Economic Effect and the Quality of Products

Yu Guangyuan

Chinese Economy, 1980, vol. 13, issue 3, 3-19

Abstract: The concept of economic effect varies with the differing natures of social production. The goal of capitalist production is to create surplus value for the capitalist, whose means for achieving this goal is to advance a certain amount of capital.** Because of this, the economic effect, as defined in capitalist production, cannot but be a ratio between the surplus value the capitalist gained and the capital he advanced. As far as the capitalist is concerned, to produce the same amount of surplus value with a smaller amount of prepaid capital means a larger economic effect, while a larger amount of prepaid capital means a smaller economic effect. The reverse is also true. With the same amount of advanced capital, the economic effect is greater when more surplus value is created, and the economic effect is smaller when lesser surplus value is created. In capitalist production the maximum economic effect is achieved when maximum surplus value is extracted with a minimum of advanced capital. This is precisely the concept of economic effect in capitalist production. In a socialist society, the purpose of production is to create use value to meet the needs of society. Labor is the means for a socialist society to achieve this goal. Therefore the economic effect, as defined in socialist production, cannot but be a ratio between the use value the socialist society obtains and the labor it consumes in production. In producing the same amount of use value, the economic effect is larger if less labor is consumed; the economic effect is smaller if more labor is consumed. The reverse is also true. By consuming the same amount of labor, the economic effect is larger if more use value is created; the economic effect is smaller if less use value is created. The maximum economic effect in socialist production means the production of maximum use value by the least possible labor consumption. The concept of economic effect in capitalist production is essentially different from that in socialist production. This is obvious.

Date: 1980
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