THE GOAL OF PRODUCTION UNDER SOCIALISM

Economist

ONE HUNDRED MILLION people are at work in Soviet factories and mills, collective and state farms, transport and trade, research institutes and laboratories. They produce an ever increasing volume of values of every kind and description to satisfy the growing requirements of the country's population. This is the sole aim and purpose of production under socialism—to produce a sufficiency of goods and services for every citizen, to provide him with the facilities for cultural growth, to equip him with skills so that he can do a creative job, to ensure him the security with which he can enjoy his leisure.

The development of every sphere of the Soviet economy has one end in view that is encompassed in the phrase "a high standard of living." That has been the goal of the Soviet Union ever since the Socialist Revolution. In the very first months following the establishment of the Soviet government legislation was adopted to improve living conditions. The workday was legally fixed at eight hours. All workers were granted an annual paid vacation at state expense. A system of state social insurance was set up. Everyone was guaranteed free medical attention. Women were granted paid maternity leave. Rents were drastically reduced.

But the young Soviet state had only limited possibilities at the time for a really expanded and thoroughgoing social welfare program. Those were hard years. The Soviet government had taken over a country with a backward economy and almost totally illiterate population, a grave legacy of the czarist rule, a country which had been, moreover, virtually ruined by the First World War.

The Civil War and the intervention of 1918-1920, when Soviet people had to defend themselves against the invading armies of fourteen foreign powers, reduced production to the barest minimum. It took the concentrated effort of the entire nation to repair the colossal damage, and only in 1927 was the economy brought up to the 1913 level.

But even with this the Soviet Union was still far behind many other countries. Its industrial output was several times below that of France, Britain and Germany. It produced less pig iron than Belgium or Luxemburg, less coal than Belgium or Poland, less electric power than Italy or Switzerland. In 1925 it produced a grand total of 525 tractors and 116 automobiles.

Prerevolutionary Russia was primarily an agrarian country. To make it economically independent, the Soviet people had to build a heavy-industry base. This was an immediate necessity, the only way by which every other sector of the economy could be developed, including that of consumer goods production, to ensure radical improvement of living conditions.

With a series of five-year plans—then ridiculed as grandiose, now universally acknowledged as monumentally successful—the Soviet Union transformed itself into a leading industrial country. The industrialization program also changed the character of the country's agriculture. The large-scale collective farm equipped with modern machinery replaced the hand-worked peasant household of czarist Russia.

The Soviet Union had to build its own engineering industry; power plants; iron, steel and nonferrous metal mills; oil, coal, chemicals and building materials industries—all practically from scratch and many of them new to the Russian economic scene. It was not an easy way, but it was the only possible way to provide the country with a modern technological base and thereby guarantee its economic independence and raise the people's material and cultural well-being to levels never before attained by any society.

Industrialization on this scale and in so short a span of time required the mobilization of all the resources of the nation and meant temporary sacrifice, even of necessities at times. But the people made the sacrifices willingly. They were aware that the hardships were dictated by difficulties of growth of a new country, and that all sacrifices and hardships would be repaid with high interest in a future not too distant.

It was industrialization that helped the country to win both a military and an economic victory over Hitlerite Germany and to make its decisive contribution to the war waged by all freedom-loving people against fascism. Especially at that crucial time did the wisdom of the policy of heavy industry concentration become most apparent.

The achievements of prewar industrialization brought good dividends also after the Second World War. The Soviet Union was able to heal the scars left by Nazi invasion in a remarkably short time and not only restore the economy but push it much beyond the prewar level. By 1959 Soviet industry was turning out five times the volume of goods it had in 1940—more than Great Britain, France and West Germany combined. In the basic industries—iron, steel, oil, coal and electric power—the Soviet Union has long held first place in Europe and second place in the world.

The rapid growth of all branches of the national economy has helped to solve such a grievous social problem as unemployment. At the close of the twenties there were still labor exchanges in the Soviet Union. By the early thirties, when the program for industrialization got into full swing, they had all shut their doors. They were no longer needed since there were no longer people out of work.

The number of employed in the country has been growing from year to year. In 1928 there were 11 million factory and office workers employed; in 1960 the figure had shot up to 60 million. In the period following the Second World War the annual increment in employed workers averaged two million. It increased appreciably after the recent cut in the Armed Forces which returned 1,200,000 men to peacetime jobs. The problem today is not jobs but men to fill them.

During the initial period of industrialization, when large funds were invested in building heavy industry, the Soviet Union was not in a position to develop its light and food industries at a comparable rate.

But even then production of consumer goods ran ahead of population growth.

As soon as general economic growth made it feasible, however, the pace was accelerated. In 1929-1932 the ratio of increased output of consumer goods industry to heavy industry was 1 to 1.75. After the Second World War the ratio narrowed and is now 1 to 1.09. Production of consumer goods at present is 16 times greater than it was in 1913, while the population has increased by 36 per cent. This means that the 1961 consumer receives 12 times the quantity of goods the 1913 consumer did.

Growing consumption is graphically reflected in mounting sales in retail trade. In 1960 state and cooperative shops sold about 5.5 times more goods, in comparable prices, than in 1932. Sales in 1965, the end of the current seven-year plan period, will be almost eight times higher.

A breakdown of the sales figures shows that people now spend less on food but eat better. While consumption of such foodstuffs as rye bread or potatoes has dropped, that of meat, bacon, dairy products, eggs, sugar and confectioneries have gone up. As food prices go down, more money becomes available for manufactured goods, and here, too, the trend is toward higher quality. Silk and woolen fabrics, for example, sell much faster than cottons. In recent years trade is particularly brisk in radios and television sets, cameras, washing machines, vacuum cleaners, motorcycles, automobiles and furniture.

One of the gratifying results of industrialization has been the creation of a solid foundation for large-scale housing construction—the production of cement, structural steel and other building materials keeps increasing, and the country has more and more building machines and equipment. Industrialized methods of construction make it possible for the Soviet Union to solve its housing problem much more quickly than any other country.

In prerevolutionary Russia millions of people lived under the most appalling conditions. In urban communities 80 per cent of the houses were made of wood. Rent ate up a third of the month's earnings. Workers, as could be expected, suffered most. Many of them could afford to rent only a bed or share a basement. As early as the first months after the Revolution the bulk of the housing in cities and towns was nationalized. Hundreds of thousands of workers' families were moved into decent apartments. This helped considerably, but it did not solve the acute housing problem.

During the Soviet period the country's population grew by 55 million. The rural-urban ratio shifted, to complicate the problem even more. Prior to the Revolution only 18 of every hundred people lived in cities, but now the figure is closer to 50. Although housing was being constructed on an unprecedented scale, until quite recently it was outpaced by the growing urban population.

The shortage was aggravated enormously by the war. Hundreds of cities and thousands of villages were literally wiped off the face of the earth. More than 25 million people—every third or fourth person in the Nazi-occupied regions—lost their homes. These ravaged cities and villages were all rebuilt after the war, but it was not nearly enough to meet the increased need for housing.

In 1957 a national plan was adopted to end the housing shortage within ten to twelve years. The rate at which construction is going on everywhere in the country is phenomenal. In the past two years more than 25 million people moved into new apartments and houses. During the seven-year plan period, from 1959 through 1965, it is estimated that at least 100 million people will have new housing. By the end of the sixties the whole of the Soviet population, an expected 230 million, will be adequately housed.

Expanding socialist production and growing labor productivity increase the national income year after year. It is used entirely, in the final analysis, to meet the people's needs and to raise their living standards. This means a better life for every family.

The gradual abolition of the income tax has already been put into effect with the exemption of low income workers as of October 1, 1960. By 1965 taxes will have been abolished for people at all wage levels. There have been several retail price cuts since the end of the Second World War. All these savings mean more real income for the population.

Real income in the Soviet Union is growing much faster than cash income. The reason is a constant increase in allocations from public funds to provide more social services. These funds come from the state budget, the budgets of industrial enterprises, collective and state farms, trade unions, cooperatives and other public organizations.

The public funds are used for social insurance payments, old age and disability pensions, free medical services, free education, sports facilities and a score of other benefits which in most other countries a worker would have to pay for out of his earnings. Training of one college student costs the state about 75-100 rubles a month. Besides that, eight out of every ten students get a state maintenance stipend. Each visit to a polyclinic doctor costs the state a ruble, a hospital patient costs about 5 rubles a day. The population has all this free.

A recent survey of 200 Moscow families demonstrated that these various services actually raise the average wage by nearly 36 per cent, and even more in the case of low income workers. The maintenance of a child in a nursery or kindergarten, for example, costs the state 50-60 rubles a month (figured in terms of the new ruble), but the parents pay only 12 rubles, and those whose wages are low or whose families are large pay nothing at all. The major expense of keeping children in boarding schools is also carried by the state, while the parents pay only a tenth of the actual cost.

Public funds keep increasing year after year. So do wages, although not so rapidly. The average wage of factory and office workers is expected to rise by about 26 per cent in the 1959-1965 period, while expenditures financed from public funds for all kinds of social services during the same period will go up about 70 per cent.

By 1965 allocations from the national budget for social insurance and other welfare items will average approximately 380 rubles a year per worker, or 30-odd rubles a month. Another 80 rubles a year per worker will go to build schools, clubs and palaces of culture, hospitals and housing.

The real income of factory and office workers—wages plus social services—in 1959 was roughly four times higher than in 1913. For the farmers, it was five times higher. By the end of the seven-year plan period the real income of the working people in town and country will be about three times higher than on the eve of the Second World War.

Constant expansion of production in every sphere of the national economy accelerates the building of the material and technical foundation of communism in the Soviet Union, brings closer the time when it will be possible to implement the Communist principle "From each according to his ability, to each according to his needs."

During the current seven-year plan period the Soviet Union started out on the decisive phase of its work toward its fundamental economic goal—to overtake and then outstrip the most highly developed countries in per capita production. That means the further expansion of the productive forces to provide the world's highest standard of living.

The entire previous development of socialist production created the necessary prerequisites. The Soviet Union already has a higher absolute level of production of major commodities than Britain, West Germany and France, and it is steadily approaching the level of the United States. In 1959 the industrial output of the Soviet Union was 60 per cent that of the United States and its per capita production was 50 per cent. In 1960 the ratio in this peaceful economic competition between the two Great Powers continued shifting in favor of the Soviet Union.

The decisive factor for successful achievement by the Soviet Union of its fundamental economic goal is a rapid rate of industrial and agricultural growth. Up to the beginning of the seven-year plan the average annual increase in industrial output was 10.1 per cent. In the past two years this figure was exceeded. This is a continuing guarantee that in the near future the Soviet Union will be able to give its people a higher standard of living than any nation in history has yet achieved.

MOSCOW