Proposed New Outlets for Consumer Spending

G. Popov, Problems and Opinions: Concerning the Earned Ruble. May 24, 1980

 

Original Source: Pravda, 24 May 1980, p. 3.

Would the Money Be There?… When all earnings were spent mainly for the basic necessities, the monetary incentive was really quite effective. But now the earnings of most contingents of the working people are higher than that minimum. Of course, it may be that the figure for average monthly earnings, which is approaching 200 rubles, should not be consider ed all that high. But even at that level, savings-bank deposits have long since exceeded 100 billion rubles.

This means that a large part of the population now has free money. The situation in which one says “I buy it because I need it” has been replaced by “I buy it because I like it.”

However, many times a person cannot acquire what he likes. When this is the case, it’s usually because the market does not have enough goods to satisfy the population’s requirements. The shortage of high-quality foodstuffs and other goods is especially noticeable.

In such conditions, the incentive role of basic wages, like that of bonuses and various funds and benefits, begins to weaken. One finds people who seemingly have no interest in working harder and earning more.

What is the solution? What should be done not only to preserve but also to increase the influence of monetary earnings as incentives for productive work?

In the first place, it is obviously necessary, as economists say, to strive to provide an inventory equivalent for money in circulation and to further increase the production of consumer goods and foodstuffs. Every effort must be made to expand the production of meat, milk, vegetables, fruit and other valuable foodstuffs. To this end, the Party is firmly steering a course aimed at achieving a further upswing in agricultural production. It is necessary that not only the prime necessities but also goods that are still scarce-cars and color television sets, for example-be available for purchase always and everywhere …

All this will take a long time, needless to say. However, a great deal could be done right now.

For example, a considerable effect will be achieved by establishing order everywhere in the trade and services sphere, so that goods that Siberian residents need for the winter, for instance, do not lie around unsold in stores in the warm South, so that consumer services are high in quality, efficient and accessible, so that no waiting lines develop, etc.

But this will not be enough. It seems that is important to seek new spheres for the use of money.

For example, why don’t we consider using the money of people who want to own cars to build another automotive plant and then use cars to pay back the “stockholders”?

And what about cooperative housing construction? The public’s money is being put to use in this sector, but so far only on a modest scale and in forms that are not very flexible. A good many people could be found who would be glad to pay more for an apartment designed to their own specifications, or for a common garage and a gymnasium in their apartment building’s basement.

There is still another way-dacha, gardening and other cooperatives. They are being established, but they have to surmount major bureaucratic obstacles. Their opponents’ main argument is that there’s not enough land. But these people don’t take into account the fact that the land that is provided is not, to put it mildly, of the highest quality, and that, moreover, this land doesn’t lie idle-it also provides agricultural products. In other words, this does not hinder the improvement of the supply of foodstuffs to the population; on the contrary, it helps that process. And, after all, one must keep in mind children’s summer recreation, the working people’s use of free time, and the utilization of pensioners’ labor. If these arguments don’t sound persuasive, let’s consider the following point:

Why shouldn’t society demand from those who want to receive parcels of land monetary compensation for the income that a collective farm or state farm would receive from these plots, 0. 05 or 0. 06 hectares in size?

There are also other channels for creating services that are attractive to consumers. Why don’t we pay extra charges for express service, for example, in the purchase of airplane tickets or the repairing of apartments, furniture or cars? Such charges have been adopted in many countries, but in our country they apply only to dry cleaning and telegrams.

Certain prices and rates need to be differentiated. Let me stress that I’m talking not about raising prices but about differentiating and regularizing them. There’s a great deal of difference in comfort between traveling in a compartment for two in a first-class train and traveling in an ordinary reserved-seat coach. But there is little difference in ticket price between the two. The same could be said about rooms in hotels, in vacation homes and at tourist centers, about apartments on different floors and in different boroughs of a city (and even in different cities), etc. That is to say, payment should be brought into line with the quantity and quality of various services.

The Other Side of the ‘Coin.’-… The regularization of the sphere in which money is spent should be accompanied by the regularization of opportunities to earn it. These are two sides of the same coin. And, I dare say, the “other side” is more important and requires even more attention.

The system of pay in our country developed long ago, and improvements in that system have not always kept up with life. Thus, at present the difference in pay between an idler who merely puts in time and a superior worker who puts his whole heart into the common cause is not very great. At design bureaus and research institutes, the difference is even less. The difference in pay between a front-rank worker and a laggard is less than 30%, on the average. It’s not surprising that lackadaisical workers are in no great hurry to raise their labor productivity and catch up with the front-rank workers. And even the good workers could perform still better if they had a real stake in doing so.

The results of work must be rigorously linked to pay. Furthermore, no excessive restrictions should be applied here, if pay is to act as an incentive to productivity. Most of all, one would like to see this approach established in the sphere of material production, where an increase in labor productivity is of decisive importance in developing the country’s economy, in general, and in increasing consumer goods production, in particular. Otherwise, what happens is that some engineers earn extra money by repairing radios, while after their shifts are over many workers go out and repair. automobiles and apartments, unload railroad cars, etc. But during their shifts they work at half strength. That is to say, the first and most important part of the socialist principle–to work according to one’s abilities–is not always realized. It will always be realized if a person works at full strength and earns correspondingly more at his basic job.

But where will we get the money to make this possible? On the one hand, it should be provided by the new spheres for the spending of earnings that have already been discussed. On the other hand, I don’t think it would be amiss to take a stricter approach to the pay of lackadaisical workers, using this as a means of paying top workers more.

Once More About Work. -Work schedules deserve attention. The five-day workweek has made possible a considerable improvement in working and recreational conditions. However, this innovation has cut women’s labor productivity, because evening shifts end late, at times when there is no public transportation to take the women home, and inconvenient schedules often prevent husbands and wives from spending their days off together. As a result, some women have expressed a desire to return to the six-day week. In some cases, this might be advisable.

reducing the working people’s free benefits-they would all be preserved and, as a result of the implementation of the Party’s social policy, would steadily increase. What we are talking about is supplementing the right to free benefits and services with an expanded “right” to paid services.

One also must take into account the fact that dishonest people are beginning to take parasitical advantage of the inequality that actually exists in the quality of free benefits. Sometimes articles appear in the press about the illegal extortion of money for free apartments in a better section of town or for more attractive vacation accommodations. If a monetary value were placed on the real difference in services received and this money were paid to the state, a purer moral atmosphere would be created, of course.

In the second place, the elements of inequality that might be created by the proposed measures are elements of inequality between poor workers and good workers; they organically follow-and should follow!-from the principle of payment in accordance with the quantity and quality of labor.

Thirdly and lastly, the implementation of the proposed measures must be viewed in combination with the tasks of stepping up public supervision over both earnings and expenditures, enhancing upbringing work and making more information open to the public. One would think that we should have more precise knowledge than we do now concerning both the amount and sources of the income of every member of society. One should not be embarrassed to ask a person who intends to buy a car or dacha, for example, where he got the money to make the purchase. It is necessary to wage a resolute struggle against speculation and other forms of unearned income.

Perhaps some thought should also be given to imposing a more sharply progressive tax on certain excessively high incomes (obtained from some types of market trade, moonlighting, casual employment, etc.). This would be an effective means of equalizing real incomes. Moreover, benefits, stipends and various forms of credit and loans should be increased for families that have low incomes because of the number of children or the state of the adults’ health.

Source: Current Digest of the Soviet Press, Vol. XXXII (1980), p. 21.

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