Khozraschyot
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''Khozraschyot'' ( rus, хозрасчёт, p=ˌxozrɐˈɕːɵt; short for , 'economic accounting') was an attempt to introduce capitalist 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 into the
planned economy of the Soviet Union The five-year plans for the development of the national economy of the Union of Soviet Socialist Republics (USSR) (, ''pyatiletniye plany razvitiya narodnogo khozyaystva SSSR'') consisted of a series of nationwide centralized economic plans in ...
. ''Khozraschyot'' introduced a certain degree of independence of enterprises (which continued to be state-owned and subject to state control) and allowed for self-management and self-financing within the framework of prices set by the Soviet government.


Meaning

The term has often been translated as
cost accounting Cost accounting is defined by the Institute of Management Accountants 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 includ ...
, a term more commonly used for management approaches in a
free market In economics, a free market is an economic market (economics), 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 ...
economy. It has also been conflated with other concepts: self-financing,
cost-effectiveness Cost-effectiveness analysis (CEA) is a form of economic analysis that compares the relative costs and outcomes (effects) of different courses of action. Cost-effectiveness analysis is distinct from cost–benefit analysis, which assigns a moneta ...
(; ), and self-management (; ) introduced in state-owned enterprises in the 1980s. As defined in the '' Soviet Encyclopedic Dictionary'':


History

introduced the necessity of accountability and
profitability In economics, profit is the difference between revenue that an economic entity has received from its outputs and total costs of its inputs, also known as surplus value. It is equal to total revenue minus total cost, including both Explicit co ...
, as well as motivation for economical expenditures. The concept was introduced during
Lenin Vladimir Ilyich Ulyanov ( 187021 January 1924), better known as Vladimir Lenin, was a Russian revolutionary, politician and political theorist. He was the first head of government of Soviet Russia from 1917 until Death and state funeral of ...
's New Economic Policy (NEP) period. However, the concept of "profitability" often favoured
light industry Light industry are Industry (economics), industries that usually are less Capital intensity, capital-intensive than heavy industry, heavy industries and are more consumer-oriented than business-oriented, as they typically produce smaller consum ...
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 sometimes deemed to have "poor profitability." Since the development of heavy industry and
capital goods In economics, capital goods or capital are "those durable produced goods that are in turn used as productive inputs for further production" of goods and services. A typical example is the machinery used in a factory. At the macroeconomic level, ...
was a priority for the rapid modernisation of the Soviet Union, by the end of the 1920s, the notion of economic profitability was subordinated to the requirements of an
economic plan A market intervention is a policy or measure that modifies or interferes with a market, typically done in the form of state action, but also by philanthropic and political-action groups. Market interventions can be done for a number of reaso ...
. This plan was heavily influenced by political decisions, with its "control figures" becoming obligatory targets within the framework of the
Five-Year Plans Five-year plan may refer to: Nation plans * Five-year plans of the Soviet Union, a series of nationwide centralized economic plans in the Soviet Union * Five-Year Plans of Argentina, under Peron (1946–1955) * Five-Year Plans of Bhutan, a series ...
. The concept re-emerged during the
1965 Soviet economic reform The 1965 Soviet economic reform, sometimes called the Kosygin reform () or Liberman reform, named after E.G. Liberman, was a set of planned changes in the economy of the USSR. A centerpiece of these changes was the introduction of profitability ...
(" Kosygin's reform") and was further emphasised in the late 1980s during
perestroika ''Perestroika'' ( ; rus, перестройка, r=perestrojka, p=pʲɪrʲɪˈstrojkə, a=ru-perestroika.ogg, links=no) was a political reform movement within the Communist Party of the Soviet Union (CPSU) during the late 1980s, widely associ ...
, when it also included
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-managed economy, ...
. A tentative step towards private activity occurred in 1986 with a law allowing private management of a few handicraft and service businesses, which involved unpaid and family labour, strict state controls, and high tax rates of 65% (later reduced in 1988).


Notes


References

{{Authority control Reform in the Soviet Union Costs Economy of the Soviet Union Profit 1920s in the Soviet Union 1960s in the Soviet Union 1980s in the Soviet Union