The Measurement of the Rate of Profit and the Bonus Scheme for Managers in the Soviet Union

Geoffrey Harcourt

Chapter 12 in Selected Essays on Economic Policy, 2001, pp 173-179 from Palgrave Macmillan

Abstract: Abstract IN a recent article Mr Merrett discussed some of the implications of linking money bonuses for managers to the rate of profit in Soviet industry.1 The purpose of this note is to comment on some further implications of the bonus scheme which arise from the measure of the rate of profit used in the Soviet Union. It is shown that managers in charge of enterprises which use particular types of machines are favourably treated by the bonus scheme and that if the sizes of expected bonuses influence the choice of investment projects, the measure of the rate of profit has an arbitrary impact on these decisions. The note concludes with a discussion of the relation between the bonus scheme and the criterion of choice of technique put forward by Professor Meek.2

Date: 2001
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Journal Article: THE MEASUKEMENT OF THE RATE OF PROFITAND THE BONUS SCHEME FOR MANAGERSIN THE SOVIET UNION (1966)
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DOI: 10.1057/9780230510562_12

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