Consumption Fund

the part of national income that is used for individual and social (nonproductive) consumption. The necessary product and part of the surplus product are the source of the consumption fund. In physical terms, the consumption fund is embodied in consumer goods. In the USSR, the consumption fund constitutes approximately three-fourths of the national income. In 1975 personal consumption absorbed more than 86.9 percent of the consumption fund, expenditures by service establishments accounted for 9.1 percent, and expenditures by scientific and administrative institutions accounted for 4 percent.

In terms of the mode of formation and utilization, the consumption fund is divided into the wage fund for workers in material production, the social consumption funds, and the fund for maintaining the administrative apparatus. During the period of full-scale construction of communism in the USSR, wages have been steadily rising, while retail prices have remained stable; prices for consumer goods have declined with the buildup in commodity resources and the gradual abolition of taxes. The most rapid increases have been seen in payments and benefits from social consumption funds. Between 1965 and 1975, the consumption fund increased by a factor of 1.9, amounting to 266.6 billion rubles in 1975. In that year, social consumption funds totaled 90 billion rubles, more than twice the figure for 1965. The increase in the consumption fund forms the basis for high and stable growth rates in the real incomes of the population. In 1975, real per capita income was 4.9 times higher than the prewar level (1940); during the ninth five-year plan (1971–75), the increase was 24 percent.

In other socialist countries, the consumption fund constituted the following percentages of utilized national income in 1975: 67.5 in the People’s Republic of Bulgaria, 70.3 in the Hungarian People’s Republic, 78.1 in the German Democratic Republic, 62.4 in the Mongolian People’s Republic, 62.8 in the Polish People’s Republic, and 70.7 in the Czechoslovak Socialist Republic. In capitalist countries the share of national income consumed by the working people has been systematically declining, the part consumed by the exploiter classes, the state, and the military has been rising.