PROBLEMS OF DEVELOPMENT AND PLANNING OF PERSONAL CONSUMPTION IN CZECHOSLOVAKIA

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• Document Number (FOIA) /ESDN (CREST): CIA-RDP81-01043R001800230009-4
• Release Decision: RIPPUB
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• Document Creation Date: January 4, 2017
• Document Release Date: March 20, 2013
• Sequence Number: 9
• Publication Date: March 5, 1958
• Content Type: REPORT

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Problems of Development and Planning of Personal Consumption
in Czechoslovakia STAT
Kotazkam rozvoye a planovani osobnispotrebs v CSR, Prague, 1957, pp 1-88.
STAT
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PROBLEMS OF DEVELOPMENT AND PLANNING OF PERSONAL
CONSUMQTION IN CZECHOSLOVAKIA
K otazkam rozvoie a planovani
osobni sootrebv -v CSR
[Problems of Development and
Planning of Personal
Consumption in Czechoslovakia),
1957, Prague
Pages 1-88
.TABLE OF CONTENTS
INTRODUCTION
Miroslav Misar
CHAPTER I. CONSUMPTION IN THE PROCESS OF EXTENDED
REPRODUCTION
1. Reproduction Process and its Spheres 3
2. The Relation Between Production and Consumption 6
3. Definition of the Components of Personal Consumption;
Personal Consumption and the Standard of Living 19
0
CHAPTER II. FACTORS WHICH INFLUENCE THE DEVELOPMENT OF
PERSONAL CONSUMPTION UNDER SOCIALISM 26
CHAPTER III. PRINCIPAL DEVELOPMENT TENDENCIES OF PERSONAL
CONSUMPTION UNDER SOCIALISM AND DURING THE TRANSITORY PERIOD 40
1. Development Tendency of the Total Volume of Personal
Consumption 41
2. Development Tendencies of the Individual Sections of
Personal Consumption 43
3. Changes in the Consumption of Food and Non-Food
Articles during the Rise of Personal Consumption 49
4. Changes in the Structure of Consumption within the
Groups of Food and Non-Food Articles 53
5. Tendency toward Adjustment of Local Differences in
Consumption- 59
6. Examination of the Development of Personal Consumption
According to Population Groups 69
7. Personal Consumption in Czechoslovakia compared to the
Consumption ' in the most Developed Capitalist Countries 84
STAT
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CHAPTER IV. PLANNING OF THE CIRCULATION OF RETAIL GOODS
IN CSR
1. Parts of the Consolidated Plan of Retail-Store
Circulation
2. The Planning of Total Volume of Retail-Store
101
Circulation
3. Determination of the Time?and Regional Proportions
101
During the Establishment of Retail-Store Circulation
109
4. Planning of the Supply of`Consumers' Goods
5. Determination of the Entire Extent of Retail Price
113
Reduction
116
6. Planning of the Supplies of Consumers' Goods
119
CONCLUSION
122
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PROBLEMS OF DEVELOPMENT AND PLANNING OF PERSONAL
CONSUMPTION IN CZECHOSLOVAKIA
Introduction
Today theoretical and practical problems concerning the
development of the Czechoslovak national economy interest a growing
public circle. In this respect a comparison between the standards
of living in Czechoslovakia and in other countries is of particular
interest. Even men who otherwise are not concerned with the problems
of national economy take a keen interest in this matter.
This is nothing strange. Everyone wants to live better, have
more consumer goods, and be able to buy more things. Often we
hear that we should have more goods on the market, and that we
should raise wages or lower prices of goods so asto enable the
people to buy all they want or all they need. Sometimes the
Czechoslovak economic and planning organs are blamed because the
standard of living of the population is not rising as rapidly as
we desire. A number of people think that our standard of living
depends entirely on the national economy planning.
Problems of the standard of living are most closely connected
with the degree of the satisfaction of the people; they have a direct
influence on their attitude toward work and on their political
.views. Therefore it is especially important that the greatest
possible number of people should know the actual basis of the
development of the standard of living in a socialist regime and the
factors which determine the rate of this development. We also have
to become acquainted with the problems of planning for the standard
of living and try to understand these complex problems.
in this work we would like to present a short review of the
principal problems that we meet in life in the course of the plan-
ning of the development of personal consumption in Czechoslovakia.
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Personal consumption of the population is a more narrow concept
than the total standard of living. However, it is the principal. part
of the standard of BEng of the population and therefore plays an
important role in its rise.
The limited size of this brochure does not allow us to make a
deep and a truly manifold' analysis of the whole economics.and proce-
dure problems of'the planning of personal consumption. We will
concentrate, therefore, only on the most important theoretical
knowledge concerning` personal consumption and on those parts-of the
plan which directly express the increase of consumption.
We do not want to analyze the development of personal consump-
tion in Czechoslovakia only in an abstract way by deriving general
conclusions. As the reader will himself see, we are trying to show
the main facts which at present can give the unavoidable idea of
the actual degree of the development of personal consumption in
our republic. However, we should not suppose that the numerical
material given here is exhaustible and sufficient for a deep economic
analysis. We do not even attempt such task in this general and
comparatively short work. Therefore, the majority of figures given
here are intended to illustrate a general theoretical conclusion and
by no means to represent the full material. Such usage of statis-
tical materials comes from the fact that so far we do not have any
data covering a sufficient period of time in-order to beiable to
draw definite conclusions.
The author is grateful to the State Planning Bureau in Prague
for-a great amount of information contained in this work. When
source has not been quoted for any information raterial,it has been
obtained from the SUP [statnimu uradu planovacimu -- State Planning
Bureau].
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CHAPTER T. CONSUMPTION IN THE PROCESS OF E=ENDED REPRODUCTION
When we consume products of the greatest variety, we are
usually not concerned with their origin or with the way they reach
us. To us the important factor is the availability of the
consumers' goods; we should know that in case of need we can always
obtain them in the stores. We like to leave the concern for our
supplies to the-organs of_domestic trade.
Only a few people, however,, realize how complex is the task to
make sure that our stores are well supplied with consumers' goods
and that our people are able to buy larger quantity of better
quality goods. Mostly we do not realize how our own work is connec-
ted with.the increase of personal consumption.
The level of personal consumption at a definite period of time
is a result of complex economic transaction and is conditioned by
a great number of factors. Therefore, if we want to understand why
today we can consume exactly this much and not more, if we want to
know .what has to be done to obtain more and better goods in the
future, we have to consider the problem of personal consumption in
a somewhat isolated way but, at the same time, in connection with
further economic process of the socialist, people's economy.
Personal consumption is the final phase -- the result of
extended socialist reproduction. Certainly we do not have to stress
that the knowledge of economic processes, which is closely connec-
ted with personal consumption, is simply imperative for the practical
planning of personal consumption.
1. Reproduction Process and Its Spheres
We have already used the expressions "process of extended
reproduction," "spheres of reproduction process," etc. Before we
come to the next explanation we have to explain these concepts.
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In political economy the process of reproduction is called
the continuous renovation of general production. If, however, the
single act of production is defined as production (for example, we
speak about the production of machines, grain, etc) then the produc-
tion, never considered as a single act but a continuous always
renewed action, is called the process of reproduction.
The process of general?production,has to be continuous because
the process of consumption of material goods is continuous. Human
society cannot even for a,minute Interrupt the consumption of a
great variety of products. With this continuous consumption it keeps
its existence.
If at different periods of time, general production develops
to the same degree, we speak of "simple reproduction." If, however,
in the course of its continuous renewal the production is enlarged,
it becomes "extended reproduction." For the capitalist, and even
more so, for the socialist economy the extended reproduction is
necessary and typical.
The process of reproduction always goes through identical
stages or phases which we also call spheres of reproduction. There
are 4 spheres of reproduction: manufacturing, division, exchange
(or circulation), and consumption. These spheres mark the way
through which the product paws from the moment it was manufactured
to the moment it attains its own purpose, i.e., to satisfy the
demands of the people -- to be consumed.
Manufacturing is the logical beginning of the reproduction
process. It produces.a great variety of material products, the
sum of which makes up the general products. Immediately after
manufacturing comes "division." In the course of division it is
determined how much of the manufactured products can be acquired by
each member of the society. In other words, the individual's
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quantitative shares in general production is determined here.
Division, for example, is carried out in the form of wages. When
a laborer receives wages at a certain level, he is given means with
which he is able to buy a definite amount of goods. (This is only
one form of division which in reality is much more complex. In the
same manner the level of nominal wages themselves is not the principal
factor for the determination of a laborer's quantitative share in
the manufacturedproducts. -However, here we do not have enough
writing space for a more detailed analysis of this sphere of
division and, moreover, it is not the purpose of this chapter. The
same applies to the short characterization of all remaining spheres
of reproduction which we are discussing here.)
The next sphere of reproduction is the "exchange" or the
"circulation." In the course of exchange, individuals are conver-
ting their quantitative shares determined in the process of division
into various applicable values which they need to satisfy their
individual demands. Returning to our simple example, a laborer
(who for his part in manufacturing received definite wages) comes
to buy various consumers' goods for a portion of his wages.
At the moment.of sale to ,a definite consumer, goods pass from
the sphere of circulation into the sphere of consumption. Here
they are either immediately or gradually consumed, their physical
substance is destroyed; the products are consumed in order to
satisfy our needs and to renew our strength. Thus, consumption is
not only the final. phase of reproduction, but at the same time it
is the condition and the motivefor the repetition of the entire
process of reproduction.
Consequently under consumption in the sense of independent
sphere of reproduction, we understand consumption of consumers'
goods. Ifarx called it "a final consumption" in order to differentiate
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from the consumption of manufactured means which are produced in
the sphere of manufacturing:.,,,-The consumption of manufactured means
(raw materials, machinery, instruments, etc) is called "the?manufac-
ture or produce consumption.,"
The division of any consumption into manufacture and final
consumption corresponds to'the division of all products into
manufactured means and consumers' goods. If we attempt any other
basic division, we will see that it opposes the objective nature
of things and cannot be carried out.
,All the presented spheres of reproduction form mutually
connected parts of one organic body, i.e., the reproduction process.
Therefore they are in no way isolated from one another but are
infiltrated and mutually influenced. Ede know this reality very well
from our everyday experience, but as a rule, we do not realize it.
For example, the process in the sphere of exchange has a strong
influence on manufacture and consumption. The course of division
(for example, wage regulation) can either accelerate the growth of
production or hamper it. In the same manner it can lead to a rise
of consumption or to its decline, etc.
We have to bear in mind this mutual dependence of all the
spheres of reproduction during the observation of any one of them,
even during the observation of consumption. In this work we will
not analyze the connection between consumption and the rest of the
spheres of reproduction, but we will only mention one.main relation
of the entire reproduction process -- the relation between produc-
tion and consumption.
2. The Relation_Between?Production and Consumption
The relation between production and consumption is the basic
relation in the entire process of reproduction. If, however, we
have mentioned earlier that manufacture is the starting point of
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reproduction (because the entire process starts with manufacture,
i.e., the origin or production), we can designate consumption as
the goal of any production and more so as the final goal and sense
of the entire process of reproduction.
The relation between production and consumption has been for
a long time subject of research by the economists. The substance
of this relation and its most general aspects were explained by Karl
Mark in his work Criticism of -Political Economy. (Karl Marx,
.Criticism of Political Economy, SNPL, 1953, Pages 155.170.) Mutual
relation between production and consumption is determined first of
all by the fact that production gives consumption its subject --
the product. It is clear that consumption cannot be carried out
if there is nothing to consume. Consequently without production
there is no consumption.
Production, however, does not produce the object of consumption
alone, but it also determines the way of consumption. It effects
the way of consumption of different products by means of the fact
that the level of production forms the standard of living which is
characterized by definite practices and ways of consumption. (The
dependence of production and consumption is explained by K. Marx
with this example: "Hunger.is hunger, but hunger which is-abated
by cooked meat that is consumed with knife and fork is entirely a
different hunger from the one which swallows raw meat with the aid
of hands, nails, and teeth. Production therefore creates not only
the object of consumption, but also the way-of consumption, not
only objectively, but also subjectively. Production therefore
creates the consumer." K. Marx, ibid., Page 163.)
Finally production creates also the cause for consumption, i.
e., when new, previously unknown products are produced an incentive
is created in the people to feel the need for these products.
7
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In the reproduction process, however, consumption does not
have merely a passive part. It does not depend on production alone.
The consumption effects production very actively, not only by
determining the very sense z.nd purpose of the entire production,
but also by the physical destruction of the product in consumption
which creates the need for new production. We can therefore say that
consumption creates the need for new production -- the continuous
impulse of its development.
The needs which originated as a result-of actual consumption
are constantly rising. The more products are consumed by man and
the better theyare, the higher are his requirements for further
consumption. This we ace ezerywhere around us. Human needs have a
tendency to rise infinitely. This fact creates an incessant impulse
for the development of production. This is why our needs cannot be
satisfied so completely as to leave us with none. Otherwise produc-
tion would become stagnant and would lose the natural motivating
force of its development.
When we investigate the relation between production and
consumption, we see that with consumption the people are renewing
their working strength -- their ability to manufacture. By destroying
products, the consumption constantly leads to the renewal of produc-
tion. In the course of constant repetition of production, man
acquires working skill and production experience. We can therefore
say that to a certain degree consumption directly creates the
producer, the working man, the principal agent of productive forces.
This analysis of mutual relationship between production and
consumption has a very ccncrete and practical significance. It
demonstrates, for example, that the rise of consumption in reality
is possible only when it is based on the permanent growth of
production. Therefore it is impossible to require higher wages
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or faster falling of prices where the growth of production does
not correspond to it. It also shows that belated production of
new kinds of goods does not only harm its own consumption, but also
directly the very production by paralyzing the cause of its further
development and by reducing the people's interest in the growth of
production. If we were to examine thoroughly the Marx's analysis
of mutual relationship between production and consumption we would.;
be able to make a whole series of similar?practical conclusions.
We will take up some of these relationships in the course of the
following discourse.
The relation between production and consumption, which for the
present time we have defined only generally it its essential traits,
differs in each social order according to the characteristics of
production relations. Thus under capitalism, where the entire
system of production is contrasting in character [see note], there
is a profound discord between production and consumption. The
capitalists are striving to acquire the greatest possible profits.
Therefore they are intent on the constant growth of production,
for the more products, the greater the profit; at the same time
they are trying to pay the laborer just so much that he would be
able to work and his wages would suffice for the mere support of
his working strength.
([Note) The contrasting character of the capitalist way of
production follows from the fact that the capitalist production has
reached a high level of general usage. The capitalist concentra-
tion and development of social divition of labor are mutually
uniting the activity of millions of workers into one social produc-
tion process while the results of this social production remain as
the property of a small group of contractors. The way of produc-
tion and the form of appropriation are therefore in an insolvable
conflict. This conflict is manifested as the antithesis between
the bourgeoisie and the proletariat.)
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These1two tendencies of capitalist production eliminate each
other. The effort of the capitalists to develop production conflicts
with their strive to limit consuming ability of. the laborers.
"Such development of production without an adequate development of
consumption exactly corresponds with the historical mission of
capitalism and its specific social structure; its mission rests in
the development of production strength of the society; its structure
eliminates the use of these technical achievements by the masses
of the population. There is an indisputable conflict between the
unl;aaited tendency toward the development of production which is
typical of capitalism and the limited consumption by-,the masses
-- limited by their proletarian position." (V. I. Lenin, 'The
Development of Capitalism in Russia," Works, Vol 3, SNPL, 1952,
Page 45.)
The inexorable conflict between production and consumption is
mostly evident at the time of cyclic crises when, on the one side,
immense supplies of consumers' goods are hoarded as there is no mar-
ket for them and they depreciate, while millions of unemployed people
suffer from chronic malnutrition. The employed laborers, however,
suffer from the capitalist cyclic crisis by having their personal
consumption reduced.
Not to go too far after examples, let us look back 20 years at
the Republic of Czechoslovakia. ? Not even the official figures of
statistical yearbooks could cover the decline of personal consumption
during the years of the world cconomic.crisis. The representative
savings-of food consumption among the laborer's families show that
in 1926-27 a gradual decline of food consumption started and became
especially critical during the world economic crisis..
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Name of Product Unit of
Measure
1926/27
1933/34
Difference
beef
kg
14.19
11.11
- 3.08
pork
kg
10.49
9.06
- 1.43
veal
kg
2.49
2.15
- 0.34
smoked meat
kg
2.46
2.25
- 0.21
meat products
kg
7.21
7.09
- 0.12
fat
kg
12.92
11.21
- 1.71
butter
kg
4.36
4.83
+ 0.47
bacon
kg
0.78
0.62
- 0.16
milk
1
195.30
168.08
- 27.22
flour
kg
60.92
55.07
- 5.85
bread
kg
129.08
98.48
- 30.60
pastry
kg
15.34
12.23
- 3.11
rice
kg
5.91
4.26
- :1.65
potatoes
kg
103.56
113.51
+ 9.95
legumens
kg
3.44
2.08
- 1.36
sugar
kg
30.87
29.47
- 1.40
beer
1
61.13
41.07
- 20.06
Yearly Food Consumption in Workers` Families in CSR During'
1926/27 1933/34 in the Average of one Consumption Unit [see note]
(Statistical Yearbook, CSR, Years 1936 and 1941)
([Note] In the prewar CSR under the consumption unit we under-
stand one mature man at the age of 16 to 60. Persons over 60 and
women and children are transferred into this consumption unit by a
definite coefficient. For the consumption of food, for example,
there are these coefficients: women from 16-60 -- 0.8, persons over
60 -- 0.8, children from 1-2 -- 0.2, from 4-5 -- 0.4, from 6-7
0
0.5, from 8-9 -- 0'.6, etc. See Pramenne Dilo"SUS, 1935).
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If the consumption of food, rightly called the most conserv-
ative factor of consumption, declined so much, then the consumption
of other products had to fall even more. The economic crisis pressed
hardest on the families of unemployed laborers. The decline.of
consumption in the families of unemployed laborers was sometimes
simply drastic. as we shall see from the attached data. The army
of unemployed comprised not only thousands but hundred thousands
of people. Together with their family members a far greater number
of people had met with unemployment than the data on the number-of
unemployed show.
Number of Unplaced Applicants for Job in the Years 1931-1936
(in Thousands of Persons}
Monthly average of unplaced applicants
1931 1932 1933 1934 1935 1936
Total 291 554 738 677 686 621
women 73 130 163 140 143 140
men 218 424 575 537 543 481
number of
unemployed
in industry 149 294 373 330 322 280
(Ten Years of Development of CSR, Rude Pravo, 1956)
The consumption among the families of unemployed laborers
differed from the average yearly consumption among the laborers'
families as follows:'
(An average yearly consumption per consumption unit in the
families of unemployed laborers is calculated on the basis of the
representative saving effected by the State Bureau of Statistics in
February 1932. Data on monthly consumption are multiplied by 12.
This manner of calculation of average yearly consumption is naturally
not exact, just as the data of the SUS on this saving cannot be
considered as representing all unemployed families. Nevertheless
we can use these data for comparison as they express quite typical
conditions in the families of the unemployed.)
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The Comparison of Average ConsuMtion per' Consumption Unit between
The Average Laborers' Families
and those of the Unemployed?'Laborers
Kind of Unit of Average Average Yearly Difference Index
food Measure Yearly con- Consumption in in 7.
sumption in a-Family of Un
?a laborer's employed laborer
family in in 1932.,Period.
1932/33 of unemp'loyment-
longer'than one
year
beef
kg
11.52
7.56
- 3.96
65
pork
kg
9.54
4.80 '
- 4.74
50
veal
kg
2.16 '
1.80
- 0.36
83
smoked
meat
kg
7.99
5.16
- 2.83
64
fat
kg
11.38
4.68
- 6.70
41
butter
kg
4.57
3.48
- 1.09
76
milk
1
169.55
134.29
- 35.26
79
eggs
kusy
181.00
91.35
- 89.65
50
flour
kg
54.59
44.04
10.55
81
bread
kg
95.23
95.28
+ 0.05
1013"
pastry
kg
14.42
11.52
- "2.90
80
potatoes
kg
110.34
159.96
+ 49.62
145
sugar
kg
29.97
20.52
- 9.45
68
beer
1
50.33
11.04
- 39.29
22
In the table we can see a sharp decline in the consumption of
meat, fat, milk, eggs, and sugar. Thus, it is cv dent that the
families of unemployed laborers first of all-reduced their consump-
tion of the'most valuable food. The fall in the consumption of flour
and pastry is somewhat slower (roughly 3070 slower against the consump-
tion in an average laborer's family). The consumption of bread and
potatoes shows a growth. With a general absolute decline of food
consumption it reaches an acute aggravation of the structure of food
consumption, which effected thelralth of families of unemployed
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The relation between consumption and production has a different
characteristic under socialism. Under socialism specific limits
of the growth of personal consumption, which follow from the char-
acter of capitalist production relation,*fall and disappear together
with the liquidation of capitalist ownership of production means
and with the reaoval of the exploitation of workers.
This means, however, that the growth of personal consumption
under socialism would not have any limits. These limits is the
level of production in a given historical period, it is the ability
of production to supply the consumers with a fixed quantity of,
products and in a definite season. The final aim of socialist
reproduction -- the cons
umgtion of the population -- does not
conflict with the cause of production, the motivating-force of its
development because this motivating force is again the strive toward
maximum satisfaction of needs of all the members of the socialist
society. This harmony is possible only in such social structures
where the means of production belong to the workers who know that
each economic achievement will mean the improvement of their standard
of living.
Since the limits of the consumption rise under socialism
create only the pos3ibility of production, all the workers have a
personal interest in the development of these possibilities -- in
the raising of the standard of production.
Under socialism, therefore, mutual relationship between consump-
tion and production is the principal agent which accelerates the
development of the entire socialist economy. Judging by this rela-
tionship, we see the frequent repetition of the statement by I. V.
Stalin that under socialism the rise of consumption (buying power)
of the masses always exceeds the growth of production and encourages
it to move ahead. (I. V. Stalin, Works, Vol 12, SNPL,, 1953 page
307.) This concise scatd cnt became the foundation of a series of
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speculations which were to be explained and proved. '(See, for exam-
ple, the work of V. Raigel "The Problems of Operation and the Use
{
of Economic Regulations" where the author besides a series of
correct views incorrectly explains the manifestation of "superiority"
of consumption over production with the excess of income of the
population over the buying fund (page 191). He formulates this
conclusion more clearly on page 194 by a similarly incorrect asser-
tion that "the buying power of the masses under socialism exceeds
the total of manufactured production of consumers' goods and the
total of services rendered to the population for reward.") Further
experiments were conducted to draw, practical conclusions for the
Czechoslovak economic policy. This is the principal cause for our
attention to this problem.
We suppose it would be incorrect to reject Stalin's statement
with one sentence. It seems to be correct until it shows that
consumption of the masses is the principal motive of the development
of socialist production and that under socialism the rise of consump-
tion drives production ahead. Above we have attempted to show the
reason for all this. We consider that this statement is incorrect
while it asserts that the consumption of the masses under socialism
(the buying power) exceeds production. I. V. Stalin has limited
himself only to this brief statement without showing in details
where this excess is and how it is manifested. The dogmatic explana-
tion of this "excess" has done much damage both in theory and in
practice. (Soviet authors. A. Charnak and A. Stanislavskiy discuss
this problem in the magazine Partiynaya zhizn (Party Life] No 12/1956.
In their article, they point not only at the theoretical incorrect-
ness of the dogma on excess of consumption over production, but also
stress that in practice these views would indicate the support of
the shortages in Soviet trade and that the temporary disproportions
between demand and supply would be presented as lawful phenomena
and a precedence under socialist economy..)
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We do not wish to enter on an extensive polemics on the accu-
racy of Stalin's statement. On the entire problem we would only
like to remark that first of all one should not confuse the consump-
tion of the population with the buying power (or buying demand).
Consumption is the very act of turning to use a great variety
of serviceable values with which man satisfies his needs. The buying
power or the buying demand of the population belongs to the category,
of commodity management. This means the amount of goods which the
population can buy on market and which consequently enter the sphere
of personal consumption. The extent of the buying demand is
determined both by a nominal portion of money which the population
can at a definite time dedicate for the buying of consumers' goods
and by the leveling of prices on consumers' goods.
Since under the conditions of commodity management the majority
of products enter the sphere of consumption by means of buying and
selling, the buying demand often mingles with its own consumption
and then it is said that the extent of consumption is determined by
the extent of buying demand. This, however, is not completely
accurate when we take consumption as a whole. There is a relatively
considerable amount of consumers' goods which under socialism do not
enter the sphere of consumption by way of buying and selling. These
are the consumption of farm produce by the farmers, then the.consump-
tion of products offered free of charge to the population by the
sanitation and social institutions, etc.
Consequently in reality the extent of actually consumed
products is far greater than the extent of the buying demand. From
the difference between consumption and purchasing demand, besides
other things, follows that the total consumption of the population
will increase but the volume of the buying demand will not rise;
or it will grow slower than the consumption. For example, this is
possible on.the assumption that in a definite year the amount of
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goods spld to the population in the stores will grow but the
consumption of farm produce and the consumption of products offered
free will grow rapidly. Indeed, mutual relation between the rate
of increase of the-consumption and the purchasing demand can be
reversed.
Thus, if we speak of the "excess" of consumption or of pur-
chasing power over production, we should understand that they are
two different things. When we analyze the first possibility, i.e.,
whether there is any excess in consumption in regard to production,
we see that the problem, when defined in such terms, is again not
accurate. Is it-the question of relation between the entire produc-
tion and the final consumption or of here relation between some parts
of production and consumption?
There is an entire series of possibilities and we will not
occupy ourselves with all of them. The relation between final
consumption and production of consumers' goods (i.e., the second
group of general production) is of practical importance. To this
relation generally applies that which applies to the mutual relation
between consumption and production on the whole, i.e., consumption
can never exceed production as far as the entire volume is concerned
because.one can consume only that which was previously produced.
This relation can be influenced by the increase of supplies and
reserves of the consumers' goods and in some countries also by
the structure of foreign trade. This however does not change its
substance.
When we take the other possibility and judge the rate of
increase of the purchasing demand and the production of consumers'
goods, then-again we have to formulate the question. more accurately.
Under planning practice this problem is reduced to a question:
which should grow faster -- the purchasing funds of the pop~uiat-.wn
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or the market supplies of the consumers' goods? (Purchasing fund
is a multitude of money which the population spends at a definite
time for the purchase of consumers' goods. Market supply is a
multitude of goods which is to be sold to the population within the
planned time. Market supply also includes the planned increase of
supplies and reserves.)
Not even in this case may we-speak of the excess of purchasing
funds over market supply. If the purchasing funds of the population
increased faster than the market supply of. consumers' goods, then
it would result in hoarding of surplus money by the population which
would not be covered by consumers' goods. This would mean a distur-
bance in food supply. We know this situation from the times before
the currency reform of 1953 and we know how many difficulties it
caused.
In order to have the correct stock of consumers' goods for the
population and to raise the standard of living it is necessary that
the market supply of consumers' goods be increased more rapidly
than the purchasing funds of the population. This is the only way
to secure the increase of the supplies of consumers' goods and above
all the creation of the necessary reserve of consumers' goods for
a systematic-decrease of retail-store prices.- It is consequently ?
obvious that the theory on the excess of consumption or purchasing
power over production in quantitative sense can not be considered
as correct.
The needs of the population, however, actually exceed the
production. These needs originate on the basis of actual consump-
tion. The population requires from the production always new
types of consumers' goods and always 'higher quality of the manufac-
tured goods. The demand for individual types of goods is not uniform
and changes constantly in the course of some years. This constant
excess of the population needs over the possibilities of production
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which is manifested by the demand for definite types of goods is
the real and permantent motive of development and perfection of
socialist production. Therefore the development tendencies of
personal consumption of the population under socialism have to be
especially carefully examined and their analysis is of immense
significance to the planning of trade, production, and, in general,
the entire socialist economy.
3. Definition of the Components of'Personal Consul tion. Personal
Coniggetion'and the Standard of Living
So far we have been occupied with the final consumption as a
whole without differentiating between its individual parts. As we
have mentioned, final consumption includes the use of all consumable
goods, therefore, it satisfies any non-manufacturing needs of the
society. When we imagine the immense amount of consumers' goods
which are consumed annually in Czechoslovakia and when we realize
how many different needs are satisfied by them, we would realize
that the concept of final consumption is so complicated that it
would be difficult to understand. There we have to make a more
detailed division -- a classification of individual principal parts
of final consumption.
The starting point for carrying out the classification will
be the principal types of needs which are satisfied by consumers'
goods. When we. have examined the needs for these consumers' goods,
we would see that they serve for the following purposes:
(1)'individual satisfaction of material needs of the population;
(2) common satisfaction of some cultural, social, medical, and
other needs of the population;
(3) satisfaction of public administration, defence,, and security
needs;
(4) increase of supplies and reserves of the consumers-01. goods.
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An impressive portion of consumers' goods is assigned to the
first two purposes.
Bich of these parts of the final consumption do we designate
as,_ personal consuirptioa?
The Czechoslovak political economy plan classifies into per-
sonal consumption only the individual consumption of primary goods
which the population finances. from its own final income. This means
that under individual consumption within the balance of the national
economy we count the following:
(a) the purchase of goods by the population in state stores
and cooperatives;
(b) the purchase of goods by the population from far market;
(c) the personal consumption of farm produce by the farmers;
(d) the remaining individual consumption of the population
(e.g., the consumption of water, electricity, gas, cost of individual
housing maintenance, etc).
The consumption of consumers' goods in the institutions offering
services to the population (health, educational, cultural, conimanity
service, etc) and the consumption of state administration, defense,
etc are designated as general consumption within the balance. of the
national economy.
The use of consumers' goods for the extention of nonproduction
basic supplies and for the increase of supplies and reserves of
consumers' goods is classified in the state plan partly under
accumulation and partly under increase of reserves. This is jus-
tified,by a series of practical reasons, From the point of view of
classification of final consumption, these factions belong to the
general consumption because they are financed by the income of the
population.
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The division of final consumption?into;.two parts -- into per-
sonal and general consumption -- has its basis in the diverse
manner of payment of individual parts of the ultimate-consumption.
Personal. consumption is financed from the ultimate income of the
population. Contrary to. this, general consumption is financed from
the ultimate income of the companies. (The ultimate income of the
population and the companies is-produced in the process-of division
of national income. They originate on the basis of original income
and balance of the redistribution of national income. A more detailed
explanation of the creation-and the use of ultimate income of the
population-and the companies would take:;too long and is beyond the
scope of this pamphlet.) This criteria of classification of the
ultimate consumption is very important for the planning of national
economy because it corresponds to thechjectively necessary process
of the division of national income in a socialist society.
Individual factions of the ultimate consumption, however, cannot
be judged only by the type of income they are financed with. For
the socialist planning, the ultimate purpose of which is to secure
maximum satisfaction of man's needs, a classification of individual
parts of the ultimate consumption according to the degree of their
influence on the standard of living of the population -- whether
or not they are contributing toward its 'rise -- is immensely important.
Looking at-the ultimate consumption from this side, we can again
divide it into two parts the components of which, however, would
be somewhat different-from the components of personal and general
consumption. In the first part there will be those factions of the
ultimate consumption which directly raise the standard of living
of the population. These are the purchases of the population in
stores and on the farm produce market, the personal consumption of
farm produce by the farmers, the remaining individual consumption
of the population, then the material consumption of institutions which
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offer services to the population, and finallyr the increase of basic
nonproduction suuplies_for living quarters construction and'for
the institutions which offer services to the population.
The entire personal consumption and a greater part of general
consumption belong to this division. Consequently it follows that
an absolute majority of the consumers goods'from the primary national
income is deternia .d for a direct improvement of the standard of
living of the people.
The second part of the ultimate consumption is produced by
those factions of general consumption, the satisfaction of which is
necessary but which do not make direct contribution toward a rise
in the standard of living, These are the consumptions of social
administration, defense, some expenditures for science and technical
development, and then the increase of supplies and reserves of the
consumers` goods. Also a part of the increase of basic nonproduc-
tion supplies assigned toward the payments of the needs of national
administration, defense, etc are in this group.
While compiling the state plan for the national economy, we
are doing our best to accelerate the increase of those factions of
the ultimate consumption which contribute toward the rise of the
standard of living. Contrary to that, those parts of the ultimate
consumption which do not directly serve to raise the standard of living
and yet, at a given time, are socially necessary, will be developed
only to the necessary extent; and we would gladly take advantage of
every opportunity to reduce them when such'action is justified.
(The only exceptions here are the expenditures for science and
for technical development whic, within the balance of national
economy, are joined into a single amount together with the expenditures
for state administration, etc. These expenditures are of a different
type. Their classification in this group is not quite consistent
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as they should rather belong into accumulation or production consump-
tion since they mostly serve toward the development of production.
As far as these expenditures are concerned, we are trying to accel-
orate their increase within'the limits of our means.)
Consequently there is a basic difference in the approach of
the planning agencies to the development of individual parts of
the ultimate consumption based-on-whether or not they raise the
standard of living of the population. There. is also a practical
significance in the application-of this second criteria during the
classification of the ultimate consumption.
Presented in the form of an outline,. the classification of
the ultimate consumption according-to both criteria reads as
follows.
A. Division of the Ultimate Consumption Based on the Income
I. INDIVIDUAL CONSUMPTION Purchases of the population in the stores;
(financed from the ul- Purchases of the population on the farm
timate income of the pop- produce market;
lation) Personal consummation of farm produce
by the farmers;
The remaining personal consumption
(gas, water, etc)
II. GENERAL CONSUMPTION Material consumption of the service
(financed from the ul- institutions;
timate income of the Consumption of state administration,
companies) defense, etc;
Increase of mnproduction basic, supplies
[see note] and supplies of the consumers'
goods;
Increase of the reserves of consumers'.
goods
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B. Division of lji imate'Consumption According to its Influence on
the tandard__ of Living of the Population
1. CONSUMPTION THAT Purchases of the population in the stores;
CONTRIBUTES TOWARD THE RISE Purchases of the population'at the farm
OT THE STANDARD OF LIVING produce markets;
Personal consumption of farm produce by
the farmers;
The remaining personal consumption;
Material consumption of the service
institutions; Increase of nonproduction
basic supplies [see Note i].
II. CONSUMPTION THAT DOES Consumption of social administration,
NOT CONTRIBUTE TOWARD THE defensa:J etc;
RISE OF THE STANDARD OF Increase of the supplies of consumers".
LIVING goods (which are predominant in the trade
system) ;
Increase of the reserves of consumers
goods (state and government reserves)
[see Note 21.
[Note 1] In both divisions, the increase of nonproduction
basic supplies is of mixed character. Mostly, however, it is financed
from the ultimate income of the companies and contributes toward
the rise of the standard of living. Into this division belong the
basic supplies in the living quarter construction, education, health,
and other institutions which offer services to the population.
[Note 2] Increase of the reserves of consumers' goods has a
slightly different character than the remaining parts of ultimate
consumption. tie classified, it into the second group because from
the point of view of a planned season, it does not directly serve
the consumption and consequently does not raise the standard of
living. In the.next few years however, it can be the instrument
of rise of the standard of living if derived from the reserves.
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Whenever we speak of personal consumption in this work we
should understand its composition as it is defined in point A of
our classification, i.e., from the standpoint of income. At the
same time we should not forget the significance of the individual
parts of the ultimate consumption in the raising of the standard
of living, as we have determined'in point B of our classification.
Personal consumption is the most important factor in the
standard of living-of the population. However, this is not its
only factor, for the composition of the standard of living is more
extensive and cannot be confused with personal consumption.
In short, under the standard of living of the population we
understand the sum total of material and cultural conditions amid
which the inhabitants of certain country live. Naturally the
principal factor and the determining indicator of the standard of
living of the population is the level of personal consumption.
This means that (according to the explanation of the components of
personal consumption we have used above) the principal factor is
the quantity of consumers' goods which the population can consume
annually, the quality of these goods, their assortment, etc.
The consumption of purchased goods (acquired With own means)
is not sufficient for the'judgement of the standard of living. An
important component of the standard of living are the services,
their extent with which they are offered to the population, and
their level. To the services belong not only community services,
but above all such important services as education, health, social
and physical training establishments, recreation, cultural,estab-
lishments, etc.
In the same manner, the level of housing conditions, i.e.,
living area per inhabitant, furniture, amount of rent, etc also
belong to the standard of living. Then the care fd= suitable work-
ing conditions, the length of working hours, the intensity of work,
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and the working conditions of the population in general are-also
in this group. A significant part-of the standard of living is
the security of existence, first of all the security of the right.
to work. There is no advantage if. a worker is to live in prosperity
for several years -- when he is employed -- and imaediately?after-
wards, for some years he were to suffer from want either because his
working conditions become worse or he loses his job.
The rise of the standard of living demands a great deal from
this part of the standard of living. This has to be remembered
especially when comparing the standard of living on an international
scale. The socialist countries, especially Czechoslovakia, have a
considerable advantage over the capitalist countries, particularly
in these areas of the standard of living. Now it is necessary to
continue to increase and to extend this advantage to those factors
of the standard of living in which, when compared to the most developed
countries of the world, we are still behind. (At the conclusion
of the third chapter we will return to the problems of comparison
of the standard of living on an international scale.)
CHAPTER II. FACTORS WHICH INFLUENCE THE DEVELOPMENT OF PERSONAL
CONSUMPTION UNDER SOCIALISM
The size of personal consumption at a definite time, its struc-
ture, and its rate of increase are the result of a series of cir-
cumstances. A thorough answer to the seemingly simple question:
why does personal consumption grow and why does its internal
structure change -- is in reality difficult and very complex. If
we are now considering the factor of-the development of personal
consumption, it does not mean that we simply want to determine its
influence on consumption as a whole; we are concerned only with
the original information of the reader which would facilitate
understanding of the development tendencies of personal consumption
under socialism.
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The basic factor which effects the volume and the structure
of personal consumption is the level and structure of consumption.
It is the production of the second group of general production --
the production-of consumers' goods. When the production grows and
the assortment becomes more rich then the material basis of personal
consumption in extended.
However, it would be incorrect to suppose that the increase
of personal consumption is determined by the devel opment of produc-
tion of consumers' goods alone.' The level of production of consumers'
goods is determined first of all by the quantity of production means
which light industry has at its disposal. Therefore production of
consumers' goods depends on the extent of development of the manufac-
ture and the production means. Without the development of heavy
industry which has to supply light industry with machinery and equip-
ment and to secure a sufficient stock of raw material for the produc-
tion of consumers' goods, we would not have acquired strong basis
for the development of production of consumers' goods. However,
dependence of the production of consumers' goods on the production
of manufacture means does not end with this. The quantity of products
which we can consume per capita at a definite time is essentially
determined by the quantity of products per capita manufactured by
us, in other words, by the level of social productivity of labor.
If we do not increase the production which falls to the share of
one person, we cannot seriously speak of the increase of consumption
per capita.
However, what is it that decides the level of social producti-
vity of labor per capita? The principal factor which determines
the degree of labor productivity is the quantity and the perfection
of manufacture machinery we have at our disposal -- the more per-
fect its technical level, the more we will produce; the greater quati-
tity of products will fall to each person, the cheaper and the more
accessible they will be to everybody.
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Heavy industry, i.e., the first group of general production,
is the supplier of manufacture machinery and raw materials. There-
fore it is not incorrect on our part to justify the significance
of rapid development of the manufacture of production means as the
basis for development of the entire national economy, and for the
increase of personal consumption.
In the past years Czechoslovakia attained a sharp rise in
production both in the area of production means and in the area of
consumers' goods. This made the creation of strong basis for
improvement of the standard of living possible. In this regard
Czechoslovakia is classified among-the most developed countries
of the world. Industrial production of the CSR increased from
1948 to 1955 by 123.5%. Thus, in 1955 it was almost 2 1/4 times
larger than seven years ago. This is a great accomplishment when
we realize that in 1948 we crossed the prewar level of production
and already then Czechoslovakia belonged to the most industrialized
countries of the world.
The development of the Czechoslovak industry is best seen in
this survey table.
Branch Increase in Branch Increase in
1955 as 1955 as
opposed to opposed to
1948 in % 1948 in %
INDUSTRY AS A WHOLE +123.5 glass and porcelain + 52
manufacture of produc-
tion means
manufacture of consum-
ers' goods
power plants
mining fuel
mining ore
metallurgy
machinery and metal
wood processing
+147 industry
+ 98 paper industry + 70
+106: textile industry ? 71
+ 51 garment industry +104
+ 80? leather and fur industry + 38
+120 food industry
processing industry +268
chemical industry +188
fats, soap, and perfume
industry
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(Information taken from the publication Ten Years of Development
of National Econosv and Culture of the CSR, Rude Pravo, 1956.
Hereafter we will identify this publication as "Ten Years of the
MR. 11)
Production of the Prigci,pal Tines of Consumers' Goods
Increased as Follows
Name of Product Unit of Production in
1953 1955
All meats on bones except
horse meat ton. . ? 162,694 335,493 344,943
meat products ton 77,297 138,685 141,745
refined sugar 1000 t 517,000 657,000 659,000
vegetable oil ton 72,104 87,250 91,069
milk 1000 hl 6,531 8,902 8,607
dairy butter ton 22,856 35,252 43,197
wheat flour 1000 t 589,000 922,000 966,000
bread in the store 1000 t 536,000 899,000 878,000
beer 1000 hi 8,160 10,982 10,486
cigarets mil. pieces 12,984 16,246 16,136
cotton fabrics 1000 m 279,699 345,871 355,849
wool fabrics 1000 m 42,090 39,8391 39,4541
flax and semiflax fabrics 1000 in . 34,495 51,425 55,317
vacuum cleaners piece -- 29,833 121,977
electrical washing machines piece 2,098 39,703 205,897
cameras piece 233,414, 65,071 146,455
leather footwear 1000 pairs. 27,717 23,289 22,550
rubber footwear 1000 pairs 25,528. 25,699 29,709
televisions piece -- 12,341 17,250
motorcycles piece 68,007 46,369 95,812
Statistical Information SUS, No 1/1956.)
(1)Changed content of assortment.
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 f
Analyzing the development of manufacture of consumers.', goods
we should not erroneously suppose that the level of production of
the second group by itself determines the actual increase of per-
sonal consumption. The growth of.production merely makes the increase
of consumption possible because -- as we have mentioned in the first
chapter -- division and circulation are between production and
consumption. First we'have to consider the influence of foreign
trade, i.e., the fact that each year we export and again import a
definite amount of manufacture means and consumers' goods. This
changes both the size and the structure of the manufactured product
as opposed to the size and structure of the available product.
If in a given year export is larger than import then the
available product is less numerous than the manufactured one. If,
on the other hand, import is larger than export, then the available
product is more numerous than the manufactured one. Mutual relation
between import and export analogically effects the structure of
these products. When the manufacture means prevail in import and
the consumers' goods prevail in export then the share of conaumtr '
goods in the available product is larger than in the manufactured
product and vice versa.
Differences between'the manufactured and the available product,
besides foreign trade, are also caused by losses which occur in
production and circulation. We can, however,, disregard their in-
fluence here for they do not play an important part. The material
basis of personal consumption is not created by manufactured produc-
tion of the second group but by the-available production. Therefore
personal consumption (and the entire ultimate consumption), for
exazaple, can increase more rapidly than the production aE consumers'
goods, if by means of foreign trade, we will import consumers'
goods in exchange for manufacture means.,
Present situation in Czechoslovakia is such that machinery and
other manufacturing means predominate. in our export.
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Contrary to that consumers' articles or raw materials for the
production of consumers' goods make up greater part of imports than
that of exports. Therefore it is evident that for a portion of
the exported manufacturing means we buy abroad either directly
consumers' goods or raw materials for their production. This is
proved by the figures in the following table.
Export and I?a,ort Record of the Classes of Goods
(in millions of crows, fco supplying country)
EXPORT
Year
machines,
equipment,
and tools for
manufacturing
fuel material farm produce
and raw and food
materials including raw
materials
consumers'
goods other
than food
1937
767
5625
1179
4412
1948
1099
2361
299
1663
1953
3031
2637
614
871
1954
2788
2811
591
1048
1955
3680
3325
IMPORT
522
940
1937
1072
7471
3.787
652
1948
354
2770
1649
133
1953
889
3433
1912
96
1954
803
3548
2205
160
1955
1,005
4064
2198
312
(Statistical Information sus_ No 111956.)
The increase of personal consumption is also effected. by the
proportion in the distribution of consumers' goods between the
individual parts of ultimate consumption, namely their distribution
between the. personal and the general consumption. If general consump-
tion increases unusually rapidly, then personal consumption rises
slowly or may stagnate and even decline.
Stagnation of personal consumption would occur when the entire
increase of manufacture of consumers' goods would,be exhausted for
general consumption. For example, the development of general
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consumption is faster than the rise of the manufacture of consa,wers'
goods (if we do not watch foreign trade closely). In this' case
general consumption is financed in such a way that the funds 'necessary
for goods are obtained at the expense of personal consumption. Such
extreme cases, however, do not occur in the normal conditions of a
socialist-economy (nevertheless, they occured during the war).
During the transitory period of the building of socialism we
encounter much phenomena as general consumption increasing more
rapidly than personal consumption. This occurs::especially during
the initial period of the building of socialism when almost all fac-
tions of. general consumption increase rapidly. This can be
explained by the fact that in the transitory period from capitalism
to socialism great social and cultural achievements which had been
neglected by capitalism, are carried out. (A free.general education
system is established; professional and higher learning grows rapidly;
medical care and a series of social establishments such as infant
homes, old age homes, recreational institutions, mess halls, etc
are established everywhere with great speed. In the same way a
powerful development of culture is brought about.)
In Czechoslovakia this tendency for faster increase of general
consumption was manifested during the First Five-Year'Plan, When
raising the standard of living, the increase of personal consumption
is essential, therefore, in the Second Five-Year Plan, personal
consumption Will grow faster than general consumption. Faster
increase of personal consumption is' expected- also for future five-
year plans.,
Personal consumption is also greatly effected by the process
in the sphere of.division and circulation, especially in the estab-
lishment of Wages, retail business prices, and supplies of consumers'
goods. This occurs because the people are satisfying the majority
of their personal needs by purchasing consumers' goods in retail
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stores. Consumers' goods which are sold to the population by means
Mfr
of retail-store circulation come into the sphere of personal consump-
tion through purchase and sale by means of circulation. The popula-
tion is satisfying an overwhelming part of its personal consumption
by means of retail-store circulation. The ramaining-factors of
personal consumption play only a small part ire relation to the
size of purchases made by the population in state stores-and coop-
eratives.
The sale of goods to the population by means of retail business
is effected by a series of economic phenomena which depend ?on the
effect of the law of value and on the existence of money circulation
in the socialist national economy. These are first of all such
processes as establishing the prices of individual types of goods
while considering the changes in their value, the mutual relation
between supply and demand during a definite period of time, etc.
Here we have reached a very extensive sphere of economic process
which the planner should use for the advantage of the people.
Among the majority of people the extent of personal consumption
depends on the size of their wages and salaries. Nominal cages and
salaries under socialism are increasing with a certain dependence
on the increase of productivity of labor, while productivity of
labor grows with a greater rate than wages.
(Dependence between the increase of wages and the productivity
of labor will not be discussed here in detail. A more detailed
information on this problem can be found in economic literature,
for example, in the pamphlet by A. Chervinka, Dependence Between
the Growth of Labor Productivity and Wages under Socialist Extended
Reproduction, Rude Pravo, 1956.)
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Average Monthly Wages in Crowns
Year Of a worker in of a worker of a worker in
socialist sector in industry construction
of national work
economy .
1946 -- 655 --
?1947 -- 657 --
1948 819 735 783
1949 867 785 868
1950 944 878 . 998
1951 1005 944 1043
1952 1047 1043 1119
1953 1112 1145 1210
1954 1180 1236 1290
1955 1197 1253 1325
(Ten Years of Development of CSa, Rude Provo, 1956.)
In comparison with 1948, in 1955 the average wages of a worker
in a socialist sector in Czechoslovakia increased 46%. The devel-
opment of nominal wages in CSR is characterized by the above table.
The entire nominal wages, however, will not be spent on the
purchase of consumers' goods alone; for taxes, various installments,
payments, etc are also paid from wages. In the.same manner services
like transportation, rent, and cony n ity service are to be paid
for. These are the so-called out-of-market expenses the portion of
which in total expenditures of the population totals about 20%.
The remaining 807. of expenses is spent on the purchase of consumers'
goods.
The amount of money which is assigned-for the purchase of
consumers' goods is called the purchasing fund,.
Thus the absolute extent and increase of the purchasing fund
of the population is influenced by the size of nominal wages, the
portions of out-of-market expenditures, and also by the change of
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the number of employed persons. Purchasing fund and volume of
personal consumption of the population increase together with the
rise of employed persons. From 1948 the. number of employed persons
in. the socialist sector of CSR has been rising as follows.
Year Number of workers*
in the socialist
sector (in thousand
of peraoss)
1948
2527
1953
4046
1954
4196
1955
4248
(Statistical Information SUS, No 1/1956. The figures exclude
apprentices and employes of the JZD.)
In the same period of time total wages of the workers of
socialist sector increased from 24,847 million crowns payed out ~i
1948 to 61,527 million crowns in 1955. (Not counting wages of
apprentices, loyalty allowances, and rewards payed from the non-
personal fund.)
When we compare these facts with those on average wages, we
can conclude that as a result of a rise in employment the total income
of the population (including the purchasing fund) can increase more
rapidly than the average nominal wages. This way personal consump-
tion of the working man can grow faster than the nominal and actual
wages [see Note]. In Czechoslovakia, from 1948 to 1955 the number
of employed persons in socialist sector. (as the above table shows)
increased 69.5%, while during the same time the total number of
population increased. only 6.1%. The average month]:y nominal wage
of a working man of the socialist sector increased from 1948 to
1955 by 469., while the total amount of wages increased 147%.
('[Note) By nominal wage we understand the wage which is
expressed in money units. By actual wage we understand the amount
of consumers' goods and services which a working man can purchase
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with.his nominal wage. When determining the level of the actual
wages of working people in individual countries, we should consider
not only the height of nominal wages and the level of consumers'
goods prices, but also the costs of services, the rent, the amount
of taxes, and'then also such circumstances as.tho length of working
hours, the intensity of work, the conditions of employment; etc.)
We will understand the relation between the increase in nominal
and actual wages, between the increase in number of employed persons
and the increase in personal consumption, much better if we present
an example of a family.
Suppose there is a family with one employed member so far.
Later, without any conditions changed, another member of the family
takes employment. For simplicity reasons let us suppose that his
salary is the sane as that of the previously employed member.
Personal consumption of this family will roughly double while actual
wages of the employed persons has not increased, nor has their
nominal wages. Nevertheless the quantity of the available consumers'
goods will be roughly doubled along with the increased number of
employed persons in the family. In principle, the same is true on
a national scale. In a national economy, however, the rise of
nominal and actual wages is even more frequent. In order to compare
our relations with the capitalist countries it is necessary to
weigh these.circumetances. Defenders of capitalism often operate
with sensational data on the rise of actual wages of some category
of employes and conceal the reduction of employment, the increase
of work intensity, and other factors which lead toward decline of
the entire standard of living.
International statistics show that chronical unemployment does
not spare a single one of the leading capitalist countries. As
proved by the following table, even at the time of a boom there are
hundreds of thousands and in some places even millions. o? unemployed
in the capitalist countries.
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Number of Unenaloyed Perseus
(according to official data, in thousand of persons)
Country
Yearly Average
1948
1950
1952
1953
1954
Great Britain
totaly. unemployed
329
332
368
356
303
employed part-time
9
9
94
24
15
France (a)
78
153
132
180
183
Western Gsrrssny (b)
592
1580
1379
1259
1221
Belgium (c)
81
170
17.4
184
167
Austria (b)
43
125
157
184
164
Italy (b)
1742
1615
1850
1947
1959
(d)
2064
3142
1673
1602
3230
(a) Not placed applicants for work (b) registered, totally
uneMloyed; (c) insured totally unemployed; (d) official guess on
the number of totally unemployed. (Ten Years CSR, Rude Pravo, 1956.
Data taken from the Statistical Year-book OSN and from the
Statistical Year-Book of the International Bureau of Labor.)
We do not have to stress the way the existence of this
permanent unemployed army reflects on the standard of living of the
working class in the capitalist countries. It is certainly clear
to-everyone that with regard to the unemployed we can speak of the
"standard of living" only figuratively. It would be more convenient
to speak of the misery of living which is multiplied by the number
of family member's dependent on their income.
Let us return-, however, to the factors which effect the rise
of personal consumption under socialism., We have just explained that
the increase of the number of employed persons necessarily loads (under
socialist conditions) to absolute increase of the purchasing fudd
through which grows the amount of money which the population. can
spend on the purchase of consumers' goods. The sum total of nominal
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wages or the level of purchasing fund of the population and their
development are not the only factors which determine the actual
level of personal consumption. Besides these factors, retail
store prices of consumers' goods can also determine this, We
know that the price ceiling. of retail stores under socialism is
constantly falling and the policy of price reduction of consumers`
goods is the principal way toward the raising of the standard of
living of the population.
From 1953 to March 1956 the total price ceiling of consumers'
goods in Czechoslovakia fell 16%. The reduction of prices of food
totalled 10% of this amount,, of drinks 14%, of non-food articles this
reduction of the entire ceiling price came to 23%. Through this
reduction of prices the population acquired products to the value
of 12 billion crowns. Besides, in 1956 two price reductions were
carried out to the extent of over 3.5 billion crowns. Total savings
which we have acquired by reducing retail store prices until the
end of 1956 come to 15 billion drowns.
(This official calculation of the amount of savings which
the Czechoslovak citizens acquired through the reduction of retail
store prices does not however exactly agree with the actual savings
which the reduction of prices produced. It includes only those
savings which were acquired from the price -reduction during the
year when this. reduction was carried out. Tnelsum of these yearly
savings makes up the above-mentioned 15,000,000,000 drowns. However,
the fact that the reduction of prices applies also to the following
years is not expressed here. Thus, for example, price reduction carried
out in 1954, 1955, etc applies to the following years and therefore
brings to the population further savings which are classified with
new savings from the further price reductions.)
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Purchasing power of the population is increased both through
the rise of nominal wages and by the reduction of retail-store
prices. Both ways are necessary for they are the result of the
different functions of wages and prices in the socialist national
economy.
When we reduce the prices-of consumers' goods, almost always
a very large circle of population benefits*by it. At the same time
so.-- social groups can have greater advantages than others.- For
example, the population of towns and cities principally gain from
the reduction of prices of food. Price reduction is carried out on
different scales, i.e., some products are reduced more, others less,
and still others not at all. In this way price relationships are
created and the sale of products is effected in different ways --
according to the requirements of a given situation.
When we increase nominal wages, it is usually connected with
the rise of labor productivity or with the preference of definite
branches or departments. Thus we are using wages as economic
stimuli to raise and to perfect production and to influence the
movement of labor force.
One result of the rise of wages and the reduction of prices is
uniform: it is the increase of personal consumption. The remaining.
results, however, are different and serve to other ends. Therefore
,ae cannot use one or the other method exclusively: we must use
them both simultaneously.
These are the principal factors which constantly influence the
development of personal consumption and which we encounter both
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during planning and during analysis of the development of personal
consumption.
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CHAPTER III. _PRINCIPAL DEVELOP}1E TENDENCIES -OF PERSONAL
CONSlMION UNDER SOCIALISM AND DURING THE TRANSITORY PERIOD
During the process of its develagssnt, personal consumption
changes constantly. First.of all there is the question of the
quantitative change, i.e., a change in the total volume of consumers'
goods. At the same tile, however, the change is also qualitative
as far as it concerns the composition of individual available,
-products, their quality, etc. Also those changes are important
which occur in the course of the distribution of products in terms
of the individual districts of the country and then the changes
which develop in the portion of 'individual population groups in
the entire personal consumption and in the consumption of individual.
products.
If personal consumption were to increase in absolute uniformity,
always with a uniform rate, and if its internal structure were not
to change basically in the course of a series of years, then the
planning of the development of personal consumptions would be very
simple. If, however, constant changes in the internal ,,structure
of personal consumption are necessary, and if we are to observe
that its total volume would not increase equally during individual
years -- then we have to follow very carefully those changes which
occur in the developmcnt of personal consumption independently of
our wishes; we haveL.to investigate the causes and conditions for
the realization of these changes and the manner-of their probable
occurence during a planned period of time. In other words, we have
to look for lawful development tendencies of personal consumption
because- only on the basis of their detailed knowledge can we see
into the future correctly aid also carry out a series of measures
which would assure a successful development of personal consumption.
Development tendencies of personal consumption are nothing
else but the necessary changes in the structure and rate-of its
-increase-which occur during a longer period of time.' 'these are the
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roads by which the development of personal consumption advances
under socialism. The better we know it the less mistakes we make
during the planning of personal consumption.
Rnowledgo.of the most important development tendencies of
personal consumption is a scientific base for the planning of retail
store circulation and for other'parts of the state national economy
plan which secure the development of-personal consumption. Certainly
in the course of the practical planning work we always have to
consider the extent to-which these general tendencies have already
developed and would probably develop during a planned time. We
have to determine the actual figure of each tendency in a definite
period of time. Here a.general woretical knowledge alone will not
suffice, for we have to know the actual facts, a series of temporary
and often even accidental circumstances whic$e.could effect the
development of consumption in the nearest future. Even during the
planning of personal consumption we are convinced in the correctness
of the old principle that even the most difficult task can be duly
carried out if theory and practice are combined correctly.
1. Development Tendency of the Total Volume of Personal Consumption
The basic development tendency of personal consumption under
socialism is its constant increase.. Personal consumption under soc-
ialism is rising because the factors which determine its size at a
definite time grow and develop. We saw that the total general produc
tion, and, within its frame, also the manufacture of consumers'
goods are constantly growing. Productivity,of labor is rising
continuously, so are the average profits and the number of employed
persons. In parallel with that the level of retail-store prices is
reduced systematically. Under these conditions the rate of personal
consumption will also increase.
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4 :4
Constant increase in the total volume of personal consumption
is the legitimate tendency of its development under socialism. This
basic development tendency of personal consumption has to be always
expressed in the state plan for the national economy. If is obvious
that the rate of increase of the total volume of personal consumption
cannot be the same every year. ' Since the possibilities of the
development of our production are limited by the degree of devel-
opulent of production capacity, during each period personal consump-
tion can be developed only to such extent that it would neither
harm the harmonious development of entire national economy nor cause
disproportions which could threaten further development of prdduc-
tion and standard of living.
Thus, for ex le, we cannot assign a vast majority of our
industrial business to the manufacturing of consumers' goods because
in a short time we would lack necessary manufacturing means and
would be left without tools or material necessary for manufacturing.
In the same manner, we cannot assign all the already manufactured
consumers' goods for personal consumption alone, because it is
inevitable that we should also satisfy social needs without which
human society cannot exist.
Determination of the rate ofiincrease of personal consumption
during a definite period does not therefore depend on the subjective
wishes of the planning organs or the government but is made by a
series of objective conditions. Concrete possibilities for a rise
in personal consumption for a definite time can be therefore
determined only after a thorough analysis of all our opportunities
and needs in connection with the securing of a harmonious and
proportional development-of the entire national economy.
Tendency toward a constant raise in the total volume of per-
sonal consumption is clearly manifested in the Czechoslovak natibnal
economy. In the course of the First Five-Year Plan, personal
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consumption increased 257.. During the two following years -- in
1954 and 1955 -- we have recorded a rapid increase'of personal
consumption by further 25% above the last year level of the First
Five-Year Plan. Party and government instructions for the Second
Five-Year Plan determine that the increase in the total volume of
peisonal consumption is to be at least 337. higher than the level
attained in 1955.
Obviously these percentages of personal consumption increase
should not be valued on equal basis. We should realize that 17.
increase in.personal.consumption does not have the same absolute
volume at different times. During the First Five-Year Plan, when
the absolute level of personal consumption was lower, it meant 17.
increase less than, for example, during the Second Five-Year Plan.
The absolute rise in personal consumption planned for the Second
Five-Year Plan will be more than doubled in comparison with the
increase achieved during the years 1949-1953.
2. Development Tendencies of the Individual Sections of Personal
Consumption
In Chapter I we have shown that personal consumption includes:
(a) purchases of the population in state stores and cooperatives;
(b) purchases of the population at the farm produce markets;
(c) personal consumption of farm produce of the farmers;
(d) the so-called remaining personal consumption of the population.
Now we shall discuss the rate of increase of these individual
components of personal consumption. When planning national economy,
the question as to which of these sections should increase faster
and which slower and why should be of interest to us.
The first section -- purchases of the population in state
stores and cooperatives -- is absolutely predominant in the entire
personal consumption. This part of personal consumption is carried
out by means of retail-store circulation and represents approximately
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90% of the entire volume of personal consumption. Consequently it
is obvious that its development is of major importance in the
development of the entire personal consumption.
The index of the entire volume of retail-store circulation is
the index of value, i.e., money. Therefore its increase is effected
by the fluctuation in the prices of consumers' goods. If we want
the index of retail-store circulation to express the rise of the
actual, physical volume of-consumption, we have to avoid price
changes. This occurs when we present the index of retail-store
circulation not in current but in permanent prices.
The development of retail store circulation expressed-in
permanent prices is of major importance in the judging of consump-
tion development because the major factor is the amount of various
products consumed by the population at a definite time and not the
amount of money the population pays for them. In the experience
of economy we have to plan the volume of retail-store circulation
in current prices, i.e., in prices applicable during a planned
period since goods are actually sold at these prices.
The rate of increase of the entire volume of retail-store
circulation in permanent prices is always higher than in current
prices because prices of consumers' goods are regularly reduced.
Physical volume of the retail-store circulation grows therefore
faster than its value volume. During the past years retail-store
circulation in Czechoslovakia has increased as indicated below.
Development of the Total Volume.of Retail-Store Circulation
in CSR
(in Billions of crowns)
Total volume of the retail-
store circulation
in permanent prices of 1952
in current prices
44
1952
1955
Index
1955/52
62.65
80.48
128.5
62.65
75.78
120.9
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Thus in 3 years, the amount of goods which thepopulation pur-
chased, in state stores and cooperatives, increased roughly one-third.
This is a great achievement which we have attained in raising the
standard of living. -The data which has been coming from the Soviet
Union for many years prove that this development is legitimate for
a socialist economy.
Increase of the Total -Volume of Retail-Store Circulation in the USSR
(in billion of rubbles of current prices)
1928 19321937 1940 1950 1951 1952 1953 1954 1955
total vol- -
ume of
retail-
store cir-
culation'11.8 40.4 125.9 175.1 359.6 379.8 393.6 430.7 481.9 501.5
(These. and further data from the USSR, except when otherwise
indicated, are taken from the statistical almanac National Economy
of the USSR, Russian edition. Gosstatizdat, 1956.)
Rise in the Physical Volume of Retail-Store Circulation in the USSR
(in % on the basis of permanent prices)
1950
1951
1952
1953
1954
1955
increase in the physical volume
of retail-store circulation in
relation to 1950
100
115
126
153
181
189
Successful development of retail store circulation in Czechoslovakia
continued at an especially rapid rate after 1953. That year a currency
reform was carried out which rectified the state of currency and
withdrew speculation profits from some classes of the population.
We have unquestionably profited by carrying out the currency reform
and by loosening the rationed economy. In 1953 the rapid increase
in the physical volume of retail-store circulation started, and this
will continue also in the course of the Second Five-Year Plan.
Purchases of the population in stores represent that fraction
of personal consumption which is growing with the greatest speed.
In comparison with them, purchases on. agricultural market and per-
sonal consumption of farm produce of the farmers increase much slower;
only the consumption of gas, water, and electricity can increase with
the same rate, sometimes even faster.
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There are a series of causes for the differences between the
rates of increase.. of individual components of personal consumption.
In the first place we have to investigate why purchases of the
population in state stores and cooperatives are increasing faster
than the. consumption of farm produce by the farasrs and the purchases
of the. population . on agricultural market. The principal factors 't.: _'-
which are most important here are both the movement of population
between city and-country and the movement between money income and
income from farm produce of the population.
There are two types of income for the population. First,
there is money income (wages and salaries, financial rewards for
work in JZD, etc), and then the income from farm produce which is
practically the consumption of food by the farmers. When we compare
the increase of money income and income from farm produce of the
population we discover that money income grows faster in longterm
perspective. This is true because the share of farmers who are
practically the sole bearers of income from farm produce is rel-
atively diminishing and the share of non-farmers who collect only
money income is increasing. As this review indicates, in Czechoslovakia
there is an absolute decline in the number of people working in
agriculture.
Development of the Number of Persons Permanently Active
in riculture
(in %'to 1948)
1948
1949
1951
1953
1954
1955
31.12
31.12
1.1
1.1
1.1
1.1
CSR as a whole
100
96
85
73
75
81
Bohemia
100
92
83
84
76
80
Slovakia
100
102
89
70
75
83
(Ten Years of CSR, Rude Pravo, 1956.)
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Besides, even money income of the farmers, compared with
income from farm produce, grows faster in connection with the in-
crease of market production share in the entire agricultural p`roduc-
Lion and especially in connection with the development of JZD.
During the last'3 years farm produce consumption of the farmers
increased as follows.
Farm Produce Consuaation of the Farmers per Capita in CSR
Type of food
Wit of, 1953
1954
1955
Index
measure
1955/53
flour in general kg
116.40
89.70
134.40
115
wheat flour
kg
77.80
74.20
115.30
150
rye flour
kg
38.60
15.50
19.10
49
boned meat
kg
24.90
27.90
33.60
135
fat
kg
5.50
5.70
7.50
136
butter
kg
1.77
1.89
2.21
125
eggs
piece
298
253
318
107
cow milk
1
312
275
253
82
potatoes
kg
264
262
264
100
Let us compare the increase of money income of the members of
JZD with the increase of farm produce consumption of. the farmers.
Development of JZD Income per one Hectare of Farming Land
(in crowns)
1951 1952, 1953 1954 1955 Index
1955/53
total money income per one
hectare-of farming land . 1140 1384 1717 2249 2615 135
income from the distribution
among members of cooper-
atives
355 433 760 1122 1389 183
(Ten Years ofCSR, Rude Pravo, 1956.)
In this comparison we see that during the same time the amount
0
of money which is allotted for one hectare of farming land and dis-
tributed among the members of cooperatives increased 83%. Consequently
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it increased much faster than any other amount of the farm produce
consuuytian
Although this comparison is not completely
accurate, nevertheless-it reflects correctly the basic tendency in
the development of income.
Because the increase of retail store circulation basically
depends on the growth of money incomes-these circuiostances? cause a
faster rate of increase of the purchases in stores as opposed to
the farm produce consumption of the population.
The volume of purchases of the population on agricultural
market is increasing less rapidly. Here it is of major importance
that purchases on the agricultural markets are almost exclusively
purchases of food. Food consumption however grows less rapidly
than the consumption of non-food articles (as we will see in further
analyses). Therefore purchases at the agricultural markets grow
also less rapidly than the entire personal consumption of the popula-
tion. In Czechoslovakia these purchases have a completely insignif-
icant share in personal consumption. In 1954 they represented
about 2% of the entire volume of personal consumption. Data from
the Soviet Union indicate that even the share of agricultural market
in the very purchases of food is declining.
The Share of State, Cooperative, and Collective Farm Stores in
the Sale of Foodstuffs in the USSR
(in % from the whole)
Total sale of foodstuffs
from that;
share of state stores
and cooperatives
share of collective
farm stores
1940
100
1950
100
1954
100
1955
100
79.8
81.9
84.8
84.9
20.2
18.1
15.2
15.1
The share of collective farm store in. the total retail-store
circulation of the USSR is much higher than the share of agricul-
tural market in the retail-store circulation of the CSR. However,
data from-Czechoslovakia-cannot be compared with the Soviet data.
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That is to say, the conditions for existence and development of
the agricultural market are not uniform in the two countries.
Density of the state and cooperative retail-store network, distribu-
tion of goods, distance. between city and village, structure of the
village population, and last but not least, established traditions
-- all of these are different in-each of the two countries.
In Czechoslovakia the town and village population buys an
absolute majority of the consume-.rs' goods (and foodstuffs) in-the
dense network of state stores and cooperatives. Other purchases,
as the purchases of a special types of goods, are often obtained
in towns which are easily accessible to the rural population.
Therefore it is almost certain that the agricultural nmrkets in
Czechoslovakia will never be as important in their supply to the
population as the collective trade in the USSR.
The remaining portion of the personal consumption is generally
small. In 1954 its share in personal consumption was about 1.5%.
This fraction of personal consumption, however, will grow more
rapidly than purchases by the population in stores. This growth
is connected with the growth of urban population and with a better
equipment of urban and rural apartments with electric appliances,
gas, and water. Perfecting the living quarter conditions is one of
the most important elements of the standard of living. Therefore
it is of great interest to us to have this part of personal consump-
tion grow as fast as possible.
3. Changes in the Consumption of Food and Non-Food Articles during
the Rise of 'ea-ndl Consmio
tiny products which become objects of personal consumption can
be divided into two groups according to their primary value: the
first group is composed of food and the second of.non-food articles.
(bon-food articles are often called industrial products. We also
find this name in the state plan for the circulation of retail goods.
Neert::cle o it is not accurate. Also food, in its final stage, is
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mostly the result of industrial production because it undergoes
industrial processing. Therefore a more accurate term for the second
group. is non-food articles because it characterizes more adequately
consumption value of the products which belong to this group.)
Food is almost exclusively supplied by farmers (vegetable and
animal products), occasionally obtained through hunting and fishing,
.and it is mostly processed in the factories of 'the food industry
before it reaches the table of the consumer. That part of food
which is consumed directly, without an industrial processing, is
constantly diminishing along with the development of social division
of labor. Food is basically divided into that of vegetable origin
(flour, sugar, vegetable fats, green vegetables, etc) .:nil that of
animal origin (meat, milk, butter, etc).
The majority of non-food articles draw their raw material from
agriculture, vegetable and animal production, or from forestry;
for example, raw testiles (cotton, wool, flax, etc), leather, wood,
etc. With the development of chemistry and the artificial materials
and fibers industry dependence on raw materials of agricultural
origin is gradually diminishing. Nevertheless even in this group
of products agriculture will remain an important factor for a long
time.
The principal groups of non-food articles are textile and
clothing articles, footwear, furniture, factory products (including
electric appliances), books, printings, sanitary, and cosmetic
products,
For a long time, economists and statisticians were observing
changes which are manifested in the consumption of food and non-food
articles during the development of personal consumption. They found
that when personal consumption is rising, consumption of food
increases less rapidly than consumption of non-food articles. Also
the reverse is true: when personal consumption is reduced, the
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consumption of food falls less rapidly than the consumption of non-
food articles. The first tendency occurs under capitalism as well
as under socialise, the second can be-clearly observed under
capitalism when personal consumption falls,
The roots of this tendency are in the development of needs
which are satisfied by food and'non-food articles. Basic physiolo-
gical?needs of an are satisfied by. food. Food processing depends
on a considerably large number of products which form the necessary
base of nutrition and cannot be freely increased or, changed.
The limits of food consumption are therefore relatively narrow;
the demand for food is slowly extending, and for a long time in
the future a rise in food. consumption would depend mainly on the
population increase. I4ore extensive changes will undoubtedly occur
in the composition of foodstuffs, in its diversity, but we are now
not concerned with this problem. Now it is the question of quantitative
increase of food consumption as a whole, compared with the increase
of consumption of non-food articles. a
's' he development of personal consumption of non-food articles
has a different course. Needs, satisfied with these articles, have
many more varieties and practically no limits. Regardless of the
level of non-food consumption, further'needs will always arise --
needs which are different from the present ones and which are satisfied
by different products.
Consumption of individual non-food articles has also certain
limits. Thus, for example, man can only have a limited number of
suits, furniture, and it would be absurd for hint to have 10 cars,
etc. The assortment of non-food articles, however, is so wide
(today there are several thousands of articles) and is constantly
being enlarged that as far as this group is concerned one cannot
speak of any satisfaction of needs.
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In Czechoslovakia, consumption of food and non-food articles
developed in accordance' with the following table. (For the
characterization of this development tendency of personal consumption
we are using the index of retail-store circulation because the share
of this circulation is,-the major factor in the entire personal con-
sumption. )- '
Evolution of the Structure of Retail-Store-Circu lation in CSR
(in permanent prices, 1952)
1952
1953
1954
1955
Total retail-store
circulation
100
100
100
100
Food
52.96
54.14
50.55
49.68
Non-food articles
47.04
45.86
49.45
50.32
The structure evolution of the circulation of retail goods in
permanent prices indicates that the sale of food in physical volume
increased less rapidly than the Sale of non-food articles. In
comparison with 1952, in 1955 the amount of food sold increased
20.6% but during the same period the amount of non-food articles
sold increased 37.3%. Gradual decline of the share of food in the
total volume of retail-store circulation corresponds to a faster
rate of sales of non-food articles. In 1955 non-food articles
increased to such extent that they became predominant and their
`share in the Second Five-Year Plan will continue to increase.
Coasequently, these data clearly affirm that the above-Mentioned
tendency toward a faster increase of the consumption of non-food _
articles is also current in the CSR when we investigate it from
the material point of view (as far as the physical volume is con-
cerned) which, is always most important for the characteristics of
consumption development.
As these data from the Soviet Union., testify, this tendency is
legitimately manifested also in other countries.
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Share of Food and Non-Food Articles-- in the Total Volume of
Circulation of Retail Goods in the USSR
1937
1940
1950
1954
1955
Total Circulation-of
retail goods
from that:
100
100
100
100
100
Food
63.1
63.1
58.4
54.8
55.2
Non-food articles
36.9
36.9
41.6
45.2
44.8
Even though these data are presented in. current prices and
consequently are distorted by the fluctuation of prices, nevertheless,
a uniform tendency is quite evident from them,- i.e., reduction of
the share of food in personal consumption and faster increase of
consumption of non-food articles.
Observation of changes in the development of the share of food
and non-food articles is of greatest importance in the planning of
retail-store circulation. When the organs of domestic trade
determine their demands for supplies from production they have to
consider that in due time this tendency will predominate. With
this they execute pressure on the development of agricultural prod-
ucts and light industry.
4. Changes in the Structure of Consumption within the Groups of
Food and Non-Food Articles
Changes which occur in the 'structure of consumption do not
remain limited only by the mutual relation between the consumption
of food and non-food articles on the whole. They extend much
farther, and project into the internal structure of food and non-food
articles of consumption. A detailed analysis of all these changes
would be too complicated, disregarding the fact that we do not yet
have data for an extensive length'of time to be able to reveal all
the share tendencies. Therefore we will only show some principal
changes which occur inside the consumption of food and non-food
articles. These changes have been known for some time and we can
observe them in a series of statistical data from various countries.
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i
A. Chaises in the Structure of Food Consuaation
When food consumption is increasing, consumption of all types.
of food-does not grow with the same rate. An analysis. of statistical
data yields that the share of some food increases, of c her declines,
and of still other types of food declines more rapidly.
Consumption of the food of. animal origin, i.e., consumption of
valuable albumins and fats is increasing with the most rapid rate.
Thediare. of these focdstuffs'in the total, food consumption is
constantly growing. Contrary to that, the consumption of some food
of vegetable origin is increasing with a lesser speed, for example,
flour, potatoes, etc. Their share in the total food consumption
is declining.
Description of changes in the structure of food consumption is
given in the table which gives the rate of sales increase of
individual types of food. The data are calculated from the amount
of goods sold (in physical units) which falls to the share of each
citizen of the CSR.
Increase of Sales of Principal Articles of Food per Person in 1955
in Percent a in Relation to the Data from 1952 and 1953
Name of article Index 1955/52 Index 1955/53
[1 [2] [31
retail meat 111.9 103.3
butchers' produce 104.4 102.1
canned meat 131.7 120.2
poultry . 130.5 111.9
salt water fish 124 119.2
fish products 193 175,6
milk -- 100.1
cheese 152 160.2
cottage cheese 176 --
pork lard
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105.5 130
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(l ] [21 [31
vegetable fats 110.5 98.8
bread 118 97.6
wheat flour and fine goats 88.4 103.9
groats, grits, and oat flakes 98.6 110.6
wheat cookies 112.8 119.8
pastry 75.1 87.2
peeled rice 244 204.5
sugar 118.2. 119.8
potatoes 96.8
beer 86.6 98
wine 101.4 108
spirits 131.7 132.2
coffee 133.3 181.8
166.6 166.6
Data given in the table generally confirm that in recent
years even in Czechoslovakia a notable movement in the demand toward
products of animal origin has been manifested. A more expressive
application of this tendency is prevented by the frequently limited
extent of market supplies of meat, milk, and other products the
demand for which is increased.
Naturally one cannot draw any definite conclusions from the
data on two or three years because they are filled with certain
accidental influences, seasonal fluctuations, etc. Price relations
between individual types of food also have great influence here.
Besides this, the sale of food per capita mostly characterises
the food consumption of non-agricultural population and does not
show the increase of farm produce consumption of the farmers.
However, it quite truthfully expresses the main feature of the
above-mentioned tendency. If we look at the long-term data from
the Soviet Union, we will again see the same tendency.
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I
SSQ
Sale of Food in State Stores and Cooperatives in the 11
(in permanent prices)
Name of product
meat products.
from that: meat and poultry
fish products
animal fats
vegetable fats
milk and milk products
eggs
sugar
flour, bread, and bread products
Index
Index
index
1955/40
1955/50
1960/55
261
?220
185
296
.231
--
263
185
159.
` 253..
158.
157
242
222
160
--
--
270
150
185
260
241
188
170
141
158
-~
(According to instruction of the Twentieth Congress of the
Communist Party of the Soviet Union for the Sixth Five-Year Plan of
the USSR, "Novaya Mysl," extra edition, February 1956, page 542.)
This tendency in food consumption is also expressed in our
proposal for the Second Five-Year Plan. Instructions of UV KSC
for the Second Five-Year Plan explicitly urge to secure a faster
increase of supplies of food of animal origin compared with the
food of vegetable origin. By 1960 the sale of basic types of food
will increase as-follows: meat and meat products 35%, fish and fish
products 42%, butter 30%, fat 45%, fine pastry 29%, rice 134%,
cofee 114%, etc. ?
B. Changes in the Structure of Consumption of Non-Food Articles
The teudency3hich is manifested in the changes of structure of the
consumption of non-food articles can be expressed in short as follows.
When the consumption of non-food articles rises the consumption
of high quality products of all types; especially the consumption
of biich roai~c_ts ae.:washing machip s; ,refrigerators # vacuum cleaners,
motorcycles, cars, televisions, etc which, as a whole, are usually
called the products of long-term consumption; would 1screase with
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the greatest speed. (This definition is not completely accurate
for also other non-food articles are mostly articles of long-term
consumption,-i.e., their service is guaranteed for longer than one
year.)
Movements in the consumption towards better quality products
are not easily noticeable for the nomenclature in which we plan
the circulation of ,retail goods is very general for this purpose
and, as a rule,-does not detect the qualitative differences of
individual groups of products. In a limited way we can judge
the qualitative movements, for example, in textiles.(sale of wool,
cotton, and silk fabrics, etc) and partly also in footwear (leather
and rubber footwear), but otherwise it is considerably difficult;
also the movement of demand is to be deduced indirectly, mainly
according to the average price of sold goods of individual groups
of products.
Increase of Sales of the Principal. Tunes of Non-Food Articles in the CSR
Unit of
measure
Sale in 1953
in quantity
Sale in 1955
in quantity
Index
1955/53
wool fabrics
1000 in
L7,223
9,892
136.9
cotton fabrics
1000 m
49,194
57,170
116.2
silk-fabrics
1000 m
10,117
19,269
190.4
leather footwear- 1000 pairs
16,035 -
16,559
103.2
rubber footwear
1000 pairs
12,910
17,221
133,4
soap
1000 pairs
26,366
36,202
137.5
cigarettes
[sic]
million
pieces
14.938
16,320
109.2
motorcycles
piece
24,480
52,010
212.4
refrigerators
piece
2,725
21,690
795.8
radios
piece
89,636
170A94-...
1189.8
televisions
piece
335
29,143
8209.3
(Statistical Information SUS, 1956)
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During the years of 1953-1955 the physical volume of all the
sold non-food articles increased 47.9% (compared with prices of
1952). The table shows that this average cannot be compared with
the rapid increase in sale of motorcycles, refrigerators, televisions,
etc (i.e., products which, as we- have'mentiocied above, will grow
much faster in the future than other' products.
Likewise we cannot draw any final conclusions from this table.
Here the sale of some products is effected by the deficient supplies
of goods (wool fabric, leather footwear) which is again connected
with the import of raw materials. on the other hand, other products
show an excessive rate of increase (televisions)because their
manufacturing was begun only recently and therefore in 1953 there
was a minimum of these products on the market. Consequently, again
just as in the above table of food sale -- a series of short-term,
temporary influences which distort the long-term development tendency
have been active here.
Nevertheless we consider it correct to present these data here
for they will acquaint the reader with at least the basic facts and
although in rough lines, they still show certain development ten-
dencies.
With regard to.what we have just said about the unreliability
of short-term data on consumption, it is very instructive to look
somewhat further into the future -- at the planned perspective of
consumption development in the Second Czechoslovak Five-Year Plan.
Tendencies toward change in the consumption of individual types of
non-food articles which previous data only gave in an outline, are
much more evident when we observe the planned development of
consumption for 1960.
Consumption of'the most important non-food articles per person
will increase in the Second Five-Year Plan as follows:
Clothing and footwear 43.5%, consumption of machinery products
of longterm service 124%, and consumption of.building material 45%.
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is depicted by this table:
Product
private cars
motorcycles including scooters
tires including motor wheels'
home electric washing machines
home refrigerators
sewing machines
radios
televisions
cameras
.
8/1956
conomy,
d E
anne
(P
l
Unit.of 1955
measure
1960
Index
1960/55
ks
1,700
24,700
1468
ks
52,000
80,000
115
'ks
164,100
10.2000
-116
ks
193,600
260,000
134
ks?
21,700
120,000
553
ks
44,900
56,000
125
ks
170,200
210,000
123
ks
29,100
198,000
680
ks
136,700
380,000
278
)
These long-term data show very clearly movements in the struc-
ture of consumption of non-food articles.
5. The Tendency Toward Adjustment of Local Differences in Consumption
So far we have been discussin;L-;hhe changes which occur in
personal consumption at different periods of time. We did not
investigate what differences there are in the level of consumption
for an identical period of time but in different regions of the
earth. It is important to know regional peculiarities in personal
consumption in order to-plan the circulation of retail goods. If
we.had planned incorrectly the regional structure of retail store
circulation; if we had incorrectly allocated the supplies of
consumers' goods in individual regions, then, even in the presence
of total prosperity, the supply of the population in some regions
could be obstructed while at other places there would be a surplus
of goods: -Consequently it is very important to study regional
differences in consumption to observe their development -- if and
how they increase or are adjusted.
Local differences in consumption can be roughly divided into
two groups:
(a) differences in the absolute level of consumption per person;
(b) differences in the structure of consumption.
The increase of sales of the most important non-food articles
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Differences in the absolute level of consumption are first of
all aroused by the inequality of economic development of individual
regions and districts of the land. Unequal development is typical
for a capitalist national economy. It is manifested in different
ways, for example, in such way that certain districts of a state
remain greatly behind in economic development, especially in indus-
trial production; they vegetate and become a reservoir of labor
for other districts.
In capitalist Czechoslovakia there Were, above all, great
differences in the economic level between the Czech region and
Slovakia. The population of Ruthenia was much worse off. Diff-
erences in the economic development of these regions are evident
from the structure of employment of the population.
Division of the Population of CSR According to Professions
From 100 persons to individual
branches belonging:
Region Year to farming, to to
forrestry, industry commerce
and and and
fishing production farming
in
maintenance
[1 ] [2] [31 [41 [51
Bohemia
1921
29.69
40.55
6.87
1930
24.06
41.78
8.91
Moravia and
1921
35.27
37.79
5.30
Silesia
1930
28.56
40.82
6.67
Slovakia
1921,
60.63
17.43
4.1-4
1930
56.82
19.07
5.44
Ruthenia
1921
67.63
10.41
4.66
1930
66.29
11.94
5.73
CSR
1921
39.56
33.44
5.78
1930
34.64
34.94
7.43
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From 100 persons to individual
branches belonging:
Region Year to trans- to public to
portatioa service azid armed
free forces
professions
[1) (21 [61 [7) 181 (9)
Bohemia
1921
5.58
4.95
1.13
11.23
1930
6.18
5.13
1.19
12.75
Moravia and
1921
4.97
4.39
1.05
11.23
Silesia
1930
5.46
4.64
1.31
12.54
Slovakia
1921
3.53
3,58
1.43
9.:26
1930
4.73
4.69
1.62
"7.63
::..Rhthenia
1921
2.47
3.23
1.12
10.48
1930
3.18
4.15
1.06
7.65
CSR
1921
4.84
4.44
1.18
10.76
1930
5.53
4.86
1.31
11.29
(Statistical Index of the CSR, 1956, page 10.)
From this table we can immediately see how much the Czech
regions were ahead of Slovakia and especially of Ruthenia in indus-
trialization. The sphere of farmers in Slovakia was almost double
the-share in the Czech regions, and in Ruthenia it was even more thazb
double. _
Moreover there was a considerable difference in wages between
the Czech regions and Slovakia and Ruthenia. Thus, for example,
the wages of farm day laborers (to which group belonged the majority,
of the population of Slovakia and Ruthenic) varied as follows:
0
to the
remaining
professions
aad non
professionals
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Waxes of the Farm Day-Laborers in 1934
Average daily wages in crowns per
Region
man with
woman
man with-
woman
food
out food
Bohemia: industrial region
11.59
8.79
16.05
10.71
non-beet-growing region
11.96
8.67
16.23
11.22
beet-growing region-
11.35
8.21
15.52
10.36
Moravia and Silesia: non-
beet-growing region
9.65
7.49
13.97
10.51
Slovakia: non-beet-growing'
region
9.58
5.89
13.34
8.42
Ruthenia: non-beet growling
regions
7.38
5.67
11.33
8.49
(Statistical Index of the C;R, 1936,? page 215.)
However, differences in the economic development did not exist
only between the Czech regions and Slovakia but also within the
Czech regions and within Slovakia. The so-called poor regions, as
was the Czech-Moravian Highland, Wallachia, parts of Sumava,
Krkonose region, eastern Slovakia, and other smaller regions are
generally well known. Here, often little over 10 kilometers from
towns, the population practically vegetated, lived mostly on the
poor produce of their small fields and on occasional seasonal work.
We inherited these differences in the absolute level of
.consumption between various regions and districts from the capitalist
republic. From them -- to a certain degree -- also follow diff-
erences in the structure of consumption..
Local differences in the structure of consumption have basically
two reasons. First of all they result from the differences in
absolute level of consumption and from the economic development of
respective region on the whole. In the second place they come
from-the deep-rooted national traditions, occasionally from climatic
differences, etc.
The first reason exerts influence mostly on the share of
consumption of both food -and non-food articles, the second'---
mostly on the assortment of consumption, for example, preference
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for certain types of goods, models, etc. To our regret we do not
have sufficient statistical materials available to be able to elu-
cidate these local differences in consumption more concretely for our
statistical data are too general to be able to detect these fine
differences in consumption. Nevertheless these differences exist,
each one of them is known from experience and we have to take then
into consideration during planning.
For the time being we give most of our attention (and rightly
so) to the adjustment. of absolute differences in consumption between
individual regions. The only correct and effective way to this goal
is the policy of economic development of all regions and districts-
of the republic which we are carrying out since 1945. (We are not
giving the facts on the economic development of Slovakia and indivi-
dual regions for it would be too space-consuming and, moreover, it
does not enter into this subject.)
Results of this policy appeared in the development of the
circulation of retail goods. From the table that follows we will
see that the volume of retail-store circulation grew with different
rate even in individual regions. Those regions which previously
suffered from a low standard of living and where person consumption
has been for many years behind, were developing with an above-the-
average speed.
,
Development of Retail-Store Circulation according to Regions
in Current Prices
(1950 = 100)
1952.
1953
1954
1955
[l ]
[21
[31
[41
(51
Entire CSR
110
Ill
124
133
Czech regions
109
110
122
131
Slovakia
114
115
127
137
IJNV Prague
99 *
95
104
111
KNV Prague
117
122
135
146
Czech Budejovice
110
112
125
137
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[13
(21
[33
(4)
[51
Pilsen
114
118
132
141
Carlsbad
107
106
128
139
Usti nad Labors
108
114
125
131
Liberec
105
105
117
122
Hradec Zralove
107
108
120
128'
iardubice
122
124
137
148
Jihiava
113
116
129
140
Brno
109':
Ill
124
133
Olomouc
105
109
121
130
Gottwaldow
110
114
127
137
Ostrava
112
111
122
128
Bratislava
117
113
126
137
Nitra
118
125
136
148
Banska Bystrica
113
116
124
134
Zilina
107
111
122
132
Kosice
114
113
123
130
Presov
109
115
133
144
(Information on Domestic Trade, MVO, 1956.)
We should not forget, however, that the table dep~,icts only
that part of personal consumption which is satisfied by means of
the circulation of retail goods and that other parts, mainly the
farm produce consumption of the farmers, are not included here.
This has to be taken into consideration, especially in connection
with Slovakia and other agricultural regions where the growth of
the farm produce consumption represents an important component of
the rise of the entire personal consumption.,
The table shows that retail-store-circulation increases faster
in Slovakia than in the Czech regions. This fully corresponds to
the faster economic development of Slovakia within the frame of the
republic.
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Further we see that the volume of the circulation of retail-
goods io growing with an above-.ttie-average speed exactly in those
regions which previously belonged partly or totally to the so-called
poor regions. These are specially the regions of Presov, Nitra,
Gottwaldow, Jihlava, and Czech Budejovice. The tendency which is
expressed in our table is a healthy tendency which will continue
to develop although perhaps in_some other concrete form.
The success of this policy. is ' beginning to manifest itself
even today. As these facts prove, the absolute level of consumption
of the principal types of consumers' goods per person is in our
regions entirely well adjusted.
-Comparison of the Sale of Food per Person in 1955 in Individual
Regions with a National Average (in Physical Units)
CSR - 100)
Region
Bread,
flour
from
groats
Rice and
legumens
Heat and
meat
products
Sugar
Beverages
[l1
[2]
[3]
[4]
151
[61
Entire CSR
100
100
100
100
100
Czech rettfons
106
102
r:1l4
101
94
MW Prague
.91
116
176
81
117
KNV Prague
117
108
102
106
72
Czech Budejovice
103
98
91
107
71
Pilsen
102
110
116
102
63
Carlsbad
108
114
143
100
135
Usti nad Labem.
115
109
140
96
79
Liberec
115
113
123
97
86
Hradec Kralove
110
97
110
101
97
Pardubice
111
93
96
106
87
Jihiava
94
78
78
113
70
Brno
102
81
96
109
86
Olomouc
105
108
95
100
107
Gottwaldov
101
92
80
111
98
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(1]
(2)
(3]
(4]
(51]
(6]
Ostrava
109
111
137
101
135
Entire Slovakia
86
93
61
97
117
Bratislava
78
103
56
110
113
Nitra
71
.89
49
102
95
Banska Bystrica
95 -
93
59
108-
126
Zilina
107
88
66
78
147
Kosice
87
104
70
98
130
Presov
77
73
43
90
102
in analyzing this table we should'not forget that it does
not include the entire personal consumption but only sales per
capita. This means that in the ra$ions with a larger agricul-
tural population the sale of food per capita will be necessarily
smaller since the farmers obtain a majority of the food consumption
from their own sources and do not buy them in the stores. This
concerns mainly Slovakia as a wb16lo and especially its eastern
regions.
a The greatest fluctuations occur in the consumption of flour,
flour products, and meat -- consequently in the typically self-
supporting product. (Besides, size of the consumption of farm pro-
duce per capita is by no means insignificant, as we have shown on
page.46. Therefore conclusion presented in the following paragraph
is fully legitimate.)
Fluctuation in sugar and beverages are much smaller for the
consumption of farm produce is practically not taken into considera-
tion. However, there are only 8 regions out of 20 with flour and
flour products Where the deviation, when compared to the national
average, represents more than 10%. With meat there are 14 regions,
but here, besides the influence of the consumption of farm produce,
also acts a contrary influence which is the high consumption of
meat in industrial centers such as Prague, Pilsen, Usti nad Labeni
and Ostrava.
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If we examine these circumstances closely the conclusion which
follows from the table is synonymous. Basic differences in food
consumption between individual regions and districts do not exist-
any more in Czechoslovakia.. Previously existeit differences in
sales will continue their adjustment by means of a more rapid econo-
mic development in the less developed regions.
Comparison.of the Sale of Non-Food Articles per Capita in'the
individual. Regions with a National Average (in Physical Units)
-In -1955
ALP
Region
External
fabrics
Top
garments
Foot--
wear
Radios
and
tel-
evisions
Tires per
1000 persons
Entire CSR
100
100
100
100
100
Czech regions
96
107
100
103
100
UNV Prague
117
147
109
158
75
K NV Prague
88
78
109
98
84
Czech Budejovice
106
101
83
92
118
Pilsen
107
101
96
96
98
Carlsbad
75
135
115
139
117
Usti nad Labem
75
156
105
120
105
Liberec
69
ill
96
94
84
Hradec Kralove.
82
95
96
91
127
Pardubice
97
88
90
92
109
Jihlava
99
89
89
84
- 96
Brno
102
103
95
84
88
Olomouc
84
ill
98
93
132
Gottwaldov
115
99
108
-78
11.0
Ostrava
105
118
106
115
104
Entire Slovakia
110
93
99
92
100
Bratislava
100
93
103
93
118
Nitra
123
93
98
98
136
Banska Bystrica
113
- 93
102
103
80
Mina -
100
92
94
82
80
Kosice
109
107
101
97
81
Presov
111
76
87
69
68
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This table shows that the division of sales of the basic non-
food articles, i.e., textiles, confection, and footwear, is much
more commensurate than the one of food. More so, because the pur-
chases of textiles and confection are mutually complemented. The
above-average sale in UNV Prague should be considered?in connection
with the below-average gale in KNV Prague. It is obvious that the
inhabitants of the outskirts of Prague are buying their materials
and confection in Prague. ,In the majority of-regions in-Slovakia,
contrary to confection, textile yardage is bought in larger quan-
tities. The sale of footwear is balanced in the best way. Only 4
regions show more than 10% differences with the national average.
A much larger inequality exists in the:sales of radios, tires,
and wheels and other plant products which are not mentioned here.
The fact that television was introduced onoly in 1955 has some effect
on the lower sales of radios and televisions in Slovakia and some
Moravian regions. Assortment of the remaining non-food articles
is very extensive and a series of products can be substituted by
each other. Because of the limited extent of the book, it is
impossible to carry out a deeper analysis of regional distribution
of sales which would require detailed data on great number of pro-
ducts.
Purchases of non-food articles are'to a certain degree supp-
lamented between individual regions. The people often make their
purchases in regions other than their residence. Thus, for example,
a large number of visitors from the entire republic and many foreigners
who come to CSR for a visit, shop in the. region of IP3V Prague.
Also a number of brigaders and other temporary mine and furnace
workers who live in other wgions shop in the region of Ostrava.
In the same way, the people from bordering territories of individual
regions often shop in county seats which already belong to another
district. We have to take all this into consideration when we
judge the distribution of purchases in various regions.
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6. Eranimation of the Development of Personal Consum Lion according
to Population Grouse
So far we have examined the development of personal consumption
either from the point of view of its entire volume or its structure,
etc -- in short we were interested in personal consumption mostly
from the point of view, of products which compose its.material content.
Problem of.the development of personal consumption do not rest
only in the type of products and the quantity in which they are con-.
sumod on national scale during_indiyidual'years. After all,. .'personal:,
consumption is carried out by the people; besides, not all the
people consume the same amount of products in the same period.
The level of personal consumption is different in the same period
of time within different groups of people. Consumption of these
individual groups will also develop differently. The entire satis-
faction, the relation to work, and a series of other importantrela-
tions depend on the volume and the structure of consumption of
various population groups.
Therefore the examination of personal consumption according
to different population groups is very important and cannot be disre-
garded in the planning of personal consumption.
After we have recognized this fact, comes the problem how to
classify the diverse population of Czechoslovakia into groups
0 according to which we could follow the development of personal
consumption. There can be as many such population groups as there
are criteria of division chosen by us. For example, we can classify
the population according to age, sex, professions, etc. Which
criterium, however, is important for the study of personal consumption?
All the conditions mentioned above and a series of others in-
fluence personal consumption to a lesser or greater degree. However,
we are not concerned with all of the conditions but only with the
most important of them. First of all, the amount of wages and then
the belonging to either the agricultural or the non-agricultural
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population has an important influence on the level of personal con-
sumption of individual groups of the population. The influence of
wages on the level of personal consumption.is completely char and
we do not have to make any further comments. Divisi'on'of the
entire population into agricultural and non-agricultural groups
is important because the farmers consume part of-the food from
their own natural sources and the structure of their consumption
and purchase is therefore different in domestic trade from those
of the remaining population. Moreover workers and farmers (workers
represent the majority of non-agricultural population) are the
principal classes in a socialist society and it is important to
study their personal consumption also from the point of view of
strengthening the union between their classes.
After this problem is solved, immediately arises another
one. How should we study the development of personal consumption
according to these population groups? Today we are solving this
problem in such way that we study personal consumption according
to the above-mentioned population groups by means of the so-called
family accounts. The State Bureau of Statistics compiles family
accounts on the basis of representative statistical examination of
the structure of expenses in individual families which are divided
into groups according to professions (agricultural and non-agricul-
tural population) and according to the level of income which belongs
to one member of a family.
There are around 3000 families under observation which are
being chosen on the basis that they most accurately reflect the
true structure of all the families in our republic. The individually
chosen families keep accurate records of their income and expen-
ditures which show in details what was bought in each period of time.
In such way we obtain from direct consumers a series of unusually
valuable data which we otherwise would not be able to obtain from
the national statistical data.
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(Statistics of family accounts have (and had especially in
the past years) certain shortcomings as, for example, small represen-
tation of families under observation, too general a structure of in-
come groups, insufficient control over the accuracy of reported data,
etc. These shortcomings, sometimes caused difficulties during the
)ractical application of data from family accounts. In 1957,
however, begins a basic improvement of this statistics and con-
sequently all the data-will be more accurate,;)
A. Comparison of the Structure of Expenditures in Non-Agricultural
and Agricultural'Families
0
Statistics of family accounts enable us to look carefully
into the management of individual families. Non-agricultural fam-
ilies (families of laborers, office workers, and other employees)
satisfy their personal consumption mostly with purchases of goods
in retail-stores. On the other hand, families of the farmers obtain
a great portion of food from their awn sources and purchase mostly
non-food articles.
Statistics of family accounts give us a picture of the natural
part of personal consumption. This is very important for judging
the development of personal consumption of the farmers. The subject
of this investigation is merely that part of personal consumption
of non-agricultural and agricultural population which is satisfied
by purchase of goods on the market. The observation of this part
is of great importance for the planning since the central office
-has to secure it with proper supply of goods with which is'the
volume circulation of retail goods filled.
What do the statistics of family accounts tell us of the struc-
ture of expenditures of the two principal groups of our population?
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Structure of Expenditures' in Non-Agricultural Families(in current prices)
Expense Item
1953
1954
1955.
Total financial expenditures
from that:
100
100
100
1. expenditure on cocisuners' goods
64.8
65.1
64.7
(a) expenditure'on food
40.3
41.6
40.9
(b) expenditure on beverages
2.3
1.9
1.9
(c) expenditure on non-food articles' 22.2 21.6
21.9
2. expenditure on c6 mon meals
3.5
3.8
3.7
3. expenditure on building, equipment,
and maintenance of apartment houses
0.3
1.5
1.9
Portion of expenditures on food and
beverages from the expenditures on
consumers' goods
66 67 66
Nov let us compare this table with another one which shows the
structure of expenditures in families of farmers.
Structure of Expenses in the Families of Farmers
(in current prices)
Expense Items
1953
1954
1955
Total expenditures from that:
100
100
100
1. expenditures on consumers' goods
51.9
54.9
46.7
(a) expenditure on food
19.7
20.2
17.9
(b) expenditure on beverages
3.3
3.3
2.7
(c) expenditure on"non-food articles
24.9
29.4
26.1
2. expenditure on common meals
1.5
1.5
1.4
3. expenditures on building and
equipment
6.3
10.6
1x.5
Portion of expenditures on food and
beverages from the expenditures on
consumers' goods
44 43 44
This general division of expenditures of urba-, and rural
families immediately shows several basic differences which are typ-
ical for theseoopulation groups. First of all we notice that the
portion of expenditures on consumers' goods from the total expen-
ditures is much higher within the'non-agricultural population than
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between.the farmers. This is mostly.. Caused by the expenditures of
farmers on building and' farm equipment and partly also by the
relatively higher out-of-the-market expenses of the farmers.
Basic difference in the structure of expenditures between
both population'groups, however, rests in the different portion of
expenses on food, be it measured in regard to the total expenses
or to the expenses on consumers' goods.
(The. data of .both tables are given in current-prices. This
means that during individual consecutive years we cannot compare
their dynamics with other data of this pamphlet expressed in per-
manent prices. Data in current prices are effected byFrice fluctua-
tions (as the reduction of food and non-food articles' prices which
is carried out in various degrees for each group) which are excluded
from the data in permanent prices. We are using here the data in
current prices because they are more correct for the comparison of
structure of expensitures between both population groups. On the
other hand, data given in permanent prices (as we have stressed above)
are more reliable for the purpose of expressing the development
tendencies of personal consumption as a whole and according to
individual types of goods.)
It is quite understandable that the agricultural families
spend much smaller amount of money on the purchase of food than the
families of town population. From the table we can see that the
portion of expenditures of the farmers on food is (in comparison
to the total expenditures) roughly half the portion of non-agricul-
tural families. Differences in the structure of expenditure between
both population groups are relatively steady during individual
years and in the coming years will probably undergo only slight
changes.
The second striking difference is noted in the third group
of expenses to which belong expenditures on building and main-
tenance of apartment houses and on the developing of the farmers'
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economy.. Between. the farmers this expenditure is considerably
large and their portion has been rapidly growing in the past few
years. As our table shows, in 1955 it represents 13.5% of the
total expenditures of agricultural families and almost 22% of the
expenditures which the farmers spent on the purchase of goods (sum
of the items 1 - 3). Certainly this is an evidence of rapid rise
of the farmers; standard of living who are rapidly improving their
housing conditions and their economy. In connection with-the
development of JZD, the share of expenses on the maintenance of
living quarters and their building will undoubtedly rise within
this expenditure.
On the other hand, among the non-agricultural population,. this
expense represents relatively small portion of the total expenditures
and of expenditure on goods. Besides, it is growing with a simply
terrifying speed, much faster than in the agricultural families.
We can almost certainly count on the fact that their volume will
continue to grow fast in the future.
During the evaluation of the above tables we have to combine
the amount of expenditures on non-food articles with the increase
of expenditures on building and equipment. Compared to 1952 the
expenditures of the farmers on non-food articles relatively decreased,
but if we combine both amounts, we will find that on the contrary,
their portion increased. (The relative decline of expenditures
on non-food articles in the families of farmers is effected by the
fluctuation of prices. That is to say, in the last few years a have
reached a rapid decline-in prices of non-food articles the prices
of which were falling much faster than those of food. If in our
table we had used permanent prices, the portion of expenditure on
non-food articles in 1955 would have been much higher than in 1953,
as the following table shows.)
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Statistics of family accounts enable us to conduct closer
observation of the management of agricultural and non-agricultural
families. On the basis of family accounts we can classify the pur-
chases of consumers' goods state stores and cooperatives according
to two principal grQups-of goods. Then we will obtain the following
picture;
Coug arison' of- the Structure of Purchases of the Workers! and
Farmers' Families ?in,State Stores and Cooperatives
(Percentile shares calculated according to the structure of
purchases in the prices of'1953.)
Workers' families'' Farmers' families
1953 `411954 ;l955 1953 1954 1955
Total expenditures in store 100 100 100 100 100 100
1. food(1) 62.01 60.39 57.85. 36.73 37.80 37.11
meat and meat products 14.25 12.75 13."01 7.96 5.38 5.18
fats 10.62 10.19 9.65 5.71 4,32 4.40
milk and milk products 5.62 4.89 4.65 0.47 0.59 0.49
eggs 2.38 2.04 1.97 0.12 0.03 0.05
flour, flour products
legumens and rice 12.02 11.50 10.96 5.53 5.45 5.84
sugar and sugar products 8.46 7.88 7.88 9.81 9.36? 9.03
coffee, tea 0.74 0.80 0.96 1.06 1.18 1.44
2. beverages 3.86 3.32 3.52 6.49 6.07 5.53
3. non-food articles 34.13 36.29 38.63 56.78 56.13. 57.36
textiles 14.89 16.45 17.70 17.91 28.86 27.52
footwear 3.42 3.69 3.89 6.15 5.97 5.90
soap 1.65 1.82 2.02 1.69 - 1.74 1.79
goods of investment value 5.13 6.05 6.90 9.24 10.70 13=:96
fuel 2.23 2.07, 1.98 - 3.27 1.96 2.01
(1)idithout expenditure in public mess halls
Again appears the familiar difference between the share of food
and non-food articles,in the total purchases of workers'- and farmers'
families and again we note the tendency of faster increase of the
consumption of non-food articles in contrast to consumption of food.
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The portion of food in the total volume of purchases in stores
grows normally in the farmers' families which is caused mainly by
the fact that to a greater extent, farmers buy food which they do
not supply themselves. This is evident from the fact that the
portion of expenditures on food which the farmers produce themselves::
(meat, milk, eggs, etc) is not growing but declining because the
consumption of farmers' produce is growing. Besides, because of
insufficient extent of investigation, a slight distortion.is not
excluded here.
Remarkable is the very'rapid growth in purchases of goods of
investment nature (as furniture, building materials, etc) especially
among farmers and to a lesser extent, among workers. Both among
the farmers' and the workers' families we see that in the expenditures
on non-food articles purchases of textiles and footwear plays the
leading part (together they form more than half of the expenditures
on non-food articles). This means that the principal portion of
supplies of non-food articles meanwhile has to be assigned for the
financing of these purchases.
Further,, it is significant among the workers' families that
the share of expenditures which these families spend on the purchase
of food is declining not only in general but also in the principal
types of food. (tie should not forget that these are portions from
expenditures and therefore are not absolute numbers. When the total
expenditures are growing then even a smaller portion can mean an
absolutely greater part. This is. true both on paper and in reality.)
This means that the workers do not feel a necessity to increase the
purchase of food with the same rate as their income and therefore
spend aapart'of their increased income on other ends, for example,
onion-food articles or on services, etc.
From the above-mentioned relations between the structure of
expenditures of urban population and the farmers, besides the above-
mentioned conclusions on portions, also follows one basic conclusion
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for the future. First we will have to gradually and more intensively
expand the purchases of non-food articles by urban population.
Otherwise the urban population would be at a disadvantage against
farmers who can (relatively in regards to the amount of their income
and consumption of farm produce) buy much larger quantities of
non-food articles'as shown in our tables.
The best acceptable way to solve this problem, according to
all indications,- is the policy of-systematic reduction of food
prices which we have already introduced and will continue in the
future according to the condition of supplies on the domestic food
market. Such a policy will have. favorable influence on other rela-
tions within national economy, especially on the removal of equal
precedence in the problem of wages, etc. (If, however, the prices
of food are higher in comparison with other types of goods then we
have to give a considerably high renumeration for non-professional
work so that even non-professional workers would have not only plenty
to eat, but also anuld live in corresponding cultural conditions.)
These are the principal conclusions which follow from the
deliberations on structure of the expenditures of rural and urban
families. So far, however, we have been examining individual groups
of households as a whole, without being concerned about the type of
families they are composed of. When we examine the families more
closely and divide them into several groups, we see further differences
in their consumption %--d reach new conclusions which we then utilize
directly in the planning experience during the planning of retail-store
circulation and also during the planning of retail price reduction.
B. Comparison of the Structure of Expenditures in Families according
to Income Groups
Classification of the population according to the size of in-
come is of great importance for the study of the development tendency
of personal consumption and for the analysis of the standard of
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living of these groups. Until 1956, according to the rules of
our statistics of family accounts, the population was classified
Lnto the following income group:
1. families with an average yearly income up to 3600.00 crowns
per capita;
TI. from 3600.00 to 4800.00 crowns;
III.?from 4801.00 to 6000.00, crowns;
IV. from 6001.00 to 7200.00 crowns;
V. 7200.00 crowns and' higher.
Recently, however, this classification became inadequate mostly
because the higher income group -- over 7200.00 crowns yearly
income per capita -- does not represent the really highest income
but the average national income per capita. According to the balance
of income and expenditures of the population, in 1955 the average
yearly income per person in CSR wac 7277.00 crowns. Therefore
beginning with 1957 the number of income groups is to be increased
by several groups with above-the-average income.
Observation of the structure of expenditures (especially the
structure of consumers' goods in stores), according to individual
income groups of the population, enables us to discern the development
tendencies of personal consumption just the way they actually occur
in a given year. The structure of consumption of the higher income
groups represents the probable future consumption of lower income
groups which these groups will reach in coming year, after the
increase of their actual income.
In recent years, the increase of average income calculated
for one inhabitant of CSR was developing as follows:
1952
1953
1954
1955
1956(1)
Index
1952/55
Income inn crowns
per inhabitant
5999.91
6262.07
6849.62
7277.31
7626.49
121
(1)Planned development.
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The increase of income causes constant movement of individual
families into higher income groups. This means that these families
also change the structure of their consumption in the direction
which is determined by the structure of consumption of a given higher
group. Therefore data of the statistics on familiy accounts are of
invaluable help during perspective planning of the retail store
circulation, during the planning of reduction of prices,,-etc. Con-
sumption according to income groups is important because after
studying it we come to important conclusions, as .it is also noticeable
from the following explanation.
In the preceding chapters we have shown that our nominal wages
and sitaries are consta;$4-ly growing. and so are the number of employed
persona and the actual income of farmers. Besides that every year
we are reducing the prices on consumers 'goods. Therefore, not only
the average income per person, but simultaneously also the actual
income of the population and especially, the quantity of consumers'
goods are increasing.
In the third part of this chapter we have discussed the devel-
opment tendency in the consumption of food and non-food articles.
We have proved that under physical manifestation the Czechoslovak
consumption of non-food articles is growing faster than the consumption.
of food. -Therefore the share of food is falling if we are using
permanent prices. From the statistics of the circulation of retail
goods, we know the total development of the portion of food.(see
table on page 52). This, however, is too general an index for a
more thorough analysis and if we want to foretell probable future
development, we have to know what is this general index composed
of and how did we obtain it.
When examining food consumption, we have to consider first
the consumption of non-agricultural population because this is the
major consumer of purchased food. We have seen that the non-agricultural
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population as a whole invests an average of almost 607, of all
expenditures in stores for the purchase of food, while for the
same purpose, the farmers dedicate only 37% of expenditures on pur-
chases in stores. (See table on page 72 which shows the structure;
of expenditures among workers' and farmers' families. The structure
of expenditures among office workers' families is slightly different
-- in 1953 share of food was 57.467 )
Distributed into individual income groups,,this general
indicator is manifested as follows:
Share of Food eases from the Total g endituras in State Stores
and Cooperatives among Non-Agricultural Families(l)
(in permanent prices of 1953)
Annual income per capita 1953
1954
1955
Index
1955/53
to 3600.00 crowns 67.75
67.50
69.11
102
from 3601.00 to 4800.00 crowns 65.86
66.42
65.22
99
from 4801.00 to 6000.00 crowns 63.30
60.93
60.21
95
from 6001 to 7200.00 crowns 61.35
56.57
54.59
89
over 7200.00 crowns 56.55
53.47
52.87
95
(')Food without beverages and without expenditures in common
mess halls. The same applies to next tables.
The table shows that with the exception of the first income
group, in all the remaining groups the portion of food in the total
amount of purchased goods declines during individual years. Then
we see that each year the same tendency appears in various income
groups. This tendency is manifested in.such a way that the portion
of food in the total purchases constantly declines-in the families
with higher income. This is the concrete form of the general tendency
which we have discussed in the third part of this chapter. Besides,
the decline of the food portion in the total purchases is higher in
the two highest income-groups than in the preceding groups.
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These data could point to the fact that-the rate of decline of
food portion in the purchases of nonfarming families will increase
in the future years while a greater number of families will transfer
into the higher income groups which are characterized by the faster
decline of food portion. However, for final conclusions the above-
mentioned data are still not completely adequate both because~of
lack of time and possible shortcomings of the inquiry.
Further aspects of the rise, of_personal consumption will appear
if we look at the portion of the major types of consumer's goods in
various income groups of the city population, especially in food.
Shares of Major_ T'Pes of Food from the Total Purchases of City
Families in 1955
Type of foodstuffs
Income groups Index
I. II. III. IV. V. V. V.
I. II.
food as a whole
(without beverages) 69.11 65.22 60.21 54.59 52.87 76 81
meat and meat products 13.23 12.92 13.42 12.76 12.39 94 96
fats 12.30 11.04 10.32 9.14 8.04 65 73
milk and milk products 5.55 5.77 6.30 4.53 3.84 69 67
eggs 1.95 2.08 2.23 %1.85 1.90 97 91
flour, flour products,
legumens and rice 15.99 13.73 11.75 10.41 8..34 52 61
sugar and products
from sugar 9.09 8.60 8.35 7.98 7.15 79 83-
coffee, tea 0.78 0.60 0.91 0.83 1.33 171 166
beverages 2.85 `2.88 2.89 3.59 3.43 120 119
We have already seen that the share of food in total purchases
declines together with growing income. Now we see that this decline
is not, the same in all types of food. In the.table we present indexes
of shares of the highest group (i.e. above 7,200.00 crowns of yearly
income per capita) to the shares of the first 2 income groups.
In the share of food as a whole, the index of the fifth group
to the index of the first is, 76%, index of _the fifth groups to that
of the second is 817,. From the following data we see that. the share
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of expenditures for meat and meat products, eggs, sugar and products
from sugar declines together with growing incomes less rapidly than
the shares of food as a whole. The share of expenditures for coffee,
tea and beverages even increases. Contrary to that the share of
expenditures for fats, milk and milk products declines a little
faster and the share of expenditures for flour, flour products,
legumens.and rice, declines most rapidly.
These ;acts show that demand for food in the highest income
group os a whole (which actually is nearer to the average than to
the above-average incomes) as we have shown above,)?is satisfied in
the vegetable and major animal products. Families that belong to
this group readily increase their expenditures for other goods,
The same tendency also appears occasionally in the comparison of
shares of expenditures between all income groups. The differences
between neighboring groups are naturally smaller but the basic
tendency remains mostly unchanged.
Therefore we can rightly certify the conclusion that with the
rising of income of the city population, the demand for non-food
articles will continue to grow rapidly. Among the different articles
of food, the demand for flour, flour products and legumens will
grow less rapidly; the dewnd for meat, eggs etc will grow faster
and the demand for luxury food will increase most rapidly. The
structure of food consumption is therefore improved systematically
from one income group to another. We made this conclusion in the
fourth part of this chapter on the basis of the total nationwide
data. This was again confirmed by the analysis of different types
of facts and we projected this general tendency into the actual
conditions of individual population groups.
Similar tendency in separate income groups can be found with
non-i :ad articles. Analysis of the statistics of family accounts
completely certifies the fluctuation in consumption of non-food
articles which we have characterized in general terms in the fourth
part of this chapter.
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Changes in the structure of purchases in separate income groups
can also be described in a different way, not according to shires,
but according to the growth of absolute expenditures. 'Then we will
have the following picture
y-ra
Consux tion of the City Population According to Income Groups
in % of the Increase of Absolute Expenditures
Income group
1. It. III. IV. V.
Total expenditures in stores 100 124 152 '174 222
fr that:
food
non-food articles
eggs
sugar
butter
100 122 142 151 181
100 131 180 240 340
100 150 211 192 233
100 110 119 121 128
100 126 161 161 208
lard 100 133 143 171 173
edible fats 100 106 105 101 105
meat and meat products 100 125 150 164 196
bread and pastry from rye
hour 100 101 97 97 104
potatoes 100 93 119 93 128
wheat flour 100 98 95 90 94
cotton fabrics 100 142 183 284 351
silk fabrics 100 162 235 335 494
wool-fabrics 100 127 153 273 473
footwear as a whole 100 118 144 161 182
radio?reeeiving sets 100 318 208 682 1819
furniture 100 151 214 519 894
remaining apartment furniture 100 251. 306 472 767
books
100
transportation means
100'
(Plannad EconoM No 4, 1956.)
_ 83
155 216 263 405
118 210 269 458
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Again the previously found'tendency appears in another form
in this table. We see that the rise of food consumption in the high-
est income groups is slower than the rise in consumption of non-food
article`s. We observe that .the higher the income group which we
analyze the bigger are these differences. The evolutional tendency
in food and non-food articles is also corresponding.
Among the non-food articles the rapid increase of the consump-
tion of silk and wool fabrics and machine-shop products deserves
special attention. This table -certifies , again that the reduction
of prices of the rising of income of city population will develop
pressure first of all on the increase of purchases of non-food
articles. If the prices of food become reduced, it will mean only
a smaller increase of their consumption and a bigger part of thus
freed purchasing power will be directed toward the purchase of
textiles and machine-shop products.
Data of the statistics on family accounts are far more detailed
and the ways of their use are more manifold than we showed above.
Our task was to draw only the major conclusions which follow fray
the analysis of family accounts.
7. Personal Consumption in Czechoslovakia Compared to the Consumption
in the most Developed Capitalist Countries
We would like to close the analysis of the evolutional tendencies
of personal consumption in CSR with the comparison of the results
of progress of personal consumption in our country and with the
results which'were achieved by.other European and overseas countries.
This comparison will certainly be very useful and will allow us to
create a wider scope of opinion on the standard of living in CSR.
First however, we have to discuss the difficulties of such a comparison.
If we have to compare the level,of personal consumption in
various countries, it is necessary to compare the comparable data
first. So, for example, we cannot compare the height of nominal
wages because it does not tell us what a worker could actually buy
for his wages. Even the dimensions of real wages could not be
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compared without further analysis of data on the average conditions
of employment, number of unemployed persons and so on. Also the
way of calculating various indexes which characterize the level of
personal consumption, varies in different countries, so that their
components are often very different. Besides that the incomplete
bourgeois statistics and the almost universal effort,to base as
much data as possible on the standard of living of the population
make most of the official data in capitalist countries unreliable.
In order to describe the level of personal consumption, the analysis
of reliability of bourgeois statistics and the problems of methods
of calculation of correct indexes do not belong to this pamphlet but
to the special statistical works. In this work we have to draw
attention to the difficulties of the comparison, but we cannot
solve it.
Therefore we can not make an international comparison of the
level of consumption in its entire scope: instead we will limit
ourselves to some major types of consumer goods. We will make the
comparison on the basis of calculating consumption per person in
material units because this represents relatively the smallest
danger of distortion, if we wish to stay within the simple indexes.
For the capitalist countries we use the data obtained by the Institute
of Technical-Economical Information in Prague which produced the
original data of official statistics. [See note] Because some
countries do not have this, for comparison we always use the previous
year for which we have more data.
([Note] It is necessary to say that these data do not render
an exact representation of the level of personal consumption but,
as a rule, make it appear higher. They are obtained by means of
the method of balance, that is, we start with the volume of production
of appropriate types of goods, add the import, subtract industrial
processing and export and (if there are any data): we also take
into consideration the fluctuation of supplies. Thus obtained :!::,.
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multitude of products is divided by the amount of population.
Disregarding the fact that the starting data often are not precise,
consumption per capita, found in this way, also includes group
consumption as is the consumption of the Army, various institutions
and so on.)
Const Lion of Food per Person
Country
Meatl Butter Margarine2
kg' , kg kg
1953 1954 1954
Czechoslovakia 38.5 4.8 6.81
Belgium and Luxembourg 47 11 9.5
Finland 30 15.3 5.0
France 68 6.7 --
Italy 18 1.5 --
Western Germany 41 6.7 12.4
The Netherlands 32 2.9 18.4
Norway 35 4.2 23.6
Austria 42 4.2 2.8
Sweden 50 11.4 12.8
Switzerland 48 6.3 --
Great Britain 56 6.2 8.4
USA 75 4.1 3.6
r
4
Flour3 Suga Eggs
kg'
kg
pc-'s
1953',
1954
1953
132.3
32.4.
156
104
.27
204
127
35
119
120
30
187-
1555
16
119
x-98
25
153
95
36
102
104
38
102
118
26
102
83
43
170
108
39
153
98
386
204
74
41
391
1The data for meat, flour, sugar, eggs and milk are from 1952-53,
1953-54 etc.
2Vegetable edible fats in CSR.
3Grain is counted in the price of flour.
41n CSR, only refined sugar is included. In the remaining
countries there are data including honey and syrups.
31953-54.
61952-53.
For comparison we chose all the leading capitalist countries
with a highly developed economy and a series of smaller countries
which have highly developed industry and agriculture. In the next
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series of capitalist countries the level of consumption per capita
is far lower than in the countries shown here. Food consumption in
various countries is influenced by a series of specific factors, such
as the level of agricultural production, common traditions of consump-
tion, sometimes also climatic conditions and so on. However, in
the countries which we introduced, these'influences are not strong
enough to make any comparison of food consumption per inhabitant
possible.
From the table is first seen the fact that in the consumption
of food per capita, Czechoslovakia occupies one of the leading posi-
tions in the world. Let us look closer at the consumption of various
types of food.
The consumption of meat in CSR is higher than in Finland, Italy,
the Netherlands and approaches the level of consumption in West Germany
and Austria. The difference between us, West Germany and Austria
is no longer great. However, we are considerably behind the highest
consumption in the USA, Great Britain, France and other countries.
But the consumption of meat in Czechoslovakia grows steadily and
will mostly depend on the development of animal husbandry, until we
will reach and exceed the level of consumption of countries which
today are still ahead of us.
Butter and margarine: A comparison in this sphere is especially
difficult because the consumption of fats has numerous peculiarities.
In some places mostly butter or margarine are consumed (in northern
countries), elsewhere again more oil (for example in France-and Italy).
In still other places the consumption of lard is higher. In the
consumption of butter we surpass Italy, the Netherlands, Norway,
Austria and the USA. In the consumption of margarine we are behind
the majority of countries because we consume more lard and butter
than margarine.
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Flour and flour products: In the consumption of these products,
Czechoslovakia surpasses all the given countries, with the exception
of Italy. High consumption of flour is traditional in our country
and without doubt it is connected with the relatively lower consump-
tion of meat. As we shoved already, a universal tendency toward
the decline of the share of flour in the consumption of food is
appearing.
In our country consumption of sugar is on a high level, as is
proved by comparison with-other countries. Besides the data from
CSR do not include consumption of syrup and honey. The differences
between our level of consumption and the consumption of sugar in
such countries as USA, Sweden, Switzerland or Great Britain can be
overtaken in a short time.
The same is true in the consumption of eggs where we surpass
the majority of the above-mentioned countries, among them such
countries as West Germany, the Netherlands, Austria and Switzerland.
In the USA the consumption of eggs is extraordinarily high which
(excepting possible inaccuracies in the inquiry) is doubtless caused
by the specific character of American kitchen. In the majority
of European countries the structure of consumption is different,
therefore the extreme case USA should not be considered in the
comparison.
Especially instructive is the comparison of consumption of
food between Czechoslovakia and Austria because these countries
have very similar structure of economy and geographical conditions.
We see from the table that except for meat the consumption of all
food in CSR is higher than in Austria and in some places even
considerably higher.
Because of the lack of reliable statistical data from capitalist
countries, it is impossible to-make a comparison of the level of
consumption of non-food articles. Bourgeois statistics pay attention
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first of all to the consumption of food and in most cases give only,
incomplete and often indirect data on the consumption of other goods.
Mostly they give only the total amount of processed raw materials
etc. While the more, comparable data on the consumption of non-food
articles in various countries are not yet prepared or publicized,
it would be-foolish to make any kind of comparison. [See note] To
that which we said about the consumption food (and it also applies
to the consumption of non-food articles) we have to add these fur-
ther explanations:
([Note] In the magazine "Nova Mysl " (The New Though), N. 12
from 1956 a valuable article by-J. Flek and B. Lefeik was published.
it compares the level of production per inhabitant from the internat-
tioaational point of view. There are also data on the production
of consumers' goods per capita in CSR and in the capitalist countries
which can give us an indirect idea about consumption.)
(a) When we are examining the data published here we must
realize that they characterize only the immediate state of consump-
tion in a given year and do not say anything about their dynamics.
At our disposal we have only data for one year, thus only one
point on the development curve, which is not much. Besides, the
directioni-.Of the curve - either upward or downward - is to be of
great interest to us. Comparison of the dynamics of consumption
needs an-analysis of time series on the development of consumption.
To avoid the necessity to give a series of tables on the consumption
of various kinds of food in various countries, we will quote the most
representative data on the relation of consumption in prewar years
and at the present time. Some data quoted in the previous table'
In absolute quantities are transferred here into the indexes against
the prewar averages-
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Heat
Butter
Mar.-
garine
Flour Sugar
Eggs
`127
100
145
127
136
119
Belgium and Luxembourg
102
126
142
90
96
150
Finland
91
145
132
99
125
--
France
128
124
--
97
125
122
Italy
90
125
--
95
228
87
West Germany
80
79
159
87
96
129
the Netherlands.
-84
48
300
89,
124
67
Norway
92
6.0
127
87
126
86
Austria
86
117
187
86
108
86
Sweden
102
103
121
87
98
125
Switzerland
91
98
--
98
102
100
Great Britain
82
55
216
103
83
92
USA
117
54
276
82
93
127
This table is in one direction more objective and more truthful
than the table on the absolute level of the consumption per capita
in one year. It shows namely the direction of the development of
food consumption in CSR and in the major capitalist countries.
In 1953 consumption of meat in Czechoslovakia exceeded the
prewar level by 277e. In 1955 consumption of meat per capita in CSR
was already 42.2 kg and thus exceeded the prewar level by 3970.
Contrary to that in the majority of the capitalist countries the
consumption of meat per capita declined against the prewar level,
in some places substantially (in West Germany by 2070, in the Netherlands
by 16% and in Austria by 14% etc). The decline of the consumption
of meat in the majority of the capitalist countries is a doubtless
proof of the aggravation of nutrition of the workers because meat
belongs to food, the consumption of which has to grow absolutely
and relatively in relation to food of vegetable origin.
Consumption of fats: If we judge the consumption of butter
and margarine at the same time, we see that the consumption as a
whole in Czechoslovakia increased. With butter it reached only the
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prewar level which is a success, if we consider that in 1954 there
were 352,000 less milking cows than in 1937. Yet the consumption
of vegetable fats.(the quality of which remarkably improved) increased
almost by one half.
In the capitalist countries the situation is remarkably diff-
erent. In all the countries which are shown in the-table, the con-
sumption of butter and margarine together increased, in some places
however, only slightly, as'in Sweden and Switzerland. In Great
Britain and the USA there even occurred a gradual absolute decrease
of the consumption of butter and margarine. In the majority of
capitalist countries we can watch a typical phenomenon in that the
consumption of butter stagnates or absolutely decreases buththe
consumption of margarine increases. In Great Britain and in the
United States consumption of butt:r decreased against the prewar
level almost by one half, in Norway by 40%, in the Netherlands even
by 52%. While each year we increase the consumption of butter and
in 19-55 we crossed the prewar level, in the capitalist countries
the workers have to buy margarine because they do not have enough
money to buy butter. The consumption of flour decreased against
the prewar level in all the capitalist.countries except Great
Britain where it shows a slight increase. In' Czechoslovakia con-
sumption increased more than by one fourth against the prewar level.
In the preceding parts of this pamphlet we showed that the share
of vegetable products, especially flour decreased in the whole con-
sumption of food. But if we observe now that in the majority of
capitalist countries occurs an absolute decline of the consumption
of flour with a simultaneous absolute decrease of the consumption
of meat, it could only mean that the population in these countries
backs the money for the purchase of basic food, i.e., the level of
nutrition is not even such as it was before the war.
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In the majority of capitalist countries the consumption of sugar
develops noticeably unsymetrically. In the rate of increase of
the consumption of sugar we surpass all the capitalist countries
except Italy, where however, consumption of sugar per-capita in
absolute quantity is indeed still very low.
The consumption of eggs presents a different- situation in the
individual countries of our table. In a series of countries the
level of consumption is'well below the prewar average. Only 46.-,i4
out of 12 capitalist'countries surpass us in the,rate of increase
of the consumption of eggs.
From the mutual comparison of both tables, as we have done
now, follows this general conclusion about the consumption of food
per person in Czechoslovakia and in the chosen capitalist countries:
As far as it concerns the absolute level of consumption of
food per person, Czechoslovakia ranks with the foremost countries
of the world. It did not reach the highest level of consumption
yet, as we see it in Sweden and the USA. However, we surpass all
the capitalist countries in the equal and also fast rate of increase
of food consumption. Here rests our basic priority and, it depends
only on us how quickly we will increase it.
(b) Further it is, important that the consumption of products
in our country is divided among the inhabitants far more equally
than in the capitalist countries. While here the indexes of average
consumption per capita in reality characterize the level of consump-
tion of the majority of population, in the capitalist countries,
on the other hand, there,exist sharp differences between the level
of consumption of the capitalists and some well paid groups of
the population and also in the level of conaumptio:-of laborers and
the majority of workers. The consumption of the unemployed and
parttiuie employed person is minimal, i.e. millions of people whose
existence is closely-connected with the capitalist system.
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(c) During the comparison of the consumption per capita in
our country and in the capitalist countries we finally must also bear
in mind that the standard of living (as we already showed in the
first chapter) is not only the consumption of products per capita.
Important factors of the standard of living are the services which
we are not discussing in this pamphlet because-they do not belong
to personal consumption but with which we have to deal if we want
to be able to judge which laborers live better - ours or those of
some capitalist country.
In order to realize the doubtless and great achievements that
we reached by raising the standard of living with the exception of
the area of personal consumption, we will now present a brief outline
of the major facts on the development of social, cultural and other
services. Facts which we will discuss are not new. However, we
often forget the great achievements of our young republic or we are
not always capable of being emphatic enough in reminding the people
about them, for they "forget" on purpose, in order to lessen the
results of our socialist buildip. (See note]
([Note] Almost all the data on the progress of education,
culture and health and other services are obtained from the publica-
tion Ten Years of CSR, Rude Pravo, 1956.)
First we will observe our education. The care of the state
for the education of youth and grownups is now such-a natural phenomenon
that we do not even realize what our education means to us and that
in the world there are many countries where education is still the
privilege of the rich.
In the academic year 1955-56, in our schools of general education
2 million pupils studied. Their number was only .00,000 less than
-before the war when we had almost one and a half million more inhab-
itants. At the same time the number of pupils who receive higher
general education is rapidly increasing. In the academic year of
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1955-56 almost every sixth eighth-grade graduate was registered in
the ninth grade of the 11 year schools. In our professional schools
there are now.more than 140,000 pupils, that is 86% more than in 1936.
The biggest progress however, van made by our universities.
The highest possible education can be now obtained by everyone who
can prove his ability to study at a university. After 1945 we'
.established new universities and colleges in a-series of cities of
1936-37
1945-46
1949-50
1953-54
1955-56
Number of schools
13
11
25
39
40
Number of colleges
52
44
54
106
106
Number of students with
Czechoslovak citizenship
23,435
54,902
41,243
46,738
48,534
our republic. The total development of the universities in Czechoslovakia
is characterized by this table:
Universities in the Academic Years 1936-37 to 1955-56
As far as the extent of the university education is concerned,
not one of the leading capitalist countries can compete with us as
it is shown in this table:
Number of University Students for Every 100,000 of Inhabitants
Country
Year
Number of
students
Czechoslovakia
1950
302.3
Czechoslovakia 1953
364.6
.Czechoslovakia
1955
370.8
England
1953/54
195.4
France
1953/54
306.7
W-0 I- Germany
1953
217.8
Sweden
1952
279.4
Switzerland
1954
237.0
Italy
1954/55
285.8
Austria
1954
193.0
Norway
1951
183,3
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At the same time there are thousands of people studying while
working who enter under the category of special students. The above
table does not include their number. In 1955-56, in our highschools
and professional schools there were 51,566 special students. The
.same year, at the universities there-were 22,302 special students.
In great contrast to-.these data is the information from
capitalist countries. According to the information of The New York.
Times, in 1952 more than'3.5 million of American children could
not attend school because of the lack of schools, teachers'and
financial funds. According to the official data, during the-same
time, there were over 2,800,000 illiterate persons of 14 years of
age in the United States.
Such is the brief outline of the situation of our education
which is fully sufficient for documentation of the indisputable
priority of our socialist organization. We are not even mentioning
the great extent of our non-academic establishments as student
boarding houses, mess halls, groups of school youth and so on.
Further division of the standard of living is culture and
enlightment. Because of the small size of this publication we can
take up only some mass forms of cultural services.
Our theater made remarkable progress after liberation. The
number of permanent theaters increased from 52 in 1937 to 70 in
1950 and the number of visitors increased in the same time from
5,000,000 to 12,700,000. Attendance in the moving picture theaters
reached a still higher peak, The attached table shows the-increase
of the number of movie theaters, movie performances and the rise
of the number of visitors from 1937'to 1955.
1937 1948 1953 1955
:..Number of movie theaters 1,838 2,647 3,466 3,478
Number of performances 424,600 724,400 960,600 989,100
Number of visitors
(1000 persons) 84,500 154,300 144,400 163,600
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The table does not include the regular movie performances
which are arranged by cultural clubs and other organizations which
yearly have an attendance of about 11 million people. If we take
into consideration also these performances then in 1955 there was
an average of about 13 visits to the moving picture theaters per
person. Contrary to that, in 1954 in France there were nine visits
per person. Approximately the same amount of visits per person
was true in Austria and Denmark,-while' in the Netherlands there
were in the same year six visits and in Norway 10 visits per person.
The amount of radio licenses grew in 1955'against 1946 by
70.8%. In 1955 there was one radio license for 4.6 persons, while
in 1937 it was for 14 persons. Although we introduced television
later than the capitalist countries, in 1955 there was one television
license for 410 persons. Among the European countries only England,
France, West Germany, Italy and Belgium surpass us in the development
of television. The remainder of the countries, among them Sweden,
Switzerland, Denmark, the Netherlands are behind us in the progress
of television.
The rapid rise of published books Joins the general progress.
of our culture. In 1937 we published 32,000,000 books and an
average edition of one book had 4,931 copies. In 1955 we published
more than 46,000,000 books and an average edition of one book had
10,551 copies.
Such are the brief characteristics of the development of our
cultural services. Not one capitalist country can boast such a
rate of development of culture and its mass expanding among all
classes of the population.
An unusually successful chapter of the rise of standard of living
in the people's democratic Czechoslovakia-is-the development of
our health instituutions. By the law of people's insurance all the
laborers and their families, members of JZDSJ and self-employed
persons -- that is, almost all the inhabitants of the state -- are
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insured for hospitalization and income. Contrary to that, in the
capitalist countries illness represents a real disaster for the
afflicted and his family. Data of the American bulletin Labor Fact
Book, volume 12, 1955, assert that about eight million of American
families are indebted as a result of expenditures for medical trev,,C-
ment. About one million families spend'one half of their income
for d'octors' care because they cannot afford the high insurance.
In 1937 there were in our country 1,218 inhabitants to one
physician. In 1946 this amount increased to 1,283 inhabitants.
After this followed a rapid increase of the number of physicians
so that in 1955 there were only'714 inhabitants'to one physician.
Herewith Czechoslovakia ranks among the most developed countries
of the world, as the attached table shows:
Country
Year
Number of inhabitants
to one physician
Czechoslovakia
1953
760
Czechoslovakia
1954
740
Czechoslovakia
1955
714
Australia
1952
1016
Belgium
1953
982
-Denmark
1953
954
Finlanci
1953
1870
France
1953
1132
Canada
1952
937
West Germany
1953
751
the Netherlands
1953
1166
Norway
1952
920
Austria
1953
6.46
Sweden
1953
1357
.Switzerland
1954
705
1953
763
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At the same time our own experience teaches us that a large
number of,our physicians are fully used by the inhabitants, while
in the capitalist countries there are a number, of physicians without
employment or with part-time employment only.
Finally we have to mention the further and no-less important
factor of the standard of living -- home culture. Our government
rightly emphasizes the improvement of housing conditions.
Even though our dwelling construction. is continually behind
the needs of the population, yet-the number of apartments consigned
yearly to utilization is increasing. This review testifies, it:
In 1946 there were 21,683 apartment units consigned to
utilization.
In 1953 there were 38,957 apartment units consigned to
utilization.
In 1954 there were 38,193 apartment units consigned to
utilization.
In 1955 there were 50,951 apartment units consigned to
utilization.
(Statistical Data SUS., No 1/1956.)
From the beginning of 1948 to the end of 1955 in the socialist
sector there were 206,313 apartments with living area of 9,029,000
n2 (square meter) and within-the frame of individual home construc-
tion 80,599 apartments were gained. Besides,- the average rent today
in Prague is substantially lower than it was- in the times of the
first republic, representing an average of 2,200,00 crowns yearly
including the appropriate payments and central heating.
It is very instructive to look into the prewar statistical
year-books on the data of the'height of rent. An average yearly
rent in Prague, in the capitalist republic was not only high, but
was steadily rising. The rent of a two-room apartment which came
under the law of rent Qcontrol, developed as follows:
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Year
1930
1931
1932
1933
1934
Average yearly rent in crowns 2220
2220
2220
2250
1300
As the following, review indicates, the rent was much higher on
those two-room apartments which did not come under the law of rent
control (in 1934 such apartments were in the majority).
Year
1930
1931
1932
1933
1934
Average yearly rent in crowns 4500
4750
5150
5300
5500
The balanced average of rent of both categories of apartments
was such:
Year
1930
1931
1932
1933
1934
Average yearly rent in crowns 2836
3232
3523
3775
3958
Besides the number of apartments which did not come under the
law of rent control was systematically rising. While in 1930 there
were 2.5 apartments not under rent control to one apartment
belonging under rent control, in 1933 the difference between both
categories was 1:1 and in 1934 1:0.9 (all the data on rent are taken
from the Statistical Year-book of CSR, 1936).
Besides that we have to consider the equipment of alartments
with gas, water, bathrooms and electricity. In 1930 only 317, of
Prague's apartments had gas, 32% bathrooms, 50%0 water and 73% electricity.
In 1950 gas was installed already in 52% of Prague's apartments,
electricity in 97%, water in 88% and bathrooms in 547Q. Consumption
of electricity in households increased in the previous years as
follows:
Year
increment in 1955
1937
1948
1955
against 1948 in %
Consumption of electricity
in households in million KJH
281
712
1371
+92.5
All these are the indisputable facts which speak in our favor
- in favor of Socialism. Our standard of living is rising noticeably
every year despite all difficulties and mistakes.
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CHAPTER IV. PLANNING OF-THE CIRCULATION OF RETAIL-GOODS IN CSR
In the preceding chapter we have.analyzed the situation of
personal consumption in the process of reproduction and its principal
development tendencies in socialism. In this last chapter we
will discuss the methods of planning of personal consumption in our
republic. ,
The development of personal consumption is included in various
parts of the state plan of national economy., Almost every part
of the state plan of national economy expresses either a side of
the rise of personal consumption or secures the creation of conditions
for its lasting growth and improvement. Therefore-it would not be
possible to speak here about the methods of compiling all the parts
of state plan which are directly or indirectly concerned with per-
sonal consi.mption. Therefore we will analyze only those parts of
the plan which are most significant for the determination of
expected development of personal consumption.
The most important problems of the development of personal
consumption are concentrated in the plan for retail-store circulation.
The consolidated plan of retail-store circulation belongs to the
principal parts of state plan of national economy. Almost nine-tenths
of any personal consumption of the population is carried out by
means of retail-store circulation. No other part of the state plan
is concerned with the development of personal consumption.as exten-
sively as the plan of retail-store circulation.
The following pages will acquaint us with the main principles
of planning of the retail-store circulation on the national scale.
We will not discuss the problems of planning of retail-store.
circulation on the level of ministries or business concerns. As
far as these problems are concerned, we recommend that the reader
obtain literature in the field of domestic trade.
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1. Parts of the Consolidated Plan of Retail-Store Circulation
The consolidated plan of retail store circulation is compooed
of 4 principal parts. These are:
(a) The proper plan of retail-store circulation which contains
the denominator of the total volume of retail-store circulation in
the distribution according to systems and regions.
(b) The plan for securing retail-store circulation in state
stores and cooperatives with goods.
(c) The plan for the circulation structure of common mess halls.
(d) The plan of the-.-retail-store system and the system of
common mesa halls.
For every year the actual content and form of these parts of
the plan are determined by methodical directions which are issued
by the State Bureau of Planning. Tice plan of retail-store circulation
is compiled by all the ministries and central bureaus which are
carrying out the retail-store circulation. In the same way, the
KNV and the Slovak planning organs compile a draft of the plan which
concerns the region that is in their jurisdiction. The Ministry
of Domestic Trade and the State Bureau of Planning are compiling
the plan of retail-store circulation on national scale.
2. The Planning of Total Volume of Retail-Store Circulation
The first task which the planning organs have to consider is
the determination of total volume of retail-store circulation during
the planned year. The index of retail-store circulation represents
an index of value, i.e. money. It is manifested in billions of
crowns in current,prices. The problem which concerns us now is
the type of methodical. progress to be chosen by the-planning organs
in order to determine correctly the expected volume of retail-store
circulation during the next year.
Before solving this problem however, we have to explain what
retail-store circulation actually means and what the form of this
index is in the state plan. Theoretically, under retail-store
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circulation we understand only the sale of good to the population.
Therefore, the total volume of retail-store circulation will be
determined by the sum of the prices of cold gods or by the amount
of money which the population spends in stores.
The actual content of the index of retail-store circulation in
the state plan is however somewhat different. Besides th'e purchases
of goods by the population, retail-store circulation also contains
the sale of consumer goods'to different collective consumers from
the state and cooperative concerns. For example, it is the'sale of-
small office supplies to business, schools etc, the purchase of
tools and equipment and other necessities by individual agricultural
organizations etc. If, however, these purchases in a store by a
public organization are financed with market funds and are carried
out for retail-store prices and if these purchased products are not
resold, then they are included into the retail-store circulation.
Such a form of indicating retail-store circulation has its
own justification. It would be both impossible and a bad economic
policy if we had excluded the small purchases of public sector
from the retail-store circulation, especially since they represent
only a small part of its total volume. [See note] However, pur-
chase's of the population have always-had the major share in the
retail-store circulation. From these characteristics of the index
of retail-store circulation also follows a methodical progress
during the planning of its total volume. The determination methods
of the volume 'of retail-store circulation is based on such considerations.
([Note] On the other hand, it is not purposeful that the pur-
chases by general consumers in retail stores be carried out on
large scale. That is to say, these purchases are financed from
the funds of consumers' goods, in other words,from,the same funds
which also cover purchases of the population. If we do-not limit
the possibilities of the general sector to purchase goods with market
funds, various concerns, organizations, -cooperatives, etc, would
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be able to buy such' manufactured goods as television, radios, record
players, musical instruments, furniture etc, in other words, goods
on which the population concentrates its demand and therefore we
have to secure these goods first of all for personal consumpticn.)
Development of retail-store circulation in socialism is undividedly
united with money circulation, for it is carried out by means of.
this circulation. Thus, if a definite volume of retail-store cir-
culation is to be realized, (volume which is determined by the sum
of prices of sold goods) then the-population has to take first of
.all the money for purchases of these goods. If therefore we want
to determine the extent of the volume of planned retail-store cir-
culation, first we have to decide on the volume of financial income
of the population, since the volume of expenditures naturally depends
on it.
The income of the population depends mainly on the planned
development of production and on the increase of labor productivity
because these circumstances determine the amount of financial income
of the largest part of population. The size of income of the popula-
tion is further effected by the expected increase of salaries of
employees in the nonproduction sphere and by the increase of payments
from the financial and credit system of the state, as pensions, sub-
sidies, scholarships, credits, etc.
The population however, does not spend all its money on goods
in retail stores. Part of the money goes for services or for the'
payment of taxes, dues, installments, etc. These expenses are
called out-of-the-market expenses because for money spent in this
manner the population does not receive any goods as counter value.
Now the population leaves the remainder 'of spending money for the
purchase of consumer goods in retail stores. The amount of money
designated for the purchase of consumers.` goods is called the pur-
chasing fund. The volume of retail-store circulation depends
basically-on its size.
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If we want to plan correctly the total volume of retail-store
circulation for a given year we have to start with the purchasing
fund of the population at that period of time. For that purpose
we compile a balance of income and"e-tpenditures of the population
which in a siwplified form - as "calculation of purchasing funds
of thepopulation" is a basis for the total volume of retail-store
circulation.
The calculation scheme of,,purchasing funds of the population
is such:
I. Money income of the population from state and cooperative
organizations:
A. Money income from labor relations:
Wages.
Money income of the members of cooperatives according
to the amount of work units and their remaining money income.
Income from the sale of products to state and coopera-
tive organizations (sale of agricultural produce, occasionally manufac-
ture of independent craftsmen).
B. Income of the population from the financial and credit
system:
Pensions, subsidies, scholarships.
Insurance compensations.
Offered credits.
Gains and interests from investments.
C. The remaining money income of the population:
Money income of the population from the socialist sector,
the sum total of ,A-C.
II. Expenditures of the population in state and oooperativb
concerns:
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A. looney spent on services:
Rents and community services.
Transportation and communication.
Personal services.
Admission fees'to cultural, amusement and sport,centers.
Recreation, child care, medical care.
The remaining services.
Total for services.
B. .Payments to the financial.and credit system:
Taxes, duet and installments.
Insurance fees, cooperative dues and payments to
public organizations.
Payed credits.
The remainder.
Total out-of-the-market expenditures (A to B).
Reduction in rate of decrease in saving and credit
Total expenditures.
Increase and decrease of ready cash of the population.
III. Purchasing funds of the population - from that:
(a) for the purchases in state stores and cooperatives,
(b) for purchases in JZD.
The method for the determination of the planned purchasing fund
of the population is evident from this calculation. The purchasing
fund is therefore that part of the financial means which the population
uses for purchases of consumers' goods. and to which the total volume
of retail-store circulation is to correspond. The purchasing fund
represents about 75 - 80% of the total expenditures of the population.
When compiling the state national economy plan we are interested
only in that part of the purchasing fund which will be used in the
state stores and cooperatives. In order to finance it, it is
necessary to secure proper supplies of consumer'goods for the state
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stores and cooperatives. Purchases in JZD which at the present
time represent only an insignificant fraction are covered with the
products of agricultural surplus and therefore are not secured by
the center. Also these purchases are not included in the plan of
retail-store circulation.
In order to understand correctly the above mentioned calculation,
we have to add this:
On the side of.income the most important items are the wages
which are payed to the populated by cooperative and state concerns
and organizations. We find it according to the volume of wage funds;
their share in the total income of the population forms about 73%
in CSR.
The next important income item is the money income of the
farmers. With the progress of collectivization, the money income
of the members of cooperatives for units of work predominate
steadily, while the share of profit ffom the sale of production
will fall even though these profits will grow. Since the content
of this item is as a rule misunderstood, we are again warning that
this balance shows only financial relations between the population
and the socialist sector. This means that the profits of private
farmers or members of JZD of types I and II and the profit.from
small farmers are given only when their produce is sold to the
state or cooperative purchasing organs. Therefore the profits of
JZD of types III and II. as a whole and the profits of individual
farmers on agricultural market do not belong here. Both-types of
data on money income of the farmers are obtained from the financial
plans JZD, the total results of which are at the disposal of the
ministry of agriculture, both coming from the tasks planned for
state purchases. ,
The third basic source of the money income of the population
is the income from the financial and credit system of the state.
The majority of this income source consists of payments on
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hospitalization and social.security which in 1956 are to reach
almost 13 billion crowns. The tendency to increase is common to
all income from the financial and credit system. This is both.a
manifestation of better state care for social security of the
population, development, ofeducation and culture, and a manifestation
of the improved standard of living-which is notable-in the increase
of- deposits, insurance etc.' The growth of interest payments and
insurance premiums .corresponds : to that.
On.the side of expenses there are-2 groups of items. First,
the out-of-the-market expenditures whlch~consist of expenses for
services not included in the retail-store circulation and payments
to the financial and credit system of the state. The portion of
these out-of-the-market expenditures makes up about 21%, of the total
money expenditures of the population.
The second item of this side is the purchasing fund, i.e.
expenditures of the population on the purchase of consumer goods.
Purchasing fund is the result of the entire balance, if we subtract
the out-of-the-market expenses from the total income and take into
consideration the balance of deposits and the balance of ready money
of the population. Increase of the deposits (which is a?normal
tendency) and increase of the treasury of ready money among the pop-
ulation are actually expenditures; decreases of the deposits and
the treasury, from the point of view of balance, mean the increase
of money income and therefore increase the purchasing fund.
The total purchasing fund is divided into 2parts. The first
and the principal part is the purchasing fund which is designated
for the purchase of consumers' goods in the state stores and coop-
eratives; the second (still an insignificant part -in CSR) is the
.purchasing fund which is' determined for the purchase of food in JZb.
When considering the planning of retail-store circulation we are
interested only in tho first part of purchasing fund which is
assigned for the purchase in state stores and cooperatives.
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That is to say, in the State plan, retail-store circulation
represents only the circulation of the state. and cooperative sector
(circulation of the private sector is practically insignificant).
This circulation is to be planned on a national?scaleiand then
particularly secured with due supplies of consumers' goods in
order to correspond to the needs of the population. Compared to
the circulation:of state stores and cooperatives, the sale of food
from JZD has only. a supplementary significance and the supply. of
goods does not have to,be secured by the central organs but instead
flows from the surplus of'JZD.
Therefore all further.bindings in the state plan occur only
between the first part of?purchasing and'the extent of retail-store
circulation in the state stores and cooperatives.
The planned extent of retail store circulation however, cannot
exactly agree with the size of the purchasing fund, but instead is
always larger. Thus retail-store circulation includes also such
purchases which are not payed from the purchasing funds of the popula-
tion but from the means of the society. These, the so-called growing
items represent about 10% of the total volume of retail-store circula-
tion. Among these, the most significant are purchases of the general
sector in retail stores which are included in the retail-store
circulation and which, especially recently, are growing with the
increased purchases of products for general consumption of JZD.
Purchases by the general sector in retail stores is unavoidable
when it concerns those products which it would hot be advantageous
to allot to the state and cooperative organizations by means of
the materially technical- storage supply. fleanwhile, we should not,
allow this purchase to go beyond certain-limits or to remove excee-
dingly large quantity of goods from the market supply designated
for the population.
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Further growing items are the payments of employers for common
meals in factory mess halls, the state taxes on some products and
the-duplicities which occur during the carrying out of retail-store
circulation.
Thus, such is the basic progress during the planning of the
total volume of retail-store circulation. This however, does not
mean that the Volume of the retail-store circulation would mechan-
ically follow from the sum total of,.tL' purchasing-fund and.the
growing items. Such an explanation-wo; d be incorrect, since we have
to realize that behind these financial indexes there are material-
relations, which is their basis. In order to be able to actualize
the planned total volume of the retail-store circulation, it is
necessary to have a sufficient supply of consumer goods because
otherwise the number representing the retail-store circulation will
be incorrect, no matter how accurately calculated. Finally it is
necessary to secure even a greater amount of goods than is necessary
for retail-store circulation under present conditions, because we
have to count on further reduction of prices and a corresponding
growth of consumer goods supply. Therefore, during the planning
of retail store prices we cannot agree with such growth of its total
volume as-we can actually secure by increasing the supply of goods
in' the business system.
Until it becomes a question of the volume of retail-store
circulation, the previously mentioned tendency is fully applied
during the planning of this circulation, that is to say that both
the value and the physical volume of the circulation of-retail goods
is increasing.
3. Determination of the Time and Regional Proportions during the
Establishment of Retail-Store Circulation
However, in order to secure the accurate amount of goods supplied
to the population it is not sufficient merely to determine the total
volume of the retail-store circulation for a whole year and for .CSR
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as a whole. It is also necessary to determine the basic time and
regional proportions in the establishment of retail store circulation.
Therefore we have distributedthe.retail-store circulation also
quarterly and territorially.
The bisic tendency toward continuous increase of the retail-store
circulation is manifested not only during individual years, but
also every 4 months. This is caused by the fact that during the
year not only production, but also the productivity of labor are
growing and therefore not only the products of workers but also their
purchases on the domestic market are increasing.. This basic ten-
dency is also supported by the seasonal, prevalence of, agricultural
production and purchase of products which increases the purchasing
power of the farmers, especially in the last quarter of the year.
The fourth quarter has an extraordinarily large share in the total
yearly retail-store circulation of goods. This fact is caused by
the peculiarity of consumption itself and by the division of purchasing
through which a part of yearly savings of the population is carried out.
The distribution of the retail circulation of goods into
quarters is best carried out according to quarterly balances of money
income and expenditures of the population. Since.however, it is
very difficult and practically inapplicable to compile a balance in
such a short time, the planning organs are mainly directed by exper-
ience from past years, with most careful consideration of those
influences which could 'change the considerably stable shares of
individual quarters in the yearly volume of retail store circulation
of goods.
Even more significant is the correct territorial division of
the retail-store circulation. The smallest deficiency in the territo-
rial division of retail circulation of goods can cause heavy distur-
bance in the supply of the population and can also lead to unnecessary
losses in goods and to unnecessary transporting and storing of
products.
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The extent of retail-store circulation in individual regions
is far from being the same both as a whole and as a portion of
the retail-store circulation that belongs to each individual.
Therefore we should not plank the territorial distribution of retail-
store circulation mechanically, according to the size of'the popula-
tion, but should begin with the analysis of the socio-economical
digits which have an influence on the size of the retail-store
circulation in, individual regions.
Volume of the retail-store circulation in each region is first
of all, effected by the number of inhabitants employed'in industry,
farming, etc. The greater the employment in a region (especially
employment in industry), the higher the money income of the popula-
tion, and consequently also his purchases in stores. Equally
important is the development of industrial and agricultural produc-
tion in the region, the rise of labor productivity, occasional change
of structure in industry products because all these circumstances
have an influence of the form of the purchasing funds in a region.
Besides the analysis of these digits we are concerned with the
.degree of assumed money fluctuation between individual regions.
That part of money which will be payed to the populction'in an
appropriate region will not be used for the purchase of goods in
that region but will be applied on the domestic market of other
regions, As a result, complicated fluctuation of purchasing funds
occur which'can have great influence on the size of retail-store
circulation in some regions, either increasing or decreasing it.
It is evident that the development of the given socio-econo-
mical indexes differs in some regions and therefore, the rate of
increase of retail-store circulation differs according to individual
regions, while at the same time, the differences in consumption
between individual territories of the country are gradually levelled.
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Influence of the socio-economical indexes on the establiar~,ummt
of retail-store circulation in individual regions is observed through
the territorial balance of money income and expenditures of the
population. Volume of the purchasing funds planned according to
individual regions is the most reliable basis for determination of
territorial proportions in the retail-store circulation. The territo-
rial balance of money income and expenditures of the population
is compiled by the territorial people's committees who present them
to the ministry of domestic trade and the State Planning Bureau.
Since the individual KIEV, when compiling the regional balances,
could commit even bigger mistakes, especially in the calculation
of interregional money circulation, it is necessary to make not only.
a confrontation of the regional balances with the national balance
(which is more or less precise), but also a continuous comparison
of the development of retail-store circulation in individual regions
during a few past years when the retail-store circulation in individual
regions during a few past years when the retail-store circulation
is distributed among the individual regions, and, according to this
to discover the mistakes in the calculations of purchasing funds.
The main reps onsibility for correct division of retail-store
circulation into separate regions is now transferred to the ministry
of interior trade. The government does not approve the indexes of
retail-store circulation for regions but only for the entire state.
Besides time and territorial rates in the retail-store circula-
tion, the state plan indicates. also the interior structure retail-
store circulation according to its individual types. Index of the
entire volume of retail-store circulation is further divided into:
(a) The system of retail-store circulation from that:
circulation for repairs of items of.personal cons=pt- os,
household necessities and circulation for coaanission work;
(b) circulation of common meals establishments from that:
circulation of plant dining rooms and canteens.
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We divide the circulation of coca on meal establishments
according to its structure into:
(a) Circulation of restaurant meals in general from that:
entire circulation of products of own production from that:
sale of main nails of own preparation (in million crowns
and in million portions);
(b) Circulation of factories dining rooms and canteens (in the
same division as point a).
The division of retail-store circulation into the circulation
of the retail-store system and the circulation of the comon meals
establishments is of great importance in the advancement of the
standard of living of the population. Demands for common meals are
growing very rapidly with the construction of socialism which rapidly
increases employment possibilities, especially where women are
concerned. At the present time, the circulation in the factories
of common meals represents about 14% of the entire volume of retail-
store circulation. While the entire volume of retail store circula-
tion increased from 1951 to 1954 by 24% (in current prices), the
circulation in the plants of coxcnwn meals increased in the same
time by 53.7%.
The state plan must also correctly depict the development
of the structure of circulation in the plants of common-meals in
such way as to increase first of all the sale of-meals of own
production, especially the portion of main meals in the whole circula-
tion-of the plants of common meals.
4. Planning of the Supply of Consumers' Goods
Determination of the value of the volume of retail-store
circulation -- either for the whole state or regions only -- is
only the first stage in planning. The aim of this stage is to secure
harmony between the buying demands of the population-and the sum of
prices of all goods which will be sold-by means of interior trade.
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Planning of the retail-store circulation only in general' k:exprres-
sion of money is not sufficient for the state political economy
plan to secure entirely the increase of personal consumption within
the limits of common tendencies which we explained above. We can,,,.-
speak about the actual increase of personal consumption only when
the quantity of goods consumed by the population grows physically
and when the assortment and quality of consumed goods improves
simultaneously. This side of the development of personal consumption,
which is the most important one, we do riot sec from the summary
indexes of the volume of retail-store circulation (which is always
planned in current prices), for the dynamics of its growth could
be distorted by the fluctuation of prices of consumers` goods and
this summary index does rot give us the structure of sold goods as
far as it concerns its applicable value.
Therefore during the planning of retail-store circulation,
the planning of the supply of consumers' goods is greatly important;
it is expressed in the plan for the securing of the retail-store
circulation with goods either in physical units or in retail prices
to be able to establish a union between the supply of goods and
the indexes of,the value of retail-store circulation.
The planning of the, supply of consumers' goods belongs to the
most complicated and difficult parts of planning of the interior
trade. It meets with evolutionary proportions of production which
is the source of the supply of consumers' goods; also the multiple
influence of all the evolutionary tendencies of personal consumption
manifests itself. Here also belong the relations of the Czechoslovak
economic policy with foreign countries, situation of the reserves
of consumers' goods and, so forth. Also, besides the long-term
evolutionary tendencies of personal consumption the planners have
to count with the short-term fluctuations of consumption, with the
influence of fashion, and so forth.
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Knowledge of the long-term evolutionary tendencies of personal
consumption is very important for the organs which are occupied
with the planning of retail-store circulation. It gives them the
guidance for the development of the interior structure of retail-store
circulation, shows them which product should be secured in the
constantly growing multitude, and so forth. This especially applies
to the perspective planning of retail-store circulation.
The biggest problem in the practical planning is to establish
the extent of development of this or that tendency,. mainly the
kind of concrete form it,hat3 to have in the planned year. In this
work only general conclusions on the evolutionary tendencies would
not be sufficient, for it is necessary to start herewith a detailed
analysis of factors which influence the sale of individual types of
goods in the planned period.
In the plan of securing the retail-store circulation with goods
we plan the material structure of the supply of goods according
to the principal groups of food and industrial goods. In the state
plan we present a total of about 120 main groups of foodstuffs and
industrial goods which are determined in the list issued by the
State Bureau of Planning. In this list the separate items of food
and industrial goods are divided into 3 groups:
1. Fund consuming goods - balanced in the State Bureau of Planning;
II. Goods planned by central offices -- balanced by the individual
ministries in the main administration of production;.
III. Goods not planned at the central offices, which are shown
in the state plan only totally in million of crowns.
The division of consumers' goods among these groups is correspond-
ing to the nomenclature for material technical supply.
The proper task of the plan for securing the retail-store
circulation of goods is to establish the volume of necessary supply
of individual types of consumers' goods to the trade system in regard
to the expected movement of supplies so that the planned realization
of retail store circulation and the possibility of further decrease
of retail prices by fully secured.
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The complexity of relations during the securing of consumption
for different types of consumers' goods dcmaiuds that the planning
of individual kinds of consumers' goods must, be done by specialized
groups of work-era who know the problems relatedtm various types of
goods thoroughly and who can correctly establish the demands of-
interior trade for the deliveries of different kinds of goods..
In the drawing of the plan for securing, we start-from the
following main bases:
1. the analysis of-the sale and state of supplies of various
kinds of goods during the prcious periods, especially in the
current year;
2. the analysis of data found by investigating consumers
demand, as far as it concerns the d`gree of its satisfaction and the
future probable development;
3. discussions with the organs supplying production and foreign
trade in which the possibilities to satisfy the demands of consumers
are explained;
4. the tasks included in the resolutions of the party and the
government to improve the supply of the population.
From these analysis gradually follow demands for the deliveries
of consumers' goods for interior trade which are included in the
plan of securing and which are applied during the discussion of
balance.? During the coiling of uateriai balances of consumers'
goods, the appropriate balancing offices cannot be occupied with
the establishing of needs for market supply. Workers, during balancing,
start from the demands of trade which follow from the plan for
securing, and coordinate these demands with the possibilities of
production and eventually import.
5. Determination of the Entire Extent of Retail Price Reduction
Market reserve which is, determined in the n aterial balances of
consumers' goods, serves partly to cover the planned sale, partly
includes the planned reserve of consumers' goods-for reduction of
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retail store prices. We have to mention this actuality in detail
because it has big influence on the determination of the size of
market reserve. During the planning of the reserve of consumers'
goods, it is impossible to ignore the necessity of systematic reduc-
tion of prices of consumers' goods which is one of the basic roads
to the increase of actual wages and to.the rise of the standard of
living. Conditions-for the planned reduction of retail prices have
to be stated already in the plan of securing the retail-store
circulation with goods and in the material balances of consumers'
goods.
It is connected with the fact that by the reduction of prices
of consumers' goods we create the situation when the.population
receives more goods in material for the same market reserve, but
the volume of value of the retail-store circulation as a rule does
not change. It is obvious that the reduction of prices demands
bigger delivery of consumers' goods to trade.
The extent of planned reduction of retail prices for a given
year is determined by the amount of goods which,we can render to
the population with the exception of funds which compose the retail-
store circulation in present prices. In other words, the extent of
price reduction is basically determined by the rise of market reserve
above retail-store circulation.
Percentage of the reduction of retail prices is calculated from
the formula
-m . 100
f
where "f" is the general market reserve, "in" is the volume of retail-
store circulation, both in current prices. "f - m" is the surplus
of market reserve over retail-store circulation and expresses absolute
extent of the portion by which it is possible to-reduce the prices
of consumers' goods. Tice financial reserve in the total financial
plan for the reduction o?. retail prices also. corresponds to this.
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The percentage of reduction is determined the way. it is shown in
the formula that this absolute saving is compared with the market
reserve of goods determined for sale.
During the calculation of the reduction of prices we m,est also
count with another factor which is the increase of standardized
supplies of consumers' goods resulting from the reduction of prices.
This growth will be expressed materially but not in value because
the pecuniary volume of the standardized supplies does not change,
but must be (after the reduction of prices) filled with bigger
amount of goods.
Therefore the entire rising of thei=arket reserve above
retail-store circulation cannot be dedicated solely for the coverage
of increased sale after the reduction of prices, but in some partic-
ular part, =List be dedicated also for supplementing standard supplies
on account of reduction of prices. With this the total percentage
of the reduction of prices will somewhat decrease and it is
necessary that the denominator of the shows formula for calculation
of the percentage of reduction be supplemented with the size of
standardized supplies so that the final formula for the calculation
of reduction of prices has the denominator "% + n" where ''n" is
the size of standardized supplies.
Thie is in main features the procedure for determining the.
extent of reduction of retail prices. In reality the calculations
are made in far more detailed way, observing other factors-, as for
instance the above-standard supplies and so on.
At the same time with the determination of the total extent
of reduction of retail prices, it is necessary-to determine in which
main types of consumers' goods and to which extent will this reduction
be made. This again influences the work during the planning of
reserves of separate kinds of consumers' goods because both in the
total and in the separate kinds of goods, the possibility of reduction
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of prices is given by the rise of market reserve over the planned
circulation. Now there appear new complications as.the fluctuations
in the demand among separate kinds of goods with which it.is nec-
essary to count beforehand.
in order to determine the probable E tt!. ,tijjn in the demand
for reduction of prices of:consumers' goods, family accounts serve
as a substantial source of material.
From the above-mentioned brief interpretation it follows that
the reduction of prices remarkably coaplicates the planning of the
structure of reserves of consurs is goods. Because together with
the development of socialist production and with the growth of the
productivity of labor, bigger possibilities are created for the
reduction of retail prices, the influence of price factors on the
planning of the reserve of consumers' goods will be continuously
bigger. Therefore it is necessary to perfect the planning of the
reserves of goods from this side, namely we must acquire the thorough
and rapid review on the present structure of consumption, on the
possibilities of production and on the structure of supplies of
consumers' goods.
6. Plan?ins of fire Supplies of Consumers' Goods
Correct determination of-the size and assortmt of the supplies
of consumers' goods is of great importance for the drafting of
material balances of consumers' goods, for the compiling of plans
for securing the retail-store circulation with goods and in general,
for the planning of activity of our interior trade. The supplies
of con'sumers' goods are the inevitable condition for a smooth supply
of the population. They are formed both by the producers and in
the wholesale stores of interior trade and in the retail-store system.
without adequately extensive supplies we could not secure smooth-
supply-for the population, we could not secure that the consumer
always have at his disposal a sufficient amount of goods to choose
from. In a series of cases the creation of supplies of consumers*-
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goods is the only possibility to satisfy the consumers' demand even
when the production is not able to deliver in a short time the
required amount of particular goods or when the cycle of production
is not in harmony with the cycle of consumption, In this case it
is necessary-to create the seasonal supply of goods.: This occurs
for desistance in ,the nejv=i!ty' of agricultural products but also in
the non-food articles of seasonal character (for example, textiles
or footwear iasde'especially for a particular season of the year, etc).
The creation of due supplies of-consumers' goods is also
necessary for the execution of reduction of retail prices (see
preceding chapter). In short the supply of consumers'-goods fulfills
not only significant but also complicated tasks so that their determina-
tion is quite complica Ced.
In this dissertation we will not occupy ourselves with the
determination of size and structure of the supplies of consumers'
goods for various possible p'urposes:' We will explain only in short
the method of calculation of the size of current supplies of goods
which help the warehouses and stores to fulfill their function
correctly in the course of supply to the population.
The number of individual types of goods which has to be kept
in stock in the stores (or in warehouses) is determined by the norm
of-supply. The norm of supply is determined in days, in such way
that for example, the supply of ready-made clothing will be for 40
days, the supply of footwear for 30 days and so on (numbers are made
up). Knowing the amount of one day's sale, we can transfer this time
norm of supplies into money or into an amount either in physical
units multiplying it by the amount of one day sale in crowns or in
quantity.
Gradual procedure of the determination of the time norms of
supply is such that for each type of goods we determine, the so-called
minims supply and then, we examine which period will elapse
is
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approximately between the two deliveries of goods (the so-called
delivery cycle). On the basis of these quantities we determine
afterwards the maximum and the average supply.
Minimum supply of goods is the. supply which always has ' to be
in stock and which protects the'store (warehouse) from unforeseen
circumstances. Probable._fluctuations in the deliveries of goods,
complexity of the assortment of an appropriate type of goods,
warehouse possibilities, and so on effect the
qualities of goods
size of minimum supply. Thus, 'for exaiople, with the goods, of
complex assortment (textiles) we must count with higher minimum
supply than in the goods the assortment of which is very simple
(flour), in order to guarantee adequate choice for the consumer.
in the same manner, the minimum supply of goods must be higher if
the deliveries are irregular because otherwise it could happen that
the store would be entirely without particular goods.
Delivery cycle influences also the height of supply. It is
clear that the supply can be lower for those goods which are delivered,
for example, twice a week than for those goods which are delivered
only once a month.
Maximum supply appears immediately after the delivery of goods.
If, for a le, the minimum supply of goods is 4 days and the cycle
of delivery is 30 days, then maximum supply will be 34 days. This
maximum supply decreases gradually in the periods between deliveries
to the height of minimum supply.
We. can determine the average supply of goods by adding the
maximum supply to the minimum supply and dividing the sum by two.
We Will receive the same result by adding to the m.~.imz~ supply one-
half of the delivery cycle (all the calculations are in days).
Determined supply norms,ae the basis for planning of the size
of, supplies of individual groups of consumera`.goods. Of course,
the norm ,of suRiy could not be determined once and for all. Because
the conditions of delivery and sale of goods and, therefore, its,
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assortment and often also seasons.of production~aitd consumption
change. It is necessary to control and arrange the determined
norms of supply again and again so that they would not bwome ob-
solete and would actually express the greatest height of supplies
of consumers',good*.
CONCLUSION
I completed the dissertation on the development and planning
of personal consumption in Czechoslovakia with the explanation of
the main questions of-planning of retail-store circulation. There
are a few words to be said for the conclusion of the whole, work. I
do not want to recapitulate in the-conclusion the objective prob-
lematics of this pamphlet which the reader has before him.. I
would like only to add some remarks in connection with some problems
of this work which were my guidance during writing.
First basic connection which the reader hast:to consider seriously
is the mutual relation between the final consumption and the remain-
ing spheres of reproduction. The relation between production and
consumption is of extraordinary importance. I wanted to reach the
point of making the reader realize that the development of personal
consumption does not depend on the desire and subjective wishes of
the people. It does not depend on the percentage of growth that
the party and government directives determine for him. Development
of personal consumption is the result of economical processes occuring
in all the spheres cf reproduction, especially in production.
First of all it is the level of productivity of labor -- economy
not only in production but in our entire life which decides the
increase of personal consumption and the standard of living of all
of us. Neglected shifts, uneconomically working machine, shop, or
factory, wasting-common property anywhere -- these are the parasites
which devour billions from our personal consumption. For them we
all .have to. y additional amounts because nobody will pay them to
us. We can afford only that much which we can buy with out earnings.
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It is remarkable how, in public life this primitive truth, which
everybody recognizes without discussion in his private life,.is
violated by us perhaps in the supposition that the necessary and
harmful results will riot arrive.' They undoubtedly will arrive,
only the connection here is not as obvious as in the family and in
household.
Farther cognation, which we have to mention; is the connection
between the evolutionary tendencies of personal consumption and
the development of production. It is'again the question of mutual
relation between production and consumption but comprehend from
another point of view.
The evolutionary tendencies of personal consumption shows the
ways by which consumption advances. Sometimes it appears that their
roots are somewhere outside of economy, as if these tendencies were
caused by subjective delights of the people, tastes, fashions, etc.
There cannot be any discussion about the fact that noneconomical
factors influence the structure of personal consumption. But the
basis.of evolutionary tendencies of consumption is again in produc-
tion. The growing and more manifold production enables us to
increase the level of personal consumption in the quantitative and
qualitative, sense. It givks us objects by which we change the size
and structure of personal consumption. It is then the development
of production which evokes to life the development of personal con-
su:mption and with that also its evolutionary tendencies.
Because socialist production is purposefully directed toward
the satisfaction of the demands of people, the evolutionary tender jes
of personal consumption influence backwardly the rate and structure
of production in the individual branches. We must, not neglect this
reality when planning political economy. Planning of the development
of production without the close connection with knowledge of tendencies
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elo mmit n# consumption is condemned to failure, just as the
of day P
of developm t of con5UtUPtion without the connection with
planning
possibility of production
knowle1tC of the real developm .
'Finally I want to.mention also the connection between concrete
forms and methods of planning of retail-store circtzLat (ace
Chapter 4) with the whole objective economical evolution which is
p
described in the previous chapters.
y people look on the methods and forms of planning as on an
affair more or less of personal opinion of the planner. But actually
each method and organization form of Political economy plann7in$ must
be depicted in some part of the plan and determined in the future
evolution.
In the same manner the plan for retail-store circulations
..-all
construction of its indexes) and method of its composition
T,-ow from the knowledge of the real objective substance of personal
consumption, from the study of its position in the reproduction
process and from the knowledge of the objectively necessary way of
its satisfaction. There is no doubt that today used methods and
forms of planning of personal consumption are not perfect and that
they do not?give us full possibility to foresee and direct the
developm 1t of personal consumption., Yet if we realize the objectively,
economical bases of the planning of personal consumption, we surely
wi11 find the correct way to improve the system of image ent.and
planning of our political economy.
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