Purchasing Funds of the Population

that part of the monetary income of the population that is set aside for the purchase of goods and characterizes the total volume of the effective monetary demand for consumer goods. In the planning and accounting practices of the USSR the total volume of the purchasing funds of the population is determined on the basis of the balance of the monetary income and expenditure of the population. It constitutes the difference between the total monetary income, on the one hand, and the sum of noncommodity expenditures, including payment for services and compulsory and voluntary payments and growth in savings, on the other. When determining the purchasing funds of the populations of individual Union and autonomous republics, krais, and oblasts, the balance between monetary capital sent and received in the form of transfers and letters of credit is also taken into account.

The population’s purchasing funds for a specific planning period are calculated by the Gosplan of the USSR, the state planning committees of the Union and autonomous republics, and the planning bodies of the executive committees of local Soviets. Accounting data on purchasing funds are compiled by the Central Board of Statistics of the USSR and its local agencies. On the basis of the figure for purchasing funds, plans for retail commodity turnover in the state and cooperative trade systems are developed, calculating full satisfaction of consumer demand. Not included in the calculations is that part of the income used by the population to purchase goods in the consumer cooperative system (at local market prices) and directly from kolkhozes.

In 1970 the amount of goods purchased in state and cooperative trade in the USSR was 48 percent greater than in 1965 (in comparable prices). In 1973 the figure was 186 billion rubles. But purchase of consumer goods does not completely describe either the population’s purchasing capability or the actual realization of its purchasing funds. It should be kept in mind that the volume of state and cooperative retail commodity turnover reflects the sale of goods not only to the population but also to organizations, enterprises, institutions, and kolkhozes, on the basis of what is called small-scale wholesaling; the share of such sales averages 4.5–4.6 percent of the volume of state and cooperative retail trade. The volume of trade also encompasses (for cooperative trade) the sale of agricultural products purchased and accepted on commission at agreed-upon prices; in 1973 the volume of such sales in the consumer cooperative system was 1.4 billion rubles.

Part of the monetary income designated for purchase of goods may remain unrealized, as a result of structural differences between supply and demand of goods, and go to increase personal monetary savings. At the same time, with an optimal combination of supply and demand, the population’s purchasing funds may increase at the expense of savings. Under socialism, steady growth in purchasing funds is a result of the high growth rate of the national income and its use in the interests of society. The amount of the population’s purchasing funds is directly influenced by growth in the number of industrial and office workers in the national economy and the increase in their wages, rise in the monetary incomes of kolkhozniks, growth in payments to the population from social consumption funds, reductions in taxes, and other factors. From 1961 to 1970 alone the number of industrial and office workers in the USSR increased by 45 percent; average monthly wages, including payments and benefits from public funds, rose by 53 percent; and the payment as wages of money and food products to kolkhozniks, calculated per man-day worked, increased by 2.75 times.

A similar process is observed in other socialist countries. For example, the number of industrial and office workers in the COMECON countries increased 33.4 percent from 1961 to 1970. The average monthly wage of industrial and office workers in the state and cooperative sectors rose during this same period by 58 percent in Bulgaria, 46 percent in Poland, 39 percent in Hungary, and 38 percent in Czechoslovakia. In the USSR and other socialist countries the purchasing funds of the population are growing not only nominally but in real terms. This occurs as the result of a decrease in retail prices for consumer goods. Reducing prices, which does not affect the total sum or per capita level of purchasing funds, increases opportunities for the population to purchase goods.

Under capitalism, as the result of inflationary growth in prices for consumer goods, the real purchasing funds of the population show a tendency to decrease and this tendency persists even where the working people achieve a certain increase in wages through class struggle.