p There are close and multilateral, direct and feed-back connections between scientific and technical progress, the efficiency of production and the basic proportions of socialist reproduction. What is the mechanism of these ties and interactions?

p The usual approach in describing scientific and technical progress is to show its directions, and to classify these according to the branches of science or their technical content: electrification and atomic energy, atomic engineering, chemicalisation, automation, computerisation, beam engineering (quantum generators), etc. Such an approach and classification are well-justified and necessary.

p But it is another matter when we want to analyse the impact of scientific and technical progress on economic results, on the efficiency of production.

p By improving all the elements of production, scientific and technical progress is the condition for saving every type of inputs: living labour, materials, and fixed assets.

p The improvement in the instruments of labour enhances their productivity, i.e., helps to increase output per unit of time and, consequently, to reduce the assets-output ratio and especially that of the active part of the assets; mechanisation and automation help to save the inputs of living labour connected with the use of the instruments of labour. The outcome is a growth of labour productivity and an increase in the output-assets ratio.

p The introduction of more progressive (especially synthetic) materials increases the output per unit of primary raw and other materials, i.e., helps to reduce the material- intensiveness of production. Because the new materials lend themselves more easily to treatment, the inputs of labour and assets into the processing operation are reduced, and this helps, to lower the assets-output ratio and labour intensiveness.

p The introduction of new and more progressive production methods improves the use and output indicators for equipment, makes for more rational use of primary materials, improves quality and gives the final product longer life, i.e., improves the use of all the elements of production and, accordingly, reduces all the elements of the inputs.

p Improvements in the organisation of production, organisation of labour and control (management) produce the same results.

p Each of these lines may have an influence on different elements of the inputs. Thus, for instance, electrification of production processes can help to save living labour (when labour processes are mechanised), or may help to save on materials, where some electrotechnology hardens the material, improves its quality, length of life, etc. The use of chemicals may accelerate some production processes ( oxygen blast in metallurgy, catalyst in chemistry) and with the same or relatively smaller inputs of labour may help to increase output, i.e., to increase the effectiveness of equipment, the output-assets ratio and labour productivity. It tends also to ensure optimal use of primary raw materials, and 35 improve their quality, so reducing the material- intensiveness of production.

p Consequently, if one is to characterise the lines of scientific and technical progress from the standpoint of their impact on the economic results of socialist production and its efficiency, one has to classify these lines according to their impact on the elements of production inputs: on labour- intensiveness, material-intensiveness and assets-intensiveness.

p Such an economic classification is especially necessary in studying the influence of scientific and technical progress on the basic proportions of reproduction. That is so because the various lines along which the efficiency of production tends to change, i.e., changes in the inputs of labour, materials and production assets, are most closely connected and exert an active, even if different, influence on the basic proportions of reproduction.

p The most important proportions of expanded socialist reproduction are the correlation between the two departments of social production—production of the means of production and production of the consumer goods, the share of production accumulation (the resources allocated for expanding production, formation of production reserves, and research), and the share of consumption in the national income.

p What is the mechanism by means of which scientific and technical progress acts on the proportions of reproduction? By raising the effectiveness of equipment and labour productivity, and ensuring saving of raw and other materials, scientific and technical progress determines the changes in the inputs of basic production resources per output unit, i.e., changes in the labour-intensiveness, material- intensiveness and assets-intensiveness of production. This makes for a corresponding change in the volume and dynamic of requirements of material production in labour resources and the means of production. Let us recall that the means and objects of labour are the products of Department-I of social production. Consequently, scientific and technical progress determines the necessary volume and dynamic of this Department, and so also the share of the national income which needs to be allocated for expanding the production of the means of production, i.e., the share of production accumulation. A change in the share of production accumulation determines changes in the share of the population’s consumption fund.

p By relatively reducing the requirements in the means of production, scientific and technical progress also exerts an influence on the structure of the use of the production accumulation fund. The higher the inputs of the means of labour and materials for a given volume of final product, the greater the part of the means of production (and accordingly of the production accumulation fund) that society will be forced to allocate for increasing the production of the means of production; in other words, in those conditions, Department-I—production of the means of production—tends largely to cater for itself. But on this also depends the part of the means of production that have been made and that can be used in the development and expansion of the production of the consumer goods. The latter, for its part, determines the volume and dynamic of the consumption fund.

p Consequently, the more perfect the means of production and the more fully and efficiently they are used, the faster the growth of the consumption fund. There is here a very direct connection. That is why under socialism the working people’s concern for the technical level and efficiency of production is also concern for improving their own wellbeing.

p So, there is a close interconnection between the elements of the chain’, the lines of technical progress—efficiency of production—basic proportions of reproduction. From this it follows that the socialist state’s technical policy can become an ever more active factor in boosting the efficiency of production and improving the proportions of reproduction.

p At the same time, the scale of the feed-back connections tends to become ever more impressive as the efficiency of production and the proportions of reproduction influence the pace of scientific and technical progress.

p First of all, the growing efficiency of production helps to increase the volume of production accumulations  [36•1  and, on that basis, the growth of the means and resources allocated for the development of R & D.

p The growing efficiency of production includes the fuller (intensive and extensive) use of equipment and, consequently, accelerates its payback period and, accordingly, brings 37 on the economically justified deadlines for its replacement by new and more sophisticated equipment.

p If we assume, for instance, that the depreciation rates are calculated on the basis of a 15-year period of service with a 2.0-shift ratio, the equipment will be fully depreciated in 20 years, instead of 15, if the actual shift ratio is 1.5. This means that the deadline for installing new hardware, i.e., the period for realising scientific and technical progress in production, will be put off .by five years. If society refuses to accept this, and replaces the equipment within 15 years, it will be forced to incur a loss equal to 25 per cent of the full cost of the replaced equipment.

p Under socialism, the growing efficiency of production makes it possible to increase the consumption fund and to raise the people’s wellbeing, and consequently also the cultural standards of the working people, which are the subjects, the creators of scientific and technical progress. This naturally acts as an accelerator in the progress of science and technology.

Finally, the growing efficiency of production implies an improvement in the organisation of production and the use of modern scientific methods of planning and management at every level, which is also an essential condition for accelerating scientific and technical progress.