Sectors of the National Economy

Sectors of the National Economy

 

classification units consisting of qualitatively similar groups of economic entities that are defined by distinct conditions of production within the system of social division of labor. Each sector has a specific place in the process of expanded reproduction.

The Marxist-Leninist doctrine of the social division and forms of labor is the theoretical basis for the classification of national economic sectors in the USSR. This classification is used to analyze the structure of the national economy and to compute the social product and the national income. It is also used to determine the level and rate of growth of the sectors that produce, respectively, producer and consumer goods and to establish the interrelationships between the sphere of material production and the nonproduction sphere.

Tabulation of a balance of labor resources, broken down by economic sectors, makes possible the planned redistribution of labor resources to spheres in which they can be used most fully and efficiently. The classification system for sectors of industry and the national economy can be used to keep track of the formation and development of new sectors, including those advanced sectors that determine the rate of scientific and technological progress and have a decisive influence on the whole course of economic development. The classification system facilitates the making of the broadest and most essential decisions concerning the whole economy. It also permits the establishment, on this basis, of stable production links within the national economy and the planning of an optimal structure of social production.

The national economy is first of all subdivided into the sphere of material production and the nonproduction sphere. Material production includes all activities that result in the creation of material necessities. Among these necessities are goods—both producer and consumer—and energy and the whole range of functions that are an extension of production into the sphere of circulation. These functions include transport, storage, sorting, packaging, and wrapping of goods. Other activities, which do not create material goods, make up the nonproduction sphere. Within each sphere, delineations are made between national economic sectors formed by grouping economic units that perform similar economic functions or that carry out similar social activities.

In Soviet statistics the sphere of material production includes industry, agriculture, forestry, freight transport, communication networks that serve enterprises in the production sphere, construction, and trade. Material production also includes the food service industry and the systems of material and technical supply and marketing and of procurement of agricultural products. The nonproduction sphere includes housing and utilities, personal services, passenger transportation, communication networks that serve the public and organizations in the nonproduction sphere, public health, physical education, and social security. Education, culture, art, pure and applied science, credit services and state insurance, administration, and public organizations also belong to the nonproduction sphere.

Each national economic sector is broken down in turn into consolidated sectors, sectors as such, and forms of production. Industry is the most complex national economic sector. Its consolidated sectors include the electric power industry, the fuel industry, ferrous metallurgy, nonferrous metallurgy, the chemical and petrochemical industry, and machine building and metalworking. Other consolidated sectors of industry are forestry, wood products, and pulp and paper products; the construction materials industry; the glass, china, and earthenware industry; light industry; food processing; the microbiological products industry; the concentrates industry; medical products; and the printing trades.

In every consolidated sector, there are individual sectors that are generically similar but are specialized for the production of particular types of output. Thus the food-processing industry, for example, contains 24 sectors, each of which has further subdivisions that are specialized according to their products.

When deciding which national economic sector an enterprise, form of production, or service belongs to, one must take into account the nature of the product or service provided, the type of raw or processed materials used, and the character of the production process. In many cases it is difficult to assign a particular segment of the economy to a particular sector. This difficulty comes from specialization, whereby products that are similar in purpose are often manufactured using different production methods and different starting materials. This is the case, for example, in the production of synthetic fibers as opposed to fibers made from agricultural raw materials. Moreover, procedures and methods from certain sectors spread to others. Products intended for the most varied purposes are made from the same raw material.

The division of social production into production of producer goods (subdivision I) and production of consumer goods (subdivision II) is very important for analyzing the process of reproduction. Industry is subdivided correspondingly into two groups called Group A and Group B. In the USSR, this grouping of sectors is based both on the predominant planned designation of goods and on the way in which the goods are actually used.

Each type of production is characterized by a definite list of products. Under conditions of growing social division of labor, the classifying of national economic sectors becomes increasingly complex. A differentiated system makes it easier to follow the succession of classifications. This method of classification is based on types of output and of production processes and on the unification of these types (at subsequent levels of classification) in sectors, consolidated sectors, and national economic sectors. The requirements of broad economic cooperation with the socialist and developing countries and the requisites of trade with the capitalist countries create the need for further unification of the classification systems for sectors and types of production. This unification is necessary in order to promote the development of standardization for foreign trade and other types of economic ties. The classification of national economic sectors is a part of the uniform system for classification and coding of all technical and economic information.

REFERENCES

Klassifikatsiia otraslei narodnogo khoziaistva i otraslei promyshlennosti SSSR. Moscow, 1971.
[Shvyrkov, lu. M.] Klassifikatsiia otraslei ν narodnokhoziaistvennom plane. Moscow, 1965.
Gur’ev, V. I. Klassifikatsiia otraslei narodnogo khoziaistva SSSR. Moscow, 1971.
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