The Social Services

According to Marxism-Leninism, a certain level of social services (for example, in the fields of education and health) is necessary for the effective operation of a modern capitalist society. Unhealthy workers, without a minimum of education, are incapable of maximising the creation of profit.

Expenditure by the Soviet state on education, the health service, sickness benefits, children's allowances, pensions, recreational and holiday facilities, housing construction, vocational training etc., are drawn from what is termed social consumption funds. These funds account for some 17-20% of the income of the average working class family. (Y.L. Manevich: "Wages Systems", in: "The Soviet Planned Economy"; Moscow; 1974; p. 259).

Some 60% of Soviet state expenditure in connection with social services takes the form of monetary benefits, some 40% that of services. (Y.L. Manevich: ibid.; p. 263).

The aim of a capitalist class, however, is to keep the level of social services at the minimum level consistent with maximum profitability and social stability of the social system and to make a higher level of services available only on a payment (and profit making) basis.

The Soviet capitalist class pursues both these aims.

The growth rate of payments from social consumption funds has fallen consistently since the "economic reform", as follows:

1966-70: 53%

1871-75: 40%

1976-80 ("planned"): 26-30%

("Soviet Economy Forges Ahead"; Moscow; 1973; p. 70).

(A.N. Kosygin: "Guidelines for the Development of the National Ecoomy of the USSR for 1976-80", 25th. Congress CPSU; Moscow; 1976; p. 25).

The development of educational and health services that operate on a payment and profit-making basis has been a feature of the Soviet social system since the "economic reform":

"A certain percentage of services (health, education) is offered for prices that contain a profit: certain health and educational institutes that operate on a cost-accounting basis".

(V. Azar & I. Pletnikova: "On the Question of the Classification and Full Assessment of Services in Personal Consumption", in: "Nauchnye doklady vysshei shkoly: Ekonomicheskie nauki" (Scientific Reports of Higher Schools: Economic Science). No. 11, 1973, in: "Problems of Economics", Volume 17, No. 2; June 1974; p. 55).

and it is planned that these paid services shall expand at a faster rate than the unpaid:

"The current five-year plan calls for the relatively more rapid growth of paid services...

The volume of paid services will grow by 47% during the five year plan.. The volume of unpaid services will increase by 32% during the five year period".

(V. Komarov: "The Service Sector and its Structure", in: "Voprosy ekonomiki" (Problems of Economics), No. 2, 1973, in: "Problems of Economics", Volume 16, No. 3; p. 8,9).

This latter development is presented by contemporary Soviet propagandists as "in the interests of the population" on the grounds that the standard of the paid services is higher than that of those which are unpaid:

"The preferential development of branches of paid services in the present stage conforms to the interests of the population... The population receives the possibility of supplying its needs more completely".

(V.Komarov: ibid.; p. 9).

In fact, this development is in the interests, not of the Soviet working people but of the Soviet capitalist class. In the first place, it enables the latter to reduce the proportion of national income which would otherwise have to be spent on unpaid social services; in the second place, it opens to Soviet capital a "highly profitable" sphere of operations:

"As a rule, all basic branches of paid services.... are highly profitable".

(V. Komarov: ibid.; p. 9).

Some of the more humanitarian of the contemporary Soviet economists have, however, been frank enough to demand that this replacement of unpaid by paid services should not be carried "too far" because of its undesirable social effects:

"The reduction of the sphere of free services and the satisfaction of the expanding range of the needs of the people in paid form are possible only up to a certain limit, beyond which the undesirable differentiation of the enjoyment of services by individual groups of the population with a different level of per capita income in the family may take place".

(V. Rutgaiser: "A Comprehensive Plan for the Development of the Service Sector", in: "Planovoe khoziaistvo" (Planned Economy), No. 2, 1973, in: "Problems of Economics", Volume 16, No. 5; September 1975; p. 49).

Other economists, however, are drawing attention to Marx's statement that the value of labour power includes the cost of its education:

"In order to modify the human organism so that it may acquire skill and handiness in a given branch of industry,... a special education or training is requisite, and this, on its part, costs an equivalent in commodities of a greater or lesser amount... The expenses of this education (excessively small in the case of ordinary labour power) enter to that extent into the total value spent in its production".

(K. Marx: "Capital", Volume 1; London; 1974; p. 168-9).

While denying, in other connections, that labour power is a commodity -- and so has a value -- in the contemporary Soviet Union, these economists do not scruple to use Marx's analysis above to support the demand that no education should be free, but should be paid for, at least in part, by students of parents:

"Educational expenditure takes the form of a portion of the outlays required for the reproduction of the labour force...

The first and most widespread assumption is that all expenditure for education should necessarily come out of the surplus product. But this is not true...

In the expenditures for education, it is necessary to discriminate between those made by the government and those made by parents or the pupil himself".

(V. Zhamin: "Economics and Education", in: "Voprosy ekonomiki" (Problems of Economics), No. 2, 1967, in: "Problems of Economics", Volume 10, No. 5; September 1967; p. 48, 49-50).

An exception to this general movement from subsidised state social services towards "economic" profit-making services is to be found in the sphere of housing. This was partly because --as in orthodox capitalist countries -- it became increasingly difficult for profit-making building enterprises to construct dwellings at economic rents (or mortgage repayments) which working people could afford to pay. But it was also partly because, by 1960, in the larger towns, where there was a sizable petty bourgeoisie, a shortage of building land had arisen as a result of extensive private building of single - and two-storied houses.

Accordingly, on June 1st., 1962 a joint resolution of the Central Committee of the CPSU and the Government instructed republic administrations to prohibit the building of private houses in towns with a population of more than 100,000.

At the same time citizens in need of a home were encouraged to invest in housing co-operatives which, with the aid of state credits, would build multi-storey blocks of flats in such large towns. Those who could afford a down-payment of 40% (1,000 to 3,000 rubles, depending on the type of accommodation) would in this way have the possibility of moving into a new flat within a few years of joining the co-operative, without having to wait their turn on the state housing list.

These measures brought about a relative increase in the proportion of dwellings being built by the state and by housing co-operatives, and a relative decrease in the proportion being built privately:

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Proportion of Housing Space Built

1961-65 1966-70

BY THE STATE 58.5% 61.5%

BY HOUSING COOPERATIVES 2.7% 6.5%

PRIVATELY 19.2% 14.0%

BY COLLECTIVE FARMS &

COLLECTIVE FARMERS 19.6% 18.0%

("Narodnoe khoziaistvo SSSR v 1970 godu" (The National Economy of the USSR in the Year 1970); Mosocw; 1971; in: H.W. Morton & R.L. Tokes: "Soviet Politics and Society in the 1970's"; New York; 1974; p. 181).

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For urban housing this trend was considerably more marked:

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Proportion of Housing Space Built

1960 1965 1970

By the state 75.6% 76.1% 79.9%

By housing co-operatives 10.7% 10.8%

Privately 24.4% 13.2% 9.3%

(Ibid.; p. 182).

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State housing is, to date, a true social service in the contemporary Soviet Union, being subsidised by the state as to two-thirds of its construction and operating costs, with rents fixed at a nominal 3-4% of the income of the occupying families.

("Soviet Economy Forges Ahead"; Moscow; 1973; p. 207).

(P.S. Mstislavsky: "The Standard of Living", in: "The Soviet Planned Economy"; Moscow; 1974; p. 269).

Nevertheless, in line with other social services, the proportion of total capital investment devoted to housing has declined significantly in recent years:

1956-60: 23.2%

1961-65: 18.3%

1966-70: 17.0%

("Narodnoe khoziaistvo SSSR v 1970 godu" (The National Economy of the USSR in the Year 1970)); Moscow; 1971; in: H.W. Morton: op. cit., p. 168).

and the standard of state housing is admittedly low:

"Newlyweds can initially get along very well without certain types of utilities... Not until they have children do they need separate apartments with all the conveniences".

(E.G. Antosenkov: "The Availability of Housing and Personnel Turnover", in: "Izvestia sibirskogo otdelenya Akademy Nauk SSSR: Serila obshchestvennykh nauk" (Journal of the Siberian Section of the Academy of Sciences of the USSR; Social Science Series). No. 11, 1972, in: "Problems of Economics", Volume 16, No. 3; July 1973; p. 59)

Not all social services, however, are provided by the state. Some are provided by enterprises specifically for their own personel.

Since the "economic reform", every enterprise is required to set up out of its profits, in addition to a production development fund and an economic incentives fund, a fund for social and cultural undertakings and housing:

"There are now three types of material incentive funds at the Soviet enterprises:.... b) a fund for social and cultural measures and housing from which an enterprise can make the necessary expenses for providing services for its personnel, in addition to those provided by the state".

(V.M. Batyrev: "Commodity-Money Relations under Socialism", in: "The Soviet Planned Economy"; Moscow; 1974; p. 172).

Out of this fund the enterprise is obliged to provide on its premises a health centre and a canteen for its personnel. (Statute on the Socialist State Production Entrprise, in: M.E. Sharpe (Ed.): "Planning, Profit and Incentives in the USSR", Volume 2; New York; 1966; p. 294).

Like the other two funds, the size of the fund for social and cultural undertakings and housing is dependent on the rate of profit made by the enterprise:

"Housing, communal and cultural facilities provided by an enterprise depend on the profitability of production, since expenditure on these items is made from the fund for social and cultural measures and housing, which is financed from deductions from enterprise profits".

(S. Kamenitser: "The Experience of Industrial Management in the Soviet Union"; Moscow; 1975; p. 134).

It thus functions as a secondary economic incentives fund, stimulating the personnel to maximise the rate of profit.

At the same time, the fund is designed to assist the enterprise in competing for manpower and retaining it, by providing amenities such as housing to its employees that might not otherwise be available. This applies also when the fund is used to assist employees to purchase houses privately:

"The enterprise helps these workers under the following terms: the funds for socio-cultural resources and housing construction advance 40-50% of the down payment to the worker, and this sum is cancelled after the worker has worked a certain length of time at a given enterprise".

(E.G. Antosenkov: ibid,; p. 68-9).

The social welfare schemes of Soviet industrial enterprises are thus little different from those operating in orthodox capitalist countries, about which contemporary Soviet sociologists comment scathingly:

"Welfare and cultural schemes the management of industrial corporations.. introduce for their employees are prompted by egoistic class interests...

The corporations' expenditure on welfare schemes.. is seen to 'produce the greatest material and ideological returns to the corporation'".

(W.G. Scott: "Human Relations' in Management", Homewood (USA); 1962; p. 368).

(N. Bogomolova: "Human Relations' Doctrine: Ideological Weapon of the Monopolies"; Moscow; 1973; p. 107).

In the Soviet Union, however, the funds for social and cultural undertakings have grown much more slowly than the other two funds:

"Between 1966 and 1970... the production development fund rose 6 times, the fund for socio-cultural measures and housing construction 2 times, and the material incentive fund 4 times".

(N.Y. Drogichinsky: "The Economic Reform in Action", in: "Soviet Economic Reform: Progress and Problems"; Moscow; 1972; p. 207).

and considerably more slowly than the growth of profits:

"At the same time that the profits of enterprises and organisations increased 3.5 fold during the last decade, their allocations for social and economic services increased only 2.8 fold.... These figures alone are evidence of the great reserves that exist for the development of the sphere of social and economic services".

(B. Khomeliansky: "The Sphere of Social and Economic Services and the Reproduction of Aggregate Labour Power", in: "Nauchnye doklady vysshei shkoly: Ekonomicheskie nauki" (Scientific Reports of Higher Schools: Economic Science), No. 4, 1972, in: "Problems of Economics", Volume 16, No. 2; June 1973; p. 62-3).

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