For this and other reasons State Planning Committee of the USSR was doomed to practice defective and vicious methods of modeling social and economic development and of plan optimization.
In order to demonstrate what idiotic notions about the functioning of a multiindustrial production and consumption system the State Planning Committee indulged in and what ideas Soviet economic science cultivated let us consider a quotation from the work “The Planned Equilibrium: installation, maintenance, efficiency” (by V.D. Belkin and V.V. Ivanter, «Economica» Publishing house, Moscow, 1983, p. 209):
«The question is how to estimate the product a part of which was produced over the desired solvent demand? It can be done using the equilibrium prices[150]. As it was demonstrated (…) the prices for the goods, the production of which is redundant in relation to the solvent demand, should be lower than the production prices. The redundant production means redundant expenditure in labor, material and natural resources, damages for the entire society and the recession of economic efficiency of national economy».
The last phrase is the expression of a private-owner, capitalist mode of thinking, which does not comprehend the structural integrity of a multiindustrial production and consumption inside a society and which a single businessman directs towards deriving of maximum of profit right now and always.
This world understanding is incapable of defining targets and evaluating efficiency in the activity of a super concern state. The logic of the last phrase from the given quotation leaves only one step to make towards suggesting to destroy the product, which is redundant in relation to the solvent demand at prices that do not cover the expenses on its production. Private-property economy gives us a scope of such examples: it is well known that corn was drowned in sea or used as fuel for electric power-stations in order to raise prices while the population of whole regions in other countries was starving.
There is a need in a different approach to the efficiency of national economy. The latter is a structural integrity designed for guaranteed satisfaction of the daily living needs of the entire population in the succession of generations, but not of the degraded parasitic needs of a small “elite” group. However we do not even put a question of interrelation between a turnout exceeding the solvent demand and a demographically grounded need in a book dedicated to the planned equilibrium in a state whose goal is to build «communism» when everything will be free of charge and free-for-all.
Yet if one proceeds from the principle that production in a society is performed for the sake of satisfying vital needs, then in a normally functioning production system product quality should correspond to these needs and to the standards in which they are expressed. A price in such system first of all is a means to limit the number of consumers. It deprives the insolvent part of the possibility to obtain or use some product.
Correspondingly production exceeding the expected (planned) solvent demand on the demographically grounded range of needs an advanced result in carrying out the plan and is socially useful for it will permit to satisfy the vital needs of more people within the planned period. Therefore the prices on this product should be lowered in due time to ensure its sales, and the «losses» of the manufacturers should be covered by subsidies. Otherwise former prices ensuring the profitability of production should be retained, while the potential consumers should be offered target subsidies.
Here is the opinion of H. Ford on the question:
«We are not much concerned with the statistics and the theories of the economists on the recurring cycles of prosperity and depression. They call the periods when prices are high “prosperous.” A really prosperous period is not to be judged on the prices that manufacturers are quoting for articles.
We are not concerned with combinations of words. If the prices of goods are above the incomes of the people, then get the prices down to the incomes (put in bold type by the authors). Ordinarily, business is conceived as starting with a manufacturing process and ending with a consumer. If that consumer does not want to buy what the manufacturer has to sell him and has not the money to buy it, then the manufacturer blames the consumer and says that business is bad, and thus, hitching the cart before the horse, lie goes on his way lamenting. Isn’t that nonsense?» (Ch. 9. “Why Not Always Have Good Business?”).
This helps to understand that H. Ford understood the aim and manner of a normal functioning of a multiindustrial production and consumption system better than the collaborators and directors of State Planning Committee 60 years after “My Life and Work” by H. Ford has been published[151]. The fault of State Planning Committee and economic «science» of the USSR is aggravated by the fact that unlike H. Ford they had several decades of working-out the plans of which they were to make sense. But social climbers and bureaucrats are hopeless.
As for the question raised by the authors of “The Planned Equilibrium” it demands a substantial answer:
The exceeding of a planned range of production by a real output will inevitably lead to the reduction of prices on the product on the demographically determined specter of needs. And in this case the fiscal-subsidizing policy of a super concern state, such as the USSR, should provide under the normal functioning for the solvency balance of the branches of economy. This — is a normal regime of functioning of a multiindustrial production and consumption system of a morally healthy humanly developing society.
If the product exceeds the proper demographically determined needs of the state it should find its outlet on the world market (its quality should suffice) or it should be given to the destitute countries as a gratuitous or other kind of help in the course of the goals of state’s global policy[152].
However the economic science of the USSR did not understand the exceptional position of a socialist political system as an owner of the whole credit and finance system and an exclusive operator of the «financial press» which gives birth to law of value (i.e. a price current base of nominal prices and price correlation). This science put it in the way that the state — is one of many private owners of this system, which can use it until its activities are paid off under the set prices and price correlation.
Such position would be correct in relation to any private-capitalist political system where the owner of the credit and finance systems and operator of a financial running knot is a usurious corporation independent of state[153].
Such branch of sociological science that could be called «juridical cybernetics» also did not appear in the USSR. This science could have analyzed and developed legislature as a system of social self-government algorithms in the course of a definite conception of global policy.