Khozraschyot

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Khozraschyot or Khozraschet (Russian: Хозрасчёт, хозяйственный расчёт, literally: "economic accounting") was an attempt to simulate the capitalist concepts of profit and profit center into the planned economy of the Soviet Union.

The term has often been translated as cost accounting, which does not cover significant peculiarities of the Soviet economy. It has also been conflated with other notions of self-financing (самофинансирование), self-repayment (самоокупаемость), and self-management (самоуправление) introduced in 1980s.

As defined in Soviet Encyclopedical Dictionary,

"khozraschyot is a method of the planned running of an economic unit (i.e., of a business, in Western terms) based on the confrontation of the expenses incurred in production with the production output, on the compensation of expenses with the income".

Khozraschyot introduced the necessity in accountability and profitability, as well as the motivation in thrifty expenditures. It attempted to provide real ways and means for implementing a catch phrase "Economics must be economical", attributed to Leonid Brezhnev, a subject of mockery.

[edit] History

The notion was introduced during the NEP period ^[1]. However the notion of "profitability" tended to favor the light industry over the heavy industry, which was hindered on the pretext of "poor profitability". Since the priority in development of heavy industry and capital goods to ensure fast modernization of the Soviet Union was among the major dogmas of Marxist economics, by the end of 1920s, the notion of econimic profitability was subordinated to the demands of an economic plan (хозяйственный план) 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 pyatiletkas.

The notion re-emerged during the economic reform in 1965, and finally a great emphasis on it was placed in late 1980s, during perestroika.