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APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-00850R040500010005-0 FOR OFFIC.IAL USE ONL�Y _ JPRS L/ 10207 22 ~ecember 1981 USSR R~~ort ~ , MILITARY AFFAIRS CFOUO 14/81) Economec Bases for the Defen~e Migtit of a~ ~Social~st St~te By A.I. Pozharo~o ~g~$ FOREIGN BROAD~A~T INFORMATION SERVICE FOR OFFICIAL USE ONd,Y APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2407102/09: CIA-RDP82-00850R000500410005-4 ~ ' NOTE JPRS publications contain information primarily from foreign newspapers, pe.riodicals ar..d books, but also from news agency transmissions and broadcasts. Materials from foreign-language sources are translated; those from English-language sources are transcribed or reprinted, with the original phrasing and other characteristics retained. � Headlines, ed~torial reports, and material enclosed in brackets are supplied by JPRS. Processing indicators such as [Text] or [Excerpt] in the first line of each item, or following the - last line of a brief, indicate how the original information was ~ processed. Where no processing indicator is given, the infor- mation was summarized or extracted. Unfamil.iar nandas rendered phonetically or transliterated are enclosed in parentheses. Words or na.mes preceded by a ques- tion mark and enclosed in psrentheses wPre not clear in the original but have been supplied as app:opriate in context. Other unattr?bu~ed parenthetical notes within the bodj~ of an ite~ originate with the source. Times within items are as _ given by source . The contents of th~s publication in no way represent the poli- cies, views or attitiudes of the U.S. Government. COPYRIGHT LAWS AND REGULATIONS GOVERNING OWNERSHIP OF MATERIALS REPRODUCED HEREIN REQUIRE THAT DISSEMINATION OF THIS PUBLICATION BE RESTRICTED FOR OFFICIAL USE OD1LY. APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 - FOR OEFICIAL USE ONLY JPRS L/10207 22 December 1981 - USSR REPORT ~ - ~ ~ ~ ~ MILITARY AFFAiRS (FOUO i4/si) ECONOMIC BASES FOR THE DEFENS~ MIGHT OF A SOCIALIST STATE`, . Moscow EKONOMICHESKIYE OSNOVY OBOROlv"NOGO MOGUS~iCHESTVA SOTSIAI,ISTICHES- KOGO GOSUDAR~'i'~?~ in Russian 1981 (signed to press ZO No~ $0) ' pp 1-19~ - (Book "Economic ~ases for the Defense Might of 3 5ocialist State", by Aleksandr Ivanovich Pozharov~ Voyenizdat, 25,000 copies, 192 pages] - ~ CONTENTS Author's Foreword . . . . . . . . . . . . . . . . . . . . . . � � . . . . . ---i . CHAPTER I. THE METHOD OF PRODUCTION AND ECONOMIC SUPPORT OF WAR 3 1. The Relationship of War ana Ecanomics. The General Concept of Military Economics . . . . . . . . . . . . . . . . . . . . . . 3 2. Military Economics in Class Antagonistic Socioeconomic Formationsll 3. Military Ecqnomics of a Socialist State . . . . . . . . . . . . 23 k. The Scientific-Technical Revolution and Economic Support of a - War . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 CHAPTiR II. THE STATE'S ECONON~IC MIGHT � � � � � � � � � � � � � � � � � � � � 5~ 1. The State's Economic Poter_tial and Economic Might 50 2. The Structure of Ec9nomic Potential and Economic M~'.ght 57 3. The Constant Growth of Economtc Might - The Backboae of the Party's Ecanomic Strategy . . . . . . . . . . . . . . . . . . . CHAPTER III. MILITARY-ECONOMIC POTENTIAL AND ITS REALIZATION 81 - l. Essence of Military-Economic Potential and Ways of ~ Reinforcing It . . . . . . . . . . . . . . . . . . . . . . . . 81 ~ ,2.. Military F~roduction and Realization of Military-Economic Po tential . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 3. Distribution and Consumption of Military Products 98 4. Socialist Integration and Military-Economic Potential . 104 - - a - [I=I = USSR - 4 FOUO] - Fnn nF~(~~ s T T icF nNi v APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007142/09: CIA-RDP82-40854R040500010005-0 FOR OFFIC[AL USE ONLY CHAPTER TV. THE EFFECTIVENESS OF ECONOMIC SUPPORT FOR DEFENSE 115 1. The Need, Essence and Features of an Economic Approach to ~ . . . . . Defense Problems . . . . . ~ . . . . . . . . . . . . . 115 ' _ ----1 - 2. Military Economics as a Science and Its Significance in ~ Training Military Personnel . . . . . . . . . . . . . . . . . . 120 . 3. Current Issues of Military-Economic Theory anc3 Practice 125 Brief Uescription On thP basis of the Marxist-Leninist thesis on the interrelationship of war and ~ economics, the book examines the origin, essence, hiatorical development phases and forms of military economics. After explaining the basic directions of ecotiomic sup- port of defense under present-day conditions, the author analyzet~ ways of strength- : ening military-economic potential, features for implementing it a,nd issues on the effectiveness of military economics. The book i.s intended for off icers, generals and other re~.ders studying military ~ economics. b FOR OFFICI~IL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFFIEIAL USE ONLY , AUTHOR'S FOREWORD ~ ~ The developed socialist society built in our country is a supreme achievement of social progress and a natural stage along the path to communism. In a world where aggrassive reactionary forces still are preserved we need a reliable and effectiive defense of revolutionary achievements. This is one of the most important functions of the socialist state and a matter for all the people. A country's defense capability rests on its economic capabili~y, since "nothing depEnds so much on economic conditicns as the Army and 1Vavy." The scientific- technical revolution extremely reinforced the interconnection and interdependence of war and the economy. Fundamental changes occuz�red in the nature of possible warfare and throughout military organizationai. developr~ent. At the same time there was an ~x+traordinary strengr~hening of the reverse inf:uence on the economy by measures involving economic support of the armed for~.:es. By virtue of this, eco- _ nomic basis of military policy and of every con~rete step in national defense has taken on especially great importance. - In order to achieve the set goals with the least costs (and here specifically is = the meaning of the economic basis), one has Co know the economics of a specific sghere of activity and, to master it, one needs above all general military-economic knowledge. "...Whoever takes up specific issues without first resolving general issues," cautioned V. I. Lenin, "inevitably will 'stumbJ.e' on these general issues at every step without realizing it."2 The foundation of milit3ry economic knowledge consists in the Marxist-Leninist - theses on the relationship of w3r and economics, on the principles of economic sup- port for defense, on chazacteristic traits of the military economy in a socialist - state, and on its fundamental distinctions from the mi~itary economics of imperial- ism. Of fundamental importance to resoleing specific issues is the thorough understand- = ing of the extraordinarily complex mechanism for etrengthening and realizing military-economic potential and of the ways for increasing the effectiveness of using funds allocated f.or defense. This book is devoted to an elucidation of these theoretical issues. The scientific-technical revoluti.on and the rapid develor~ment of economics and military affairs are constantly introducing new elements to the resolu~ion of many issues of military economics. It is important to comprehead theoretically the changes occurring and draw necessary conclusions for practical endeavor~. 1 FOR OFFICIAL USE ONLY � . APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2407/02/09: CIA-RDP82-00850R000500410005-4 - FOR OFFIC[Ai. USE ONLY _ A study of the essential interconnections of econowics, politics and war helps to overcome oversimplified impressions and bourgeois pseudoscientific theories an the most vital issue of modern times--that of war ~~.nd peace. A correct understanding of these issues is of especially great importanc~ under gresent-day conditions, when internatianal relations are at a crossroads as it were, leading either to in- creased trust 3nd cooperation or to a renewal uf the C~ld War and the arms race. ~ ' - ~ FOOTNOTES 1 K. Marx, and F. Engel?, "Soch." [Works], Vol 20, p 171. 2 V. I. Lenin, PS~ [Complete Collect~d Works~, Vol 15, p 368. _ 2 FOR OFFICIAL USE ONLY . APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-04850R000500010005-0 FOR OFFICIAL USE ONLY CHAPTER I. THE METHOD OF PRODUCTION AND ECONOMIC SUPFORT OF WAR 1. The Relationship of War and Economics. The General Concept of Military Economics - The question of the relationship between war and the economy or military and eco- nomic might of states has been a key one over the ages. There are theories which make a fetish out of the role of the economy. For example, there is the well-known catchword that for victory ir. a war three things are essential--money, money and more money. But the opposite views are equally widespread. "Not ~old, as vulgar oginion has it, comprises the nerve of war, but good soldiers do, for gold alon: is not enough to find good soldiers but good soldiers will always find gold,"1 wrote Machiavelli. ~ The essence of the argument has been magnif icently expressed by A. S. Pushkin in his poem "Gold and the Sword": "Everything is mine," said gold; "Everyth~ng is mine," said'the swArd. "I will buy everything," said the gold; "I will take everything," said the sword. There have been various attempts tn overcome the absolutizing and opposition be- tween economic and military might. Thus, the military historlan H. Delbruck on the issue of the opinions which put ecor.omic and military might into opposition, - stated: "Either one is equally right and wrong. When money is put foremost, strategy shows a tendency to ma~euver; but when a state shifts to the soldier, it becomes involved in thz engagement."2 This attempt to rise above the one-sided approach of the opposing opinions cannot be termed successful as it generally avoids the issue and does not solve it. A scientific solution to the question of the dialectical relationship between war- ~ fare and the ec~nomy ha~ been provided by Marxtsm-Leninism which established that wars are economically determined and in turn they have an inverse effect on the economy. The technical and economic relationship is also known to bourgeois stience but it has energetically avoid~d and at present continues to overlook or consciously dis- - tort its socioeconor~ic aspect for reactionary, class apologetic interests. But the closest attention must be paid to this due to its ~reat importance. . 3 ' FO~t OFF[CIAL US~ ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL USE ONLY The economic causality of urars means that reasons for their occurrence are rooted in the oconomy of an antagonistic society and that the economy predetermines the essence, r.ature and political goals of the wars. tn actuality, wars became a natural social phenomenon only at that stage of economic development where the rule of private ownership of the means of production became established and when society _ was split into antagonistic classes with the rise of an exploiting state. "...War- fare and the organization for warf are are now becoming regular functions in the life of the people,"3 wrote F. Engels. Wars are the continuation of a political line by violent means. But palitical life, reflecting the relations between classes and states, is rooted in ths economy and in the economic interests of the ruling classes of antagonistic societies. Wars are conducted for the sake of these inter- ests. The slaveholders, landowners and capitalists employ military violence against the exploited masses for preserving and strengthening their class domination, for intEnsifying exp?oitation an.d for increasing income. Wars against other countries are aimed at preserving and broa3ening spheras of domination and at acquiring addi- souxces of enrichment, since "violence is only a means, while, on the con- - ~rary, economic gain is the aim."4 The economic relationships which form ora the basis of private ownership give rise to a policy of wars, militaristic ideology, moralit:y and law. For this reason V. I. Lenin poir.ted out that "war i:s not contYadictory to the bases of private own- ership but is rather the direct anc~ inevitable development of these bases,"5 arid that militarism is a"vital manifestati~n" of capitalism.6 As capitalism developed, military force found ever-broader application. Militarism achieved its flourishing when it grew from premonopolistic capitalism into imperialism and with the develop- ment of the general crisis in capitalism. ~n the basis of a scientific analysis of imperialism, V. I. Lenin proved that the greater aggressiveness of imperialism derives from its very econamic essence, that is, the rule of monopolies. "Imperialism is, economically, monopolistic capital- ism. In order that the monopoly b e complete, it is essential to eliminate competi- _ tors not only from th~ domestic market (from the market of a given state) but also from the external one, from the entire world."~ The struggle for a"complete" monopoly gives rise to a polic~ of world domination and ~'~is leads to wars between states. "World domination" is, putting it briefly, the content of impsrialist policy and a continuation of it is the imperialist war."8 The struggle for the economic partitioning of the world by the international monop- olies caused a struggle among the imperialist states for its territorial partition- ing. But as a consequence of the uneven and abrupt development of capitalism it~ its monopolistic stage, the agreements concerning the economic and territorial ap- portioning of the world between the monopolies and states were inevitably only truces between wars. "Peace treaties prepare f~r wars and in turn grow out. of wars, in determining one another anrl giving rise to an alternation of the forms of peaceful and nonpeaceful struggle from the same grounds of the imperialist ties ' and relationships of the world economy and world policy."9 Thus, aggressiveness, a striving f or wars, their preparation and conduct are not a random plienomenon but rather an in5 eparable property of imperialism stemming from its economic essence and developing with it. 4 FOR OFFIC[AL USE OP1LY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL USE ONLY The entry of into the age of general crisis further intensified its reac- tionary and aggressive nature and the brunt of aggressi~e drives is now directed against the USSR and the other socialist nations and against the revolutionary and national liberation movements. "...To their defeats in social ba~tles, to th~ loss of colonial possessions, to the abandoning of capitalism by ever-new nations, to the successes of world socialism azd the increased influence of the communist _ par~cies in bourgeois states--to all of this the aggr~ssive eircles in the capital- ist world have responded by a feverish initiating of milita~y preparations. The military budgets are inflated, new types of weapons are being developed, bases are being built, and military provocations undertaken. Relqing on this 'position of strength,' imperialism is hoping to keep hold of the opportunities slipping from its fingers of commanding other nations and peoples."1~ As the deepest roots of wars are to be found in the economy, hence for eradicating them and excluding wars from the life of mank.ind it is essential to alter the economic rela.tions. A, s~art to this was made by the Great October Socialist Revolction which eliminated private ownership of the means of production, the exploitation of man by man and the div~d- ing of society into antagonistic classes, having eliminated ~he economic rocts of militarism in our nation. On the basis of socialist ownership and a unity of fun- damental economic interests among friendly classes and social groupss between the - people relations of comradely cooperation and mutual aid have been eszablished; _ concern of all for the good of each and the concern of each for the good of all have becon~e a law of our life. With the development of socialism the substantial differ- ences have gradually been overcome between the city and countryside and between men- tal and physical labor. The social homogeniety of society and its political and ideological unity are growing stronger. All of this means that in the system of ixiternal social relations of socialism--in the economy, policy and ideology--there is no room for socialism. Socialism atso fundamentall.y i.ransforms international relar.ions. Even in their "Communist Manifesto," K. riarx and F. Engels wrote: "To the degree that the ex- , ploitation of one individual by another will be eliminated, so the exploitation of one nation by another will be eliminated. "Along with the antagonism of classes within nations the hogtile relations between nations will be done away with."11 This inspired prediction has faund brilliant confirmation in the relations of friendship, cooperation and comradely mutual aid ~ which have developed between the socizlist countries. The poli~y of peace l~as been legally reinforced in the Basic Law of a mature socialist society. This law es- ' tablishes that the USSR consistently carries out Lenia`s peace policy and is in . , favor of a strengthening of security among peoples and broad international coopera- ~ tion. At the same time the USSR Constitution in legislation prohibits the propa- gandizing of war. The grawth and strengthening of the world socialist system have undermined the eco- nomic, political and ideological bases of wars which reside within imperialism, for the sphere of action of the economic laws of socialism is growing wi~ier while the influence of its peace-loving policy and ideology on the development of internation- al relations is growing. "The growing superiority of the socialist forces over im- perialist forces, the forces of peace over the forces of war has led to a situation where even before the complete victory of socialism throughout the world, with the preservation o~ capitalism in a portion of the world, a real opportunity will arise 5 FOR OF'FIC[AL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2407/02/09: CIA-RDP82-00850R000500410005-4 FOR OFF'iCIAL USE OIVLY to exclude a world war from the life of society."12 This program conclusion of the CPSU has gained ever-new conf irmation as a result of the steady struggle of the USSR and the entire sncialist commonwealth to maintain peace. But as long as socialism exists, the social roots of militarism and hence o� a mili~ tary threat to peace survive, since "although the opportunities for aggressive ac- tions by imperialism are now significantly curtailed, its nature re~ma.ins as be- fore."13 Under these conditions, in order to pr.event the unleashing of a world war and t. g~ve an irreversible nature to the favor~able changes in international rela- tions, ~t is essential to strengthen tr.~ international ini~luence and increase the might, unity and solidarity of the world sociali~t commonwealth. The economic causality of wars goes beyond what has been ~said here. The economy is the material basi~ for conducting wars and has a aetermining influence on their scale, duration and intensity. In order to condsct wars, it is essential to have armed forces and significant means are required for their creation and support. The amount of ineans a society can allocate will depend upon the economic development level. The higher the e~onomic development level the more weapons and military J equipment, and of higher quality, the armed forces can employ and, consequently, the higher their combat capabilities. The ec,~nomic development level a?so determines the possible size of tk~e armed forces and the fighting qualities of the men and their ability to master the weapons and military equipment and employ them skillfully. This notiou is particularly pertin- - ent under present-day conditions, for "wars are now conducted by peoples," wrote V. I. Lenin, and they require "high quality human material."14 In speaking of. the economy as the material basis for the conduct of wars, it is es- sential to bear in mind not only the development level of the productive forces but - also the production relations. The growing of socioeconomic contradictions into military conflicts and the duration and intensity of wars depend upon the depth, acuteness and complexity of these contradictions. The nature of the production re- lations and the degree of their conformity to the productive forces in addition in ' a decisive manner ~nfluence the realization of the capabiLities residing in th~ pro- ductive forces and the degree to which economic might is subordinated to military int~rests. "In modern warfare, as everyone knows, the economic organization is of decisive significances"15 poin~ed out V. I. Lenin. This statement has assumed _ particular pertinence under the conditions of the historic clash between capitalism and socialism, the two systems which represent twu opposing types of society's eco- nomic organization. Finally, the economy has a determining influence on rhe development of all military affairs, that Is, on the size, structure and organization of the armed forces, on the forms and methods of waging war a~d on the statP and development of military art. Here it is also essential to distinguish two aspects: the technical-economic and the socioeconomic. The davelopment of the productive forces tells in a direct and indirect manner on the quantity and improvement in weapon~ as well as an the fighting qualities of the men and through them on the state of military art. On the basis of analyzing military lii$tory, F. Engels convincingly proved that "it was not the 'free creativity of the mind' of inspired militaYy leaders which operated - here in a revolutionizing manner but rather the inventing of better weapr~ns and the = 6 ~ FOR UFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2407/02/09: CIA-RDP82-00850R000500410005-4 FOR OFFICIAL USE ON1.Y change in soldier materiaZ; the influence of great military leaders at best was limited to the fact that they adapted the method of conducting combat to the new weapons and tc the new fighters."16 Tr~ie increase in the power of weapons, the radius of their action, mobi.lity and mase ~ nature has led to an unprecedented increase in the scope and intensity of combat operations in the u~orld wars and to a change in the forms and m~thods of armed com- bat. The general engagement has given way to operations by armies and fronts in World War I and to strategic offensive and defensive operations in World War II. The qualitative changes in tne productive forces on the ba~is of th2 scientific and technical revolution have made it possible to rearm rhe Army and Navy with nuclear missiles and this has led to a revolution in military affairs. Military affairs also constantly are diversely influenced by the socioeconomic sys- tem wtii~h, in determining the goals and nature of the war as well as ti~e morale of the people and the army, tells directly on th~ nature of military organizational development, strategy and tactics. V. I. Lenin has writt.en that in the wars at the - end of the 18th CQntury, the French revolutionary people showed "gigantic revolu- tionary creativity, having recreated the entire systzm of strateg~, having broken all the old laws and customs ot war and having created a aew, revolutionary peoples army and a new conduct of war in the place of the old troops,"Z~ Here V. I. Lenin drew attention to the fact that in France "an economic basis was first created for a new, higher method of production and as a result a strong revolutionary army was the s~~perstructure."18 The advantages of socialism over capitalism have been vivid- ly manifested in the military organizational development ~f the socialist nations which have created fundamentally new armed forces which differ basically f.rom the imperialist armies in terms of their purpose, nature, structure and organization. Soviet military science and art have withstood the severe testing in the harsliest wars which mankind has ever known, in the wars to defead socialism against imperial- ist aggression. , The econcmy influences the method of a war's conduct not or._ly as an internal factor in the military organizational development of a given state but also as the exter- nal environment. Within the system of conditions char~cterizing one or another theater of war, economic conditions are of exceptionally important significance. These include: the level of industrial development, the transportation n~~work, fuel and energy resources, population density, the socioeconomic system and so forth. F. Engels pointed out that the method of waging a war depends upon the de- velopment of the productive forces and upon the means of communications "botl: in _ the rear itself as well as in the theater of war....i19 V. I. Lenin also drew attention to ttiis. For example, he pointed out that during the Russo-Japanese War, the Japanese occupied the b~tter and most populated part of Manchuria and this made it possible for them to support the army by the means of the conquered nation ~nd with Chinese aid. The Russians were zestricted to the supplies tran~ported from Russia over a s.ingle railroad and this clid not make it possible to have full use of the available economic and military capabilities in the war. V. I. Lenin pointed to this as one of the reasons for the futiility of continuing the war and the in- evitability of a defeat for tsarist itussia.20 World War II which involved many nations and entire continents in its orbit provided vivid examples of the depend-- ence of military art and the nature of cc~mbat operations upon the development of ~ the productive forces and means of communications in the various theaters of war. 7 - FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007142/09: CIA-RDP82-40854R040500010005-0 FOR OFFICIAL t1SE ONI.Y This dep~ndence h~s also been confirmed by the numerou~ local wars started by the imperialists in the post-war pertod. It is particularly important to consider all of this in solving the present-day questions of military organizazional development. Thus, ~~ars and military affairs are economically determined. The dependence o~ wars a:~d military affairs upon the economy is their most essential relationship, a per- ~ manent, repeating orie which tends to intensify. T'his is an objective law. Buti it ; must not be absolutized anra iL must not be assumed that superiority in economic strength in and of itself guarantees military superiority and victory in war. In the firsr place, military affairs is influenced not only by the econamic factor but aiso feels the effect of the political goals, the national and geographic features ; of a nation as well as the subjective factors, including the assessment by states- ' men of the real capabilities of their nation a~td the enemy and the ability of the military leaders to more or less completely and quickly adopt the methods of warfar.e to the ne~a weapons and new soldiers. Secondly, economic might does not convert automatically into military strength. In order to realize military economic poten- tial in a state it is essential to create a military economy and to sub~rdinate as fully as possible all resource~ to satisfying the nee3s of a war. Consequently, the question arises of. the demands made by a war on the economy. _ The inverse ef.fect of wars on the economy is a diverse and contradictory one and ex- ~ tends both to the productive forces and to the production relations. This happens _ in two basic ways. The first is related to the immediate armed effect or action from the enemy and ~he second to ensuring the funct~?oning of one's own armed forces. . The inevitable conse~uences of wars are human casualties and material. destruction, the destruction o� a portion of national wealth and a reduction in a society's pro- ~ duction capabilitiPS, With the existing means of waging wars, a real opportunity has arisen for destroying the economy in the process of combat operations and eradi- cating the populaticn over enormous expanses. For this rea4on, under present-day : conditions, in economic construction one must consi~ler ahead of time the problem of ensuring the stability and survival of the economy in a possible war here being guided not only by economic but also military strategic considerations. Wars have a substantial influenc~ on the economy in the fact that they give rise to specific social needs and particularly the needs for personnel used to man the armies, for weapons, ammunition and other military-end articles. The sattsfying of - these needs, in the first place, diverts a significant portion of the populace called up into the army from particip~tion in production and this restricts the op- portunities for economic development. Secondly, for satisfying military need~, the production of military-end articles is organized and this also requ3res manpower, and above this, also the means of production. However, the question dees not come down merely to diverting a portion of society's forces and means to military ends. F~r supvZying military production with the es- sential means, substantial structural shifts must occur in the national economy. The basic national economic proportions are altered as well as the sectorial and territorial structure. This is particularly apparent in the period of preparing and conducting the wars. Preferential development is given to the sectors and areas - which are militarily important at the exgense of the sectors which satisfy civil needs. World War I, as V. I. Lenin pointed out, led to such a growth of the 8 = FOR OFFICIAL USE ONLY . APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-4 FOR OFFICIAL USE ONLY military industry that even the production of the absolutely essential minimum of = consumer goods and the means of pr~du~tion was impossible.21 The negative conse- quences of World War II in this regard were even ~nore significant. The arms race which has developed in the postwar period has led to a situation wher2 in the im- perialist nations during peacetime a significant scale of military producti~n Yta.~ - been initiated and this has had a 5ubstantial impac*_ on t.he entire economy. ~ The preparations and conduct of wars te11 on the production relati~ns. G~;:ct. - the occurrence of particular military needs, economic processes arise which work to satisfy them and economic relations develop in the sphere of production, distribu- _ tion, exchange and consumption of m~litary-end articles. Let us terna thess = military economic relations. As is known, economic relations are manifested as - interests. ~his also applies to military economic relations. As militarism has - grown in the capitalist world, one has felt evermore strongly the interesi:s of those - social groups for whom the satisfying of the a~ilitary needs of the ruling class has become the social runction determining their place in the sncial division of labor. _ It is no accident that under present-day conditions the military industrial con~plex operates as a state within a state, applying pressure to the economy, politics and ideology of a capitalist society. In generalizing, it can be concluded that on the basis of develdping the dialecti- = cal relationship between ttie war and *_he economy, a portion of social production~ is specialized in the supporting of military might. This also forms tre military~. economy. In other words, the military economy is a systen, which serves the state's military needs and the preparation and conduct of wars. V. I. Lenin, in speaking about the capitalist economy which operated for war, defined it as an "economy directly or indirectly linked with military deliveries...."22 In order to turn the military economic potential into military might, it is essen- tial to pY~luce the weapons, military equipment and other military-end articles, to deliver them to the armed forces and ensure their efficient use. Hence the mili- tary economic process includes three consecutive ghases: production, ni5~~ibution and exchange and consumption of the military-end articles. For performing the cor- responding functions there are special elements of *_he military economy: produc- = tion, distribution and the element which serves end military consumptiom. _ The mili~ary economy can be viewed fr~m two aspects, the technical and the social. The technical aspect is made up of the material and physical ~elements of its indi- ~ vidual units and the personnel ~~mployed iti them. The production element of the military economy is a part of social production while ~che elements serving distribu- tion and consumption--the dumps, depots and rear facilities of the armed forces and = th e systems of logistical support--are a component part of the armed forces. The military economy caz also be viewed as a system of social relations which de- velop in the process of the production, distribution, exchange and consumption of military end articles. These relations are manifested in the various spheres of society's vital activities, that is: in social production, in that portion which - is directly concerned with the supplying of the armed forces and in the armed forces themselves. In accord with this it is possible to isolate three groups of military econ.omic relations: the relations caused by the ties between ~ilitary and civilian production, the relations of military production per se and the reZations 9 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007102/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL USE ONLY of the di~tribution and consumption of end mili.tary product. In their aggregate = th~ese encompass all aspects.and phases in the process of the economic ~upport of 3efense, starting by determining the volume of military needs and the means required to satisfy them an3 ending with ensurinJ efficient consumption of the end military- end proaucts. Military economic relations are specific ones. Their.specif ic features are deter- mined by the particular purpose of the military economy and by the derivative ~ = nature of these relations. In being basecl upon the production relations of one or ~ another specific method of production, they reflect their essence and change along - with them. But one must not derive military economic relations directly and solely from the economic base as they are formed in an interaction between the base and the superstructure. Thus, in a socialist society these relations are of a requi- _ site nature and are caused by the policy reflecting the need to defend socialism - against the externally-arising mtlitary threat. The mil.itary economic process is directly linked to the production process. The - military products going to the troops are removed permanently from this process and - for this reason i.ts on-going renewal is inconceivable withou*_ special ties to the civilian economy on the basis and at the expense of which can the military economy _ only exist. Objective laws are inherent to the military econom~ and these reflect a definite de- - velopment level of the economy and military affairs, their dialectics caused ~y this _ level, the relationship of military production and military consumpti~n, current military production and reserves, the relat3_onships of the various element~ of the - military economy, civilian and military production and so forth. The development of the military economy is subordinate to the economic laws inherent to the given socioeconomic formation and these laws define its social essPnce, qualitative uniqueness and particular features. For example, a capitalist military economy is subordinate to the operation of the law of surplus value and the other economic laws of capitalism. Also inherent to it are the antagonistic contradictions, anarchy and competition indemic to capitalism. In opposition to this the~social- ist military economy is subordinate to the operation to the economic la~as of social- - ism. As for the immanent laws internally inherent to a military economy and w~hich can ~e termed the military economic laws, these arise on the basis of the economic laws and iaws of war and are derivative from them in the same manner that mil;tary eco- nomic relations are derived from a given society's production relations and are shaped under the impact also of political and military factors. These laws are historically transitory and change with the development of the economy and military affairs. During various historical ages there have been different military eco- nomic potentials of states, different forms and methods for realizing these poten- tials, and different relationships between the component parts of the military economy, current military production and accumulated reserves and so forth. Thus, the hierarchical landowning system in a feudal society gave rise to a decentralized system of supplying the troops. On the ba~is of the concentration and centraliza- tion of capital and w~*h the growth of the economic and political strength of the capitalist state, new ..;~stems for the economic support of wars developed and these have their intrinsic quantitative and qualitative different ties and relationships, that is, new military economic laws. 10 FOR OFFiCIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL USE ONLY ~ Along with the military economic laws inherent to ~ust one or another historically specific form of a military economy there are also certain general laws of a mili~ tary economy which operate in all stages and levels of its development. These ex- press tne most general relationships which do not depend upon the social nature.of _ military economic relations. Among such laws one could put the law of the depen3- _ ence of military might upon military prod.uction and the law of the dependence of - military prodt~ction upon the deve:Lopment level of the productiye forces and the method of production. F. Engels pointed to these relations: "...The victory of violence is based upon the production of weapons and weapons production, in turn, - is based upon production generally....i23 The inverse effect of war on the economy - and the growing relationship of the economy and war also are of a natural natur.e. From an examination of the relationship of war and the economy, it �ollows that in their dialectical interaction the military eco�nomy is that connecting link through which the economy has a determining impact on the war and the war subordinates the economy to its interests. Because of this the social essence of a military economy - is predetermined by that economy which has created it as well as by the wars which it serves. Since the existence of a military economy under socialism derives not from its in- - ternal essence but rather due to external conditions, it is quite understandable that these external conditions have a signif icant itnpact on the socialist state`s military economy. For example, the scale of this economy is influenced by the nature and the degree of military threat at a specific historical moment and by _ . the military preparations being carried out by probable enemies. Hence in order to co:rectly solve the problem of economic support for the defense of a socialist state, it is essential to know the present military economy of imperialism and for comprehending its essence, laws and development trends it is essential to at least generall} trace the historical process of its rise and development. 2. Military Economics in Class Antagonistic Socioeconomic Formations ~ A study of the historic developmental process of the economic s~xpport of wars, of the objective military economic laws and specific forms of their manifestation at various stages helps in elaborating a scier_tific approach to solving modern mili- tary economic problems. Certain methods and forms tested out in previous wars can be employed in practical activities under present-day conditions while others have lost their importance and sh~uld be replaced by new ones. But "it is impossible to iearn to carry out one's tasks by new procedures to day," pointed out V. I. Lenin, "if previous experience has not c:pened our eyes to the incorrectness of the old ~procedures."24 The basic turning points in the development of economic support for wars have been determined by the change of socioeconomic formations, each of which har its own in- _ herent method of economic support for a war and its own military economy. A gen-. , eralized expression of the technical-economic and socioeconomic aspects of a mili- tary economy are~found � in the first place, in the development level of the material means of armed combat, and secondly, in the forms and methods for satisfying the needs for these means. Precisely the quantitative and qualitative certainty of the r,.aterial requir~ements of a war and of the forms for satisfying them character- izes a military economy as a natural outgrowth of a given level of social develop- ment. ~ ~ 11 FOR OFFIC[AL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 - FOR OFFICtAL vSE ONL1' Ti~e Origin and Development of a Military Economy in Slaveholding and Feudal ~ - Societies = The conditions for the rise of a military economy began to develop with the split- ~ ting of society int~o an antagonistic classes and with th~ rise ~f the state and - army. During the age of primitive society their existed an automatically aperat- _ ing armed organization of the population. With armed clashes the entire adult pop- ulation assumed the role of warriors and em~ployed ordinary implements of labor as ' weapons. Under these conditions there was no need for a separate military economic - organism and it arose only in the development stage when a war and the organization _ for a war became regular social fLinctions and armed detachments of inen were organ- . ized which were separate from the people and specialized in the performing of these functions. At this stage there was a differentiation of military and civilian needs and military production and military economic relations aroae. ~ Thus, a slaveholding state imposed military taxes, both monetary and in-kind, on tha population, it used loans and made collections of food and fodder. In Ancient~Rome expenditures on the army were set for the year and annual estimates were drawn up. Accounting rules were established for supply questions. In the large slaveholding states, armies were created of several-score thousand men and fleets consisting of hundreds of ships. These required a large amount of weapons, food and other supply articles.. Military production developed out of this and there was also the process - of its specialization. Shops based on slave labor were organized to manifacture weapons,25 and in the troops there were specia]. detach.ments of military craftsmen. , K. Marx pointed to the presence of an incipient shop system in the Roman corpora- tions of military craftsmen.26 In the army troop services developed and these served to meet the needs of the ~ troops for food and fodder. Often the source for satisfying these needs was the military plunder, tribute and direct ravaging of the population in those areas where the troops were quartered. Food was issued to the soldiers in-kind or in the form of script. In the latter instance markets were org~-~ized in the areas where the troops wer~~ located. In the Roman army the questor under the coasul was in charge of the treasury, he sold military loot and slaves to the merchants, he manufactured the necessary supply articles and issued rations to the troops. Wagon- trains with food and military loot moved behind the troops. These were the incipient elements of the military economy which arose with the rise of armed forces in a slaveholding society. From the material and technical aspect, the arising military economy was def ined by the comparatively low development level . of the productive forces while its socio~economic essence was determined by the nature of the slaveholding production r~lations. The long era of feudalism during which there were repeated substantial changes in the economy, political relations and military affafrs clearly illustrates the close ~ dependence oE the forms and methods of economic support for wars upon the develop- ment level and the particular relationship of the economy and the war in various. stages. In a feudal society, miJ.itary economic relations were datermined primarily by the then-existing landowning relations. "The hierarchical structure of land tenure and the related system of armed companies gave the nobility power over the peasants,i27 wrote F. Marx and F. Engels. Military organizational development was carried out on this basis arid the army provided with everything necessary. The 12 - FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL USE ONLY ~ standing companies of princes and feudal lords wer~ the core of the feudal army.- ~ Along with this, during wars, people's militias were cxeated. Economic supply of military needs was decentralized. Thus, in preparing for the campa~gn against Kazan', Ivan the Fourth in 1545 senr to ~ the Novgorod military leader an ukase to assemble 2,000 arquebusiers, 1,000 on foot and 1,000 mounted. "And those arquebusiers, both mounted and on foot, for every man there should be an arquebus, for every arquebus 12 copper rounds and 12 lead rounds for shot."2S Upon the demand of the central authorities, the feudal lords reported "with horse, men and weapons" and w~re themselves concerned for sup- plying their troops. With the development of the productive forces, particularly metallurgy and trades, and with the growth of the cities there were fundamental changes in the means of - armed combat, in the nature and structure of military might, in the methods of con- ducting wars and their economic support. Of particularly great significance were the appearance and improvement of firearms. With their introdsction, small arms, guns, ammunition and other articles began to hold a significant place in military consumption and in contrast to the feed and personal supplies these had to be pro- vided, as a rule, from one's country. In line with this it became necessary tn organize large enterprises for producing them and maintain regular close ties be- tween the army and nation. The role of the lines of communication grew and the necessity of organizing centralized troop supply increased. . Feudal relations did not help to solve arising new problems. The feudal lords were not interested in strengthening central power or the centralizing of military organ- izational development and troop supply for this undermined their feudal autonomy. _ They desperately resisted the broad introduction of firearms. As for military art, here as well the reactionary political positions of the feuda3. l~rds made themselves felt. The feudal lord realized that in carrying out the will of the monarch, he y was risking his own armed force and consequently his own feudal independence. Hence the desire to replace strategic operations by strategic gestures. Strategy was con- stantly in opposition to policy.29 F. Engels has written that f irearms brought about a major change in military affairs and influenced in a revolutic+nizing manner the political relations of domination and suppression. "In order to have powder and firearms, an industry and money were needed and both these were possessed by the urban citizens. For this reason from the very outset firearms were a weapon aimed against the feudal nobility by~ the - cities and arising monarchy which relied on the cities."30 The cannons uf the burgers _ destroyed the walls of the knights' castles, the bullets of the towns' guns pierced ~ the knights' armor and the rule of the nobility, write F. Engels, collapsed along with the�noble armor-clad cavalry. In indivi.dual states there were permanent and temporary troops recruited as mercen- _ aries combined with compulsory recruitment and supported by the state. The German troops provide a typical picture. These were poorly organized hordes of inen for whom war was a trade and means of existence. They served whoever paid more. Here were representatives from all estates and various nationalities. In receiving pay, the Landsknecht had to provide himself with everything requirEd. In one of the documents from those times entitled "Military Regulation at Sea and on Land," it ' states: "...Each soldier should eat and drink independently of who pays for this, 13 . - FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFFECIAL USE ONLY the priest or the sexton; the Landsknecht has neither home, farm, cows or calves and no one brings him dinner. For this he must seek supplies where possible and buy - without money, regardless of whether the peasant likes this or not."31 In other ~ words, the plundering of the population from those areas where the troops were qua.r-. tered comprised the most important source of their existence. With this system of suppl~, the soldiers on a campaign provided for their own needs, like an itineranr peddler. For every infantry regiment there were un to 4,000 women and servants. In a march a 3,000-man regiment took with it at least 300 wagons with women, child- ren, servants and all sorts of baggage. The Thirty Years War (1618-1648) which involved a significant portion of Europe showed aIl the unattractive failings of this system. It was bad enough that the Landsknechts everywhere carried out wild plunder, terror and destruction. This sys- ' tem involved a constant danger that the soldiers would scatter in all directions, ' turning into bands of highwaymen. After this war, the magazine supply system became widespread in Europe. Its roots can be found even in the slaveholding armies and were occasionally observed in the ~ feudal states. This system which presupposed the availability of significant re- a sources in the hands of the state developed fully in the 18th Century. It was " characterized by the construction of a system of magazines in the theater of war.. y Food supplies were delivered to the magazines. With the aid of special wagontrains _ the food was transported from the magazines closer to the troops. Bread from bak- eries was delivered by special wagontrains for the troops. Such a supply system freed the army from the necessity of moving cumbersome wagontrains with it and made it possible to limit the food~supplies to a quantity which was needed for moving from one magazine to another. But this system tied an army down to the magazines, it limited the range of its operations to the organization of wagontrains and neces- ~ sitated significant funds. ; The magazine supply system was the last word of feudalism at that stage in its de- _ velopment when capitalist relations had already become widespread and the atomistic feudal system was replaced by an absolute monarchy with its comparatively large standing armies. "The very thing which had occurred in the organization and per- manent recruitment of armed forces was also to occur with their supply," wrote K. Clausewitz. "...The government was forced to view the supplying of the troops as - a question re~ting completeiy on its shoulders.... It was essential not only to ~ create a separate military caste (Kriegsvolk) but also a special supply organization and develo? i*_ as much as possible."32 This system disappeared at the end of the 18th and the beginning of the 19th centuries when mass armies appeared, when the ' scope of wars broadened unprecedentedly and when the methods of waging them changed substantially. The Capitalist Military Economy The development of the productive forces and production relations and the increased degree of worker exploitation under capitalism created an economic opportunity for - a further growth of the military economy and the necessity for this was~determined ~ . by the intensified class and international antagonisms and by the ever-broader use _ of military force. "War is the constant accomplice of capitalism. The system of exploitation of man by man and the system of the annihilation of man by man are two aspects of the c~pitalist system."33 Because of this progress in the area of 14 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00854R004500010005-0 FOR OFFICIAL USE ONLY science, technology and the economy is evermore fully subordinated by capitalism to militaristic interests. Military production becomes the most important component in social production and a dPVeloped military economy is formed. Machine-based industry, the material and technical base of capitalism, made~it pos-- sible ~o create powerful weapons and to industrialize the armed forces. "A modern ship of the line is not only a product of large-scale industry," wrote F. Engels, "but at the same time a vivid example of it, a floating factory; in truth, one which serves chiefly to spend money."34 The development of weaponry accelerated particularly with the growth of premonopo- ~ listic capitalism into monopoli~tic. Thus, during the years of World War I the armed forces underwent a technical revolution. In the course of its many new types of weapons appeared and became widely used, including: antiaircraft artillery, mortars, tanks, aircra~ft, toxins as well as equipment such as optical devices, the telegraph, telephone and radio. "...For the first time in history the most power- ful victories of technology were employed on such a scale, so destructively and with such energy for the mass annihilation of millior.s of human lives,"35 wrote V. T. Lenin on this question. _ With the creation of large armies equipped with powerful weapons, means of trans- - port and communications, there was also an increase in the scale of the wars, their scope, duration and the intensity of armed struggle. There was an abrupt rise in the material needs of wars. The budget cost of World War I reached 186 billion dollars and World War II cost 662 billion dollars.36 But the matter does not come down to the quantitative growth of the ma.terial needs of wars. Qualitative = changes also occurred in the structure and nature of military consumption. One of the characteristic shifts in the structure Qf the material needs for the armed forces was in the increased share of weapons and military equipment and the reduced share of personal consumption articles for the servicemen. While 3uring ~ the time of the wars of Peter the Great, Russia spent 11--12 percent of the total military expenditures on military equipment, 14 p~rcent in the war of 1812- 1814 and 25 f-~rcent in the Russo-Japanese War, duri~g World War I the belligerents spent alm~st 60 percent of their military expenditures for these purposes and in World War II 70-75 percent.37 The proportional amount of weapons and military equipment in the t.otal volume of military expenditures increased in Germany from 7.6 percent in 1872 up to 19.7 percent in 1913 and 44.8 percent in '1938; in the United States, respectively, from 25.9 percent to 40 percent and 41.7 percent.38 Another structural shift is that in the total composition of weapons the most ad- vanced and powerful ones develop at more rapid rates. Thus, in World War II the production of firearms and ammunition increased by 2-3-fold in comparison with World War I(in the United States, England and Germanq taken together), while guns increased by 5-fold, mortars by 16-fold and tanks by 45-fQ1d.39 Thus, the development patterns of the productive forces show a specific reflection in the arm.y and the military economy. Corresponding to the growth of the technical,� value a?'sd organic structure of czpital are analogous changes in the relationship of equi~~nent and personnel in the troops and in the structure of the material require- - ments for the wars. In military affairs the increased combat might of the traops and tt?e destructive force of wars correspond to the ~ncreased Iabar productivity in the national economy. 15 . FOR OF FIC[AL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-04850R000500010005-0 FOR OFFICIAL USE ONI,Y ~ As is knowi:, the material requiremenzs of the armed fcrces per unit of time are higher the greater their equipping level. The material losses of armies in the course of armed combat grow in the same if not in a greater proportion. It is pos- sible to judge the increased intensity of inilitary consumption of fighting armies from the amount of ma*_erial and equipment going pex~ saldier per day. This has in- ' ~ creased from 6 kg in World War I up to 20 kg in Wor1d War II. How has a11 of this infiuenced.the mili.tary economy? A corresponding increase has been required in the might of military production and the other elements of r?~e military economy in order to ensure the reproduction and delivery to the troogs of a large quantity of intensely destroyed weapons, ammunition, military equipment a~nd other military-end articles. The growth rates of military production and consumption during the age of imperial- ism have significantly outstripped the grpwth of civilian production. For example, - in comparison with the 1870's, in the 1930's industrial production had increased by 10-fold in the united states and military expenditures by 19-fold; in Germany the corresponding figures were 4.3-fold and 27-fold. During the years of World War II the level of industrial production in the United States was only 3-fold higher than the level during the period of World War I while the volume of military expendi- tures was almost 20-fold more; in Germany, respectively, by 2.2- and 4.5-fo1d.40 The increased military consumption in comparison with the growth of all social pro- duction has meant a rise in the degree to which the latter is subordinate to mili- tary aims. ' The increased volume, the more complex composition of the material needs of wars and the greater intensity of military economic processes have necessitated quali~tative changes in the military economy and a fundamental revision in the entire system of military economic relations. Capitalism, in comparison with its preceding methods of production, has created more favorable conditions not onl~? for the growth of the productive forczs but also for subordinating all economic capabilities to the interests of war. This has been ' causea by the characteristic concentration and centralization of production and capital under capitalism and by the concentration of all economic power in the hands , of a small class of capitalists, its monopolistic upper clique which has subordin- ated the state to itself and has entrusted to it the representation of its most gen- eral class interests, including militaristic ones. ~ . The process inherent to capitalism of the socialization of production has become - most vividly expressed in the production of military-end articles. Military prod- ucts are manufactured, as a rule, upon the state's order which, in essence, guaran- tees and recognition of its socially necessary nature as it is known beforehand what is tq be produced, in whati quantity, by what time and at what price sold. In the sea of universal anarchy and confusion, mi?.itary production operates as some- thing unusual and unique. V. I. Lenin emphasizec_ this uniqueness: "When the capi- talists work for defense, ~hat is, for the treasury this clearly is not 'pure' capitalism, but rather a special type of national economy. Pure capitalism is com- modity production. Conanodity ~roduction is working for an unknown and free market. But a capitalist who 'works' for defense is `working' not for the market but rather upon the order of the treasury and quite often even using the money received as a 16 FOR O~'FICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007102/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAI. USE ONiY loan from the treasury.i41 A bourgeois state, in carrying out the will and repre- sentirg the interests of the capitalist class, places the burden of mil�Ltary expend- itures on all society and performs the function of the henchman of the bourgeoisie. "Governments.are the henchmen of the capitalist class. The henchmen are well paid. The henchmen are the very shareholders. And the l,amb is �leeced accompanied by $ stream of noise about `patriotism'....i42 Thus, V. I. Lenin defined the socioeco- nomic content of this phenomenon. Militarism is older than capitalism but only under capitalism, in its monopolistic stage, does it reach its apex. At the same time the system ~f military economic relations gains its full development. In the place of duties established by social positions and the in-kind decentralized supplying of armies, universal military ob- ligation is established ar_d the support of armies becomes exclusively a question for the state. Weapons production is turned into one of the most prof itable spheres ~ for the employment of capital and for this reason in the place of state-owned mili- tary manufacturing enterprises, large capitalist factories arose which mass produce military-end articl~s.43 With the general class interest of the capitalists in strengthening militarism and consequPntly in the existence and development of military production, among them individual groups of weapons manufacturers arise the interests of whom are directly tied to wars. Having invested their capital into the production of military-end articles, they thirst for an arms race and wars. On this basis ever-closer. ties began to develop between the weapons manufacturers and the upper military in the state system. The concrescence of the monopolies with the state system and mili- tary led to the formation of the military industrial complex. . _ The military industrial monopolies did not restrict the sphere of their activities to national li~nits but went beyond them, involving the entire world in the sphere . of military economic relations. As early as 1886 there arose an irternational alli- ance of military monopolies in the fnrm of the Nobel Dynamite Trust where the lead- ing role was played by English and German industrialists; in 1894 there was the Harvey International Syndicate of Armor and Battleship Manufacturers which brought _ together EngJ.ish, German, French, Italian and American businessmen. In 1904, agree- ments were conclu3ed by the military concerns of the German Krupp, the Austro- Hungari~n Skoda and the French Schneider-Creusot. These agreements provided for the setting of prices, the establishing of quotas and the apportioning of markets and the exchange of patents. In obtaining enormous profits from weapons deliveries and being directly interested in their expansion, the military concerns in every possible way accelerated the preparations for World War I. "...The shipbuilding and cannon, the dynamite and f irearms factories and plants represent international , enterprises in which the capitalists from various nations together dupe and fleece the 'public' ,f various nations with equal ease building ships or cannons for Eng- land against Italy or for Italy against England,"44 wrote V. I. Lenin in 1913. ~ . Certain international agreements of the military industrial monopolies continued operating even during the period of the world war.s regardless of ~he fact that the monopolies which were members in these agreements were located ~.n hostile countries. In the postwar period, on the basis of the increased integration processes and the growth of militarism, there has been further development of international military monopolies. ~ 17 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFF!CIAL USE ONLY _ Pfilitary economic relatians have developed not only in breadth.but also in depth. - The very military economy has been transformed, the relationship of its structural elements and ties with the national ecanomy have become altered and a number of new patterns have arisen. Certain development trends in the military economy have been noted by representatives of classic bourgeois political economy and military sci- - encs. However, bourgeois science was unable to provide a scientific analysis of - the social essence and objective laws of military economy and it has dagenerated into a servile apology for the existing order. It has also been unable to proID.ptly raise and grasp the pertinent questions of economic support for a world war which is being prepared by imperialism. Here are certain characteristic examplps of the "foresight" of bourgeois sc_ence on = tk~e eve of World War I. Thus, the representative of the German General Staff, Schlieffen, in 1909 wrote that now it would be futile "to achieve further advances and set new tasks for the inventors. Everything imaginable has already been achieved."45 In Russia, A. A. Gulevich proved that the food question would be of _ crucial significance in a war while f inancial poverty and the poor development of industry and the railroads would not be of decisive importance. I. S. Bliokh as- serted that "the lo~o level at which the development of agriculture stands in Russia will increase its defensive strength. The abandoned fields are not worked out be- cause they have not been tilled as they snould." Even certain bourgeois authors have pointed out this reactionary nationalistic blindness.46 It is not surprising that the waging of the approaching world war as before was _ planned basically from supplies created in peacetime and from comparative~.y small weapons production at the regular military plants with the involving of a few civil- ian enterprises. But life repudiated these plans having fundamentally altered the method of economic support for the war. One of the distinguishing features in the economic support of World~War I was the meeting of military needs from current production of military-end products. For this purpose enormous capitalist military production was organized. In the Entente nations (not including the United States), it employed over 40,000 enterprises with 13 million workers and in the nations of the Austro-German bloc, around 10,000 en- terprises with 6.million workers. As a total during the war years these countries produced more than 24 million rifles, 1 million medium and light machine guns, al- most 150,000 artillery pieces, 17,500 moxtars, 8,200 tanks, almost 170,000 aircraft, over 1 b~llion artillery shells, 44 billion cartridges and much other military equipment and weapons. Military produc*ion reached even greater scale during the years of World War II, its structure became extremely complex an-? new ma~or sectors of military production appeared.47 Another particular f_e~ature was that on the basis of the transforming of weaponry and the increased sc.ale and intensity of military consumption, the nature and mech- ani5~n of interaction among the component parts of the military economy were altered. In previous times the weaponry products had been produced ahead of time and stored at state depots.. With the start of the war a period of intense consumption began without the corresponding reproduction of military products. For this reason upon the depletion of the stockpiled supplies the war would halt or be interrupted. Con- sequently, there was no direct interrelated link in time betwQen current military production and current military consumption and the distribution network also 18 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2407102/09: CIA-RDP82-00850R000500410005-4 ' FOR OFFICIAL USE ONLY _ performed the role of a sort of storage capacity. Due to the fact tha~ now the re- = quirements of the war began to be met from current produ~tion of military producr_s, fuller coordina~ion was required between product{~n and consumption in terms of the - volume, composition and delivery dates while the distribution network had to facili- tare their interrelation. and reciprocal adaptation. Thus, the production, distribu- tion and consumption of military-end products now operated as organically linked, _ mutually determining and related elements of a single whole, the permanently func- _ tioning military economy. This was th~ essence cf the occurred change. The third change involved the nature of the reiationship between the military and civilian economy. The colos~al growth of military needs and the n~cessity of cover- ing them from current production brought about a sharp increase in military produc- tion during the war and required the diverting r~f all the means of production to serving the cause of war,4S wrate V. I. I,entn. Thus, by the end of World War I, 75 - percent of France's and Germany's industrial product was used for military ends - with the figures of 65 percent in England and 40 percent in the United States.`'~ In order to achieve this, it was essential to fundamentally alter all the national economic proportions, adapt~ng them to the interes~s of the war. But the question did not come down merely to altering the sectorial proportions. Since the mi~itary economy required direct centralized management of it, the reorganizatien ~f rhe en- tire national economy in the interests of ineeting military needs presup~~osed the _ introduction of state regulation. Universal labor conscription was introduced along with a state monopoly of food products and the compulsory regulation of the alloca- tion of raw materials and production. Military-state monopolistic capitalism under- went rapid development. ' Thus, in ~he process of the growth of premonopolistic capitalism into monopolistic ' on the basis of changes which had occurred in the method of production, in the meth- od of waging wars and in the relationships of war and the economy, a series of new patterns in econo~ic support for wars had arisen. These patterns were vividly ap- - parent in world wars I and II and continue to operate under today's conditions. The further development of the economy and military affairs in the postwar years have also been reflected in the economic support of wars. This will be taken up below. Being the embodiment of the dialectical relationship betw~een the economy and war, a military economy is internally contradictory. Its contradictions are dynamic, as they reflect the development of the economy and military affairs and the change in the social essence of the very military economy. Inherent to the military economy of class antagonistic societies is the contradic- tion between the insatiable desire to increase military might and the limited capa- bilities determined by the achieved economic development level. This contradiction achieves particularly great acuteness in those stages of historical development when the given socioeconomic formation has outlive~ its age and the class which has ex- hausted its historical mission evermore widely employs military force in domestic and international relations for the sake uf continuing its rule. With the growth of pcemonopolistic capitalism into imperialism, the designated con- tradiction became sharply more acute and took on a new content. An imperialist struggle developed for world domination and for reapportioning the already divided world. This strengthened the gap between the aggressive military political aims of the imperialist powers and coalitions and their actual economic capabilities. This 19 FOR OFF'ICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007142/09: CIA-RDP82-40854R040500010005-0 ~OR OFFICI,~L USE ONLY achieved even greater acutenesc when capitalism entered the age of general crisis - and wk~en militarism was given ttie insolvable task of preventing ~he deve].opment of the replacement of capitalism by socialism and turning the wheel of history back. Its absurdness bec~mes evermore apparent for all mankind ~aith each new stage in _ the exacerbation of the general crisis of capitalism. Thus, the limited capability of the capitalist military economy was predetermined by the historical limitation of the.capitalist method of production. In all capitalism's development stages theories have been created which 3ustify the - existence of the mil.itary economy. Under present-day conditions, bourgeois econo- mists, politicians and the military represent the military economy as a factor in _ scientific and technical progress, an effective means to combat economic crisis and a stimulant of economic growth and increasing the public's employment and income. The reactianary, class apologetic essence of ~uch th~ories is apparent. Howev~r, it is not enough to point this out but rather it is also important to elucidate the scientific unsoundness of military product fetishism. For this it is essential to _ disclose the actual relations between military and civilian production as the dis- tortions of these are used by bourgeois apologetics for the militarizing of the economy. The Marxist-Leninist theory or reproduction has proven scientifically that military production does not directly serve to reproduce either the labor force or the means _ of production and ultimately restricts the possibilities of expanding social pro- duction. A war, according to the definition of Marx, "in the directly economic sense is the same thing as if a nation dropped a portion of its capital into the water."50 Fortresses and military ships, wrote V. I,. Lenin in i~02, are not a plus but rather a minus~ in the national economy.51 Of course, the bourgeois state, in relying on its increasing economic role and ex- treme measures, can create a significar~t detnand for military end articles. In this . instance the accelerated growth of military production causes a chain reaction in increased production in the servicin~ sectors. This can lead to a decline in unem- ployment and ;reater profit. But this is a temporary and decaptive relief as will be discovered ~~~ooner or later and the more starkly the higher the scale of military production. Wars are most indicative in this regard. Thus, World 4.'ar II interrupted the development of the economic crisis. In the course of it, in the belligerent nations initially a rapid rise in military produc- tion could be observed against a background of a certain increase in the overall ~ volume of industrial production. Then the growth of the total volume of industrial production slowed down and finally a decline set in which was followed by a drop also in military production. Such development was c.aused by the following. With the aid of extraordinary compulsory measures it was possible to increase the mass of employed Iabor and to raise the degree of exploitation and the load factor on pro- duction capacity. As a result of this produr_tion grew. But military consumption which rose simultaneously with this absorbed the entire increase in production and ~ in addition to this also a portion of the previously accumulated national wealth. As a res~ilt there was a"consuming" of fixed capital and an irreplacable wasting of manpower. An economic collapse under these conditions was inevitable. As for the time of its occurrence, this depended, in the first place, upon the ratio of the intensity of these opposite processes, and secondly, upan the scale of a state's economic might (Table 1). 20 ~OR OFF[C[AL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007142/09: CIA-RDP82-40854R040500010005-0 FOR OFFICIAL USE ONLY Table 1 Dynamics of Industrial Production and Military Expenditures in the United States, Grea~ Britain and Germany (1938-1945)* . . . . ~ , . Y~~r . . . . . . { . Indicatior Country . � . . 1938 I 1939 I 1940 I 1~41 , I. 1~41 ' 1l19 �'.1W4 ~...,1946 Industrial 'IIS** l 1,22 1,40 I 1~8 '2,21 . 2,64~ 2,6p�~ 2,25 . production GB . 1 1,06 ~ 0,95 1,~ �1~12� : 1~13 , 1,12 i,0? Germany 1 I,05 1,09 I 1,21 1,21 ...1,39 1~41 , 0~36 I '1 ~ ~ . Military USA 1 ~ l,li 1,43 ~4,59. I 14,62, ~:38.72 46,06 47,98 consumption GB l 2,44 9,30 L1.86 13.00' 12,62 t2,55 10,66 Germany I 1 ~ 1,07~ 3,04 :.4,12 . 6,10. .~.~6,53 7,y6 5,61 Share of mili- UgA ' 1.,8 1,9 2,2 6,0 I 1~6~,6 � I ~~3~7,6 I 61~2 I 5~~9, - tary consum ~GB 5,4 12,4 ~ 53,9 I 58,8 ' . - tion in nationT Germany 25,5 � . . ~ , ave~age� 67,8 ' income (in ~ , , . , 0 . . * Compiled and calculated from the book of M. I. Burlakov "Voyennoye - potrebleniye i kapitalisticheskoye vo$proizvodstvo" [Military Consumption and Capitalist Reproduction], pp 201, 227. Due to the absence of data on industrial production, the national incume index has been calculated. F ha du in the ears of World War II in German the rom the table it car. be seen t t r g y , y maximum industrial production level was reached in 1944 (the 1938 level was exceeded by 1.4-fold). By this time military conaumption had also reached a maximum, having increased by 7.6-fold in comparison with 1938. But since the share of military con- sumption during the war years was 67.8 percent of national income, ultimately Germany's national wealth did not increase but declined by almost 2-fold.52 In the United States, industrial production over the same time increased by 2.6-fold, in- _ cluding by 46-fold for military production, but here the degree of nilitary economic stress was signif icantly lower. On the eve of the war military consumption was 1.8 percent of national income (in Germany, 25.5 percent), while the maximum during the war years did not exceed 44.4 percent. U.S. national wealth over~the war years did not increase and it has been estimated (in 1947-1949 prices) at 986.5 billion dallars in 194C and 984.0 billion dollars in 1945. During the war years fixed capital in- creased by just 6 percent, while military assets rose by more than 20-fold and their share in national wealth rose from 0.8 to 11.3 percent.53 Thus, even in the United _ States, where the ratio of military and civilian production was the most advantage- - ous, an overall ~increase of 2.6-fold in industrial productic,n actually did not pro- duce an increase in national wealth for this basically occurred from military pro- duction. 21 FOR OFFICSAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-04850R000500010005-0 FOR OFFICIAL USE ONLY Since the impeding influence of military production is not directly apparent an the surface of phenomena and moreover since the growth of milita�ry production is accom- ~ paaied by an increased demand ~or manpower, the apolagists of mil~tarism, the reac- tion and aggrPSSion as well as tha supporters of the arms race have been able to assert that a decline in military production leads to a further economic drop and to a new growth in unemploynient. But life has unmasked such asgertions. In the postwar period ~.he highest economic development rates have been observed in those capitalist nations and during thc~se periods of their development when and where the ~ military expenditures were rela.tively less. The United States if the most militar- - ized nation of the capitalist world and the bulwark of militarism. But it is pre- cisely the United States that suffers most f?-om those illnesses for which the mili- - tarization of the economy is prescribed as a medicine. With inereased militariza- _ tion in the FRG and Japan, their economic development rates have slowed down. The conrradictions of the capitalist military economy do not end with thos~ men- tioned above. Fully inherent to it are all the contradictions of capitalist produc- ~ tion which in the military-economic sphere assume specific forms. ThE basic contra- diction of capitalism in this sphere is characterized by a very high level of social- ization in military production and by the concentration of it in the hands of a - handfcl of military industria.t monopolies. From this derives the specific contradic- tion of the capitalist mi?itary economy between the aim and means of achieving it. Th~ military eccnomy is s~rpated to satisfy the needs af the armed forces. However, - in being a sphere for the application of capital, it becomes a means of enrichment and for thzs reason helps to satisfy the needs of tYce armed forces only to the de- gree that such service provides a high profit. This cannot help but have a negative - impact on the efficiency of the military economy. The contr~diction characteristic of c~pitalism betw~en the organization of produc- - tion at individual enterprises and anarchy on a scale of the enttre society is also inherent to the military economy, although i,n a somewhat unique form. The competi- tive struggle between the military industrial monopolies for advantageous military orders, for positions in the military departments and tor using highly placed mili- _ tary officials on their own boards undermines the framework of state regulation. Decisions about what w~apons are to be produced in what quantities are often set- _ tled not so much by the actual needs of military organizational development as by - the balance of forces and the influence of fighting military industrial groups who _ for the sake of increasing profits expand the production of their products without considering the actual need for them. Along with this the proportions of the mili- tary economy are disrupted under the influence of the general market forces, for the movement of the economic cycle also affects the the military economy. In turn, the militarization of the economy complicates the entire system ot production ties, the proportions and selling cczditions for aggregate social product. T'he interac- tion of these two processes aggravates tne anarchy and instability of the capital~- ist economy. ~ The contradiction between production and consumption is manifested in a very unique manner in the capitalist military economy. The gap between the production of mili- tary end articles and their consumption is inevitable even due to the desire to create the necessary supplies and reserves. But how should one determine the ad- visable limits to such a desire? In benefiting from this ambiguity, the monopo'lies ~ expand these supplies and often melt down completely unneeded surplus articles. The 22 ~ ~ FOR OFFIC[AL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007142/09: CIA-RDP82-40854R040500010005-0 FOR OFFICIAL USE ONLY competition between the mi.litary industrial monopolies leads to a separation of military production from the actual needs for military-end articles and intensi- fies the disproportions between military production and consumption. Finally, as a result of the increased militaxy production, the contradiction is intensified , between production an.d consumption in society as a whole. The relative independ- ence of capitalist production from w~rker consumption increases with a rise in the share of military production and hence the pernicious consequences of this gap are intensif ied. The growth of the military economy exacerbates the contradiction inherent to capi- talism between labor and capital as well as other social antagon~sms. Military- state monopolistic capitalism, in the definition of V. I. Lenin, is nothing more than "military hard labor for the warkers and the military protection of capitalist profits."54 The increased militarization of the economy and the fabulous enrich- _ ment of the military industrial comple~: deepen not only the basic class contradic- tion between the working class and the capitalist class but also the contradiction between the handful of military industrial magnates and the enormous majority of the ~ entire nation. Finally, international contradictions are also characteristic of a capit~~~_ist mili- tary economy. These assume ever-greater acutenes:c with the growth of imperialist integration and with the broadening of external m:Llitary-economic relations. The international military industrial monopolies have grown up on the basis of these _ contradictions and cause their further exacerbation. As historical experience has shown, the creation of military political blocs of the NATO type cannot eliminate the fierce struggle for the markets of strategic raw products and materials and for the weapons markets. This struggle is intensifying particularly now between the U.S. and Western European monopolies as well as between the monopolies of the West- - ern European nations. An examination of the development process of economic support for wars discloses its dependence upon an aggregate of scientific-technical, economic, political and military factors. In this process one can establish a number of stages or qualita- tive shifts related to the change in the methods of production and the major stages _ in the development of the given method of production. The military economy has achieved its greatest development in the monopolistic stage of capi'talism. But, having created exceptionally f avorable conditians for the flourishing of the mili- tary economy, imperialism at the same time has left on it the imprint of an�obso- lete meth~d af production, the imprint of irresolvable antagonistic contradictions which do not make it possible to utilize military-economic potential fully and most effectively. This has become particularly apparent in the sge of the general crisis of capitalism and in the wars w:iich it has started up against the world's first socialist state. 3. Military Economics of a Socialist State Economic support for the defense capability of a socialist state and for wars in delense of socialism is characterized by a number of specific traits which reflect the fundamental properties of a socialist society, its economic, political and social system as well as its military organization. F. Engels foresaw that the liberation ~f t~e proletariat "will have its specific reflection in military af- fairs and will produce its own special, new military method."55 This prediction ' 23 FOR OFFIC[AL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007102/09: CIA-RDP82-00850R000500010005-0 FOR OFF[CIAL USE ONLI' has been confirmed by life. V. I. Lenin, in analyzing the experience of the Civil War, concluded that "in the political and military area we have tak.en a world his- torical step forwarc~ which has gone down in world history as the change of two ages."56 The fundamental qualitative changes in the economy, political life and military affairs could not help but bring about fundamental changes in the economic support of a war. The method inherent to socialism of economic support for defense capability has not remained unchanged. It has developed under the impact of changes in internal �ac- tors. Various forms of military organizational development have corresponded to the various stages in the economic maturity of socialism. Since the existence of a military organization under socialism is dictated by external factors, it is quite obvious that its forms also depend upon external conditions such as the scuteness ~ af contradictions, the balance of forces between the opposing systems and the forms - of struggle employed by imperialism. The unique combination of internal and exter- nal factors also determine the specif ic traits of economic support for the military - defense of socialism in the various stages. � - ~ In the history of the Soviet military economy it is pos~ible to isolate several ~ periods which are marked by unique development conditions, tasks to be carried out and methods for implementing them. These are: the period of civil military inter- . vention and the Civil War, the year5 of peaceful socialist construction under the = conditions of hostile capitalist encirclement, the Great Patriotic War and the post- war period in which a number of stages can also be established. Let us briefly de- scribe the f irst three periods. During this time there were formulated and became clearly apparent the basic traits and fundamental distinctions and advantages of a socialist military economy which withstood the severe testing in the largest mili- ~ - tary cl.ash of socialism with the shock forces of imperialism. All the ~ubsequent chapters are devoted to urgent military economic problems of the postwar period. A particular feature of the first period, the period of "war communism," was that during thi~ time there was a fundamental breaking up of the old method of produc- tion and the creation of a new one as well as the method of waging war and its eco- nomic support. Everything was being done for the first time in history, in feeling our way. The carrying out of the basic tasks of a socialist revolution and the armed defense of its achievements were a single process whic~i necessitated the _ mobilizing of all forces, the converting of all society's life to a revolutionary military footing and the turning of the nation into a unified military camp. At the same time the tasks were carried out of creating the bases of a socialist econ- omy and mobilizing all society's forces to defend the socialist fatherland. The elimination of landownership by large landowners, the nationalizing of large-scale industry, the creation of a socialist structure and the implementing of~ an entire system of ineasures which was named war communism (prohibiting private trading in grain and other consumer goods, the introduction of in-kind food requisitioning and labor conscription)--the aggregate of all of this created a firm socioeconomic basis for successfully carrying o~t the arising military economic tasks and at the same time fundamentally undermined the military economic capabilities of the counterrevolutionary fo_r.ces. One of the most difficult tasks was the rebuilding and development of military pro- duction. A large portion of the plants filling military orders was~in enemy-held _ territories (3,500 out of 5,402 plants), many had been destroyed by the White Guards 24 = FOR OFF[CIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-04850R000500010005-0 FOR OFFICIAL USE ONL~' and interventionists while the surviving ones were in a bad way. Thus, the Tula - Gun Plant in July 1918 produced only 8,350 rifles while in July 1917 the figure was 40,500.57 Simultaneously it was essential to carry out the task of maintaining general economic potential, without which military production could not exist. For solving the entire range of questions rel.ated to the defense of the revolution, - the Council of Worker and Peasant Defense was set up (30 November 1918) headed by V. I. Lenin. This ensured a unity of actiuns by the war department, the supply, transport and f ood bodies in carrying out the tasks of strengthening the army's - supgly of guns, ammunition and clothing. Tt~,e Decree of the VTsIK [All-Russian Central Executive Committee] on the organiz~tion of the Defense Council stated that "not only in the Army and Navy but also in food and transport questions as ~ell as in the area of military industry wartime conditions should be established, that is, conditions of strict labor discipline and appropriate to the situation in the nation - which the imperialist bandits have ~orced to be turned into a military camp."58 The Defense Council became directly involved in the specific questions of organizing , military production. Thus, at its very first session (1 December 1918) it was de- cided to introduce a third shift at the Tula gun and cartridge plants and to supply the plant workers with food using the standards of the Red Army rations under the condition that production was brought ug to maximum amounts. Bonuses were also in- troduced. As a result of the measures undertaken, the Tula Gun Plant in February 1919 had doubled rifle output in comparison with July 1918. Due to the party's unceasing activities the nation began to reestablish military production. In the first half of 1919, 355 enterprises were operating directly for defense purposes, including 231 enterprises producing weapons and 124 producing uni- forms.59 As a total during the 3 years ~f the war, the military plants provided the Red Army with around 2.5 million rif les, 21,000 machine guns, about 1.5 billion cartridges, 3,973 guns, around 8 million shells, over 1.6 million grenades, and 669 ~ new aircraft; some 1,574 aircraft were overhauled.60 During the war years the vol- ume of military production fluctuated in rather large amounts. Thus, in February 1919, more than 50,000 rifles and 24.3 million cartridges were produced; in April, 16,000 rifles and 16.6 million cartridg~es, in September 51,200 rifles and 34.5 mil- lion cartridges, and then a period of a decline in production followed and this was overcome only in 1920. In July of this year, up to 34,000 rifles and more than 33 million cartridges were produced. These fluctuations were caused both by difficul- ties in the supply of the enterprises and manpower shortages as well as by the very course of the war. But, regardless of all the difficulties, the party succeeded in ensuring the necessary level of military production. During the period of the fight against the third Entente campaign, the basic portion of the military products obtained by the front had been produced at Soviet enterprises. The operational army received 252,700 rif les, 2,193 medium machine guns, over 215 million cartridges and much other weapons and supply articles.61 In creating a military economy, the party was concerned not only for the production of military-end articles, but also for their correct all.ocation, prompt delivery to the troops and efficient use. A portion of the weapons, clothing and food acquired at a price of enormous effort sat idle at the dumps and depots, it was sent out where it was not required, it was wasted, squandered or was not promptly :~-eceived by the troops. This reduced the effectiveness of the party's and people'.; efforts. For this reason the creation and improvement of an economic organism in the army itself was a most important concern for the party. V. I. Lenin personally worked - 25 . FOR OFF[CIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2407/02/09: CIA-RDP82-00850R000500410005-4 - FOR OFFIC[AL USE ONLY - out the fundamental questions in the organizational development of the Red Army rear. He established the necessity of strict centralization and the unification of ; all supply questions under single leadership and showed the incompatibility of the - existence of separate Red Army supply bodies in the frat.ernal republics with the de- fense interests.62 V. I. Lenin frequently himself investigated many particular ' questions in the organization of troop supply. In the course of revolutionary cre- ativity, new forms of logistical support were elaborated and these confbrmed to the nation's economic opportunities, to the nature of the war, to the situational re- quirements and to the local conditions which were marked by great diversity. Due to the unceasing efforts by the party and the people under unbelievably diffi- _ cult conditions, a powerful military economy was created ensuring the formation and equipping of the multimillion-strong Red Army. While in 1916, in the Tsarist Army for every 1,000 bayonettes there were 3-4 guns and 8-10 machine guns, in the Red Army in 1920,.the figure was 5.5-7 guns and 30-37.5 machine guns.63 This result was achieved on the basis of an economy devastated by the imperialist war and under con- ditions of a Civil War and foreign intervention. This shows the exceptionally great efficiency and the social advantages of the new type of military economy. The second period in the development of the Soviet military economy occurred under peacetime conditions and reflected the major achievements and strengthening of the nation's economic might in the course of socialist construction. In being guided - by Lenin's instructions on the existence of a permanent threat from the imperialist predators and the necessity of preparing over a long period of time and seriously, starting with the economic upsurge of the nation"64 for defending socialism, tlie party steadfastly carried out Lenin's plan for the construction of socialism. This made it possible to quickly turn the nation into a powerful socialist industrial- kolkhoz power and, in developing rapidly, as early as 1937, to t~ove from fiftli to second place in the world in terms of the volume of industrial production. The party directed the growth of the nation's economic might considering the need to successfully carry out defense tasks. The directives for compiling the First Five-Year Plan pointed out: "Considering the possibility of a military attack by - the capitalist states on the f irst proletarian state in history, it is essential, in working out the f ive-year plan, to pay maximum attention to the very rapid de- velopment of those naticnal economic sectors and industry in particular which have ~ been assigned the main role in ensuring the nation's defense and economic stability in wartime."65 This policy was also characteristic for the subsequent five-year plans. As a result important changes occurred in the economy's sectorial structure - and placement and these brought about a significant rise in the nation's military economic potential. Among the other economic sectors, industry developed most rapidly, particularly heavy industry, the share of which increased from 35.1 per- cent in 1913 up to 61.2 percent in 1940. Machine building and metalworking products during this time rose by 29.6-fold. In 1940, the USSR generated 48.3 billion kilo- watt hours of electric power and produced 66,200 tractors (in 15-hp units), 145,400 motor vehicles and 58,400 metal cutting machines. Some 31.1 million tons'of oil were produced and 18.3 million tons of steel were cast.66 Soviet military theory proceeded trom the view that in a future war the necessity , mi~ht arise of fighting on two fronts and that a war could be waged until the com- plete defeat of the aggressor. This would necessitate the mobilizing of all forces and wouid assume an extended nature as the enemy's possessed great material and 26 - FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2407/02/09: CIA-RDP82-00850R000500410005-4 FOR OFFICIAL USE ONLY human resources and were able to quickly replenish the losses. In accord with this, in the economic preparations for a war, along with increasing the military economic potential, the required attention was given to oreating sufficiently large m3.litary production, to carrying out preparatory ffieasures far the wartime reorgan- ization of the national economy and for increasing its stability. . Socialist industrialization made it possible to cr~ate a modern defense industry which waS capable of rearming the Red Army and Navy, to meet their current needs and make the necessary supplies of military-end articles. During the Second Five- Year Plan, the defense industry products increased by 2.8-fold, including by 5.5- fold for aviation.67 However, in considering the approach of the war, the party critically viewed the achieved results in terms of the volume of military produc- tion, the quality of the produced weapons and the location of the military industry. The 18th Party Congress and the 18th Al1-Union Party Conference devoted great at- tention to the questions of strengthening the nation's defense capability. The party adopted the required measures to further 3evelop the military economy. Allo- _ cations for the development of the defense industry increased from 47 billion rubles in the Second Five-Year ~lan to 118.2 billion rubles during the 3 years of the Third Five-Year Plan. In 1940, military outlays were 56.9 billion rubles.68 The leader- - ship of the deferise industry was strengthened and differentiated and more attention began to be paid to developing and putting into production new types of weapons at~d military equipment. Due to the adopted measures, by the end of 1940, the number of aviation industry enterprises had increased by three-quarters by comparison with 1937 and its produc- tion capacity surpassed the capacity of the German Air Plants by almost 1.5-fold. The aviation industry was preparing to put new combat aircraft into series produc- tion. Production capacity for tank building by the summer of 1941 exceeded the capacity of the German tank industry by 1.5-fold. The artillery industry and the production of firearms and ammunition had undergone significant development. Naval shipbuilding was developing rapidly. Prior to 22 June 1941, 533 fighting ships were laid down of which 312 had been commissioned. As a whole the growth ~f de- fense industry products had significantly outstripped the growth of all industry. In 1938, the increase in industrial product as a whole was 11.8 percent, including 36.4 percent for defense; in 1939, the figures, respectively, were 15 and 46.5 per- cent while in 1940, the volume of defense industry prcduct had risen by more than one-third.69 For the purposes of increasing the invulnerability of the military economy, work was started up to rapidly create a second military-industrial base which would be beyond the reach of air strikes by aggressors both from the west and from the east; ~ this was to be in the regions of the Volga, UraY~~ and Siberia. Moreover, a military industrial base was developed in the Far East. In 1940, the eastern regions pro- ~ duced 35.9 percent of the coal, 28.3 percent of the iron ore, it cast 31.4 percent of the steel and produced 27.1 percent of the tractors and 7.1 percent of the metal- cutting machines. By the summer of 1941, one-fifth of all the nation's military - plants was located in the eastern regions.~~ The necessary measures were also carried out for the mobilizatioa preparations of the national economy. In building new plants provision was made for the opportun- ity to convert them to producing military products, a number of civilian enterprises had military product shops and large enterprises had military mobilization plans. 27 , FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL USE ONI.Y . The state reserves and mobilization supplies were increased for meeting the needs of industry and the Armed Forces for the period of the wartime connersion of the _ econamy. By the time Germany attacked, the value of these reserves and stocks reached 7.6 billion rubles.~~ In terms of the actual annual average consumption ~ during the war, the created stockpiles were: from 36 to 294 percent for ammuni- j tion, 280 percent for rifle cartridges, around one-half for gasoline and diesel ' - fuel, and from 90 to 150 percent for clothing and uniforms.~~ Of important sig- nificance in preparing the economy to convert to a wartime footing were the meas- ures to convert to an 8-hour workday and a 7-day work week and to strengthen labor : discipline and organization. , On the basis of the technical reconstruction of the Red Army, the scale of military , consumption increased, its structure became more complex and the intensity rose. Saviet military theory correctly foresaw that combat operations in a future war ~ would be carried out simultaneously by all branci~es of troops in close cooperation - and that their spatial scope and pace would rise sharplq. All of this necessitated a further improvement in the rear services of the Armed Forces, their motoriza~ion, , - a rise in technical equipping, a wider basing system and of skilled ' administrative military personnel. The appropriate measures were carried out as the nation's military economic capabilities were increased. By the start af the war the Army and Navy had signif~cant supplies of weapons and other military-end " articles and the rear services of the Armed Forces possessed the necessary number ' of depots, dumps, transport, repair, medical and other units and facilities. How- ever, the central rear services and a significant portion of the operational rea~ were still stationary while the troop rear services were cumbersome. Some 42 per- cent of the troop trains required for the transporting of a rifle division were occupied by the rear units and subunits.73 Thus, in the interwar period, on the basis of the advances in building socialism and the growth in the nation's economic might, the tasks were actively carried out of raising military economic potential, creating and developing military,production, preparing the economy to convert to a wartime footing as well as for developing the rear of the Armed Forces. In seeing the approaching danger of war, the Communist ~ Party and the Soviet government undertook the necessary measures to strengthen the nation's defense capability. ~ Measures were started in the area of the mobilization deployment of the Army and Navy. From 1 September 1939 through 21 June 1941, the size of the Armed Forces ~ grew by more than 2.8-fold. The technical reequipping of the troops was continued at an accelerated pace. The plans for protecting the state frontier were ad3usted. Fortified areas were built and the theaters of the forthcoming military operations were prepared. On the basis of the considerations of the General Staff which were examined by the VKP(b) [All-Union Communist Party (Bolshevik)] Central Committee and the 5oviet government, a Mobilization Plan (organizational and material questions) or MP-41 was worked out and approved in February 1941. In accord with this the mil- itary districts incorporated the necessary additions and clarifications ln their plans. Colossal work was to be done in the area of reorganizing the Soviet Armed Forces, strengthening the frontiers and raising the nation's defense potential by the summer of 1942. However events were to change this time table.74 28 E'OR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL USE ONLY The Great Patriotic War was a~horough testing of the Soviet military economy. . With its outbreak the party reorganized its own ranks and the wosk of the state bodies and public organizations to a military footing. All state porr~r was concen- trated in rhe hands of the State ~efense Commitzee [GKO], the rights of the ~ ~ people's co~nissars were significantly broadened and a number of laws were promul~ gated for rhe purposes of mobilizing the labor resources, for increasiag the work- ing time budget, raising discipline, organization and a maximum effort by all the people. In order to restrict and strictly regulate personal consimmption, a ration- ing card system was introduced. In converting social relations to a wartime foot- ~ ing and immobilizing all society's resources, the party and government oa a planned basis directed them to satisfying the war's requirements. On the very second day of the war, a mobilization plan was put into effect to pro- duce ammunition and a week later (30 June) a general mobilization national economic plan was approved for the third quarter of 1941. The Soviet military economy began ta rapidly increase in strength. However, the course of events on the front forced an emergency curtailment of the basic mili.tary industrial basis which was located ~i the western regions of the country in urder to evacuate it to the east and there - reorganize military production capable of ineeting the needs of the front. On 4 July 1941, the GKO instructed a co~ission headed by the chairman of the USSR Gosplan, N. A. Voznesenskiy, "to elaborate a military economic plan for the support of national defense bearing in mind the utilization of resources and enterprises existing on the Volga, in Western Siberia and the Urals as well as the resources and enterprises which have been evacuated to the designated,areas."75 The military economic plan approved on 16 August by the USSR 5NK [Council of Peo- ple's Commissars] and the VKP(b) Central Committee on 16 August provided for th~ evacuation of enterprises belonging to the military and other people's co~issari- ats to the eastern regions, and envisaged an extensive program for the productiou of weapons, ammunition, aircraft, tanks and fighting ships, the dev~elopment of heavy industry, rail transport and other economic sectors and the concentration of re- _ sources on the shock construction sites and on reestablishing the evacuated enter- prises.76 The program for establishing a well-coordinated military economy which surpassed the enemy's military economy required a certain amount of time. While a signifi- - cant portion of industry was in the stage of disassembly, trans-shipment to the east and reconstruction, the total production volimme dropped. Gross industrial product declined by 2.1-fold from June through November, 3.1-fcld for ferrous metals in December in comparison with June, by 430-fold for rolled ferrous metals and by 21-fold for bearings.~~ A decline in military production followed. In November 3.6-fold fewer aircraft were produGed than in September. The tank out- put plan in the second half of the year was fulfilled by just 61.7 percent.78. The last months of 1941 were particularly difficult fer our nation. But under the leadership of the Communist Party the Soviet people overcame the difficulties~ of this period. In a short period of time (July-November 1941), our nation carried out a gregt move- . ment of the productive forces to the east. Some 10 million persons and 1.5 million railroad carloads of freight were moved and 1,523 industrial enterprises, including 1,360 large military ones, were moved. By the end of 1941, many of them had begun 29 . " FOR 9FFICIAL USE ONLY ~ ~ APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2407/02/09: CIA-RDP82-00850R000500410005-4 FOR OFFICIAL USE ONLY to produce products. From Maxch 1942, a rise began in the total voltmme of indus- trial product and this created a dependable basia for the development of military production. In Jul;� 1942, the enterprises under the .~ir industry people's commis-. sariats produced 1.3-fold mo~e product than in June 1941, for the tank industry the figure was 3.8-, for armament 1.2- and for ammunition 1.7-fold more. The East becstne the main foundry of weapons and military equipment. The proportional amount of the military industry enterprises located here reached 76 percent in June 1942.79 - Thus, a year after the start of the war, the reorganization of industry was basic- ally completed, a large portion of the military enterprises which had been moved to the east were back in operation and in the second half of 1942 the process of sez- ting up a smoothly functioning military economy was completed (Table 2). Tab le 2 ~ Gross Product of All Industry and the Product of the Military People's Commissariats in the . War Years (in X of 1940)* . 1941 1942 1943 1944 1945 - Gross industrial product 98 77 90 104 92 . Including product of military commissariats 140 186 224 251 *"Istoriya Velikoy Otechestvennoy voyny Sovets~COgo Soyuza 1941-1945" [History of the Great Patriotic War of the Soviet Union of 1941-1945], Vol 6, Moscow, 1965, p 45. From the given table it is apparent that while in 1941-1942, the grdwth of the . military industry occurred with a decline in the total volume of industrial produc- - tion, in 1943, the significant growth of military production (by 20 percent) was ~ achieved with a simultaneous increase (by 17 percent~ in total industrial produc- tion. An analogous picture can be observed in 1944 while in 1945 there was an ex- . tensive reorganization of the military economy to a peacetime footing. In other words, from 1943 the growth of ehe organized military economy occurred not by a further redistribution of the material and labor resources but basically by the growth of labor productivity and the efficient use of production capital. As a total during the war the USSR produced 134,000 airplanes, 103,000 taaks and SAU [self-propelled artillery mount]; and over 825,000 guns and mortars. Here are the corresponding data for Germany: around 79,000 aircraft, 54,000 tanka and SAU and 170,000 guns and mortars. The deliveries of weapons and military equipment to the Soviet Union under Lend Lease were: around 13 percent of total production in � the USSR for aircraft, 7 percent for tanks and 2 perceat for anfiaircraft guns.80 The total amount of Lend Lease deliveries to the Soviet Union was 9.8 billion dol- lars while the nations of the British Empire (basically Great Britain) received a 30.269 bilZion dollars.81 � ~ 30 FOR OFFIC[AL USE ~NLY ~ APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/42/09: CIA-RDP82-00850R000500010005-4 - FOR OFF[CEAL USE ONI.Y - Thus, the task of supplying the Armed Forces with weapons and military equipment was in fact carried out by our nation independently and there are no actual grounds to extQl the role of Allied aid. The rear services of the Soviet Armed Forces were an important element in reali2ing the military economic capabilities of our nation. The war made substantial adjust- ments in its organizational development. The surprise attack and the deep drives - by the Nazi troo~s prevented the planned deployment of the rear in the border mili- tary districts. The mobilization supplies in these districts were partially cap- tured by the enemy and partially destroyed by our troops in the retreat. Very di- ficult conditions arise for forming and equipping the new rear unit:s an~d facilities. On 28 July 1941, the GKO adopted a decision to set up independent ~~ontrol bodies for the rear of the Red Army. The new organization of control and com~nand made it pos- sible to more effectively solve all the questions, to improve troop supply and make more efficient use of the rear's resources. Urgent measures were also carried out to improve the technical equipping and transport capabilities of fhe rear forma- tions. Subsequently, on a basis of a rise in the nation's military economic might, their technical equipping, the degree of motorization, productivity and maneuver- _ ability increased rapidly. - In the course of the war, the tasks of the Armed Forces rear grew and became more complicated. Thus, the seizing of strategic initiative and the going over to de- cisive offensive operations, the increased depth and pace of thp operations the longer lines of co~nunications and the greater amount of military consumption de- - manded an increase in the capacity and a greater role for the central rear services an increase in the number of railroad troops and motor transport units and the cre- ation of reserves. The strength of the front rear services also increased sharply in line with the greater equipping of the troops and the increased scale and comp3.exity of the tasks carried out by the fronts. As an example, the first Be~.orussian Front during the Vistula Oder Operation had 2,500 operating aircraft, 4,000 tanks and SAU, 70,000 motor vehicles and 3,000 tractors. For every linear meter taken from the enemy, 250 tons of ammunition and 333 tons of fuel were con- sumed and each day around 5,000 tons of food and fodder were used. The rear serv- - ices of the front included 1,500 units and facilities (not counting the divisional ~ level) and all its elements down to the company level made up around 20 percent of the number of troops.82 . During the war years th~ rear of the Soviet Armed Forces developed into a powerful military econamic organism capable of receiving from military productfon, process- ing, allocating, promptly delivering and ensuring the safekeeping of an enormous amount of all sorts of military-end articles. The scale of its work increased rapidly. If the average daily consumpt~on of ammunition and fuel in the battle on the Volga is taken as 100 percent, then in the battle at Kursk this was, respec- - tively, 306 and 475 percent, in the Vistula-Oder Operation 498 and 607 percent, and in the Berlin Operation 668 and 800 percent.83 Ther~- is no single indicator by which it would be possible to express the amount of _ wark carried out by the Armed Forces rear during the ~aar years and for thYs reason this must be judged from numerous particular indicators. Among them particularly impressive is information on weapons deliveries. During the war the rear of the Soviet Armed Forces received and allocated 108,000 combat aircraft, 95,000 tanks 31 ~ FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OF'FICIAL USE ONI.Y and SAJ, around 445,700 field guns of 76-mm and larger caliber and mortars, 954,500 machine guns, 12 million rifles and carbines and 6.1 million submachine guns.84 Truly colossal was the amount of ammunition deltveries: 427 million shells for field gun.s and mortars, around 21.4 billion cartridges, more than 168.3 million grenades, 40,000 mines and torpedoes and 163,100 depth charges. During the war the Soviet Army and Navy consumed over 16 million tons of fuel. Finally, the army millions strong had to be clothed, shod and provided with food and other types of services. The total food and fodder consumption was 40 million tons and the Armed Forces received more than 38 million overcoats, 73 million field shirts, 70 million cotton cloth and around 20 million padded trousers and over 11 million pairs of felt boots.85 . The rear bodies of the Armed Forces delivered all this enormous amount of military- end articles to the troops and issued it to each subunit, crew and soldier, ofter. operating under difficult conditions and under enemy fire. Just the transporting of the 7ilitary-end articles and troops by rail required 19.7 million cars, motor transport carried over 100 million tons of freight and water transport 22 million tons o� various cargo. Here 170,000 km of main, secondary and station track, 14,000 bridges and thousands of other rail installations and about 100,000 km of motor roads were rebuilt and built and a large amount of military equipment was repaired.86 Thus, we have sketched in the process of the development of the Soviet military ecc:io*.riy from the moment of its rise up to the victory in the Great Patriotic War. It shows that a socialist military economy is a specific part of society's economy which encompasses the production, distribution, exchange and consumption of military- end articles, in materially supporting the functioning of the Armed Forces and the maintaining of the state's defense capability and under wartime conditions the wag- ing of war. � The Great Patriotic War required a reorganization of the entire economy to a war- time footing and to wartime work. In such a war only the nation would win which - possessed.not accidental or temporary but rather permanent and essential advantages internally inherent to the social system as a whole and its component elements. It , has been extremely important to theoretically analyze the acquired experience in the economic support for the defense of the socialist fatherland and to draw the neces- sary practical conclusions from this, since the past, as L. I. Brezhnev said, must be perceived "as material for reflection and for critical analysis ef one's own de- cisions and actions. From the past we draw insp.'r.ration for present and future deeds.i87 ~ First of all it is important to emphasize the most essential difference of the ~ Soviet military economy and the capitalist military economy. This is that they de- velop on fundamentally different socioeconomic bases and have a different class es- sence and political purpose, Because of this their nature and the functioning and developmental laws are fundamentally different. This is apparent at every step. For example, let us take the reorganization of the entire national economy for mil- itary aims. In the capitalist nations this was carried out by military-state monopoli~tic regulation leading to a sharp intensification of worker exploitation and to the redistribution of profits in favor of the financial oligarchy. Here it 32 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-04850R000500010005-0 - FOR OFFICIAL USE ONLY must be pointed out that for the sake of obtaining maximum wartime profits, a nar- row group of monopolists and military in every possible way accelerated the peace- time militarization of the economy and when war broke out, its indiv3dual represen- - tatives impeded the carrying out of an economic mobilization, gaining better condi- tions for the reorganization of production. For these reasons the large French Schneider-Creusot Trust refused to participate in the government-organized associa- tion of the military industry; in England due to resistance by firms to governmental measures the rate of creating the military economy was extremely slow; in the United States many concerns also for a long time did not make a start on military produc- tion, gaining from the government better conditions for military deliveries.88 In contrast to this, the Soviet economy demonstrated a mobility unattainable for the . imperialist nations during the years of the Great Pa~riotic War. The socialist society was turned into a single military camp which was closely united around the Communist Party. Relying on the public ownership of the means of production and the monolithic unity of the people, the socialist state on a planned basis redistributed the available resources and altered the basic proportions in the aim of creating a well-coordinated military economy. One of the specific features in the Soviet military ecoaomy was the harmonious and coordinated development of all its elements based upon the objective economic law of socialism,~that is, the planned development of socialist production. In con- trast to this the maintaining of effective ratios between the basic elements of the ~ capitalist military economy was naturally difficult, since the profit motive was operating here along with military considerations. This contradiction between the military purpose and economic incentive motives ob~ectively and inevitably gave rise to a fatal dualism in the organization and control of the German military econ- _ omy. Regardless of numerous reforms this was not overcome during the entire war. Researchers of the military economy have noted an analogous situation in the other capitalist countries.89 The basic features as well as the strong and weak points of a military economy are ' basically predetermined by the objective properties of the specific method of pro- duction. Due to this the socialist military economy possesses permanent advantages over the capitalist one. One of its most essential features is that it is based on a national economy which develops without crises, on a planned basis and at a rapid pace. During tne period between the two world wars, the industry of the capitalist countries experienced a v~ery profound economic crisis in 1929-1933. This put tha ~ economy far back. Withou~` yet escaping from this, the economy had begun to slide into a new crisis the development of which was interrupted by World War II. On the eve of the war, the volume of industrial production in the mai.n capitalist nations ~ was only a little more than the 1913 level. As for the Soviet Union, its industrial production in 1940 surpassea the 1913 level by 7.7-fold. The rapid growth of 9ur motherland's economic might created a sound material bacis for its defense. Another indisputable advantage of the socialist military economy is that with an equal economic development level the socialist state possesses relatively more mili- tary economic potential than the capitalist one. Each component part of national income, aggregate social producti and national wealth in a socialist society can be most fully subordinated to the interests of achieving victory. Let us take the con- sumption fund. Having eliminated the parasitic consumption of the bourgeoisie, a 33 ~ FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00854R004500010005-0 FOR OFFIC(AL USE ONLY socialist society, in comparison with a capitalist one, can channel more resources - into military needs, at least by the amount of cor:sumption by exploiting classes and their servants. A unity of fundamental interests among the workers and their readin~ess to make sacrifices and endure hardship for the sake of defending social.- - ism additionally broadened the military economic potenti3l of the socialist state at the expense of personal consumption and accumulation. Being the owner of the fixed capital of.society, the socialist state when necessary can channel a significant portion ~f its national wealth (including also the replacement fund) to military ends. The enormous military economic potential of socialism was apparent even dur-- ing the years of the Civil War and foreign military intervention. This was one of the main sources of the victory of the USSR in the Great Patriotic War. Some 57-58 percent of national income and 65-68 percent of industrial product went for the needs of the front.90 A most important achievement of the socialisr military economy is that it makes it possible to have signif icantly more efficient utilization of the military economic resources than capitalism does. This can be specifically judged from the ratio of indicators des~ribing the total production vol~ne and the military production vol- ume. If one compares the corresponding data for the USSR (from 1 July 1941 through 1 July 1945) and Germany together with the nations occupied by it (1941-1944), then we will obtain the following picture (Table 3). Table 3 Production Ratio of the Most Important Types of Products in the USSR and Germany* Name of Product USSR in Relation to Germany, X . Iron . . . . . . . . . . . . . . . . 32.2 Steel . . . . . . . . . . . . . . . . . 33.8 Coal . . . . . . . . . . . . . . . . 20.5 Electric power . . . . . . . . . . . 44.0 Tanks and SAU . . . . . . . . . . . . 176.7 Combat aircraft . . . . . . . . . . . 136.8 Medium- and large-caliber guns 184.3 Mortars . . . . . . . . . . . . . . 511.1 * Calculated from data in the book "50 let Vooruzhennykh Sil SSSR" [Fifty Years of the USSR Armed Forces], p 457. As is seen from the table, the USSR, in having 3-5-fold less iron, coal, steel and electric power than Germany and the occupied nations, produced 1.4 mare aircraft, 1.8 more tanks, St~iJ and medium- and large-caliber guns and 5-fold more mortars. A comparison with the other capitalist nations provides an analogous result. The USSR not only more fully subordinated its economic resources to the interests of military production than did the capitalist nations but also utilized them more efficiently for producing weapons and military equipment. 34 FOR OFFIC[AL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007142/09: CIA-RDP82-40854R040500010005-0 - FOR OFFICIAL USE ONLY The efficiency of a military economy is expressed in the optimum ratio of military and civilian production, in the harmonious development o~ all elements in the mili- tary economy and in the high productivity of each individual element. One of the generalizing indicators for the comparative military economic ef,fectiveness of the ~ belligerents is the dynamics of the size and equipping of the operational armed forces (Table 4). Table 4 Dynamics of Ratio (in of Number of Troops and Weapons of USSR and - Germany in 1941-1945 (USSR level ta.ken as 100%)* Ratio o~ Indicators on Designated Date Indicators of Military Strength Jun Dec May Nov Jui Jun Jan 1941 1941 1942 1942 19~3 1944 1945 Personnel of operational fronts 100 100 100 100 100 100 100 and fleets 190 119 113 102 83 61 52 Guns and mortars (without 50-mm 100 100 100 100 100 100 100 mortars and rockets) 136 122 99 98 55 59 31 Tanks and 5AU (assault guns) 100 100 100 100 100 100 100 156 87 79 109 61 65 36 Combat aircraft 100 100 100 100 100 100 100 . - 321 ~ 100 108 113 36 24 14 * Calculated from data in the book "Velikaya Otechestvennaya voyna Sovetskogo Soyuza 1941-1945. Kratkaya istoriya" [The Great Patriotic War of the USSR, 1941-1945. A Concise History], Moscow, 1970, p 579. On the day of the treacheross attack on the USSR, the enemy had, as is seen from the , given table, a significant superiority in the size of the operational army and in the number of guns, mortars, tanks, SAU and combat aircraft. By the end of 1942, the forces were basically equal, and subsequently the Soviet military economy began to increase it5 superiority, providing ~ rapid growth in the technical equipping of the Soviet Armed Forces and a rise i.n their. combat might. Many bourgeois authors have been forced to recognize the exceptional efficiency of the Soviet military economy. Thus, the American miTitary economist K. Moore, in comparing the Soviet military economy with the American, has written: "There is no doubt that the Soviet Union was able to put a much larger share of its steel (and in all probability other materials) to serving the military industry in comparison with the United States." He gave data showing that the USSR in 1942-1944 produced 6-fold more tanks, armored vehicles and SAU per thousand tons of steel than the - United States, 13-fold more artillery pieces and 3.5-fold more aircraft.91 _ A socialist military economy is characterized by a high level of organization, mo- bility and survivability. These properties are inseparably linked to the very 35 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2407/42/09: CIA-RDP82-40850R000500410005-0 FOR OFFICIAL USE ONLY essence of socialism and to the just nature of the wars in its defense. In analyz- - ing the experience of the Civil War, V. I. Lenin drew attention to the surprising fact that in its flames "a strong inner strengthening was created along with the _ development of revolutionary enthusiasm," and tfiat tha "peasants and workers, re- _ gardless of the hunger and cold, were united, they grera stronger and responded to - each heavy blow b;~ a greater unity of forces and economic.strength...."92 These advantages of socialism were manifested with new strength during the years of the Great Patriotic War. In describing them, L. I. Brezhnev said: "The front and rear . clenched into a single powerful fist. The nation becam.e a single military camp. It was difficult for everyone. People did not have enough to eat and were tired. Women worked in the shops along with the men and children grew up in front of machines in the place of their fathers. The industrial heart of the motherland did not skip a beat. Our plants provided the Soviet Army with weapoas which crushed the military machine of German fascism which relied on the industrial might of al- most all Europe."93 � The realization of the advantages of soci.alism in the area of economic support for defense does not occur automa.tically but rather presupposes active, purposeful ac- - tivities by all society in accord with the recognized objective laws. With good reason V. I. Lenin said that "war is a testing of all the economic and organiza- tional forces of each nation."9`' During the war years, the directing role of the Communist Party was strongly evident and victory was prepared for an achieved under its leadership. In being~constantly guided by Marxist-Leninist teachings, the Com- munist Party spelled out a scientifically sound military economic policy aud con- sistently and steadily carried it out. The party mobilized all the people's energy and achieved its most effective use in the interests of achieving victory. An examination of the basic developmental stages in the Soviet military economy shows that a socialist state maintains it on a level required by the iuternational situation. As for the military economic capabilities of a nation these dev::lop - with the development of socialism. With the building of a developed socialist society in our nation, the advantages inherent to the new social system are fully apparent. Its strong economic base, the improvement of social organization, the unprecedented moral and political unity and solidarity with the Communist Party make it possible to successfully carry out the most difficult tasks of communist construction and the strengthening of defense. 4. The Scientific-Technical Revolution and Economic Support of a War . In the postwar period, substar.tial changes have occurred in the economic support of war and these have involved all elements of the military economy and its relations _ with the national economy. These have occurred both in the capitalist and socialist countries. These changes have both a common basis, the scientific and technical revolution, as well as different social causes arising solely out of one.or another system. Thus, in the capitalist world, under the conditions of the scientific and technical revoluti~n, there has been a deepening of the general crisis of capital- ism. In the socialist world there has been a further unfolding of the advantages , of the new system and a rise in its maturity and development. These opposite social processes have a different impact on the capitalist and socialist military economy. This is why it is essential to consider the influence of both the technical-economic and socioeconomic factors. 36 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02109: CIA-RDP82-00850R000500010005-0 = FOR OFFICIAL USE ONLY ; - The scientific and technical revolution has influenced virtually every area "of mili- - tary ~rganizational deve_lopment and has transformed the material and technical base - of the Army and Nav;, ~hei.r organizational structure, the manning and troop training system as well as military science and art. Fundamentally new weapons, nuclear mis- siles, have appeared. On the basis of modern sc~entific and technical achievemente, the conventional types of weapons have also risen to a qualitatively new stage. As a result of changes in the means of armFd combat, there has been a noticeable in- tensification in the previously observed trends toward a further complicating of the material needs of war, toward increased intensity and a greater scale of mili- ~ tary production and consumption. The interdependence of war and the economy, of the military and economic development has been further strengthened under today's con- ditions. The greater compiexity of the material needs of the armed forces has been expressed primarily in the greater diver sity of military-end articles. Their range now num- bers in the several millions of names. Thus, in 1966, the NATO catelog had 3 mil- lion names.95 There has been a particularly rapid increase in the demand for weapon-� ry, military equipment, f uel, ammunition and controls. The proportional amount of this group of military-end ar ticles continues to grow while the personal consump- tion artic?e~ of the serviceme n are declining (with a simultaneous absolute growth in tY~e scale and broader assor tment of personal consumption articles). The share of the former group on the eve of World War II was 40-45 percent of the total volume of military consumption while at present it is almost two-thirds. This structural shift has been related to qua lir_ative changes in the weaponry which is becoming _ evermore complex. The design complex3ty of a modern gun can be judged from the fact that the number of parts in individual types reaches hundreds of thousands of pa_eces. The appearance of modern armed forces is determined not by an individual weapon but rather by powerf ul complexes and systems o~erated by well-trained large - military collectives consisting of highly skilled specialists. A characteristic trait of the entire postwar period has been the wagering of imper- ialism on military and technical superiority and the related rapid rise in expendi- tures on military scientific research and experimental designing. In 1940, all ~ American expenditures on military-scientific research comprised 26 million dollars, during World War II this rose to 513 million dollars a year96 (not Gounting the atomic program), that is, it increased by almost 20-fold. In the 1970's, this reached 8-12 billion dollars a year, that is, exceeded the expenditure level ~.:~f the World War II years by 20-fo1d.97 The share of expenditures on scientific research - and the development of new types of w~apons in the tvtal volume of military expend- - itures has risen up to 10 percent of total Pentagon expenditures. This has been particularly high in the expenditures on missile equipment, some 43.5 percent.98 An inevitable consequence of the fatal policy of military technical superiority has been an acceleratied process of weaponry obsolescence znd the necessity of syste- matically rearming the troops. While it took more than a century to move to fire- arms, and one or two decades f or the establishing of tanks and aircraft, it has been even shorter for the introduction of atomic and nuclear weapons. While at the beginning of the present century it took 20-30 years to develop a more advanced weap on and supply it to the armies, at present this process has been accelerated by 2-3-fdld in the armies of the ma3or states. --4 37 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 _ FOR OFFICIAL USE ONLY Production expenditures grow with the improving of weapons and with an increase in ~ their power and diversity. Military production requires special equipment, scarce ' strategic materials and highly-skilled manpower. Accor.ding to~official Ainerican estimates, the development and deployment of a cumplex of B-36 strategic bombers cost the United States 2 billion dollars while the next generation, the B-5~2, cost almost 9 billion dollars and it is to be replaced by~the eyen more expensive sys- tem of the B-1.99 A submarine from world war days cost 4.7 million dollars, a 1968 ~ model cost 200 million dollars while the newest American submarine of the "Trident" class costs over a billion dollars.100 The increased cost of the weapons and mili- ~ _ tary equipment has been one of the reasons that expenditures on their acquisition are steadily and rapidly rising. Also very costly are the storage, maintenance and operation of modern weapons as ' - these require a large amount of electric power, fuel and other materiel as well as the live labor of highly-skilled specialists. In one combat sortie a F-4 aircraft ~ consumes 7,900 liters of fuel. For the support of 1 flying hour by an F-111 air- craft, 30-35 man=hours of maintenance are required.101 As an average in the 1960's, the initial equipping of a U.S. infantry division cost 111 million dollars and its support for 5 years ran to 582 million dollars, that is, much more than the initial equipping.l02 - Along with the increased cost of weapons and expenditure on their operation, expend- ~ itures on personnpl have also in~reased. With the greater complexity of weapons and military equipment, the share of skilled specialists in the troops has increased and the training of each specialist costs constantly more. Thus, 372,U00 dollars were spent on training the captain of a KC-135 aircraft, 489,000 on a B-47 and I.19 mil- lion for a B-52.103 The proportional amount of officer personael has increased in - the troops. A number of nations are converting to the manning of armed forces on the basis of vol.uzteering. As a result expenditures on personnel have increased and at times this r.etards the tendency toward a decline in the share of these expendi- tures in,the total volume of military consumption and sometimes even leads to a rise in this share. The changes which have occurred in the means of armed combat and in the structure of military needs are directly related to a further increase in the intensity of mili- tary economic processes. Very indicative in this regard are the data on the direct average annual military outlays per serviceman. In the United States, by the end of World War I these were something more than 3,000 dollars. By the end of World War II they had doubled, and by the end of the 1960's, they had risen almost to 12,000 dollars, that is, again doubled (data in comparable 1926 pric~s),104 The cost of the October war in 1973 for Israel was the equivalent of this nation's annual aggre- gate product.105 Hence the intensity of military econom3.c processes at present ts significantly higher than it was during the years of the past worZd wars. This is - one of the mas*_ dependable growth factors for military expenditures as well as in complicating the economic support of the armed forces. ~ On a basis of all these changes in structure, the intensity and scale of military production and consumption, the relationships of the civilian and military economy have become more complex while the conditions for realizing military economic capa- bilities and carrying out economic mobilization have altered. These changes are now felt in the scale and internal structure of the military economy itself and in the ratio and interaction of its component elements. - 38 FOR OFF[CIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 - F~R OFFECIAL USE ONLY If one examines military economic theories and practical activities in the imperial- ist countries, one is struck by their contradictoriness. Obviously this cannot be explained solely by subjective aspects although they play an important role. The main thin~ is in the rapid development of the methods of economic support for wars _ and in the contradictory nature of this development and tfie ob~ective contradictori- ness of modern reality. In actuality, although there is no fatal inevitability at the present stage that a new world war will break out, the factors giving rise to it do exist. As for local wars and military conflicts, during the postwar years these have broken out in Korea - and Vietnam, in the Near East and the Indian Subcontinent, in Latin America and ~ - even in Europe. Due to high vigilance, the strong defense capability and to the in- f luence of the peace-loving foreign policy of the USSR and the other socialist na- tions it has been possible so far to localize the military conflicts and di~ert them to the path of a political settlement. But the possibility cannot be excluded of the widening and even the development of similar conflicts into a world war. This very necessity of being ready for any type of war gives rise to a whole series of , contradictions, for a world nuclear missile war and local wars using just conven- tional weapons differ both in their nature, in the scale of material needs and the , content of preparatory measures. A number of contradictions in theory and practice have been caused by the military- te chnical revolution itself. Bearing in mind the inconsistency in the policy of the heads of cer.tain bourgeois states, L. I. Brezhnev has commented that each new type of weapon is "an equation with several unknowns, and not only on the level of _ military-technical or strategic consequences, but also political ones. The casting _ f rom one type of weapon to another based, evidently, on a naive hope to maintain a monopoly of them, merely intensifies the arnis race, deepens mutuaZ mistrust and im- pedes the implementing of disarmament measures."106 The contradictory nature of the impact of the scientific and technical revolution on th e economic support of a war has also been reflected in the evolution of the mili- tary economic concegts of states by which one understands a system of more or less es tablished views underlying practical activities in the economic preparations for - a war. The military economic concepts of a state are determined primarily by the na tion's economic capabilities and by the demands of the assumed (or prepared for) war on the economy. They reflect the nature of the g3.ven state, the political line and military doctrine. The historical experience of the given country also influ- ences the shaping of the military economic concepts. Under the impact of all these factors, the impulses arising out of the scientific and technical revolution are re- fracted differently in the military economic concepLs and in the practice of the capitalist and socialist countries. _ The military doctrines of the imperialist states are elaborated within the aggres- sive military blocs in terms of the overall class aims of the struggle against s ocialism and national liberation revolutions and for saving the capitalist system. But since interimperialist contradictions survive and are growing more acute, each na tion which is a member of a military alliance endeavors to impose its own inter- es ts on the others as the common interests. For this reason the bloc's militaxy ~ do ctrine reflects, on the one hand, the anticommunist intent of its participants and, on the other~ their contradictions and the existing balance of forces. The stronger ~ 39 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00854R004500010005-0 FOR OFFICIAL USE ONLY _ the given nationa~ group of imperialists the more its influence. NATO military doc- trine at the moment this aggressive bloc was created was dictated by American imper- ialism. The presently-occurring shifts in tfie balance of forces and the forming of ~ new centers of interimperialist rivalry have brought about an altering of various _ aspects in this doctrine, but as before the United States controls policy in NATO., In the imperialist nations there is an extensive military economic literature in which one can encounter directly opposite statements on each specific question. TYtis is a conglomerate of concepts and opinions reflecting a desire both to under- stand the real relationships of modern warfare and the economy as well as to inten- tionally distort them for class apologetic purposes, to seek out the most effective ways of military economic preparation and at the same time the most profitable paths of "legitimized embezzlement of state property," and to ensure the over-all class ~ interest of the imperialists and above all the selfish interests of the various spe- cific groups of monopolies. In comparing these statements with the entire aggreg~te of ineasures carried out to prepare for a war, it is possible to discover contradic- tions not only in the concepts but also between them and practice and in practice itself. These contradictions reflect in one way or another, in the first place, the real processes involved in the development of science, technology, the economy, ~ politics and military affairs, and, secondly, the influence of sociopolitical fac- ~ tors which determine the direction of military economic preparations and their in- terpretation in military econom~,.� concepts. The course of the duel between the two systems is one of the important factors. During tt~e period of the predominance of the doctrine of "massive nuclear retalia- tion," the center of gravity in the economic preparations for war resided in ensur- _ ing a devastating nuclear strike which would destroy the enemy's economy before it ceuld carry out mobilization measures. But when the advances of the USSR in streng strengthening defense capability buried this doctrine, in the 1960's, the doctrine. of a"flexible response" was proclaimed. This required simultaneous preparations for an all-out nuclear war and the conducting of "two and a half wars" by non- nuclear forces. The scale and complexity of ineasures relating to the economic prep- � arations for war grew sharply. But, as is lcnown, the plans to achieve superiority over the USSR in strateg~c nuclear.forces did not come about. The concept of "two and a half wars" also failta for the war in Vietnam which was viewed by this strate- gy as j;:st a half war was exceptionally extended, severe and was lost by American imperialism. The then-prociaimed doctrine of a"realistic deterrent" as before was oriented at the preparations for both a universal nuclear war and conventional wars in envisag- ing a greater contribution by allies to carrying out the aggressive imperialist policy aimed primarily against the nations of the socialist commonwealth. New bil- lions of dollars both in the United States and in the other imperialist.nations were thrown into the maw of militarism, new hardships were put on the peoples and new contradictions irritated imperialism. But a new presidential directive U-59 ap- peared and this "legitimized" the possibility of a nuclear war and the pace of the arms race again increased. Naturally, the conclusion emerges that with the exist- ' _ ing balance of forces the reactionary and aggressive aims of imperialism are unat- ' tainable and for this reason it is unable to find a"true" military economic con- cept. Any of them is merely a criminal adventure capable of causing only inconceiv- ! able hardships for mankind and an inevitable death for imperialism. Nevertheless 40 ~ FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007142/09: CIA-RDP82-40854R040500010005-0 FOR OFFICIAL USE O1VLY preparations for war are underway and the foxces o~ imperialism are en- _ deavoring to intensify the arms race. This is the essence o~ the in�luence of sociopolitical fac::ors in imperialism.on tfie m~litary-economic concepts of the bourgeois states. The sociopolitical relations of socialism give rise to other impulses and militarism is alien to them. Ever-broader masses of people throughout the world realize that it is not the scientific and technical revolution by itself but rather capitalism which gives rise to the colossal military economic needs. It is capitalism which will bring incalculable calamities to mankind as it subordinates the enormous oppor- tunities opened up by the scientific and technical revolution to military aims, in squandering national wealth and creating a threat to the very existence o~ mankind. Socialism endeavors to free mankind from this threat and from the excessive burden = of military expenditures. But until this task has been carried out and as long as there is an objective, externally imposed necessity for economic support of military strength and for dependable defense capability, the socialist state in its military ecor~omic concepts cannot help but consider, in the first place, the objective de- - mands of the scientific and technical revolution on the economic support of defense and, secondly, the specific military econamic preparations of the probable enemies. What are the basic directions of economic preparations for war by the aggressive f orces of the modern world? The most important af them is the increased military economic potential. This is characteristi~ both for iudividual imperialist nations as well as for their reactionary aggressive alliances. The socialist countries can- not help but consider this in their economic policy. They are carefully studying the objective conditiot:s for strengthening military economic potential at the pres- ent stage and are taking the necessary measures. In order that economic development conform most to the growth of military economic potential, under present-day conditions it is essential fi.rst of all to widely intro- duce the achievements of the scientific and technical revolution into production and to improve the sectorial economic structure on a basis of the predominant develop- ment of the progressive sectors which at the same time are of crucial significance for the production of modern weapons and military equipment. Also of exceptionally important significance is a better placement of the productive forces which combines greater economic effectiveness and the interests of i~icreasing its survival under wartime conditions. There are also other ways to strengthen military economic ~oten- tial and these will be tak~en up in the �ollowing chapters. . - For creating ar~d maintaining military might it is important not only to have the re- quired mi~itary ~�;conomic potential but a18o to realize this. The importance of this problem has also been recognized in previous wars. It has assumed even-greater im- portance at the present stage, as the contradictoriness of the demands of modern war- _ fare on the economy complicates the canditions for realizing military economic poten- tial. T~ao methods are known for satisfying military needs: from previously acquired sup- plies and from current military production with the subordination of the entir~ - economy to the interests of the war. At the present stage it is possible to observe the elements of either method as well as a comp letely new element, namely the "enor- mous constantly-operating armament industry"10~ which exists permanently in peace- time. This fias actually been achieved by all ma~or imperialist states and cannot 41 FOR OFFICIAL ~JSE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-04850R000500010005-0 ~ FOR OFFICIAL USE ONLY help but be considered in military economic theory and practice of the socialist states. At present, in order to ensure dependahle de~ense capability, we must not limit ~ur- selves ;o just strengthening military economic potential. It is essential to con- stantly n;3intain the necessary military economic might, that is, to have a military economy corresponding to the international situation and to the nation's capabili- _ ties. A peacetime military economy should supply the armed forces with everything neces- sary, and particularly modern weapons. It must constantly improve and replace the means of armed combat, preventing military and technical superiority by the enemy. Finally, it should maintain sufficient reserves and supplies of military equipment, ~ special equipment, strategic materials and food and be capable of an immediate and significant increase in its scale within the re.~uired amounts. Here lies the second area of activities for the economic support of defense for the socialist fatherland under present-day conditions. ~ In the military economic preparations of the various imperialist states, along with maintaining a permenent military industry, important significance is given to a third area, that is, to early preparatidns for a military changeover of the entire economy. It is considered that mobilization preparations in the economy under present-day conditions are significantly more complicated both because the scale has increased many times and the relationships of the national economy and military economy have become more complex as well as because the increased role of the time _ factor places more rigid demands on it. Of course, a socialist state, in being concerned with a s~trengthening of defense capability, considers these aspects as well as the fact that a question is far from exhausted by preparations for the military c:onversion of the national economy. The greater possibilities for a weap- onry impact on the economy by the enemy has moved to the forefront the task of in- - creasing the economy's (military and civilian) stability and the capacity to quickly restore or compensate for destroyed elements. This requires the carrying out of measures to rationally locate the eccr_omy as well as to create civil defense. In the economic preparations by the imperialist countries for war, great attention is given to developing those elements of the military economy which ensure the de- livery, distribution and consumption of military-end products. These are: mili- tary economic preparations of possible theaters of war, the creation of an exten- - sive network of bases, storage facilities and lines of com~?unications and the strengthening of the armed forces rear. The improving of the rear services is an important area in military economic prep- arations and it largely determines the converting of economic strength into military strength. As a result of the changes which have occurred in the economy and mili~. tary affairs, the amount of work carried out by the armed forces rear as well as the impor.tance and complexity of the tasks carried out hy it have significantly in- creased. This has necessitated qualitative changes in its technical equipping, organizational forms and methods of activities. The rear units, facilities and sub- units are equipped with highly-pro3uctive technology, automa'ted systems have been _ introduced and continue to be introduced in maay elements of rear control and the rear is fully motorized. Technical, engineer and special formations comprise an impoxtant place in its fighting strength. The naval fleets have received effective 42 = FOR Or FICIAL USE ONLY ~ APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR !~FFICIAL USE ONLY systems of mobile basing. Thus, there have heen the further development and in- creased role o� those elements in the military econon~y which in organizational terms are part of the armed ~orces structuxe and in the forma~ion of it is ~ particularly important to correctly comhi:ne tfie contradtctory economic and mili- - tary requirements. Ensur~ng the coordinated development of all component part~ of the military economy and the opportunities for expanding them under wartime condi- tions are onE of the basic areas in military economic preparations which largely _ determines the effectiveness of the military economy. Economic preparations far a possible war also bear the imprint of the fact that in the event international imperialism starts such a war it inevitably will assume a - coalition nature. The bloc strategy of the imperialist states impels the develop- - ment of integration processes in the sphere of the military economy. A clear ex- ample of this is the economic preparations for war by the aggressive NATO bloc. Naturally the socialist states are forced to draw the proper conclusions from this. These are the basic traits which characterize the contents of military economic preparations under present-day conditic;zs. In the given instance it has been a question of those which stem directly from the occurring scientific and technical revolution under the condition of subordinating its achievements to military ends. - These are dictated by the technical and economic features of the relationship be- tween th.e war and the economy with the present level of their development and they manifest the general laws for the economic support of a modern war.. At the same time it is essential to bear in mind constantly that the presence of a number of similar elements in the economic preparations for war by the aggressive imperialist forces and the responses by the socialist states in the area of economic support for defense does not mean an identicalness of the specific military economic ~ f orms and methods employed by the various nations and coalitions. These forms and methods are determined by the entire aggregate of socioe~onomic conditions and laws and they, as was already pointed out, differ fimdamentally under capitalism and - socialis~, Precisely because of this two different types of military economy cor- respond to the two simultaneously existing but fundamentally opposite world systems, socialist and capitalist. FOOTNOTES 1 Quoted from the book by H. Delbruck, "Istoriya voyennogo iskusstva v ramkakh politichiskoy istorii" [The History of Military Art Within Political History], Vol 4, Moscow, 1938, p 102. 2 Ibid., p 254. 3 K. Ma~x and F. Engels, "Soch.," Vol 21, p 164. 4 Ibid., Vol 20, p 164. 5 V. I. Lenin, PSS, Vol 26, p 353. 43 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007142/09: CIA-RDP82-40854R040500010005-0 FOR OFFICIAL USE ONLY 6 See: Ibid., Vol 17, p 187. ' ~ Ibid., Val 30, p 94. S Ibid. , p '85. 9 Ibid., Vol 27, pp 417-418. - 10 L. I. Brezhnev, "Leninskim kursom" [By a Leninist Course], speeches and articles, Vc+l 6, Moscow, 1978, pp 168-169. 11 K. Marx and F. Engels, "Soch.," Vol 4, p 445. 12 "Programma KPSS" [The CPSU Program], Moscow, 1976, p 58. 13 L. I. Brezhnev, "Leninskim kursom," Vol 5, Moscow, 1976, p 474. - 1`` V. I. Lenin, PSS, Vol 9, pp 154, 155. 15 Ibid., Vol 34, p 194. 16 K. Marx and F. Engels, "Soch.," Vol 20, p 171. � , i~ V. I. Lenin, PSS, Vol 32, p 80. 18 Ibid., Vol 35, pp 345-346. 19 K. Marx and F. Engels, "Soch.," Vol 20, p 176. 20 See: V. I. Lenin, PSS, Vol 9, p 154. 21 See: Ibid., Vol 31, p 449. 22 Ibid., Vol 34, p 173. 23 K. Marx and F. Engels, "Soch.," Vol 20, p 170. 24 V. I. Lenin, PSS, Vol 44, p 205. 25 In Athens at the end of the 5th Century B.C., the couch shops employed 20 slaves each, the arms shops had 32 and the shops to manufacture shields had 120 slaves each (see S. Lilly, "Lyudi, mashiny i istoriya" [Men, Machines and History], Moscow, 1970, p 46). 26 See: K. Marx and F. Engels, "Soch.," Vol 29, p 154. 27 Ibid., Vol 3, p 23. 28 "Russkoye oruzhiye XI-XIX w." [Russian Weapons of the llth-19th Centuries], Moscow, 1953, p 10. - 44 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFF'ICIAL USE ONLY 29 See: M. N. Tukhachevskiy, "Izbrannyye proizvedeniya" [Selected Works], Vol 2, Moscow, 1964, p 127. 30 K.� Marx and F. Engels, "Soch.," Vol 20, p 171. 31 Quoted from: F. Mehring, "Ocherki po istorii voyny i voyennogo iskusstva" [Essays on the History of War and Military Art], Moscow, 1938, p 126. 32 Clauseqitz, "0 voyne" [On War], Vol 1, Moscow, 1936, p 402. ' 33 ~~Dokwnenty Soveshchaniya predstaviteley kommunisticheskikh i rabochikh partiy. Moskva, noyabr' 1960 goda" [Documents of a Conference of Representatives from Communist and Worker Part:ies. Mosca~w, November 1960], Moscow, 1960, p 23. 34 K. Marx and F. Engels, "Soch.," Vol 20, p 177. 35 V. I. Lenin, PSS, Vol 36, p 396. ~ 36 See: Yu. ~e. Vlas'yevich, "Vo chto obkhodyatsya narodam imperialisticheskiye voyny" [What the Imperialist Wars Cost the People], Moscow, 1971, pp 61, 64. ' 37 See: A. N. Lagovskiy, "Strategiya i ekonomika" [Strategy and Economics], Mos- cow, 1961, p 8. 38 See: M. I. Burlakov, "Voyennoye potrebleniye i kapitalisticheskoye vosporizvod- stvo" [Military Consumption and Cagitalist Reproduction], Moscaw, 1969, pp 256, 268. � . 39 Calculated from the book: "Militarizm. Razoruzheniye" [Militarism. Disarma- ment], Moscow, 1963, pp 17, 18. 40 Calculated from the book: M. I. Burlakov, op. cit., pp 253-255, 265-266. 41 V. I. Lenin, PSS, Vol 32, pp 318-319. 42 Ibid., Vol 23, p 176. _ 43 ~e first attempts to organize the mass production of firearms on the basis of the interchangeability of parts was made in Fran~e in 1717 and 1785. In 1800, Eli Whitney (United States) organized the mass production of muskets. In England, in 1853, the British Firearms Cammfssion adopted a decision to intro- duce this system. Soon mass factory production was extended to all basic types of military products and to the civilian sectors (see: S. Lilly, op. cit., p ly6). 44 V. I. Lenin, PSS, Vol 23, p 176. 45 Schlieffen, "Kanny" [Cannae], Moscow, 1938, p 356. 46 See: S. N. Prokopovich, "V~iyna i narodnoye khozyaystvo" [War and the National Economy], Moscow, 1918, pp 6, 13, 19. 45 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL USE ONLY See: "Militarizm. Razoruzheniye," pp 14, 17, 18. 48 See: V. I. Lenin, PSS, Vol 36, p 396. ~ `'9 See: "Mirovaya voyna v tsifrakh" [The World War in Figures], Moscow-Leningrad, 1934, p 55. 50 K. Marx and F. Engels, "Soch.," Vol 46, Part 1, p 67. ~ 51 See: V. I. Lenin, PSS, Vol 6, p 260. , 52 See: "Promyshlennost' Germanii v period voyny 1939-1945 gg." [German Industry During the Period of the 1939-1945 War], Moscow, 1956, p 182. . 53 See: M. I. Burlakov, op. cit., p 204. _ 54 V. I. Lenin, PSS, Vol 34, p 191. 55 K. Marx and F. Engels, "Soch.," Vol 7, p 509. � ~ ~ 56 V. I. Lenin, PSS, Vol 44, p 324. 57 See: "Istoriya grazhdanskoy voyny v SSSR" [History of the Civil War in the USSR], Vol 3, Moscow, 1957, pp 306, 307. 58 Quoted from the book: "Istoriya sotsialisticheskoy ekonomiki SSSR v 7 tomakh" [History of the Socialist Economy of the USSR in Seven Volumes], Vol 1, "Sov~tskaya ekonomika v 1917-1920 gg." [The Soviet Economy in 1917-1920], Moscow, 1976, p 243. 59 See: "Istoriya grazhdanskoy voyny...," Vol 3, p 388. 60 See: D. A. Kovalenko, "Oboronnaya promyshlenaost' Sovetskoy Rossii v 1918- 1920 gg." [The Defense Industry of Soviet Russia in 1918-1920], Moscow, 1970, pp 383, 393. 6I See: "Istoriya grazhdanskoy voyny...," Vol 4, Moscow, 1959, pp 88, 90, 387; Vol 5, Moscow, 1960, pp 85, 293. 62 See: V.,I. Lenin, PSS, Vol 38, pp 400-401. ' 63 See: M. N. Tukhachevskiy, "Izbrannyye proizvedeniya," Vol 2, p 26. ~ 64 V. I. Lenin, PSS, Vol 35, p 395. 65 ~~KpSS v rezolyutsiyakh i resheniyakh s"yezdov, konferentsiy i plenumov TsK" [The CPSU in Resolutions and Decisions of Congresses, Conferences and Central Committee Plenums], Vol 3, Moscow, 1970, p 507. 66 See: "Narodnoye khozyaystvo SSSR 1922-1972 gg. Yubileynyy statisticheskiy yezhegodnik" [The USSR National Economy in 1922-1972. Jubilee Statistical Annual], Moscow, 1972, pp 130, 132, 136-140. 46 FOR OFF[CIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2407/02/09: CIA-RDP82-00850R000500410005-4 FOR OFFICIAL USE ONLY 67 See: "Istoriya Velikoy Otechestvennoy voyny Sovetskogo Soyuza 1941-1945" [History of the Great Patriotic War in the Soviet Union of 1941-1945], Vol 1, Moscow, 1960, p 55. 6$ See: G. S. Kravchenko, "Ekonomika SSSR v gody Velikoy Otechestvennoy voyny'~ [The USSR Economy During the Years of the Great Patriotic War], Moscow, 1970, pp 73, 86. 69 See: "Istoriya KPSS" [History of the CPSU], Vol 5, Book 1, Moscow, 1970, pp 119-120. See: "Narodnoye khozyaystvo SSSR 1922-1972," pp 142-145; "Istoriya KPSS," . Vol 5, Book 1, p 120. 71 See: "Istoriya KPSS," Vol 5, Book 1, p 121. 72 See: "Tyl Sovetskikh Vooruzhennykh Sil v Velikoy Otechestvennoy voyny 1941-1945 gg." [The Rear of the Soviet Armed Forces During the Great Patriotic War of 1941-1945], Moscow, 1977, p 486. 73 See: Ibid., p 490. 74 See: "Istoriya vtoroy mirovoy voyny 1939-1945" [History of World War II of 1939-1945], Vol 3, Moscow, 1974, pp 435, 441, 442. 75 "Resheniya partii i pravitel'stva po khozyaystvennym voprosam" [Party and Governmental Decisions on Economic Questions], Vol 3, Moscow, 1968, p 42. 76 See: Ibid. , pp 44-48. See: N. Voznesenskiy, "Voyennaya ekonomika SSSR v period Otechestvenv~y voyny" [The Military Economy of the USSR During the Period of the Patriotic War], Moscow, 1948, pp 42-43. - ~a See: "Istoriya V-alikoy Otecheatvennoy...," Vol 2, Moscow, 1963, p 161. 79 See: Ibid., pp 148, 500. SO See: "Parti3~a i armiya" [The Party and Army], edited by A. A. Yepishev, 2d supplemented edition, Moscow, 1980, pp 213-214. 81 See: "Bol'shaya Sovetskaya Entsiklopediya" [The Great Soviet Encyclopedia], Vol 14, Moscow, 1973, p 292. 82 See: N. A. Antipenko, "Na glavnom napravlenii" [On the Main SectorJ, Moscow, 1967, pp 203, 213, 217 and 298. 83 See: "Tyl Sovetskikh Vooruzhennykh...," pp 510-511. ' 84 See: "Velikaya Otechestvennaya voyaa Sovetskogo Soyuza 1941-1945. Kratkaya Istoriya" [The Great Patriotic War of the Soviet Union of 1941-1945. A Coacise History], Moscow, 1970, p 571. 47 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL USE ONLY 85 See: "Tyl Sovetskikh Vooruzhennykh...," pp 492, 493. 86 See: "50 let Vooruzhennykh Sil SSSR," [Fifty Years of the USSR Armed Forces], _ Moscow, 1968, p 466. 87 L. I. Brezhnev, "Leninskim kursom," Vol 6, p 345. 88 See: L. Gatovskiy, "Ekonomicheskaya pobeda Sovetskogo Soyuza v Velikoy Otechestvennoy voyne" [The Economic Victory of the Soviet Union in the Great Patriotic War], Moscow, 1949, pp 67, 72-74. ~ ~89 See: "Promyshlennost' Germanii v period voyny 1939-1945 gg.," Moscow, 1956; H. Eccles, "Rol' tyla v voyne" [The Role of the Rear in a War],.Moscow, 1963; L. Ya. Eventov, "Voyennaya ekonomika Anglii" [The Military Economy of England], Moscow, 1946; D. B. Koyen, "Voyennaya ekonomika Yaponii" [The Military Economy of Japan],~Moscow, 1951. 90 See: PLANOVOYE KHOZYAYSTVO, No 1, 1971, p 52. - 91 See: K. Knorr, "Voyennyy potentsigl gosudarstv" [The Military Potential of States], Moscow, 1960, p 261. 92 V. I. Lenin, PSS, Vol 39, p 321. 93 L. I. Brezhnev, "Leninskim kursom," Vol 2, Moscow, 1970, p 90. 94 V. I. Lenin, PSS, Vol 39, p 321. 95 See: A. 0. Smukul and A. S. Fedurin, "Tyl voyenno-morskikh sil" [The Naval RearJ, Moscow, 1973, p 264. ~ 96 See: D. Tompkins, "Oruzhiye tret'ey mirovoy voyny" [Weapons of World War III], Moscow, I969, p 187. 97 See: R. A. Faramazyan, "Razoruzheniye i ekonomika" [Disarmament and the Econo- my], Moscow, 1978, p 89. 98 See: G. I. Kuz'min, "Voyenno--romyshlennyye kontserny" [Military Industrial Concerns], Moscow, 1974, p 87. 99 See: L. M. Gromov and R. A. Faramazyan, "Voyennaya ekonomika sovremennogo kapitalizma" [The Military Economy of Modern Capitaliam], Moscow, 1976, p 76. 100 See: PROBLEMY MIRA I SOTSIALIZMA, No 5, 1974, p 91. lol See: L. M. Gromov and R. A. Faramazyan, op. cit., p 81. 102 j,,~HR UND WIRTSCHAFT, No 2, 1966, p 108. _ 103 See: R. A. Faramazyan, "SShA: militarism i ekonomika" [The United States: - Militarism and the Economy], p 118. 48 ~ FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-00850R040500010005-0 ,1 FOR OFFICIAL USE ONLY 104 See: Ibid., p 315-316. 105 See: PRAVDA, 4 March 1975. 106 See: L. I. Brezhnev, "Leninskim kursom," Vol 6, p 596. 107 ~~Soyuza mecha i dollara" [Alliance of Sword and Dollar], Moscow, 1973, p 48. ~ 49 - FOR OFFIC[AL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL USE ONLY CHAPTER II. THE STATE'S ECONOMIC MIGHT � 1. The State's Economic Potential and Economic Might The categories "economic potential" and "economic might" describe the economy from different viewpoints and in different aspects. They are interrelated like cate- gories of possibility and reality, At the same time, in a number of instances . ~they are employed as synonyms. This is 3ustifiable only when the given difference is not of substantial significance in the designated regard. But at present at almost every step there is a need to draw a clear line between economic potential ~ ~ and economic might. This is essential, for example, ~.n comparing the economy of - �socialist and capitalist nations. The given distinction is quite essential in carrying out current and long-range�economic tasks, that is, for satisfying the ' most urgent needs of the day the attained ecoaomic might is important but when it is a question of the larger and more distant tasks, it ia important to know eco- ' nomic potential and the possibilities of increasing economic might. T~e differ- � ence between economic might and economic potential is particularly sharp when one poses the problem of the efficiency of social production. One of its main aspects is to ascertain the reserves for a growth in production by comparing the existing production at a given moment with the existing production passibilities. It is no _ surprise that with the moving of the effectiveness problem to the forefront, the question of the balance of economic potential and economic might has ass~ed par- ticular pertinence and has been thoroughly examined in a number of party documents. "The USSR presently possesses enormous economic potential" stated the 24th Party Congress, "and the effectiveness of our economy ta an ever-greater degree depends upon how this poten~ial is utilized and above all the operating prod~ctive capital."1 At the 25th Party Congress and at the plenums oi the CPSU Central Committee of re- cent years particularly great attention was given to the questions of disclosing and more fully realizing economic possibilities. ~ Economic potential describes an economy from the viewpoint of the existing ob3ective ' opportunities for producing material goods. These posaibilities ultimately come down to the personal and material production factora, that is, to the labor force and means of production which are the initial atructural elements in economic - potential. Each of these has a qualitative and quantitative definiteness and can be calculated and shown over time, it can be forecast and in a socialist society under~o planned development. Our motherland is increasing its economic potential at a rapid pace. To the economic potential which has been created over almost a half century has been added an equal ~mount created in ~ust 10 years~, se was point.ed. out at the 25th CPSU Congress. Capital investments 3nto the national economy are systematically increasing. During the Tenth Five-Year Plan over~the first 4 years 50 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED F~R RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL USE ONLY as much money was invested into the national economy as over the entire Ninth Five- Year Plan. This has made it possible to renew and increase the fixed productive - capital. Data on the size of the population and its structure, the production capacity, energy sources, the reserves and output of fuel, raw products and material make it possible to form a certain understanding of a nation's economic possibilities. However, neither the size of the population, the existing production capacity or any other structural elements in an economy can be adopted as the direct cr~teria_ - for economic potential, part3cularly if the potentials of different nations are being compared. As an example, take the size of a population. Ac~ording to this indicator, Japan is almost twice the size of the FRG, but in terms of the volume of - industrial production only recently achieved and somewhat surpassed the West German level. At the same time in terms of the coal and iron ore reserves, Japan is tens of times behind the FRG, but has surpassed it by double in terms of iron and steel casting. Similar discrepancies are encountered at every step. Hence economic po- ' tential must not be judged merely from various particular characteristies of indi- vidual elements, as *.heir role and weight change in various combinations with other elements of potential. Economic potential must not be determined either in the form of a list of the most important properties of its elements as it is not a mechanical total of these ele- ments ~but rather an optimum model of social production. Economic potential, in providing a.notion of what social production could be, is determined by the sntire aggregate of conditions which influence the realization of personal and material production factors, such as: the nature of the social division of labor, the placement, specialization and cooperation of production, external economic ties and other aspects determining the involvement of all the existing possibilities in the � real production process and their use. For describing economic potential, the scientific development level and the link be- bween science and production are assuming ever-increasing importance. "If the pro- duction process is becoming rhe application of science, then science, on the con- trary, is becoming a factor, so to speak, a function of the productioa process,"2 wrote K. Marx. This Marxist thesis is particularly pertinent at present. Under present-day conditions, when science more and more is being turned into a direct productive f arce, it is very important to consider its influence on the economic possib ilities of a state. The economic system is of particular significance for der~cribing economic poten- tial. As is known, product~.on is inconceivable without the combining of a labor force and the means of production, and the method of this combining as determined ~ by the form of ownership of the means of production has a crucial i~fluence on the nature of production and on the degree of realizing its personal and material fac- tors. Historical experience shows ~hat social revolutions, without changing such indicators of potential as population size, available natural resources and produc- tive capital, have led to an immediate and substantial increase in ~ nation's eco- nomic possibilities precisely as a consequence of the change in the socioeconomic - system. Under the conditions of the historic conflict between the two opposing social sys- - tems, capitalism and socialism, it is particularly important in determining and de- fining economic potentials to cor?sider the role of the economic system. - 51 FOR O~FICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFFICiAL USE ONLY Thus, economic potential is the available possibilities which a nation (coalition) - possesses to produce material goods. This is determined by the quantity and qual- _ ity of personal and material production factors as well as by the method of their bringing together, that is, by the nature of the economic system. In a most gen- eral form, economic potential can be imagined as an optimum national economic model - and its quantitative express ion as the maximum possible production volume. While economic potential represents an ideal picture, economic might is actually existing production. Its amount and dynamics can be ~udged from the achieved pro- duction scale and from its ab solute and relative increases. Thus, in characteriz- ing the enormous might created in our nation as a result of building developed socialism, the General Secre tary of the CPSU Central Committee, Comrade L. I. Brezh- nev, at the 24th CPSU Congres s, said that the Soviet economy "in 1 day produces al- most 2 billion rubles of soc ial product, that is 10-.fold more than was produced daily by the end of the 1930's."3 In the given instat:ce, a nation's economic might and the dynamics of this migh t can be expressed in~the indicators for the social production volume per unit of time. In speaking about economic might, one has in mind not only the volume, weight and value of the numerous types of produced prod- uct but also those social requirements which this might satisfies as well as the - possible degree of satisfying these requirements. In bringing out the essence of econamic might, it is important to draw attention r.o two aspects of this category. In the first place, it describes the efficiency of social production from the v iewpoint of realYzing potential opportunities. The more fully the potential opp ortunities are realized the higher the economic might. In turn, the growth of economic might is related to broadening the boundaries af economic potential and to increasing it. A comparison of economic potential and economic might makes it possible to estab- lish the degree to which the present economic possibilities have been realized and helps to elucidate the unutilized reserves and the ways and methods for increasing _ r.he efficiency of social production. These questions are assuming ever-greater - urgency. They have been sys tema~.ically discussed at the party congresses, the plen- ~ �ms of the CPSU Central Committee and the sessions of the USSR Supreme Soviet, the Union republic supreme soviets and the local soviets. This has made it possible to promptly disclose the existing reserves and determine the possibilities and ways for increasing the eff iciency of social production and raising economic might in the current five-year plan and over the long run. To put it briefly, these paths - come down to the fuller utilization of each of the elements in economic potential and to raising the efficient use of the labor forces, fixed capital (a rise in the output-capital ratio) and mat erial resources (a decline in the materials-output ratio). - In concretizing each of these ways in terms of modern conditions, the party has = moved to the forefroiit accele rating the pace of scientific and technical progress and increasing the e�ficient use of scientific potential. At present the social _ aspect of efficiency has assumeci particular significance and this is caused by the need to fully utilize the advantages of developed socialism. These are: a con- ~ stant improvement in national economic management, planning, management methods and economic incentives, and the organizational structure of management. Ultimately this will make it possible to solve the problem of organicalTy combining the achievements of the scientif i c and technical revolution with the advantages of - 52 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFF[CIAL USE ONLY developed socialism. This is why the carrying out of the measures outlined by the party to improve the economic mechanism is a ma~or economic and political task. _ The relationship with economic potential brings out only one aspect of economic might. Another aspect is seen through the relation with those aims to which pro- duction is ob~ectively subordinate and which determine its structure and essence. The econoinic stra~egy of the party starts precisely by determining fundamental goals and the growth of economic migh~ acts as a means of achieving these goals. , There are a dialectical relationship and a reciprocal causality in quantitative and _ qualitative terms between the goal and the means of attaining it. Surplus value, as the goal of capitalist production, presupposes the exploitation of labor by capital and a rise in the rate of surplus nothing more than an increased degree of exploitation. Ensuring the we11-being and all-round development of the workers, in being the objective goal of socialist produ.ction, presupposes the elim- ination of exploitation and universal, jointly planned and organize~ ?.abor by all members of society. This labor is based on modern scientific and achieve- ments. Here the growth of economic might broadens the range of satisfien nepds and increases the degree of tkeir satisfaction. In our nation a qualitatively new stage of economic might has been ~chieved with the building of developed socialism. This now makes it possible to carry out simultaneously such complicated tasks as en- suring the necessary conditions for the further growth and improvement of produc- tion, increasing the prosperity and well-rounded development of the workers and strengthening national defense. Since economic might serves certain goals, it can be described not only by the over- all scale but also by the structure of prodiiction and its conformity to those gouls ta which production is objectively subordinate. With the shifting of emphasis to efficiency and quality, the end result~ of produc- tion, the volume and composition of products destined fQr directly satisfying social _ and personal needs move evermore decisively to the forefront. The efficiency of socialist production on this level is characterized by the constant growth of worker prosperity. The ever-fuller satisfying of the material and cultural needs of the workers and the ~ensuring of their all-round developmeat are the highest goal in the party's economic policy. At the same time, this is a most important prerequisite for a growth in production and for increasing its efficiency for both the develop- ment of the modern means of production on the basis of scientific and technical progress as well as an improved quality of production presuppose a further improve- - ment in the main productive force, the workers. Thus, the economic might of a socialist state is characterized by the scale and - structure of social production and by the abiZity to create everything necessary to satisfy the needs of society and for the all-round development of the workera. Marxist-Leninist political economy has elaborated a series of criteria for economic might. The most important of them is aggregate social produc~, that is, the entire mass of material goods produced in society over a certain period. . A cost indicator of aggregate social product makes it possible to represent over time the economic might of a giv~en state as we~l as to compare different cauntries and determine their share in the world total. For example, Soviet gross social 53 . FOR OFF[CIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00854R004500010005-0 FOR OFFICIAL USE ONLY product in 1978 in current prices was 992.1 billion rubles, that is, it surpassed the 1913 level by 65-fold, the 1940 level by almost 13-fold and.the 1970 level by 1.56-fold.4 These data ~how the high and steady dynamicness of our motherland's economic might. . Along with aggregate social product, it is possible to employ the indicator of the _ volume of industrial production for describing economic might, and for comparisons, an indicator for the share of different countries in world industrial production. _ This makes it possible to express the relationship of their economic might in rela- tive amounts (Table S). ' Table 5 Share of Individual Countries in Industrial Production of Capitalist World Year Country Million 1950 1960 1970 1970 1975 1978 pri~es Total capitalist world 100.0 100.0 100.0 711,887.5 100.0 100.0 _ United States ' 48.7 41.9 37.84 269,500.0 35.9 37.3 Japan 1.6 4.8 9.51 67,738.7 9.1 9.4 FRG 6.3 10.6 10.00 71,871.6 9.3 8.9 ; Great Britain 8.6 7.4 5.39 38,373.1 4.8 4.4 ~ - France 5.9 6.6 6.46 45,977.7 6.4 b.2 *"Economic Status of Capitalist and Developing Countries," Appendix to the Journal MIROVAYA EKONOMIKA I MEZHDUNARODNYYE OTNOSHENIYA, No 8, 1977, p 13; No 8, 1979, p 21. The data given in the table make it possible to ~u~ge the ratio of industrial might in various countries during different stages. The data show that in the postwar years there has been a process of a relative weakening in the positions of tlxe United States and Great Britain and a strengthening of the positions of Japan and the FRG. From them it can be concluded that, regardless of the relative weakening of U.S. indus*rial might, its scale significantly surpasses the aggregate might of the maj or cap italis t countries . National income is frequently used as an indicator of economic might. This de- ~ scribes the objective possibilities which a society possesses for consumption and accumulation. In 1979, Soviet national income exceeded 438.3 billion rubles. Around three-quarters of national income was used for consumption.5 The volume of national income in various nations can be expressed in a single currency and this is convenient for comparisons (Table 6). ~ 54 ~ FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 . FOR OFFICIAL USE ONLY TabYe 6 National Income of the USSR and Foreign Countries (estimate)* ~ Absolnte Amount of NatiQnal IncomE. : (by methodologq adopted in Soviet Country Year statistics, billion dollars) According to official In terms of price exchange rate ratio USSR 1976 548 673 _ United States 1976 1,010 1,010 FRG 1973 196.1 135.8 France 1973 139.3 125:8 Great Britain 1973 91.9 107.5 - Japan 1973 242 *"Narodnoye khozyaystvo SSSR v 197~ g." [The Soviet National Economy in 1978], p 54. ~ ' The indicator of national wealth can also be used to describe economic might. The waalth acquired by society and its mamberg under certain condition~ can become an important source for covering suddenly and sharply increasing social needs (harvest failure, war and so forth). USSR national wealth exceeds 2.5 trillion rubles.s . Along with the synthetic value indicators, an important role is played by physical _ indicators for the production of the maJo~ product types. In a number of instances these in more apecifically ~howing the actual poasibilities of a state to satisfy various needs. The following f igures describe economic might very expressively. In 1979, the USSR mined 719 million tons of coal and produced 586 million tons of oil (including gas condensate), it cast 149 million tons of steel, produced 94.5 million tons of mineral fertilizers, 123 million tons of cement, it manufactured 557,000 tractors and harvested 9.6 million tons of cotton.~ For all of these and a number of other product types the Soviet Union holds in the world. _ Various attempts are known to find a universal criterion of economic strength. For example, Nazi Germany used an indicator for the volume of steel casting. This was ~ caused by the particular importance of ferrous metals for. weapona production. But it turned out that during the war years l.ton of cagt steel produced several-fold _ more weapons and military equipment of different typea than in Germany, England or the United States. ~ ~ - The West Ge.rman economist, Herold, has attempted to express economic might by ab- stract figures.8 He has multiplied three indicators together: the size of the employed population (in million persons), the proportional amount of.industry and the service sphere in gross domestic product (in percent) and the value of the pro- duced gross national product per capita (in 1,000 dollars). The product of these ' 55 . _ FOR OFFICIAL iJSE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2407/02/09: CIA-RDP82-00850R000500410005-4 . FOR OFFICIAL USE ONLY three multipliers has been taken as the indicator of economic might. For the United States it equaled 23,OG0, for the FRG 3,790, for Gregt Britain 3,720, for France 3,160 and for Japan 2,880. To a certain degree these abstract figures reflect the ratio of the economic strength of various countries for they are based on the volume - of social production but here also the actual ratio is distorted. Ae for the abao~ lute amounts they are completely devoid of any definite conteat. One cannot help but point out that inherent to bourgeois scientists, particularly ~ if this is done for propaganda purposes, is a one-eided quantitative approach to the characteristics of economic might and an intentional ignoring or underestimating of the qualitative aspect determined by the production metho3. ~.'his is necessitated by class interest. The problem is that scientific analysis of the qualitative as- pect of economic might inevitably leads to a disclosure of the organic failings of the capitalist economic system. In estimating economic might one must see the limited nature of any quantitative in- dicator. They must be used with particular care in comparing the economic might of ~ nations with different socioeconomic systema. The econamic system influences not only the degree of realizing the poteatials of current production but also deter- mines the nature, patterns, the mechaniem of economic functioning and the possibil- ity of mobilizing and effectively utilizing a society's resources for achieving a ; certain gaal. Economic stability, the economy's ability to endure all sorts of dif- ficulties and hardships also depend upon a atate's economic system. All these properties cannot be expressed in quantitative indicators. Thus, the nature of the socioeconomic and political system determines the n.ature of wars and the attitude ~ toward them among different social groups. In a nation conducting an un3ust, ag- gressive war, with an increase in military hardshipa, all class contradictions are exacerbated, the process of disintegration is intensified and econamic might is weakened. Just, liberation wars or wars in defense of revolutionary victories, on the contrary, strengthen the solidarity o� the people and evoke mass heroism. This increases the sources of strength, If this is not cons3.dered and one is guided solely by the indicators of th~ prewar production volume, an erroneous nution may develop ~~n the ratio of economic might in~different countries. The same ratio of production indicatars can conceal a different ability to satisfy social needs de- pending upon a change in the content of these needs and the economic functioning conditions. . Thus, the quantitative indicators for economic potential and economic might do not provide a full description of them. Being more or less dep~ndable guides under some conditions, they become completely insufficient in others. However, it would be profoundly wrong to deny the importanc~ of quantitative analysis because of this. The extensive use of modern computer technology and mathematical economics modeling ~ has made it possible to obtain evermore dependable quantitative characteriatica for the economic capabilities of nations and coalitians under different situationa. The quantitative and qual.itative aspects of economic might must be viewed in their unity and reciprocal causality. V. I. Lenin, in demandiag a serious attitude to- ward national defense, explained: "To have a aerious attitude toward national de- fense means to prepare thoroughly and to strictly consider the balance of forces."9 In emphasizing that socialism possesses qualitative advantages over eapitalism, it must not be forgotten that the advantages of a social system are not realized auto- matically but rather through the organizational activities of the party, the state and the social organizations and by the active participation of all society's mem- bers in the economic and political life of the nation. 56 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00854R004500010005-0 FOR OFFICIAL USE ONLY ~ ~ 2. The Structure of Economic Potential and Economic Migh+t Econamic potential and economic might are characterized not only by the scale but also by their structure. An improvement in the structure of an economy is a most important indicator of its maturity and efficiency. The isolating of basic ~tructural elements, the analysis of the3~r relationships, state and dynamics and an elucidation of the degree to which ~he structure of eco- nomic potential amd economic might conforms~to the structure.of .social needa~shed. - vivid light on many questions of econom3.c strategy. For example, they help to dis- close the most effective ratio of extensive and.intensive paths of development at a given stage, to spot the main shifts in sectorial structure and the locatioa of production, to determine the directions for the development of the international division of labor and increased efficiency of foreiga economic ties and so forth.~ An economy is a complex and many-sided phenomenon which can be studied by ma~.y sciences. Political economy pays great attention to studying the organic s'ructure . of production. The specific economic sciencea investigate sectorial and reg.~onal structures. All aspects of the economic stru~ture are important for understanding and estimating economic potential and economic might, but it is important to empha- size that whatever aspect is used to examine the structure of economic potential or - economic might, it must be pr~sented in the form of a systematiaed and strictly subordinated system of elements which in their aggregate produce a single whole. The Ratio of Human and Physical Structural Elements Structural analysis presupposes an examination of economic.potential and econamic might primarily as a unity of the h um an and physical production factors, and if it is a question of potential, the optimum variatioa of this unity is elucidated . but if economic might is being studied, then the actually existing production as a specific embodiment of this unity ~.s analyzed. Each of the elements in economic potential and economic might (the labor force and the means of production) is char- acterized by its own particular properties which do aot make it possible to reduce them another. None of them individually provides productioas Only as a re- sult of uniting them do the "molecules" of production arise and the social type or nature of production depends upon the method of this unification anri upon the form~ of ownership of the means of production. If it is a~uestion of an ind~vidual enterprise, a production sesociation, an eco- nomic sector or region, then all of these are economic units which are quantitative- ly and qualitatively defined, that is, this is, in the first place, production as a unity of its human and physical factors; secondly, this is sociallq defined produc- tion (capitalist or socialist); and thirdly this is one or another part of social production, its structural element (an enterprise, sector or territorial unit). Because of this a study of an economy, as a unity of human and phys3cal production factors and an elucidation of their relationahip and dynamic8 are the starting point methodologically investigating the structure of a state's economic potential , and economic might. The human factor is the chief element in the productive forces. People create all goods by their labor. "The first productive force of all mankind," wrote V. I. _ Lenin, "is the worker or"1~ People are also the main force in armed combat. ~ 57 ~ FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL USE ONLY The economic and military capabilities of states and coalitions are found primarily in the human resources. Human resources are characterized by number, by the age-sex structure, by the state _ of health, professiona.l composition and by educational and cultural level. Tha political-moral state and labor activeness are of particular importance for describ- ing them and these are determined by the entire way of life inherent to a given ~ society. - In terms of population size, the USSR is one of the largest states in the world. ; - On 9 August 1973, the USSR had reached the 250-million mark in population size. Socialism has created previoualy unknown coaditions for the most complete and ra- tional utilization of the labor potential. The elimination of the exploitation of man by man, parasitism and idleness, the universal right to labor and the universal obligation to work, equal pay for equal work and the elimination of any discrimina- tion in pay have caused the high level of labor activeness among the population. According to UN data, the economically active popu~ation in 1970 was 50.8 percent of the total Soviet population, and the world figure was an average of 41.3 per-� cent.ll On the basis of the constant rise in labor productivity there has been an increased share in the persons employ~d in the nonproduction sectors. In coatrast to capitalism, where an analogous process has been forced by the swelling of the - state apparatus, by the growth of parasitism and various forms of irrational con- sumption, in the sacialist countries the increased number ot persons employed in the nonproduction sphere has been related to a broadening of the sectors which pro- vide a further improvement in health, the development of physical and mental capa- ~ bi~ities, improved worker skills and better domestic services for the workera. The number of persons employed in science has bsen growing particularly rapidly. ~ Among our nation's labor resources a significant and rapidly increasing shar~ is ~ made up of highly skilled speciaZists. The Soviet state has shown constant concern ~ for developing the system of higher and specialized secondary education. The aver- age annual number of persons employed in the Soviet national economy has increased from 33.9 million persons in 1940 up to 110.6 million persons in 1979. In the tatal number of workers there has been a particularly rapid increase ia the share of spe- - cialists with a higher and specialized secondary education. On 1 Januaiy 1941, there were 2,401,000 of them, and at the beginning of 1979, 26.4 million. At pres- ent the annual number of specialists graduating with a higher and specialized secondary education exceeds 2 million persons. Thus, in 1979, 1,253,7.00 specialists were graduated with a specialized secondary education aad 790,000 with a high~r edu- cation. The number of scientific workers which in 1913 was ~ust 11,600 has in- creased up to 1,340,300 in 1979. This is one-quarter of all the scientific workers in the world.12 , t In characterizing human resources it is particularly important to ~onsider their ! sociopolitical and moral qualities and these are determined by the way of life in- - herent to a given state. In this regard the socialist countries possess permanent advantages over the capitalist ones. Modern capitalist society is a society de- - void of a future and it is living through s general crisis which affects the econo- ~ _ my, political life, ideology and marality. Characteriatic of it are periodic eco- . nomic crises, chronic mass unemployment, cruel exploitation of the workers and the - ab~surd squandering of the results of labor. The intenaifying ideological and ~ 58 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL USE ONLY = political crisis has affected the institutions of power, it has led to a decline in spiritual culture, and has shattered the elementary moral standards in fostering corruption, violence and crime. All of this deprecates ar}d suppresses the human in-� dividual, it gives rise to a feeling of futility and diminishes social activeness. - In contrast to a capitalist society, a socialist ome is a society of a crisis-free, continuously growing economy which develops along the path to the bright future of all mankind, co~unism. A different way of life is characteristic of it. "An at- mosphere of true collectivism anci comradeship, solidarity, a friendship of all.the " nations and peoples in the country, in growing stronger day by day, and a moral health which makes us strong and steadfast--these are the bright aspects of our way of life and these are the great victories of socialism embodied in the flesh and blood of our reality."13 The socialist way of life forms particular qualities in _ our people. The Soviet man is not only a highly cultured person, a person of di- verse knowledge, physically strong and professionally trained. In him these quali- ties are comt~i.~ed with invincible ideological conviction, high social activeness, an ardent love for the motherland and consistent internationalism. Hence the enor- mous vital energy, the capacity to endure hardships and deprivation and mass hero- ism--qualities which multiply the strength of a socialist society. , However enormous the r~le of the human factor, production is impossible without the means of production. Among them an important role is played by the mechanical means of labor the aggregate of which was termed by K. Marx the skeletal and muscu- lar system of production. The,se characterize the degree to which man is armed in the struggle against nature and are the measure for thE development of the labor force. Economic ages differ not in what is produced but rather how this j.s pro- duced, with which means of labor."14 The socioeconomic essence of the means of production, like the labor force, is de- termined by the ownership of the means of production. With private capitalist own- ership, the means of production are turned into capital and into an imple~ent for exploiting the workers. With socialist ownership, the social essence of the means of production changes fundamentally. They act in the form of productive capital and express the rela- tionships of exploitation-free workers who, being the joint owners of the means of production, utilize them in a coordiaated and planned manner in the production proc- ess. Here production is subordinate to satisfying needs and to the all-round de- velopment of the workers while the means of production serve to facilitate labor it- self and to increase its efficiency. Productive capital in~the process of its functioning physically wears out and be- comes obsolete. The worn out capital is replaced by new. But this is not the sim- ple replacement of one example by another. As a r.esult of scientific and technical progress there is the continuous reequipping of production with evermore advanced technology. This process is occurring particularly acti.vely under the conditions of the present-day scientific and technical revolution which is causing fundamental, qualitative shifts in the physical elements of the productive forces. The possi- bilities of introducing its achievements into production and the social consequences _ from scientific and technical progress depend upon the method of.production. "...Only under socialist conditions does the scientific and technical revolution assume a true direction which conforms to.the interests of man and society. In 59 F'OR OFFICIAY, USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00854R004500010005-0 FOR OFFICiAL USE ONLY turn, only on a basis of the accelerated development of science and technology can the end tasks of a social revolution be carried out, that is, a co~unist society constructed."15 Public ownership of the means of production turns technical progress from a means of increasing worker exploitatioa and of raisiag the rate of surplus value into a means of making labor easier, for increasing its productiVi~y and for the all-round development of production workers. Because of this the atti- tude of the workers to it is changed. They actively introduce the achievements of _ scientific and technical progress into production and develop rationalization and ~ inventions. Characteristic of a socialist society are high growth rates and a qualitative im- provement of the productive capital. The total volume of fixed productive capital by the end of 1979 reached 1.07 trillion rubles (in 1~73 prices) and this was 39- fold higher than the 1913 leve1.16 But this has also not been merely quantitative growth. At the same time there have been qualitative changes in the c~pital. For example, the capacity of the largest steam turbine produced in prewar years was 100,000 kilowatts, in the Seventh Five-Year Plan it was 300,000 and in the Eighth and Ninth f ive-year plans, 800,000 kilowatts.l~ In 1976-1979, 15,100 new types of machines, equipment, devices and instruments were developed and of this number 10,800 types were put into production and series output started. During these years 7,300 types of obsolete machines, equipment, devices, instruments and articles were taken out of production.l8 Since quantitative and qualitative ch~nges in the labor force and the means of pro- duction are occurring in the process of developing the productive forces, the~r - ratio does not remain fixed. The ratio between the mass of the means of production and the mass of the labor force operating them is called the production structure. If both factors are taken in a physical form, their ratio is termed the technical - structure and is e:cpressed in such indicators as the energy-output ratio, the ~ available production area, the machine tool-output ratio and the materials-output ratio. But if both factors are taken in cost terms (the cost of the employed means of production to the cost of the live means going for the reproduction and develop- ment of the labor force) then one speaks of a cost structure which can be expressed ~ in such a f orm as: 2:1, 3:1 and so forth. The development of the productive forces and a rise in labor productivity, K. Marx wrote, "are manifested in a reduction in the mass of labor in relation to the mass - or the means of production operated by this labor or in a reduction in the amount of the subjective factor in the labor process in comparison with its ob~ective fac- tors."19 This change in the technical structure of production is also expressed in the cost structure but less noticeably so, for with an increase in labor produc- tivity not only is there a greater volume of the means of production consumed by it but also their cost is reduced. At the same time with a rise in worker well-being, the quantity of vital means consumed by each worker is broadened. In order to ex- press the interdependence of the technical and cost structure, K. Marx introduced the concept of an organic structure by which he meant a structure in terms of cost, _ since the latter "is determined by its technical atructure ~nd reflects changes in the technical structure...."20 The question of the development of the ob3ective and subjective productlon factors ~ and of the production structure is most closely linked with the question of increas- ing the productivity of social labor and economic efficiency. A study of the - 60 - FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2447/02/09: CIA-RDP82-00850R000500414445-4 FOR OFF[CIAL USE ONLY ~ = particular features of these relations at each specific stage ia the~development of the productive forces is of exceptionally important sigaificance for the elaboration ~ of the party's economic strategy and, in particular, for elucidating the possibili- ~ tiee of extensive and intensive ways and for choosiag the optimum ecoaomic develop- ment variations. As a whole, a growth in the amount of technology available to labor incre~ses labor productivity, but this relationship is not as simgle as might seem at first glance. For an illustration let us take a specific example of the dynam.ics oP the capital- output ratio and labor productivity in certain industrial sect.ors (Table 7). _ Table 7 Ratio of Growth Rates of Capital-Output Ratio and Labor Productivity in Soviet Industry in 1978 in Comparis~n with 1970 (X)* Growth of Growth of Industry and Its Sectors Capital~-Output .Labox Ratio Productivity All industry 171 149 Ferrous metallurgy 169 138 ~ Machine building and metalworking 17G 184 * Compiled from the book: "Narodnoye khozyaystvo SSSR v 1978 g." [The USSR Nationa~ Ea~nomy in 1978], Moscow, 1979, pp 127, 131. ~ From the given table it can be seen that over the period from 1970 through 1978, the capital-output ratio in Soviet industrq rose by 1.71-fold while labor produc- tivity increased by 1.49-fold. How~ver, in the various sectors the ratio of the - growth of labor productiyity and the growth of the capital-output ratio was far from the same. Thus, fn ferrous metallurgy, with very significant growth in the capital- ~ output ratio, labor productivity increased to a lesser degree than for industry as a whole. In machine building a more favorable process was.observed. Labor produc- tivity rose more rapidly than the capital-output ratio. It is important;to society at what price a growth of labor productivity is acltieved, It is interested in achieving a most favorab le ratio between the growth of the capital-output ratio and labor productivity. For this it is important to make full use of the available pro- - duction capabilities. Under present-day conditions there are great prospects for.inCreasing economic might through the fuller utilization of each of the elements of economic potential. As for the physical elements, these possibilities are related to a rise in the out- - output-capital ratio and a decline in the material~-output ratio. A 1 percent in- crease in the output-capital ratio for the existing productive capital would pro- vide additional national income over the qears of the Tenth Five-Year Plan in a - total suff icient for building housing for 2-2.5 million families. There are also significant reserves in the area of reducing the materials-output ratio. A rise in the output-capital ratio and a decline in the materials-output ratio are most. ~ ~ 61 FOR OFF[CIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007102/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL USE ONLY . important tasks in the unified technica7. policy at the present atage. Characteristic of it are: in the production of the implemeats of labor, a rise in unit capacity and a changeover to~the developmznt and introduction of systms of machines which encom- ~ pass the entire production process; in the area of improving production procesaes, ; the development of inethods involving few operations and production methods which save raw products, materials and fuel, and in the production of materials, aa increase in the output of high-quality steels and broadening the assortment of rolled products and producing synthetics with preset properties. � There a~ e also many opportunities for improving the utilization.of labor resources. These are related primarily to the replacing of manual labor by mechanized anci auto- mated labor and unskilled labor by skilled labor. ~f important signi�icance are the ubiquitous introduction of the scientific organization of labor, the elimination of working time losses, the strengthening of labor diecipline and the development of a communist attitude toward labor. A socia'list society has enormous advantages over a capitalist one both in increasing the elements of economic potential as well as in utilizing potential.opportunities. But these advantages are not realized automatically or spontaneously. For their ~ f*iller utilization it is essential to conatantly improve economic management and the ~ economic mechanism. The party has urged the Sovist workers to precisely calculate and effecCively utilize each ruble, each hour of labor and each ton~of product and , to completely eliminate mismaaagement and slipshod work. i ~ National economic planning has been constantly improve:: on the basis of an ever- " ; deeper understanding of the system of economic laws in.developed socialism. At the present stage important ~ignificance has been assumed by the problems of the more skillful combination of sectorial and territorial, long-range and current planning, � ensuring the balancing of the plans and their focus ~n achieving the end national economic results. Here ever-wid.;r use is being anade of mathematical economics plan- ning methods and the f orecasting of scientific-technieal progress and its socioeco- nomic consequences. An important role is played by improving the managemeat and economic incentive methods. The grc~wing unity of fundamental economic interests among.all members of ~ a socialist society creates the most favorable opportunities for reciprocally co- ordinating the system of economic incentives and levers and for strengthening the effect of cost accounting, prices, profit, finances and credit on increasing pro- - duction efficiency. The Sectorial Stru~ture The sectorial structure of economic potential and economic might is of very impor- ' tant significance for carrying out many economic, political and military tasks. In this regard economic potential,operates as the aggregate of the industxial, agricul- tural, transport, power and other particular potentials, each of which character- izes the production capabilities of the correeponding sectorial complex or individu- al sector. The sectorial structure of economic might makes it possible to ~udge the possibilities for satisfying specific needs while its comparison with the structure of e;,onomic potential disclo~ea reserves for economic growth and variations for the ~ nossible directions of national economic development. Under the conditions nf the 62 cUR OFF[CIAL USE ONLY � APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 . FOR OFFICIAL USE ONLY scientific and technical revolution, a rise in the efficiency of social production presupposes a ~onstant improvement also in its se~torial structure on the basis of the accelerated developmen~ of progressive sectors. In the process of developing the productive forces, the division of labor, specisl.- _ ization and production cooperation become deeper and as a result of this ~he sector-� ial national economic structure becomes more complex. The ma3or f,ectors of material production (industry, agriculture and transportation), in turn, dre divided into a number of sect:-rs, subsectors and individual types of production. Certain sectors develop more ;-apidly and assume ever-greater importance while the role of others ~e- clines. linder the conditi^ns of a planned economy there are an opportunity and nec- essity of effectively influencing the sectorial structure. - 'Ihe national economic and military economic importance of each sector is determined, in the first place, by what product it produces, and secondly, by what is its quan- titative contribution to the state's economic might,, A notion of the role of the varioixs sectors in creating aggregate social product is provided by Table 8. Table 8 Gross Social Product for the Nationa.l Economic Sectors (in current prices, billion rubles/%)* Gross Social Product National Economic Sectc,rs Year 1960 ~ 1970 1978 National economy as a whole 303.8/100 643.5/100 932.1/100 Including: Industry 189.5/62.4 409.0/63.6 633.1/63.8 Agriculture 49.3/16.2 103.8/16.1 147.0/14.8 Transportation and communications 12.9/4.2 25.7/4.0 43.7/4.4 - Construction 31.9/10.5 67.6/10.5 99.2/10.0 Trade, procurement, material- - technical supply and others 20.2/6.7 37.4/5.8 69.1/7.A * Compiled and calculated from the book: "Narodnoye khozyaystvo SSSR v 1965 g." [The Soviet National Economy in 1965], Moscow, 1966, p 63; "Narodnoye khozyaystvo SSSR v 1978 g.,�' p 41. Almost two-th~rds of the nation's total gross aocial product is produced by indus- try. In industry heavy industry holds the main place and its is responsible for three-quarters of all industrial product. Heavy industry is the foundation of the economy and the develog�:nent of all other economic sectors depend on it. For this reason the party has always given enormous signif icance to ensuring its predominant growth. As a result, the share of heavy industry in the total volume of industrial product has risen from 35.1 percent in - 63 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007142/09: CIA-RDP82-40854R040500010005-0 FOR OFFICIAL USE ONLY - 1913 up to 74 percent at present.21 The ragid development of heavy industry has made it possible to ensure the nation's economic independence, to securely defend the victories of the revolution and to build a developed socialist society which rests on enormous economic might. At the present stage the role of heavy industry has not been reduc.ed. It must cre- ate the most advanced types of products, machine~ and equipment, supply them to all economic sectors 3nd to the serv3.ce aphere, raise economic efficiency and en- . sure the building of the unaterial and technical base of communism. Heavy industry must also carry out imnortant tasks ia the intereate of economic support for the nation's dep~ndable defense cap~3bility and for constantly maintaining a high scien- tific and technical level in the defense industry. Because o� all of this one of the key questions in the party's economic strategy is ensuring stable and balanced growth of heavy j.ndustry. - The party's decisions have pointed out that for heavy industry's development of ever-greater significance are the elaboration of ma~or comprehensive programs de- signed for two or three 5-year periods and a further improvement in~the ratio of the most important sectorial complexes (fuel-energy, raw material and mactiine building) as well as the individual sectors within each complex. , - The Fuel-Energy. Complex The fuel energy and power comprise the fuel and energy base of the economy. In the world of today, there is an accelerating growth of fuel and energy consu~ption. The demand for oil and gas has been increasing parti.cularly rapidZy and their share in the world balance of energy resources at the beginning of the 20th century was 3.2 percent, 17.6 percent in 1940 and 59.7 percent in 1970. According to certain fore- casts, during the current decade the world will consume 31 billion tons of oil, that is, as much as over the previous 110 years.22 The Soviet Union is the world's only ma~or industrial atate which bases its economic _ development on its own fuel and energy resources. This crsates favorable conditions for independent development and for stable economi.c growth and is of important military-economic significance. The products of this complex are essential for pro- - ducing various types of fuel, explosives, synthetic rubber and plastics. Our nation's rich natural resources are being evermore fully utilized to strengthen its economic might. The USSR has a developed fuel and energy complex which encompasses over 20 sectors and types of production, oil and gas fields, coal mines and all. types of pc~wer plants. Its development is characterized by the following data (Table 9). Among the sectors of,. this complex, the oil and gas ones are developing most rapidly, - and in power production, the nuclear sector. In 1978, in comparison with 1940, oil - output (includ ing gas condensate) has increased by more than 18-f old, for gas by 100-fold, and their share in the produced fuel (calculated in of conditional = fuel units) has risen from 20.5 percent up to 70.3 percent.23 However great o ur natural reserves of energy, they are not inf:Lnite anci their use must be approached carefully, economically and thriftily. The 25th CPSU Co:igress 64 FOR OFFICIAL USE ONLY ~ APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED F~R RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL USE ONLY Tab le 9 - Growth in Output of Most Important Product Z`ypes of Fuel and Energy Complex* Production Volume Pro3uct Type . ' Year 1913 1940 1975 1979 Electric power, billion kilowatt hours 2 48.6 1039 1239 Oil, including gas condensate, million t~~s 10.3 31.1 491 586 Gas, billion m3 3.2 289 407 Coal, million tons 29.2 166.0 701 719 * Compiled from the book: "SSSR v tsifrak,h v 1979 godu" [The USSR in Figures in 1979]; p 107. ~ drew particular attention to this. Zts decisions established the bases so that the further growth of energy potential would be carried out predominantly from hydro- power, nuclear fuel and cheap coal. The increase in oil and gas output will to an ever-greater degree be channeled into pruduction needs. In being concerned about future energq, the party has outlined extensive construction of nuclear power p lants with fast neutron reactors and the developing of work on a controlled thermonuclear - synthesis, the production or synthetic liquid fuel and the use of solar and geo- thermal energy. The Raw Material Complex - The extracting industry, ferrous and nonferrous metallurgy, the chemical industry, _ the building materials industry and others are of great.national economic and de- fense significance. The production of weapons and military equipment requires high quality ferrous and nonferr.ous metals and materials with preset properties includ- ing extra-strong, super-pure, heat resistant and so forth. Cement, reinforced con- crete an~ ;,~aer building materials are needed for the construction of military in- stallations. All of this is produced by the numerous sectors of the raw material complex. Here are certain data on the development of the most important of them (Tab le 10). At the present stage thEre is to be the most rapid growth in the production of eco- nomic types of inetal products and quality steels. The assortment of rolled prod- ucts is to be broadened, the share of aluminum, titanium and polymers in the total ~ ou*_put of structural materials i~s to be inereased, and the production of synthe tica with preset propFrties is to rise. Machine Building Machine building is the heart af heavy industry. It comprises the basis for the technical reequipping of al.l the national economic sectors and for improving their qualit~ indicators, including for the defense industry. - 65 - FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL USE ONLY ~ Table 10 Production Growth of Most Importan,t Product Types of the Raw Material Complex* Production Volume Pro~uct Type Year 1913 1940 1975 197~ ~ Steel, million tons 4.3 18.3 141 149 � _ Mineral fertilizers, million tons 0.09 3.3 90.2 94.5 Synthetic and plastic resins, thousand tons 10.9 2,838 3,477 Cement, million tons 1.8 5.8 122 123 * Compiled from the book: "SSSR v tsifrakh v 1979 godu," pp 107-111. In all stages machine building in aur nation has developed rapidly, in outstripping the growth of other economic sectors. With a 20-fold growth of material production from 1940 through 1979, the output of machine building and metal-working products has increased by 6~-fold.24 "The linking of science and production and the effect of progressive ideas on it in practical terms occur through machines and production - methods. Hence the incomparab le role of machine building in national economic de- velopment and in iaising lab or productivity,i26 commented L. I. Brezhnev. In 1979, our machine building produced 231,000 units of inetal-cutting machines, 55,200 forging-stamping machines and an enormous quantity of all sQrts of instru- ments and automation equipment. Over the 4 years of the Tenth Five-Year Plan, 30 - percent of the fixed productive capital was renewed in industry and 41 percent in = agriculture.26 Machine building has been conf ronted with particularly crucial tasks with the shift- ing of emphasis to efficiency. In practice this notion has meant the need to achieve profound qualitative shifts in the structure and technical level of the national economy and a fundamental change in its very appearancA. This has required, in the first place, increased capacity and a higher total volume of machine building products and, secondly, an improvement in its structure and the making of this structure more flexible and accessible to technical innovation. For this reason a rapid increase in the output of the implements of labor has been planned with a _ more rapid pace for the development of nuclear, metallurgical and chemical machine building, machine tool building, instrument building as well as the electrical en- gineering and radio electronics industry. The output of instruments and automation as well as computer technology is to increase at particularly rapid rates. The unified technical policy in the area of the production of the imp].ements of labor envisages a further increased in the unit capacity of machinery and units, the intro- duction ~f machine systems as well as the mecha~eization and automation of labor in- tensive production processes. For this purpose, ia power machine building series ~ production is being organized for thermal reactors and turbine units for them with a unit capacity of at least 1 million kilowarts. Complete equipment is being de- veloped for nuclear power units with a capacity up to 1.5 million kilowatts while 66 _ FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007102/09: CIA-RDP82-00850R000500010005-0 FOR OFEICIAL USE ONLY _ the electrical engineering industry is developiag the production af turbogenerators with a capacity of 1-1.2 million kilowatts for nuclear and thermal power p lants. ~ In heavy and transport machine building, there will be the output of large-capacity - excavators and dump cars with a capacity up to 170 tons. The motor vehicle industry ' will increase the output of dump trucks and dumping tandem rigs with a capacity of 75, 120 tons and more. For sectors with large-series and mass production, the ma- - chine tool building industry is presently producing complete automatic lines which can be quickly adapted to various part sizes and this will signif icantly increase the economy's mobility. The machine building complex is developing significantly more rapidly than the fuel and energy and raw material ones and this helps to increase economic efficiency. On the basis of more advanced equipment and production methods it is poss ible to achieve the more complete processing of raw materials, to reduce wastes, to lower the materials-output ratio and improve product quality. This will make i t possible "even with the current production level to much better satisfy the needs of the nation for metal, fuel, building materials and consumer goods.i27 These are the most important complexeb ~f the heavy industry sectors which are the economy's foundation. Its stable and balanced growth ensures an expansion and f undamental renewal of productive capital as well as a further rise in the nation's economic might. Along with heavy industry, the other economic sectors also are of important signifi- cance. As is known, the need for food, clothing and footwear among other material needs are the most primary and essential. Food and clothing are also required for _ the support of the armed forces. V. I. Lenin pointed out that "for defense we need a strong and steadfast army, a strong rear and for a strong and steadfas t army a strong organization for the food question is of prime importanc:e."28 All of this - shows the great economic and defense significance of the sectors which producs vital necessities and the initial raw materials for them. Light and Food Industry. Agriculture The food industry holds the basic place in the production structure of consumer goods. This industry produces around 45 percent of the total bulk of consumer goods, 28 percent of the product is produced by light industry and 21 percent is made ~a.p of heavy industry products used for nonproduction purposes.29 As for agriculture, more than one-half (52.4 percent) of its products goes for industrial processing, one- _ f ourth is consumed and approximately one-fifth is used in agricultural production itse1f.30 With the building of developed socialism in our nation and with the achieving of a high level of economic might, the necessary conditions have developed for a rapid rise in agriculture and the industrial aectors producing consumer goods. The nation's general economic potential is now being more widely used �or these pur- p~ses. Thus, of the total capital investments (320 billion rubles) which agricul- ture has received during the years of Soviet power (up to 1975), 213 billion rubles, that is, two-thirds, were invested in 1966-1975. These funds have gone for the mechanization, recl~mation and introduction of chemistry into agriculture. Over the designated 10 years the energy-output ratio in agriculture has doubled and the 67 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007102/09: CIA-RDP82-00850R000500010005-0 - FOR OFFICIAL USE ONLY - use of fertilizers has risen by 2.8-fold. Agriculture has taken a ma~or step along the path of becoming a highly developed economic sector. The average annual volume of gross agricultural product in 1971-1977 was 116 billion rubles in comparison with . - 81.4 bill.ion rubles during the years preceding the March (1965) Plenum of the CPSU Central Committee. In relying on the achieved successes, the July (1978) Plenum of the CPSU Central Committee set new goals: to provide an annual gross grain harvest of 238-243 mil- lion tons in the llth Five-Year Plan and by 1990 to produce 1 ton of grain per per- son as a national average. By the end of the llth Five-Year Plan meat production should rise to 19.5 million tons.31 In order to create a sound basis to achieve such results, it is essential to ensure the greatest possible strengthening and further development of agriculture's material and technical base, bearing in mind = the conversion of this sector to an industrial footing. It is a question of increas- ing the capital investments into this sector, and of accelerated development for agricultural machine building, the production of mineral fertil.izers and plant pro- tection agents, the processing industry and other sectors of the agroindustrial com- _ plex. For this reason the Central Committee plenum emphasized that "the intensifi- _ cation of agricultural production, on the basis of its greatest possible mechaniza- tion and electrification, the introduction of chemistry and land reclamation, re- mains the basic direction of the party's agrarian policy at the present stage."32 Along with a rapid rise in agriculture, the party has worked constantly for the ac- celerated development of the industrial sectors which produce consumer goods as well as the service sphere. Life shows that agricultural production cannot be viewed in isolation from the system of procurement, transport, storage, processing and trade of food products. All of this is a single food complex. As L. I. Brezh- nev said, it should also be planned as a single whole. "The allocation of capital investments and other resources must be subordinated to the end goal of improving the food supply for the population. It must also be managed as a single complex, ensuring the uninterrupted and rapid movement of the products from production to . the shelves."33 Construction Or~e of the most important national economic sectors which largely determines the development of all other sectors as well as the strengthening of defense is con- struction. It employs more than 10 percent of the workers and white collar person- nel and creates over 10 percent of the gross social product.34 Th~ large scale of capit~l construction ensures a constant rise in the production potential. Our na- - tion is a gigantic cunstruction site and this si~~ is growing broader and broader as we advance toward communism. During the Ninth Five-Year Plan over 500 billion rubles were channeLed into capital construction and as a result of this around 43 percent of the national economy's productive capital was replaced and its total volume rose by 1.5-fold. In the Tenth Five-Year Plan the scale of capital construction will be even more grandiose with 630 billion rubles invested. In line with this the problem of improving - capital investment effectiveness has assumed even greater significance, and partic- ularly so for the problem of accelerating construction, concentrating assets on nearly completed projects and reducing proportional capital inves~ments per increase in product. 68 FOR Or FIC[AL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-04850R000500010005-0 FOR OFFICIAL USE ONLY For the normal functioning of the material production sectors and for creating gen- eral conditions for the reprodu~tion of the labor force, it is essential also to have a so-called infrastructure, both a production one which is f~ormed by all sorts _ of transportation, com~unications and the material supply system, as well as a social one which includes housing and public buildings, schools, hospitals, tr~de, public dining and consumer service enterprises and so for~h. The development of the infrastructure, on the one hand, is the result and, on the other, the condition - for highly efficient social production which is assuming evermore important signifi- cance. Transportation Of all the infrastructure sectors, the role of transportation is particularly great and this includes, in the first place, the railroad network with its freight, pas- senger and marshaling stations, terminals, ports, depots, corresponding equipment and support; secondly, the means of transport including railway cars, vessels, motor vehicles, locomotives, aircraft and so forth; and thirdly, the rep3ir yards and various ancillary enterprises. In 1976, transportation and communications were re- sponsible for 13.6 percent of all the fixed capital and more than 10 percent of the persons employed in the national economy.35 The work of the entire economy depends largely upon the operation of transport. It links together all the enterprises of a sector, the regions, all spheres r~nd phases of production, and the production process is continued and completed in it. "After the transporting of the products from the production area to a different place there must also be the transporting of f ir.ished products from the production sphere to ~he consumption sphere. A prod- uct is only ready for consumption," wrote K. Marx, "when it completes this move."36 , Transport plays a great rale also in a war. V. Y. Lenin called transportation "a most important material factor in a war having primary significance not only for the carrying out of military operations but also for supplying the Red Army with combat equipment, clothing and food."32 The demands of modern warfare on transpor- tation have increased sharply in all regards. Tha increased volume of military needs has increased the scale of work to transport mi.litary-end articles to the troops. Th~ highly fluid nature of a war, if th~ imperialist start it, requires high speed and intensiye operations by transportation to concentrate, disperse and move large masses of troops under the conditions of armed action by the enemy. In many nations rail transport is presently the basic type of transport. The high . proportional amount of peacetime shipments, the great transport capacity and speed determine its great significance under w~artime ~�onditions for supplying the civil- ian and military economies and for carry{*�g ~ut large troop movements. In the USSR, rail transport is highly developed. In terms of the volume of freight turnover by all types of transport the USSR surpasses the United States by 1.31-: fold and by 2.64-fold for rail transport. The operational length of the railroads in the USSR in 1978 was 140,400 km, including 41,100 km that were electrified.38 The further development of rail transport envisages the equipping of it with more powerful locomotives, an increase in the number and capacity of railroad cars, the construction of double tracks on the sections with the h~aviest traffic and the laying of new rail lines. The Baykal-Amur Mainline [BE~M] which is being built at a rapid pace is the construction nro~ect of the century. _ ~ 69 FOR OFFICIAL USE ONLY ~ ~ ' APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-04850R000500010005-0 FOR OFFICIAL USE ONLY Characteristic of maritime transport, on the one han~, is the great capacity (the displacement of a modern tanker is several hundred thousanc~ tons) and low cost, and on the other, comparatively slow apeed and high vulnerability (in World War II more than one-half of the prewar world's tonnage was sunk). In the USSR, maritime transport is developing rapidly and its share in the cargo turnover of all types of transport has been increasing. In 1978 it was responsible for 827.7 billion ton-km out of the 5,947,900,000,000 ton-km of cargo turnover for all types of transport.39 Because of the Pver-greater broadening of USSR foreign economic ties, the role of the maritime fleet is growing. The port system is being expanded, the fleet is re- ~ ceiving large-tonnage and specialized vessels and the ship repair industry is de- veloping. - River transport holds an important place in carrying out nonurgent supply and national economic shipments and makes it possible to relieve certain railroads. Significant development of river transport is foreseen in Siberia, the Far East and the Far North. New ports are being butlt, the capacity of the existing ones, is be- ing increased and the river fleet is receiving large-capacity sectional units and - combined "river--sea" vessels. Motor transport is m3rked by high maneuverability, high speed and the possibility of rapid recovery and the creation of new routes with comparatively amall outlays. , In the world there has been a marked rise in the role of motor transport. This is also characteristir, :�or the USSR. The length of hard-surfaced roads has incrpased � from 133,400 km in 1940 up to 741,600 km in 1978 and over this time the freight turnover of motor transport has increased by 44-fold and by 106-fold for passenge�r turnover.40 There has been a process of the accelerated introduction of motor ve- hicles on the basis of a sharp increase in vehicle output. Air transport possesses high speed and non-stop range but the demand for a large number of aircraft and high shipping cost limit the possibilities of its use for the regular transporting of bulk freight. This type of transport is irreplacable ' in carrying out such tasks as delivering cargo and passengers to inaccessible areas. In the USSR the length of the airlines has increased from 148;000 km in 1940 up to 408,000 km in 1978.41 During the Tenth Five-Year Plan, an extensive program is to be carried out to equip the air routes with the new generation modern aircraft such as the IL-76 (airbus), the Yak-42 and the I1-76 cargo aircraft. Onboard and ground systems are to be widely introduced which will automate air traffic control, the take-off an~ landing of aircraft. New airports are to be built and there will be further mechanization of the servicing processes. Pipeline transport is a specialized type of transport. It is marked by cheapness, large capacity, continuous operation, reduced vulnerability to enemy attack and the possibility of rapid rebuilding. Pipeline transport is developing rapidly through- _ out the world. The USSR surpasses the developed capitalist nations in terms of the growth rate of the pipeline network and its product turnover. The length of the large-diameter pipelines has increased from 4,100 lan in 1940 up to 63,700 km in . 1978; the figures for gaslines are from 2,300 lan in 1950 up to 117,600 lan in 1978. The product turnover of pipeline transport has increased by 276-fold over the period from 1940 through 1978.42 As is seen from what we have reviewed, in order to most fully and rationally satisfy national economic and military needs, there must be the planned and coordinated de- velopment of all types of transport as component parts af a unified system. 70 FOR OFTIC[AL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL USE ONL,Y In a descripzion of economic potential and economic might, of important signifi- cance is the nonproduction sphere or social infrastructure. In the. total amount of fixed capital in the USSR which in 1978 was estimated at 1.54 trillion rubles, the nonproductive capital was 534 billion rubles, or 34.7 percent. In the total number of persons employed in the national economy, the nonproductive sectors are respons- ible for 25.6 percent (in 1965, 20.2 percent and in 1940,.11.7 percent).43 The non- productive sphere does not take a directive part in the creation of material goods but it largely influences the efficiency of social production and the possibilities of its intensification. This influence is primarily manifested through the main productive force, the worker. The development level of science, culture, the edu- cational system, public health and the consumer service system tells directly on the physical and moral state of people, on their general educational, cultural and professional level and creative activeness. Technical progress causes not only the obsolescence of equipment and its replacement with new but ulso the necessity of constant personnel retraining, a rise in their skills and the consrant renewal and adding to of knowledge. For this it is essential to more rationally organize r..on- working time. Leisure, the satisfying of physical and spiritual needs and the all- round development of each man in this light operate not only as a goal which society directs its economic might to achieve but also as the necessary prerequisites for the intensification of production, for raising its ~fficiency and for realizing the achievements of scientific and technical progress. Also completely apparent is the enormous military economic significance of the social infrastructure. The Territorial Structure For carrying out a whole series of important tasks, of primary significance are a study of the territorial national economic structure and an examination of economic potential as an aggregate of the potentials of individual regions and territorial- production complexes. This aspect of structural analysis is exceptionally impor- tant, for example, in solving such problems as improving the placement of the pro- ductive forces, determining the ways to increase econcmic potential, raise economic efficiency, economic mobility and a number of others. For successfully solving such problems there must be a comprehensive approach and long-term programs. "Such pro- grams," comanented Comrade L. I. Brezhnev, "should, natur~lly, consider on-going progress in Soviet and world science and technology and the possibility of economic cooperation with other states. These programs should also provide for a more ef- fective placement of the productive f.orces within the nation and consider the needs ~ for developing new areas, particul~rly those rich in raw materials and fuel."44 As is known, the Soviet state inherited an extremely irrational placement of the , productive forces. Along with the industrially developed, central regions there were alsn the economically bac~.ward national borderlands which had a status of colo- n'_es and semicolonies. As was pointed out by the Tenth CPSU Congress, the primary task was the "planned implanting of industry in the borderlands by shifting the factories closer to the raw material sources....'~45 The aid to the national border- lands assumed the form of a consistent and all-round course in national economic policy and as a result of carrying this out by the 50th anniversary of the USSR the volume of industrial product in Kazakhstan had risen by 600-fold, in Tajikistan by mare than 500-fold, in Kirghiz3a by more than 400-fold, in Uzbekistan by almost 240-fold and in Turkmenia by more than 130-fold. The gross cotton harvest in- creased by 120-fold xn 'lzbekistan and by 90-fold in Turkmenia. Kazakhstan produced 30-fold more grain cnan in 1922.46 At a price of intense labor by all the Soviet , 71 FOR OFF[CIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007102/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL USE ONLY people, in carrying c~~t Lenin's nationality policy, accelerated develo~ment was achieved in the formerly backward areas and basically the task was carried out of equalizing the economic development levels of the national republics. At the same time there was a process of ine~ging the separate territorial-economic units into a = single whole as a result of which the Soviet economy became a single ecarcflmic ofggn- ism. With the carrying out of the task of equalizing the economic development levels in the national republics an opportunity ap~eared to more fully focus efforts on the questions of raising national economic effectiveness. This was related to a further improvement in the territorial placement of the productive forces, the accelerated tapping of natural resources and increasing the economic potential of the European North, Siberia, the Far East, Kazakhstan and Central Asia. On the basis of major comprehensive programs designed for two or three decades, ever-new industrial areas ~ and centers of national significance are being formed here. Among these programs is the one for the development of the Western Siberian Territorial-Industrial Com- , plex. As a result of the Tenth Five-Year Plan, oil output here reached 150 million tons and for gas 38 billion m3. Over the long run this region can produc2 around _ one-half of the oil and natural gas for the nation's general balance�as well as a. significant portion of the synthetic rubber and plastics. In 1980, 300-3I0 million tons of oil will be produced here as well as 125-155 billion m3 of gas. There is to he a fundamentally new stage in the development of Eastern Siberia. Here an entire system of Angara-Yenisey complexes is being created. On the basis of the power from the world's largest Sayano-Shushenskaya GES, the Sayan Territorial- Production Complex is being organized and this will include a number of industrial centers specialized for metallurgy and machine building. In a little time, said L. I. Brezhnev in speaking to the construction workers of the BAM during his trip through the regions of Siberia and the Far East, in these areas human labor will create new industrial. complexes. "The BAM will help in more fully utilizing the very rich mineral wealth of this area and in a new way will solve the question of developing the productive forces. This is a program of great state significance."47 The construction of the BAM will provide a powerful impetus to the economic develop- ment ~nd to the tapping of the natural riches in a vast area from Lake Baykal to the Pacific Ocean. It will make it possible to put into economic circulation new de- . posits of coal, oil and gas, iron ores, copper, asbestos, nickle, molybdenum, tungsten, mercury and other minerals. A second rail outlet to the Pacific Ocean will be opened. Here a number of complexes will be created including the very large Chul'man-Aldan with mineral raw material centers for many industrial sectors. As a whole the eastern regions will be resgonsible for the entire increase planned for the Tenth Five-Year Plan for the output of oil and gas and for the production oi - aluminum; these areas will be responsible for more than 90 percent of the increase in coal mining, approximately 80 percent of the increase in copper production, 45 . percent of the increase in the output of pulp and around 60 percent of the increase in cardboard production. - Such major programs as the agricultural development progra~ for the Nonchernozem Zone of the RSFSR, the industrial-agrarian zone of the Kursk Magnetic Anomaly, the Southern Tajik territorial-production anrl other complexes are of important signifi- cance for improving the territorial structure of the economy. 72 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/42/09: CIA-RDP82-40854R040500010005-0 - FOR OFFICIAL USE ONLY The comprehensive programs consider both the nece3sity of the effective placemEnt of productive forces within the nation as a whole as well as the particular features of the corresponding regions. In the areas of Siberia and the Far East there will be rapid development of the energy-intensive typ~s of production, the fuel industiy, agriculture and the entire social infrastructure complex. As for the European por-~ tion of the nation and the Ur~ls, here industrial development will be carried.out ' basically by the technical reequipping and reconstruction of existing enterprises. The power base of these regions is to be strengthened by building nuclea: and thermal power plants. In regions with a favorable labor resource balance, labor intensive types of production are to be developed. There is to be a further re- stricCing of the growth of large cities and the development of economically promis- ing small- and medium-sized cities with the locating of small enterprises, affili- ates and special~zed shops of existing associationF in them. An improvement in the territorial national economic structure means the greatest possible development of each territorial-production complex together with the other _ complexes viewed as elements of the single economic organism. For this reason this includes rational economic transport ties. The development of the major transport arteries plays an important role as was mentioned above. But equally important is the work of creating a unified power system for the nation by unifying the United - Power System of the European USSR with the power systems of Siberia, Kazakhstan and Central Asia. For this super-powerful long-distance power transmission lines are - being built. The creation of a unified national oil and gas supply system serves the same aims. Pipelines are being built for heavy flows of oil and gas from the northwestern regions of Siberia and Central Asia into the European USSR as well as oil pipelines from the northwestern regions of Siberia to the oil refineries in the eastern regions of the country. All of this is important elements in the all- round development of the national economy and its territorial structure. The USSR presently has a mature, technically well-equipped economic system which is characterized by the presence of a complete and constantly developing sectorial structure, the solving basically of the task of equalizing the economic development levels of the national republics and the further improvement of the location of pro- ductive forces over the nation's territory. The constructing of a developed social- ist society has created even better conditions for uniting the achievements of the scientific and tschnical revolution with the advantages of socialism, for shifting emphasis onto the intensive economic management methods and for seriously incr.eas- ing economic efficiency. All of this has been reflected in the party's economic strategy. 3. The Constant Growth of F.conomic Might--The Backbone of the Party's Economic Strategy All states endeavor to increase their economic might although he motivating forces and the reasons for these desires are extremely diverse. The growth of economi~ might presupposes an increase in economic potential but the intensive growth of eco- nomic potential and economic might can differ substantially in terms of their di-. verse structural elements. For example, the dynamics of tha human factor is influ- enced by the "demographic waves" related to past wars. The strength of their effect on various nations is far from uniform, for their participation�iin the wars has differed. As for the physical elements of economic potential, for example, fuel, 73 FOR QFFICIA~, USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2407/02/09: CIA-RDP82-00850R000500410005-4 FOR OFFIC[AL USE ONLY _ energy and raw materials, their abundance or scarcity depends upon the ratio of such contradictory processes as, on the one hand, the depletion of the explored natural reserves and, on the other, thr creation of new energy and material sources on the basis of achievements in scientific and technical progress. Because of this during different periods various problems uf increasing economic possibilities and the ways of realizing them can move to the forefront. Characteristic of the USSR and the other sacialist countries has been a rapid and continuous growth of economic might. This has occurred on an exceptionally solid basis. The USSR possesses colossal human resources, in holding third place in the world (after China and India) in terms of the size of the population. Soviet terri- tory is 22,402,000 km2. Our motherland is rich in mineral reserves. It holds first place in the world in terms of hydropower resources and forested area with total lumber reserves of 80 billion m3. Our nation has 176 million hectares of highly fertile chernozem and meadow-chernozem soil, b0 million hectares of dark chestnut and chestnut soil and around 60 million hectares of grey forest soil. But it is not merely a question of rich natural resources. The main engine of eco- nomic growth resides in the nature of socialist production. The higher the achieved maturity of socialism the more vividly it~ advantages over capitalism are manifested in all regards, including in mastering the achievements of scientific and technical progress and ensuring on-going growth of economic might. The high growth rates of Soviet economic might can be seen from the following data (Table 11). Table 11 Growth Rates of Basic Indicators for Soviet National Economic Development in the 1917-1977 Period* Year 1917 1940 1945 1950 1970 1977 Gross social product 1 7.8 6.5 13 64 95 Produced national income 1 8.2 6.8 13 71 103 Total industrial product 1 12 11 21 142 225 - Gross agricultural product 1 1.9 1.1 1.8 4.1 4.6 Freight turnover of all types of transport 1 5.8 4.4 8.3 45 66 * Compiled from the books: "Narodnoye khozyaystvo SSSR za 60 let" [The USSR National Economy in 60 Years], p 9; "SSSR v tsifrakh v 1977 g." [The USSR in Figures in 1977], p 41. ~ Our national economy which in the prewar years made a gigantic leap from backward- ness to progress has achieved even more important advances in the postwar period. Thus, in terms of the volume of industrial production in 1978, the 1940 leve~ was surpassed by 19.7-fold. Consequently, completely new scales are characteriatic for the present development stage of the Soviet economy. 74 FOR OFFICIAL USE ONLY ~ APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-04850R000500010005-0 FOR OFFICIAL USE ONLY . The growth of our nation's economic might is clearly apparent not only from a com- parison of the indicators for the various periods of its history but also from a comparison with the corresponding indicators of the capitalist nations. Such a comparison clearly demonstrates the basic long-term trend in the change of the bal- - ance of forces on the world scene in favor of the USSR as brought'about by the ad- vantages of the socialist method of production (Table 12). The Soviet Union, in terms of the production volume o� the basic product tiypes, has long since outstripped the main capitalist countries with the exception of the United States. As for the ratios of indicators for the Soviet and American econo- mies, as the given data shaw, for a majority of them the USSR is approaching and for some has equaled or already surpassed the United States. Here the growth rates of the Soviet economy have remained atable and higher than in the capitalist~na- - tions. In 1:51-1979, the avera,ge annual increase rates of industrial product in the USSR were 8.9 percent, and. in the developed capitalist nations 4.8 per.cent, in- cluding 4.3 percent in the United States.48 The heart of the party's economic strategy which permeates the current plans and the long run is a further rise in the nation's economic might, an expansion and - fundamental renewal of productive capital and the ensuring of stable, balanced growth for heavy industry which is the economy's foundation. In 1976-1990, our nation will possess approximately double the amount of material and financial re- sources than in the current 15-year period. A clear notion of the on-going growth and enormous scaZe of our nation's economic might can be gained by comparing the production scale per day during different years (Table 13). In 1979, our nation ir. one day produced as much electri'c power as would have re- quired 1.5 year to produce in the prerevolutionary period while for oil (including gas condensate) the figure would be 57 days, 34 days for steel, 3 years for mineral fertilizers and 60 days for cement. As is known, there are two methods for increasing economic might: extensive, that is, by increasing the production scale as a result of introducing additional man- power and means of production into it, and intensive, that is, by increasing pro- duction efficiency on the basis of qualitative changes in the productive forces, t-heir better organization and fuller use. PrQCeeding from the specific conditions, - the Communist Party in its economic policy will endeavor to harm~niously combine the possibilities of both ways, achieving an optimum result. At the present stage, as was emphasized in the party decisions, in order to successfully carry out the diverse economic and social tasks confronting the na~ion, there is no other way ex- cept a rapid growth of labor productivity and a sharp rise in ttie efficiency of all social production. A shifting of emphasis to production efficiency is interna.lly inherent to developed socialism. The urgency of this party course is intensified by the fact that the _ increase in labor resources during the 1980's will decline as well as by the fact that with a comparative insignificant rise in human resources an ever-larger part _ of the labor force must be directed into developing the infrastructure, that is, transportation, communications, material supply as well as science, public health and other sectors of the nonproductive sphere. It is quite undPrstandable that a decline in the increase of the size of the labor force can be compensated for only by improving its quality and by raising social labor productivity on the basis of the fu~ll mechanization and auto~ution of labor. 75 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFF[CIAL USE ONLY Table 12 Ratio of Basic Economic Development�Indicators of the USSR and United States* Economic Indicator Year USSR in Y of USA National income 1950 31 1970 over 65 - 1979 67 Industrial product: 1913 12.5 1950 under 30 1970 over 75 1979 over 80 Oil output (including gas 1913 27 condensate) 1950 14 1970 74 1979 139 Steel casting 1913 15 1950 30 1970 95 1979 117 Cement production 1913 13 1950 26 1970 141 1979 158 Agricultural product 1909-1913 65 (annual average) 1971-1975 approx. 85 (annual average) 1976-1979 approx. 85 (annual average) Grain production 1909-1913 73 (annual average) 1971-1975 "78 (annual average) 1976-1979 77 (annual average) Cotton fiber production 1909-1913 7 (annual anerage) 1971-1975 99.7 (annual average) ~ 1976-1979 99 (annual average) Freight turnover of all types 1913 19 of transport 1950 31 ~ 19 70 102 ~ 1979 . 130 [continued on following page] . ~ ~ 76 ~ ~ FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFF[CIAL U5E ONLY [Table 12 continued] . . Economic Indicator ~ Year ~ USSR in X of USA Capital investment volume 1950 approx. 30 1970 . approx. 100 1979 approx. 100 * See: "SSSR v tsifrakh v 1979 godu," pp 64-66. Table 13 One Day of the Nation* Production of Major Industrial Product Types Year (Average) Per Day . 1940 1970 1979. Electric power, million kilowatt hours 133 2.030 3,395 Oil (including gas condensate), thousand tons 85 967 1,604 Natural gas, million m3 8.8 512 1,114 Steel, thousand toiis 50 318 408 Motor vehicles, units 397 2,510 5,953 l~ineral fertilizers (in standard units), thousand tons 9.0 152 259 Cement, thousand tons 15.8 261 337 *"SSSR v tsifrakh v 1979 godu," p 45. ' As for the physical elements of economic potential, particularly those such as raw products, materials, fuel and energy, at the present stage there is an ob~ective need for their more economic and efficient use. The problem is that the scale of their consumption is increasing rapidly while output and production are beceming ' evermore expensive. It is economically better to work for the more complete proc- � essing of raw materials and for reducing the materials-output ratio than it is to increase their output and production. At the same time a whole series,~of natural resources must be reproduced. The more intensively they are consumed the more money which must be spent on their reproduction. The problem of environmental conservation is growing more acute and the solving of it also requires evermore significant resources. These can be obtained only on the basis of increasing effi- ciency in social production. � Thus, economic potential and economic might are dialectically interrelated. A rise in the use factor of economic potential means a rise in economic might while the growth of economic might in turn necessitates a rise in economic potential. The - increasing efficiency of social production is the main element in this relationship. The intensive path of economic development and production efficiency are expressed - in a generalized manner in the growth of social labor productivity and i~ the 77 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-04850R000500010005-0 FOR OFF:CIAL USE ONL~I' increased role of this factor in bringing about the growth of the nation~s economic might. The following data are indicative in this regard. Labor productivity in industry during the Seventh Five-Year Plan rose hp 29 percent and in the Eighth Five-Year Plan by 37 percent; due to rhis, correspondingly, 62 and 73 percent of the increase in industrial product were obtained. During the Ninth Five-Year Plan the growth of labor productivity w?s 34 percent and this provided 84 percent of the in- = crease in tndustrial product. Over the 4 years of the Tenth Five-Year Plan (1976- 1979), three-quarters of the increa~e in national income was obtained from greater - social labor productivity. The increase in labor productivity provided a savings equivalent to the labor of 12.5 million persons. The material intensiveness of - social product was reduced and as a result of this the savings of raw products, materials, fuel, energy and other sub3ects of labor were around 1~ billion rubles.`+9 These are the gigantic steps taken by the economy of a developed socialist society. They clearly demonstrate the growing possibilities for successfully solving those difficult problems which our society is encountering in its directed development along the path toward cou~unism. FOOTNOTES _ 1"Materialy XXIV s"yezda KPSS" [Materials of the 24th CPSU CongressJ, Moscow, 1971, p 62. 2 K. Marx and F. Engels, "Soch.," V~1 47, p 553. - 3 L. I. Brezhnev, "Leninskim kursom," Vol 3, Moscow, 1972, p 235. ~ See: `"Narodnoye khozyaystvo SSSR v 1978 g." [The Soviet National Economy in _ 1978], Moscow, 1979, pp 31, 33, 34. 5 See: "SSSR v tsifrakh v 1979 godu'~ [The USSR in Figures in 1979], Moscow, 1980, p 179. 6 See: Ibid., p 49. ~ Ibid., pp 107, 110, 111, 116. 8 D. Herold, "Industrie--Wirtschafts--und Machtpotentiale im Internationalen Vergleich," WEHRWISSENSCHAFTLICHE RUNDSCHAU, No 5, 1970, pp 251-263. 9 V. I. Lenin, PSS, Vol 36, p 292. l0 Ibid., Vol 38, p 359. il See: "Narodonaseleniye stran mira" [The Population of-the World's Nations], Moscow, 1978, p 296. 12 See: "SSSR v tsifrakh v 1979 godu," pp 87, 167, 175, 214, 216. 13 L. I. Brezhnev, "Leninskim kursom," Vol 5, p 548. ~ 78 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFF[CIAL USE ONL?! 14 K, Marx and F. Engels, "Soch.," Vol 23, p 191. 15 L. I. Brezhnev, "Leninskim kursom," Vol 5, p 501. 16 See: "SSSR v tsifrakh v 1979 godu," p 40. _ I~ See: "Narodnoye khozyaystvo SSSR v 1978 g.," p 99. - 1S See: "SSSR v tsifzakh v 1979 godu," p 88, _ 19 K. Marx and F. Engels, "Sc~ch.," Vol 23, p 636. 20 Ibid., p 626. ' 21 See: "Narodnoye khozyaystvo SSSR v 1978 g.," p 117. ~ ~ 22 See: S. M. Lisichkin, "Energeticheskiye. ~esursy i neftegazovaya promyshlennost' mira" [World Energy Resources and Oil and Gas Industry], Moscow, 1974, pp 9, 400. 23 Calculated from thel~ook: "Narodnoye khozyaystvo SSSR v 1978 g.," p 144. 24 See: "SSSR v v 1979 godu," p 101. 25 L. I. Brezhnev, "Spe~~ch at the October (19801 Pl~num of the CPSU Central Com- mittee," ~RAVDA, 22 October 1980. 26 See: "S~SR 'v tsifrak.h v 1979 godu," pp 49, 108, 109. 27 L. I. Brezhnev, "Leninskim kursom," Vol 7, Moscow, 1979, p 619. 28 V. I. Lenin, PSS, Vol 36, p 342. ' 29 See: "Narodnoye khozyaystvo SSSR v 1978 g.," pp 118, 119. = 30 ;ee: "Narodnoye kY~ozyaystvo SSSR v 1973 g." [The Soviet Nati.onal Economy in 1973], Moscow, 1974, p 116. 31 See: PRAVDA, 4 July 1978. 32 PxaVDA, 5 July I978. 33 L. I. Brezhnev, "Rech' za plenume Tsentral'nogo Komiteta KPSS. :7 noyabrya - 1979 goda. Postanovleniye plenuma TsK KPSS" [Speech at the Plenum of the CPSU ~entral Committee. 27 November 1979. Decree of the Plenum of the CPSU Central Committee], Moscow, 1979, p 19. 3'' Calc~aJ.ated fr~m the oook: "Narodnoye khozyaystvo SSSR v 1978 g.," pp 41, 366. _ 35 See: Ibid. - 79 _ FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-04850R000500010005-0 FOR OFFICiAL USF. ON[.Y 36 K. Marx and F. Engels, "Soch.," Vol 24, p 170. 37 V. I. Lenin, PSS, Vol 38, p 400. ~ 38 See: "Narodnoye khozyaystvo SSSR v 1978 g.," pp 50, 299. 39 See: Ib id., p 297. 40 Ibid. , pp 297, 298, 311. ' 41 See: Ibid., p 323, '~2 See: Ibid. , p 310. 43 See: Ibid., pp 41, 364. 44 L. I. Brezhnev, "Leninskim kursom," Vol 5, p 49h. 45 ~~KpSS v rezolyutsiyakh...," Vol 2, p 253. 46 See: L. I. Brezhnev, "Leninskim kursom," Vol 4, Moscow, 1974, p 53. 47 Ibid., Vol 7, p 256. ' - 48 See: "SSSR v tsifrakh v 1979 godu," pp 62, 67. ~ ~ _ 49 See: Ibid., pp 30, 39. 80 FOR OFFICi ~ ' JSE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007102/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL US~ ONLY CHAPTER III. MILITARY-ECONOMIC PO`PENTIAL AND ITS REALIZATION Economic might is the basis for satisfying all society's needs.. Due to the fact that economic might has certain limits in each specific stage, there is the problem of its advisable use. In terms of defense requirements, this operates in two forms: in the first place, as the problem of strengthening a nation's defense capability and maintaining the necessary level of combat readiness of the armed forces in - peacetime; secondly, as the problem of the maximum possible military-economic effort in the interests of ineeting the war's requirements. These are the problems of military-economic might and military-economic potential. At the present stage the conditions for realizing military-economic potential have become exceedingly complex and at the same time the time factor has assumed excep- tionally great significance. As a consequence of this an objective necessity has arisen of drawing a sharp distinction between military-economic potential and - military-economic might. It is also essential to carefully examine the mechanism for realizing military-economic potential. 1. Essence of Military-Economic Potential and Ways of Reinforcing It ~ In order that economic might is turned into military strength, it is essential, as was explained, to ensure the production of weapons, military equipment and other military-end articles, to have the correct allocation and prompt delivery of them to the troops and to create all the coaditions for their effective utilization. A separate social organism exists to carry out these aims and this is the military economy. The scale and effectiveness of the military economy characterize a state's military-economic might,~ that is, its actual ability to economically supply its armed forces and to maintain the nation's essential defense capability. Military-economic might for a so~ialist state is not an end in itself, it does not automatically follow a grawth of economic might b+it rather conforms to society's actual needs for armed force. The exacerbation of the international situation has forced the socialist state to increase military production and consumption while a lessening of tension makes it possible to reduce theae and to more fully utilize economic might for increasing wor~er prosperity and developing the aational economy. - Here it is essential not to permit, on the one hand, a reduction in military eco- nomic might for in this instance the nation's defense capability would be jeopar- dized and, on the other, an excessive increase in this as ultimately this could re- tard the development of the very basis of economic might, the economy, and thereby cause irreparable harm to defense capability. "If a war is lost because of the 81 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007102/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL USE ONLY overstraining of a nation's economic might," wrote B. M. Shaposhnikov, "then such a loss may occur even before the start of a war with a high military budget the burden of which does not conform to the population's solvent demand and the mili- - tary budget does not keep pace with the state's economic development."1 Under certain conditions a society's interests can require a maximum effort and the subordinating of all forces to military ends and for this reason it is important to know the limit up to which a state's military-economic might can rise. The military- - economic potential is this limit and this characterizes the ob~ective possibilities of a country (coalition) which can be used f or stren~thening defense might and wag- ing a war.2 ~ Military-economic potential (VEP) and military-economic might (VEM) express differ- _ ent aspects of the problem of utilizing economic resources for military purposes, that is, the maximum possible and the actual. At the same time the VEP is a part of economic potential (EP) while VEM is a part of economic might (EM). Proceeding from this it is possible to bring out certain links between the VEP and the EM. If one accepts the maximum possible level of the VEM as the amount of the VEP, then such an assumption in a whole number of instances in theoretical terms is complete- ly explainable and is practically advisable and in quantitative terms it can be de- fined as the portion of economic might minus the unconditionally essential minimum of civilian consumption. And if we know the amount of economic might, then for calculating military-economic potential it is merely the question of establishing - the minimum of civilian needs. Let us point out that it is not easy to do this, for these requirements in terms of volume and composition are not strictly determined and constant. In setting the minimum of civilian requirements it is essential to consider not only the material factors and reproduction conditions but also the socioeconomic and political ones, the nature of the social system and the nature of a possible war. The latter de- termine the attitude of a people to a war and their readiness to make certain sac- rifices and endure hardship for the sake of achieving victory. The ~ust nature of ~ a war makes it possible to broaden the limits of milit3ryyeconomic potential while ~ an unjust war, even with a relatively low level of effort, in a bourgecis socier.y causes crisis situations since the contradictory influence of these factors is - particularly difficult to consider. New aspects of the linkage are disclosed in posing the problems of strengthening and realizing the VEP. Proceeding from the simplest notion of the VEP, the prob- lem of it comes down to increasing overall economic might, for if one portion of the whole is given (the necessary minimum of civilian consumption) and cannot be reduced, an increase in the other part (the military-econamic poten- tial) is possible only as a result of increasing the whole. However in reality the question of the essence of military-economic potential, its quantitative certainty and~wavs af strengthening is significantly more complex than may seem in the first, abstract approach to it. In actuality it is not difficult to realize that for satisfying military needs there must be not merely a"portion" of economic might but rather this portion must be turned into the essential _ military-end articles. Cons~quently it is not only the total voluune of that share 82 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL USE ONLY ~ of economic might which a nation can allocate for military ends that is important but also the economy's sectorial structure. If it is assumed that one-half of aggregate social product is efficient for satisfying the necessary civilian needs, thFC~ this still does not mean that the second half can be fully employed for mili- tary purposes. This portion of ag~regate product can be turnEd into element$ of military might only in the instance that the economy's sectorial structure makes it possible to produc~ the might in the form of the specific military-end articles and in the required assortment. Of course, theoretically it can be assumed that the articles which do not correspond to military needs are converted into foreign eic- change with which the lacking military-end articles can be purchased abroad: But the fine words that three things are needed for war, that is, money, money and more mor.~y, are valid only in the figurative sense. Hence the essence of military-economic potential does not come down to the simple difference between economic might and the minimum civilian consumption, rather it is more profound and more complex and includes as a characteristic feature also a _ notion of the specific purpose and structure in the corresponding part of economic might. A new problem arises, the problem of the conformity or the adequacy of an economy to the needs of a war. The more fully the economic structure meets these needs the higher the military-economic potential of a state with other conditions being equal. Hence for increasing military-economic potential there must be not only the growth of economic might but also a definite focus to economic development is required. Even M. V. Frunze wrote that "with every new undertaking, be it eco- nomic, cultural and so forth, the question must always be asked: to what degree do the results of this undertaking conform to the cause of ensuring national de- ~ fense? Is it not possible, without harm to peacetime needs, to achieve definite y military aims here?"3 The question is, consequently, to have an optimum combina- tion of both the civilian and defense interests of 3 aociety in economic policy and _ strategy. An improvement in the economy's structure considering the demands of a war under present-day conditions is one of the most important ways for strengthen- ing military-economic potential. In the course of preparations for World War II great attention was given to the problem of r_he economy's adequacy. In order to compensate for the shortage of various types of products needed for military needs, some states conducted a policy of autarky (particularly characteristic for Germany and Japan) while others fol- lowed a policy of stronger defense of external lines of communications (England) which provided the delivery of raw products, fuel and go fo_th. The choice of either path was determined by many circumstances. Its economic aspect was in com- paring the effect and the expenditures related to one or another policy, the politi- cal aspect was to determine the probability of maintaining frie~dly relations with trade partners while the military aspect was the dependability of ~he chosen policy and the balance of forces at sea and in the air. In previous world war.s the ex- ternal transport links were a very vulnerable economic element while the enterprises located deep in the rear were virtually untouchable for the enemy's weapons. For this reason, from the military viewpoint, autarky was a more dep~ndable policy. But _ nuclear missile weapons capable of destroying industrial centers deep in the rear have nullified this advantage. This is one of the reasons for the resumed interest in various forms of neocolonialism and the apeeding up of imperialist integration as means making it possible to increase the survival factor of a military economy. 83 " FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2407102/09: CIA-RDP82-00850R000500410005-4 FOR OFFICIAL USE ONLY Under the conditions of the further development of the international division of - labor ~.nd integration processes, foreign economic ties have begun to have an ever- more substantial impact on military-economic potiential of states. These are felt in the economic development rates, in the economic structure, its efficiency, mo- bility and survivability. For this reason they must be considered in assessing military-economic possibilities. In all the stages of our state's development the party's economic policy has con- - sidered the interests of strengthening the nation's defense capability. With the building of developed socialism and the achieving of the present scale of economic might, better conditions have developed for harmoniously reconciling the interests of increasing national prosperity, further developing the national economy and strengthening the nation's military-economic potential. An organic unification of the achievements of the scientific and tachnical revolution with the advantages of developed so~ialism and greater efficiency of social production the state's military-economic possibilities both as a consequence of increased economic might as ~,~11 as because the production of modern weapons and military equipment can be ensured precisely by an economy based upon the most recent scientific and techni- cal achievements. In speaking about adequacy, one must not assume that there is any ideal economic structure which would fully cover the given problem. Under present-day conditions, when the catalogs of military-end articles run into several million names, when a - new generation of weapons comes every 5-7 years and when armed combat has assumed an exceptionally dynamic and intense nature, under these conditions the volume and composition of military requirements change frequently and substantially. If one considers in addition the contradictory nature of the requirements of modern war- fare, then one cannot help but note that the problem of the adequacy of an economy is inseparably linked with the problem of its mobility and with the ability to rapzdly adapt in terms of the cha~nging needs of war, since the greater the mobility of an economy the more rapidly it can adapt and the more fully it can subordinate the nation's economic might to military interests. Thus, a rise in economic mobil- ity i~ also one of the ways of increasing military-economic p~tential. The mobility of an economy depends upon th~ development level of the productive f.orces and the production relations. While the technical level of production in our nation and the developed capitalist countries is approximately the same, social- ist ownership, the unity of the fundamental economic interests of classes and social groups and the planned nature of production development give rise to permanent ad- vantages for socialism in terms of economic mobility. were clearly apparent during the years of the Great Patriotic War. In relying on the high mc~bility of the socialist economy, the USSR evaciated industr;~ to the East arid created a well- organized military economy which ensured our victory. These advantages were sig- nificantly increased as a result of the building of a developed socialist society. In the course of communist construction, there has been the further development of the productive forces and socialist production relations have been continuously im- proved. This has been apparent in the increased level of the sc:ialization of pro- duction, in the development and strengthening of the economic and social role of nationalized property, in the further strengthening of cooperative and kalkhoz ownership and in the bringing of it closer to the nationali2ed as well as in other _ phenomena. At the same time there have been a higher degz~ee of understanding the economic laws and their conscious use by society, planning, management methods and ~ 84 - FOR OFF[CIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00854R004500010005-0 FOR OFFiCiAL USE ONLY economic incentives have be~n improved, whiZe the organizational structure of national economic management and the entire economic mechaniam have been bettered. This has created favorab'le conditions for stren~thening~the nation's defense capa- bility. Under present-day conditions, in determining military-economic potential, it is es- sential to consider the time factor as well. It is important in a dual sense. In the first place, frOm the viewpoint of the time over which a maximum subordination of economic might to military ends can be achieved. Secondly, from the viewpoint of the length of that period during which one or another degree of military-economic effort can be maintained. Certainly the length of this period (month, year or decade) largely determines what portion of its economic might a soci~ty can subord- inate ta military ends. In particular, if a war starts as a surprise and ends quick- quickly, then military-economic potential actually comes down to that level of nomic might which the given nation had the moment the war started. These are the most important factors which determine what part of economic might can be used for military purposes, that is, can be viewed as military-economic potential or as the maximum limit f~r the growth of military-economic might. Since military- economic potential and military-economic might are derivative from economic might and are a part of it, all the provisions relating to a description of the atructure and quantitative criteria of economic might apply to it. However, the structure of military-economic potential is not merely a smaller copy of economic might's struc- ture. It is precisely the structuraJ. differences which determine the problems of adequacy, mability and the readiness of an economy as problems of strengthening military-economic potential. It is important, consequently, to understand the par- ticular features of a military economy's structure in comparison with the structure of the civilian economy and the ways for carrying out a military reorganization of the national economy. ' It must be said that the question of the role of military-econ~omic potential and the ways of realizing it has been a matter of sharp debate from t..e end of World War I. Prior to World War II, there was a struggle between the concepts of armaments "in breadth" and "in depth." This struggle assumed particular sharpness after the war in line with t'~e military technical revolution and the changes in the balance of forces on the world scene. In the United States, one group of theoreticians contin- ued to emphasize the crucial significance of economic might and military-economic potential for the outcome of a war,`' while the other one asserted that "we should build c~ur military might on the basis of a view completely opposite to the idea of . the importance of industrial potential. We must create armed forces which are ready to fight with all their might on th~ very day that a war breaks out."5 The supporters of this view have continued the notion of armaments "in breadth" charac- teristic of the most extremist representatives of the military-industrial complex. Certain theoreticians and practical workers, without denying the role of military- economic potential f ully, emphasize its realization. The significance of military- economic potential under present-day conditions has been reduced, say C. Hitch and R. McKean, for with the aid of nuclear missile weapons the enemy's economy can be destroyed even before the carrying out of mobilization measures. "The superior military-economic potential of the United States wfll be able to play it~ important role only in the instance that it is effectively used in the interests of ensuring national security even before the start of a war,"6 they write. 85 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-04850R000500010005-0 FOR OFFICIAL USE ONI.Y In the United States, the second group is very influential. It has powerful support from the military-industrial complex which reaps colossal profits from the arms race. It preaches unrestrained expansion based on the view that the United States is the economically most powerful state in the capitalist world and for this reason the problems of realizing economic might for the American imperialists are more keenly felt than the problems of increasing it. There is a different situation in the FRG, Japan and England which are Pigni.ficantly inferior to the United States in terms of economic strength and this has fostered concepta of strengthening economic might and military-economic potential. However in these nations the voices of i.he ~ most arch extremists are heard calling for an arms race. In the FRG, during the first postwar years, there were widespread views emphasizing the importance of economic might. These contributed to the rehabilitation of the. German military (the war supposedly was lost not by the military but rather by the economy) and at the same time expressed the revanchist spirit of the "economic ~r~iracle." Thus, the wel~.-known West~German economist and politician K. Schiller in his work "Constant Economic Growth as an Economic and Political Task" proved that the ensuring of constant economic growth will make it possible to successfully carry out structural shift~ in the national economy as dictated by the scient~fic and technical revolution, to raise the competitiveness of the West German industry, to further foreign economic expansion, to rearm West Germany and bear the expendi- tures related to solving the "German Question." As West Germany has increased its economic might, squeezing out France and England, the questions of creating a mili- ~ tary economy and preparing to mobilize the entire economy have become more fashian- able. L. Erhard even in the middle of the 1950's was concerned with the establish- ing of "correct, systematic and safe ways" of rearming and in the following decade F. Strauss, U. de Mesier, A. Duren, F. Ziu~erman and others began to intensely wark out the theoretical ~nd practical questions related to realizing e;,onomic possibili- ties to increase military strength. In England at one time official recognition was given to the theory of a"war with - a broken back," according to which the enemies after the exchange of nuclear strikes would continue the war with all availab?.e means, in relying upon the surviving part of economic potential. For this reason, supposedly, it was essential to increase , economic potential and carry out measures to raise the s~rvival of the economy. In sharply criticizing this theory, thp co-worker at the American Rand Cor~~ration, ~ Prof B. Brodie, among the arguments against ir gave the following: it was iwnos- sible to plan such a war and "there was not enough either data or imaginat:ion to create such a plan." For this reason the militant professor found it much easier to imagine that the enemy would be consumed in the flames of nuclear explosions without causing any losses to the aggreasor. We would point out that at the end of his book, Brodie, in referring to historical experience, concluded that the pre- war calculations of both the victors and the losers were ordinarily profoundly wrong and that wars were the cemetary of the predictions which had been made prior to their start.~ One might ask: what is the value af the predictions of the present supporters of a new war? Life has buried one military doctrine of imperialism after ~ another. There is every ~ustification (even without having too great an imagination) to conclude that a future war, if tiie imperialists succeed in starting it, will be- j come the cemetary not only of their prewar plans but also of capitalism itself. If we move from theory to practice, one cannot help but note thar in L�he capitalist nations very great significance is given to incr2asing military-economic potential. l ~ 86 ~ , FOR OF'F[CIAL USE OIYLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-04850R000500010005-0 FOR OFFICiAL USE ONLY ~ ~ ' This is apparent in the subordinating of the achievements of scientific and,..techni- cal progress to military interests, in the growing pressure of the monopolies and the state on the standard of living of the workers, in those structural shifts which are occurring in the economy, in neocolonialism fanned by the desire for sources of strategic raw materials, in imperialist integration whieh is encouraged by a desire to overcome bottlenecks in the military economy and in many other phenomena. Under the influence of the aggressive imperialist forces at the end of the 1970's and the beginning of the 1980's, the international situation took a noticeable turn for the worse. The leading circles of the United States and certain other NATO countries set out on a policy hostile to detente and leading to a greater militar~ danger. One of the manifesr.ations of the influence of the most reactionary and ag- gressive groups is the unceasing increase in t~=~ military outlays of the imperial- ist nations. Consequently, the question has n~t been restricted to increasing military-economic potential but also there is a process underway of raising military-economic might. ~ The designated differences in the military-economic concepts are differences within one essence, differences in the question on the choice of ways and means to imple- ment the reactionary functions of imperialist militariam in an age of the deepening general crisis of capitalism. The various justifications of military-economic prep- - arations are of the same value. They all are a reactionary apology for militarism and aggression, regardless of whether one or another concept is clot~?ed in the worn out but recently intensely revived garb of the utility of military outlays as an anticrisis means or shamelessly shouts about the supposed Soviet threat. In this regard it is not difficult to understand the reactionary essence of the d~magogic assertions by Maoist propaganda on the inevitability of a new world war. In und~r- taking feverish attempts to block detente, to prevent disarmament and to provoke a world war, Bei~ing is hoping to benefit from this and to achieve its own great power goals. ~ Along with unmasking the bourgeois and Maoist apologies for material preparations of a wai, an important task for Soviet military-economic science is research on the ob- jective laws of economic support for the defense capability of our nation and the entire socialist cocrunonwealth and along with other sciences the elaboration of the most effective solutions to the urgent theoratical problems and practical military- econo?nic tasks. Among them is the task of strengthening military-economic ~otential and maintaining it on a 1eve1 sufficient for maintaining a lasting peace and for en- suring constant combat readiness which would guarantee an immediate rebuff of any � aggressor. ' 2. Military Production and Realization of Military-Economic Potential - The turning of potential military-econ~mic poesibilities into real mi.litary might - occurs on a basis of the functioning of the military economy which produces the military-end articles and ensures their prompt delivery to the troops and their cor- rect allocation and utilization. The military economy should correspond, on the one hand, to the nation's economic possibilities and, on the other, to the nature and requirements of modern warfare. It must support constant high combat readiness of the armed forces and be capable of rapidly inereasing its might up to a levzl needed for thwarting aggression an~I defeating ~n aggressor. 'lhe p.roblems of reglizing military-economic potential can be redttced to two main. ones: a) the degree of 87 FOR O~ FICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPR~VED F~R RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL USE ONLY utilizing military-economic opportunities, b) the effective use of the allocated resources. The former presupposes an elucidation of the relationships between military and civilian production, the essence and mechanism of economic mobilization while the latter involves the patterns in the functioning of the military economy itself under socialist conditions. ~ Military Production and Economic Mobilization In beginning to examine the given problem, it is essential first of all to clearly - establish the limits of military production. In the ordinary understanding this is the production of nuclear missiles, military aircraft, tanks, cannons, rifles, am- munition and other similar products the military purpose of which is apparent. But fuel and other means are required in order for the tanks to move and the aircraft and missiles to fly. The men must be fed, provided with housing and various serv- ices. Finally, for producing military-end articles there must be the corresponding materials, equipment, energy and ~ther ~neans of production as well as the people producing 7ilitary products. Thus, in line with the supplying of the military forces, a complex network of economic relations is formed within which the bound- aries of n~ilitary and civilian production are not very clearly marked. How can military production be isolated in the system of the social division of - labor and how can its limits be drawn in? Obviously this cannot be done on the basis ~ basis of the departmental affiliation of enterprises as military or3ers, particular- ly in wartime, are carried out not only by defense but ulso civilian enterprises and many defense enterprises in peacetime produce not only military but also civilian products. In terms of the physical form of the produced product it is also not al- ways possible to ~ldssify it with complete certainty in the military or civilian , category. Only its actual use provides a clear answer. This also serves as the criterion for isolating military production. But, regardless of the unity of opinions on the given question, the range of mili- tary needs and, co~sequently, the limits of military production have been defined di�ferently by various authors. Some restrict nilitary production to ~ust the pro- ~ duction of the "means of destruction"e while others include in it also the produc- tion of personal consumption goods of the servicemen,9 while still others also would include the means of production in producing military products.l~ We would point out that each of the given viewpoints makes certain sense. The problem is that the Frocess of a transition from a civilian-end product to a military product is many- staged and contains a number of intermediate elements. Just where t~he distinction should be drawn is the essence of the different views. But if military production is viewed in the broad sociopolitic~l sense, then it is essential to cAnsider the entir2 system of needs caused by the creation and functioning of militrary might, as direct military needs, for soldiers and weapons, and as indirect ones, for workers ar.d the mea~s of production to create the articles which.satisfy the immediate ; military needs. In accord with this military production includes: 1) the praduc- tion of end military products, 2) the production of the means of production for - military produ~=ion, 3) the procluction oF constmmer goods for the workers in military production. Now the question arise~ of in what manneY this broken down structure of military production can be included in the classic scheme of the reproduction process in 88 FOR OFFIC[AL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL USE ONLY order to view the latter considering the new relationships caused by the existence of military prodtction. Here it is wise to recall how the founders of Marxism- Leninism approa~hed the question of social production into its comgonent parts. ~ _ "All social production, and consequently a11 production of a society, cr~n be broken down into two ma~or subdivisions: "I. The means of production, that is, goods having a forn in which they should en- ter or, at least, cauld enter production consumption. . "II. Consumer goods, that is, goods having a form in which they go into individual use by the class of capitalists and the working class."li K. Marx viewed each of these subdivisions a5 a large secror producing either the means of production or consumer goods. The value of all annual product produced in each of the subdivi- sions is broken do~.m, like the value of an individual good, into three parrs: c+ v+ m. Let us investigate the approach to the problem of dividing social product from t~~e viewpoint of searching for a correct solution to the question confronting us. When the task was to investigate in what manner social production compensat~s for the two parts of the product, that is, ~i~e one which goes to satisfy the indi- vidual needs of the workers and capitalists and that which serves to form the material elements of productive capital, it would be necessary to consider the ~ dividing of all social product by purpose and material composition intr two parts. - It is essential to do this, wrote V. I. Lenin, "because that portion of the product which consists of elements of capital cannot aerv^ for personal cansumption and vice versa."12 Now the task has become more complex becau~+2 we must investigate in what manner sociai production compensat_s not only for the two designated parts of the product but also that portion of which serves to satisfy military needs. Certainly the military-end articles utilized for this purpose are constantly being consumed and hence should be constantly reproduced in their physical form. Consequently, here the question comes up of compensating not only for the value but also for the phy- sical form of the product, but in this in.stance, as V. I. Lenin ponted out, "it is ~ unconditianally necessary to distinguish the products which play a completely dif- ferent role in the process of the social econamy."1' In following the logic of this argument, it can be said that the part of the product consisting of weapons and military equipment plays a completely different role in comparison with the means of production and the consumer goods. Certainly thie rart cannot be includad either in individual or productive consumption and, on the other hand, in terms of physical form it cannot be compensated for either by the means of production or by personal consumption goods. Only one conclusion can be drawn from what has been said. If the task has been - posed of analyzing the reproduction process considering military production, then in this instance the end military product must not be confused with the c~ther com- ponent parts ~f aggregate military product. To the degree that the end mi?itary product is earmarked and used for military purposes, the personal consun~pt:ion goods are used to satisfy personal needs and the means of production go for production needs, we must distinguish ,r,hese different purpose products. 89 FOR OFFICIAL USE ~NLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-04850R000500010005-0 FOR OFFICIAL USE ONLY THen the question arises of i?~,,: this step can be taken in moving from the abstract to the concrete, that is, how to detail the reproduction scheme in terms of the set _ task. The method of the approach to solving this question has been given by K. Marx and V. I. Lenin. They did not limit themselves to dividing social production iato two subdivisions. Depending upon the specific aims of the research, they isolated . in the subdivisions the more detailed parts which differed in purpose. For example, K. Marx established two }~arts of the product of subdivision II and these differed in terms of their purpose: a) the necessary vital essentials and b) luxury goods. Such a separation of product in subdivision II was important for elucidating the opposition of class interests between the workers and exploiters and K., Marx introduced this division.14 Under the new historical condi~ions, for re- futing the pseudoscientific theories of the populists and the "legal Marxists" on . the destiny of capitalism in Russia, it was essential to examine the nature and particular features of the expansion of the market in the process of expanded capitalist reproduction. For this V. I. Lenin broke down the structure of sub- division I of social production, establishing in it: a) the means of production for the means of production and b) the means of production for consumer goods.l5 An elucidation of tae ratio of the corresponding parts of social production made it possible to unmask the ideological opponents, to discover the law of the predomi-. nantgrowth of the production of the means of production in comparison with the pro- duction of constuner goods and to analyze its action. In the works of K. Marx there are indications that social labor can be embodied also in such a form or in s~~~h a product "which is neither part of individual or produc- tive consumption," for example gold and silver which function as money. Here social ~ labor is fixed "in a form where it serves only as a machine for circulation," and consequently this portion of social w~alth must be "sacrificed to the process of circulation."16 There are also ~rounds for a similar dividing of social laL~r fixed in the form of end military product which is neither part of individual or produc- tive cons~m?ption, it serves the functioning of the milit~ry machine and is sacri- ficed to the social evil of militarism. Aggxegate social production includea two sectors--the civilian and military, each of which is broken down into its functional parts (see the Diagram). As a result, five sectors are obtained. The first two sectors (Ig and Iv) produce the means of production. These can be viewed as a single subdivision which includes two sec- tions: Ig--the means of production ior civilian production and Iv--the means of production for military production (in a aimilar manner as V. I. Lenin established , in subdivision I the means of production for the means of production and the means - of production for consumer goods). The following two sectors (IIg an3 IIv) produce consumer goods. These als~ can be viewed as one subdivision with two functional _ sections: IIg--consumer goods for civilian production and Ilv--consumer goods for military production (in much the same manner as K Marx established the necessary vital essentials and consumer goods in'subdivision II). Finally, in the diagram a fifth sector has been established, the~KVP which creates the end military product. It holds a special place. In terms of the role in the reproduction process, it cannot be included either in subdivision I or in II, but at the same time it is not an independent subdivision similar to subdivision.s I snd II, for the product of this sector does not compensate for any of the production factors found in the given sector and in both subdivisions and cannot be exchanged with subdivisions I 90 FO~t OFFICIAL USE 011ILY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00854R004500010005-0 FOR OFFICIAL USE ONLY . and II. The product of this sector ie constantly removed from the reproduction process. The economic essence of"this sector is that it represents a subtraCtion from the reproduction process carried out in the specific form of producing the end military product.l~ ~ Civilian ~ ~ Military ~ ~ Sector ~ ~ Sector ~ 1- . . . . . . . . . . . - ...I I I. Means of production, ~ including: ~ G. c+v+m ~ ~ V. c+v+m ~ � ~._._._._._.1.._._.~.I_._._~J - T- I II. Consumer goods, ~ ~ including: ~ G� c+v+m I I V. c+v+m ~ � ~._._._._.-�-~�-===-~--.I_._._~J r._._._.i_._._i.~ KVP, end military product ~ ' I V. c+v+m I ' ~ . Diagram. Logical Scheme of Reproduction: G--Civilian ;roduct; V--Military product; c--Cost of ineans of production; v--Cost of vital necessities; m--Value of surplus product. The given diagram clearly illustrates Lenin's well-known thesis that the economy for war is an economy directly or indirectly linked to military deliveries.18 Ar_~ording to the diagram the production of end military product is directly linked to military deliveries while i.he production of the means of production for military production (Iv)~and the production of consumer goods for military production (IIv) represent those parts of the war-oriented.economy which are indirectly related to military de- liveries. The diagram makes it possible to show the basic r~,slationships b~tween military and civilian production, those within the two as we~t as the nature and direction of those structural shifts which occur as a result of the increase or re- duction in military production.~ Consequently, the diagram can be used as the basis of a mathematical economic model for the economic mobilization process. For example, in order to increase the production of end military product (KVP), it is essential first of all to increase the scale of Iv and IIv. This �an be achiev- ed by various ways: bq a corresponding reduction in the sectors of Ig and IIg, by mobilizing reserves, by redistributing the accumulation fund in favor of Iv or IIv and so forth. Each of the possible ways will produce a different effect and will tell differently on national economic development. The dif_ferent variations can be "played through" in a mathematical economics model. Here it is possible to em- ~ ploy the actual data of previous wars or hypothetical data making it possible to trace possible s~.tuations. An elucidation of the corresponding relationships is important +to determine military-economic potential and its dynamics, for solving specific questions related to preFarations for c~nverting the economy for military purpos~as and carrying this. out ae well as for other aims. 91 FOR OFF'CIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-04850R000500010005-0 FOR OFk7CIAL USE ONLY If one turns to the experience of World War II, it will provide examples of the most different variations of the military-economic preparations and the carrying out of economic mobilization. Thus, Nazi Germany reorganized its economy aiiead of time for the interests of war and for a number of years increased its military-economic might, using not only its own potential but also the potential of a number of states and occupied territories. France was unable to any significant degree to realize its military-economic capabilities and surrendered at the very outset of the war. The United States and England created a powerful military economy in the course of the war, spending several years on conversion. The differences in the method and degree of economic mobilization were caused by an unique combination of economic, political, military, geographic and other ob~ective and sub~ective factors. But behind the - diversity of specific forms one can note certain common features and patterns in economic mobilization aad the functioning of the military economy. Previously data were given (see Table 1) on the dynamics of total industrial production, military consumption and the share of military consumption in U.S., English and German national income. The data not only showed differences in the degree of economic mobilization and in the time during which these nations succeeded in maintaining a more or less intense military consumption but also that in all the nations, although after a certain time and to a varying degree, inevitably there occurred a slowdown in growth and then a decline in the total production volume. This was followed by a curtaiLnent of military production. The degree of military-economic effort and _ the time it could be sustaine3 are closely related, being in an inversely propor- tional dependence. A certain notion of the relationship of modern military production with civilian production and of the particular features of economic mobilization can be gained from a study of the structural shifts occurring in the economy in relationship to local wars, conflict situations and changes in military doctrines as well as in line with crisis phenomena in the economy. As an example, take certain aspects of the economic support for the dirty war of American imperialism in Vietnam. This was the largest war in U.S. history since WorZd War II. In it 56,000 Americans were killed and over 300,000 wounded. Expenditures on aggresaion reached 146 billion dollars and during the most intense period rose up tc? 30 billion dollars a year. The war did not cause a fundamental reorganization of the entire economy to a war- time footing but had a noticeable impact on the load factor for defense production capacity and was a testing of its mobility and capacity to reorganize in terms of che requirements of such wars. From the materials of the American press it is obvious that during the years of the escalating of the Vietnamese war, the increased demand.for various types of , military products by the American war machine occurred very unevenly. ~The most rapid increase occurred in the consumption of products from the most militarized sectors of the manufacturing industry, particularly the sectors producing artillery and small arms weapons, aircraft, radio equipment, TV sets and coBnnunications equipment. Here the growth in the number of persons employed in servicing military - needs was accompanied in some sectors by a significant increase in total employment and, in others, by more or less proportional growth while in still others there was no increase in overall employment. In order to bring out the causal dependences in these processe~, many factors must be analyzed, including: changes in the size and _ structure of the armed forces, reserve capacity and manpower in the various sectors, the length of the work week and so forth. But the matter goes beyond this. In the 92 FOR OFFICIAL USF' ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-40850R040500014005-0 FO1R OFFICIAL USE ONLY given instance it was a question of a specific war. With a different type ~f war there could have been completely different structural shifts, new problems put forward, that is, the necessity of ~nvestigating different variations and utilizing mathematical economics modeling for these purposes. ~ In theoretical terms it is possible to establish three levels in the process of eco- nomic mobilization. At the .first level the growth of military production does not - exclude accumulation, that is, it is carried out on a basis of expanded reproduc- - tion. The second stage is a critical situation where the scale of military consump- - tion excludes the possibility of accumulation and expanded reproductio*i becomes sim- ple reprodu~tion. When the growth of military consumpti~n exceeds this limits, the third level is reached and here there is the more or less rapid �'consumption" of , b3sic fixed capital, material and foreign a~xchange reserves, property and assets of the population and the physica~ exhaustion ~~f people. Obvious~y with each level of economic development there is a certain limj.t to the military-economic effort. From the viewpoint of the theory of reproduction, the lirnits of economic mdbiliza- " tion are expressed in the relationship of military-econom~.c might (VEM} and military-economic potential (VEP) understood as the maximum possible level of VEM, and economic might (EM). The corresponding relationships can be expressed in the - form of the following ratios: VEM = K � VEP; VEM = II~I - G; VIIrI = K1 ' EM, - where K--the coefficient for reali~,ing the VEP; G--the voli~e of civilian production; K1--coefficient of economic mobilization. It is important not only to disclose the direction and nature but also express quantitatively the basic relationsr.ips of economic mobilizatioz in terias of the different situati,ons. This will make it possible to find the opti.mum solutions for certainly. T_he essence of economic mobilization, as is seen, consists in increasing military production up to the necess~.ry amouhts and the related reorganization of the national economic proportions and the redistribution of society's resources. When the corresponding patterns have been elucidated and defined quantitatively, the questicn comes down to carrying out the necessary measures of preparing for eco- nomic mobilization. Here one is fully confronted with the importance of the eco- nomic and political aspects and their influence on the nature, forms and methods of economic mobilization and on the creation and operation of the military economy. It must ~e emphasized that just as the discovery of the objectiva pa~terns of capi- talist reproduction and the conditions of realization did not mean the eradication of anarchy and disproportions in capitalist production so the elucidation of the patterns of economic mobilization still does not mean that requirements are fully observed in the military-economic practices of capitalism. The development = of military-state monopolistic capitalism has not eliminated the spontaneous action of economic laws and this reduces effective regulation and the degree of utilizing m~litary-economic potential. 93 � FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 _ FOR OFFICIAL USE ONLY . In contrast to this, a socialist state, in relying on the socialist economic system, has an opportunity to carry out economic mobilization ~.n a planned and organized manner in accord with the war's requirements. The success of these activities is largely dependent upon a profound understaa~ding of military-economic patterns, upon - scientific prediction and early preparations for the forthcoming reorganization. This determines the practical significance of studying the processes involved in ~ econ~mic mobiliaation under present-day conditions. Military Production as a Component Part of the Military Economy As a phase of the military-economic process, military production represents the starting point in realiz~ng military-economic possibilities and the creation of the physical elements of military might. This is the main and det~rmi~ing compo- _ nent of a military economy because the scale, organization, structure and particu- ; = lar features in the functioning of its other elements and phases depend upon what ' quantity of which means of armed eom~at military production can create and within what time. _ Hawever, this relationship must not be interpreted in an oversimplified manner with _ independent significance ascribed to military production and an automatic nature to the military-economic process. The scale and composition of military production and the r:ature of military consumption depend not only upon the available produc- _ tion capabilities. The aims, directions and degree of utilizing these capabilities at each given moment are determined by the state. It also defines the nature of the operation of military might. To put it figuratively, cannons do nofi begin ~ firing merely because the battery has receiv~d the shells and has been aupplied with everything necessary to fire; the command to ~pen fire is also needed. This ! however is not the prerogative of the military economy. If mili.tary production is viewed as that very source from which military needs are satisfied, the need arises of concretizing its functional structure. ' In the production of end military product, twc+ types established in terms of its functional purpose: the produc~tion of personal supply articles for the service- men and the production of weapons, military equipment and other technical means. Each of the types, in turn, has a compl.icated structure. Particularly complex is . the structure of the second type, the scale and role of which have been growing particularly rapidly with the development of military production. The modern cata- - logs include several million types of military end articles. The question of the structure of military production and the classification of military end = has assumed great pertinence and has become a question of lively debate. One of the general concepts which has gained wide acceptance has been the concept of military equipment which is used to designate all the technical.devices in use by the army. As part of military equipment, combat weapons are considered separate- ; ly, and within them, the weapons, the delivery systems and the controls.20 However, as yet there is no complete military economic classif ic.ation and the related incon- ; veniences are felt in many areas oP knowledge and praccical activity, for example, in solving such important questions for increasing military-economic efficiency as a scientific cataloging of military-end articles, the automating of processes in- volved in accour~ting for their movement, information, inventory control and so - forth. 94 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500014005-0 FOR OFFICIAL USE ONLY In arder to provide the armed forces with'everything necessary to maintain constatrt high combat readiness, to c~ntinuously improve and 'replace weapons and milit~ry equipment, and finally, to be able to immediately and sharply increase armament pro- duction, a rather large multisector defznse industry is needed with a broad network of scien*_ific research institutes, laborarories, tes*_ing ranges and with a large group of highly skilled specialists. For the socia].ist nations these are compulsory measures in response to the aggressive preparations of imperialism. Even after the , conclusion of a numozr of agreements to�limit and ban individual types of weapons, military expen.ditures and milit~ry prod~ction in the main capitalist nations have not declined but rather grown� This is largely aided by the military p~oduct fetishism which for decades has beer~ in:planted iz the West and continues to be im~- planted, for *_he source of this is the reactionar}r, aggressive essence of imperial- ism which cannot tie altered. ~ The presence of military production as a permanent, large-scaled, multisector com- plex is a generally recognized tenet in the military-economic concepts and military _ technical policy of imperialism. Such comglexes include a number of specialized - sectors and types of production, including aerospace, nuclear, shipbuilding, the motor vehicle and armored industries, the production of artiltery and firearms wea- pons ~r~d ammunition and others. No matter how diver5e in their.essence and purpose, civilian and military production are rather similar in technical and economic terms. Moreover, one can note a def- inite tendency to unify them. "Military aviation, the motorized tank troops, the military r.adio and military chemistry," wrote M. N. Tukhach~vski~, "represent almost a complete standard with ci~ilian models.... A situation is developing when masses o~ the most technically combat weapons are found in the national economy itself.i21 This process has continued un~er present-day conditions (along with the 9pposite tendency of the specialization in military production). In the capitalist nations, on this basis, there has been an e�ver-deeper merging of milita~ry production into civilian and an increased role of the private sector in the pro~luction of military-end articles. On the eve of World War I the basj.c nass of weapons was produced by state-owned defense plants. The war forced private en- terprises to be widely involved in military production. After the war the role of state-owned defense plants again rose. But they were now basically concerned with improving ex!sting types of weapons and developing new ones whtle the basic mass of production was carried out by privat~s Enterprises. During the years of World ~~ar II, with a simultaneous rise in the number and cap~city of the state-owned and pri�~ate defense enterprises, the share of the privaCe c?nes increased. Finally, in the post- war period, in a majority of the capitalist nat+.ons, there has been a further de- cline in the share of state-owned defense plants in the production of armament. Each year the U.S. Department of Defense concludes contracts and deals for the de- vel.opment and production of weapons, military equipment and supplies with 2?_,000 basic contractors. In addition, ov~r 100,000 subcoritractors are involved i: carry- ing out defense orders. The structure and allocation of these orders between the various firms may change but the same maj~r mon~polies are the basic contractors. The 100 largest monopolies are responsible for 65-70 percent of the total defense orders, the first 10 firms are responsible for 30 percent and the first five (Lock- _ heed Aircraft, General Electric, General Dynamics, McDonnell-Douglas and United Technologies) for almost 20 percent of the total. The narrow cirele of firms 95 - FOR OFFICIAL USE dNLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2407/02/09: CIA-RDP82-00850R000500410005-4 FOR OFFICIAL USE ONLY ~omprises ti+e basic defense ind~sstry backbone around which defense production is shaped. The extensive development of diversif ication and the formation of conglom- erate firms gi.ves higher mobility to tlte economy and makes ;t possible to quickly inGrease military production. A general notion of what place the various sectors hold in satisfying military needs ~an be gained from data on the allocation of exp~nditures for purchasing g~ods and ~ - services in the various sectors. For example, in the United States out of the total purchases of the Defense Department in the 1960's, around one-half went to the manufacturing industry, around one-third to the state enterprises, approxi- mately one-tenth to transportation, communications and other sectors ira the service sphere, 2-4 percent for construction, less than 1 percent for agriculture and the extracting industry and around 4 percent for imports. ~ Thus, under present-day conditions milit3ry production cannot be confined to spe- cialized military sectors and enterprises. Many types of military end articles, as before, are produced by civilian enterprises. The ratio of these depends upon , many factors, such as: upon the development of specialization and standardization processes in defense and civilian production, changes in the structure of military consumption, upon military doctrine and the military-technical policy of a state. - The given ratio varies in the different nati.ons. ~ The defense industry of the Soviet Union, 3n possessing skilled personnel and in having suff icient production capacity, a high scientific-technical potential and significant reserves, provides an opportunity to maintain milita.ry production on the necessary lev~:l. In con~idering the nature of the military-economic prepara- tions of imperialism and the demands of modern warfare on de.fense production, the socialist nations have given the necessary attention to the development Af the de- fense ir.dustry. In the USSR, on the basis of the last scientific and technical achievements, various types of modern weapons have been developed and are being pr~duced and the combat and technical qualities of the weapons increased. The Soviet Armed Forces are equipped with the highest class of modern military equip- _ ment. The development c~f our state's defense industry and tne specific programs for its activities depend Zargely upon the international situation. The USSR has worked steac:ily to reduce weapons and for dtsarmament. As long as a military threat re- mains, we are ready for any shifts in the development of events. "The economy, _ science and technology in the USSR have reached a le~~el where they are c3pable of ensuring the development of any weapon on which our enc~mies may wish to wager."22 In technical econumic terms, the defense industry has a number of particular _ features. I~1 the first place, military production requires specialized equipment and high-quality materials. Secondly, here there is the particularly acute prob- . lem of maintaining production on a level of t.he most recent achievements of scien- - tific and technical progress. Thirdly, the ensuring of high mobfility in teLms of structure and scale is of vitally important significance for defense production. These par.ticular features tell also on the defense industry's economy. The necessity of special equipment an~i m~terials with s.pecial properties prevents _ the satisfying of the need for these :cram a simple reallocation of product from ~ _ . 96 _ FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2407/02109: CIA-RDP82-00850R040500010005-4 F0~2 OFFICiAL USE ONLY subdivision I nnd ne~zssitates the creation of enterprises to produce the corres- , ponding materials and equipment. This complicates the prablem of organizing de- fense production ard the ensuring of its mobi].ity and requires great,capital invest- ments. Z'he situation i.s aggravaL~d by the fact that due to th~ prc~gressive obsolescence of military equipment it must be replaced. Over the 3.ast 10-15 years in our nation az,1 alaroad there have been two or three generations of missiles, a sig- nificant portion of the combat aircraft, surface vessels and submarines have bEen replaced and the systems of antiaircraft missile and radar weapons, controls and . com~~nunications equipment have been changed several times. Naturally, unique diffi- _ cultie5 in defense produc~ion are related to the rapid obsolescence of military equipment. Having scarce7.y begun ~L~3action of new ~'~eapons in an amount which would replace the old, the defense industry should already be converting to the production of new weapons. At the same time at any moment it should be capable ~o~h of changing the types of productQ produced as well as si:arply increasing the pro3uction scale, 3nd consequently, have significant capacity reserves. As a re- sult the capital intensiveness of military production is increased. A~ is seen, the particular features of the defense industry complicate the problem � of ensuring its economy and efficiency. ~'he efficiency of military production in a decisive raanner inf ~uences the eff iciency of all the remaining elem~:nts of the mil- itary economy and the or.ganizational development of the armed forces as a whole. Because o~ this the;:e is an urgent need for an integrated solution to the interre- lated scientific, technical., economic and military probl~ms in �orecasting and or- ganizing the output ;;T military-end articles and conducting a unified military technical policy. ~ - Our military technical policy is a system of scientifically based views on the ques- tions of developing weapons and military equipment. It is carried out in the ai_~i of maintaining the technical_ e,~~ipping of the Armed Forces on d level of today's re- qui.rements. Its essence is that, in relying on ecanomic and scientific-technical ~ potential and considering the advantages of socialism, to ensure the primary de- velopment of those areas of scientific and technical progress which are capable most fully and thoroughly of satisfying the requirements of national defense and the Armed Forces for effective means to conduct combat operations.23 The unified military technical policy of the USSR reflects the antimilitarietic socioeconomic essence of socialism and conforms to its peace-loving foreign policy and the defensive nature of its military doctrine. The ~~?SSR is carrying out a policy not of superiority in armaments but rather of red~zcing them. But it cannot allow anyone "to acquire a better cr sharper sword"24 as this would be extremely - dangerous f or universal peac~. "The achieved military strategic equilibrium be- tween the socialist world an~ the capitalist world is a victory.of �undamental, his- torical significance. It serves as a factor restraining the aggressive drives of imperialism and this conforms to the fundamental interests of all peoples," empha- sized the June (1980) Plenum of the CPSU�Central Committee.25 Only proceeding from the general achievements of science, technology and the econou~y and from a clear understanding of their development prospects is it possible to correctly f4resee the main directionsof military technical progress and ensure the development of the most efficient types of weapons and military equipment, that is, those which possess _ . 97 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007102/09: CIA-RDP82-00850R000500010005-0 - FOR OFFICIAL USE ONLY the highest tactical and technical speci�ications with the least expenditure of money on development, production and operation. It is quite understandable that for carrying~out ttiis task there must be profound penetration into the development - patterns of military afzairs and a study of the directions of use for military tech- ' nical progress and the development trends in armament abroad. Increased labor productiv3ty in the defense sphere is an exceptionally important _ problem in the unified military-technical policy. This applies to any military - labor, including to the labor of staff and headquarters workers and to the labor of all ranks of commanders. For this it is essential to have equipment making it possible to further improve the existing methods of troop and weapon control, to develop new ones and improve the communications systems. 3. Distribution and Consumption af Mi~.itary Products The military-economic process, in deriving from production, then passes through the ~ stages of distribution and exchange and ends with the consumption of the military- end product. Marxist-Leninist p4litical economy has established th~ natural nature ~ of the relationship between production, distribution, exchange and consumption. K. Marx wrote: "Certain production causes...certain distribution, consumpti26, ex- change and certain relations of these various aspects vis-a-vis each other. - Quite understandably, this d.ependence is also char~~teristic o.f the military eco- nomic process as distribution, exchange and consumptior of military end articles are also predetermined by military production, its scale and functional structure. This applies primarily to the consumption of the means of production earmarked for military production. This is nothing more than the process of producing military - products while the distribution and exchange of the meatils cf production comprise aspects of production itself and are found in it. As for personal consumer goods earmarked for the reproduction of the labor force employed in military production, their distribution, exchange and consumption.are also carried out in accord with - the known laws of political economy. Regardless of certain specific features, the ' distribution process oi the designated means of production and consumer goods is basically c-irried out with the aid of the ord~.nary civilian distribution network. The distribution and cunsun?ption of end military product are something quite else. These are very specific and differ substantially from the corresponding phases of the civi.lian economy. Just what are their specific features2 In accord with the functional structurp of end military production, end military product consists of two parts: in the firsti place, of personal consumer goods of the servicemen and, secondly, of weapons, military equipment and other means of armed combat. The personal cans:unption of servicemen ensures the maintaining of their ability far military labor. In the socialist countries this is regulated by the economic - laws of socialism. The law of distribution according ta labor operates through a differentiated system of food and clothing rations ae well as salaries in terms of position and military rank and surpayments. The constant rise in the well-being~ of the Soviet people in acc�rd with the basic economic law of socialiam also has specific forms of manifestation in the ~;rmed Force;~, These are in increased ra- tions and an improved assortment of supplies for the servicemen, an improvement in - their billeting and cultural-service conditions, increased pay and so forth. The 98 ' FOR OFFiCIAL U5E ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL USE ONLY Soviet soldier in all regards is a citi.zen of his state with full rights. In carry- � ing out his military~duty to society, he constantly feels~the concern of all ~he people for him. ~ - The personal consumption of servicemen, with all its importan~e, does not exhaust t:::: ~.rocess of realizing military-economic possih~lities. The final act of this process is the consumption of weapons and military equipment which are operated by the servicemen. The consiunption of weapons and military equipment accurs in the process of armed combat (in peacetime, in rhe process of training to master the weapons and military aquipment and in stxengthening defense capability).~~In this sense military consumptian is of a dual sort: as the military of the _ tr.oops zt goes beyond tha limits of the military economy, it is determined~by the laws of military affairs and is the sub3ect af military art, but as the final phase of the military-economic process it is subordinate to its laws. It is important to consider both sets of laws in military organizational development. Military consumption un3er socialism differs fundamentally from military consinnption _ under capitalism by its vEry social essence. While for r.aF~italism a war is one of the immanent forms of its existence and for this reason military const:mption is in- ternally inherent to it, for a socialist society military consumption is a phenome- non which arises not out of the systems essence but is rather imposed on society by external conditinns. Specifically military constmmption, that is, the functioning of the armed forces of the socialist nations, serves not to suppress the working - m~sses and is not used for predatory goals (both ar~ alien to socialism) but to ensure the secure defense of communist construction and to prevent a world war. Finally, while under capitalism the entire mechanism serving to prepare for military c~nsumption is, in the def inition of V. I. Lenin, systematic and legitimi~ed pill- fering of the treasu~ry and a weapon to intensify the exploitation of the workei~ _ and to enrich the monopolies, in a socialist society military consumption is f:~e _ of this explpiting and parasitic function and it is organ:Lzed in a planne~l and - ~urposeful manner conGidering the political, economic and military factors determin- ing it. ~ Ira emphasizing thi~ determining rola of prosiuction and the fact that it creates con- sumption, the founders of Marxism also pointed out that consumption in turn creates production. It creates production in a double sense: in the first place, by the fact that "only in consumption does a product become truly a product," and secc.ndly, by the fact that "consumption creates the need for new production and thus an ~ciealy " internally en~endered motive for production which is its prere.quisite.... There is no production without a need. But precisely consumption repro3uces the need.i27 T.hese words of K. Marx apply fully and completely to military consumpti~n as well. In the f irst place, a weapon becomes a weapon when it is used according to its pur- - pose. Secondly, combat training and armed c~mbat during which the military-end articles are consumed create a demand for their new prQduction. It must be pointed out that military production responds very sensitively to new needs and not only in _ the sense of reproducing what is consumed but fllso in the sense of constantly im= proving the nean~ of armed combat in terms of the new req~sirements of military af- fairs. For example, in the course of the Great Patri,otic War, th~ Soviet military economy not simply reproduced the consumed means of armed combat an an expanded scale, but constantly improved them and developed new one~. One-half of the types of firearms used by the Soviet Army in 1945 was developed and put into series 99 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-00850R040500010045-0 FOR OFFICIAL USE ONLY production during the war and three-quarters of the new models of artillery systems in use by the raar's end had been developed by industry in wartime. The number of submachine guns in a rifle division during the war inc~eased by 21-fold, the weight of a divi_s~onal artillery salvo increased by almost dou~ble and that of a mortar. salvo by more than 7-fr~ld. RockFt artillery became a new effective variety of weapon. In the middle of the war, tk~e Soviet Army began to be armed with self- propelled artillery mounts [SAU], and in 1945 4,000 units were pr~duced. During the entire war there was an intensive struggle for qualitative superiority in avia- tion equipment and here our fighter aviation underwent the greatest development. _ The development of ground attack aviation was an outstanding achievement. Other armies did not possess such aircraft as the I1-2 and I~-10. . The process of improving weapons and the methods of their production under the im- pact uf the demands of developing military affairs has continued at present as well. This has been accelerated by the evil alliaiice of armament ma.nufacturers and the upper military in the imperialist nations. The appearance of new weapons has caused changes in military affairs but, in rising to a higher level, military affairs also set new tasks for military-technical thought and cause the states to broaden scien- tific research, to reorganize the defe~nse industry and improve weapons and military ec~uipment. This relationship has shown a tendency to grow stronger. The mass in- troduction of new weapans in the postwar period has caused a chain reaction in the improving of all the existing types of weapons and the inventing of new ones. The ensuing further development of military art has given rise to the need for evermorP aZvanced means of armed combat and consequently produces ever-new impulses for the ~ development of military production. ~ The relationship and reciprocal influence of military production and military con- sumption are mediated by the distribution and exchange (circulation) o~ mili*_ary-end articles. Distriburion encom~passes all the products while exchange involves only a portion, mainl~ the means of production and consumer goods. The problem is that the distribution of end military product to a significant degree is dir~ctly influenced - and determined by the corresponding plans. It should make certain that each con- sumer receives those military products, in the amount aad on the date which are dictated by the tasks set by the command. For this reason here little room remains - for exehange (circulation). This specific feature in the relationship between mili- _ tary production and military consumption tells on the organization and functioning of the distribution eleme~t of_ the military econony and on the contral of the cor- responding processes. Favo�rable opportunities are provided by it for widely intro- ducing automatic systems into management. - Just what is that elEment of the military econamy which carries out distribution and - consumption? In performing certain functions of distribution, delivery and the storage of military-end artiGles, the general civilian infrastructure is emplo}~ed. This applies chiefly to the distribution of the means of pr~duction and consumer goods earmarked for military production. But the civi:.ian infrastructure cannot carry out a whole series of specific tasks in the distribution of end military pr~d- uct and for this reason there is a special element of the military economy which includes a di~?ersified network of lines of com~unications, powerful means of trans- - port, military, naval and air bases, special dumps and storage facilities for mili- tary property, fuel and equipmeut, repair and service enterprises, facilities and the corresponding units and subunits. - 100 - FOR OFF[CIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02109: CIA-RDP82-00850R400500010005-0 FOR OFFICIAL USE ONLY _ This element which is part of the armed forces continues and completea the process of producing the end military product as well as bringing the product to full readi- ness for consumption. This is a function ef the logistical support services~, mil- itary transport, communi~cations, trade, as well as the repair enterprisea and sub- - units. The~construction of military installations ie 81so involved here. The functions of the distrib~stion, circulation and consumption of end military prod- uct are closely intertwined with one another. This tells on the structure and or- gaiiization of the corresponding elements of the military economy. These are sub- stantially inf luenced by the fact that in structural terms, these elements which - form the specific housekeeping organism of the armed forces, are because of this simultaneously an orga.~ic component part of th~n. This is a question of the rear ~ of the armed forces and the system of their logistical suuport. The higher ele- ments of this organization (the strategic and operational rear) carry out predom- inantly distributive functions while the inferior ones (the organic rear and uriit services and administration) serve end military conaumption. - Since the economi.c organism of the armed forces operates simultaneously as a part of the military economy and as a part of the armed forces, not only the structure - but also the process of its functioning and development are determined by the over- lapping influence of the military-economic laws and the laws of armed cou:bat. ~ The existence Lnder today's conditions of large armies and the rapidly developing ~ military-technical revolution have brought about colossal growth in the sc~le of ~ the military administrative organization of the armed forces and the intense occur- , rence of the processes of their economic support even in peacetime. Defense produc- tion~ give~ the armed forces exceptionally diverse products while the scale of military constnnption in the lesding capitalist states, in increasing year after year, has virtually equaled the scale of the World War II per3od. ~'or this reason ~ the rear of the armed forces has assumed a complicated and developed structure through the arteries of which various military end articles are continuously flow- ing to the troops, in ensuring current consumption and the viability of the mili- ~ tary organism and in replenishing and renewing the stock.s of weapons, military equipment and other military products. The closer the military end articles come - to the unit, subunit or sol.dier the more complicated and diverse this network for ; each cnnsumer must receive specific items in a certain quantity and assortment. The coalition nature of a possible war, the developmant of integration processes and - r..he creation of large ocean-going navies hare broadened the spatial scope of the ac- tivities of the armed forces rear se:vices, having advanced their limits beyond the territory of a single state and having increased the extent of the lines of commu- nications. This is p3rticularly characteristic for the U.S. armed forces which ~ have assumed the role of the world's polic;men. The United States maintains one- quarter of its troops overseas. While in the 1920's American soldiers were sta~ tioned only in 3 foreign countries and in 39 during World War II, by the beginning of the 1970's they were found in 64 countries. The United States has cr~~ated ~ore than 450 major military bases on the territory of other states.28 For su~porting the American troops in Vietnam, a rear command was organized with a headquaz�ters in ~aigon and in 1967 this numbered 60,000 men. Each month 752,000 tons of freigizt were delivered. ~he freight flows were regulated by a computer center which processPd data on 20,000 different troop supply ar~icles. 101 ~ FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL USE ONLY ossible war requires high motorization of the rear services. The The nature of a p rear is equipped with powerful motor vehicle and air transport which togethe~e entl - water and pipeline transport make it possible to Qnsure the p Y the rail,_sea, 3rticular feature of the organizational development of - required mobility. Another p_ 1 rocess- t h e rear under present-day conditions is the II1eC~ T e s e n t scaleeandadiversitypof t es and the automating o f rear c o n t r o l. W it h t h e p mi litary consum ption, a simple rise 3.n the number af rear formations an~o therdata bod~e~ could not ensure the prompt servicing of the troops. According in the American prPSS, in 1973, over 6,730 computers haercent wastuseddinntheeASUS� governmental organizations and of this number over 55 p lo istical [automated.control system] of the a~riedeoutPtot~aling 428billion dollars with some n- - support for tne armed forces was - 4 million types of various supplies.29 Mechanization and automation, in sharp y creasing the productivity and eff iciency ~f all elements in th~ reaandemobilitysasm~ make it possible to achia~efeaturesfofaarmedccombatiin asmoderniwar. These a,re� dictated by the particul the enormous spatial sc:ope, high inten~ity and dynamicness. The r.heory of the armed forces rear is consurno~t sy temudyAmong theamostnimportant - principles in the f ur_ctioning of the rear PP 1 the troops, thz conform- of these are: the constant readiness of the rear to supp y ity of the tasks in organizing rear supportdtforcestgroupangs,rtheicombiningfofYlrear armed services, branches of troops and arme rou in s and - support centrali2ation with the a~eeLhoroughlypconsidered in develop~ng thegrear naval forces and othPrs. Tt~ese support system. The rear of the Soviet Armed Forces represents the resources (dump~, depota, shops, facilities and subunits), both those transport troops, medical and other units, which are organizationally part of the Armed Forces and those made available by the state to the military command for complete material, technical and medical support for the troops. It consists of threerear.EnCharacteristic oftit isnaestrictlyPera- tional rear and the organic or troop a de ut minister ~ centralized and ordered organ~fz~he~rear of~thelArmed Forcesdand in theP armed serv- of defense who is the chief _ ices by deputy commanders-in-chief forlnh~heemilitaryrdistrict e formationstandrear of the corresponding armed services. units there are deputy com~?anders who fformatio 8ndtunitsar in the districts an deguty commanders for the rear in the ical e uipping, the organization and activ:Ltieof~theharmedrsexvicesnandub- The techn 4 articular features units are arranged considering the p ort of this the branches of troops. With the araasis~~fwaSeworkedeout f or~theTsupps t e cor- 1 responding rear bodies appeared an new armed service. ThQ introduction~unf missple weapons and the improving o tra- d troo s, in causing a furthei increase in ditional types of weapons in the gr the amount of work to service them as ~enlofst eerearrunits andesubunitsiof thetop- troops demanded the complete motorizatio obs which now can erational r.ear a.nd the mechanizing �ositic~n~butlalso duringitroop movement. ~is be carried out not only in a fixed p eriod of . is major progress in the developme~nerationalrreariwas~stationaryith the p the Great Patriotic War when the p ~ 102 _ FOR OF.~'ICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED F~R RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL USE ONLY The rear of the airborne troops has its own particular features as it must support combat operations under the conditions of extended autonomy. Characteristic of it is high saturation with air trans~ort equipment and a number of other apecific fea- tures. In the activities of the air force's rear, a special place is held by the deliveries of large quantities of fuel, compressed gases and electric power. The rear is equipped with the corresponding technical devices whil, the airfield and airfield operations subunits ensure the rapid rebasing of the air units and the equipping of new airf ields. The co~nissioning of atomic submarines and missile-carrying ships for the navy and the development of the naval infantry and landing ships have determined the area for the improvement of the naval rear services. It was necessary to significantly de- velop the auxiliary f leert, to mechanize cargo handling work, to introduce container shipments, to widely employ air transport and to aupport the naval fleet operations far from shore. The organic rear is the most widely developed element in the Armed Forc~s rear. Each formation and troop unit has its own unit administration and services. The organic rear directly serves military consumptj.~n, that is, it completes the process of economic support for the Army and Navy. Military readiness and combat capability , of the troops and the success of their combat activities depend directly upon the technical state, organization and functioning of the troop rear. All the experience of Soviet military organizational development teaches that man , the Soviet soldier, should always be at the center of attention, that is, his health, material and cultural needs. ~ Under present-day conditions, without a well-rounded, politically aware soldier who has mastered the weapons and military equipment it is inconceivable to create j powerful Armed Forces which would be capable of carrying out the tasks entrusted i to them. In addition, military service in our nation is not only schooling in co~ ; bat skill. "During service in the army there is continued the process ~tarted in the family, school and on the ~ob of co~nunist indoctrination, the process of shap- 'i ing a well-rounded, harmonious personality~. In essence, the army plays the role of the 'people's university' which 'is completed' by virtually all male citizens of ~ the nation."30 Unit administratiqn and services must also carry out this very im- portant social role of the Soviet Armed Forces. l, The increased scale and the greater complexity of unit administration and services have posed certain questions of their running in a new light. At present the ques- tion does not come dc~wn to promptly obCaining and economically expending materiel or car~fully storing and corre~tly operating the weapons and military equipment. It is important to ensure the optimum structure and functioning of the unit administra- tion and se~vices�ss an organic component part in the military ecan~my and the Armed Forces proceeding from the particular features of combat training and armed combat ~tnder present-day conditions. High military-economic and tactical-rear training _ are essential. The rear services of the Soviet Armed Forces are being constantly improved on the basis of the development of the Economy and military affairs. These services have 103 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL USE ONLY been fully motorized and this has increased the maneuverability and mobility of all the rear bodies. The mechanization of supply processes has increased and all types of troop support have been improved. At pregent the rear of the Armed Forces j basically meets the demands placed on it by modern warfare. In terms of its organ- ' _ ization and eqiipping it is capable of dependably carrying out the responsible tasks ~ placed on it.3 4. Socialist Integration and Militar~~-Economic Potential At the present stage our motherland is carrying out the tasks of co~aunist construc- tion, defending its revolutionary victories and preserving peace not in isolation - but in a fraternal family of peoples from the socialist countries. After World . War II, as a result of the victory of socialist revolutions in a number of nations, there arose "a social, economic and political commonwealth of free, sovereign peo- ples following the path of socialism and communism, and united by c3mmon interests ; and goals and by close ties of international socialist solidarity. Better condi- tions and opportunities were created for the development of the socialist countries, for defending peace in the world and for defeating imperialist aggressors in the event that they would at~empt to start a war against the socialist countries. Socialist Integration and the Strengthening of Military Economic Poten~ial History knows many examples of how artificial state formations were created by vio- lence and deceit, by "iron and b lood," by "fire and swor3," and how they inevitably , disintegrated. Similar methods and similar results.are characteristic in our days ! of imperialism. The world socialist system represenCs a fundamentally new type of ' _ international relations. Its rise has been brought about by the action af both uni- ~ versal laws and also specific economic laws of socialism. I i - The question of the relationships among peoples who have thrown off the chains of , capitalist slavery arose for the f irst time with all its act~al political signifi- cance with the victory of the October Socialist Revolution. In analyzing and weighing the entire aggregate of f actors which demanded the unification of our nation's peoples, V. I. Lenin wrote: "...It is essential to work for an ever- closer federal union, having in mind, in the fir~t place, the impossibility of de- fending the existence of Soviet republics surrounded by incomparably militarily � stronger imperialist powers of the entire world and without the closest union of the Soviet repul~lics; secondly, the necessity of a close economic union of the Soviet republics, without which it would be impossible to rebuild the productive forces destroyed by imperialism and ensure worker prosperity; tY:yrlly, the tendency to create a single, world-wide economy which is controlled according to a general ' plan by the proletariat of all nations; such a tendency is clearly apparent even under capitalism and wi~l certainly undergo further development ancl full comple- tion under socialism."33 On 30 December 1922, the First All-Union Cougress of Soviets adopted the hiator~c decision to create the world's f irst multinational socialist state, the USS~. 1'his union has undergone complete testing. The merging of the economic capabilities o� all the republics and their planned development on a nationwide scale have made it possible to accelerate the rise of each of them and even out their economic develop- ment levels. On the basis of colossal successes in the economic area, fundamental ' shifts have occurred in the area o~ social relations and a new historical community 104 FOR ~FFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/42/09: CIA-RDP82-00850R000500010005-4 - FOR OFFICIAL USE ONLY of peoples has come into being, the 5oviet people. A culture has flourished which is socialist ~n content, diverse in terms of its national forms and fnternationalist ti in terms of its spirit and nature. The union and friendship of all nations and nationalities in our country have withstood severe testing during the years of the Great P~triotic War and were one of the sources of our victory. The Saviet Union, as V. I. Lenin foresaw, has become tl~e prototype and center for the unification of the world socialist system. "...I am profoundly coi~vinced individual different federations of free nations more and more will group themselves araund rev~lutionary Russia,"34 he wrote at the beginning of 1918. At present this Leninist prediction is a real vital fact and reinforced in the Soviet Constitution which states that the USSR, as a compon~nt part of the world socialist system and the socialist comnonwealth, is developing and strengthening fxiendship and coopera- tiAn, comradely mutual aid with the socialist nations on the basis of the principle _ of socialist internationalis~ and takes an active part in economic integration and ~ in the international socialist division of labnr. At present the socialist nations account for 26.2 percent of the world's territory and 33.7 percent of its popula- tion. These countries determine the main path of man~Cind's development. Since the moment of its rise the world socialist system has undergone a series of development stages. The 1960's held a special place in its history. During this decade taany fraternal countries completed the creation of the foundations of social- ism and mov~d on to building a developed soc~.alist society, while the Soviet Union, ; having built a developed socialist society, has entered the period of the full-scale ~ construction af communism. The process of socialist economic integration has de- - veloped widely on this basis. As was stated in the Comprehensive Program approved jointly in 1971 by the nine socialist nations (Bulgaria, Hungary, the GDR, Cuba, Mongolia, Poland, Romania, the USSR and the CSSR), the devel~pment of economic in- tegration among the socialist countries represents a process of the international socialist division of labor, the merging of their economies, the formation of a ~ modern, highly efficient structure of the national economies, the gradual drawing ~ together and evening out of th~ir economic 3evelopment levels, the formstion of 'j deep and ia5ting ties in the basic Pconomic sectors, in science and technology, the broadening and strengthening of the international ~arket of these nations and the improving of co~nodity-monetary r~lations.35 The deepening of socialist integration creates favorable conditions for the more efficient uae of all resources in the socialist countries and for the broad development of. the scientific and technical revolution. It increases the economic might of the fraternal countries and creates - favorable conditions for strengthening the defense capability of the socislist countries and for preserving and s~rengthening peace thro~�ghout the world. What ' specifically is the military-economic significance of socialist ec~nomic integra- � tion? ?n the first place, the development of socialist economic integration multiplies t:he econo;nic (including the military-economic) possibilities of the member nations. "...When it is a question of cooperation among the socialist countries," L. T.. - Brezhnev has pointed out, "then there is not merely the addition of forces but rather their multiplying."36 Integration means the ~oint tapping of natural re- sources for comman use, the j~j.nt construction of large industrial complexes de- signed to sstisfy the needs of all its members and cooperation planned for many _ years to come between the enteiprises and entire industrial sectois of our countrieP.. On the basis of integration the socialist cauntries obtain favorable opportunities - 105 FOR OFFICIAL. USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R400500010005-0 FOR OFFICIAL USE ONLY to more fully utilize the benefits of the international division uf labor, ta achieve th~rough consideration of the requirements of the scientific and technical _ revolution, to gain a fuller and more rational use of the labor resources, the pro- ~ ductive capital and natural possibilities and to substantially increase economic efficiency. All of this helps to increase efficien~y and reliability of defense for the socialist states, it creates additional opportunitie~ to successfully carry out current economic tasks and makes it possible to reduce the economic strain caused by ensuring constant high combat readiness of the a~-med forces, and conse- quently, to maintain high rates of economic development and the growth of worker prospQrity. ~ Secondly, socialist integration makes it possible to more rully utilize the achieve- mer.ts of the scientific and technical revolution for the interests of defense. At = t:~e present stage the optimum development of the productive forces caa be achieved only within a world-wide economic system. Eco~omic integration has become a neces- sary condition for organically uniting the achievements of the scientific ar~d tech- - nical revolution with the advantages of the socialist econom.[c system. Scientific and technical cooperation makes it possible for the socialist countries to firmly maintain the world technical level in all production spheres and this would be un- attainable for individual small and medium-sized countries. The same determines the ~reat defense significance of scientific and technical cooperation among the socialist countries. In additic,n., on this basis the cooperating nations increase the efficiency of scientific research in coordinating it and in iocusing efforts on the key areas of scientific and technical progress which devel~p the economy along *_he path of production intensification and higher product qualit~. All of this is very important for defense, for V. I. Lenin taught that "the upper hand will be gained by that side which has the greatest technology, organization and disciplin~ and the best machines.i37 In possessing superior scientific and technical achieve- ments, it is possible tu respond to any of ttie enemy's military technical innova- ; tions and promptly provide sobering responses which convince it of the hopelessness ' of continuing the arms race. _ Thirdly, socialist integration i*~creases economic efficiency and mobility. This is due to the fact that planned economi~ cooperation leads to an optimization of the � sectorial structure and territorial placement of production and to the creation of - optimum territoriaJ economic complexes which are rationally interconnected; it de- velops the capacity ror the broad maneuvering of reaources. The communist party congresses of the socialist countries have noted with satisfac- tion that the work in the area of carrying out the Comprehensive Program has led to a situation wher~ even now economic cooperation among the fraternal nations has been signif icantly deepened and the complimentariness of their economies has increaesd. - For Example, take the problem of supplying the economy with raw materials and fuel. On the territory of the socialist countries which posaess rich natural resources, enterprises are being built ~ointly ta produce scarce types of raw materials and fuel. An ~xample of cooperation in this area would be the construction of the Ust'- Ilimsk Pulp Plant with a capacity of 500,000 tons or the construction in Kingisepp _ of the phosphorus mine and dressing combine. "...The carrying out of such vitally important economic tasks for the GDR as supplying the energy and raw material base and utilizing th~ achievements of the sciPntific and technical revolution for the further construction of socialism have been possible only within the family of the 106 rOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 - FOR OFFICIAL USE ONLY fraternal socialist countries,"38 wrote the General Secretary of the SEP~r,.Central Co~nittee, E. Honecker. The socialist countries are working out and implementing long-range spec ific pro- grams in order by common efforts to meet the nepds for energy, fuel, the ba~iC types of raw materials and highly productive machiner}? and equipment. On the basis of deepening the international division of labor, production specialization and co- operation, sectorial and territorial ties are being braadened and unifieQ supply systems are being develo~ed such as the Peace Unified Electric Power Sysrem, the Friendship Oil Pipeline and the Fraternity Gasline. In improving transport ties between them an important role is being played by the forming of an integrated ~ transport system based upon the further development of all types of transport, ~pe- ciaZization and cooperation in producing.the neans of transport, the coordinated development of the railroad and highway network, the building of recipro cal deep railroad spurs of Soviet and Western European gauges, the broadening of the common - freight car fleet and other measures being carried out ~ointly in the area of the comprehensive development of transport. All of this increases ~the ecoromy's effi- - ciency and mobility. As for the territorial placement of production, the socialist countries possess exceptionally favorable opportunities. The world socialist system occup ies a vast territory. On this territory are found rich natural reserves of fuel; exiergy and ; raw material resources as we11 as necessary conditions for producing agr icultural products. Its enormous extent in longitudinal and latitudinal directions, campact- ~ ness of placement and transport possibilities make it possible to locate the produc- tive forces con'stdering economic and other mutual interests, to effecti;;~ly pro- vide the necessary economic aid to one another and to widely maneuver ma terial and tPChnical resources. Of course, the quesrion does not come down to the benefits of geographic position and natural condit3.ons. Their realization, like the overcoming of historically ' determined discrepancies in the structure and placement of production, depends upon the nature of the economic and political system in the states, comprising th~ given world system. In this regard the advantages of the socialist system are particu- larly impressive. Precisely on their basis there has been the planned, steady and rapid growth of economic might in each individual nation. The economic develop= ment levels of the different nations have constantly and steadily been evened, ' socialist integration has been deepened, economic mobility has been increased and so forth. All of this is the result of the enormous efforts taken by the peoples i.n the socialist countries under the leadership of the communist and workers parties. As a result of these collective efforts a dependable and effective syst~m ~f all- round cooperation has come into being and this meets the vital interests of the peoples in the socialist countries and helps to strengthen the cause of peace. The Development of Military-Economic Cooperation Among the Socialist Nations As a response to the creation of th~ aggressive North Atlantic Military Bloc in ].949, the socialist states in May 1955 concluded a Pact of Friendshi~, Cooperation and Mutual Aid in Warsaw. Since then the Warsaw Pact member nations 9(Bulgaria, - Hungary, the GDR, Poland, Romania, the USSR and CSSR) have acted as an organized defensive coalition. Each of them carries out d;efense tasks as part of cooperation. 10' � FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/42/09: CIA-RDP82-00850R000500010005-4 FOR OFFICIAL USE ONLY _ ~ _ "Tlte further deepening of cooperation among the socialist countries in the political, _ economic, defense and other areas and the constructive activities of their 3oint _ organizations, that is, the Warsaw Pact and CEMA, dependably serve the cause af _ peace and progress."40 The economic, political and military alliance of the social- - ist countries has created favorable opportunities for their military-economic co- ~ operation. The military-economic relations of the socialist countries are an essential compo- = nent part of the relations between them under conditions when there are a military ~ threat and the ensuing necessity for maintaining the high defense capability of the socialist commonwealth. These r~lations exist not only in the sphere of their in- , ternational exchange but also in production. They also encompass rear support for = the Joint Armed Forces. The specific forms of military-economic cooperation have not remained fixed. Z'hey have been improved on the basis of the strengthening and development of the world socialist system. _ Lenin's "Draf t Directive of tlie Central Committee on Military Unity" (May 1919) is ~ of important significance for understanding the essence and basic development ' trends of military-economic cooperation among socialist countries. It pointed out that a necess~xy condition for success in a war which the RSFSR together with the fraternal Sovi~t republics was foLced to wage against world imperialism and the in- ternal coun*_errevolution was the "unified command over all the Red Army detachments and stricLest centralization in the disposition of all the forces and resources of the socialist republics, in particular, the entire military supply apparatus as well as rail transport as a most important material factor in the war...." In line with this it was proposed "to recognize as unconditionally essential during the en- tire time of a socialist defensive war to have the unification of the entire Red , Army supply question under the unified leadQrship of the Defense Council and the ; ~ other central RSFSR institutions...."41 ' The experience of jointly carrying out military-economic tasks by the Soviet repub- lics in the Civil and Great Patriotic wars and during the years of peacetime con- - struction is preser~tly being creatively applied by the nations of the world social- ist system in solving specific problems of economic support for their defense. Their military-economic relations are developing on a basis of deeper economic, political and military cooperation. One of the f irst forms of military-economic cooperation among socialist countries was the aid in supplying weapons and other military-end articles. This form was greatly developed in the concluding stage of the Great Patriotic War. Upon the re- quest of the governments in the liberated nations of Southeastern and Central Europe, the USSR supplied them with weapons which made it possibZe to outfit 20 in- fant:y divisions, 1 artillery division and 3 antiaircraft artillery divisions, 6 - artillery brigades, 4 tank destroyer brigades, 2 mortar brigades and 1 ca~alry bri- gade of the Polish Army; 4 infantry 3ivisions, 1 cannon brigade and 1 tank de- - stroyer brigade of the Czechoslovak Army; 1Q infantry divisions of the Yugoslav - People's Liberation Army; 5 infantry divisions of the Bulgarian People's Liberation Army; 2 infantry divisions of the Romanian People's Army. Soviet tanks were used ; to outfit tank corps and two separate tank brigades of the Polish Army, a separ- ~ ate tank brigade of the Czechosluvak Army and a s~parate Yugoslav tank brigade. i The USSR also turned over 630 aircraft for the air corps of the Polish Army, 491 ' 108 _ ~ FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL USE ONLY aircraft for the Yugoslav Air Force and 25 aircraft for a Yugoslav air division. Finally the frate rnal armies were provided with supplies, food and fodder totaling 1.5 billion rubles.42 Bilateral military-economic cooperation among the socialist countries did not l.ose its importance in the postwar period. "At present our motherland," stated F. Castro _ in 1974, "possess es magnificently equipped armed forces and military equipment re- - ceived from *_he U SSR. This great nation, regardless of the hi~h cost of the weapons, - but considering the special economic conditions in Cuba, has supplied us with them gratis.i43 But along with providing aid in equipping the armed forces and in train- ing military pers onnel, other forms of military-economic cooperation are also de- veloping on a b as is of the rurther, closer unification of the socialist countries. With the changeover to stable ties in the area of material producti~n, cooperation has begun to deve lop more widely in the production of military-end articles. The - commonwealth's na tions have elaborated a coordinated military-technical policy, they - are standardizing military equipment and weapons, they exchange licences for the production of weapons and military equipment and are carrying out specialization and coflperation of military production. On this basis favorable conditions have arisen for the development of cooperation in the inferior elementa of the military economy ~ as well. As a re sult, military economic cooperation among the socialist nations is now developing in all the areas of economic support for their defense capabiiity, that is: in carrying out the tasks of strengthening economic might and military economic potential, in creating and developing military production and in improving rear troop supp or t. This is becoming evermore effective. - One of the impor tant development patterns of the world socialist system is the l~igh and steady economic growth rates due to which the socialist countries have rapidly increased their economic potential. The average annual increase rates in industrial product during 19 51~-1978 in the socialist nations were 9.6 percent, and in the de- veloped capitalis t tiations 4.8 percent. The share of the socialist countries in the total volume of world industrial product increased from 20 percent in 1950 to 40 - percent at present.44 However important quantitative growth of economic might is for strengthening defense capability, it d oes not fully describe the capabilities of the community's countries. It is also impor ~ant to consider that "along with the flourishing of each socialist nation and the s trengthening of the sovereignty of the socialist states, their ties are becoming ever-closer, evermore elements of commonness are arising in their poli- = cies, economy and social life and the development levels are being gradually evened out. This proces s of a gradual merging of the socialist countries is now fully ap- - parent as a resul t pattern."45 For determining the military economic potential of a coalition of nations there is the widespread method of totaling the various indicators of economic might for tHe countries comprising the coalition and comparing the obtained data with analogous data for another coalition. For example, a comparison may be made of the total pro- d~iction volumes of steel, electric power and other types of products, the share in world industrial production is determined and so forth. Without denying the valid- ity and advisab ility of such camparisons, we must emphasize th~ hypothetical and - limited nature of such a method, for the economic potential of a coalition is not a mere ~otaling of the potentials of the states which are members to the alliance. 109 L~OR OFFIC[AL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED F~R RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 - FOR OFFICIAL USE ONLY This is particularly important to bear in mind in comparing the two opposing world systems which differ not only in terms of degree but also in the nature of integra- tion among the member countries. On the basis of the~on-going growth and economic improvement in the socialist coun- tries, the necessary conditions have come into }aeing for the creation of a modern defense industry in each of them. The Soviet Union which possesses a well-developed defense industry, highly-skilled engineers and technicians as well as powerful sci- entific potential has provided complete aid to the fraternal countries in the crea- tion and development of military production, in its technical equipping and organi- zation and in training specialist personnel. In the interests of defense, each socialist nation presently has enterprises prod+.:c- ing various weapons, ammunition, various types of mili.tary equipment and supply articles for the servicemen. For example, Poland produces ~et aircraft, helicopters, combat ships, tanks, motor vehicles, various engineer and radar equipment, communi- cations equipment and so forth. The CSSR manufactures diverse military-end products including aircraft and motor vehicles. Military production has also been organized in other nations. It is based upon the solid foundation of socialist ownership of the means of production and planned national econosic development in accord with the demands of the economic ~aws of socialism. Completely foreign to it is a spirit - of gain and mercinariness as the scale of military production~is determined by the ~ actual defense needs of the sociaiist countries. The international division of labo�c, specialization and cooperation are characteris- tic not only for civilian production but also for militar�;*. The specialization of each country in these most important spheres is determined by its economic speciali- ~ zation. For example, the GDR with its developed precision machine building, chemis- try and electrical engineering is specialized in producing all sorts of instruments, ~ explosives and other military-end articles. Consideration of economic specializa- i tion conforms to the interests of each country. Integration processes in the de- fense industry of the Warsaw Pact countries are evermore clearly apparent in the ; process of developing their military-economic cooperation. This applies both to the ~ sphere of direct scientific and production activities in developing and producing ; military equipment as well as to the questions of planning and realizing the program - for scientific and technical progress in the interests of improving and strengthen- - ing the material and technical base of defense. The carrying out of a coordinated military-technical policy by the commonwealth's countries is of exceptionally important significance, in making it possible to es- tablish large series production of the most recent types of weapons, to standardize the military equipment and armaments and to consider the availability of production capacity, personnel and raw material and f uel resources in one or another nation in organizing military production. All of this helps to reduce costs and to increase - the efficiency and economy of military production as well as the quality of military - equipment. _ The material and technical base of the fraternal armies is constantly being improved and their technical equipping raised. Thus, the number of tanks in a Soviet divi- sion of the 1960's in comparison with 1939 has increased by 16-fald, for armored personnel carriers by 37-fold while the weight of an artillery-mortar salvo has risen by 30-fold. The motorization level of the motorized rifle formations in the ~ ~.~.0 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/42/09: CIA-RDP82-00850R000500010005-4 FUR OFFICiAL USE ONLY - Bulgarian People's Army in recent years has risen by more than 30-fald and for the tank formations by 50-fold. An artillery salvo of a modern Bulgarian division is 6-fold more powerful than that of a division from the World War II period. The fire power, strik~ force and maneuverability of the units and formations in the Hungarian People's Army have increased by several-fold. Tn comparison with the Gdarld War II period, the fire power of a Romanian mechanized division has in~reased by 3.5-fold. Each tank division of the Palish Army how has 2-fold more arm~,red equipment than existed in the entire Polish Army by the start of World War ~1I. The present-day mechanization of the Polish Army is 35-fold more than in the prewar times.46 The technical equipping of the armed forces in the other socialist coun- tries is up to present-day demands and this comprises the material basis for their successful carrying out of the most complex tasks. The co~nunist and workers parties in the socialist nations give great significance - to the development and improving of combat cooperation among their armies. The military organization of the Warsaw Pact is constantly being improved and the forms and methods of cooperation among the armies are being developed on the most diverse _ levels. Actual combat cooperation has helped to develop effective forms for mutual enrichment in the experience of troop control, for their military and political " training and all-round support. The daily life of the armed forces is full of military-economic activities. Quite understandably, military cooperation among the armies has numerous military-economic aspects. These include the questions of troop rear support, the questions of military-economic analysis in making decisions, economic work in the troops and much - else. The carrying out of a coordinated military-technical policy by the commonwealth's nations, cooperation in the area of military production, the development of stand- ardization and unif ication, on the one hand, the unity of military theory and policy, the uniform organizational structure and system of troop training, on the other, create favorable opportunities for improving logistical support for the Joint Armed - Forces and for establishing a unified and standardized system of their supply. These opportunities are being turned into reality in the process of daily troop combat training, in the thorough study of the existing rear support systems, their consr.ant improvement, mutual enrichment and standardization. There are various forms of cooperation among +the fraternal �rmies in solving such ~~,estions. For example, there has been the extensive exchange of specialists in the aim of the rapid mastery of new military equipment by the men as well as for gaining ~xperience in servicing and operating it. Also widefound are the exchange of military li.terature, the organization of exhibits and the holding of military- theoretical conferences at which the most important problems of troop rear support are examined among others. ~tudy of the~very rich experience of the Soviet Armed Forces is a most important scurce for improving the fraternal armies. Joint troop and command-staff exercises are an effective means for raising combat skill, for developing cooperation among tha armies and fox improving their economic support. These exercisPs also serve ta further develop military science. Due to systematic military-scientific informa- tion, the results of research conducted by military scientists in the socialist ~ 111 . FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2407/02/09: CIA-RDP82-00850R000500410005-4 FOR OFFICIAL USE ONLY countries are becoming available in the fraternal armias. Scientists ' from the fraternal countries have contributed greatly to the development of . ~ military-economic thecry. Strong unity and solidarity of the socialist countries are an indispensable condi- tion for their ever-new successes in strengthening their v:conomic might and defense. capability. f ( FOOTNOTES _ 1 B. M. Shaposhnikov, "Vospominaniya. Voyenno-nauchnyye trudy" [Memoirs. Military Scientific Works], Moscow, 1974, p 464. . 2 See: "Bol'shaya Sovetskaya Entsikloped3ya," Vol 5, Moscow, 1971, p 240; "Sovetskaya Voyennaya Entsiklopediya" [Soviet Military Encyclopedia], Vol 6, Moscow, 1978, p 477. 3 M. V. Frunze, "Izbrannyye proizvedeniya" [SeZected Works], Moscow, 1977, pp 167- 168. 4 See: K. Knorr, "Voyenny potentsial gosudarstv" [The Military Potential of States], Moscow, 1960. 5 T. K. Finletter, "Sila i politika" [Power and Policy], Moscow, 1956, p 216. 6 C. Hitch and R. McKean, "Voyennaya ekonomika v yadernyy vek" [Economics of Defense in the Nuclear Age], Moscow, 1964, p 50. ~ See: B. Brodie, "Strategiya v vek raketnogo oruzhiya" [Strategy in the Missile AgeJ, Moseow, 1961, pp 186, 424. - 8 See: S. G. Strumilin, "Izbrannyye proizvedeniya" [Selected Works], Vol 4, Moscow, 1964, p 83. 9 See: G. S. Kravchenko, "Ekonomika SSSR v god,y Velikoy Otechestvennoy voyny," p 17. 10 See: "Voyenno-ekonomicheskiye voprosy v kurse politakonomii" [Military-Economic Questions in a Course of Political Economy], Moscow, 1968, p 70. 11 K. Marx and Fe. Engels, "Soch.," Vol 24, g 445. r2 V. I. Lenin, PSS, Vol 1, p 72. 13 Ibid., Vol 3, p 39. _ 14 See: K. Marx ard F. Engels, "Soch.," Vol 24, p 453. 15 See: V. I. Lenin, PSS, Vol 1, p 80. 112 , FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-00850R040500010045-0 _ FOR OFF(CIAL USE ONLY - 16 K. Marx and F. Engles, "Soch.," Vol 24, pp 154, 155. 17 For comparison see: "Dva podrazdeleniye ohshchastvennogo produkta (metodologiya deleniya)" [The Ztao Subdivisions of Sociai Production (The Methodology of Divid- ing)], Moscow, 1476, p 25. 18 See: V. I. Lenin, PSS, Vol 34, p 173. 19 See: PROBLEMY MIRA I SOTSIALIZMA, No 5, 1974, p 95. See: "Nauchno-tekhnicheskiy progress i revolyutsiya v voyennom dele" [Scientific- Technical Progress and the Revolution in Military Affairs], Moscow, 1975. p 32. 21 M. N. Tukhachevskiy, "Izbrannyye proizvedeniya," Vol 2, p 182. - 22 D. F. Ustinov, "Izbrannyye rechi i stat'i" [Selected Speeches and Articles], Moscow, 1979, p 425. ?3 See: "Partiya i i~rmiya," p 294. 2`' L. I. Brezhnev, "Leninskim kursom," Vol 7, p 476. 25 "Materialy Plenuma Tsentral'nogo Komiteta KPSS, 23 iyunya 1980 g." [Materials of _ the Plenum of the CPSU Central Committee, 23 June 1980], Moscow, 1980, p 13. - 26 K. Marx~and F. Engels, "Soch.," Vol 12, p 725. 27 Ibid., pp 717-718. 29 See: PROBLEMY MIRA I SOTSIALIZMA, No 5, 1974, p 91. i 29 See: A. S. Muzychenko, V. A. Baranyuk and V. I. Vorob'yev, "Avtomatizatsiya ' upravleniya tylom" [Automation of Rear Control and Command], Moscow, 1976, pp 292, 294. 30 A, A. Yepishev, "Mogucheye oruzhiye partii" [A Powerful Weapon of the Party], Moscow, 1973, pp 24-25. ~1 See: S. Kurkotkin, "Born By Great October," TYL I SNABZHENIYE SOVETSKIKH VOORUZHE?~1N5'KH SIL, No 2, 1978, p 7. 32 "Programma KPSS," p 20. 33 V. I. Lenin, PSS, Vol 41, p 164. . Ibid., Vol 35, p 288. 35 See: "Kompleksnaya programma dal'neyshego uglubleniya i sovershenstvovaniya sotrudnichestva i razvitiya sotsialisticheskoy ekonomicheskoy integratsii stran-- :.helnov SEV" [Comprehensive Program for Further Deepening and Improving Coopera- tion and for Developing Socialist Economic Integration Among the CEMA Member NationsJ, Moscow~, 1971, p 7.~ . 113 FO~t OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2407/02/09: CIA-RDP82-00850R000500410005-4 FOR O~FICiAL USE ONLY _ 36 L. I. Brezhnev, "Leninskim kursom," Vol 6, p 304. , i 37 V. I. Lenin, PSS, Vol 36, p 116. . ~ 38 PRAVDA, 4 October 1974. � 39 Since 1962, Albania has not participated in the work of the Warsaw Pact Organiza- , tion and in 1968 officially withdrew from it. 40 "Materialy Plenuma Tsentral'nogo Komiteta KPSS, 23 iyunya 1980 g.," p 14. 41 V. I. Lenin, PSS, Vol 38, p 400. , ; '+2 See: "Istoriya KPSS," Vol 5, Book 1, p 574. ' ~ 43 pRAVDA, 31 January 1974. f { _ 44 "Narodnoye khozyaystvo SSSR v 1978 g.," p 47. 45 j,,, I. Brezhnev, "Le?.~ :o.~~ni kuYSOm," VO1 5~ p 453. 46 Sze: "Boyevoye sodruzhestvo bratskikh narodov i armiy" [Combat Cooperation of " the Peoples and Armies], Moscow, 1975; "Varshavskiy Dogovor--soyuz vo imy~ mira i sotsializma" [The Warsaw Pact--An Alliance for the Sake of Peace ~ and Socialism], Moscow, 1980. ~ ! f ! ~ - ~ . ~ ! _ ~ - ~ . , ~ ; ~ _ ~ 114 ~ ~ FOR OFFICIAL USE ONLY i APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 ~ FOR 0~'FICIAL USE ONLY CHp?TER IV. THE EFFECTIVENESS OF ECONOMIC SUPPORT FOR DEFENSE Intensive management and a ghift of emphasis to effectiveness and quality are typi- cal of a developed socialist society. This assumes a more detailed understanding of the essence and mechanism of the action of economic laws; an improvement in management methods and a rise in workers' activeness in the struggle to fulfi.ll economic plans. This is why increasingly complex tasks are being advanced for eco- nomic science in the given phase and economic:education~~is assuming primary impor- tance. i The issues of increasing effectiveneas and quality are di exceptional importance -I not only in economics, but ~�?so in military organizational development. They are ~ specific, require consideration of the features in the defense sphere and, conse- ~ quently, assume a further development of military-economic science and an improve- ~ ment in the economic training of military pQrsonnel. 1. The Need, Essence and Features of an Economic Approach to Defense Problems The effectiveness of military expenditures cannot be viewed abstractly as a standard-normative category. It reflects the class essence of society and its basic economic law. If surplus value is the law of movement in the capitalist - method of production, then profit and its amount and rate are necessary com~onents - in the concept of the effectiveness of economic support for this society's military needs. The soci~l content of defense expenditures of effectiveness in a socialist society is determined by the basic economic law of socialism, which subordinates - production to fullest satisfaction of the needs and comprehensive development of workers. The comprehensive nature of development, the consuonption and the activi- ties both of an individual and of society dep~nd on saving time, wrote K. Marx. Marx considered the saving of time and its planned distribution by production sec- tors to be the "first economic law" of socialism.l Being forced to divert a portion of its personnel and funds to military purposes, a socialist society strives for that use of them in which the goal is achieved in the most economic way. V. I. Lenin stated that "the,cause of defending the Soviet republic insi~tently demands the greatest economy of personnel and the most produc- tive application of the people's labor."2 This task has special significance in the defense sphere because here we are speaking not ~ust about the expenditure and replacement of personnel and resources; the lives of millions of people and the fate of revolutionary achievements depend on the effectiveness of their use. 115 FOR OFFIC[AL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2047102109: CIA-RDP82-00850R400504010045-0 _ FOR OFFICIAL USE ONLY And so the social essence of the category of effectiveness of using funds intended . for military purposes is predetermined by the basic economic law. In a socialist society their most effective use is that wf~ich provides for a high degree of nation- = al defense with a minimum diversion of personnel and resources for the accomplish- _ ment of the direct tasks of building communism. The Greeting of the CPSU Central ~ Committee, Presidium of the USSR Supreme Soviet and USSR Counci~. ot Ministers to military personnel on the occasion of the 66th anniversary of the Soviet Armed , Forces emphasizes: "The essence of our military policy is everything for an effec- tive defense, and more than this. The Soviet Union n:aver has armed itself - for the sake of armament; it never was and never will be an instigator of the arms race."3 ~ The problem of the effective utilization of resources earmarked for defense is a specific one. It combines not only economics but also political and military inter- ests and factors. The end result which must be achieved is by its nature a politi- cal result or a military result or both simultaneously. And although it also has an economic content, in that it affects the development of productive forces and the � people's welfare in one way or another, it is directly incommensurate with economic ~ expenditures. A military-economic analysis views these expenditures as the price of the political or military effect obtained. Depending on the nature of the specific task, the unique combination of economic, political and military factors may advance to the foreground and attach decisive importanc~e first to one, then the, other. In- asmuch as different tasks are being accomplished at different levels of leadership and in different areas of military organizational development, the approach to their economic evaluation and the role of economic considerations cannot be identical. - In one instance the economic fa~tor plays a decisive role, and in another it ac- ~ quires importance only "with other things being equal." A number of specific f.eatures are determined by the fact that the effect obtained and costs connected therewith are incommensurate in the defense sphere. By virtue of this we have to compare not costs with results directly, but either compare variants in achieving a set goal by costs (minimiza~tion of costs) or, based on specific costs, select the most suitahle of possible goals (maximization of results). These are the basic kinds of tasks being accomplished in the process of a military- economic analysis. The problem of the effective use of defense-allocated resources is a complex one requiring a systems approach, strict subordination according to degree of impor- tance, a certain sequence of resolution and a precise coordinated system of criteria which consider the specific nature of tasks being accomplished at different levels of economic support of defense. Concrete examples of a scientific approach to resolution of complex military- = economic problems are characteristic of V. I. Lenin. For.example, in discussing the question of a Frogram for repair and construction of naval vessels, he said: "The entire proportion of the ship repair program must be made to conform...with the size of the fleet which for political and economic reasons we decide to main- tain." Assuming that the sum being requested for these purposes was large, Lenin suggested reducing it to a gpecific size (7 million rubles) and, based on this amount, "calculate the proportions in which this amount must be designated for particular purposes within the framework of the ahip repair program, of our ship ~ 116 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2047102109: CIA-RDP82-00850R400504010045-0 FOR OFFICIAL USE ONLY _ repair yards to metal articles needed hy the peasants.i4 This example attests to the precise subordination of problems being r.eaolved according to the degree of their importance, and of the need for a concrete analysis of the economic, political and military as~ects of the problem. - `The problem of effectiveness has its specific features at every level and in every = part of economic support of defense. At the highest level it must be viewed in _ conformity with the sum total of so:.~ial needs, interests and relationships and must be evaluated both from the position af social pruduction as a whole as well as that of the armed forces, since the former determines military-economic capacities and resources and the latter determines concrete requirements for military economics. The effectiveness of econamic support of defense in this case will appear as the ratio of the state's military might (the result) to the scale of the functioning military economic system (the costs connected with maintaining military might)--VM [military might] to VEM [military-economic might]. The meaning of this ratio is simple. If two states have identical military force, then the effectiveness of eco- _ nomic support of defense is higher for the one which achieved this result with the least scale of military economy and the fewer costs. This ratio can be presented in different forms. If we are speaking not of the status at this very moment, but of states' maximum capabilities, then military ' potential (VP) must be used in place of VM, and economic potential (EP), economic might (EM) or military-economic potential ZVEP) must be used in place of VEM depend- 1~ ing on the aspect of the problem. Either the minimization of costs at a given level ; of military might or maximization of result with given resources can be used as the criterion of effectiveness. The effectiveness of economic support of defense can be expressed quantitatively~by various indicators, which are constructed o^, the basis of a comparison of results _ ~ and costs. It is customary to characterize military might using indicators of ' troop strength, number of combat-ready divi~aions and numbers of the basic types of j weapons and combat equipment in armiea of t'ne belligerent countries. Corresponding j data are given in abs~lute proportions and in relative terms, as of a specific ~ moment and in the dynamics. Data on human resources, the amount of productive ~ capital, production volume of basic kinds of products, the gross product and nation- al income are used as indicators of economic potential and of economic and military- economic might. The different forms of comparison of these two groups of indicators are the concrete indicators of effectiveness of economic support for defense. Noze of the~ pretends to be universal. Eact~ one describes effectiveness only to a cer- tain degree and highlights only a certain aspect and a separate side of it. For example, the ratio of troop strength to human resources snows the degree of their mobilizations and the ratio of the amount of weapona supplied to troops to economic resources describes the effectivsness of resource utilization for military purposes. A ratio given previously is very indicative: with approximately 3-4 times less steel and 3-3.5 times less coal, the USSR produced twice the combat equipment of Germany during the Great Patriotic War. These data persuasively indicate that the Soviet Union subordinated economic resources for winning victory in the war more fu11y than did Germany and used them more efficienxly. The effectiveness of economic support for defense ia shaped on~ the basis of the ef- fectiveness with which all component elemei~ts of the military economic systems and 117 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-40850R040500014005-0 FOR OFFICIAL USE ONL1' all its parts functian. Therefore specific critexia and indicators of effective- ness characterizing the work of each section of the military-ec~nomic system and each stage of the military-economic process are of exceptionally great importance for its optimization. Specific criteria are~constructed so as to reflect the spe- cific nature of the section being described, and at the same time so as to enter the framework of requirements of general effectiveness criteria. Here a breakdown ' of the process of ~conomic support for defense may reach the primary part of each structural unit: the enterprise, shop, brigade and work station in the production unit and to the lowest section, service or subunit in the logistical support system. Optimum functioning of the ~ilitary-economic system assumes the presence of a de- veloped system of ~rutually related, precisely subordinated criteria for its optimi- zation. Effectiveness criteria for its primary part--military production--are the next ef- fectiveness criteria of the military-economic system in rank. With respect to the production costs of military goods, their measurement bears no substantial features or differences at all from the measurement of resaurces of public production.. The result, on the other hand, is very specific--it must be measured not only with an economic yardstick, but with a military one as well. Herein lies the chief diffi- culty for developing an effectiveness criterion for military production. Based on - the purpose of the military-econamic system, the result of functioning of military production is determined not only by the amount of manufactured product~, but also - by what kinds of weapons and comb3t equipment are produced and how the aggregate - combat effect expected from the use of these weapons and equipment is correlated - with costs. For example, trie Soviet T-34 tank was~one of the most effective kinds of weapons in World War II. It is believed that the colossal expenses of the V-2 were not repaid by the effective operation of this kind of weapon, and that fascist Germany's only weapon meeting the demand of maximum effectiveness with minimum ex- penditure of personnel and resources for its production was the antitank rocket launcher, the Faustpatrone.6 Selection of weapon systems has assumed exceptionally great importance in the modern scientific-technical revolution. No matter how well and economically organized military production may be, there can be no mention of its high effectiveness or that of the military-economic system as a whole if tre weapons being manufactured are obsolete or do not correspond to the nature of misaions assigned the armed forces. That means a comprehensive and scientifically substantiated approach is needed to determining military production programs with consideration of the very latest achievements of military-technical thinking and the demands Af modern mili- tary art. The development of precise criteria of military production effectiveness is a necessary condition for success in this matter. This is a complex knot in - which technical, economic and military p~oblems are intertwined, which require a complex approach and the use of economic-mathematical modeling and modern computer technology. The problem of effectiveness of the armed forces rear and the entire system of their; logistical support is no less spec~.fic. The effectiveness of this part of the military-economic system can be defined as the capability of providi~g troops with weapons, combat equipment and other military goods on a timely basis, in the neces- sary amounts, with the necessary assortment and with minimum costs. The determina- tion, measurement and quantitative expression of the results of work represent ~ 118 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2047102109: CIA-RDP82-00850R400504010045-0 FOR OFFICIAL USE ONLY � great difficulty. We will touch on *_wo specific problems without going into the special issues in the work of the armed forces rear. _ The first problem is what should be considered a result, how it is to be measured and what indicators should be used to express it. Different indicators are beiag used: the amount of ammunition, fuel, rations and other military goods supplied to the troops and used by them for an entire war, for an operation or for one day in physical indicators (tons, standard rail cars, and so on); the amount of food prod- ucts procured, shipping volume by different kinds of transportation; amount of re- pairs performed, and so on. The question of a development of generalizing indicators for ihe operation of the armed forces rear thus arises above all, but matters are not reduced 3ust to this. In describing the amount of work performed by the rear, all these indicators are insufficientl~ tied in with results of troop activities,. The fact is that logisti- cal support is not a goal in itself, but the m~ans to acnieve z goal assigned to the troops. Therefore, the most important cha;~acteristic of the rear's effective- ness should be considered its conformity to the missions of the armed forces and its direction toward their achievement. If such conformity is absent, an increase in the amount of rear activities may not signify an increase in effectiveness; moreover, it may lead to a drop in effectiveness. As an example, let us refer to the evidence of American military economist Eccles, who analyzed the activities of ~ the supply service during World War II and concluded that "the volume of logistical work tends toward an uncontrollable expansion or exceeding of the bounds af any - reasonable proportions...." He wrote that there were inatances where American naval supply units "operated so inefficiently that they not only did not contribute to support of the f leet, but, to the contrary, became the chief consumers of sup- plies coming to it."~ It follows from what has been said that the work effecti~~eness criteria and indi- cators of the armed forces r.ear must be linked with the end result of troop activi- - ties or else they will not serve for optimization of the logistical support system to the proper extent. The second problem concerns a determination of the contribution of the armed forces rear toward attainment of the overall result, an.d an elimination of the distorting effect of external factors on work effectiveness indicators of the rear. The f~ct is that particular features of military production on the ~ne hand and features of troop activities on the other influence the work effectiveness of the rear. High mobility of war production and the capability to adapt rapidly to changing troop requirements permits a decrease in stockpiles of military goods in the lowest parts of the mi~itary-economic system and a reduction in costs involving attainment of a specific effect. And to the contrary, if production does not ensure the prompt fulfillment of troop requests, this has a negative effect on the work effectiveness of the arme~ forces rear. Various features of troop operations also have a sub- stantial inf luence on it: their disposition (the compact or excessively extended nature of lines of communication affects the volume of logistical work); their combat skill (it has a direct influence on the amount of ammunition, fuel and so on ' required for performing.a combat mission); the operational-tactical and military- economic competence of the command, and so on. 119 FOft OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-40850R040500014005-0 FOR OFFICIAL USE ONLY Both problems lead to the idea of an ever-increasing universalization of military- economic knowledge and the need for it to train h~ghly qualified military person- nel. There we~e instances during the war, recalls M~r SU G. K. Zhukov, when "tens of thousands of tons of ammunition were put out witout resuit. And how many un- substantiated and unjustified regroupossalaamount~ofefueliand other~costlyematerial were pexformed during the war! A col ~ was consiuned for all this and, most important, the people's efforts were spent without any benefit."e This emphasizes once again the importance of military- economic training not only for military personnel engaged directly in military- economic f unctions, but also for commanders and political workers. Speaking at the - Ali-Army Conference for Improving Troop Welfare, USSR Minister of Defense Mar SU D. F. Ustinov expressed this idea very clearly. "There is a need to imp~ove the - style of all our economic work and achieve its highest effectiveness," he saoliti- "We leaders must be the example in this. Commanders-in-chief, commanders, p cal workers and supply service workers are not simply people holding particular posts, but active conductors of party policy in our Armed F9rces, irlc:luding in the sphere of economic organizational development within them. 2. Military Economics as a Science and Its Significance in Training Military - Personnel The training of highly qualified mi?itary economists and the raising of th~ economic education of all Soviet Army and :~avy s~ecialis~s and all military personnel is a necessary condition for hig~- effectiveness in utilizing funds earmarked for defense. Life suggests that every ~~fficer now must be familiar with a broad range of military-� economic issues both of a general theoretical and applied nature. He has to know the operating features of economic laws in the defense sphere and master the funda- I - mentals of military-economic analysis and an approach to daily tasks with economic criteria so as to raise the effective use of funds and physical assets and the ef- fectiveness of all ndrfor increasingitheirgactivenesstinccombatetrainingiandCimprrnr- tion of personnel ing efficiency. A well-developed and differentiated system of such education has been created in - the~country on the basis of resolutions of congresses of the party, which teach that economic education of all cadres and broad masses of workers acquires primary - importance in the present stage of building communism. It is in this system that many millions of workers ~f industry and agriculture acquired economic knowledge. In further developing economic education, the party i~ striving to ensure that it contributes to the maximum disseminatiion of foremost experience of labor organiza- = tion everywhere nndotoAllethisralsotappliestfullyhto~theneconomicieducationtofhoffi- ogy in productio cers and all military personnel. A study of Marxist-Leninist political economy and ather economic sciences comprises the basis of economic education. Economic laws dictate behavioral logic for every Soviet citizen, including military personnel. By arming a person with ~ knowledge ~ of objec~tive economic laws, political economy permits a correct evaluation of states' miliLary-economic capacities and an understanding of the features of their realization as determined by a given economic and political system. But in oider to take account af the demands of economic laws in the military sphere knowledge- _ ably, it is absolutely necessarq for a person to have a knowledge of military 120 FOR OFFIC[AL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL USE ONLY - science as well as of concrete military-economic and special disciplines, and he needs a specific goal orientation for this knowledge. 1~Iilitazy-economic theory contributes to this goal orientation. Its study provides the necessary connection between political economy and other economic sciences on the one hand and with military sciences on the other. It activates and integrates this knowledge and r permitis an understanding of the operating features of economic laws in the defense _ sphere and mastery of the methodology of an approach to and proper accounting of their requirements in daily military activities. In addition, in training engineer and economic cadres, it is the general theoretical base for specific mil3.tary- economic disciplines being studied, it allows a detailed comprehens ion of' their content and performs a methodological f unction with respect to them. Let us dwell on the question of the sub~ect and place of the theory of military ec~nomics among - other sciences. It was explained in Chapter I that military economics as an ob3ective reality has - two 3spects: technical-economic and socioeconomic. The first aspect is studied by military-technical and special sciences, while the second, i.e., social relation- ships formed in connection with the production, distribution, exchange and consump- tion of military goods, is studied by the theory of militaiy economics. Having originated on the boundary between economic and military sciences and relying on them as its basis, the theory of military economics makes extensive use of their scientific apparatus. For example, the categories "military-economic potential," _ "military production" and "military consumption" are derivative from the categories "economic potential," "production" and "consumption" and express interrelationships - and phenomena simi~ar to those reflected in the given categories of political econo- my. The presence of general elements in these phenomena permits us e of one and the same categories. At the same time, the specific nature of the~e phenomena in the sphere of military economics is emphasized by the attribute "military": military production, military consumption and so on. Use of these categories, a clarifica- tion of the specific nature of the action of laws uncovered by poli tical economy in the sphere of military economics, reliance on provisior.s of military sciences, and application of the material of specif ic economic and military-technical disciplines comprise a necessary condition for developing a truly scientif ic me thod and a sys- tem of categories, laws and principles of military-economic science. - The most essential aspects of military-economic relations and the s table cause-and- effect ties between phenomena and processes in military economlcs f ind their reflec- tion in objective laws. Penetrating deeper and deeper into the essence of military- economic relations, military economics as a science uncov~rs the laws and principles internally inherent to them and the mechanism of their action and use. An increasingly deeper penetration into the essence of military-economic relation- ships and processes presumes an understanding not only of their qualitative aspects, but of their quantitative definiteness as well. The possibilities of a quantitative expression of particular military-economic processes are predetermined, on the one hand, by the nature of these processes and their inherent dialectics of quantity and quality and, on the other hand, by the level of science development, i.e., by the degree of understanding of the essence of these processes and by successes of mathematics and computer technology in the matter of their formalization. - 121 = FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/42/09: CIA-RDP82-00850R000500010005-4 FOR OI~ FICIAL USE ONLY ' The except.ional compTexity of the relationshipa they e~ress and the high degree of i abstraction is a feature of economic laws. In describing economic laws, F. ~ngels ; wrote that "none of them have any other xeality than in an approximation, in a ' trend, in an average, but not in,dir ect actuality. This occurs in part because - their action crisscrosses with the simultaneous action of other laws and in part as a result of their nature as concepts."11 For example, studying the dynamics of the average prof it rate, K. Marx identifies first of all the main interrelationship-- the inversely proportionate depen3ence of the amount of the profit rate on the level of organic construction and turnover time of capital; and secondly, the large number of factors counteracting a reduction in the mean prof it rate and giving its law the nature only of a trend toward reduction. The features of economic laws generate a skeptical att~tude toward their mathemati- cal interpretation in some economis ts and mathematicians. For example, N. Wiener, one of the originaLOrs of cybernetics,~~elieved, in emphasizing the complexity and dynamic nature of econom~c phenomena, that it was "useless and dishonest" to ascribe a special to econom3c values and "decep tion and an empty wasta of time" to apply precise formulas to them.12 With respect to the laws of military economics, these features stand out even more starkly in them, since here we are dealing with secondary, derivative relationships, and a need to consider overlapping actions of economic laws, laws of and militaxy-economic laws and principles. Nevertheless, an ever-deeper understanding i of the essenc~ of these relationship s, clarification of the action mechanism af = their inherent laws and the level of development reached by mathematics and computer technology have opened up new oppor tunities for creating mathematical models of economic, including military-economic, processes. The works of academicians L. V. . Kantorovich and V. S. Nemchinov, pr ofessors V. V. Novozhilov and A. L. Lur'ye and - others made an important contribution to this matter. In recent years the quantita- tive aspect of military-economic phenomena is attracting more and more attention of military economists. Based on the general law of war's dependence on economics, military-economic science - studies concrete forms of their interaction determined by the given level of eco- nomic development and its inherent method of warfare, i.e., it studies above all historically concrete methods of economic support of wars. By clari=ying available - economic capabilities and demands of warfare and the content of military-economic relations forming objectively on these bases, it reveal� natural ties of military- economic phenomena and processes inherent to a given stage of development. By studying them in close connection with the technical aspect of military economics, it serves as a theoretical basis f or comprehending concrete manifestations of these principles in individual sectors of military-economic efforts (transportation, supply, finances and so on), which are studied by sectorial and special military- , economic disciplines. The theory of military economics is li.nked with these dis- ciplines, relies on their data, generalizes them and is enriched and developed as a result of the interaction with them. Concrete methods of economic suppor t of wars are examined in their development. . Military economics is linked with economic history and military-historical science and has its own history. What occurs is not a simple accumulation and systematiza- tion of knowledge (laws, categories and principles) which reflect processes of the economic support of warfare more and more fully and correctly. In time, certain - 122 ' FOR OFFIC[AL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007102109: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL USE ONLY conclusions of military-economic science lose their significance while others are updated and transformed. New fields of science open up and new problems appear simultaneously with this. And so military-economic relations in their integrity are the sub~ect of the theory of military economics. In st~dying the relationships of production, distribution, exchange and consumption of military goods in their internal unity and causality and in their interconnection with the technical aspect of military economics, with all economics and with political and militsry affairs, military economics, as a science, clarifies ob~ective laws and principles of economic support for wars in different stages of historical develo~ment. Together with other economic, military and spe- cial sciences, it is called upon to substantiate scientifically the most effective solutions to contemporary military-economic tasks of defending the socialist home- land and maintaining a constant combat readiness guaranteeing an immediate rebuff to any aggressor. Military economics is a profoundly class, party science. In its goals, method, class-political character and ideological directions, it is the opposite of various bourgeois military-economic teachings. In serving the selfish interests of the im- perialist bourgeoisie, these teachings are reactionary and antiscientific. Serving the high goals of defending socialism and the building of communism, and the cause _ of peace and progress represents the firm foundation of the genuine scientific and progressive nature of socialist military-economic theory. The struggle of the two ideologies is especially acute in the military-economic ~ sph.ere. Bourgeois military economists deal not only in questions of aggressive wars, but also in their justification. In contrast to this, the military-economic science of socialist society exposes all a~ologies of militarism, reveals the true substance and reactionary nature of imperialism's military economics, and clarifies the need, features and advantages of socialist military economics and ways of real- izing them. In the process of its development, every science develops a method corresponding ~ to its subject and tasks. The development of military economics as a science is linked inseparably with the application of laws and categories of materialistic dialectics to an analysis of the economic support of wars. This permitted identify- ing military-economic relationships from among the sum total of social relation- ships and clarifying their natural link with the development of economics, politics - and warfare, the dialectical unity of which is determined by the development of the economic support of wars. The alternation periods of slow evolutionary changes and revolutionary ~eaps marking a change in the methods of economic support for wars arose as ~ result of corresponding natural processes in the development of produc- tive forces, production relationships and the political superstructure. The laws and categories of materialistic dialectics are the basis for understanding specific military-economic principles and cat~gories. .The method of military economics is nothing more than concretization of dialectical materialism as applicable to its features and tasks. It is characterized by the braad use of mathematics and elec- tronic computer technology for the purpose of understanding the quantitative rela- tionships of processes being studied as well as for modeling military economics and developing the foundations of military-economic analysis and criteria for selection of optimum solutions. The need for considering a wide range of factors relating only to strictly military economics, but also to the entire national economy, 123 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2407/02/09: CIA-RDP82-00850R000500410005-4 FOR OFFICIAL USE ONLY . ; f politics and warfare, and the need for comparing and correlating quite heterogene- ous phenomena of economics and warfaxe reinforce the importance of a universal - method--materialistic dialectics--for military-economic science. Military economi'cs as a science studies a most important field of military orgahiza- i tional development, and this determines its importance for training military cadres : and elaborating the most important theoretical and applied problems of economic support of the armed defense of socialist countries. In training com~?anders, polit- ical workers and specialists in various areas, it is important to arm them with a ~ system of military, economic and special knowledge revealing the complex mechanism ~ of objective laws by which the military organism functions, including military- ' - economic laws. This is what goes to create the foundation on which the high politi- ~ cal awareness of military personnel and their desire to work imaginatively and zealously, thus achieving high effectiveness in utilizing resources earmarked for defense, alone can be realized in concrete deeds. A knowledge of military economics is necessary for developing the correct over-all view and con~rete methods and i methodologies of military-economic analysis, which is beginning to receive increas- ; ing emphasis in the work of army and navy economic and engineering-technical spe- cialists. The methodological function of military economics is of very great im- ~ portance in training personnel. ~ The growing importance of economic education of military personnel is re�lected in ~ ~ the programs of military educational institutions and the command training system, in agitprop work and in the military press. This is quite natural, since the task ; of improving the economic training of officer personnel can be accomplished success- ~ fully only on condition of universal attention to it and complete use of available _ reserves. No matter how much the training process improves in academies and schools and no ' matter how much the propaganda of military-economic knowledge is bettered, the offi- i cer's independent work will of course remain as before the basic method for increas- ing his level of econamic education. As a rule, independent work introduces a certain goal-orientation, inventiveness and interest in training, since it usually - contains an impetus coming from life and from day-to-day work and a search for answers to questions posed by practical work. The most important element in independent work is above all a detailed and imagina- tive study of the works of Marx, Engels and Lenin and documents of the CPSU and Soviet government. They contain the foundation of success, since works by the founders of Marxism-Leninism have a permanent ideological and methodological impor- tance and their study helps develop a correct approach to contemporary military- economic problems. Marxism-Leninism created an ordered teaching on war and the army, it revealed natural interrelationships of war and economics, and clarified the ~ = essence, class nature, place and role of military economics. The works of Lenin for ~ the first time provided a scientific analysis of economic principles of imperial- ! istic wars, of the essence of "a capitalist economy for war" and military-state - monopoly capitalism, and of a broad range of military-economic problems of imperial- ism. Lenin formed the foundations of Soviet military economics as a science and provided ingenius examples of a practical solution to problems of economic support of the de- fense of socialism. A study of Lenin's work is a necessary condition for thorough . mastery of military-economic science. 124 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL USE ONLY It is important in any matter not only to master knowledge, but also to acquire an . ability to apply the knowledge obtained. aataples o~_a capable implementation of theoretical conclusions are provided by the many-sided work of the Communist Party in the f ield of economic support of national defenae. Its basis conaists of Lenin- _ ist ideas on the importance of the state~s economic organtzation, on the unity of the front and rear, on the entire country~s conversion to a single military camp during war, on the need for serious and comprehensive preparation for the defense of socialism and others. How did the party apply them in fact and how did it de- velop them? An answer to these questions is provided by corresponding party and state documents and by the works of L. I. Brezhnev and other par.ty and state leaders. A study of them arms one with knowledge of practical party experience and _ the method of an imaginative approach to tasks of economic support of a defense of socialism's achievements. There is a very rich material contained in the basic works by collectives of Soviet scientists devoted to the Civil and Great Patriotie wars and in works by Soviet state, party, Fconomic and military workers. They cover specific issues of economic support of ou~~ motherland's defense in various phases of its historic history. They clearly and pexsuasively show the basic features and advantages of Soviet military ~ economics and expose the reactionary teachings of the apologists of imperialism. , Works dedicated to contemporary military economics are of special interest. In refuting bourgeois military-economic teaching on the main, fundamental points, it is impossible not to see or take account of developments on specific military- economic problems in capitalist countries. Take, for e~nple, the system for eval- uai:ing and substantiating decisions in the field of military organizational develop- ment, the so-called PPB (planning-programming-budgeting) system. According to - foreign specialists, the effectiveness of resource utilization is increased as a result of its application. For exampl~, the U.S. Defense Department used it to es- tablish the irrationality of a large number of systems under development (the B-70 bomber, Skybolt air-launched missile) and rejected them. Conversion to the PPB system facilitated development of a standardization of military products. For ex- ~ ample, while there were 78 types of internal combustion engines of '~-20 hp in the U.S. Armed Forces in World War II, now a total of six models have been developed for - this range of power and the number�of parts for manufacturing engines has been cut tens of times.13 There is no doubt that the PPB system facilitates a rationaliza- tion of imperialism's war machinery, but in serving the interests of the military- industrial complex it is being used to intensify the arms race. With respect to general theoretical matters, bourgeois scientists capable of providing valuable work in specialized fields cannot be believed one bit when the talk turns to general theory. Lenin directed attention to this repeatedly, emphasizing that the bourgeois "professor-economists are nothing more than learned henchmen of the class of capi- talists...,"14 3. Currer~t Issues of Mi?itary-Economic Theory and Practice New opportunities for productive studies both of a general theoretical and basic nature as well as of an applied nature, open up at the boundary of different sci- ences. riilitary economics is the 3unction point in which social and natural sci- ences, economics, politics and military affairs interact. There is a broad field for study here and its currency and importance is exceptionalJ.y great. 125 FOR OFFICIAL .USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFFICIAL USE ONLY An increase in the role of basic, general zeseazch i.s a genexal feature of modern times. The correctness af words to the e~fect that thexe is noth- ing more practical than a good theory is especially undexstandable under conditions where science more and more is becomi,ng a direct productive force and when the gap between ma~or scientific discoveries and theix realization is being reduced sharply. The present practice of financing scientific research and~development projects in developed countries, including the USSR, attests to the fact that approximately one-third of appropriations are spent to conduct scientific research and two-thirds ~for development work. At the same time one notes a certain increase in the share - of appropriations for basic research. Every science has its own general theoretical and applied tasks, and they are present in military economics as well. General theoretical research has acquired , special urgency. The fact is tnat essential changes are occurring in economic sup- port of defense. They are caused, first of all, by the rapid development of produc- tive forces and economic capacities as a result of the scientific-technical revolu- tion; secondly, by the resulting revolutionary transformations in the means of armed warfare and in military affairs as a whole; and thirdly, by the dynamic process of opposition of the two world systems--capitalist and sociali~*_. These � changes concern not the individual aspects of economic support for defense, but rather encompass the entire system of military-economic relationships as a whole which are being improved constantly. Therefore, it is necessary to have systematic, complex general theoretical research in the field of military economics which per- mits delving deeper into the essence of military-economic processes, reflecting them in the form of a strictly subordinated system of laws, categories and princi- ples; to generalize and systematize the knowledge gained in concrete economic and military disciplines; and analyze current military-economic activities. These are necessary conditions for the scientific substantiation and perfection of the state's military policy and of all endeavors in the field of economic support of defense. As the essence of military-economic processes and their qualitative aspects are clarified, the center of gravity shifts to their quantitative cY~aracterization, to the conduct of applied military-economic research and to the development of practi- cal reconunendations on the most important tasks and directions of economic support of defense under presenC-day conditions. The level reached in development of math- ematics and computer technology creates new opportunities for mathematical modeling of military-economic processes, but these opportunities can be realized only on the basis of broadening the~understanding of the essence of military-e~conomic phenomena and their inherent objective laws. Therefore a detailed theoretical elaboration of military-economic categories and laws as a single, thoroughly articulated and strictly subordinated system has become~the primary task of the general theory of military economics in the present stage. This is a complex, many-sided task requir- ing methodological unity and coordination of efforts of different collectives specializing in specific areas of work. Z~ere are numerous outputs from it to con- temporary practical military-economic activity, since it is inseparably linked with a proper understanding of the essence and main trends in development of military economics and ways of strengthening military-economic potential, with an increase in effectiveness of utilizing funds allocated for defense, and with questions of _ personnel training. Those basic directions of economic support of national defenses mentioned in the first chapter draw attention above all among the rather broad range of current 126 ~ _ FOR OFF[CIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-4 FOR OFFICIAL USE ONLY military-economic problems. Each of them requi.zes a theoxetical elaboration on the basis of a complex approach.. ~n addition, there are protalems permeating all directions of military-,econotaic endeavor. 5trengthening of the military-economic potential is oae of the basic areas of eco- nomic support for ~efense and at the same time one of the fundamental problems of military-economic science. A comprehensive studq of the content and structure of military-economic potential and of its interdependence with economic and military might is necessary for a study of the military-economic capabilities of one's own state and of probable enemies, of the existing balance of forces and of their dynamics; and it is necessa.ry for developing military policy and doctrir:.e. Oppor- tunities are especially broad here and there is an especially insistent need for applying achievements of mathematics and contemporary computer technology. There - must be a theoretical elaburation of the methodology and procedures o� mathematical modeling of social reproduction. A special complexity is presented by an account- _ ing for the effect of socioeconomic factors on the dynamics of economic might and military-economic capabilities. Practical studies of the military-economic capa- bilities of individual states and coalitions must develop on the basis of the solu- tion to theoretical problems of military-ecQnomic potential. Economic mobilization. With the appearance of military needs, a differentiation of military and civilian production occurs, specific interrelationships form between them, and the problem of a proper distribution of personnel and resources intended for satisfaction of particular social needs arises. Study of the interrelation- ~ ships of military and civilian production in each phase of development is a neces- sary condition for clarifying the limits of economic mobilization, the magnitude of the military-economic potential, optimum ratios of military and civilian prodt~ction, ways and methods for military reorganization of the economy and a number of other problems which must be solved in order to develop the most common guidelines in the field of economic support for defense. The study of this group of relationships - has been ~iven especially great attention since World War I, which required the reorganization an3 subordination of the entire national economy of warring states to the satisfaction of military needs. Nevertheless, these issues are very current even today, since fundamental changes in the method of economic support for defense _ and warfare which occurred in the postwar period introduced much that was new to the interrelationship of military and civilian production. One of the features of economic mobilization in the present stage is its multiple variants, determined by the possibility of quite varied wars, requirements of which for a military reorganization of the economy d3ffer substantially in content, scale and time. Another feature consists of the sharply increased importance of mobility of the economic system. The economic system must adapt rapidly to changing condi- tions and needs of warfare, caused first of a11 by fihe multipl~ variants of economic mobilization; secondly, by the fact that the scope and composition of military needs in the era of scientific-technical revolution are subject to frequent abrupt changes: in peacetime, let alone in wartime; and thirdly, by the fact that the status and - conditions for the functioning of the national economy also will change often and abruptly in modern warfare as a result of a reinforcement of its fluid nature and sharply increased capabilities of armed influence on the economic aystem. This adaptability depends on preliminary preparation for possible reorganizations. Economic-mathematical modeling of corresponding processes and the playing through 127 FOR OFF[CIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2047102109: CIA-RDP82-00850R400504010045-0 FOR OFFICIAL USE ONLY of different variants of economic mobilization as well as variants for restoration of the economic system subjected to armed pressure on the part of the enemy help , understand the make-up and character of necessary preparatory measures. Relationships in the process of production of military goods make up a m~st impor~ tant group of military-economic relationships. As has been explained, in the nar- row sense of the word, military production signifies the production of the end military product going directly to the troops. It plays a decisive part with re- spect to ether phases of the milit_ary-economic process--distribution, exchange and consumption. At the saMP time, military production is the chief structural element - of the military-economic system, since the character, quantity and quality of wea- pons and combat equipment being produced deteruiine the possible scale and character of military consumption, the system of troop supply and activities of the armed forces rear as a connecting link between military production and ultimate military consumption. By virtue of this, studies of relationships in the sphere of military production have a fundamental, key importance in the understanding of relationships and processes occurring in oth~r elements of the military-economic system. Military production must be examined not only in the narrow sense, but also in the . broad sense of the word, having in mind the entire system of relationships connected with economic support of defense. In this sense, along with producti.on of the end military product, it also includes production of ineans of production for military production and production of consumer goods for workers engaged in military produc- tion. A broad approach to military production is necessary first of all because it provides a key to solving problems of economic mobilization already mentioned; and secondly, because without such an approach it is impoESible to understand the social essence of military production and features of its functioning stemming therefrom. Since military production is based on production in general, features of the his- torically concrete method of production with its advantages or flaws directly affect it. Advancement of the task of achievements of the sci2ntific-technical revolution organically with advantages of developed socialism also is of fundamen- tal importance for the military-economic system and its effectiveness. Finally, an examination of military production in the broad sense is necessary in the interests of a systems approach to economic issues in a single military-technical policy, - since it cannot be separated from the common front of scientific-technical progress. Problems of military distribution and consumption and consequently of the organiza- tional development and functioning of the economic organism of the armed forces, hold a special place in the range of military-economic problems. As has been noted, military distribution and consumption in peacetime serve combat training, and in wartime they serve armed warfare. In this sense their study is a subject of mili- tary science. At the same time, however, military distribution and consumption are the intermediate and final phases in the process of functioning of the military- economic system, and the economic organism of armed forces is a link within it. That means these problems have an economic content which military-economic science - is called upon to reveal. This is necessary for a more effective and economic solu- tion to corresponding problems of military organizational development. ~ Issues of logistical support have attracted the attention of many sciences and many - researchers. There are scientific research institutes in western countries engaged _ in problems of logistical support. For example, an Armed Forces Logistics Manage- ment Institute was set up in the United States in 1961. It drew up programs for 128 ~ FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2407/02/09: CIA-RDP82-00850R000500410005-4 FOR OFFICIAL USE ONLY supply economy and fighting surplusea and for auch procurement methods as incentive , contracts and fixed-cost contracts. In view of the fact that problems of logisti- cal support are within the sphere of many sciences, their study requires a complex ' approach and coordination. The problem df effective use of funds earmarked for defense is a problem which per- meates all aspects of military-economic endeavor. This problem is not just one of military-economic science. The highest effectiveness of military economics will be reduced to naugtxt if military leaders and the commanders have not developed the de- sire and ability to win victory with fewest losses of inen and materiel. "The problem of the economic utilization of human and m~aterial resources in a period of war has been and always will be one of the most important,"15 noted Mar SU G. K. ~ Zhukov in a foreword to N. A. Antipenko's book. The complexity and multifaceted nature of the problem of effectiveuess assumes the need for developing its general methodological principles designed to assure a uni- form approach to solving concrete problems of effectiveness in all defense spheres. , On the other hand, the development of simple, rather precise particular methods of military-economic analysis easily uraderstood by appropriate specialists is an appro- ' priate condition for achieving high effectiveness of the military-economic system - as a whole, of each of its individual parts, and of specific decisions by commanders of all ranks. The work of raising the effectiveness of all kinds of military en- deavor and all structural elements of the Armed Forces is being analyzed more and more under conditions of nationwide attention to problems of effectiveness and qual- ity. A comprehensiva development of Soviet soldiers' creative activeness, of ra- tionalization and inventiori, patriotic initiative and socialist competition, and an upswing in economic work among the croops are very effective means for rational- izing the economic organism of the Armed Forces and for increasing the effective- , ness of military wark. The study of international military-economic relationships i.s one of the current and very difficult complex problems. This problem assumed special acuteness and importance in the p~stwar period in connection with the formation of two world sys- tems and the rapid development in each of them of integration processes which encom- passed economics, politics and military affairs--all aspects of state life. - External military-economic relationships in the capitalist world have colossal scope and importance. New forms have appeared as a supplement to the traditional form of these relationships--the arms trade, which saw exceptionally great development in tlie postwar years: military assistance, military production on the basis of foreign licenses, joint research, development and production of armaments, the creation and development of a military infrastructure on the territory of countries participating in aggressive military blocs and so on. It is impossible to assess the real scope and basic directions of physical preparation of war by aggressive forces or to understand the actual processes occurring in the military economic system of im- perialism without a thorough analysis of ail these forms. In solving all military- economic problems at any level one now has to take account of their international aspects. When we speak of military-economic potential, we must examine it in a - system of states and in the make-up of a coalition. When we study military produc- _ tion, we can evaluate it correctly only with consideration of the international division of labor. But it is not only problems of production; economic mobilization 129 FOit OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 FOR OFF[CIAi. USE ONLY and vitality of the economy which have an international aspect. Also questions of transportation, comanunication and troop logistical support are reso]_ved with con- sideration of the capabilities and interests of a coalition. - A developed system of military-economic relationships also exists in the socialist community of countries, as mentioned earlier. It is fully understandable that a : comprehensive study of coalition problems and their consideratibn in military- economic activity is necessary for realization of the advantages of a world social- ist system. Generalization of the experience of economic support for wars in defense of social- ism is one of the important tasks of military-economic science. This experience permits a deeper understanding of the advantages of socialism and ~he art of their realization. The decisive role of the Communist Party's management activities was ~ - displayed in all its greatness during the Civil and Great Patriotic wars. It was - thanks to these activities that all sources of strength contained in the socialist social and state system were used fully for victory. The need has matured to create a scientific history of the military-economic system of socialism and illuminate th~s important aspect of the many-sided proce3s of struggle for establishing social- ism. This is a task which goes far beyond the narrowly specialized military- economic framework. ' The history of the military economic system from its inception to our days, as ~ written from a Marxist position, would have very great importance along with the ; creation of the history of socialist military economics. This would be a document ; of supreme importance. Historians have estimated that some 15,000 wars have taken place over the last 5 millennia. Some 4 billion~persons perished in these wars, ' which approxi.mately equals the entire present population of earth. Capitalism and imperialism brought the most disastrous of them. Lenin saw in victorious socialism for tiie first time in history the appearance of a ghysical force capable of oppos- ~ ing war."16 Now the Soviet Union and other socialist countries are a reliable bul- � wark of peace and the center of gravitation of all peaceloving forces. ; These are the most urgent problems of military-economic science. They are closely % interconnected and interd~pendent, being successive links in a single process of ' economic support of defense of the sacialist state. Close interaction and precise coordination of the work of collectives engaged in elaborating them is a necessary ~ condition for successful resolution of these problems. The presence of a single ~ theoretical and methodological base is the main coordinating factor here. ; 1 I ~ ~ FOOTNOTES ~ 1 See: K. Marx and F. Engels, "Soch.," Vol 46, Part I, p 117. I 2 V. I. Lenin, PSS, Vol 37, p 367. ; 3 PRAVDA, 23 February 1978. 4 Lenin, op. cit., Vol 45, pp 312-313. . - 130 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0 - FOR OFFIC[AL USE ONLY 5 See: P. V. Sokolov, "Voyna i lyudskiye resursy" [War and Human Rasources], Moscow, 1961, p 51. 6 See: "Itogi vtoroy virovoy voyny" [Results of World War II], collection of articles, Moscow, 1957, p 362. ~ H. Eccles, "Rol' tyla v voyne," pp 112-114. 8 Quotation from the book: N. A. Antipenko, "Na glavnom napravlenii," p 17. 9 A. F. Ustinov, "Izbrannyye rechi i stat'i," p 411. 10 See: L. I. Brezhnev, "Leninskim kursom," Vol 5, p 537. 11 ~rx and Engels, op. cit., Vol 39, p 355. 12 N. Wiener, "Tvorets i robot" [The Creator and the Robot], Moscow, 1966, p 100. - 13 See: Yu. S. Solnyshkov, "Ekonomicheskiye faktory i vooruzheniye" [Economic Factors and Armament], Moscow, 1973, p 64. - 1~ Lenin, op. cit., Vol 18, p 364. 15 ~tipenko, op. cit., p 17. 16 M. Suslov, "Historical Truth of Lenin's Ideas and Work," KOMMUNIST, No 4, 1980, - p 27. COPYRIGHT: Voyenizdat, 1981 END 10272 CSO: 8644/1848 131 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500010005-0