Nonproduction Fixed Assets

the aggregate of buildings, installations, and other durables that function in the non-production sphere of socialist society. These objects serve society’s nonproduction needs and constitute the material basis of the national economic sectors that do not directly create material goods, such as science, education, personnel training, housing, municipal and public utility services, public health, culture, recreation, administration, and national defense.

In material terms, nonproduction fixed assets consist of the following: the buildings, installations, and equipment of scientific organizations, higher educational institutions, technicums, general-education schools, factory schools, and vocational and technical schools; residential buildings, the structures and installations of municipal systems, and urban transportation; the buildings and equipment of hospitals, polyclinics, sanatoriums, houses of rest, places of entertainment, libraries, clubs, sports facilities, forest tracts, and parks; public utility enterprises; and the buildings, installations, and equipment used in state administration.

In the USSR, nonproduction fixed assets grow as material production develops, and on that basis emerge as one factor in the standard of living. As of Jan. 1, 1972, nonproduction fixed assets were 5.3 times larger than they were in 1940; this included a fourfold increase in housing. The value of these increased nonproduction fixed assets reached 298 billion rubles, which equaled 37.3 percent of the country’s entire fixed capital. Housing represented 189 billion rubles of this amount, or 23.7 percent. The greater part of nonproduction fixed assets is under socialist ownership, that is, state or cooperative-kolkhoz ownership. But a part of the country’s housing stock, especially dwellings in rural areas, as well as such items as automobiles, are privately owned by citizens.

Nonproduction fixed assets are growing significantly at the present stage of developed socialist society. As the country’s economic potential grows, increasing opportunities and resources are afforded for development of the nonproduction sphere, which includes nonproduction fixed assets. Such development is also promoted by the increasing involvement of individual enterprises in the creation of nonproduction facilities to protect the health of working people and provide for their cultural and recreational needs. This can be done with funds set aside for sociocultural purposes and for housing construction out of enterprise profits in accordance with recent economic reforms. Kolkhozes and sovkhozes are also engaged in significant construction of nonproduction facilities. Working people in general are increasingly involved in building cooperative housing.

Nonproduction fixed assets become even more important with development of the scientific and technological revolution, which makes increased demands on the principal productive force, namely, the human being. There is a growing need for highly educated, professionally trained and skilled workers. This in turn requires expansion and reequipment of the entire network of public education and personnel training, along with further development of public health and culture. Greater development of public utility services, trade, housing, municipal services, and urban public transport promotes optimal use of leisure time by the working people to raise their professional and cultural level. Nonproduction fixed assets in these sectors directly affect rising labor productivity and efficiency in public production. The service sector is therefore growing rapidly in the USSR and the other socialist countries. Housing construction, public education, public health, and culture are continuously developing. In the 20 years between 1951 and 1970, the nonproduction fixed assets of the socialist countries outside the USSR grew significantly—by more than 100 percent in Bulgaria and Rumania, 76 percent in Hungary, 74 percent in Czechoslovakia, and 55 percent in Poland. Nonproduction fixed assets take up a large proportion of the overall fixed assets of these countries’ economies. Relevant figures for 1971 were 41.2 percent in Poland, 40 percent in the German Democratic Republic, 40.4 percent in Hungary, 33 percent in Bulgaria, ansd 33.2 percent in Rumania.

Under socialism, the source of the formation and steady growth of nonproduction fixed assets is national income. The greatest portion of nonproduction fixed assets is formed through centralized capital investment, carried out through state budgetary expenditures. However, noncentralized capital investments by state and cooperative-kolkhoz enterprises and organizations also play an important part in financing such outlays, as do the enterprises and organizations of the nonproduction sphere themselves, using income received in the course of their operations.

Under capitalism, items in the nonproduction sphere are included as fixed capital and serve the capitalist class as a means of exploiting the working people and acquiring surplus value just as if they were factories or power stations.