ABSTRACT

In the Socialist economy, accumulation is centrally fixed on a planned basis. As in Western practice, depreciation is deducted from gross investment so that only net investment is included in accumulation. The decision on the proportion between accumulation and consumption is largely political. In Socialist economics a distinction is made between 'productive' and 'non-productive' accumulation. The balance of accumulation consists of durable consumer goods for individual as well as for collective consumption, such as private housing and household effects, public buildings and equipment, educational, social, cultural and sporting facilities, and defence installations and materials. When efficiency declined, to maintain high rates of growth, usually the rate of accumulation was simply increased. Although the precise degree of difference may be disputed, there is little doubt that Socialist countries devote a higher proportion of their national income to accumulation than, ceteris paribus, capitalist countries do.