Planning of Money Circulation

Planning of Money Circulation 

regulating the amount of money in circulation to meet the needs of socialist expanded reproduction (see CASH PLANNING and CASH PLAN OF GOSBANK).

The planning of money circulation has an important effect on the development of the entire reproduction process in conformity with a plan. “Money circulation is a splendid test of the state of commodity circulation in the country.” V. I. Lenin emphasized this point in his analysis of the specifically synthetic character of the indexes and proportions of money circulation and their internal link wih the basic factors of production (Poln. sobr. soch., 5th ed., vol. 43, p. 66). The planning of money circulation is one of the important advantages of the socialist economic system over the capitalist system. Under capitalism, production anarchy and continuous fluctuations in market conditions make it impossible to plan money circulation on the scale of the national economy or even of particular regions. Planning money circulation ensures the necessary correspondence between money and commodities in circulation. Under socialism, ready-cash money circulation is restricted, for the most part, to the sphere of personal money incomes and their use. It includes the type of circulation that arises when the population receives money income from socialist enterprises (wages and labor payments to kolkhoz members) and the state (pensions, stipends, and other payments), as well as the circulation associated with the purchase of goods by the public, payment for services, and payments to the financial system.

For the planning of money circulation, planned coordination of the money income and expenditure of the population is very important, and coordinating effective demand with commodity resources allocated for sale to the population is of particular significance. Therefore, planning money circulation depends largely on planning the production and distribution of the aggregate social product and the national income, as well as the consumption fund (the part of the national income not set aside for accumulation).

The material and cost elements of the consumption fund are coordinated by means of a planned balance of the production, distribution, redistribution, and utilization of national income. They are also coordinated by developing the financial balance for the national economy (the uniform state financial plan), the state budget, the balance of money income and expenditure of the population, and the credit and cash plans of Gosbank (State Bank) of the USSR.

The planned balance of the production, distribution, and utilization of national income covers the movement of newly created value in all stages of its circulation. In fulfilling their specific functions, the financial balance of the national economy, the state budget, the balance of the money income and expenditure of the population, and the cash and credit plans of Gosbank act as levers for organizing and planning aggregate (cash and noncash) money circulation.

The state uses the balance of the money income and expenditure of the population to plan the circulation of cash. Elaboration of this balance makes it possible for the state to act to ensure that the volume of consumer goods and paid services corresponds to the dimensions and territorial distribution of the purchasing fund of the population, thus creating the conditions for normal cash circulation. To ensure a balance between personal income and expenditure and to achieve monetary stability, it is very important to take steps aimed at the comprehensive development of the production of consumer goods, improved quality, greater variety, and a more and more complete satisfaction of the population’s need for cultural and domestic services.

Gosbank plans the country’s ready-cash circulation by a breakdown of separate cash flows: the receipt of money at bank offices, classfied according to its main sources, and the issuing of money, classified by intended purpose. Operational cash planning helps draw into circulation reserves for additional production of consumer goods and helps expand the supply of goods and services to the population, in order to achieve a better balance of supply and demand under conditions of rapid growth and change in the structure of the personal needs of the population.

REFERENCES

Batyrev, V. M. Denezhnoe obrashchenie v SSSR (Voprosy teorii, organizatsii i planirovaniia). Moscow, 1959.
Margolin, N. S. Planirovanie finansov. Moscow, 1960.
Slavnyi, I. D. Ocherkiplanirovaniia denezhnogo obrashcheniia. Moscow, 1961.
Atlas, Z. V. Sotsialisticheskaia denezhnaia sistema. Moscow, 1969.
Denezhnoe obrashchenie i kredit SSSR. Writers’ group under the direction of V. S. Gerashchenko. Moscow, 1970. Chapters 6, 7.

IU. I. KASHIN