ABSTRACT
In any economy inflation, regardless of the form it takes, is a kind of adulteration of the value of money. Inevitable divergences from plan targets are not the cause of inflation but only one factor aggravating the inflationary tendencies already inherent in a planned economy. Inflationary disequilibrium is fully apparent, if not always measurable, in a planned economy. Disequilibrium is rooted in a conception of development that, from the very beginning down to the present, has given priority to heavy industry, including armaments. Some Western experts estimate defense expenditures of the Soviet Union at 13-15 percent of the gross national product, corrected by the Western criterion of measurement. The Soviet Union, however, places little importance on the equilibrium function of prices, and therefore price rises do not reflect the inflationary tensions that exist overall, as, for example, in the gap between prices on the free market and on the state market.
