''Khozraschyot'' ( rus, хозрасчёт, p=ˌxozrɐˈɕːɵt; short for 'economic accounting') was an attempt to simulate the

capitalist Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Central characteristics of capitalism include capital accumulation, competitive markets, price system, private ...

concepts of

profit Profit may refer to: Business and law * Profit (accounting), the difference between the purchase price and the costs of bringing to market * Profit (economics), normal profit and economic profit * Profit (real property), a nonpossessory inter ...

and

profit center A profit center is a part of a business which is expected to make an identifiable contribution to the organization's profits. Overview A profit center is a section of a company treated as a separate business. Thus profits or losses for a pro ...

into the planned

economy of the Soviet Union The economy of the Soviet Union was based on state ownership of the means of production, collective farming, and industrial manufacturing. An administrative-command system managed a distinctive form of central planning. The Soviet economy was ...

Meaning

The term has often been translated as

cost accounting Cost accounting is defined as "a systematic set of procedures for recording and reporting measurements of the cost of manufacturing goods and performing services in the aggregate and in detail. It includes methods for recognizing, classifying, al ...

, a term more typically used for a management approach in a

free market In economics, a free market is an economic system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers. Such markets, as modeled, operate without the intervention of government or any ot ...

economy. It has also been conflated with other notions of self-financing (; ), cost-effectiveness (; ), and self-management (; ) introduced in the state-owned enterprises in the 1980s. As defined in the '' Soviet Encyclopedic Dictionary'':

History

introduced the necessity in accountability and

profitability In economics, profit is the difference between the revenue that an economic entity has received from its outputs and the total cost of its inputs. It is equal to total revenue minus total cost, including both explicit and implicit costs. It i ...

as well as the motivation in thrifty expenditures. The notion was introduced during

Lenin Vladimir Ilyich Ulyanov. ( 1870 – 21 January 1924), better known as Vladimir Lenin,. was a Russian revolutionary, politician, and political theorist. He served as the first and founding head of government of Soviet Russia from 1917 to 1 ...

's New Economic Policy (NEP) period.Charles Bettelheim, Class Struggles in the USSR
(a translation of ''Les Luttes de classes en URSS'' 1977, Maspero/Seuil, Paris, France) However, the notion of "profitability" tended to favor

light industry Light industry are industries that usually are less capital-intensive than heavy industry and are more consumer-oriented than business-oriented, as they typically produce smaller consumer goods. Most light industry products are produced for ...

over

heavy industry Heavy industry is an industry that involves one or more characteristics such as large and heavy products; large and heavy equipment and facilities (such as heavy equipment, large machine tools, huge buildings and large-scale infrastructure); o ...

, which was hindered on the pretext of "poor profitability". Since the priority in development of heavy industry and

capital goods The economic concept of a capital good (also called complex product systems (CoPS),H. Rush, "Managing innovation in complex product systems (CoPS)," IEE Colloquium on EPSRC Technology Management Initiative (Engineering & Physical Sciences Researc ...

to ensure fast modernisation of the Soviet Union was among the major sciences of the Marxist–Leninist application of Marxist economics to the Russian situation, by the end of the 1920s the notion of economic profitability was subordinated to the demands of an economic plan (), which in its turn was put into a direct dependence on political decisions and whose "control figures" were turned from guidelines into obligatory targets expressed in the series of '' Five-Year Plans''. The notion re-emerged during the

1965 Soviet economic reform The 1965 Soviet economic reform, sometimes called the Kosygin reform () or Liberman reform, was a set of planned changes in the economy of the USSR. A centerpiece of these changes was the introduction of profitability and sales as the two key in ...

and was later greatly emphasized in the late 1980s during when it also implied

workers' self-management Workers' self-management, also referred to as labor management and organizational self-management, is a form of organizational management based on self-directed work processes on the part of an organization's workforce. Self-management is a def ...

Notes

References

Reform in the Soviet Union Costs Economy of the Soviet Union Profit Mikhail Gorbachev Political catchphrases Soviet phraseology 1980s in the Soviet Union {{Econ-policy-stub