Intersectorial Relations

economic relations among the sectors of material production. These links characterize the interrelations of the production and sale of the output of the sectors.

A developed system of intersectorial relations brings all the sectors together into a single economic organism. Intersectorial relations reflect all stages in the process of the reproduction of each sector’s output and aggregate social product. A quantitative description of intersectorial relations makes possible the determination of the actual values of proportions among sectors.

There is an objective need for proportionality in the development of economic sectors in any society with a developed social division of labor. Under capitalism, where the economic law of the anarchy of production prevails, the various spheres of production have a tendency toward balance. However, “this constant tendency to equilibrium, of the various spheres of production, is exercised only in the shape of a reaction against the constant upsetting of this equilibrium” (K. Marx; see K. Marx and F. Engels, Soch., 2nd ed., vol. 23, p. 368). The disintegration of productive forces, enormous material losses, and social disasters are the inevitable costs of short-term restoration of proportionality under capitalism.

Only with the appearance of socialist production relations, which are based on public ownership of the means of production, does it become objectively necessary and possible to establish proportions and intersectorial relations on a planned, scientific basis. Maintaining progressive proportions and efficient economic relations among sectors is a crucial economic function of national economic planning by the socialist state. It is possible to identify current production relations concerning subjects of labor and production services and relations concerned with expanding production and replacing fixed productive assets that have been taken out of use. In the USSR about one-half of all output produced goes for the needs of current production. The share of output going into further processing depends on the role of the sector in the process of extended reproduction. For instance, in the light and food industries about 30-40 percent of the output is sent on for further processing, whereas in metallurgy and the building materials industry this index is 90-95 percent.

Some 10-15 percent of all intersectorial relations exert the determining influence on the rate of development of the sectors and on the structure of the economy. Such a concentration of intersectorial relations makes it possible to reduce planning work significantly and to increase the quality of plan calculations. The electrical power industry has the highest degree of concentration of intersectorial relations with suppliers (in this industry, fuel constitutes about 90 percent of all material expenditures, not counting depreciation), whereas the highest degree of concentration with regard to consumers is found in light industry and the food industry. In light industry and the food industry more than 80 percent of the products passing through various stages of processing are intended for consumers. The production relations of other sectors are more differentiated. The most far-reaching intersectorial relations with consumers are in the electric power and fuel industries, which send their output to virtually all sectors of material production.

Scientific-technical progress and the development of the social division of labor bring about changes in the structure of production and the system of intersectorial relations. Sectors that are producing the most economical types of material resources expand deliveries of their products to consuming sectors and thus cause a relative (and sometimes also absolute) decrease in the latter sectors’ need for less efficient products from other sectors.

The intersectorial balance of production and distribution of output is expected to play a large part in improving the analysis and planning of mutual production relations among sectors. The balance contains indexes that give a quantitative description of intersectorial relations: coefficients of material expenditures and coefficients of output. The level of output of different sectors needed to supply current production is determined on the basis of the coefficients of material expenditures; the coefficients of output make it possible to analyze what elements and parts make up the need for production of a specific volume of output in each sector.

The direct relations among sectors in the national economy are accompanied by a complex system of indirect intersectorial relations that arises in the course of production in a number of sectors. Keeping track of direct and indirect intersectorial relations makes possible substantially increased precision in planning the development of sectors and in evaluating the efficiency of production and capital investments.