Economic Efficiency

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The following article is from The Great Soviet Encyclopedia (1979). It might be outdated or ideologically biased.

Economic Efficiency

 

the ratio between the results of production—output and material services—on the one hand and expenditures of labor and the means of production on the other. Under socialism, economic efficiency is a key index of economic development. For the capitalist entrepreneur, expenditures take the form of fixed capital stock and circulating productive capital advanced by him, and results take the form of profits. Comparisons of expenditures and results based on report and statistical data for the various branches of the economy and for the national economy as a whole are used in the management of capitalist firms, whose primary motive is the desire to maximize profits.

The Great Soviet Encyclopedia, 3rd Edition (1970-1979). © 2010 The Gale Group, Inc. All rights reserved.