Capital Investment under Socialism, the aggregate of expenditures allocated for the creation of new fixed assets, and for the modernisation and expansion of existing fixed assets which function both in the production and non-production spheres. 32 Capital investments are expenditures for all kinds of construction and equipment, for assembly operations, purchases of plant and equipment, for the carrying out of designing and prospecting, the preparation of construction sites, etc. Under capitalism it is surplus value that is the source of capital investment. The surplus value may be a result of wage labour inside the country, the exploitation of the peoples of dependent countries, loans at exorbitantly high interest rates, or contributions and non-equivalent exchange in foreign trade. Capital is invested in the most profitable economic sectors. Spheres of capital investment are distributed amidst fierce competitive struggle. In socialist society, capital investments are formed through internal sources of accumulation, and are channelled, in a planned way, into creating the material and technical base of socialism and communism. They are the main factor of expanded socialist reproduction (see Reproduction, Socialist) and for ensuring high and stable rates of economic development Capital investments are financed from centralised funds stipulated in the state budget, and are distributed among economic sectors; they are also financed from the funds available at industrial enterprises, in cooperative (collective-farm and cooperative) organisations, or from the depreciation funds and working people’s savings (for building houses), etc. The means slated for capital investments are concentrated in the state central banks: in the Soviet Union these are the USSR Stroibank and the USSR State Bank (apart from people’s savings invested in housing). Important sources of capital investment are the production development fund and the social-cultural and housing construction fund (see Economic Incentives Funds) created at each state enterprise. The credit form of capital investment, such as long-term credits to collective farms, other cooperative organisations and individual citizens, is also practised. Capital investments in the economy, which increase every year, serve as an indicator of the country’s growing economic strength. In the Soviet Union the dynamic pattern of capital investment has recently been characterised by their channelling into the most progressive industries, such as the electrical power and chemical industries, engineering, etc., which are the pacesetters of scientific and technical progress and of raising living standards. Capital investments in agriculture are increasing considerably. Alongside changes in the sectoral structure, a progressive trend has been the greater share of capital investments made to expand, modernise and retool running industrial enterprises (see Expansion and Reconstruction of Running Enterprises). Today, the task of radically reducing the number of launching new projects while bringing up existing projects to design output, as well as the task of increasing the effectiveness of capital investments, has become very urgent and demanding.