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Regarding Economic Planning

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Post 13 May 2018, 01:14
Hi! I’m reading the Manual of Political Economy of the USSR (written in 1956), and I’m struggling with MANY concepts regarding the economic planning. Please take your time to answer me, because I need very… careful, step-by-step explanations to understand them. I mean I read the answers of all I'm asking below in the Manual, yet I obviously didn't grasp them or comprehend them, otherwise I wouldn’t be asking for assistance…

1 – Did the plan fixed the production costs of factories? Or these were not fixed and were totally dependable on what each factory produced?

2 – When a plan started, Did the State gave its factories the raw materials and money necessary to fulfill the plan (or to begin it) or not? If yes, these raw materials were allocated according to the plan? If not, how did the factories acquired them?

3 – In the Manual, it is literally written that it is VERY IMPORTANT that factories must be PROFITABLE (which means they have to sell their products at a higher value than the cost of producing them). Is this true?

4 – On what basis the State fixed the Salaries? And to what end?

5 – I thought that Socialism didn’t produce for Profit, but for USE, yet factories were required to be profitable. Could you explain to me this contradiction? And also regarding to this: If a factory must be profitable, then how did the USSR managed to keep its factories up and running until Gorbachev introduced its market reforms? How did the Sate acquire the money and materials to keep its WHOLE economy growing and with no crises?

6 – How did Non-profitable factories (because of State-fixed sell-prices did not allowed them to be profitable) sustained themselves?

7 – What was the Role of the Central Bank?

8 – Which were the mechanisms through which the Government received money? Taxes on Production? On the profits it made?

I don't know if i make claear my doubts on the questions... what i don't really comprehend and grasp is how the circulation of money worked, through which the economy grew uninterrupted.
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