Acta Oeconomica 5. (1970)

1970 / 4. szám - Nagy Tamás: On the Expedient Forms of Reallocating Capital in the Hungarian Economy

Acta Oeconomica Academiae Scientiarum Hungaricae, Tomus 5 (4), pp■ 305—323 (1970) T. Nagy ON THE EXPEDIENT FORMS OF REALLOCATING CAPITAL IN THE HUNGARIAN ECONOMY The article discusses what new forms should be created or what combina­tions of existing new forms should be developed in the Hungarian economy to promote a more rational allocation, a planned flow and a more efficient utilization of capital within the framework of the existing model of economic mechanism. It is an important and highly debated problem for both theory and practice to find the best forms of regrouping capital* in a socialist economy — more precisely in its form where planned central control is organically linked up with the functioning of the market mechanism — necessary for a rational allocation and efficient utilization of means in the interest of society. The economic concept of capital regrouping is not exactly defined. What I consider a regrouping (flow or movement) of capital is any change in the distribution of the total (real) capital of society among the individual enterprises, excluding the investment of self-earned capital by any enterprise into itself. Thus, without wishing to give an exhaustive enumeration, a regrouping of capital** occurs in socialist economy when - the state grants capital to enterprises or financial institutions from its different budgetary revenues (mostly originating from the partial with­drawal of incomes formed in enterprises); — enterprises obtain credit through the bank system or transfer means to other enterprises in the same way; — unions of enterprises reallocate capital among their enterprises;*** — enterprises transfer capital directly to each other in money or in kind with a final or temporary character; — enterprises join for certain purposes or perhaps create joint enter­prises; * Unfortunately, no unequivocal or generally accepted term has developed for denoting the values invested or to be invested in production and distribution under condi­tions of socialist commodity production (that is, for the equivalent of “capital”). The denom­inations of assets, funds and capital are usual. Though under capitalist conditions the notion of capital is inseparable from exploitation and its use may thus give rise to misun­derstandings, English-speaking readers will find it easier to follow the article if the term is retained in spite of its above connotation. ** I do not distinguish regrouping from regroupment. I consider, namely, as incor­rect the view which wishes to reserve the latter concept for the movements of capital which are centrally determined (prescribed) by society, because it considers only the latter to be “conscious” processes, and denotes the other “spontaneous” movements by the word regrouping. I believe that the concept should be discarded which believes that only those processes are conscious that are going on according to central prescriptions and everything else is spontaneous. *** The Hungarian unions usually have no such right. Ada Oeconomica Academiae Scientiarum Hungaricae 5, 19 70

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