INTRODUCTORY NOTE

What could be done to accelerate the pace of growth of a limited number of key industrial branches might be ascertained with the help of surveys of resources on hand, statistical projections, and engineering-construction blueprints. But surveys, projections, and blueprints alone will not help to assess either the specific results which a variation in some growth rates will provoke in the growth rates of other branches and sectors, or all the impacts which the choice of a goal in one branch will have on the pace of growth of the economy as a whole.

The question of the impact of a variation in the pace of growth of one sector on the pace of growth of other sectors and of the economy as a whole was, of course, atthe heart of the Soviet discussions on macro-economic models, on strategies of development, and on the “perspectives” of the economy as it completed the phase of recovery and approached the threshold of “economic reconstruction,” i.e., the creation of a complex of entirely new industrial branches.

While some of the party planners-Krzhizhanovskii and Strumilin, for instance-affirmed that the plan could be based on “intuition” in setting up the main goals and on an isolated balancing of resources and allocation for each of the present or scheduled outputs of the main developing branches, other economists-notably Bazarov and Fel’dman-rejected as totally unsatisfactory the “intuitive” approach. Bazarov pointed out that the over-all pace of development was bound to slow down as the economy shifted from recovery to “reconstruction,” i.e., as it exhausted some of the advantages arising from the rapid return into production of recommissioned plants. Fel’dman stressed, in a rather sophisticated paper, the interdependence between the rates of growth of the capital stock and their utilization in his sectors p (consumers’ goods) and u (producers’ goods). After examining theoretically the impacts of variations in the pattern of allocation of investments as between his two sectors, and after indicating the variant which would result in the quickest increase in the rate of growth of p, Fel’dman drew the attention of the Soviet policy makers to the immediate importance of increasing the effectiveness of capital utilization until the ratio of the capital stocks of the two sectors (Ku/Kp) could be raised, i.e., “until a much higher degree of industrialization has been attained.”

The question of the effectiveness of capital utilization-or the “profitability” of capital investments-has plagued Soviet economics for many years: on the one hand because in Marxian theory capital, unlike labor, is “unproductive”: and on the other hand because, notwithstanding doctrinaire restraints, scarcity of capital and the possibility of using it in different directions forced planners and policy makers alike to consider its “effectiveness” in alternative uses. The two studies which are included in this section, by Gol’dberg and Rozentul, both show great awareness of Western literature on this subject and interesting ingenuity in an attempt to adapt some Western techniques to the Soviet environment. These papers, along with the Fel’dman studies, show clearly that the question of effectiveness of capital utilization appeared early on the agenda of Soviet planners. While, as we already know, the planners resorted in practice to all kinds of eclectic solutions in this field, the problem of finding some sort of theoretical solution to the question of effectiveness has refused to dissipate itself, notwithstanding numerous doctrinaire incantations.