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Published online by Cambridge University Press: 27 January 2017
At a very early stage of the Bolshevik experiment with economic planning it became obvious that the economy could not be made to function without the use of money and other financial instruments. In fact, a financial history of the Soviet economy would show a gradual but relentless expansion in the number and functions of financial instruments. This expansion has been gradual largely because Soviet economists, planners, and administrators have had both ideological (theoretical) and practical reservations about the appropriate uses as well as the potential abuses to which financial instruments can be put. The process has been relentless nonetheless, because for a number of essential economic functions the possible substitutes or alternatives to financial instruments are either impractical or nonexistent. Let me attempt to explain briefly the fundamental reasons for the ambivalence in Soviet financial policy.
1. The scorekeeping aspect of the unit-of-account function of money has, until quite recently as a consequence of the 1965 Kosygin reforms, been much less important than the accountability aspect. Thus, for example, pecuniary performance indicators, such as the income statement, have been considerably less significant for evaluating managerial performance than direct physical-volume success indicators. The reluctance to use pecuniary performance criteria derives, of course, mainly from ideological preconceptions, but the contemporary emphasis on the scorekeeping aspect of this function has encountered practical obstacles, because it requires appropriate (or rational) principles for price formation.
2. Millar, James R., “Financing the Modernization of Kolkhozy,” in Millar, James R., ed., The Soviet Rural Community : A Symposium (Urbana, 1971), p. 286 Google Scholar, and David W. Bronson and Constance B. Krueger, “The Revolution in Soviet Farm Household Income, 1953-1967,” ibid., appendix table 1, p. 241.
3. Ratios calculated from row A, table 5 below, Sel'skoe khoziaistvo SSSR (Moscow, 1960), pp. 64, 56, Narodnoe khoziaistvo SSSR v 1962 godu (Moscow, 1963), p. 342, and Narodnoe khoziaistvo SSSR v 1968 godu (Moscow, 1969), p. 423.
4. Calculated from table 5 below, Pizengol'ts, M. Z., Oborotnye sredstva kolkhozov (Moscow, 1968), p. 60 Google Scholar, Obshchestvennye fondy kolkhozov i raspredelenie kolkhoznykh dokhodov (Moscow, 1961), p. 196, Millar, “Financing the Modernization of Kolkhozy, “ table 1, row O, p. 292, and Bronson and Krueger, “Revolution in Soviet Farm Household Income,” appendix table 1, p. 241.
5. Millar, “Financing the Modernization of Kolkhozy,” p. 292.
6. Kartashova, K. S., Finansy, kredit i raschety v kolkhozakh (Moscow, 1970), p. 137 Google Scholar. Kolkhozes were obliged, from 1956 on, to pay kolkhozniki monthly wage advances in cash equal to not less than 25 percent of actual current money receipts in all branches and 50 percent of procurement-agency advances. See Orliankin, K. I., ed., Sbornik reshenii po Sel'skomu khoziaistvu (Moscow, 1963), pp. 259–60.Google Scholar
7. Kartashova, Finansy, kredit i raschety, p. 136.
8. Ibid., pp. 136-38.
9. Shermenev, M. K., ed., Finansy i kreditovanie sel'skokhoziaistvennykh predpriiatii (Moscow, 1963), pp. 187–94.Google Scholar
10. Ibid., pp. 187-94.
11. Kartashova, Finansy, kredit i raschety, p. 136.
12. Ibid., p. 138.
13. Pizengol'ts, Oborotnye sredstva kolkhozov, p. 49. In Soviet accounting parlance, working capital is divided into two parts : productive and circulating. The former includes stocks of inputs such as fuel, seed supplies, fodder, spare parts and hand tools, young animals and cattle in feed lots, expenses under the future year’s crop, and unfinished production, such as crops in the field. The sphere of circulating capital includes inventories of finished output of all productive branches, trade receivables, including money advances to kolkhozniki, and all current-account cash balances (pp. 48-49).
14. For a discussion of these reforms see Millar, “Financing the Modernization of Kolkhozy,” pp. 279-81.
15. Kartashova, Finansy, kredit i raschety, p. 123.
16. Based on data collected and currently being processed for a Ph.D. thesis at the University of Illinois by Mrs. Christine Wollan.
17. Semenov, V. N., Finansy i kredit v sovkhozakh (Moscow, 1969), pp. 147–62 Google Scholar
18. The main exception today is the availability of long-term credit (up to a five-year term) to finance labor payments where the kolkhoz is unable otherwise to pay its wage bill at the guaranteed level. The policy was initiated in 1966, and the outstanding balance for this item on January 1, 1970, was 668 million rubles (Kartashova, Finansy, kredit i raschety, pp. 27, 108); total outstanding long-term loans to kolkhozes on that date exceeded 9 billion rubles (pp. 99-100).
19. I., Levchuk, Dolgosrochnyi sel'skokhoziaistvennyi kredit (Moscow, 1967), pp. 77–79.Google Scholar
20. Ibid., p. 80.
21. Kartashova, Finansy, kredit i raschety, p. 98, and Levchuk, Dolgosrochnyi sel'skokhoziaistvennyi kredit, pp. 86-88.
22. Levchuk, Dolgosrochnyi sel'skokhoziaistvennyi kredit, pp. 93-96.
23. Kartashova, Finansy, kredit i raschety, p. 104.
24. Levchuk, Dolgosrochnyi sel'skokhoziaistvennyi kredit, p. 96.
25. Kartashova, Finansy, kredit i raschety, p. 99.
26. Levchuk, Dolgosrochnyi sel'skokhoziaistvennyi kredit, pp. 81-83.
27. There is evidence that a number of Soviet economists remain dissatisfied, especially with long-term loan policy. See, for example, Kartashova, Finansy, kredit i raschety, pp. 111-15.
28. For an extended treatment see Millar, “Financing the Modernization of Kolkhozy, “ pp. 279-91.
29. Sel'skoe khoziaistvo, pp. 64, 56, and Nar. khoz., 1967 (Moscow, 1968), p. 466.
30. The net flow of finance on current and capital accounts taken together.
31. D'iachenko, V. P. et al., 50-let sovetskikh finansov (Moscow, 1967), p. 217.Google Scholar
32. Ibid., pp. 216, 218-20.
33. Ibid., p. 211.
34. Atlas, M. S. et al., Kreditno-denezhnaia sistema SSSR (Moscow, 1967), p. 197.Google Scholar
35. D'iachenko, 50-let sovetskikh finansov, p. 223.
36. Semenov, Finansy i kredit, p. 157.
37. Kartashova, Finansy, kredit i raschety, p. 83.
38. D'iachenko, 50-let sovetskikh finansov, pp. 218-19.
39. Ibid., p. 216.
40. Semenov, Finansy i kredit, p. 122.
41. D'iachenko, 50-let sovetskikh finansov, pp. 223-24.
42. Semenov, Finansy i kredit, pp. 122-23.
43. Ibid, p. 129.
44. Ibid, pp. 124-25.
45. Ibid, p. 129.
46. Ibid, p. 6.
47. Ibid, pp. 36-37.
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