Abstract
THE special conditions under which industrial production takes place in the U.S.S.R. may be very briefly recapitulated. (i) The State owns the means of production. The State budget finances the capital construction of new plants. The of industrial undertakings go to the State. By redistributing these profits between different plants, and by State subsidisation, it is possible to continue production in uneconomic plants. (2) The State monopolises foreign trade. This completely prevents world prices from influencing internal prices. The Soviet rouble is not quoted on foreign stock exchanges and cannot be exported or imported. (3) All prices with the exception of those of the Kolkhoz market2 are fixed by the State planning organ. For many products the fixed prices exceed costs of production: the difference goes to the State budget in profit or turnover tax. For certain industrial goods, on the other hand, the price may be fixed even below cost and the loss covered by subsidy from the State budget.3 These special conditions are the cause at once of the positive and negative aspects of the development of industrial production in the U.S.S.R.
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