Khozraschyot
Encyclopedia
Khozraschyot or Khozraschet was an attempt to simulate the capitalist
concepts of profit
and profit center
into the planned
economy of the Soviet Union
.
The term has often been translated as cost accounting
, which does not cover significant peculiarities of the Soviet economy. It has also been conflated with other notions of self-financing , self-reevaluation , and self-management
introduced in the 1980s.
As defined in the Soviet Encyclopedic Dictionary
:
Khozraschyot introduced the necessity in accountability and profitability
, as well as the motivation in thrifty expenditures. It attempted to provide real ways and means for implementing a catch phrase "Economics must be economical", attributed to Leonid Brezhnev
, a subject of mockery.
period . However the notion of "profitability" tended to favor light industry
over heavy industry
, which was hindered on the pretext of "poor profitability".
Since the priority in development of heavy industry and capital goods to ensure fast modernization of the Soviet Union was among the major dogmas of Marxist economics, by the end of the 1920s the notion of economic profitability was subordinated to the demands of an economic plan which, in its turn was put into a direct dependence on political decisions and whose "control figures" were turned from guidelines into obligatory targets expressed in the series of Five-Year Plans.
The notion re-emerged during the 1965 Soviet economic reform
, and was later greatly emphasized in the late 1980s during perestroika
when it also implied workers' self-management
.
Capitalism
Capitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...
concepts of profit
Profit (economics)
In economics, the term profit has two related but distinct meanings. Normal profit represents the total opportunity costs of a venture to an entrepreneur or investor, whilst economic profit In economics, the term profit has two related but distinct meanings. Normal profit represents the total...
and profit center
Profit center
A profit center is a part of a corporation that directly adds to its profit.-Overview :A profit center is a section of a company treated as a separate business. Thus profits or losses for a profit center are calculated separately...
into the planned
Planned economy
A planned economy is an economic system in which decisions regarding production and investment are embodied in a plan formulated by a central authority, usually by a government agency...
economy of the Soviet Union
Economy of the Soviet Union
The economy of the Union of Soviet Socialist Republics was based on a system of state ownership of the means of production, collective farming, industrial manufacturing and centralized administrative planning...
.
The term has often been translated as cost accounting
Cost accounting
Cost accounting information is designed for managers. Since managers are taking decisions only for their own organization, there is no need for the information to be comparable to similar information from other organizations...
, which does not cover significant peculiarities of the Soviet economy. It has also been conflated with other notions of self-financing , self-reevaluation , and self-management
Self-management
Self-management means different things in different fields:* In business, education, and psychology, self-management refers to methods, skills, and strategies by which individuals can effectively direct their own activities toward the achievement of objectives, and includes goal setting, decision...
introduced in the 1980s.
As defined in the Soviet Encyclopedic Dictionary
Soviet Encyclopedic Dictionary
Soviet Encyclopedic Dictionary is an omnibus encyclopedic dictionary published by Sovetskaya entsiklopediya . The fourth edition contains about 80,000 entries, 550 black-and-white pictures and schemes and 350 maps....
:
- "khozraschyot is a method of the planned running of an economic unit (i.e., of a businessBusinessA business is an organization engaged in the trade of goods, services, or both to consumers. Businesses are predominant in capitalist economies, where most of them are privately owned and administered to earn profit to increase the wealth of their owners. Businesses may also be not-for-profit...
, in Western terms) based on the confrontation of the expenses incurred in production with the production output, on the compensation of expenses with the incomeIncomeIncome is the consumption and savings opportunity gained by an entity within a specified time frame, which is generally expressed in monetary terms. However, for households and individuals, "income is the sum of all the wages, salaries, profits, interests payments, rents and other forms of earnings...
".
Khozraschyot introduced the necessity in accountability and profitability
Profit (accounting)
In accounting, profit can be considered to be the difference between the purchase price and the costs of bringing to market whatever it is that is accounted as an enterprise in terms of the component costs of delivered goods and/or services and any operating or other expenses.-Definition:There are...
, as well as the motivation in thrifty expenditures. It attempted to provide real ways and means for implementing a catch phrase "Economics must be economical", attributed to Leonid Brezhnev
Leonid Brezhnev
Leonid Ilyich Brezhnev – 10 November 1982) was the General Secretary of the Central Committee of the Communist Party of the Soviet Union , presiding over the country from 1964 until his death in 1982. His eighteen-year term as General Secretary was second only to that of Joseph Stalin in...
, a subject of mockery.
History
The notion was introduced during the NEPNew Economic Policy
The New Economic Policy was an economic policy proposed by Vladimir Lenin, who called it state capitalism. Allowing some private ventures, the NEP allowed small animal businesses or smoke shops, for instance, to reopen for private profit while the state continued to control banks, foreign trade,...
period . However the notion of "profitability" tended to favor light industry
Light industry
Light industry is usually less capital intensive than heavy industry, and is more consumer-oriented than business-oriented...
over heavy industry
Heavy industry
Heavy industry does not have a single fixed meaning as compared to light industry. It can mean production of products which are either heavy in weight or in the processes leading to their production. In general, it is a popular term used within the name of many Japanese and Korean firms, meaning...
, which was hindered on the pretext of "poor profitability".
Since the priority in development of heavy industry and capital goods to ensure fast modernization of the Soviet Union was among the major dogmas of Marxist economics, by the end of the 1920s the notion of economic profitability was subordinated to the demands of an economic plan which, in its turn was put into a direct dependence on political decisions and whose "control figures" were turned from guidelines into obligatory targets expressed in the series of Five-Year Plans.
The notion re-emerged during the 1965 Soviet economic reform
1965 Soviet economic reform
The 1965 Soviet economic reform, widely referred to simply as the Kosygin reform or Liberman reform, was a reform of economic management and planning, carried out between 1965 and 1971...
, and was later greatly emphasized in the late 1980s during perestroika
Perestroika
Perestroika was a political movement within the Communist Party of the Soviet Union during 1980s, widely associated with the Soviet leader Mikhail Gorbachev...
when it also implied workers' self-management
Workers' self-management
Worker self-management is a form of workplace decision-making in which the workers themselves agree on choices instead of an owner or traditional supervisor telling workers what to do, how to do it and where to do it...
.