Capacity utilization and the shift coefficient in Soviet planning

Conclusion

In the eighties greater emphasis has been placed on intensification of growth in the Soviet Union. Soviet planners are now confronted with the task of improving their knowledge of existing capacity and their means of control over both capacity utilization and expansion. Imperfect knowledge has become a major hindrance to a better allocation of resources. Information is limited and biased. The ministries tend to overestimate capacity utilization by excluding from the estimates of their equipment machines in storage or recently installed. The CSA's statistics are biased by inadequate statistical methods and by the reliance on physical indicators. They tend to overestimate actual capacity and consequently to underestimate capacity utilization.

Amongst the available indicators on capacity utilization, planners focus more on the shift coefficient. All industry is presently under pressure to increase this coefficient. However in most engineering branches the equipment shift coefficient is estimated on the basis of enterprises' data on workers' attendances, which—however stable the capital labour ratio may be—cannot give evidence of idle equipment due to technical, organizational and other factors, which could be conventionally defined planning failures and that official censuses on capacity utilization show to be increasingly important. Thus the confidenence on information obtained through the estimated shift coefficient may lead to misplacing the emphasis on a human factor, e.g. on voluntarism. Labour shortages may not be a crucial factor for incomplete capacity utilization as long as most industry works on a two shift regime. But a higher shift regime, particularly in branches with prevalent female labour, may provoke increasing turnover and need for auxiliary repair and servicing personnel, which may jeopardize the policy of intensification.

Coeteris paribus the utilization of the workers shift coefficient as a proxy for the equipment shift coefficient may have been justified as long as the capital labour elasticity of substitution was almost nil. However, increasing automation and computerization may aggravate the problem of obtaining correct information on shift and intra-shift capacity utilization. Intrashift capacity utilization may even decrease when the shift regime increases. If decisions on writing off capacity were taken on the basis of a falling workers' shift coefficient, enterprises could be induced to renounce advance technology, in favour of traditional equipment. This, in turn, could aggravate the problem of labour shortage.

In default of a proper system of information, planners need to focus on the functioning and achievements of leading industry, which is more closely monitored. One may assume that this section of industry works with automated technology and is at the forefront of the process of adapting the industrial apparatus to present day technological requirements.