p The current stage of the peaceful economic competition with capitalism contains a number of qualitatively new characteristics. The U.S.S.R. now has a viable material and technical basis that has completely transformed a once backward country into a leading industrial nation. In volume of industrial output, it now stands second only to the U.S.A.; in technical and economic level of production it is now in the front rank.

p Industries like machine-building, chemicals, power, metallurgy, oil and gas, being in the van of technical progress, have played a leading part in economic development and in stimulating higher labour productivity throughout the Soviet economy. Machine-building factories are today turning out a wide variety of modern technological equipment up to world-class standards. Ferrous and non-ferrous metal industries have impressive achievements to their credit. The proportion of the most progressive types of fuel—gas and oil— in the national fuel balance now comprises more than onehalf. That of producer goods in gross industrial production amounts to three-quarters. The U.S.S.R. occupies a leading world position in space research, nuclear physics, mathematics, electronics, radio engineering, missiles, aircraft construction and many other spheres of science and industry.

p In agriculture, too, the Soviet Union has made substantial progress. The level of Soviet farm output in 1966-67 was 85 per cent of the U.S. level, and 70 per cent per head. In place of the millions of small plots and farms, Soviet farming now has some 50,000 large socialist farms in the form of collective (kolkhoz) and state (sovkhoz) farms.

p Modes of cultivation have radically altered: more than 1,821,000 tractors, over 580,000 harvester combines and over 4,100,000 other farming machines work land that used to be almost totally cultivated by heavy manual labour before the Revolution. In addition, in 1968 alone, agriculture received 36,300,000 metric tons of chemical fertilisers. Complete mechanisation has taken much of the hard toil out of farming. Ploughing before the revolution largely involved horse-drawn wooden ploughs—it is now completely mechanised; the harvesting of grain used to be done mainly by hand—now 100 per cent of the operations are mechanised; 98 per cent of winnowing, 84 per cent of haymaking, 88 per cent of potato planting and 70 per cent of potato lifting, etc., are now mechanised. These essential changes in the system of cultivation, the application of chemicals and machinery to farming have greatly improved agricultural production and the incomes, education and culture of Soviet farmers.

p All these economic advances are most noticeable in Soviet living standards, as the table amply testifies (see Table 16).

p In socialist society, popular consumption has been growing as national wealth increases, not merely on account of personal income, but, more importantly, on account of the social consumption funds, state provision of free medical services, pre-school and school education and other social benefits. Free health services and education that are universally accessible are among the greatest attainments of the Soviet system. So, too, is the unique guaranteed security of employment.

p For all the Soviet success in the economic competition with the U.S.A., it would be wrong to suppose that the fight for world economic supremacy has become easier. This is explained, on the one hand, by the fact that the scale of Soviet production and accumulation, the fixed assets in industry and capital investment, have all greatly increased, and the economic links have become more extensive and 56 Growth of Soviet Living Standards Table 16 Per-unit increase of 1968 over pre-1917 Indexes Heal industrial incomes........ Heal farm incomes........... Workers and other employees..... School pupils (7-17 years) ...... Special secondary school pupils (15-18 years) ............... Students............... Graduates of higher and special secondary education.............. Newspaper circulation......... Children in day nurseries....... Hospital beds............. Doctors (excluding dentists)...... Average life expectancy........ 7.1* 11.0* 7.4 5.1 78.0 35.2 72.4 37.6 ,429 12 23.4 2.2 * Wages after lax, with addition of pensions, allowances, free education, medical service and other benefits from the state, and with account of elimination of unemployment and reduced working hours. ** Earnings in money and kind from public and subsidiary farming after tax, with addition of free education and medical service, pensions and other state benefits. Sources: The U.S.S.R. in Figures, 1966, Moscow, 1967, pp. 140-49, 153, 165-66, 178-79 (Russ. ed.); The Economy of the U.S.S.R., 1960, Moscow, 1961, p.808 (Russ. ed.); The Economy of the U.S.S.R., 1968, Moscow, 1969, pp. 80, 91, 572, 675, 723, 730, 738 (Russ. ed.). more complex, and on the other by a considerable increase in the pace of world scientific and technological progress since the end of the last war.

p These new circumstances necessitated improvement of methods and forms of industrial management and an extensive economic reform whose main aim is to make social production much more efficient.

p The successful fulfilment of the Directives of the 23rd Congress of the C.P.S.U. on the U.S.S.R.’s economic development plan for 1966-70 was an important stage in the Soviet people’s effort to consolidate the positions of socialism in its economic competition with capitalism. The Directives said 57 that greater efficiency of production was the main factor behind economic growth and rising living standards.

p In fulfilling the five-year plan, the Soviet people scored major successes. In 1970, national income was 41 per cent over the 1965 level, growing at an annual average rate of 7.1 per cent, as compared with 5.7 per cent in the 1961-1965 period. Industrial output increased by 50 per cent. The industries ensuring modern technical progress developed at a fast pace. In the five years, output in the chemical and petrochemical industries increased by 78 per cent, engineering and metal-working by 74 per cent, and electric power by 54 per cent. Almost 1,900 large industrial enterprises were commissioned. In the 1966-70 period, the annual average increase in gross farm output was 21 per cent higher than in the 1961-65 period. The targets set by the 23rd Congress of the CPSU in raising the population’s material standards were overfulfilled. The average monthly wages of industrial and office workers went up from 96.5 rubles in 1965 to 122 rubles in 1970. Payments from social consumption funds were considerably increased. Pensions for war-disabled veterans were increased, the pension age for collective farmers was lowered, and social insurance improved. In the five years, a total of 518 million sq m of living space was built, and this helped to improve the living conditions of almost 55 million persons.

p Consequently, in the Eighth Five-Year Plan period, the U.S.S.R. made a large stride forward in creating the material and technical basis of communism and in raising the people’s living standards. The 24th Congress of the C.P.S.U. noted these successes and approved the Directives for the new and still grander plan for the U.S.S.R.’s economic development from 1971 to 1975.

p In deciding on its economic policy, the C.P.S.U. starts from the fact that the supreme goal of production under socialism is to improve the people’s living standards, and to provide for the fullest satisfaction of their material and cultural requirements. The Directives envisage a further increase in the working people’s cash incomes, mainly through higher payments for their work. The social consumption funds are also to increase considerably. In the Ninth Five-Year Plan period, 22,000 million rubles is to go into raising the people’s living standards as compared with 10,000 million in the Eighth Five-Year Plan period. The scale of housing 58 construction is to be further enlarged so as to improve the living conditions of roughly 60 million persons.

p The level of economic development achieved makes it possible to provide for some priority growth in the consumer industries, while a high rate of growth is to be maintained in the heavy industry, above all the branches embodying technical progress.

p The 24th Congress of the C.P.S.U. proposed a concentration of effort on the solution of the key problem: greater efficiency of social production, with the acceleration of scientific and technical progress and application of the latest scientific and technical achievements in the national economy as the primary task. This will help considerably to raise labour productivity, which is to account for 80 per cent of the growth in national income, 90 per cent of the growth in industrial output, and 100 per cent of the growth in rail freight turnover. It will also help to increase the share of those employed in the non-production sphere from 22.5 per cent in 1970 to 25 per cent in 1975.

p Some Western economists say the Soviet economic reform is evidence of a convergence of the two systems which should result in capitalism and socialism becoming a “unity” free from the vices and endowed with the virtues of each system. They point to a “redistribution and equalisation of incomes" and efforts to plan and regulate the economy in the advanced capitalist countries. A report by a U.S. Congress Joint Economic Committee “New Directions in the Soviet Economy" alleged that the application to the socialist economy of terms like profit, demand and interest on assets was incompatible with Marxist theory and had been borrowed from capitalist practice.  [58•1 

p These claims are groundless, first, because they ignore the crucial difference between capitalism and socialism: under socialism the basic means of production are owned by the working people in whose interests the national income is distributed, whereas under capitalism private property in the means of production blocks radical social change and abolition of exploitation. Second, because under socialism, besides the specific economic laws engendered by the new, 59 more advanced relations of production, there are also the more general economic laws which operate in other modes of production. But these more general laws are modified in substance and form, and this is especially true of commoditymoney relations and the law of value categories.

p It is quite legitimate for the socialist economy to use commodity-money relations at certain stages of development, and this is dictated by the development of the socialist productive forces. This particularly applies to the present stage of socialism, with the vast accumulation of material and production resources that must be used in the most efficient way.

In evaluating the prospects in the economic competition, account should also be taken of capitalist economic growth, which is extremely erratic. In the U.S.A., for example, postwar crises occurred in 1948-49, 1953-54, 1957-58 and 1960-61. Over the ten years from 1950 to 1960, industrial growth averaged 3.5 per cent a year, and for 1956-61, 1.9 per cent. Since 1962, there has been an upsurge in industrial growth rates which went up to 9 per cent in 1966. Certainly, state-capitalism methods of stimulating investment have done something to increase growth; so, too, has the vast increase in military commitment. The state has carried through a whole series of measures—income and profit tax cuts, shorter write-off periods, etc.—that have stimulated investment in production. The capitalist state, by withdrawing and redistributing up to 40 per cent of internallygenerated surplus value, is capable of exerting some pressure on the economy. But government stimulation of private capital cannot be a permanent and decisive factor in eliminating the contradictions, rejuvenating the economy and effecting high growth rates. No fundamental change has taken place in the capitalist economy to warrant the announcement of an era of crisis-free and rapid progress.