New Technology and the Planning of Capital Investments

The building of the material and technical base of communism requires important changes in the techniques of material production. Technical progress brings about substantial shifts in interbranch proportions which involve a reorganization of the complex pattern of related branches. The new Draft Program of the Party points out that intensive industrial development will require important progressive shifts in industrial structure. Under the circumstances, the planned estimates of production growth in any given branch must include magnitudes which reflect induced expenditures of various kinds. For example, the expansion of textile production requires approximately 5 kopecks of investment in textile mills for every meter of increment of capacity. But additional investment is also needed to expand capacities in the production of fiber, dyes and other materials. The amount of these induced investments is subject to sharp fluctuations depending on the selected raw material â for example, when natural fiber is replaced by synthetic fiber. In the first case additional expenditures are needed to expand cotton plantations and irrigation installations, potassium mines, factories manufacturing cotton-picking machines, cotton gins, etc. In the second instance, investment must be allocated to oil chemistry, output of gas and oil, expansion of power capacities and of the manufacture of pipes, compressors, pumps, measuring and regulating apparatus, etc. In metallurgy the partial replacement of steel and copper by aluminum requires an intensive expansion of electric power capacities, while the retention of the present ratio of steel to other metals involves a growth in the output of iron ore and coking coal.