valovaya produktsiya (gross output)
총생산량
The principal plan indicator by which Soviet enterprises were judged, measured as the total monetary value of all finished goods and work-in-progress produced. Commonly shortened to val (вал), it rewarded sheer volume: the more expensive the inputs and the heavier the output, the higher the indicator climbed. This created a structural bias toward costlier, heavier products and discouraged economizing on materials, quality improvement, or innovation.
In depth
Val as a Plan Indicator
Valovaya produktsiya (валовая продукция), shortened to val (вал), was the dominant success indicator for Soviet industrial enterprises from the 1930s until the 1965 reform. It summed the wholesale-price value of all finished goods, semi-finished products, and work-in-progress turned out by an enterprise in a given period. Manager bonuses, sometimes equal to base salaries, were tied directly to exceeding the planned gross output figure.
Perverse Incentives
Because val measured only the aggregate value of output, it rewarded enterprises for using more expensive materials, producing heavier goods, and tilting the product mix toward costlier items. When plans were set in tons, goods grew heavier; when set in roubles, dearer inputs were favoured. Alec Nove described the chronic consequence: enterprises produced not what the user actually required, but the assortment that added up to the required aggregate quantity. Cost reduction and quality improvement, which might lower gross output, were actively avoided. Soviet economists had been describing these dysfunctional effects since the 1920s.
Replacement and Afterlife
The 1965 Kosygin-Liberman reform abolished val as the main indicator and replaced it with realizatsiya (реализация, sales) and profitability (рентабельность), meaning enterprises now had to sell output, not just produce it, and to do so at a profit. The infamous val was dropped. But as the reform was curtailed in the 1970s, gross output targets crept back onto the mandatory list, and the structural bias toward waste persisted as a chronic inefficiency of the Soviet economy.
Sources
- encyclopedia.com Encyclopedia.com: "Profitability had for some time been one of the indicators of plan fulfillment, though the main indicator was still gross output (valovaya produktsia, or val for short)." Documents val as primary indicator and its abolition in the reform.
- Wikipedia (EN) Wikipedia: "The system also incentivized pointless increases in the size, weight, and cost of production outputs, simply because 'more' had been produced." Documents the perverse incentive toward heavier, costlier products.
- haverford.edu Kontorovich (Haverford College): detailed analysis of cost-maximizing behavior driven by the gross value of output target, including use of more expensive materials to inflate the indicator.
- newleftreview.org Alec Nove, NLR I/119 (1980): "if the plan is in tons, the heavier the goods the better; if in rouble-value then the dearer the inputs the better." Classic formulation of the val distortion.
- novayagazeta.ru Novaya Gazeta (2025): confirms val encouraged waste (расточительство) and production of expensive but unnecessary output, replaced by profit/rentability under the Kosygin reform.