[4] Lev Gatovsky was born into a Jewish family[5] on 26 July 1903 in the city of Minsk, in the Russian Empire, later Soviet Union, and current Belarus.

Additionally, Gatovsky served as the editor for numerous significant economic and statistical works, including several major monographs and various methodological guides.

[14][8] During the 1940s and 1950s, he produced several works on the theory of the Soviet economy, offering a political and economic examination to the challenges faced during the transition period and the construction of socialism.

This report, based on research by the Scientific Council of the USSR Academy of Sciences, which Gatovsky chaired, was approved and adopted as a draft, influencing subsequent policy decisions and practices.

[8] In 1964–1965, Gatovsky played a direct role in preparing the 1965 economic reform, which aimed to overhaul the planning and management of the Soviet Union's national economy.

Socialist enterprises, such as collective and state farms, demonstrated the highest marketability, yet their overall contribution to gross grain production remained minimal.

Consequently, the real incomes of the urban population decreased, while the gains for rural areas, particularly the kulaks, from state price regulation grew substantially.

These included impacts on real wages and costs, reduced profitability of intensive agricultural sectors, exacerbated rural demand for manufactured goods, and a weakened monetary system.

His analysis underscored the complex interplay between state-controlled pricing policies and market dynamics, emphasizing the need for careful regulation to maintain economic stability and equitable growth.

Finally in his draft, he proposes what he defines as the basic law of the movement to communism:[17]"Socialist nationalization of production on the basis of industrialization and the restriction, expulsion, and final dissolution of capitalist elements" Then, he provides his definition of "political economy in the wide sense":[17]"The relation of economics and politics, economics and technology, social way of life and consciousness, in conditions of planned economy.

He discusses methodological principles for studying these regularities, particularly under the dual development characteristic of the Soviet system, which includes both socialist and transitional elements.

Using the theoretical foundations of Marxism-Leninism and Lenin's blueprint for building socialism, he illustrated how, under the leadership of the Communist Party, the Soviets achieved remarkable milestones in a historically short period.

On this line, Robert Michels' "Iron Law of Oligarchy" warns of the risks of power concentration within parties, potentially leading to inefficiency and suppression of dissent.

[28] From a more economic point of view, Friedrich Hayek[29] and Ludwig von Mises[30] were critical with centralized planning for its lack of market signals and innovation.

This approach, rooted in socialist ideology, aimed to distribute labor power and means of production across various sectors of the economy, as articulated by Karl Marx.

An extensive propaganda campaign vilified centralized planning as obsolete, bureaucratic, and restrictive, attributing its flaws to Stalin's interpretation of socialism.

Liberman advocated for giving enterprises more autonomy and reducing central directives to key indices, thus allowing them to make decisions based on market demand.

[43] In this context, Gatovsky also took a critical stance against centralized planning believing that excessive bureaucratic control stifled innovation and economic progress.

Ultimately he also called for reforms that would empower enterprises to make decisions autonomously:[44][45][39]"Stalin... substituted naked administration by fiat for economic instruments of directing the economy.

[46] However, General Secretary Leonid Brezhnev and Kosygin's 1965 reforms fundamentally altered this approach, introducing cost accounting (khozraschot) and emphasizing profitability at the enterprise level.

[47][48] Gatovsky defined profit in a socialist economy as the residual surplus of revenue over costs, serving as an incentive mechanism to enhance enterprise performance.

[45]Nevertheless, the opposition claimed that even Lenin's endorsement of state enterprise profitability under the New Economic Policy (NEP) was intended as a temporary retreat to capitalist principles, not a permanent foundation for socialist development, and thus it was the duty of trade unions to proctect worker's interest.

[47] Gatovsky believed that these market forces, through the profit motive, would ensure the efficient allocation of resources and satisfy the people's needs given the existing productive capacities.

[39] Under the system of cost accountability, the rate of profit serves as the primary measure of an enterprise's efficiency, functioning as a regulator of social production.

Consequently, contemporary (to Gatovsky) Soviet economists, especially in specialized journals, often referred to these assets as capital too, emphasizing their role in profitability and the necessity of payments for their use.

Differentiated payments based on factors such as quality, location, and size were introduced for natural assets like land, water, and minerals to reflect their varying contributions to profitability.

By 1971, these payments constituted a significant portion of state revenue, raising questions about the ownership of production assets, particularly whether they remained state-owned or became the property of the enterprises utilizing them.

Well-managed enterprises received more favorable terms, while poorly run ones faced stricter conditions and punitive rates for late repayments.

This approach mirrored practices in capitalist economies, where credit is used as a tool to influence economic behavior and performance, although Soviet economist claimed to be "qualitatively different".

However, the practices and principles adopted during the reforms showed significant parallels, emphasizing efficiency, profitability, and the strategic use of credit as an economic lever.