These terms are a part of the sort of professional «slang» which was used by top party and government officials in the USSR of the Stalin era. Each of them covers a broad area of interconnected cultural and economic phenomena. That is why for the majority of our contemporaries who have no coherent understanding of the production and distribution processes in the society or have a twisted knowledge of them the following digression must be made in order to elaborate on the ideas stated quite briefly by Stalin in his work “The Economic Problems of Socialism in the USSR” which is in fact his address to all sane and well-meaning people.
There is none other «will» left after Stalin.[106]
The following digression deals with inter-branch proportions, defining objectives for production and distribution, market mechanism, addressed directive control and planning.
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The systemic integrity of any multiindustrial production having a historically formed set of technologies applied within the system can be characterized by the following three basic features:
In order to get the final product consumed by people and social institutions outside the production sphere (the state, public ass o ciations, etc.) one needs to produce intermediate (raw mater i als, semi-finished goods, components, etc.) and auxiliary pro d ucts (means of production, i.e. «investment goods») co n sumed within the produ c tion sphere.
Therefore full capacity of most branches of industry (usually termed «gross capacity») that includes both intermediate and final products is higher than the capacity of any such branch taken by i t self when measured against its final product only. In other words the efficiency factor of a multiindustrial system of production and co n sumption is always less than one ( or less than 100 % in a di f ferent representation ) because of the necessity to manufacture intermed i ate and auxiliary products.
Production of a certain range[107] of final products requires a definite ratio of the full (gross) capacities of all the industries constituting such multiindustrial system of production and consumption.
For example, in order to manufacture one car one needs mat e rials in amounts determined by the car’s design, technologies, pr o duction’s organization and general standard: this much of steel; this much of non-ferrous metals; this much or rubber and plastic; this much of glass; this much of transportation services, etc. All these goods and services are mostly delivered to the motor-car construction industry by other branches. Consequently the full (gross) capacity of, say, metallurgy, is the total volume of goods it delivers to other branches plus metal used for its own needs plus metal sold as the final product to consumers for everyday needs. The same approach should be applied to define production r e quirements and the full (gross) capacity of all other industries.
Expanding the range of final products to a definite set value requires an increase of full (gross) pr o duction capacity throughout the whole of the production system in a definite proportion between different industries determined by the d e sired expansion of the range of final products.
In order to clarify this statement let us carry on with the prev i ous example. In order to expand produ c tion of cars by a certain amount one needs to expand production in all the supplying indu s tries by the a p propriate amount. In order to expand production in a single supplying industry one needs to expand production in indu s tries that are suppliers of that industry and so on.
Besides, an increase in the number of operated cars will in time cause a growing need for fuel, lubrica t ing oil and hydraulic liquids, for expanding the motorway network, parking lot and se r vicing infrastructure. And those will in their turn require to i n crease production capacity of industries besides the suppliers of the automobile branch.
Consequently expansion of automobile production and the secondary needs for petrochemicals, a better motorway infrastru c ture and servicing, etc. stimulated by this expansion require to produce the means of production necessary for the increase of ou t put as well as for the renewal of equipment, technology, organiz a tion and management and for expanding all the industries i n volved.
And the fact is that production of means of production («i n vestment products») for these industries in some cases must pr e cede the growth of the automotive industry’s capacity though in other cases it may accompany this growth or follow it with a ce r tain delay in time.
The above statements hold true for increasing the production output of any industry, the automotive i n dustry simply taken as an explanatory example.
Besides, when certain technologies and business organization are adhered to proportions between different industries’ capacities are accompanied by certain rigid proportions of professional training and employment. It follows that:
Mobility of the systemic integrity of a macroeconomic system in terms of being capable of a structural reorganization and switching from one product to other products is to a large extent determined by whether the population’s general cultural background enables people to leave their current professions and acquire new skills in a short period of time.[108]
The proportions of the exchange in intermediate products between industries, which is involved in the process of manufacturing a certain range of final products, are described in interindustry balance equations. These formulas are heavily relied on by theories of macroeconomic planning and control worldwide and such theories have got practical proof of their workability.[109]
In terms of mathematics interindustry balance equations are a system of linear equations[110] (i.e. unknown quantities are included into the equations raised to the first power only). In this system the unknown quantities are the gross (full) capacities of industries, and the absolute terms of equations are the desired range of final products (i.e. the industries’ net output). The factors of the unknown quantities in every equation are called the factor costs and are the product volume of every industry of the set considered necessary to produce one registering unit of the industry described by the considered equation of the system (in the example of motorcar production considered above the factors of costs are the quantity of steel per car[111], quantity of glass per car etc.)
Interindustry balance equations can be considered in two forms. First, they can be based on natural calculation of capacities and costs factors in terms of output quantity according to the nomenclature of products and industries on which the balance model is based. Second, they can be based on calculation in value terms also in accordance with the nomenclature of products and industries on which the balance model is based. All these issues are fully covered in literature on the subject.