Central Planning in Czechoslovakia: Organization for Growth in a Mature Economy

By Jan M. Michal | Go to book overview

planned increases in output and in productivity of labor (see A. Production drive).25 Keeping the increase in personal incomes below the increase in output and in productivity of labor as an anti-inflationary device is discussed in Chapter 7.

On the other hand, it is noteworthy that--in contrast to the first industrialization drive of 1950-53--with decreasing output of consumer goods, inflation, and decreasing real incomes, the planners now take care to maintain a steady though moderate increase in consumption by the population, especially of consumers' manufactures. This serves not only to raise the standard of living but also to withdraw excess liquidities from circulation via high turnover tax on durables and, curiously enough, to promote a propensity to save.26


Summary

If the third Czechoslovak Five-Year Plan is fairly fulfilled, the average yearly rate of growth in the "material sphere of production" would be around 8 per cent, of which the rate of growth in industry would be around 10 per cent (in terms of "net value" by Marxist definition and by official pricing; the yearly growth of the official index of gross value of production is planned to be slightly less, 9.4 per cent). Real per capita personal income is planned to increase by slightly less than 4 per cent per year, and personal consumption by Marxist definition by slightly over 5 per cent. Assuming that the change in output in the "immaterial sphere" would not distort the above-mentioned production trends, and assuming that the general production and consumption long-term postwar trends in developed market economies will continue without much change, Czechoslovakia

____________________
25
According to Odborář, 1959, the increase in wages in 1959 was coupled with the increase in productivity of labor (gross value of output per man-year) as follows:
Index of
Productivity
Index of
Wages
105 99.0
106 100.4
107 101.2
108 102.0

According to this information, enterprises with an increase in productivity of labor below 7 per cent do not obtain any money from the state bank to increase wages, and those with an increase in productivity below 5 per cent are bound to cut wages.

26
Consumers' credit is extremely limited in Czechoslovakia. Most durables must be fully paid on delivery, and automobiles must be prepaid by two-thirds of the price several months before delivery. The propensity to save has been falling rapidly in Czechoslovakia, following two postwar currency reforms.

-253-

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Central Planning in Czechoslovakia: Organization for Growth in a Mature Economy
Table of contents

Table of contents

  • Title Page iii
  • Acknowledgments v
  • Contents vii
  • List of Tables ix
  • Abbreviations and Symbols xiii
  • Introduction 1
  • Chapter 1 Population and Manpower 6
  • Chapter 2 Industry 26
  • Chapter 3 Construction 58
  • Chapter 4 Agriculture 64
  • Chapter 5 Transportation 91
  • Chapter 6 External Trade 96
  • Chapter 7 Money and Prices 139
  • Chapter 8 State Budget and Investments 165
  • Chapter 9 Income of the Population and Standard of Living 188
  • Chapter 10 National Income, Gross Product, and Expenditure Aggregates 211
  • Conclusion 238
  • Appendix Results of the 1959 Plan; Plan for 1960 and Targets for 1965 Under the Third Five-Year Plan 245
  • Summary 253
  • Bibliography of Works Cited 265
  • Subject Index 269
  • Name Index 274
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