Faster Growth in Production of the Means of Production, Law of

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 It might be outdated or ideologically biased.

Faster Growth in Production of the Means of Production, Law of

 

an economic law of expanded reproduction through large-scale mechanized production. The law explains that it is objectively necessary that production of the means of production develop more rapidly than production of consumer goods.

Expanded reproduction depends on progressive changes in the structure of production and on improved technology, or in other words, on enhancing the technical and organic composition of production. Under such conditions, growth in social production occurs when the subdivision that creates the means of production develops more rapidly. Accordingly, the share held by the means of production within an increasing gross national product also increases. The share of consumer goods decreases even while the absolute amount increases. The specific manifestations of the law of faster growth in production of the means of production and the relative intensity of these manifestations, as well as the strength of countering tendencies and the overall socioeconomic consequences, are determined by the nature of the social system and the level of the country’s industrial development.

Under capitalism, operation of the law leads to a deepening of the contradictions of social reproduction. It impedes sales and intensifies the wastefulness of the capitalist economy. Under socialism, planned use of the law can ensure optimal growth of social reproduction, raise economic efficiency, and achieve steady, rapid growth in public well-being based on high rates of development in social production.

The law was derived and substantiated by K. Marx in his theory of reproduction. V. I. Lenin made a significant contribution to further investigating and substantiating the necessary operation of the law. Lenin considered the development of reproduction to be based on technological progress and growth in the organic composition of capital. The latter can be expressed as the ratio of constant to variable capital, as this reflects the technical structure of capital, that is, the ratio of means of production to the amount of labor force putting the means to use. Lenin then proved that, according to the law, the fastest growth will occur in that subdivision of social production that produces the means of production used to produce the means of production, followed next by production of the means of production used to produce consumer goods, and finally by production of consumer goods. “The whole meaning and significance of this law of more rapid growth of means of production,” Lenin wrote, “lies in the one fact that the replacement of hand by machine labor—in general the technical progress that accompanies machine industry—calls for the intense development of the production of… those real ‘means of production as means of production’ “(Poln. sobr. sock, 5th ed., vol. 1, p. 100).

The operation of the law grows out of the interrelationship between increased provisioning of labor with technical equipment and the productivity of such equipment, on the one hand, and growth in the technical and organic composition of production, on the other. Providing labor with more technical equipment leads to a rise in productivity. As a result, the share of past labor, or c, in unit cost, and thus in gross national product, increases, while the share of live labor, or v + m, decreases. As ever increasing amounts of raw and finished materials are processed by live labor, ever increasing amounts of past labor, which are embodied in the means of production used in production, are expended per unit of output. Growth in the share attributed to past labor also necessitates more rapid growth in production of the means of production. This can be mathematically proved.

Let P stand for the value of social product, PI the value of social product contained within the means of production, and PII the value of social product contained within consumer goods; C is the value of the replacement fund, or past labor, present in gross national product, and N the amount of accumulated production present in the means of production. Then PI = C + N. Dividing both sides of the equation by P, we obtain:

Let us assume that the ratio of N to P, that is, the norm of accumulated production within the means of production, is invariable; in fact, it is usually stable. Because the ratio of C to P, that is, the share taken up by replacement in social product, grows, then the ratio of PI to P, that is, the share taken up by output of the means of production within social product, must also grow. But because P = PI + PII, PI necessarily grows more rapidly than PII in the overall growth of P. Of course, any change in the norm of accumulation, or N to P, can either accelerate or retard the rate of growth of means of production but cannot counter the action of the law.

The entire historical experience of the development of the economies of capitalism and socialism, if considered over an extended period of years, shows the constant operation of the law. Thus, whereas growth in the volume of industrial output in the USSR in 1972 was 105 times greater than in 1913, 13.7 times greater than in 1940, and 2.6 times greater than in 1960, growth in production of the means of production (group A) was, respectively, 246, 18.3, and 2.8 times greater, while growth in the production of consumer goods (group B) was, respectively, 35, 7.5, and 2.3 times greater. To a significant degree, the ratio between the growth rates of production of the means of production and production of consumer goods in industrial output determines these goods’ ratio in the gross national product as a whole.

Under conditions of the scientific and technological revolution, the operation of the law is altered but the law itself continues in force. A decrease in the capital intensiveness and material intensiveness of production makes it possible to achieve growth in gross national product while reducing the degree to which the growth rate of production of the means of production exceeds the rate for consumer goods.

The degree to which the growth rate of production of the means of production exceeds that of consumer goods is determined by the concrete socioeconomic conditions of reproduction. Under capitalism, this ratio is influenced by such factors as economic cycles and crises, the relative intensity of reproduction, and the rising rate of reproduction. Under socialism, the determining factors include the planned nature of production, high and stable rates of social reproduction, and the economy’s freedom from the social wastefulness and losses typical of capitalism.

The ratio of the growth rate of subdivisions I and II of social production is also influenced by such factors as the concrete conditions of the reproduction process, by changes in the structure of production and the nature of technological progress, and changes in the location of productive forces. Sometimes the gap between these rates may increase; as production becomes more efficient, the rates converge. Thus, during the eighth (1966–70) and ninth (1971–75) five-year plans in the USSR, the growth rates of subdivisions I and II converged significantly. Whereas the growth rate of production of the means of production in 1960–65 was 40 percent and for production of consumer goods 28 percent, during the eighth five-year plan the corresponding figures were 44 and 42 percent and during the ninth five-year plan, 41 and 37 percent. At times group B grows even slightly faster than group A, as in the final years of the eighth five-year plan, although the dominant growth of subdivision I is preserved overall. This reflects the flexibility of the law’s operation and the possibility of raising the growth rate of subdivision II through more efficient social production. The optimal ratio thus maintained between the subdivisions ensures a high and stable rate of development for the national economy and continuous growth in public well-being.

A broad scientific debate is under way in Soviet and foreign economic literature regarding the content and manifestation of the law under conditions of the scientific and technological revolution. Some economists, making reference to temporary modifications in the law, contend that it is losing its force. Most Soviet economists, relying on concrete economic research, feel that under conditions of the scientific and technological revolution the law may undergo certain modifications but continues to operate, as in the concrete ratio of greater rates of growth within subdivision I.

REFERENCES

Marx, K. Kapital, vol. 2, sec. 3. In K. Marx and F. Engels, Soch., 2nd ed., vol. 24.
Lenin, V. I. “Po povodu tak nazyvaemogo voprosa o rynkakh.” Poln. sobr. soch., 5th ed., vol. 1.
Kronrod, Ia. A. Obshchestvennyi produkt i ego struktura pri sotsializme. Moscow, 1958.
Kronrod, Ia. A. Razvitie V. I. Leninym teorii vosproizvodstva i sovremen nost’. Moscow, 1969.
Pashkov, A. I. Ekonomicheskii zakon preimushchestvennogo rosta proizvodstva sredstv proizvodstva. Moscow, 1958.
Notkin, A. I. Tempy i proportsii sotsialisticheskogo vosproizvodstva. Moscow, 1961.
Struktura narodnogo khoziaistva SSSR. Moscow, 1967.
Dva podrazdeleniia obshchestvennogoproizvodstva. Edited by V. N. Cherkovets. Moscow, 1971.

IA. A. KRONROD

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