for the overfulfilled and unfulfilled part of the plan concerns not only the increase in sales (or profits) but also incentives for the profitability level, and such incentive is established without discounts for the level of profitability actually attained on the basis of normative rates solely within the framework of the plan.
The same methods have also been adopted for the formation of the third incentive fund, which is earmarked for sociocultural measures and housing construction.
Of basic importance is the fact that enterprises are not regulated by strictly centralized instructions in the matter of distributing the incentive fund among production participants. Enterprises may elaborate one or another provision on the procedure for awarding incentives on the basis of standard recommended methods in accordance with the specifics of their production. The only point that has been established is that bonuses to workers under presently existing statutes will be awarded from the wage funds in the future as well. But in addition to this, workers may also be paid bonuses from the material incentive fund formed from profit. Furthermore, these bonuses may be paid under special provisions, for example, for improving the quality of production, for economizing on materials, for mastering new products or processes, as well as on a one-time basis for individual attainments on the job.
The awarding of bonuses to managerial, engineering, and technical personnel and employees is also regulated by special provisions. In addition, certain sums in the incentive fund are reserved for one-time assistance. An important feature is that part of the material incentive fund is earmarked for rewards to personnel based on their performance for the year, depending on their length of service at a given enterprise. Added by: Dominique Meeùs
Keywords: incitant prime profit plan rentabilité amortissement planification
pp.43-45, Section Commodity-monetary relations under socialism, Chapter 2. Concerning the Operation of the Law of Value
The economic reform in the USSR has confirmed the essential role of commodity-monetary relations in the system of planned economic management. On this basis, a more detailed examination should be made of a number of questions of principle and methods concerning the most effective means of using commodity-monetary relations in our economic practice.
The historically determined level of development of socialist production and of the social nature of labor gives rise to the necessity of comparing the labor of every worker and every collective against the results of their labor. The value form of such comparison is due to the fact that the socioeconomic heterogeneity of labor has still not been completely surmounted. There is complex and simple labor, mental and physical labor, skilled and unskilled labor. The expenditures of labor of individual workers and collectives of workers may be higher or lower than the socially necessary expenditures of labor on a given type of use value.
Since the measure of labor must be controlled, when activity in the form of the product of labor is exchanged, the need arises to observe equivalence and to equate the products of labor. The products of labor can be compared and exchanged by equating them to a third, particular product of labor — to money, the universal commodity equivalent.
Soviet scholars differ in their explanations of the reasons underlying the existence of commodity-monetary relations in socialist society. Thus, some of them claim that the basic reason is the social heterogeneity of labor, while others believe the cause to lie in the necessity for offering material incentives for labor. In our opinion, these viewpoints are not contradictory. Material work incentives are necessary since it is essential to compare the measure of consumption against the measure of labor, and this in turn is connected with the social heterogeneity of labor.
Similarly, debates as to whether socialist production can or cannot be called “planned commodity production” or only “production in which commodity-monetary relations are used” seem relatively fruitless. Since the specific point at issue is the planned production of goods and services, it is clear that spontaneous, market-type commodity production is not involved. Planned patterns [planomernost] are evidence of the directly social nature of production. The economic relations of people are not concealed by an imaginary mask of relationships between things, and hence commodity fetishism is overcome. Exchange value does not play the role of universal or sole regulator of proportions in the distribution of social labor. Therefore, the commodity nature is not a constituent feature in socialist production, but it is nevertheless an integral feature together with other essential characteristics.
Highly developed socialist production is based on the profound social and technological division of labor. Specialization and cooperation are a guarantee of the transition to the highest forms of automated production. The division of labor means the organization of production in the form of numerous branches and enterprises. Since the means of production are owned by all the people, production in the USSR is unified, and hence it would be inconceivable to manage the economy without a single nationwide plan.
But at the same time, our production system is being divided up into a number of operationally autonomous enterprises. It is impossible to monitor and compare expenditures on production against the results of production solely by calculating the labor of each individual employed. The output of modern production is not only the fruit of the efforts of individual workers but, in larger measure, the result of the efforts of the collective worker. It is also necessary to use value levers and such a special economic category as cost-accounting in assessing, stimulating, and consciously managing enterprises in general. The exchange of activity between enterprises is now in the form of the movement of goods. Added by: Dominique Meeùs
Keywords: travail directement social fétichisme de la marchandise valeur d’échange affectation du travail social division du travail propriété des moyens de production travailleur collectif économie socialiste consommation incitant matériel marchandise monnaie planification réforme économique relations marchandes socialisme travail complexe travail non qualifié travail qualifié travail simple travail socialement nécessaire
pp.69-71, Section Plan, product-mix and economic relations, Chapter 3. Concerning the Question of Optimality of Centralized Planning
What, then, is the difference between “market socialism” and capitalist private enterprise ? As far as can be judged from certain “models of market socialism,” the difference lies in the fact fact that enterprises belong not to private owners but to society through self-governing collectives of enterprises as independently operating subjects. Naturally, there are many variations of this “model,” but they are all basically the same : it is something in the nature of corporative or guild socialism, a reminiscence of anarchistic and syndicalistic ideas that were condemned in fierce debates when Lenin was still alive.
Essentially, it is the latent or manifest assumption of the theory of “market socialism” that intrabranch competition and orientation toward the market automatically lead society to progress in production without the aid of centralized decisions.
Western commentators tend to confuse such concepts as “attention to the consumer” and “orientation toward the market.” Outwardly they appear to be similar, but in actual fact there are enormous differences between them. Attention to the consumer is a task which entirely corresponds to the economic interests of people under socialism. It is not by chance that today, at a time when a powerful production apparatus has been created, more attention is focused on the production of consumer goods. In 1968, 1969, and 1970, the growth rates of consumer goods production began surpassing the rate of production of the means of production. At the same time, the share of output of Department I remains dominant in the structure of the gross social product.
But we have a completely different attitude toward the principle of “orientation toward the market,” which is written on the banner of champions of “market socialism.” This is not so much a question of the satisfaction of and the continuous increase in the population’s needs as of somehow “facilitating” the conscious management of social production. To this end, it is proposed that reliance be placed on spontaneous market relations and collisions and that success be judged according to the degree of profitability of production and the volume of sales of any goods and services, which means following habitual, frequently perverted tastes inculcated by the petty bourgeois way of life.
Such “orientation” requires nothing more than the study of current demand or, more accurately, obsequiousness to the more profitable directions of such demand. Centralized plans (except for discussion of “indicative” programs) are unnecessary and are therefore rejected. Nor is there any need for an apparatus to actively influence the volume and structure of consumption by means of scientific forecasting, industrial research, and introduction of the sale of totally new goods and services promoting the ever more complete and all-around development of man’s capacities.
Orientation toward the market is a manifestation of the fear of failing to cope with the truly serious problem of planning production on a bilateral basis : to take resources into account, to make optimal use of them, and to master the achievements of the revolution in science and technology on the one hand, and to consider consumer demand and satisfy it maximally on the other.
Socialism is a society of creators. In a twofold process, the forces of nature are mastered to an ever-increasing extent, and the human mind is more and more restructured, man’s alienation from society is eliminated, and his capacities are developed in every way.
Orientation toward the market is the “socialism” of skeptics, of those who lack a deep belief in the creative strength of the working people. […] And this is precisely the orientation that is persistently propagandized by people attempting to undermine socialism from within. Added by: Dominique Meeùs
Keywords: anarchisme capitalisme coopérative guilde marché libre optimisation des ressources propriété publique rentabilité satisfaction des besoins secteur I socialisme de marché société de consommation syndicalisme taux de croissance