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PROF. YEVSEI LIBERMAN, of the Kharkov State Uni-
versity, has been a major contributor to the Soviet
Union's current economic reforms. Last fall, in re-
sponse to a request from the radio station of the
Columbia University, Radio Moscow prepared an in-
terview with the 69-year-old economics expert in
which he discussed some of these reforms. Printed
here is the text of that interview.

use for these needs depends on
its profits, there is incentive for
the employees to work better.

Soviet factories have all along
issued bonuses to good workers
but the amount of money avail-
able for premiums has been
much smaller.

The reform has also intro-
duced a new system of prices.
Now: prices take into account
quality, durability, style and ap-
peal to the eye. The new sys-
tem makes the factory more in-
terested in bettering quality.

Narrator: How does the re-
form fit in with centralized plan-
ning?

Liberman: The new system
combines centralized planning
of key indicators with the max-
imum development of initiative
at factory level. There have
been claims in the West that
the reform weakens centralized
planning. This is not the case.
The government still fixes the
line of goods for each factory
and the share of profit from
sales that it must contribute to
the national budget. The gov-
ernment still controls loans .and
determines what factories are
to be built and where. On the
other hand, the new system
frees the government from
minute control of each enter-
prise and gives it a chance to
concentrate on rates of econo-
mic advance, balances in the
national economy, and_ other
major problems. ~

Narrator: Economists in the
United States insist that be-
cause the Soviet Union is put-
ting more stress on profits, it is
moving towards a capitalist
economy. What is your opinion?

Liberman: Such a view is far
from the truth. Proper use of
profit helps to build up:a social-
ist economy. At the dawn of the
Soviet government, Viadimir
Lenin said that profit was im-
portant to the Soviet economy;
it expressed the value of the
surplus product, and only by us-
ing the surplus product could
the country expand production,
meet the needs of the social ser-
vices, and raise the standard of
living.

We have used profit in our
economy since 1923. Profit is
much older than the capitalist
system, though many in the
western countries believe it is
exclusively an instrument of a
capitalist economy. The concept
of profit has existed throughout
the centuries of commodity pro-
duction. It expresses the value

of the surplus product; and the
surplus product has existed and
will continue to exist in different
social and economic systems.

The difference between social-
ism and capitalism is not that
capitalism recognizes profit and
socialism rejects it. The dif-
ference lies in the use that pro-
fit is put to. In the Soviet Union
it is used in society’s interests,
either immediately or ulimately.
The bulk of the profit of Soviet
enterprises is contributed to the
national treasury and then used
to develop the economy, build

homes for the population (homes:

that are not sold to people but
rented out at low rates), the
money also goes to cover the
government - financed _ pension
system, the free medical servic-
es and, in addition, the free edu-
cational system.

A certain share of the profit
remains in the hands of the en-
terprise and is used to benefit
the labor staff.

In a socialist system no indi-
vidual can use profit to lay
hands on the means of produc-
tion and pile up wealth for his
own benefit, as can be done in
a society of private enterprise.
Profits are the source on which
we draw to maintain a steady
rise in the living standards of
every man, woman and child.
They also stimulate the econo-
my and indicate how. effectively
each unit is operating.

Narrator: Dr. Liberman, how
has the reform progressed so
far?

Liberman: We have been in-
troducing the reform gradually
and cautiously over a period of
three years. Close to 640 large
enterprises have now made the
shift. These factories employ
more than two million, and their
output represents about eight
percent of total national output.
Most of the factories shifted to
the new system just a few
months ago, on July first. But
results are encouraging even
for this short time.

Let me give you some figures.
Nationwide, production, in-
creased eight percent in the
first nine months of the year.
But at the factories working un-
der the new system the growth
was 11 percent. The same fac-
tories registered a bigger growth
in labor efficiency: eight percent
as against a national average of
five.

All the new-system enterpris-
es over-reached production tar-
gets and added greatly to profits.

As a result they were able to
set aside 60 percent more money
than usual for bonuses. At the
turbine factory in Kharkov,
where I serve as consultant on
reform problems, bonuses added
25 to 30 percent to the monthly
wage of every employee in the
main departments. In addition,
the factory was able to put away
a large sum to be used for bonus
payments at the end of the year.

More money is also available
for social and cultural measures.
Compared with last year the

Profits and socialism

fund at the Kharkov factory has
nearly doubled. If calculated in
dollars, the growth is from
$23,000 to $40,000. The factory
has been able to open another
nursery school for the children
of employees and to enlarge its
medical services for fhe work-
ers to include departments for
electro and hydro-therapy. It
also has more money to buy ac-
commodations for employees at
health resorts. The workers get
the accommodations either free
of charge or at a discount.

around the world

A SOVIET ECONOMIC delegation is to go to Ethiopia to dis-
cuss cooperation between the two countries, it was announced in
Moscow after a state visit by Emperor Haile Selassie. The joint
communique issued at the end of the visit expressed “profound
concern at the dangerous situation in Vietnam” and called for the
“speediest ending of the war and unconditional recognition of the
Vietnamese people’s right to decide their own destinies.” ... The
West German trade union confederation has demanded that the neo-
fascist National Democratic Party in West Germany be banned.

*

*

A NEW TWO-YEAR AGREEMENT has been signed between
Britain and the Soviet Union envisaging wider contacts in science,
engineering, education, public health, art, movies, radio and tele-
vision . . . In Rio de Janeiro a secret congress of senior secondary
school students ended last week. The congress condemned the sus-
pension of student activity by the government a demand an end
to the arrests of labor, farmer and student leaders.

*

*

BURNING FLESH is profitable as is shown in the 13 percent
increase in net earnings from $310,246,246 to $329,654,277 for Dow

Chemical Company which manufactures napalm . .

. Belgium’s

largest student union has broken connections with the Interna-
tional Students Conference because of CIA financial support to

the ISC.
*

*

SOME 100 VIETNAMESE children who are casualties of the
war will be treated in the German Democratic Republic. Protestant
churches in East Berlin and Brandenburg will be the hosts.

The children, all of whom have lost arms or legs, will receive
orthopedic treatment for three months.

Efferts to bring Vietnamese children to the United States for

treatment have so far been balked by Washington, although doc-

tors, plastic surgeons and other specialists and nurses have volun-
teered their services and a fund is being raised for transportation.

*

RALLIES OF STUDENTS and workers in Madrid have forced
the government to release two imprisoned trade union leaders . .
The Quaker peace yacht Phoenix, loaded with medical supplies for
North Vietnam and a crew of American pacifists, left Japan last

week bound for Hanoi.

*

March 17, 1967—PACIFIC TRIBUNE—Page 9