Category: The Humanism

Good Socialism

3.1.2.2          Good Socialism

 

A Developed Market of Work will Create Socialism 

 

Most of the problems of today’s market economy are primarily based on the underdevelopment of the market economy. This study will try to present that the main problem of the capitalist economy is not too much but instead not enough market.

 

The goods are always on the market even if they formally are not, since any products will be sold if there is a good enough offer. On the other hand, jobs are rarely on the market, which is probably a significant problem in today’s economy. A developed labour market should produce competition among workers to achieve greater productivity for every public workplace at any time. Such an economy will significantly improve society.

 

Workers in capitalism have jobs protected by laws and unions; jobs in capitalism are privileged, though to a lesser extent than in socialism. A more productive worker cannot apply for a work position already occupied by another worker. That is why capitalism’s division of work cannot efficiently allocate labour and achieve maximum possible productivity. One should protect the existence of workers, not jobs. A better future for humankind necessarily requires that workers become subjects with equal rights in production. This will be achieved when all the workers have equal opportunities to choose any job they want in public companies. Society needs to establish a standard for selecting workers. History has presented no more socially justified employment principle than hiring the best available worker at each work post.

 

Capitalism taught people to love competition and that being the winner brings enormous satisfaction. As a result, people do not hesitate to exert any effort to express themselves. So why would society not open competitions for every public workplace at any time? It sounds impossible because such a division of labour never existed. However, its realization is just a technical problem, and it will bring enormous benefits to society.

 

Work competition as a form of employment in the labour market represents an ongoing open competition for all work posts. This means that any worker may take the work post of another worker at any point in time if they perform a particular job more productively.

 

To achieve such an economic system, people need to find an efficient way to evaluate work productivity, define job responsibilities, and harmonize rewards for work at any time. In short, the workers who offer the highest productivity and accountability and demand the lowest salary in a company owned by society will get the job at any time. It would be nothing else but a developed market of work. However, the work market will require time to develop enough and be accepted by people.

 

The work competition in the market will incentivize workers much more than capitalism can through wages. The existence of workers would never be endangered because every worker will be able to find a job in a fully employed environment. The work competition will establish such a strong responsibility that no one would dare to offer work productivity they would not be able to meet. The market will also regulate workers’ salaries most objectively. As a result, the living standards for all people may increase in an unprecedented way. People may be very pleased with living in such a system. Only this shall be called socialism. The following text defines the labour division of socialism.

 

There is no fairer or better division of labour than a competition of workers through their labour productivity for any workplace at any time. Productivity will be measured by earned money, quantity and quality of produced goods or rating workers’ productivity by consumers. A worker who offers higher profits, more manufactured goods, a better, cleaner, and cheaper production will get the desired job. Comparing the productivity of workers may be complex but also very simple. Democratic anarchy will make it straightforward.

 

Permanently open work competition among workers has never existed because nobody believed it was possible and did not invest any effort into developing such an idea. However, this book analyzes the potential problems that an open work competition might bring to society and provides answers to solve such problems. Of course, the work competition will be highly regulated to avoid possible instability in such work distribution. Nevertheless, once people consider such a division of labour, it will open the possibility for significant economic and social improvement.

 

Of course, the work competition will relate only to public companies because if it applies to private enterprises, that will practically mean a seizure of private property. Private companies will continue their businesses as they do today. It will be necessary to regulate and democratically accept a new division of labour in public companies by the law. One day, the proposed division of work will be accepted because the principles of such a division of labour are natural, just, and the most productive.

 

A worker who offers the highest productivity for any workplace at any time immediately becomes a prime candidate for that position, regardless of whether the workplace is occupied or not. If there are already employed workers at such workplaces who do not want to leave their jobs, they will have to accept the competitors’ productivity, and in that case, they will continue to hold their work positions. However, if they cannot take the new responsibilities or would not want it, they will immediately vacate the workplace and leave it to the competitor.

 

The existential security of workers is necessary as a condition of stability for society, and therefore, society will guarantee it. In the proposed system, all workers will be economically secure after leaving any job. Losing a job will not create income stress, and workers will have the ability to find new work in a full-employment environment quickly. Such security will remove the great fear of unemployment that is prevalent worldwide. Capitalism finds the primary motivation for work from the fear of the workers’ economic survival, so it does not provide enough financial security to the people. The new system will build motivation for work from the free choice of choosing a career and its satisfaction.

 

The advantages of such a division of work will be enormous. The best worker in every workplace ensures maximum productivity for companies, satisfying consumers’ needs most efficiently. Thus, such a division of labour will find its most significant justification. Furthermore, the labour market will give people the freedom to choose jobs they love more. They will enjoy work far more than they do today. Work will become a value in and of itself.

 

Furthermore, the open labour market will eliminate privileges. Today, people might experience a loss of privileges as a significant disadvantage. However, as mentioned previously, privileges are one of the leading causes of problems in society. Eliminating working privileges means increasing productivity and reducing, if not removing, corruption and immorality in the community. With time, people will realize that the loss of privileges would considerably increase the possibility of finding work that enhances workers’ productive power, the power of being. The power of being develops creativity and brings great and stable satisfaction that privileges could not achieve. The proposed socialist labour market will allow a permanent development of the productive being powers in society, which will bring significant benefits to the community.

 

Such a system of production is becoming possible for the first time in the history of humankind because the development of computer technology has allowed people to plan production, monitor process the productivity of workers, the values of their work and the responsibility they bear for their work, in the system of fast changes in the work obligations. Capable Enterprise Resource Planning (ERP) systems exist today, but they must adapt to the socialist business operating system.

 

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This book develops Marx’s simplified labour theory of value by extending workers’ compensation with functions that can increase productivity and justice in the economy. Every produced commodity contains the values of past and present work. Therefore, workers’ wages should be based on their past and present contributions to production processes.

 

The current work value should show how much work brings advantages and disadvantages to workers compared to other jobs. Let’s say the average value and price of current labour are 1. Then a worker who is 10% more interested in a particular position is likely to ask for the cost of that labour at a value of 0.9 to make his offer more competitive for the job. It will make him earn 10% less than in an average job. However, the worker who demands the lowest price for the current work will receive a better chance of getting the job. The justification for accepting the lowest labour cost offer lies in that such work is the most convenient for the worker and cheapest for society. The cost of ongoing work will be one factor that determines workers’ salaries. The work market will make suitable jobs achieve lower wages, and inconvenient positions will be compensated with higher payments. A developed work market will form an objective price of current work the same way the goods market does, and workers will be satisfied with the earnings. Unions as mediators in determining incomes will no longer be required.

 

The past work value of workers presents how much workers have contributed to creating the values society possesses. In capitalism, the more valuable the past work is, the more wealth is produced, so wealth shows the value of past work. But capitalism does not recognize other values that exist in society. For example, giving birth, being born, and the productive growth of people is the highest scope of value people may produce, and people must recognize it as a value of past work. Such values are priceless, so they cannot be objectively determined, but they may be formed by arbitration in the best interest of all people. Similarly, society has established punishment for a murder that has nothing to do with objectivity, but it is beneficial because it prevents killing.

 

Recognition of the value of people’s past work will enable all to receive a basic income from birth. All people’s valuable accomplishments from birth should be valued and accepted as past work. The value of the current work of unemployed people should be adjusted to society’s capability. Past and present work will be regulated in such a manner so that all people receive at least a minimum income as a guarantee of a secure existence. The payment of the unemployed population will be automatically generated from the taxes of employed people. Such an idea is propagated today under the name Universal Basic Income.

 

The value of past work will include all the improvements people can make in society. This will motivate people to advance all values, thus bringing more benefits to the community. On the other hand, people will use the value of past work to take responsibility for any damage they do to society. For example, any crime can be assessed by people’s past work value. The criminal system will transform to recalculate the prison sentences of criminals by deducting the value of the past work of criminals in proportion to the crimes committed. Losing some of the value of past work will be a more effective and humane punishment for criminals than imprisonment.

 

The value of past work will be a very efficient tool for being held responsible in society. It will be highly beneficial and necessary for establishing the progress of humanity. The arbitration for the values of past work should be regulated by the law and democratically accepted by the people. This is a challenging task and most likely the main reason the socialist division of labour cannot be implemented soon.

 

Let’s assume that the average value of past labour is 100,000 points, while the average value of current work is 1. The multiplication of these values will determine the worker’s labour value or cost value. This means that the average salary will have 100,000 monetary units. The average value of past labour can be adjusted to gross national income per capita, while the average value of current work can be adjusted to 1, which will adapt incomes with the values of goods and services produced.

 

Only the market can establish objective prices of goods. If a company achieves a higher price of goods, making a higher profit on the market than workers’ incomes demand, they will make more money than they demanded. The difference between required and received incomes would represent a surplus value. In firms that achieve a lower price of goods making a lower profit on the market than workers’ incomes demand, workers would receive lower wages than they needed even though they reached the productivity they offered. To avoid competition for work in more profitable public companies, more profitable public companies will surrender surplus earnings to public companies that achieve a shortage of revenues in the market.

 

The overflow of surplus values of public enterprises into those with a lack of earnings in the market will prevent the imbalance in the division of labour. As a result, everyone will earn as much money as they asked for their productivity. Thus, the labour market will balance employment in all public enterprises, regardless of the revenues of enterprises arising from market inconsistencies. It should be emphasized that the market is the best gift that Mother Nature has given to the economy, capable of bringing justice and stability to production processes. Economic development will no longer be based on market benefits but will result from people’s conscious decisions. People will base the development policy of the economy on the amount of money they will set aside from the tax for the development of the economy.

 

The new economic system would have no meaning without efficient regulation of workers’ responsibilities in production processes. In the developed work market, workers may offer an increase in their productivity by unrealistic offers to get the jobs they want. Such irresponsibility may result in the collapse of the economic system. Today, for example, politicians do precisely that, which is one of the leading causes of people’s disappointment and immorality in society.

 

The proposed socialist economy will use the workers’ past work values to establish workers’ responsibility in the production processes. This is what socialism has not had, resulting in inefficient production. Workers would guarantee the productivity they propose by the value of their past work. If workers do not meet the proposed productivities, they will bear responsibility by losing the value of their past work.

 

The workers will numerically determine the scope of their responsibilities in the production processes of public companies. Let’s say the average responsibility has a value of 1. The higher the accountabilities the workers offer for the desired workplaces, the greater a right they will have to work in the desired workplaces. If the revenues of public enterprises increase, the workers will share the profits in proportion to the responsibility they have proposed for their work. Such gain will be expressed in the value of the past work. Conversely, if a company loses money, workers who offer greater responsibility for their work will make significant losses in the value of past work.

 

Once the company’s performance is identified and the responsibility of workers is determined, the rewarding and punishing of the workers by the value of past work takes place automatically. In addition, workers will also be held accountable for their work through democratic anarchy. One can imagine how powerful democratic anarchy will be when people are given equal rights to reward and punish others with only a little value representing their past work.

 

The following fictitious examples present how the work division in socialism would work: Let a baker produces 1000 loaves of bread daily, making it the standard baking productivity with a coefficient value of 1. Then, let him value his work at a value of 1 (assuming this is an average work price). Finally, let him take responsibility for his productivity at a value of 1 (assuming this is an average responsibility for all jobs). Then a new baker who wants to take the position of the existing baker needs to offer the productivity of a value greater than 1 or needs to request a lower price of the current work, which would be a value lesser than 1, or needs to offer higher responsibility which will be in a value greater than 1. If a new baker proposes a better work offer than the existing one, who cannot or does not want to meet it, the new baker gets the job.

 

Establishing labour competition among workers can be challenging because comparing different productivity can make choosing the best job offer demanding. Then the work productivity of a new baker should be evaluated, which would require the assessment of the quantity and quality of the produced bread. If the offered productivity is not realized, disputes are possible and finding solutions may be problematic. For example, if the supplied ingredients of bread were not satisfactory, it may affect the realized productivity of the baker, for which he might not be responsible. Finally, considering that the job description is usually more complex than presented in this example, the workers might spend a lot of time resolving such issues, reducing the time to work. Nobel laureate Ronald Coase stated that resolving such an issue would require a higher cost than economically justified[1]. He may be correct, but the open competition among workers might still bring superior economic productivity to capitalism.

 

However, democratic anarchy may completely resolve such a problem. By accepting democratic anarchy, workers will not even need to offer their productivities anymore; it will be assumed their productivity must be equal to or better than the productivity of the replaced worker. The work price will be standardized the same way the prices of goods are standardized today on the market. Practically, the highest responsibility offered by any worker for any job will be the main if not the only requirement for getting the job. The fine-tuning of workers’ responsibility will be determined through democratic anarchy by the evaluations made by their coworkers or customers. The following paragraphs will present what this means.

 

Let’s say the baker gets the job by offering work responsibility in the value of 1.2. The evaluations of people will be limited, so if the baker does not receive any assessment, the value of his past work will not change. However, if the baker receives two negative evaluations from people, he will lose 2.4 points from the value of his past work. Such responsibility will permanently reduce his salary by 2.4 money units. That means the baker will take responsibility for everything connected to the bread he produces. He will bear the same responsibility of being negatively assessed for any activity outside bread production. On the other hand, suppose a baker makes customers very satisfied with the bread he produces, then he may expect positive evaluations, which will permanently increase his salary. The impact of the assessments may be reduced, for example, a hundred times, and will still encourage people to behave responsibly.

 

The same will go for every job. The election campaign of a country’s president will last as long as the candidates need to register the values of their responsibilities for the president’s position. This will also represent the election process because the highest bid will get the job. Then, if living in a country is ordinary, the president might not receive any evaluation. If the standard of living deteriorates, people might give their presidents negative assessments because they will be considered the most responsible for the country. Let’s assume a president offers responsibility in the value of 1.6 to get the job; if they get one million negative evaluations, the president will lose 1,600,000 points that present the value of past work. Considering that the average value of past work would be 100,000, such a president will most likely drop into a negative value—debt. In this case, the president should pay the penalty to the economy instead of earning a salary. Considering that people would not be able to pay it, the president will receive a minimum wage as long as they do not escape from the debt. This will only be possible through highly productive work and very positive behaviour. Of course, if the president improves social life significantly, they will be well awarded by positive evaluations they receive from people.

 

Those who could not stand the heat will stay out of the kitchen. The new system will develop such a significant responsibility of the workers so they will not dare apply for jobs for which they are not qualified enough. However, if they still choose to apply, they will suffer heavy consequences for performing poor productivity. Their responsibility may be very painful and force them to resign quickly. Or, even better, they might search for their replacements to escape from significant losses of past work value.

 

In practice, workplace replacements would hardly exist without agreements among workers. When workers take jobs from previous workers, the previous workers would be considered to have performed the needed productivity and would profit from it even when they are replaced and do not contribute to such productivity. The new workers who force previous ones to leave will have to maintain the productivity of their predecessors but will profit only from the increased productivity they had offered. Besides, one should expect that replacing workers without an agreement would probably make the replaced workers dissatisfied. They will be able to retaliate by negatively evaluating their replacements through democratic anarchy. Their coworkers and friends may support them. Therefore, workers who want to replace existing ones would most likely negotiate conditions to get the jobs. Thus, one may expect the replacement of workers without negotiations only if the new workers bring noticeably higher productivity.

 

Managers will have great operational power, but the workers may still control them even before making executive decisions. For example, suppose company managers want to increase production through substantial investments. Then, workers must support them because the rise in productivity will bring new responsibilities to workers. The workers will have the right to change the values of accepted responsibilities for their work based on new managers’ proposals. If they reduce their responsibilities, it might mean that they are not confident with the changes managers propose, which might postpone or block a new production. Managers will have to persuade workers to accept their proposals by explaining the production risks and benefits.

 

Substantial responsibility in the production process will teach workers to establish mutual relations more on cooperation than competition. However, every job will find the best worker on the market the same way every good finds the best purchaser today. Besides, those who know how to improve production and society will no longer be prevented from doing so. And on top of that, workers and people will be satisfied. Thus, the open market of work will bring an outstanding contribution to the development of the economy and society.

 

Considering that in socialism, workers will not dare apply for jobs they are not qualified for, there is no need to condition anyone’s employment depending on the possession of diplomas. Firstly, a degree does not guarantee skill or workers’ productivity. Secondly, conditioning work with certifications unnecessarily reduces the freedom of access to desired jobs. The limitation of employment possibilities with possession of degrees has evolved to the level of absurdity that bureaucratically restricts the liberty of choosing work to a vast extent. Besides, the enormous volume of knowledge that the education system imposes on students usually has no connection with people’s professions. It serves authorities to ensure the survival of an authoritarian system and presents an unnecessary burden that alienates students from objective reality. Besides, alienated people can hardly solve social problems and improve society. In this regard, it is necessary to remove education as a bureaucratic requirement for having the right to work. This still means that professional education will be unquestionably necessary and welcome but not required for employment because knowledge can be acquired independently as well as through practice.

 

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Some regions in the world will accept the open work competition one day because no economy can be more productive than the one where the best available worker gets each job. Under the competitive pressures of public companies, the owners of private companies will try to increase their productivity as public companies do. However, they would not have the operational capabilities to oppose public companies. Given that workers in private companies will not have the freedom as workers in public companies and will not share the profits, they will be less interested in working for private companies. Considering that public companies will be more productive than private companies, the owners of private companies will be encouraged to join public companies.

 

Given that the saturated market does not provide substantial profits, which is the final result of every production, the owners of private companies will likely join public companies. In exchange for their firms, companies’ owners will get the equivalent value of past work. It will proportionately increase their incomes in public companies.

 

Over time, it can be expected that all companies in the region will merge into one public company, which will operate similarly to large corporations. The company will have a management that will remain the best option for organizing production. The new system will make them highly responsible for decision-making, guaranteeing efficient production. Managers will create jobs where they are most needed and remove those not needed enough. High production efficiency will be ensured by lowering competition from the enterprise to the job level.

 

The high responsibility that the proposed work division requires from workers will force manufacturers to avoid economic losses in an unpredictable market by organizing production on consumers’ demands. People will democratically determine the tax rate and directly allocate the tax fund for various consumer groups of collective spending. Furthermore, individual consumers will be increasingly required to order their expensive needs in advance. Production based on the orders of consumers presents a democratically planned economy. Such an economy should be considered the most stable production possible. Information technology can assist such a complex production to operate efficiently, which Vladimir Ilyich Lenin did not have.

 

Democratic anarchy is all the social power that may remain in socialism. Once equal rights are fully established in society, people will have no reason to commit crimes. Crime will be eliminated. Minor offences may remain and be resolved through democratic anarchy. Once equal human rights are established, police, courts, and prisons as symbols of authoritarian government will become obsolete and go down in history. This will make states go down in history as well.

 

The complete implementation of equal human rights in the economy should be called socialism. Nothing else deserves this name. Socialism will come spontaneously as the final result of equal human rights. It will not replace capitalism as Karl Marx believed; it will transform it.

 

Building socialism is a much more complicated task than reforming capitalism. The socialist solution presented in this book is not definite because this book opens up a spectrum of possibilities. It is challenging to choose the best solutions without practice. Social scientists will further develop the best solutions for socialism through experience based on the theory of equal human rights. The development of socialism will eliminate social evil and create a bright future beyond the wildest dreams of today.

 

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What is the underlying concept of the new system? The system will put society on sound footing. It will give every person the right to participate in decisions affecting their interests in the community. It will allow every individual to judge those who make decisions on their behalf. It enables the free activity of any individual and, accordingly, finding a way that is more suitable to the nature of the individual and society as a whole. Freedom allows the suspicion, formation of critical views, and the possibility of acting according to them that, together with practice, creates objective knowledge. Practice demystifies the categories of values and, therefore, allows for the breakdown of the dogmatic, non-critically accepted and alienated knowledge that is the cause of inconveniences in society today. Practice is the only possible route to understanding the individual’s power, the only way to discover society’s correct standing and orientation. This will form the process of disalienation of the community.

 

In such a system, the individual is forced to rely on their power to realize their needs. Constant reliance on their ability and the defined responsibility would teach the individual to accept the objective perception of their potency. This also means the acceptance of their impotence in cases where they cannot surmount it. By getting to know their powers objectively, the individual will live following their nature. Such an individual would form the needs only where they can realize them, which constitutes the essence of the individual’s balance and the formation of a constructive orientation in the relationship with nature and society. Such a system can satisfy the natural needs of individuals and the community, which brings harmony, peace, love, and joy to living. 

 

The new form of socio-economic relations requires the formation of new elements needed to establish: the price of work, work division, the responsibility of workers, the cost of commodities, money accumulation, credit-monetary policy, working assets, development and amortization of the production, distribution of personal and collective spending, as well as of the use of real estates. The new socio-economic policy will be presented in greater detail within the limits of possibilities in the following chapters.

 

 


[1] Ronald Coase, The Nature of the Firm (Economica, Wiley Online Library, 1937)  https://onlinelibrary.wiley.com/doi/full/10.1111/j.1468-0335.1937.tb00002.x

Association of States

3.2.3             Association of States  

 

States organize control in their territories to achieve more benefits for the people. However, when such authority does not suit the nature of a society, the states conduct an alienated, autocratic, and authoritative policy. Such a policy creates an irrational and unstable economy for the people, inappropriate and unjust orientation among nations, tensions and risks in relations among the states. As a result, the states are responsible for massive bloodshed in the history of humankind.  

The present-day world does not know any model of mutual coexistence that can ensure the prosperity of humanity. On the contrary, the present-day world’s relations are based on a dangerous and ruthless competition of determinations and not on cooperation. The current world policy is creating objective injustices between the states, caused by enormous differences in the level of economic development and in the right to use natural resources. On one side is excessive production, and on the other, scarcity.

 

The history of humankind recorded some attempts at building a better world through association. In that endeavour, world organizations were established to bring closer states and nations into an interdependent whole that complements. For this reason, the Organization of the United Nations, the World Bank, the International Monetary Fund, Interpol, international health organizations, and many others were established. These organizations had to connect the idea of creating a better planet Earth. Moreover, they were supposed to bring benefits due to the greater association of nations, labour and capital, a more substantial production, more incredible wealth and, accordingly, greater welfare. Furthermore, such organizations were supposed to reduce the possibility of an emergence of war conflict between states. However, the result is contrary to expectations. Despite some positive impacts, these organizations are generally used for winning predominance globally and represent a threat to humanity. 

 

However, there is no doubt that the greatest danger in the world arises from the alienation imposed by the authorities. People live in an alienated, selfish, narcissistic world where they form alienated needs. Alienation can deceive an individual into overcoming their impotence before nature, but no activity can realize it, and therefore an alienated individual is generally insatiable and unsatisfied. Non-satisfied alienated needs represent an origin of destructive energy, which daily brings enormous problems to the world. Alienation is a disease afflicting the world, whether rich or poor. Authorities may easily canalize such destructive energy to destroy any of its parts. Of course, the most influenced people worldwide are the most dangerous. As the world has not managed to overcome its alienated orientation, it has not found the base for accomplishing its prosperity.  

 

Today, the world is proud of developing technology and production, but it did not move a single step forward in developing human consciousness. Moreover, people enter a period of significant worldwide degradation of fundamental human values. In this connection, one cannot say that all negative phenomena, destructions, and wars belong to the past. This problem has been raised to a higher level with technology development and is threatening humankind more than ever before.  

 

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OK, but what is missing to change the situation? Knowledge is missing! This book presents the knowledge necessary to form a sound and sane society. It will take power away from the authorities and give it to the people. Socialism can efficiently solve all of the aforementioned problems. It respects democracy, human rights, general and special individual interests, past and current labour, and the values emerging from natural constructive interpersonal relations. It prevents the existence of alienation, privileges, hegemony, exploitation, and any form of destructiveness. The new system is so productive and elastic that inhabitants of other states can accept it. Such an act opens up the possibility of the association at the level of states. Once the integration process among the states has started, the associated states at the international level will be just a matter of time.  

 

By associating, the states lose a part of their sovereignty because they assign it to the union of states but also, they realize at the same time new social life qualities. When humankind accepts the described socio-economic system, the world will function as a commune. For the first time, the world will exactly know, at any point in time, how many inhabitants it has and what their individual and collective needs are. For the first time, it will be able to pursue a reasonable, rational policy and satisfy the population’s needs.  

 

In a socialist world, each inhabitant will have the freedom to act on the territory of the whole world. They will have the freedom to choose a place to live and what work to do anywhere worldwide. Freedom will have one limitation. The individual will not be free to cause disadvantages to any member of society. The system will develop very effective protection for everyone from troubles committed by any community member.

 

Democratic anarchy will allow each inhabitant to assess any convenience or inconvenience they experience from any point in the world. They will do it by making a direct statement in the administrative world centre or its satellite, the commune. The system of assessments can form a completely new system of values in the world, valorize and sanction any disadvantage and reward any advantage that the individual causes to another individual. As such assessments will directly impact an evaluated individual’s income and past labour points, everyone will be responsible before the whole world. They will try to produce the least possible inconveniences and a maximum number of conveniences for the world, thus forming the base of the productive, constructive orientation of the whole world. 

 

The new system envisages direct statements of all world inhabitants about the essential political, economic and other areas of joint interest. In this way, the rules of collective action will be established in a direct democratic way. 

 

The social system would form the world monetary policy and money distribution. The collective money would be directly and democratically earmarked by humankind for the world’s individual spending, collective spending, economic development, and all partial spheres of interest.  

 

The new socialist system introduces in all states a universally established value in the form of the price of labour, which objectively presents the past and current labour values of all workers in the world. Upon such values, all other economic values may be built to establish a just distribution of all forms of conveniences and inconveniences arising from the past and current labour of all workers. Those are precisely the elements missing today to establish a stable, productive economic policy and, therefore, society’s general stability. 

 

The new economic system envisages a worldwide association of the economy into one large enterprise of the world, world leadership, world planning of the production, and world labour distribution according to the principle of free labour competition. The managers of the world will manage the work in the world as a whole rationally and efficiently. That would form high and stable economic productivity that would optimally satisfy the material needs of the entire humankind. Furthermore, the free labour market will abolish work privileges in the world, which will inevitably entail planning production, labour, and wage distribution that optimally suit the interests of all of humankind and each inhabitant.  

 

Such a system will allow each inhabitant to get to know their natural needs through their practice and, in this way, overcome alienation. The possibility of expressing each individual’s direct genuine interest will free the society from alienated ideological, national, religious, cultural, economic and other alienated interests. Individuals will finally have the chance to live their lives fully, and they will not care about alienated values. The nature of the individual is unique to humankind. By bringing the individuals closer to their nature, the conditions will be created to form a harmonious and homogenous social community in the entire world. 

 

Each individual will rely on their forces in meeting their own needs and learn how to form them according to their possibilities of realization. This will represent the basis for meeting needs and, consequently, the constructive orientation of society.  The people who permanently satisfy their needs are not destructive. Such a system will form genuine equality among people. In such a world, the narcissistic trait of the character as the chief cause of alienation and conflicts among people will be overcome to the benefit of natural cooperative relations. 

 

The states and nations will no longer be endangered in such a system. It may be expected that the funds intended for armed forces will be abolished by the direct voting of the population, which would disallow the emergence of wars.  

 

The proposed system will form a new consciousness of the individual, new ethics of the society, and new relations in the world. Such a system will enable safety, a convenient existence, and spiritual and material prosperity for all world inhabitants. Shortly, it will form the bright future of humankind. As such a socio-economic system will be directly created by humanity, the state as a form of authoritative pressure over the society will be no longer needed. 

Pooling of Economy

3.2.2           Association of the Economy

 

A larger social community offers more potent possibilities for developing the economy and, accordingly, greater prosperity of society. At the same time, it requires a more concerted effort to accomplish coordination of collective actions. Every society strives to achieve economic prosperity but cannot because people have not defined methods to achieve more significant and more stable economic progress than capitalism offers.

 

The socialism presented in this book defines new elements that can significantly improve the economic policy of society. Socialism will be based on the agreement of the most productive manufacturers, which allows for maximal productivity of the economy and relative stability of the system. The stability of the new economic system will be based on a steady production, stable prices of products, regular incomes and the known needs of the population. Sound production and distribution are preconditions for the stability of a state.  

 

The association of communes into a state allows a higher degree of labour distribution with the total employment of workers, as demonstrated in the commune. Leadership will direct the work to use the regional and manufacturing possibilities of certain communes maximally. Socialism will lead to the merging of enterprises, diminishing competition between enterprises with similar production programs until it eliminates it. Vertical hierarchical subordination will ensure a rational production and a stable business activity.

 

Socialism will garner significant productivity by lowering enterprise competition to the level of work posts. The right to work within the state will be exercised through the competition of work among workers. Any inhabitant will be able to compete for any work post in the whole state. The work competition will, on one side, give an objective value to each work and, on the other, improve the productivity of each work post. A socialist state will, in this way, achieve a more productive and stable economy than capitalism can.  

 

Free work choice in the state also opens up the problem of excessive migrations of the population from economically less developed to economically more developed regions. Such migrations would make production planning more difficult and reduce the stability of businesses.  

 

State leaders will be required to consider the interests of all inhabitants of all communes when organizing regional economic productions. If the state managers are unsuccessful, that will cause migrations to regions with privileged status. Also, that would undoubtedly increase work competition for the limited number of work posts in privileged communes, and without a doubt, that would dissatisfy many people. State leaders, who would not offer an equal chance to all communes to develop, would receive negative evaluations from dissatisfied people. Negative evaluations would decrease the bad leaders’ incomes and quantity of past labour points. Unsuccessful leaders will be responsible to the people for the first time and therefore would have to leave their positions. Only the most skilful and brave people would dare to lead countries. This is a good enough warranty of the state’s prosperity. 

 

Socialism will completely solve the problem of working migrations from non-developed to developed communes with the past labour points of workers. Workers in non-developed communes have less valuable past labour because their contribution to building their economy is smaller. They also accomplish lower productivity and, therefore, realize smaller profits and income. Smaller incomes lead to a smaller amount of past labour points as a permanent form presenting their overall power. By migrating from one commune to another, the workers bring the past labour points that form their income. By moving to work in more developed areas, they will realize a relatively equal income for the same work as in the non-developed communes. In socialism, income will not be the factor that will stimulate workers to migrate from non-developed to developed communes.  

 

Hence, migrations of workers will be possible, but from the point of view of income and past labour points, they will be non-stimulating. On the contrary, workers will be more motivated to remain in non-developed regions, as such areas can, based on grants intended for economic development, achieve a faster increase in profit and, consequently, a more significant increase in incomes and quantity of the past labour points.  

 

The system envisages an establishment of responsibility for the workers, enterprises, and communes to realize a productive life, as demonstrated in the commune. The accountability will be performed through workers’ income and past labour points. The system also envisages the establishment of responsibility through mutual assessments of inhabitants, consumers, associations, arbitrations, and evaluation committees at the state level. This will guarantee the establishment of responsible relations in the state’s economy and the prosperity of such a state.  

 

***

 

Socialism can ensure a considerably higher degree of stability in society and coordination of its activities than capitalism. This will be achieved by pooling money and by its democratic control. The new system forms a single mass of funds that society will distribute onto all forms of spending according to market and democratically established principles.

 

Thus far, the state leadership performed the state’s macro-economic policy regulation, i.e. the fundamentals of social relations. This means that autocrats have always ruled society. As authorities often pursue interests that do not sufficiently represent the social interests, the population often remains dissatisfied with the authorities’ decisions. Moreover, the decisions made by leaders are alienated from the people, and therefore, the people cannot accept them as their own.  

 

One may say that the present-day macro-economic policy has reached its maximum efficiency. Further development of economic relations can be allowed only by utilizing democracy in the economy. In socialism, each inhabitant will create the macro-economic policy of the state by direct participation in the distribution of collective money. Thus, by distributing joint money, the people will directly form an economic policy of socialism. 

 

The sum of all residents’ statements in the function of their economic voting power will

replace the monetary, credit, development, income, and fiscal policies of capitalism. Direct distribution of collective money will drastically reduce alienation in production and distribution. At the same time, the economy will get the macro-economic orientation guidelines of its activity and thereby the elements for a higher degree of stability in business activities.  

 

The state issues money. The total money supply in circulation needs to be formed approximately between the value of the entire commodities produced and the overall realized profit on the market, as described in the commune. The system allows relatively easy control of the money in circulation and, thereby, robust control over inflationary and deflationary processes, ensuring stability in the economy’s business activity.  

 

The entire mass of money envisaged for the turnover of commodities in the state is distributed to cash assets intended for the communes and cash assets designed for the use of the state. The ratio of the money intended for the communes and the state is determined directly by democratic statements made by all state inhabitants in the function of individual economic voting powers within possible value ranges set by the state leadership.

 

Cash assets intended for the communes are distributed proportionately to the realized profits on the market. But also, the assets of the commune will depend on the protection and improvement of society and its environment. More significant improvement of society and its environment will achieve a more substantial share in distributing the funds among the communes. This has already been discussed in the chapter “Income Distribution.” This means that each commune will receive at its disposal as much money as it deserves with its overall productive orientation.

 

By pooling the money earned in all communes, it is possible to make some deviations from the revenues of communes to ensure a stable income for all communes. Namely, suppose in the case of a natural catastrophe or terrible work results, a commune registers a significant loss of money. In that case, the income of such a commune can be covered by the collective fund and gradually reduced until the economy in the commune becomes consolidated and then start growing again. In this way, the system ensures the economic stability of all communes.  

 

The population of productive communes may experience the spillover of income between and among the communes as unfavourable. However, considering that the spillover would not be significant nor frequent and would ensure the communes’ stable income, it can be assumed that the inhabitants of all communes in socialism will accept such an insurance policy. The asset realized for the commune’s expenses will be fully sovereignly distributed by the principles people accepted.  

 

Monetary assets intended for the union of communes serve the whole state’s collective spending and development needs. Such funds are formed and distributed by direct voting by all state inhabitants. It is worth mentioning that more assets intended for the state diminish proportionately the resources envisioned for the communes. In the portion of money earmarked for the state needs, communes lose their economic sovereignty.   

 

Money assets intended for the collective spending of the state are distributed per group, as are the assets earmarked for collaborative expenditure on the commune. The only difference is that the assets satisfy the needs of the state. The funds are used to maintain and build the requirements of state administration and defence, infrastructure, health, education, science, culture and sports, and other purposes that are needed by all residents of the state and represent an excessive investment burden for each commune.

 

Collective money assets are used according to the possibilities and are directly distributed by the state’s population identically to the one described in the commune. Direct expression of inhabitants’ views by votes is one of the most critical measures of socialism. Besides other benefits, the population having ruling power will try to get to know the needs of its state. Socialism will contribute to the disalienation of the people from the state so that they will accept it as its own to a greater extent. 

 

Assets intended for the economic development of the state service the developmental needs of the associated economy, for significant investments of some communes, and for all enterprises unable to realize the assets necessary for economic development in their communes. Assets are distributed to enterprises according to the size of the development coefficient in the same way as in the commune. Enterprises envisaging a more significant profit based on a smaller amount of necessary cash assets over a shorter turnover period will ensure the amount of money intended for economic development.

 

Cash assets are allocated as grants, as they are renewed from the state’s revenue in each accounting period. The whole state will then be associated with a single corporation, and companies do not have to repay themselves invested money. Enterprises are bound to realize the envisaged monetary gains within a determined period. In this way, cash assets intended for economic development would achieve their objective, and the whole financial system would find its sufficient justification.  

 

It may be assumed that the economically developed communes will be less interested in expanding their development, as their living standard will be so high that they may approach the level of saturation. A rise in productivity of a developed commune may entail a risk in terms of profit realization due to the saturation of the market and insufficient purchasing power of non-developed communes. Underdeveloped communes will require more money for economic development, and democracy will require developed communes to set aside more funds for development than they need. This fact offers a better chance to non-developed communes to ensure more money assets for development than they could themselves provide for this purpose. By increasing productivity, non-developed communes will increase their purchasing power and thus expand the state market. The system will, in this way, contribute to a more balanced development of the entire state.

 

Pooling of Policies

3.2.1         Association of the Policies

 

Generally, the origin of states has rarely had anything to do with democracy. The people have seldom been asked in what country they would have liked to live. The states are the product of the imposition of the needs of autocratic rulers. The solution is not the negation of states because of their non-democratic origin. The exit lies in their maximal democratization.  

 

In present-day states, the parliamentary form of democracy is prevailing. Society accepts it as the most democratic form of ruling society. However, after the performed election of leaders, delegates, or a party, the individual has no impact on setting the rules for collective actions. Delegated members in the parliament carry out an indirect form of democracy that easily declines from the election programs. The present-day state is a more or less closed, authoritative formation that maintains the coordination of alienated social actions by a system of more substantial or lesser pressure. This state produces alienation, autocracy, exploitation, protectionism, nationalism, and destructiveness.  

 

Elements of the politics and economy of capitalism have achieved progress in democracy and economy; however, they cannot develop further and, therefore, impede the development of society. The new method of social behaviour in the commune substitutes for and promotes all elements of politics and the economy of capitalism, thus allowing the continuation of political and economic prosperity.

 

One should hope that this book will be of interest to some foundations, state leadership, political parties, associations, and individuals who would not regret their contribution to the development of socialism. Naturally, the socialist system will require comprehensive scientific analysis and a theoretical simulation of the commune. Then, when satisfactory results are established, it is possible to experimentally apply the socialist system in a smaller social community that would accept such a system.  

 

***

 

The commune is a part of the state as a sovereign social organization. The commune’s delegates in the state assembly represent the interests of their respective communes. In this way, each commune makes state decisions in creating the country’s external and internal policy and defence of the country. The commune alone defines its internal affairs. Nevertheless, each commune is sovereign enough to enact its laws and regulations on its territory if they are not in collision with the accepted constitutional laws of the state. 

   

The socialist commune will have a closed labour market concerning the state and an independent economy. The workers from the capitalist world will not be able to freely apply for jobs in the commune with the socialist system. They cannot realize income in the socialist commune if they do not have past labour points. Transfer of workers may be allowed administratively if a worker in their commune sells their property and thus gathers a sufficient quantity of money to buy past labour points in the socialist commune. Such workers will also be unfavourable because they cannot be compensated for their participation in building collective ownership of their commune. Therefore, they would have a lower income than the worker who has realized equally valuable past labour in the new commune. The transfer of workers from one commune to another will be accessible only if communes establish an equal system. Then the organization of work would be performed on the level of associated communes. Regulation of the transfer of the value deriving from past labour would be then carried out automatically.

 

The socialist system will ensure the commune’s economic, social, and political stability. It would allow the commune to develop faster and more stable than capitalism in all fields. This also means the people would be reaching more remarkable social advantages than in capitalism. When socialism shows positive results, it may serve as a model to other communes. Then political parties of other communes will accept socialism, contributing to disseminating socialism worldwide.  

 

Accepting socialism by several communes opens up a higher degree of association among the communes based on implementing a new political and economic system. In this way, the commune keeps a part of its political and economic sovereignty and transfers a portion onto the association of communes. The association will be based on the collective labour market and collective capital. Such an association may bring direct conveniences and inconveniences to the commune’s population.  

 

Conveniences would manifest in a free choice of labour in associated communes. In this way, there would be a higher probability of finding a job in which a worker is interested and finding a suitable residence and, consequently, realizing significant conveniences. Further, associated communes are economically more potent. They are thus able to achieve higher prosperity in society and greater certainty in business operation in the case of disruptions in the market.  

 

For the same reasons, the population may also experience the association of communes unfavourably. Namely, a more significant number of workers create a more substantial work competition, and it may result in more difficulty in exercising the right to work in one’s interest. Moreover, greater economic system stability will inevitably require a spillover of money between the communes for income, collective spending and economic development needs. The population may assess such a redistribution of money as unfavourable.  

 

In this regard, the assemblies of the communes wishing to unite will form a program that will clearly define the modalities and procedure of the association. Such a program should be adopted with at least 2/3 of the votes of political parties in the assemblies of communes that want to unite. Naturally, such decisions will not be easily or quickly implemented, which is acceptable because society needs time to adapt to significant changes.

 

As the association of communes can bring benefits and inconveniences to the inhabitants, it must be carried out by the democratic vote of the population through a referendum. The association of communes is an act that significantly affects social action, so a substantial majority of the people should accept it. Let it be at least 2/3 of the votes cast and at least 1/2 of the total population of each commune. After the decision of the political parties, it will probably not be difficult to collect a sufficient number of votes of people in the referendum.

 

One should assume that the practice will show over time that the association of the communes brings a larger market that enables greater profits. Communes that would not be willing to associate themselves with other communes would become economically weaker than associated communes. Besides that, a larger-scale association enables higher productivity realized by a stronger work competition and brings more conveniences in operating results. A larger-scale association will result in a greater certainty in doing business in the case of any disruption emerging in the market. A larger-scale association of communes will form a more significant accumulation of collective money, ensuring meeting a larger quantity of people’s needs. A larger-scale association will allow more possibilities for the population to exert direct influence on making decisions of joint interest on the territory of associated communes. A larger-scale association will enable the people to evaluate the actions of any individual in the region of the associated communes. Briefly, a larger-scale association brings more benefits to the community. Therefore, it may be expected that the population of the communes will aspire to such a larger-scale association.  

 

Association can develop to the state level as a sovereign social organization in a particular territory. However, unlike the commune, the state as a completely sovereign social organization enacts the constituent and other laws of the country. The adoption and amendments to the constitutive and other basic laws are prepared and determined by the state parliament with its expert services. Fundamental rules and decisions regulate the rights and duties of citizens and relations in production and distribution. Delegates in the state parliament should adopt important state laws with at least 2/3 of the deputies’ votes and then forward them to the population in a referendum. Less critical laws, regulations and decisions covering specific activities and not being of general interest to the people are accepted if they receive a majority vote of the delegates or representatives in the state’s parliament.  

 

The population declares itself through computer applications over the Internet by accepting or rejecting such laws. Laws that receive at least 2/3 of the residents who voted and are taken by at least 1/2 of the state’s total population would be passed, and the rest would be rejected or revised. Such adoption of the law should not be problematic if political parties in the state parliament have previously done it. As the population directly decides on its laws, it is interested in knowing them and accepting them of its own free will. Therefore, they are no longer alienated from society.

 

***

 

The democratic approach to the association of the communes also requires freedom of disassociation and limited mutual links. Today, there are no international rules governing the secession of parts of the states. The right to secession should be equal to the freedom of association. Every republic, province and even the smallest territorial community of people, in this case, a commune, should have the right to self-determination. Such a decision should be made by at least 2/3 of the representatives’ votes in the commune assembly in the same way it adopts its association. Then the decision is adopted or rejected by the commune inhabitants with at least 2/3 of the votes of people who participated in the, and at least 50% of the voices of the total number of commune inhabitants.

 

If a referendum in the commune would confirm the will of the people for self-determination, then representatives of the commune and state would engage in the division of assets and liabilities, division of the collectively acquired goods of the commune and the state, including regulation of all obligations, claims and the newly established relations. Based on the agreement achieved, a referendum would need to be organized on the territory of the entire state. 

 

Established disassociation would be accepted if it were in the interest of at least half of the total number of inhabitants of the state. Since the commune has the right to self-determination, the state also needs to have the right to self-determination that can prevent the secession of the commune. The process of disassociation cannot be easy because the enormous number of ties between and among communes, companies, and inhabitants created from the establishment of the state should be considered.  

 

An objective analysis can assume that the population will reject disintegration processes through their practice because they cannot bring greater economic or social benefits. Significant benefits and benefits generally arise from the integration process. An integrated state in socialism can function better than a commune. It will bring more benefits to society than the commune can because it gives more freedom of choice, more power to the people, and more productivity and stability to the economy.

 

More associated people will have more power to develop objective values and thus demystify authorities and overcome the alienation they have imposed. Less alienated people create less problems and are less aggressive. Of course, conflicts among individuals still might be possible; however, nobody will be able to raise disputes among individuals to a social or national level, as democratic anarchy will sanction such attempts. And because the progressive orientation offered by socialism will not produce followers who would support them.

 

Collective Consumption

3.1.2.2.9             Collective Spending

Each society organizes a service that meets the collective needs of a particular territory. Collective services need cash assets for public spending. Such assets are provided by the tax policy arising from the sale of commodities, enterprise profit and workers’ income.

 

Authority determines tax policy on the territory where it has sovereignty. In the present-day social orders, the people choose their representatives in power, and they are supposed to represent their tax interests. However, in practice, the chosen representatives in power are, as a general rule, more inclined to follow their interests or to represent the interests of the privileged society members who have a strong influence on policymaking.  

 

Society does not impact the tax policy, even if authorities try hard to meet their tax policy needs. Therefore, the tax policy is permanently alienated from the members of the society, and they cannot accept it as their own. People are forced to accept the tax policy created by the authorities and, therefore, experience it as violence against their own needs. Such circumstances result in dissatisfaction with the tax payment and an insufficiently built attitude toward collective ownership.

 

***

 

Socialism needs a tax policy as well. However, it would substantially differ from the tax policy in capitalism. The commune’s population will directly tailor the new tax policy.  

 

Realized profit of public enterprises is registered in the commune’s administrative centre to determine each enterprise’s productivity. Then all the money is pooled in the public bank of the commune. The pulled funds enable the population to distribute joint money for the needs of individual and public spending and the development of the economy. The result defines collective monetary policy and directs joint action.

 

The distribution takes place using the application over the Internet, where people choose desired values within possible value ranges determined by the commune’s leadership and approved by its assembly. An inhabitant who needs more money for the collective spending will be setting aside more money for it than for other assets. A more significant amount of money intended for collective spending will satisfy the collective social needs to a greater extent. Still, it will diminish the funds designed for individual expenditure and economic development. The sum of the values opted for collective spending by all inhabitants in the function of their voting powers will represent a total amount of money intended for collective spending  

 

It is worth mentioning that the assets intended for collective spending serve exclusively for collaborative consumption and not for people’s incomes. Incomes of individuals are paid from the fund of individual expenditures. The elemental distribution of the money intended for collective spending is divided into assets designed to maintain and build communal facilities. 

 

***

 

Monetary assets intended for maintenance of communal facilities will need to be further separated among the commune’s administration, management, judiciary, social protection, health care, education, science, culture, sports and recreation, the environment arrangement for the needs of infrastructure, transport, and other forms of consumption.  

 

The commune’s leadership would set possible value ranges for distributing money to specific groups. They will select the limits for minimal resources that certain groups of collective spending must have to ensure their functioning and the optimal and maximal possible amount of money for certain forms of consumption.  

 

People of the commune who assess that a specific form of collective spending requires a larger amount of money to meet their own needs to a greater extent will appropriate a larger amount of money for such requirements at the expense of the less necessary form of spending. The statements of all the commune inhabitants are then processed in the commune’s administrative centre. The sum of all values stated per groups in the function of the economic voting power of the population would represent the ratio of cash asset distribution.  

 

The known amounts intended for the collective spending groups will create a certain standard for these groups. Based on practice, inhabitants will learn whether it will be necessary to increase or decrease cash assets for the needs of particular groups. Each collective spending group has a large number of minor and significant expenses and a limited amount of money at its disposal. However, inhabitants do not necessarily need to be interested in further money distribution. However, the distribution may be carried out by interested individuals as long as they are interested.  

 

The money for the collective spending might also be distributed to non-profit organizations that offer the highest satisfaction to society’s needs. That is similar to the principle of money distribution for the development of the economy. The evaluation of such satisfaction will be performed by arbitration commissions, evaluation courts, various associations, and directly by inhabitants of the commune. In a society where such work evaluations directly impact income or even the distribution of income-based points of workers, the use of money for the collective spending needs will be very responsible. 

 

Authorized managers will determine the final distribution of money assets under each spending group. Due to the high level of responsibility, the managers will use the money intended for collective spending in some kind of agreement with the interested population. In socialism, managers will be the workers who can no longer meet their own needs without first meeting the social conditions. Such a principle guarantees that the final distribution of even the most negligible money assets intended for collective spending will be earmarked in a fashion allowing the most efficient way to meet social needs.  

 

***

 

The population also directly impacts the construction of new facilities of social interest. Construction of the social standard-related facilities refers to building infrastructure and purchasing the equipment that requires large amounts of money. In this connection, the more the population opts for a larger quantity of funds intended for collective spending, including the need for necessary construction, the more possibilities will be in place to build many communal standard facilities and vice versa. 

 

The leadership of the commune, based on the amount of money at the disposition and the social needs, will plan the construction of new facilities. It will define the technical characteristics and the amount of money necessary for such construction.

 

Since any construction requires a large amount of money and extensive collective work and introduces lasting changes in the commune’s structure, the population needs to approve such a building through a referendum. Therefore, each inhabitant will have to consent to build capital or expensive project and may express their views about the construction of any facility in the commune. Capital projects will be developed if most of the commune’s population approves of them. Other facilities of lower significance that require less investment will need a majority of votes on the project.

 

The proposed system of distribution of money for collective spending is subject to social agreement, which contributes to the constructive orientation of society. In socialism, the population has the power to manage collective spending for the first time directly. Such control will make the people accept collaborative spending as their own. In such a system, communal ownership is no longer alienated in any segment, making the population accept its community. In such a community, one may expect a responsible attitude of the people toward the collective property.  

 

Collective spending is the most rational form of consumption and allows the highest degree of meeting social needs. Therefore, the population may be expected to increase the quantity of money intended for collective spending, contributing to society’s well-being and prosperity.  

 

***

 

The commune is fully sovereign in the allocation of its collective spending assets. However, in terms of its political affiliation, the commune represents a part of the state community. It regulates relations with other communes through delegates in the assembly of a broader territorial community. Representatives of all communes on the state territory establish collective spending at the state level in the federal parliament.  

 

Funds for federal spending are needed for the state budget. The funds are used for the needs of administration, state defence, and the construction and maintenance of facilities of national interest. When the necessary funds for the needs of the state are determined, they are collected in proportion to the income of the commune and sent to the federal administration.

 

The distribution of money at the federal level is created by state leadership and approved by delegates of the communes in the national assembly or parliament, the same as today. In other words, the commune population would not directly impact the formation and distribution of cash assets for collective spending at the federal level. Nevertheless, it may be expected that the people accustomed to directly deciding about the joint spending at the commune level will seek the same right at the national level. Direct decision-making by the population at the federal level is technically feasible, as is the decision-making at the commune level; however, it requires compatibility of the decision-making systems. In other words, all communes in the state would need to accept such, or a similar, system.

 

Use of Real Estate

3.1.2.2.8         Use of Real Property

 

Individuals need housing to meet their existential needs. The use of living spaces leads to significant advantages, so the individual ensures it through ownership. However, ownership quickly assumes the subjective features by which the individual attributes a more substantial power than the one they objectively have in nature. Such ownership then becomes alienated from its nature, thus alienating the individual from their nature. In an alienated society, in a society that develops possession, the ownership of real estate becomes a simple, efficient and recognized form of presenting the individual’s power. In such a society, the individual becomes what they have. People’s alienated needs are insatiable, resulting in struggles between people to appropriate more valuable real estate and relentless exploitation of natural resources that the planet Earth cannot stand.

 

Inhabitants who have not acquired an apartment or house are forced to enter into a rent relationship with real property owners. They pay rent according to the supply and demand market principle, which generates income for the real property owners. Although the market rent contributes to a rational construction and use of real estate, it is not socially acceptable because it glorifies alienated values and thus creates problems for society.

 

The known alternative to private ownership of real property is social property. Social ownership needs to consider the equal right of all inhabitants to use real estate. However, society has not learned how to establish it. Besides that, society has not found an acceptable way to socialize private ownership, so it used to confiscate real property from private owners through revolutions. It is a seizure of the accumulated value of past labour of the real property owners and represents, as such, the injustice committed in the name of equality among people. Such injustice brought numerous problems to society.

 

Furthermore, it must be noted that society has not managed to resolve the problems related to the distribution of living spaces in social ownership. Real property building and its use carry out the bureaucratic administrative apparatus. As a general rule, candidates wait for years to acquire the right to use living space. The bureaucratic structure cannot monitor the changes in the housing needs of the tenants and even less so to meet their requests. Such social policy results in the disproportion of the real estate distribution, which always results in privileges for some members of society. Indeed, that develops alienation and antagonism in the community as well. It must be noted that users of the housing facilities in social ownership are not owners. Therefore, they do not maintain them and do not have enough responsible attitude toward the same.

 

The right to use real property in social ownership is less efficient than private rent-based distribution. However, an efficient policy of using real property in social ownership can be enabled by a socialist policy of real property utilization.

 

***

 

In socialism, the right to work is determined by labour competition. Analogously, the use of individual housing needs to be provided by the rent competition of the people.

 

The rent-based competition of real property users requires associated ownership of real property by all commune inhabitants. This is possible to achieve by replacing the private ownership of real property with socialist past labour points, which would set up public ownership of real property.

 

Real estate owners do not have to sell their ownership to the commune if they do not wish to. In such a case, they can use the real estate and pay tax as they do now. However, real estate ownership will no longer represent the status of the individual. Instead, socialist past labour points will have this role. The sale of private ownership increases the number of past labour points, which increases incomes. Having a more significant amount of past work points will be very convenient. As past labour points are inheritable, it may be highly interesting for real estate owners to sell real property to commune.

 

The real property value is assessed freely following market value and under administrative control. Real estate owners whose residences are in other communes cannot be assigned past labour points because the past labour benefit would remain in one commune, while the income-based burden would be shifted to another. For this reason, real property owners from other communes need to sell their properties to their communes for money collectively owned by the commune’s inhabitants. Then the inhabitants may exchange that money for past labour points in their communes.

 

The rent-related policy needs to efficiently ensure rational and socially acceptable use of the real property, the residences and office premises in the first place. Therefore, society needs to provide an accessible insight into real property values. Records of all real estate can be maintained in the commune’s information centre with the technical description, position and the rent level.

 

The same real estate may bring more conveniences to one individual than another. Each inhabitant will auction up the real estate in the commune’s administrative centre that represents their most significant personal interest, following their income possibilities. The inhabitant offering the highest rent acquires the right to use the real property.

 

The procedure for acquiring the right to use real estate is straightforward. The highest stated rent becomes effective immediately and is subtracted from the income account of the user of the housing premise or of another privately used real property. If a user of real property can afford the rise in rent and wishes to continue using it, they will remain a user of this property. A competing party that did not manage to occupy the desired housing premise will further compete for another housing premise.

 

Each stated rent obliges the real estate user to use it for a certain period at the stated price. After such time expires, the real estate user may lower the rent level if allowed by a potential competitive real estate user.   

 

The user of living space who cannot afford or does not wish to accept the highest stated rent will have to surrender the used real estate to a more potent competitor within a reasonable time. They will, during that time, seek a cheaper home to rent. Leaving real estate is inconvenient; however, it will be accepted to achieve greater collective conveniences.   

 

Any space that may serve housing and business purposes is subject to the competition of real property utilization. If enterprises offered a higher rent than tenants, such real estate would become a business premise and vice versa. In this way, the market will determine the best real estate utility for society.

 

Real property such as public farming land and industrial facilities are subject to work competition. Therefore, it will not be necessary to pay any rent for such property as another form of competitive establishment for the right of its use.

 

Public spaces and facilities such as administration, courts, schools, health-care institutions, and clubs are set by the delegates’ decision of the commune’s assembly. The whole society uses such facilities for specific social purposes, and they, therefore, are not subject to the competition of the users.

 

Socialism does not need rent in the capitalist sense as a form of income because society owns real property. It also does not need rent as cash assets for constructing and maintaining the real property because such assets are appropriated from the collective spending fund. Socialism requires rents only to regulate the rights to real property utilization.

 

The amount of money intended for rents of all real estates in the commune is established by the sum of direct statements of all real estate users. Such money should be distributed to the commune’s population in proportion to their incomes and then added to their incomes. This means that each inhabitant will realize a stake from the amount of money intended for all rents in proportion to their income. A worker achieving a higher income has contributed more to the development of the society and thus has a greater right to use real estate. They exercise this right by getting a more significant amount of rent-related money. The amount of money intended for rent will be directly collected in full from the income accounts of tenants. Therefore, it will not obstruct the balance between buyers’ power and the value of produced commodities in the commune.

 

The distribution of real property will depend on the differences in the income levels of the commune inhabitants, the rent levels, and the value or, more precisely, on the necessity of the real property. More significant differences in income levels will allow more considerable differences in the power of rent-paying and, accordingly, more enormous differences in using real estate.

 

The more valuable real property will realize more effective rents and vice versa. A worker with a relatively low income who would wish to use a relatively more valuable real estate would set aside for the use of real estate the money intended for rent and a part of money intended for their spending in favour of the worker who uses a less valuable real property. The latter would, in this way, retain the entire income and a part of the money intended for rent, which will increase their consumer power.

 

Family communities rent housing spaces. Each family member realizes income in the commune. In this connection, larger family communities or groups of people get a larger payment and a greater possibility of using real estate.

 

The proposed system of real property distribution represents the most efficient, most just and most acceptable real estate distribution, regardless of the ratio of the quantity of housing premises and the number of tenants, because the competition of the real estate users on the market balances the best distribution. Moreover, such a form of rent will accept all positive characteristics of private and social renting and reject all negative aspects, which will contribute to the prosperity of society.

 

The competition of real property users would form an objective value of the real property. Where the rent value of a real estate is higher, there is a greater interest on the part of the population. This is a good indicator for earmarking cash assets for constructing real estate. The construction, demolition and adaptation of immovable property are carried out from the fund of collective spending.

 

Life in such a system will allow each inhabitant to examine the need for the living spaces based on practice. This will demystify the alienated premises of perceiving the real property value. Such an orientation may lower the importance of the turnover value of real estate and reduce it to a usable value. Society can then ensure the meeting of all inhabitants’ real property needs.

 

Income Distribution

 3.1.2.2.7           Income Distribution   

 

In the capitalist economy, the distribution of income is regulated by privileged owners of the means of production, whose subjectivity diminishes the contributions of workers in the process of production as much as they can, which creates the exploitation of workers, bringing problems to society

 

In socialism, the level of income of each worker is based on the objective price of labour and the achieved productivity. In socialism, equal human rights require the commune to provide income to all residents to secure their living.

 

All commune residents are involved in the income distribution system except workers in private companies because they retain their profits. Private companies will pay taxes like they do today. These taxes belong to the people of the commune. They are used, among other things, for the salaries of all the commune inhabitants.

 

The level of income can be determined by a coefficient with the following formula:  

C-Income = (Work price) x C-income_W x C-income_E x C-income_C

Work price = (Value of past labour) x (Value of current labour)

The work price is determined by the product of the number of past labour points of a worker and the cost of current work. The quantity of points that each worker holds is equal to the value of their past labour and past work they inherited from their ancestors. The amount of labour past points is the specific condition of the system where the worker with a higher value of past labour realizes a proportionately higher income, irrespective of what work they are performing. Past labour points present a humanistic form of shares that will bring profit based on the value of past work. Such a profit may be significant, but it will not burden companies because it will be distributed on the commune level, as explained in the chapter “Commodity price.” 

 

Each worker autonomously determines the price of current labour by comparing the work conveniences and inconveniences with other forms of work. They ensure the objectivity in valuing the current work price by the work competition where the right to work is exercised by the worker who, in the circumstances of equal productivity, asks for a lower current work price.  

 

In socialism, all inhabitants realize the safety of their survival by income, and it is, therefore, necessary to also set the current work price of unemployed inhabitants. Since unemployed inhabitants of the commune do not perform any profit or non-profit job, they cannot autonomously set the costs of their current work (Every activity will be considered as work). The price of the current work of unemployed people will be determined by the commune’s leadership with the consent of the assembly of the commune. It will be done according to the commune’s working needs and economic possibilities. More precisely, to enable a balance between the supply of and demand for the work in the commune. If the commune’s inhabitants were not sufficiently interested in work, the leadership would reduce the price of current work for the unemployed population. This would result in their lower income, which would increase interest in the work of the inhabitants.

 

Conversely, if the interest in work by workers was excessive, the leadership may increase the current work price of the unemployed, and the workers’ interest in work based on income would go down. The commune management may give a higher price for current work to children and students, stimulating education. The commune’s social policy regulates the price of current work for invalids and older people. The people in this commune will no longer need a pension plan as retirement insurance because the new system provides individuals with an income regardless of whether they work. Besides, the individual will be able to work if they wish or can without limit of their age. 

 

***

 

Finally, the level of income of each worker depends on the C-of income. The C-of income of each worker depends on the proportion of realized and envisaged productivity of workers, enterprises, and the whole commune in the function of workers’ accountability for the realized productivity. The following formula can present the C-of income of a worker:  

C-income-W establishes the relation of the realized and envisaged workers’ productivity in the function of workers’ accountability.  

 

Productivity is expressed in any accepted work values that indicate the quantity and quality of products in profit enterprises and services in non-profit work organizations. Where productivity cannot be precisely established by the quantity and quality of products or services, it can be determined by mutual evaluations of the labour productivity of workers. The system of assessment can be designed to allow the range of evaluations to indicate work productivity in the same way as in the case of the exact establishment of the quantity and quality of produced commodities.  

 

The mutual assessment of inhabitants brings each inhabitant an equal power of decision-making, which introduces a new form of anarchic-democratic behaviour in the society. Thanks to equal assessing power, each individual may become both a prosecutor and the accused without the right to complain. The impact of individual assessment on the population’s income cannot be significant. Quite to the contrary, it will be minor because the accused will not have the right to defend themselves; however, it will be sufficiently strong to make people respect each other. Such respect will pave the way for significant conveniences in society. The assessment system will force the individual to diminish their shortcomings and augment their virtues in their behaviour toward the community in the broadest sense.  

 

Suppose the realized productivity equals the necessary productivity, then the C-income-W = 1. In that case, the realized income will correspond to the envisaged income. If people do not receive any evaluation, they will be considered as they performed the needed productivity. If the realized productivity is higher or lower than the required one, the worker’s income will be higher or lower than the envisaged.  

 

Finally, the C-income-W level depends on the C-responsibility of a worker determined by the workers themselves. Mathematically, a function can be defined that will bring the worker who declares small K-responsibilities approximately the income he sought regardless of the productivity achieved. With an increase in K-responsibility, his income will increase in the event of an increase in his productivity or decrease in the event of a reduction of his productivity. Higher K-responsibility gives more competitive power to do any work.

 

***

 

The income of workers will also depend on the productivity of the enterprise. Enterprise productivity may be shown the same way as a worker’s productivity. The formula may have the following form:   

C-income_E establishes the relation of the realized and envisaged enterprise productivity in the function of the worker’s responsibility.  

 

The productivity of enterprises is shown by the realized profit on the market. Profit represents the most efficient way for assessing productivity, or more precisely, the values of the result of work in present-day society. 

 

Workers realize the envisaged income in the case of the realization of the envisaged productivity or, to say it differently, if they sell the current production on the market. But, of course, that would require a high speed in assets turnover or, practically, production for known customers. It is challenging to sell all the produced commodities during the accounting period. Some portion of such output will be sold in another accounting period, thus realizing its profit in another accounting period. However, it may be assumed that the commodities remaining from the past labour period are sold in the current accounting period and generate profit in the current period.  

 

If the profit an enterprise realizes on the market is equal to the envisaged profit, then the C-income_E will be equal to 1 (one). The enterprise’s realized income will be identical to the envisaged. If the formula establishes a C-of income_E larger or smaller than 1 (one), then the enterprise’s revenue will be proportionately larger or smaller than the envisaged ones.

 

The system of work competition in the labour market ensures an even distribution of employment benefits and disadvantages in each company. But if one company has a significantly better means of production than another company, employees in the better-equipped company might achieve a higher income than workers in the company with outdated technology. In this case, workers would be more interested in working in better-equipped companies. Therefore, the commune’s leadership will organize production in enterprises of the commune so that an equal value of work based on productivity and past labour points achieves equivalent income. In this matter, managers may improve technology in companies with redundant equipment or may overflow the incomes between companies to ensure a uniform income interest of workers in all workplaces.

 

It is further possible to regulate with the coefficient of productivity other forms of success of the production, which cannot be presented by cash profit on the market, and which would handle: the protection of the environment against pollution, the deviation from standards of the quality of goods, etc.  

 

States already have developed regulations that determine production norms, and socialism will intensify such standards. In addition, socialism will increase the efficiency of regulations. Special commissions will accept the state’s standards, analyze possible declines from them, and propose the intensity of influences of such declines on C-income_E. It will be crucial to consider all criteria for protecting the individual and their environment from pollution. This regulation will need to be accepted by the commune’s assembly. Based on such standards, the consumers of commodities, consumer associations, professional institutions, specialized arbitration commissions at the commune level or of the coalition of communes, or international arbitrations will evaluate the quality of work of economic enterprises.  

 

It is noteworthy that the system does not envisage a bureaucratic evaluation of all producers because, in that way, an enormous bureaucratic administrative apparatus would be formed. Instead, the system envisages a customer’s free assessment of those enterprises whose products deviate positively or negatively from the determined standards. Every person will also have the equal power to evaluate companies. For example, suppose a person evaluates a positively or negatively a company that has 1000 employees. In that case, their evaluation will affect the reward or punishment of all these employees with 1/1000 of the impact that their evaluation would have on an individual. Such an assessment will be minimal but will exist and affect the improvement of production processes.

 

The system also provides the evaluation based on the analysis made by expert services of randomly selected or reported enterprises. The enterprises that do not get any assessment will be treated as they operate within the envisaged productivity and adopted economic operation standards.  

 

Analogously to the profit realized on the market, the enterprises producing more socially acceptable products to the established standards will achieve a productivity assessment higher than 1, and realize a higher income. And vice versa, the socially unacceptable enterprises will realize an evaluation lower than 1, consequently, lower salaries. Calculation of the realized productivity may be presented in an indefinite number of factors that will, through mutual multiplication, give the final value of the coefficient K-Income_E.   

 

By using the coefficients, economic enterprises can efficiently bear responsibility with their income for the pollution of the environment or bad quality of products. Enterprises polluting the environment or producing low-quality products will, dependent on the influence that such declines from the standards have, realize a lower income than they are supposed to receive according to the realized profit. Workers will also be additionally sanctioned by the loss of past labour points. To remove the shortcomings in their economic activity, such enterprises will have to compete for assets intended to develop the economy in the function of a non-profitable increase of productivity expressed by assessment. 

 

Capitalism strongly opposes the protection of the human environment because it makes production more expensive. Socialism will provide a good quality of life to be accepted by the world one day. Then it will ensure that the Earth is clean and healthy.

 

Nonprofits generally do not have a measure of labour productivity. This group includes government institutions, education, health, and other service activities that do not generate income directly on the market but are funded by the budget.

 

Non-profit organizations should be placed under the same business conditions as for-profit companies. The productivity of non-profit organizations can be expressed by performance assessment. The assessment is given by service users, user associations and professional institutions. The evaluation of the performance of non-profit organizations can be presented with a coefficient as successfully as the presentation of the work of for-profit companies. Using coefficients, one can compare the performance of for-profit companies and non-profit organizations and, based on that, reward according to the values of work performed.

 

In the associated labour, each work is non-separable from another job, so that each worker also bears responsibility for the economic activity of their enterprise. A worker stating a higher coefficient of responsibility also assumes greater responsibility for the enterprise’s productivity and will realize a higher income in the case of the enterprise’s rise in productivity, and vice versa. 

 

***

 

Inhabitants of the commune are responsible for the productive orientation of the commune. Therefore, the coefficient of the commune’s realized productivity can be expressed by the following formula:  

C-income_C establishes the relation of the realized and envisaged productivity of the commune in the function of responsibility of each worker.  

 

This coefficient does not strongly impact the distribution of income within the commune. Differences occur only vis-à-vis the degree of responsibility an individual worker assumes for their own and collective productivity. Nevertheless, the establishment of the C-of realized productivity of the commune would be highly important in the association of the communes and the distribution of income among the communes.  

 

At the commune level, productivity is expressed by the economy’s revenue. It is possible to expand the measure of the commune’s productivity by a poly-functional system that evaluates the quality of life such as pollution-non-pollution, literacy-illiteracy, legality-illegality in the acting of the population. By using C-income_C is also possible to make subventions to less-developed communes. That would increase the interest of workers in working in such communes. In the same manner, regulating even the birth rate of the commune population will be possible. If the commune has too low or too high a birth rate, it may be adjusted by C-income_C by an appropriate value.  

 

The definition of such categories and their regulation will be the task of the state parliament. Defined categories of the coefficients of values would allow a more efficient implementation of social, economic, ecological, cultural, and all other policies of associated communes.  

 

***

 

The income of each worker in socialism and of the commune’s inhabitants can be presented by the following formula:

C-income = (Work price) x C-income_W x C-income_E x C-income_C

It clearly arises from the formula that C-of income of each worker depends on the envisaged work price and the coefficient of realized productivity at the level of the work post, enterprise and the commune, in the function of responsibility for the realized productivity. By applying computer technology, the level of income of all workers can be quickly calculated, regardless of the number of factors determining the income. A worker who, for example, realizes a 10% rise in productivity at their work post in the enterprise that registers a 5% drop in productivity, will realize a C-income of about 5% higher. It may be assumed that workers will be most responsible for their own work because oscillations in the enterprise productivity are smaller, while they are minimal at the level of the commune.

 

The above socio-economic system represents a shareholding-social, or more precisely, a humanistic form of ownership of the means of production; however, it also allows the production of independent private entrepreneurship. Private entrepreneurship understands an independent production where the means of production are in private ownership. Work posts in private entrepreneurship are owned by private entrepreneurs, and are not subject to work competition. The owner of an enterprise employs workers according to their needs and possibilities.

 

Upon realizing cash profit on the market, private entrepreneurs keep working cash assets according to their needs. They also keep cash assets for the upgrading and amortization of the production. They are bound to pay income tax, and property tax as is the case today. These cash assets are intended for the employed workers in the non-profit economy, unemployed workers, the commune’s collective consumption, and the federal consumption. The tax level for independent private entrepreneurs will be identical to the taxes of the associated labour. The population of the commune will directly determine the level of appropriations. The owner of a private enterprise may decide to autonomously determine the income level of their workers and pay them autonomously, or may integrate into the collective distribution of incomes of the commune’s inhabitants.

 

If an independent private entrepreneurship uses in its work a production technology unknown to the public, and realizes through the use of such technology a cash profit higher than the associated labour with the shareholding-social or humanistic ownership of the means of production, it will realize a higher income. Such private entrepreneurship can survive and attract labour force in the new system as well.

 

However, the newly proposed economy will invest money in its development as much as it is needed. The system of work competition will develop the economy to such an extent that it will become more productive than independent private entrepreneurship. When independent private entrepreneurs realize incomes lower than enterprises in the collective ownership, the number of workers interested in employment with private entrepreneurs will drop. In addition, if we take into account the right of workers to freely choose the work they want, to make all decisions about their work, to choose their salaries, and to share the profits of the companies that the new system offers, the number of workers interested to work with private enterprises will be even lower. In short, the new system will out compete the private companies from the free market and take over their workers. It may be expected with high certainty that independent private entrepreneurs will surrender the ownership of the means of production to the society in exchange for an equivalent quantity of past labour points. A larger number of past labour points will ensure a higher income, a stronger competitive power in choosing work, and therefore a stronger power in the society.

 

***

The money intended for incomes of all inhabitants is formed at the level of the commune’s administrative centre from the revenue of the commune. The quantity of money is determined by direct voting of the population and is appropriated from the total amount of money intended for the turnover of commodities in the commune.

 

The obtained amount of money intended for incomes of the commune’s population needs, in principle, to correspond with the envisaged quantity of money intended for the incomes of the population, because the system is based on the price of work corresponding to the income of workers. However, deviations are possible due to differently realized productivities. Therefore, there might be more or less money available for the overall income of all inhabitants in comparison with what the system originally anticipated.

 

Such deviations will be adjusted in the manner that the whole amount of money for incomes be distributed among workers proportionately to the defined C-income of workers. In this way, the shortage or surplus of money intended for incomes cannot exist. Bank loans will no longer be needed to cover a lack of money. The amount of money intended for income will be distributed to people in proportion to their share in production and everyone will be convinced that the distribution of incomes is fair.

 

The technique of income distribution may take place from the commune’s computer centre. Actual income can be established according to the extended proportion formula:

 

Income-1 : Income-2 : Income-2 : … : Income-n =

C-income_1 : C-income_2 : C-income_3 : … : C-income_n

 

From the overall quantity of money envisaged for incomes and the shown extended proportion that may include millions of members, by using computer technology, the income of each worker can be quickly and precisely calculated in the form of:

 

Income-1 = Value-1

Income-2 = Value-2

Income-3 = Value-3

…

Income-n = Value-n

 

The obtained income shows the operating result value of each commune’s inhabitant in a certain monetary amount.

 

Centralization of the income distribution systems allows the application of uniform distribution criteria according to the principle that equal incomes pertain to equal work. The profit that in the classical economy brings conveniences to the owners of the means of production is now, in a socially acceptable manner, distributed to all inhabitants of the commune. Exploitation is no longer in place.

 

No work is independent and, therefore, income arising from the collective operation result needs not be independently distributed. Income distribution by means of prolonged proportion and coefficients allows that the entire quantity of money intended for incomes in the commune is elastically distributed among the commune’s workers and inhabitants, proportionate to with the price of the invested labour and the workers’ responsibility for the realized production, without a surplus or deficit of money assets in the annual balance sheet.

 

Possible abrupt changes in the realized income of workers due to a high increase or strong decrease in productivity may be amortized by a mathematical function that will not allow a sudden rise or sudden fall of income, which would contribute to a more steady economic stability of the society.

 

The final say in income distribution has to be that of the commune’s inhabitants by their direct statement of the minimum income level. The obtained mean value stated by all inhabitants in the function of their decision-making voting power would represent the guaranteed survival subsistence minimum that each worker or inhabitant of the commune receives in the accounting period regardless of the size of their share in the production, and the price of their work.

 

A lower minimal income of inhabitants would with the established income-related amount of money intended for all incomes create a larger range among incomes, which would increase work engagement and, accordingly, the productivity of the economy and social standard. The high standard and high productivity can result in saturated markets, which diminish the working needs. The population then could, by its own free will, increase the minimal income of the population, thus reducing the range among incomes, and the workers, due to the decreased income-related stimulation in the process of production would reduce their own work engagement to the point where the supply and demand of work would come into balance.

 

The corrections can be applied by the computer technology easily and rapidly, where the smallest C-of income would ensure a democratically established minimal income. Application of the extended proportion will proportionately increase or decrease the differences in the level of income, according to the needs of the society.

 

This requirement finalizes the complex approach to the establishment of income distribution of the commune’s inhabitants excluding the workers in private enterprises who would keep their profits. The obtained value expresses the definite final income value and also the purchasing power of inhabitants in the commune. Incomes of workers may be presented to the public or kept secret depending on the wish of the people and every individual. Each inhabitant uses their own income according to their free wish.

 

 

Economy Development

3.1.2.2.5         Development of the Economy 

 

In capitalism, the amount of money intended for investment depends on the entrepreneurship of the owner of the means of production. It is formed by an allocation from the realized market profit of the company.

 

In socialism, society achieves the development of the economy by allocating funds for the development of the economy from the revenue of the commune. In socialism, people directly distribute the revenue of the commune on funds intended for the development of the commune’s economy and on funds intended for the spending of people in the commune.

 

Suppose an inhabitant of the commune wishes that the commune’s economy develops to a more significant extent. In that case, they will then state a more substantial amount of money intended for the development of the economy. As the total quantity of money is limited, they will have to declare a smaller amount of funds meant for the spending of the commune’s inhabitants. And vice versa, an inhabitant wishing for more significant spending will state a larger amount of money intended for spending and a smaller amount for the development of the economy. The statements of all inhabitants in the function of their voting power expressed in points of past work, entered into the Internet application of the centre for data processing, will sum up and form the amount of money intended for collective spending and the development of the economy.  

 

Suppose inhabitants will generally tend to a more significant development of the economy. In that case, a larger quantity of assets intended for the accumulation of the economy concerning spending will be appropriated, which would speed up the economic development and reduce the income of the population and, consequently, the standard of living. Such a monetary policy enables each commune to accumulate money to develop its economy by relying on its forces irrespective of the degree of economic development. When the economy grows to a point where it can ensure an expansive production, the need for society to invest in the development will diminish. In this way, the amount of money intended for spending would increase, as would society’s standard of living.  

 

Perhaps, the essential value of such a form of distribution is that the money is earmarked democratically, which means that society will plan its development. Such a monetary distribution form will guide the commune’s developmental policy. Thus, the economy gets the framework for development direction to plan its development effectively. In addition, this will overcome the alienation in the production process that has arisen from making authoritative decisions in society.

 

Assets intended for economic development services for economic investments by which enterprises acquire new machinery, industrial installations and working capital, helping them achieve higher productivity.

 

Enterprise managers demand assets intended for economic development based on the development programs of their respective enterprises. The enterprise development program contains a defined amount of needed assets, the envisaged profit of the company, and the time of implementation.

 

When the amount of money necessary for economic development is formed, it will be distributed according to the C-of development in the following formula:   

 

It is clear from the formula that a smaller amount of needed assets and a more significant profit realized with a shorter implementation time results in higher C-of development. Therefore, the assets are distributed so that the most significant C-of development will get the needed investments, followed by the subsequent C-of development, and so on. Assets are limited, so they cannot be allocated to enterprises that achieve a smaller than necessary C-of development. Such enterprises must wait for better times or have to increase the predicted profit with a smaller amount of needed assets and a shorter time of implementation. 

 

As the funds intended for the development of the for-profit economy are renewed in each accounting period from the revenue of the commune, they are allocated non-refundable as grants. The commune will become a humanistic corporation, and corporations, even in capitalism, do not charge themselves for their investments. It is enough for companies to realize the envisaged profit, and in this way, the assets intended for economic development find their social justification.  

 

Socialism presupposes precisely determined responsibilities of managers and workers in using funds to develop the economy. For example, suppose the company’s management wants to significantly increase production by proposing to take large amounts of money from the economic development fund. In that case, they must first get approval from senior management so that the economy’s improvement occurs in a coordinated manner with other economies. Then, the company manager will present the development program to the workers and his responsibility for its implementation with K-responsibility. Higher K-responsibility can give workers, among other things, greater confidence in the manager’s plan.

 

Significant investments will considerably increase the responsibility of workers in production processes, and they will need to declare whether they can accept it. Based on insight into the management program and trust in their management, workers will take the scope of their responsibility by offering their K-responsibility. Suppose workers declare an increase in responsibility for their work. This would mean that they support the management program so that the company will compete for money intended for economic development. If workers reduce their K-responsibilities, it would mean they are unsure of the investment program that managers propose, which could delay or prevent the investment. Managers will need to persuade workers to accept their proposal by explaining the risks and benefits of investing.

 

The proposed K-responsibilities from workers and management will be in force until the time required to realize the development of production. They cannot reduce or increase their K-responsibility for projected productivity during this period unless the productivity changes are jointly adopted.

 

Funds intended for the development of the economy increase the economy’s productivity and thus the value of newly-produced goods, which requires an increase in the mass of money in circulation to purchase newly-produced goods. An increase in the amount of money in circulation requires an increase in the worker’s past work points. Therefore, the new amount of past labour points should be distributed among the enterprise’s workers in proportion to their K-responsibility for contributing to the production of the newly created value.

 

Businesses have a measure of productivity expressed in monetary gain in the market. After the expiration of the time required to realize the projected increase in productivity, the calculation of business success is performed. For example, suppose the company realizes the proposed monetary profit. Such profit is treated as a permanent work improvement that permanently brings higher income. Thus, the company’s workers get the requirements for acquiring points of past work. Then the difference between the achieved realized profit and the profit that the company made before the investment is shown as an increase in profit. Then the past labour points are distributed to the employees in the company in the amount of the projected increase in the company’s cash profit.

 

However, suppose some companies of the commune do not realize the projected profit in the foreseen time with the use of money for the development of the economy. In that case, the difference between the expected and realized profit is shown as a loss. Then the past labour points are deducted from the company’s employees in the quantity of the company’s non-achieved profit gain. In this regard, if the company makes half of the expected profit, it will earn half of the expected points of past work and at the same time lose half of the expected points of past work. This means that achieving half of the productivity by using assets for economic development does not bring earnings or losses of the points of past work.

 

***

 

The productivity of a profitable economy makes a direct monetary gain on the market, while the productivity of non-profit and government organizations is realized by the benefits they realize to the commune. Work products of organizations are free of charge for the population. Such a group may include administration bodies, public protection, education, healthcare, and similar activities. In socialism, the productivity of organizations is expressed by the performance assessment of the quality of services provided by the people directly and by specialized arbitration commissions.

 

Organizations also demand monetary assets for their development, but it comes from the collective spending fund. Therefore, evaluation of the success of non-profit companies may have a scale of values equivalent to the monetary profit of the economy so that improvement in the work performance of organizations would increase their success index and vice-versa. The workers in organizations also need to be entitled to an increase in the number of past labour points in the case of high productivity, which is set aside from the profit economy.  

 

This means that the organizations of the commune will participate in the profit of the economy. The quantity of income points allocated to the non-profit economy is determined by comparing the realized productivities in the profit economy and non-profit organizations. Using the coefficients makes it possible to mathematically compare the profit of the economy and the development of non-profit organizations and form a balance of awards and punishments for all conveniences and inconveniences coming from work in profit and non-profit activities. In the division of labour through work competition, such comparison will be necessarily objective. Each disproportion would result in the spill-over of work, where the work conditions would be more convenient, in nobody’s interest.  

 

When the total amount of past labour points which need to be added to or deducted from all workers in all companies and organizations is known, then with the help of computer technology, the rewards or sanctions against each worker are calculated by the following formula:   

 

Worker-1 : Worker-2 : Worker-3 : … : Worker-n =

C-of respons.-1: C-respons.-2 : C-respons.-3 : … : C-respons.- n 

 

And the result is achievable in the form of:

 

Worker-1 = +/- Quantity of points-1

Worker-2 = +/- Quantity of points-2

Worker-3 = +/- Quantity of points-3

…….

Worker-n = +/- Quantity of points-n

 

Private entrepreneurs perform independently in the same way as the merged public company of the commune. Private entrepreneurs are accountable for their business operations with their capital. The workers employed by private entrepreneurs are responsible for their work directly to the private entrepreneur. Private entrepreneurship does not allocate money to develop the commune’s economy, so it cannot use these cash assets. Private entrepreneurship has to accumulate the cash by itself or borrow it from banks with interest-bearing loans.  

 

Considering that the work competition in socialism will be at least equal to or more productive than the work in private entrepreneurship, it may be expected that private entrepreneurship will lose the productivity fight against socialist entrepreneurship. In addition, under socialism, the productive consciousness of workers will grow, and they will want to make their own decisions, take responsibility for their own decisions, and participate in the distribution of corporate profits that they cannot achieve under capitalism. As workers will have significantly more significant rights and freedoms in the socialist form of ownership of the means of production, it can be expected that private entrepreneurs will lose the labour force.

 

Private entrepreneurs will then be forced to surrender their enterprises to the commune for the equivalent amount of past labour points. A larger quantity of past labour points brings a higher income, more possibilities in choosing work posts and, generally, a greater productive power recognition in the society.   

 

Applying the coefficient of responsibility in socialism represents a very favourable substitution for stock-exchange speculations of capitalism. This is because possible gains or losses of past labour points of workers, equivalent to shares in capitalism, are tied to the successfulness of productivity of their companies. Socialism puts workers in an equal position in production and diminishes alienation in the process of production, while collective responsibility contributes to greater prosperity in doing business.  

 

Democratic planning and management of the economy, full employment and work competition, the resolved issue of workers’ accountability, and distribution of incomes according to work values will remove the deficiencies of the known socialist and capitalistic forms of business activities. This will enable the development of socialism.

Working Capital

3.1.2.2.5              Working Capital

 

Socialism will organize an entirely new form of production. At the same time, privately owned enterprises will continue to operate according to the principles of the capitalist market form of the economy as they do today.

 

The commune will have common funds realized by exchanging money from the inhabitants with the past labour points and taxes. In this way, the commune can accumulate significantly more money than is needed for the population’s spending in the accounting period. The surplus of funds represents the monetary accumulation of the commune. From that monetary fund, the commune must keep a certain financial reserve to cover possible investment disturbances, then to cover damages caused by natural or other disasters. With these funds, the commune ensures itself. The rest of the money will be used as the working capital of the public company of the commune.

 

Working capital is the accumulated means of past labour of producers and serves as a means of payment to other producers for products, semi-finished products, and raw materials that the commune’s economy processes in its production processes.

 

Socialism can allocate working capital to its economy without interest, provided that the economy repays the borrowed money in the settlement period. In reality, the commune is becoming something like a corporation, and companies do not charge themselves for working capital. Therefore, the commune would have no interest in charging loans to itself.

 

In the capitalist system, producers and consumers who do not have cash take out loans to buy goods. Loans burden the price of goods with interest determined by the market based on supply and demand. Interest requires a higher return on money than borrowed. On the one hand, it is a form of exploitation of people unacceptable in socialism. On the other hand, money intended for interest does not exist in circulation, so it must be created to enable the return of borrowed money with interest. Interest does not contribute to the production of value in society, so it is not rational and, at the same time, brings problems to the monetary policy.

 

Interest-free lending does not increase the cost of production and eliminates the exploitation of society. If the commune can credit production without interest, then the economy may, according to its possibilities, postpone the collection of the payments for its goods with interest-free loans. When the commune grants loans without interest, private creditors would no longer be able to make money by borrowing money, thus reducing the use of interest as a form of rent. It is important to note that interest rates will not be abolished. They will exist as long as necessary, but the commune will form such credit policy conditions, discouraging interest in borrowed money.

 

In the western world, interest rates are already low today because only a slight increase in interest rates may lead to business difficulties that can cause bankruptcies. An additional reduction in interest rates would practically abolish interest rates and rent-seeking on borrowed money. A further reduction in interest rates is, in fact, the end of capitalism.

 

With the disappearance of interest, banks would lose their function of earning rent based on accumulated money. They would no longer be profitable enterprises but could perform the role of individual and social bookkeeping of the monetary transactions in the community. Aided by computer technology, banks may keep records of earnings and expenditures of the population and companies of the commune.

  

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However, interest can contribute to the efficiency of the economy. A more extended loan repayment period increases the amount of money paid for interest, so it is in the interest of loan users to repay loans as soon as possible.

 

By introducing a system of non-interest-bearing loans, it will be necessary to set up a new method of monetary distribution that will, in trading and financial terms, be as efficient as the interest lending of capitalism. Since the quantity of working capital is limited, it may happen that such money will not be sufficient to cover the needs of all beneficiaries. In this regard, the working capital needs to be distributed among the beneficiaries in the function of turnover time, which may be presented in the following formula:

The working capital beneficiary who repays the borrowed money in a shorter time will realize a more significant C-of working capital. Therefore, all larger working capital coefficients will ensure non-interest-bearing credit financing by the commune, irrespective of the quantity of the assets claimed, as long as the working capital fund shall have become exhausted.  

 

The system predicts a higher chance of getting money to the economy that envisages a shorter turnover time of commodities. This is understandable because the money repayment is faster and can be again used for lending. Production that finds its spending in the payment period of one month will be able to use working capital with the help of the described distribution system because it returns them practically immediately.

 

The economy, collectively owned by the commune’s population, uses the commune’s working capital according to its needs. It is bound to repay the borrowed amount of money within the accounting period. The economy can return the working capital provided if it produces commodities the society needs and gets paid for it. In case of failure, the producers will not make enough money. If profit is greater than the amount of working capital spent, companies are still operating relatively positively because they can return working capital. On the other hand, low profit in the accounting period will reduce workers’ income.

 

If the realized profit falls below the amount of used working capital, the enterprise then registers a loss in working capital. Toleration of such a situation would reduce the amount of working capital in the commune’s money fund, and producers would have difficulties renewing production. No economic system can tolerate financial indiscipline, so neither can socialism. Therefore, the commune will introduce measures for bearing the responsibility of workers. In socialism, all workers are accountable when companies lose money and compensate for such losses collectively through past labour points they possess.  

 

Companies’ production intended for unknown consumers need not be placed immediately on the market. In that case, the turnover of commodities may last longer than the one-month accounting period, and the enterprise may realize less profit than the working capital amount spent in the accounting period. However, as each company operates continuously, it can make the necessary profit and ensure the return of working capital based on the collection of manufactured goods from a previous production period.

 

The responsibility of workers needs to be taken independently of cyclic oscillations of profits. Over the course of one year, each enterprise takes the working capital as many times as it needs and repays it after realizing a profit on the market. Suppose such an enterprise fails to repay the entire working capital within one year. The difference between the borrowed and refunded assets shall be subtracted from the past labour points of all workers, proportionately to the coefficient of their responsibility. If an enterprise loses money, workers’ higher coefficient of responsibility will bring a more significant loss of past labour points and a lower income. And vice-versa, a lower coefficient of workers’ responsibility, in this case, will bring along a minor loss of the past labour points and a smaller decline in the level of income. The initiator of the wrong borrow decision will also be sanctioned by workers’ negative evaluations and special commissions. In this way, borrowing money involves a great responsibility of the whole collective, which is a precondition for productive production. The technique of adding and taking past labour points is presented in detail in the chapter: “The Development of Economy.”

 

Non-realization of the envisaged profit due to natural catastrophes such as earthquakes, floods, and fires need not be considered as lousy productivity of the economy. The commune’s reserve money fund would cover such losses.

 

The working capital in the commune’s reserve fund is always limited, and it may happen that some producers do not get the necessary working capital. The economy can’t produce without working capital, and such plants would need to be closed. For such cases, the commune envisages a reserve source from the development of the economy where working capital may be allocated. If neither of these are possible, they can seek it from private banks with the market interest rate.

 

However, as the working capital of the commune will be distributed interest-free, the demand for interest-bearing loans will fall, and the holders of accumulated money will have difficulty earning a commission. Then the owners of the funds will be more interested in exchanging them for past work points, enabling the commune to possess money for interest-free lending to the economy and consumers. That will strengthen the socialist economy

 

It is worth saying that irrespective of the extent to which the economy will be associated, the market economy will never be insensitive to oscillations in trends. By tightening the requirements concerning risk-bearing that will result from the work competition, the failures of producers may be markedly inconvenient. In this regard, producers will have to seek a higher degree of certainty in doing business and find it in the production for the known consumers.  

 

The associated producers will question consumers’ needs and gradually organize production on their order. The economy can successfully manage production with known spending, and labour competition will enable the most successful work performance. It should be emphasized that such economic production of goods will occur less and less in the market economy and more and more in the planned economy.