Location of Productive Forces

the geographic distribution of the material components of production and labor resources within countries and their economic regions. The location of productive forces is determined by the dominant mode of production and by the form of ownership of the means of production. Each social and economic formation has its distinctive territorial organization of social production, its specific type of distribution of productive forces.

Capitalism. Under capitalism, where the means of production are privately owned and competition and production anarchy prevail, the distribution of productive forces occurs spontaneously and has an antagonistic nature. In the capitalist mode of production, productive forces are located in conformity with a number of laws that are modifications of the law of surplus value. K. Marx’ statement concerning the “mechanism” of the manifestation of all general laws when the means of production are privately owned is applicable to the patterns of distribution of productive forces under capitalist conditions. Marx wrote that “under capitalist production, the general law acts as the prevailing tendency only in a very complicated and approximate manner, as a never ascertainable average of ceaseless fluctuations” (K. Marx and F. Engels, Sock, 2nd ed., vol. 25, part 1, p. 176).

In the period of premonopoly capitalism, the problem of the location of production was essentially reduced to a capitalist’s selection of the most advantageous place to build a single enterprise in order to obtain the maximum profit. At the stage of imperialism this problem has broadened because of the search for the “optimal” location of a number of enterprises in a particular industrial sector (sometimes all the enterprises), reflecting the interests of the capitalist monopolies, and because of efforts to choose the most advantageous correlations between the zones where the goods produced by these enterprises are consumed. In the age of monopoly capitalism, however, the private-ownership method of solving problems of the location of productive forces continues to predominate. Contemporary state-monopoly capitalism has introduced some new features into the organization of the capitalist economy, but it has not changed its essential features.

After World War II, as state-monopoly capitalism developed, greater attention was given to questions of improving the location of production in a number of economically developed capitalist countries, notably the USA, Japan, and France.

In the postwar decades, capitalist economic integration resuited in the formation of associations of the capitalist states (European Economic Community), as well as integrated associations in various industrial sectors or in the production of certain types of goods (for example, the European Coal and Steel Community). But these processes cannot mitigate the acute competitive struggle among the monopolies within capitalist countries or the economic contradictions between imperialist states and the large integrated territorial groups (for example, between Western Europe and the USA).

Moreover, within the nonsocialist world as a whole the location of productive forces reflects the acute, irreconcilable contradictions between the advanced capitalist nations and the developing countries. Inasmuch as imperialism’s internal socioeconomic contradictions only deepen with time (primarily the basic contradiction between the social nature of production and the private appropriation of its results), the possibilities for improving the location of productive forces are very limited.

Industrial production in the capitalist countries is distributed extremely unevenly. Thus, in 1973 the USA accounted for 24.5 percent of the world industrial output; the Federal Republic of Germany, for 5 percent; Japan, for 6 percent; Great Britain, for 3.5 percent; France, for 3.1 percent; Italy, for 1.9 percent; and Canada, for 1.9 percent. In all, the advanced capitalist countries produced 52.9 percent of the world industrial output and the developing countries, 8.1 percent.

Socialism. Under socialism, owing to social ownership of the means of production, there are objective possibilities for the planned, rational location of productive forces, based on scientific knowledge, the conscious use of the economic laws of socialism for the benefit of society as a whole, and mutual economic assistance and fraternal cooperation among Union republics and economic regions within a country and among countries of the world socialist economic system.

The location of productive forces is an important aspect of the development of socialist production. Therefore, the economic laws of socialism—the basic economic law of socialism, the law of planned, proportional development of the national economy, and the law of increased productivity of social labor—determine the scientific principles governing the location of productive forces, principles that take the form of specific patterns of distribution of socialist production.

The basic tenets of the scientific theory of locating production were developed in the works of K. Marx, F. Engels, and V. I. Lenin. In Anti-Dühring, Engels noted that “only a society which makes it possible for its productive forces to dovetail harmoniously into each other on the basis of one single vast plan can allow industry to be distributed over the whole country in the way best adapted to its own development, and to the maintenance and development of the other elements of production” (ibid., vol. 20, p. 307). In their most general form, the basic economic laws govering the location of productive forces under socialism were formulated by Lenin during the first years of Soviet power, when the country had embarked on socialist construction and the problem of the rational location of production had assumed great importance. In his “Draft Plan of Scientific and Technical Work,” Lenin stressed that in the future it would be imperative to assure the “rational distribution of industry in Russia from the standpoint of proximity to raw materials and the lowest consumption of labor power in the transition from the processing of the raw materials to all subsequent stages in the processing of semimanufactured goods, up to and including the output of the finished product” (Poln. sobr. sock, 5th ed., vol. 36, p. 228).

Lenin’s central idea concerning the rational location of socialist production is the saving of social labor. The theory of the location of socialist production was elaborated further in the resolutions of the congresses and conferences of the Communist Party, in the decisions of the plenums of the Central Committee of the CPSU, and in the CPSU Program. The Leninist principles governing the location of productive forces under socialism were implemented in the first plan for developing the country’s economy, the GOELRO plan, and they were reflected in subsequent long-range plans for developing the USSR’s economy. Questions pertaining to the rational location of the productive forces occupied an important place in the decisions of the Sixteenth, Eighteenth, and Twenty-first through Twenty-fifth Congresses of the CPSU.

The CPSU and Soviet government give special attention to the location of socialist production because its economic and social significance increases with the growth of the country’s economy and of capital construction. Various problems relating to the increased efficiency of social production are largely resolved by the rational location of production. They include the rational use of labor resources in all parts of the country, specialization and comprehensive economic development in the Union republics and economic regions, the opening up of new areas with a large concentration of available natural resources, the elimination of overpopulation in large cities, the gradual overcoming of fundamental differences between urban and rural areas, and the improvement of freight shipment by all types of transport. Under socialism, the location of production must also take into account the strengthening of the country’s defense capacity.

Rational production specialization and the comprehensive economic development of the country’s economic regions are important principles governing the location of production. The efficiency of social production and labor productivity is improved through a more purposeful use of favorable natural and economic conditions in regions, that is, by using the strong points of a particular region to develop the production of certain types of goods.

The rational territorial division of labor and the fullest use of each region’s favorable natural and economic conditions in order to develop specific industries make possible a significant increase in the productivity of social labor.

Socialist society is concerned with the maximum development of the productive forces of the country as a whole and all its economic regions, but at each historical stage of development it must reckon with the objective limits of production expansion. These limits are determined by the size of the portion of the country’s accumulation fund (derived from the national income) that may be allocated for production expansion during the planning period, by the availability of necessary material and labor resources, and by the level achieved in science and technology and in productivity of social labor. As the USSR economy grows, these limits are steadily expanding. Thus, the total capital investments contributed by state and cooperative enterprises and organizations, kolkhozes, and the population for the development of all sectors of the national economy increased from 8.8 billion rubles (in constant estimated prices as of Jan. 1, 1969) during the first five-year plan (1929–32) to 386.6 billion rubles during the first four years of the ninth five-year plan (1971–74). At each historical stage of the development of the Soviet economy, the most rational use of each region’s natural and economic conditions is determined, and scientifically substantiated rates and scales of development are established for each region’s productive forces in order to achieve optimal nationwide production volumes in the shortest possible time with minimum expenditures.

To achieve maximum savings in social labor and a rational distribution of productive forces, each economic region develops either those natural resources that enable it to produce the goods needed by the national economy with minimum operating and capital expenditures or those natural resources that are scarce and must be developed to meet the general needs of the country’s economy or, in some cases, the needs of the entire world socialist system.

The principles governing the location of productive forces operate through a number of natural and socioeconomic factors. The study of these factors is enormously important for planning.

Factors involved in the location of various types of production. Labor resources are one of the most important factors in the rational location of new enterprises. To use labor resources efficiently, enterprises producing labor-intensive goods are built in areas with high population concentrations, such as the European parts of the USSR and Middle Asia. To assure the fullest use of labor resources, the further industrial development of large cities is generally restricted, and preference is given to locating new enterprises in medium-sized and small cities, which have labor reserves and other favorable conditions for industrial development. The need to use the labor of both men and women more fully is taken into account.

The rational location of production in medium-sized and small cities requires the solution of a second important problem —the correct selection of the types and sizes of enterprises. World and Soviet experience has shown the desirability of establishing, in addition to large enterprises, small and medium-sized (in terms of number of employees) but profitable manufacturing enterprises equipped with modern machinery and specializing in the production of certain items. It is also desirable to locate in rural areas small seasonal enterprises for processing agricultural raw material, workshops providing consumer services, and enterprises producing simple pieces of furniture, household goods, and traditional handicraft products. This makes it possible to make better use of the labor resources of rural areas, especially during the winter. The creation of agrarian and industrial conglomerates is especially important for solving this problem.

In many industries the location of enterprises depends largely on the energy resources of a particular economic region. In the USSR, whereas most of the known available energy resources are found in the east, almost 80 percent of national consumption of fuel and electricity occurs in the European part and the Urals, which together account for more than 75 percent of the country’s population and roughly 80 percent of its productive capital. Despite the intensive development of fuel extraction in the European USSR, it is increasingly necessary to bring in energy resources from the eastern parts of the country. Therefore, energy-intensive and fuel-intensive production facilities are being established in areas where energy is cheap—in Siberia, Middle Asia, and Kazakhstan. Concurrently, the development of energy-intensive industries in the European USSR and in the Urals is being restricted.

Water resources are having an increasing influence on the location of industry, and water is no longer regarded as a free gift of nature available in unlimited supply. When deciding on the location of enterprises requiring large amounts of water, all aspects of the water factor are considered. It is recommended that enterprises pay for the water they use.

The location of productive forces is influenced by the location of other natural resources and by such factors as transport, the areas where the output is consumed, and environmental protection.

The USSR’s industrial sectors are conventionally divided into six groups, depending on the factors that determine the location of particular industrial installations. The first group comprises sectors whose enterprises can reasonably be located in areas with plentiful labor resources. Among such sectors are instrument-making, electrical engineering, light industry producing textiles, knitted goods, footwear, and garments, the pharmaceutical industry, and the production of plastic goods. The second group consists of sectors that are economically drawn to areas of consumption, for example, the baking and brewing industries and the manufacture of bricks and rein-forced-concrete products. The third group encompasses sectors that are located primarily near sources of raw material. Besides the mining industry proper, this group includes sectors that process heavy raw materials—ferrous and nonferrous metallurgy, the pulp and paper industry, and many enterprises of the building-materials industry. It also includes food enterprises that process difficult-to-transport agricultural raw materials, as well as sugar-refining, canning, and cotton-ginning enterprises. The fourth group is made up of industries that are attracted to areas with cheap electricity. They include the production of aluminum, ferroalloys, and nonferrous metals by electrolysis and the manufacture of chloroprene rubber and acetylene by electro-cracking. The fifth group comprises sectors that gravitate toward sources of fuel (thermal power stations, various sectors of the chemical industry), and the sixth group consists of sectors in which the location of the enterprises does not show a clear pattern (a number of subsectors of the machine-building industry). The factors involved in the location of industries change over time, depending on scientific and technical progress and on changes in production technology and transport conditions.

Location of productive forces in the USSR. On the eve of the Great October Socialist Revolution, Russian industry was distributed very unevenly. Virtually all industrial production (92 percent by value) was concentrated in the European part of Russia. The eastern regions and the Urals, which occupied 80 percent of the country’s territory, accounted for only 8 percent of the value of its industrial output. Of the 8 percent, Middle Asia, Kazakhstan, Siberia, and the Far East contributed 4 percent. But even in European Russia industry was concentrated in four industrial regions: the Central (primarily Moscow and Vladimir provinces), Petrograd, Donets, and Baku regions. The vast remaining territory was occupied by backward national borderlands.

Today, industry is extensively developed in all the Union republics and economic regions of the USSR. Questions pertaining to specialization and the comprehensive economic development of the Union republics and economic regions have been basically resolved. The Leninist policy of improving all the Union republics economically and culturally by combining the interests of the Soviet Union as a whole with the interests of each Union republic is being implemented consistently. Productive forces are developing especially rapidly in the previously economically backward Union republics and economic regions. Table 1 shows the dynamics of the most important index of productive forces—the overall industrial output, compared to 1940, in the various Union republics and in the major economic regions of the USSR.

The USSR’s share of the world industrial output has grown from 4 percent in 1913 to 20 percent in 1973.

Agricultural production is distributed over USSR territory on the basis of zoning conducted with due regard for natural and economic factors. Among these factors are soil, climatic conditions, the structure of land resources, including agricultural land, the development and location of industry, transportation, and other economic sectors, and population density and distribution (location of cities and other populated points). Such zoning assures stable and far-reaching specialization in the country’s zones and regions and growth in the production of those agricultural products that are best suited to a region and that permit the greatest savings in social expenditures. In the USSR zones have been established for the optimal commercial production of winter wheat (the Ukraine, Northern Caucasus, and Central Chernozem Region), cotton (Middle Asia, Southern Kazakhstan, and the Azerbaijan SSR), flax (the western part of the nonchernozem zone of the RSFSR, Byelorussia, and the Ukrainian Poles’e), and sugar beets (the Ukraine, the northern Moldavian SSR, the Central Chernozem Region, the southern part of the Northern Caucasus, and the northern Kirghiz SSR).

The location of transport in the Union republics is determined primarily by the location of industry and agriculture. In 1973 the RSFSR accounted for more than 57 percent of the length of railroads operated by the Ministry of Railroads of the USSR, more than four-fifths of the country’s navigable waterways, and 56 percent of its motor-vehicle roads. For the Ukrainian SSR the corresponding figures were more than 16 percent, 3.2 percent, and 14.8 percent; for the Byelorussian SSR 4 percent, 2.7 percent, and 4.7 percent; and for the Kazakh SSR more than 10 percent, 3.8 percent, and about 8 percent. The Baltic republics have about 4 percent of the country’s railroads and about 6 percent of its highways; the Transcaucasian republics, about 2.8 and 3.6 percent, respectively; the Middle Asian republics, more than 4 percent and 5.2 percent, respectively; and the Moldavian SSR, 0.7 percent and 0.7 percent, respectively.

Adopted by the 25th session of the Council for Mutual Economic Assistance (COMECON), the Comprehensive Program for Further Extending and Improving Cooperation and for Developing Socialist Economic Integration Among the COMECON Countries has strengthened the influence of the international socialist division of labor on the further development and location of productive forces in the USSR and the entire socialist community. The planned implementation of the joint integration programs of the COMECON countries has assured a rise in the productivity of social labor, both in individual countries and within the entire integrating system. It has also promoted the rational location of productive forces, particularly through the joint construction of industrial complexes and enterprises and the joint development of new regions for extracting mineral raw materials and forest resources, with interested countries participating in individual projects.

The policy of the CPSU and Soviet government to accelerate the development of the productive forces of the eastern parts of the country, occupying three-fourths of the USSR’s entire territory, is being consistently carried out. The great transformations in the eastern regions and the extensive study and industrial development of their natural resources, begun on the initiative of V. I. Lenin, have been continued at all stages of socialist construction.

Having adopted a policy to rapidly develop the productive forces of the eastern parts of the country, the Soviet state has allocated major capital investments to achieve its goal. The share of the eastern regions in the USSR’s total capital investments has been steadily rising. The proportion was 21.4 percent between 1918 and 1940, 22.3 percent between 1941 and 1950, 25.5 percent between 1951 and 1960,29.5 percent between 1961 and 1970, and about 30 percent during the ninth five-year plan (1971–75). In all, from 1918 to 1970, more than 200 billion rubles were invested in developing the economies of these regions.

Such large capital construction assured priority growth in the production of industrial output in the eastern regions of the USSR. Whereas the output of all USSR industry increased 14.7 times between 1941 and 1973, industrial output in the eastern regions, including the Urals, grew 19.3 times. Concurrently, the eastern regions’ share of the national output of many types of industrial goods rose significantly.

The eastern regions also contribute a considerable share of the USSR’s agricultural output. Siberia and Kazakhstan now play an important part in national agricultural production, and the Far East produces much of the nation’s soybeans and rice. The republics of Middle Asia grow more than 90 percent of the country’s cotton and have a highly developed sheep-raising industry (fine-wool and Karakul breeds).

The vast economic potential created in the eastern regions became extremely important during the Great Patriotic War (1941–45), when some of the old industrial centers were temporarily occupied by fascist German troops.

The experience of socialist construction in the USSR has shown that the economies of the Union republics flourish not by following the path of national isolation but rather through harmonious, mutually advantageous development within the fraternal family of socialist nations and peoples and by uniting their economies to form one national economic complex. On this basis, during the years of socialist construction, the material and nonmaterial forces of the USSR and all the Union republics matured and became strong. The country acquired a multisector industry, a large-scale mechanized socialist agriculture, and an advanced science. Skilled workers, specialists, and economic managers were trained, and the problem of equalizing and raising the level of economic, scientific-technical, and cultural development in the country’s regions was basically resolved.

Challenges and prospects for improving the location of productive forces. In order to continue improving the location of productive forces in the USSR, the technical and economic criteria for determining the location and optimal size of new and rebuilt enterprises are being refined with the aim of reducing social production costs. These costs include expenditures for energy, housing, municipal services, and related sectors, as well as the cost of delivery to customers. The introduction of mathematical techniques of studying the location of socialist production, using computer technology, also promotes improvement in the location of productive forces.

Of great importance is the Master Plan for the Location of Productive Forces in the USSR, a preplanning technical and economic study that scientifically substantiates the optimal territorial proportions for developing the national economy, the rational location of industrial sectors, and the specialization and comprehensive development of Union republics and economic regions over a long period, based on the most efficient use of the natural and economic conditions in all parts of the country.

The Master Plan includes a technical and economic assessment of the location and use of raw-material, energy, water, and labor resources, an evaluation of the location of the sectors of material production (industry, agriculture, and transport) throughout the country, economically substantiated proportions for the comprehensive economic development of the economic regions, and a determination of the regions in which new development and construction of major industrial complexes should take place. Plans for the development and location of economic sectors and plans for the comprehensive development and location of productive forces in the economic regions of the USSR are worked out as part of the Master Plan.

Plans for the development and location of the primary national economic sectors are drawn up using technical and economic calculations applicable to the conditions of each sector. Decisions to plan and build enterprises and structures are made on the basis of plans for the development and location of corresponding national economic sectors and plans for the development and location of productive forces in the various economic regions and Union republics. These plans are part of the overall system of national economic planning and are important for improving planning and ensuring the rational location of productive forces in the USSR.

The development of master plans for the location of productive forces in the USSR over the long run is an important factor in realizing the decisions of the CPSU congresses to raise the level of scientific substantiation in determining the location of production in the Union republics and economic regions for the purpose of increasing national economic efficiency and steadily raising the living standard of the Soviet people.