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«One often hears that the transition to market mechanism proclaimed there (in the former USSR and Eastern Europe — A.E.) is convincing proof for the market-oriented economy being superior to the centrally pla
In order to apply the last sentence of the quotation to the global economy of mankind one needs to change it the following way:
To co
Pla
The needs, which have been discovered and included in the plan, must be divided between the two classes every time a new project plan is being drawn for the upcoming period. The way this issue is dealt with determines where the plan’s control indices come from and what they are.
Earlier we pointed out that the many-sided issue of defining targets in its most aspects lies outside the mechanism of market self-regulation. Yet for same reasons it lies outside the methodology of mathematic modeling and plan optimization, as well as outside the methodology of implementing plans of economic and social development.
One and the same methods (algorithms) of making and optimizing plans, as well as identical control structures and procedures in certain cases can be used for achieving mutually exclusive objectives included in different plans. This is what those prejudiced against pla
Yet the problem formulated by S. Okito can be solved if the issue of dividing demographically grounded and degraded parasitic needs is solved. Let us remind you how this problem has been worded: to find and effective way of combining market mechanisms and state pla
The point is that generally controlling the multiindustrial production and consumption system on the basis of a plan involves the following: defining targets; distributing investments between industries and regions in compliance with the targets, as well as timing their provision and volume; addressed directive control of state-owned enterprises; working out and granting government contracts to private enterprises, defining policy on taxes, credits, insurance and subsidies co
If these heterogeneous means turn out to be in the hands of people, who advocate different conceptions of social order and economy and act at will, according to their moral principles the problem posed by S. Okito would become insoluble.
We must make special emphasis on the need to work out a policy on subsidies, credit and insurance for every pla
Every price has a share which corresponds to tax payments and return of loans and insurance credit. Besides some producers are subsidized because otherwise production would be devastatingly unprofitable or it would be impossible to retain its volume. All these payments that are reflected in price along with the «price list basis» and subsidies to consumers of certain products form a sort of «financial press» which could enable one (if one knows how to adjust it properly) to force the market mechanism of production and consumption system’s self-regulation to give out (deliver) the desired range of production and consumption of final products.
At the same time one should also know that all parameters, which determine the adjustment of «financial press» on delivering a definite range of production, are expressed in equations of interindustry balance. They are heterogeneous items of those equations expressed in value terms and form the price of any products taken into account in the interindustry balance.
If the pla
In this co
Within the integrity of the multiindustrial production and consumption system prices function as a means of limiting the consumers’ number after a certain level of production and supply on specialized markets has been attained. Therefore if production volume is sufficient for satisfying the needs of all people then there is no need in price as a means to limit consumption. Price can then be equal to zero if it is not impeded by other factors. In other words when demographically grounded needs are fully and assuredly satisfied — the perspective is zero price.[137]
While such ideal operation of the multiindustrial production and consumption system is being attained prices on some socially necessary products may fall below the level which production is profitable at. This happens because production covers the vital needs of society more fully. In his case it may be feasible (in the long-term historic perspective) to retain the socially necessary volume of production by means of grants and subsidies that are collected from other industries in tax form. This means that profitability factors are redistributed between enterprises, industries and regions.
It follows that in regard to the systemic integrity of multiindustrial production directed towards satisfying the vital needs of all laborers more and more fully the overall profitability of the system taken at historically long time intervals is more important than high profitability of some enterprises when other industries are hampered in their development due to the law of value’s being unchecked. The law of value is far from operating in compliance with a list of demographically grounded needs given in order of priority.[138]