ABSTRACT
Investment-priority for heavy industry has come to be regarded, in discussing policies of development, as a leading characteristic of Soviet industrialisation. There is one feature of the changing situation in the Soviet Union and in some others of the planned economies that might be held likely to produce a permanently rising trend. This is the approach to a situation of labour-shortage, despite an increasing population. When a country is relatively underdeveloped and mainly agricultural, it is apt to be characterised by surplus labour, on which a process of industrialisation can feed in its early stages. Increased industrial output can then march in step with increased employment by a simple process that economists have sometimes called ‘widening’ the capital structure. There is little ground for building a case for ‘investment-priority for heavy industry’ upon a forecast of a probable trend in the capital-output ratio.
