Category: Humanistic Economy

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

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.

 

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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. 

 

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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.  

 

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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.  

 

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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.

  

***

 

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.

Money

3.1.2.2.4                 Money

Money is a means of payment for goods and services in a market economy. Money in circulation is issued by the state apparatus through the central bank. The state seeks to equate money in circulation with the total value of goods and services produced to enable a stable economy. The central bank regulates the money supply on the market through monetary policy. The main instrument of the state’s economic policy in capitalism is the credit interest rate formation.

 

The government uses low-interest rates to create an expansive monetary policy that stimulates investments. As a result, economic development increases workers’ employment, national income, and society’s welfare. However, the increased mass of money in circulation creates inflation, which raises the prices of goods and leads to instability in the market, which is unfavourable for the economy.

 

The state controls inflation and stabilizes the economy with a restrictive monetary policy that limits the money supply by raising interest rates. Then comes the deflationary tension that suppresses the market, which leads to a recession in production. The recession reduces companies’ profits, increases unemployment, lowers people’s standards, and leads to economic crises.

 

Market regulation of the amount of money in circulation does not create a sufficiently stable economic policy because it is challenging to balance a huge number of independent factors that prevail in the economy. Thus, cyclical fluctuations in the economy occur, which is unfavourable for the economy and society. The state’s monetary policy is much more adapted to anarchic changes in the market than it is based on organized economic policy.

 

A stable economic policy requires a balanced distribution of labour, the known purchasing power of the population, the known needs of society, and an efficient economy that meets society’s needs. A fully balanced economic policy can only be pursued through a developed planned economy, and that is why it will have to be accepted in the future. It will necessarily require creating a monetary policy to ensure adequate money in circulation and democratic control of its use.

 

***

 

The most suitable situation for any economy would be to have the quantity of money in circulation identical to the value of produced commodities. In an ideal case, the economy produces what society needs, and the money in circulation enables purchasing all manufactured goods. This would create economic stability.  

 

Consumers possess a large amount of money. It is much higher than the value of current production and much lower than the total value of everything the society owns because those values were created by turning over the same money. Part of that money is turned over for the needs of payment transactions of production and distribution, and a large amount of money is accumulated to achieve economic security and investments of people. The big problem is that privately accumulated capital is placed freely, making it difficult for the economy to plan production. Therefore, it is necessary to introduce more order in the economic policy of the commune through the process of production planning.

 

The commune does not issue money, but it can acquire it by redeeming accumulated money held by the population using past labour points. A larger quantity of past labour points of workers brings higher incomes, so people who own money can find their interest in exchanging money for past labour points.  By selling money, the commune’s population loses the possibility of lending money with interest but realizes a rise in income proportionately to the increase in the number of past labour points.

 

In a socialist society, everyone is materially secured. As a result, the individuals will no longer have to save to ensure their future, so a significant voluntary exchange of money for past labour points may be expected. Each community should establish its public bank. Redeemed money should be pooled into the public bank of the commune. The commune will also pool the entire cash fund of the merged companies of the commune. The money collected from taxes of individuals and private enterprises will be pooled as well.

 

Thus, the commune will accumulate a large amount of money. The economic policy of socialism will form money intended for the incomes of all the commune inhabitants so that they can buy manufactured goods and pay for the services they use. However, if the amount of money is tied only to the produced value of goods, workers would realize incomes even though the delivered goods are not sold on the market. Such production would create overstock in warehouses and spend accumulated money of the commune, while the commune would not go bankrupt. In this regard, the amount of money for people’s incomes should be formed between the total value produced in the merged public company of the commune and the profit realized on the market in the accounting period. The public bank of the commune should determine the monetary policy to realize the commune’s optimal productivity and economic stability.

 

Such an amount of money may be called the revenue of the commune. The commune’s revenue is less than the amount of money that the commune possesses. The rest of the funds will be used as working capital and reserve funds for the commune.

 

Democracy in Economy

 

In socialism, managers will have the power to make decisions in the name of the people if they dare to do it because they will be directly accountable to people for their decisions. The members of the society will be able to punish a manager who makes decisions that do not serve them. In such conditions, no manager can independently take responsibility for making political decisions that guide the whole society because they cannot know with certainty how much such decisions will suit the members of society.

 

This primarily relates to the formation of the macro-economic policies of the commune.

 

For this reason, there is no doubt that the commune’s management will include the commune’s inhabitants in the decision-making process about the commune’s income, fiscal, and development policy. Socialism will introduce a new form of democracy in which commune residents will decide on how much of their income they want to set aside for taxes.

 

The commune’s management will undoubtedly let the population decide how much of their salaries they want to set for individual and collective spending. The fund on individual expenditures defines the total amount of money for incomes for all commune residents, excluding workers in private enterprises because private enterprises keep their profits and distribute payments themselves. Collective spending defines the amount of money individuals wish to deduct from their salaries for the joined spending of all the commune people.

 

Individual spending implies workers’ incomes but also includes tax money for workers’ salaries in non-profit companies and unemployed people. The individual salaries of people are determined by the values of past and current work and realized productivity. The social system gives these values, and the voters cannot influence them at this moment. In this voting, people decide on the amount of money they want to intend for their individual and collective spending. Each person will write a statement of their decision in the web application associated with the data processing center of the commune administration.

 

Since past labour points will determine the size of income, people will share past labour points they possess for individual and collective spending. In this way, each resident will exercise decision-making power in proportion to the possession of past labour points. People with more valuable past work will have more power in decision-making.

 

The rationale: Considering that all members of society have not equally contributed to the creation of collective wealth, they should not have the same decision-making power regarding the fiscal policy of society. The more productive work should have more decision-making power for better motivation. Economic decision-making power needs to be based on the value of past work determined by the number of past labour points. This will contribute to the development of the economy and society. This measure is equivalent to the power of shareholders’ voting rights in capitalism.

 

Suppose one wishes to allocate more money for individual spending and a smaller amount for collective spending. They will share the value of their past work points in such a ratio. The commune’s leadership should first define the minimum percentage of tax money so that the commune can meet its basic joined spending needs. 

 

The summarized declarations ​​of all the commune inhabitants for individual and collective spending will determine the total amount of money for individual and collective spending. Thus, society will directly create the income and fiscal policies of the commune.

 

The total amount of money for individual incomes (workers in private companies excluded) will be distributed to the commune population according to their merits. These merits will be primarily based on the realized productivity and prices of work of workers. This will be addressed in more detail in the chapter: “The Distribution of Income

 

In the same manner, society may determine the minimum income of individuals, which will regulate the range of incomes among the people. This will regulate the relationship between work merits, solidarity, and income-based work interest. For example, if workers were unwilling to perform undesirable work and thus reduce the productivity of the commune, the people can reduce the minimum income of workers through direct voting. The result would stimulate workers to work more and thus achieve higher productivity and a greater share in the distribution of incomes. On the other hand, if the commune reaches higher productivity than is required, society will increase the minimum income and thus reduce the income stimulation of work.

 

The system provides a single tax rate because it is simpler to calculate, and in this way, the people can determine it through direct democratic voting. Today’s regulation of progressive taxation, which has the task of establishing social balance, will be replaced with the commune’s income policy, which will later be explained more. Harmful forms of spending for health, such as alcohol and tobacco, might be more effectively reduced through the disalienation of society rather than through tax policy.

 

The people will further divide the money for collective spending to develop production and collaborative consumption.

 

Assets intended for the development of the economy provide for the expansion of the productive forces, purchases of new means of production, or complete companies that promote production. A larger quantity of cash assets intended for the development of the economy will engage social work and economic growth to a more significant extent, which would increase the means of production and, accordingly, productivity. More sizeable investments in the development of the economy will ensure major social conveniences in the future; however, cash assets for current spending would decrease, which would also reduce the individual and social standards. Such a system will enable each commune to develop by relying on its forces. The policy of the commune development will be addressed in the chapter: “Development of the Economy.”

 

Assets for collective spending serve to meet all common needs of society. They are used to maintain the existing structure of the social standard and the building of new social standard facilities. This includes funding commodity spending in public health, education, security, construction, and maintenance of infrastructure, etc. Assets for collective spending may, to a certain degree, be distributed by direct decisions of the population, while interested society members may directly make later partial distributions. However, the authorized management needs to make the final distribution of the smallest spending segments for which it will be directly accountable to society. Increased funding for collective spending would allow a higher common standard at the expense of other forms of spending. 

 

The money for the state spending also needs to be set aside from the funds earmarked by people for the collective expenses. This money is used for the expenditure of the state. The amount of money for federal spending is determined by the Federal Assembly through the delegates or representatives of all communes. Collective spending will be addressed in more detail in the chapter: “Collective Spending.”

 

***

 

The new voting system will be based on the unlimited validity of the voters’ votes until each voter themselves changes their vote. Also, the new system will enable people to vote whenever they want. Therefore, they will be able to change their voting statements many times per day if they wish, and the system will not have any problem processing such changes. 

 

The proposed system will significantly allow the commune population to determine the collective economic needs. Based on their own experience, the people will notice the advantages and disadvantages of a particular form of money distribution, adjusting so that all individuals and society realize more significant benefits. In this way, all individuals and society will realize greater conveniences. The community will accept the economic policy as its own, which is one of the essential elements of the disalienation of the economy and society.  

 

Identified collective economic needs define the macro spending and thereby determine the production. In this manner, the commune’s population will directly and democratically create the macro-economic policy of the commune. This will be an introduction to creating a stable, democratically planned economy.  

Commodity Price

3.1.2.2.3        Price of Commodities 

 

Commodities have their sales value expressed by price. In a market economy, the law of supply and demand determines the price of items. Manufacturing possibilities, purchasing power, and society’s needs adjust the cost of things. Commodities also have their manufacturing value based on the cost of production.

 

In socialism, the manufacturing value of commodities should incorporate money intended for the work cost of all workers who produce the commodities (1); the pertaining ratio of the work of workers in the non-profit organizations (2); the pertaining proportion of the unemployed people on the territory of the commune (3); and the working cash assets invested in the production of goods (4).

  

In socialism, calculating the production value of goods is more accurate and just than in capitalism, so it will bring much more justice to wage distribution than it is possible today. The production value of goods can be presented by the formula: 

 

A = ∑ (B x (1+C+D)) + E

 

The formula indicates that the production value of the goods includes the cost of workers who directly produce goods, then the corresponding price of work for employees working in nonprofit organizations, the related earnings for unemployed people, and finally, the value of working capital invested. Hereinafter, production value refers to the total goods produced in a company over the accounting period.

 

A detailed explanation of the formula:  

 

A – The manufacturing value of commodities produced in a company. 

 

B – The total work price of each worker who participates in manufacturing commodities. The price is defined by the number of past labour points and the current labour price of workers.   

 

The quantity of past labour points is determined by the holdings of workers, while workers determine the current labour price by stating it in a freely competitive way. The product of these two coefficients gives the work price of a worker. 

 

C – The coefficient of workers employed in non-profit organizations. It is expressed by the proportion of the work price of all the workers employed in non-profit organizations and those employed in a profit economy on the commune territory.  

 

The proportion of the number of workers employed in the profit economy and the non-profit organizations is regulated by the commune’s management, following the needs and possibilities. The work price of workers in non-profit organizations is established identically to the work prices of workers in the profit economy. The workers in a profit economy produce commodities whose sale generates profit on the commodities market. The workers employed in non-profit organizations, such as teachers and police staff, do not directly realize earnings from customers because their activity is free of charge for the workers in the profit economy and the commune’s inhabitants. This means that the total quantity of produced commodities and services is a fruit of the collective work in both profit economy and non-profit organizations sectors. Workers in the profit economy use the services of non-profit activities; thus, according to the principle of mutuality, the workers in the non-profit activities must use the products of the work performed by the workers in the profit economy. By applying this coefficient, the workers’ contribution to the non-profit organizations is built into the product’s price. The coefficient establishes the share of workers in the distribution of produced commodities.  

 

D – The coefficient of unemployed inhabitants. It is expressed by the proportion of the number of unemployed and employed workers in the profit economy on the commune’s territory in the function of the price of current labour and the quantity of past labour income-based points.  

 

The coefficient represents the entire population that does not work directly: the young, pupils, retired people, homemakers, invalids and, generally, the whole unemployed population in the commune. The unemployed population needs to receive earnings for past and future labour and the economic security of the people. Such payment needs to be incorporated into the price of produced commodities.  

 

The value of the past work of unemployed people determines the number of past labour points they possess. The current labour price of unemployed people determines the commune’s management according to the work needs and the power of the commune’s production. A lower price of current labour for the unemployed will generate smaller earnings, increasing their interest in work. And vice-versa, a higher price of current labour of the unemployed will generate a higher income, which will decrease the income-based work interest. In this way, the commune’s management will direct social work following social and production needs. For example, an increase in the price of current labour of students would stimulate education, etc.  

 

These coefficients represent the income appropriations for all inhabitants in the commune in the cost of commodities. By selling goods on the market, all the commune inhabitants realize their share of the realized profit.

 

 

E – The quantity of cash working assets spent to produce the commodities. Operating assets understand the value of the parts of products manufactured by other producers and refer to intermediates, semi-finished products, and raw materials.  

 

Working money assets are mostly set aside from the commune’s reserve fund, which is formed by redeeming cash assets in exchange for past labour points. Operating assets are taken according to the needs of the profit economy. However, the producers have the obligation of their repayment during the accounting period.

 

In the accounting period, factors C and D are unique and might be calculated by the coefficient k. Then manufacturing price of commodities can be expressed by the formula:  

 

C = ∑ (A x k) + B

 

 

The sum of all labour costs of workers involved in manufacturing products burdened with contributions for workers in the non-profit companies and unemployed people gives the total labour cost for producing a particular product. By adding the value of working capital spent, one gets the manufactured value of commodities.

 

This method of calculating the value of the price of goods equates the total value of all goods produced in the commune with the income of the commune’s inhabitants. In other words, it equates the prices of goods with the purchasing power of society. In this way, the production and distribution system achieves balance.

 

***

 

It is crucial to determine the production value of goods because it presents the efficiency of the business performance of enterprises in the commune. If the production value of goods is higher than the market price, the company is unprofitable. And if the production value of goods is lower than the market price, the company operates profitably.

 

Due to the different work equipment, enterprises’ productivity varies, and by selling their commodities on the free market, they realize various incomes. In a free choice of labour system through labour competition, jobs that generate higher salaries with equal workloads would arouse great interest among workers. On the other hand, lower-income jobs with similar workloads would arouse less interest. This would undoubtedly cause instability in the labour market and thus in society.

 

The commune’s management needs to solve the issue of balancing the demand for all work posts in the commune’s enterprises by analyzing the advantages and disadvantages of different forms of production. For example, the balance may be increased by employing more workers in enterprises, realizing a more significant profit and decreasing the number of workers in companies that realize smaller profits. If it is not economically justified, the balance may be established and more significant profits earned by investing in companies that already produce profit and closing down the loss-making enterprises. If such an option is not justified, the balance lies in investing in the enterprises operating with smaller profits, which would achieve higher productivity and, accordingly, an increase in profit.  

 

However, the difference in productivity and the realized income among enterprises in the commune will exist as long as a difference in the production equipment exists. This is because sizeable automation of the production process will always significantly reduce the necessary number of workers. In this way, the productivity and income of workers in such a company will rise in relation to the producers of the commune having a lower level of automation in their production. Hence, if work competition were the only coordinator between the supply and demand of work, it would always create instabilities in the labour division created by the needs of workers for better-paid jobs.

 

The proposed payment settlement in which the total income of all workers corresponds to the full value of goods and services produced predicts that the entire surplus income of enterprises with better material equipment in the commune will correspond to the lack of income of companies with lower material equipment in the commune.

 

A balance between supply and demand for labour in the commune can be achieved in the way that companies that perform the surplus-value, in which workers earn more than they demand, give up their surplus value in favour of companies making less money than workers demand. This is a subvention. The subvention is necessary because, in the system of free labour competition, workers would compete for work in more productive companies, where they would earn more money than they asked. This would bring instabilities in the division of labour. Such a measure has the sole task of equalizing the income interest of workers for all necessary jobs.

 

In this way, the commune becomes the basic working organization. It will allow all goods in all enterprises of the commune to be placed at market value as this is still the best possible distribution of goods to consumers. At the same time, in socialism, all workers will earn incomes in proportion to the value of work they share in the production process, regardless of the companies’ revenue.

 

Workers who have more past labour points will earn higher incomes even in companies that make less profit in the market. They will not be an income burden to their companies because the salaries will spill over between companies. Workers who have a considerable number of past work points with which they earn high incomes will not burden their co-workers. By sharing the revenue, everyone will make wages equal to the price of labour they asked for achieved productivity. Highly productive companies will be deprived of the surplus value achieved thanks to better equipment or market advantages, favouring workers who earn less than they demanded for their work.

 

From the standpoint of capitalistic entrepreneurship, socialism is fully non-stimulating because it does not allow the earning of extra profit by speculations beyond direct work. Instead, socialism will form a new work motivation that will arise directly from the competition for work, from the need to find and confirm individual productive power, which is one of the most critical drivers.

 

In socialism, speculations are only possible by altering statements of the coefficient of responsibility directly linked with work productivity and the business performance of the work collective. Individual and collective profits will continue to be achieved thanks to the rise in productivity. However, these profits will be smaller as they will not include the privileges resulting from a better status in society, from the better work equipment in production, or random market conveniences, but exclusively from the equal struggle of workers in accomplishing more significant benefits for society.  

 

In other words, if workers can equally increase the productivity of the work collective by using newly developed means of production, they cannot speak of their essential contribution to the production, and they need not be specially rewarded. However, suppose an individual worker increases their productivity more than other workers can in their position. In that case, this will be their contribution to the production process and will have to be accepted and rewarded.  

 

The product of all commodities prices and the number of produced goods give the total value of produced goods. The realization of such production requires an equivalent amount of money in circulation as a means of payment for the goods.  

 

Labour Division

3.1.2.2.2         Work Division   

 

Socialism will introduce significant changes in the system of labour division. The disadvantage of today’s division of labour lies in the insufficient possibility of choosing work. Namely, occupied jobs are not accessible to other candidates and unemployed people. Even under capitalism, such positions are privileged and do not achieve sufficient economic productivity. Therefore, socialism will introduce a constantly open competition for each job and employ the best worker available.

 

In socialist production, all jobs will be subject to labour competition in the labour market within the operational possibilities that every job has. The worker who offers the highest productivity, responsibility and the lowest price of labour will exercise the right to work in every job position.

 

The socialist work organization in the commune may freely vary from a centralized production organization to an entirely liberal business operation of enterprises. The commune’s management will establish the work division and the decision-making power in production, resulting in the most significant benefits for the commune. The managers of the commune will organize production to achieve maximum productivity. They will have the authority to form new companies and shut down companies that do not perform sufficient productivity.

 

Managers must respect the production obligations of companies. If the volume of needs for production decreases, they will reduce the number of workers who perform them until the possible closure of the company. Workers whose employment is terminated due to the redirection of the economy are recognized as having fulfilled their contractual obligations and therefore receive rewards for work as if they had fulfilled their responsibilities and search for new jobs provided by the management.

 

The management will have great operational power, which is necessary for establishing fast and efficient coordination of work, which is again essential for good economic performance. Some may compare such power to the power of dictators. Still, nothing will be further from that because the managers will directly owe the responsibility to the people and because they can be replaced at any moment.

 

Under the pressure of labour competition, every worker will strive to achieve maximum productivity within their workplace’s work competencies. Changes in the authority at each workplace are possible only by agreement between the employee and manager, provided that the managers have the right to decide. In the transition period, the work of managers will be controlled by commune assemblies and worker councils, but most likely, people will give up on it when the system shows it is more efficient without them.

 

Private companies will continue to produce just as they do today.

 

***

 

A worker who offers the highest productivity and responsibility and the lowest price of their current labour is the most suitable for the collective staff and society. Therefore, they should get the right to work at such work post. Thus, each work, management included, may be defined in the function of productivity, responsibility, and the work price. To compare the different work functions more efficiently, it is necessary to express the mentioned values for each work post by the following coefficient:   

This formula will require the coordination of influences of each variable. After that it will give the value that points to the competitive capability of a worker for a needed work post. Each worker proposes a magnitude of coefficients according to their own capabilities for the job they wish to perform. A worker who offers a higher productivity, a higher labour responsibility, and a lower current work price will win the right to work at the desired work post. Besides that, the realized higher C-of work competition allows each worker to take the work post of another worker with the obligation to assume all labour obligations and responsibilities of that work post.

 

Labour Productivity  

 

Each work has its measure of productivity. Today, the measure of productivity can be in the most straightforward, most comprehensive, and most efficient manner determined by profit on the market. Cash profit in the free market involves all elements of productive business activity, such as the quantity and quality of work, cost-effectiveness, rationality, usability, serviceability, etc. Profit is the social evaluation of the success of the business performance. However, there are no commodity-money relations within the enterprise, so productivity needs to be expressed by the quantity and quality of the goods and services produced in a determined time interval. 

 

Where it is impossible to precisely establish the labour productivity by the produced goods or where the establishment of productivity would be time-consuming, productivity can be expressed by assessing the production value. Existing productivity defined by grade for each work post has the value of 1 (one). A worker believing that they can increase their productivity by 10% will offer the assessment of their productivity higher by 10% of existing productivity, and the value of their envisaged productivity will then be 1.1. The work assessment may replace all other forms of labour productivity valuation. Each worker can show their C-productivity by the formula: 

The envisaged productivity expressed in money, products, or work estimate, and if identical with the existing one, will form the coefficient 1 (one). A coefficient larger than 1 (one) will indicate a work more productive than the existing one. A worker who offers a larger coefficient will exercise their right to the desired work post.  

 

Once the accounting period is over, it is necessary to valorize the realized productivity to establish the worker’s success in the work offer. The realized productivity may be presented by a coefficient with the following formula:  

The realized productivity expressed by cash profit on the market may efficiently show the success of the business activity, and other forms of productivity valorization are, therefore, unnecessary. However, the said form of work valorization applies only to self-employed entrepreneurs and management of the associated labour in the economy.  

 

In the direct production of commodities, the volume of realized and envisaged quantity of products and services may establish productivity. However, where the number of products and services cannot precisely express productivity or establishing the amount would be time-consuming, an assessment of indirect work value will be introduced.  

 

The evaluation of workers’ productivity may be given by managing boards, worker’s councils, and workers among themselves. The managing boards and workers councils of enterprises will monitor and grade the operational improvements and declines of workers. Their grades may show the realized productivity of workers. However, the workers know the quality and shortcomings of each other the best, so the best evaluation of workers would give they among themselves. They should get an equal right to anonymously evaluate the work of several others as a response to their proposed productivity.

 

The grade received will be a confirmation or negation of the envisaged rate that each worker has given to themselves to offer their productivity. The proposed subjective grade of a worker’s productivity will get its confirmation or negation, influencing the production development of objective value categories.  Work valorization is necessary not only for establishing the accountability of workers for the realized productivity but also as a determination that defines recognition of the individual’s essential powers. Individuals need an objective scale of values to get to know themselves objectively and the possibility of their improvement.  

 

The coefficient of realized productivity that realizes the value higher than 1 (one) will represent the productivity realized in a volume larger than envisaged and will also get a higher income. And vice-versa, the coefficient of realized productivity smaller than 1 (one) will represent the productivity realized in a volume smaller than envisaged, so that the income will also be smaller.  

 

It should be emphasized that the presented bookkeeping is based on the capitalist form of running the economy, which is quite demanding. Nevertheless, it is presented in such a way that it could explain the new economy to people who think traditionally. The socialist economy will accept the principle of democratic anarchy, which will apply significantly simpler bookkeeping than in capitalism but will not lag behind it

 

 

Responsibility of Workers  

 

Without a defined method of bearing responsibility, workers would not be bound to implement their proposed productivity. In this way, their declarations in the work competition would be exaggerated, and work results could not follow them. Such irresponsibility could have catastrophic consequences for the economy. Therefore, it is necessary to set up a system by which every worker will bear responsibility for realizing their envisaged productivity. It needs to be based on the coefficient of realized productivity. The method of responsibility bearing needs to be thorough, multi-layered and efficient.  

 

Each worker needs to bear responsibility for their work. Since their job is non-alienable from the collective’s work, they thus also take responsibility for the productivity of the collective. The level of responsibility assumed by a worker may be set by the coefficient of responsibility.  

 

Let it be assumed that the average coefficient of responsibility gets the value of 1 (one). Let it be assumed that the interval between the minimal and maximal responsibility is 0.1 to 10. The responsibility set by the value equal to 0.1 would be the minimum, and that set by the number 10 would be the maximum responsibility. Let each worker set the level of commitment that they may assume for their work and the collective work expressed by the coefficient. A higher coefficient of responsibility needs to render higher work competitiveness in the work market for performing work at every public work post and vice-versa.  

 

Workers will primarily bear responsibility in the production process using their past work points. The total quantity of past labour points of all workers in the commune needs to be equal to the realized revenue of the commune. Economic enterprises that realize a rise in productivity will realize a surplus of cash assets. They will distribute that surplus to workers in the form of past labour points proportionately to their coefficient of responsibility. Conversely, if enterprises lose money, it will be deducted from the past labour points of all workers proportionately to the coefficient of their responsibility.

 

Enterprises in non-profit sectors, such as administration, possibly health care, education and other activities proclaimed by the commune through its leaders and the assembly, do not realize direct income in the market. Instead, they realize it by the appropriations from the commune’s revenue. In non-profit companies, the measure of the production value needs to be based on the satisfaction of service users. Therefore, a higher grade from the service users will be equivalent to a higher profit for economic enterprises. In this way, non-profit companies will have a productivity measure and responsibility for their production activity.  

 

The system needs to fully equalize the measure of success in the business activity of profit and non-profit companies. By applying mathematical coefficients, it is possible to compare the revenue of the profit economy and the realized productivity of the non-profit organizations expressed in any magnitude, including the productivity assessment.

 

Unemployed inhabitants will also have some C-responsibility set by leaders and adopted by the assembly of the commune. They can, on this basis, receive or lose past labour points but in a smaller quantity than workers in production. In this way, the entire population of the commune will bear responsibility for the commune’s productivity.

 

Since the production or, more precisely, the profit in the market may show oscillations in the periods of accounting, collective responsibility by way of past labour points needs to be linked with the period when the business activity of an enterprise shows objective indicators of success. Of course, the accounting period may be different for different productions; however, it may be considered that productivity that shows smaller or larger oscillations in the monthly period will give a realistic balance of productivity in one year.

 

Once the quantity of past labour points that each enterprise realizes or loses is known, then distribution or deduction of these points will be carried out proportionately to the coefficients of responsibility of workers. By applying computer technology in the period of accounting, the distribution of past labour points, as well as their deduction, can be calculated for an unlimited number of workers by the formula:

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

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

 

Then computer technology can quickly and easily produce the results 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

 

 

The obtained values are different magnitudes expressed in past labour points added to (or deducted from) the quantities of past labour points held by workers. 

 

An example:  A worker who stated a coefficient of responsibility of 1.5 in the case of a rise in profit of the enterprise would realize, on account of the responsibility function, a three times larger gain of past labour points than a worker who stated a coefficient of responsibility of 0.5. And vice versa, they would gain a three times larger loss of the past labour points in the case of money losses by the enterprise.  

 

In the proposed system, each worker bears responsibility for the collective work proportionately to the stated size of the coefficient of responsibility. In this way, workers become active creators of their conveniences and inconveniences and are no longer passive collective members. Furthermore, such commitment will require that workers become familiar with the consequences of company businesses, which will largely contribute to overcoming alienation in production.  

 

In the capitalistic form of production, a more significant profit is, as a general rule, related to a higher risk of investing money. The new system introduces C-responsibilities with which the workers can, according to their own will, speculate the risk assumed for the success of the collective production. However, such speculation is non-alienable from the direct work of the workers, which will contribute to better knowledge about the economic process, which will again contribute to the rise of the workers’ responsibility for the output. A higher commitment requires a higher degree of confidence in the community, which will result in larger productivity and prosperity of society. A higher degree of responsibility will be formed by workers who are more familiar with business flows and have more confidence in themselves and the collective.  

 

***

 

Besides the collective responsibility of workers, workers’ personal responsibility in the production processes needs to be defined. Workers individually might produce benefits and disadvantages in the joint process of production. To create a productive orientation of society that will motivate productive work and prevent irresponsibility in the production processes, it will be necessary to determine principles of rewarding and sanctioning the workers by a certain number of past labour points. Such remunerating and sanctioning of workers should be carried out by the arbitration commissions of the company following the company regulations.

 

However, the best way to determine individual responsibility will likely be through mutual evaluation of workers through democratic anarchy. Democratic anarchy would reward good and punish bad workers in the value of the coefficient of responsibility that workers proposed for their work. Let each positive assessment bring the employee points of past work in the value of their coefficient of responsibility. Conversely, let each negative assessment deprive the employee of the points of past work in the function of their coefficient of responsibility.

 

Such a system of evaluating the value of work and submitting responsibilities represents all the influences that work brings in the broadest sense. It may reward any benefit and sanction any inconvenience that a worker does to another worker or production. Every worker will be careful not to cause inconvenience or cause as minor inconvenience as possible to any other worker and the production processes. This will be the essence of a productive social orientation that will improve interpersonal relationships and production.

 

For example: let us arbitrarily assume that the commune’s average income is 100,000 monetary units. In that case, the average quantity of past labour points is 100,000. If workers cannot assume a great responsibility for their work, they will opt for a small coefficient of responsibility. For example, if they propose their coefficient of responsibility at 0,1, one positive evaluation would bring them 0,1 point, and five negative votes -0,5 points. Then in the first case, the worker with the average quantity of past labour points will have 100,000.1, and in the second case, 99,999.5 points.

 

A worker wishing to increase their work competitiveness may also increase their coefficient of responsibility. For example, the coefficient of responsibility of 1,2 will bring 12 points to the worker who gets ten positive evaluations. If the same worker has 100,000 past labour income points, they will have 100.012 points after the assessment. If they get 20 negative votes, 24 points will be deducted, and they will thus, after that, have 99.976 income points. The evaluations will be given monthly so that the mutual evaluation system will require highly responsible work. It should be repeated that the examples are entirely arbitrary and that implementation of such measures in practice will require a broad study and social acceptability.

 

Once democratic anarchy is accepted in society, workers will no longer have to offer productivity. It will be assumed that their work productivity should meet the needs of consumers and the collectives of joint production. The price of labour will be standardized in the same way that the costs of goods on the market today are standardized. In practice, the greatest responsibility that every worker offers for any job will be the main, if not the only, indicator of workers’ productive power. The example above shows that the fine-tuning of workers’ responsibilities will be determined quickly and efficiently through democratic anarchy.

 

By accepting democratic anarchy, productivity offered by the politicians and managers loses its meaning. For example, suppose people think that their work is not satisfactory. Then, they will get negative evaluations regardless of what productivity they offered and achieved, or if they won the elections. 

 

***

 

There is no doubt that in socialism, each worker will be cautious before declaring their productivity and degree of responsibility. Such cautiousness will prevent hasty statements and voluntarism, which are dangerous to production processes. The system will allow each worker to know their capacity and act according to their ability, thus meeting their needs. Such an act is a precondition for a constructive orientation of society.  

 

The unemployed population should also bear responsibility for their activities, but the commune’s leadership will set their responsibility coefficient considering they do not work. Therefore, they will probably bear the lowest responsibility in the production processes. However, their social responsibility will be sufficient to behave with respect towards society and its environment. This means that the unemployed people may also be rewarded and punished by community members for their behaviour in the community. They will be getting and losing the points of past work in the value of the minimum coefficient of responsibility in the commune. In this way, the entire population of the commune gets the right to evaluate other people’s behaviour and be evaluated by others for their behaviour. It will significantly contribute to the betterment of society  

 

The total amount of past work points of all commune residents should be equal to the realized revenue of the commune. After all the additions and subtractions of past labour points related to the individual responsibility of all commune residents, it is necessary to settle the total amount of past labour points of all people with the revenue of the commune. The final settlement can be made in proportion to the coefficient of responsibility of the people in the same way as rewards and penalties are calculated in companies.

 

 

Current Labour Price 

 

Finally, the price of current labour forms the competitive power in selecting the work. The current labour price depends on all the conveniences and inconveniences that work brings in realizing the required productivity concerning the conveniences and inconveniences of other forms of work or from the state outside of work.

 

The system envisages workers set the current labour price by themselves by a coefficient within a value range from 0.1 to 10. The average price of present labour will have a value of 1(one); a work twice as inconvenient will have a price equal to a value of 2, while the job twice as convenient will have a price of 0.5.  

 

A worker who seeks a lower current labour price on the labour market for equal productivity will realize greater work competitiveness. The system of labour competition will form a threshold value of the current labour price for each job, which will be accepted as an objective by society. Such a current labour price will be one of the foundations for creating a just income distribution. Such a price of labour will be one of the foundations of building a just society.

 

***

 

Capitalism will face a robust political demand to reduce the work hours of workers until full employment is provided. It will employ all people who want to work, which means that capitalism’s unfavourable form of unemployment will no longer exist. Reducing working hours will increase the demand for workers. Increased worker demand will increase workers’ wages and reduce employers’ profits. Workers’ rights will grow while employers will lose their privileges. This will make capital decrease its significance. The owners of low-profit companies facing higher labour costs might be interested in selling their companies to the commune.

 

Owners of private companies that make high profits will not be interested in selling their property to the commune. Such companies will continue their production as they do today. Socialism can begin to be realized even if no private entrepreneur unites their property in the commune. Then the socialist system will be based on organizations and institutions owned by the commune. Socialism will then show significant progress in production.

 

Socialism will introduce workers’ competition for every public job. No economy can be more productive than one in which every job gets the best available worker. Private companies will not be able to allocate workers efficiently enough to compete with public companies so that public companies will become more productive and profitable than private ones. Above all, private companies will not be able to accept workers’ participation in the distribution of profits as workers in public companies will be able to. As a result, workers will be less interested in working in private companies. Consequently, working in private companies will not be as attractive to workers as working in public companies.

 

The lower productivity of private companies and the lower interest of workers to work in them represent the end of capitalism. At the beginning of implementing the socialist form of production in public companies, private companies will show interest in joining the public companies of the commune. In return for their property, the owners of private companies will receive the equivalent in points of past work that will bring them a proportionately higher income in public companies. In addition, the owners of private companies will realize that socialism is more stable to oscillations in the economy, ensuring greater stability of the values ​​they possess. If the owners of private companies could join socialism today, they would most likely do so because they would preserve the value of their capital more in the frequent problems of capitalism.

 

The commune should also allow residents to sell their past labour points for money. Thus, the points of past work could become a form of humanistic actions in which the commune population will have confidence. In socialism, private entrepreneurs may be interested in selling their property to the commune. Over time, the commune can purchase stock shares, real estate and other valuables owned by the commune’s inhabitants. When the owners of private property leave their property to society, their amount of past labour points will replace the values ​​of the capitalist system and supplement them with new values ​​that will enable the further prosperity of society.

 

***

 

People have constantly been pressured by authoritarian forces that brought them a sense of inferiority. The reaction to that creates a need for superiority over other people. This is wrong, but since such behaviour exists, it must be accepted as a reality that will prevail in socialism. People need to show their power through competitions. Being a winner is of great value to people because it proves their power. Victory compensates for the subjective experience of powerlessness.

 

Labour competition is a constant struggle to achieve greater productivity. It is a struggle that allows every worker to be the best in their field. It will be a form of compensation for powerlessness caused by authoritarian influences. People will present their competitive power in their workplaces. That power will be recognized by society and will surely satisfy the workers. Therefore, there is no doubt that work competition is more acceptable than all other forms of competition because it brings socially beneficial results and contributes to the well-being of society.

 

In socialism, work will no longer be privileged. Revoked privileges will eliminate the power of people over people, that is, the mechanism of exploitation of people, which is the basis of problems in society. Under socialism, all workers will be equal in labour and wage distribution. Everyone will be able to choose a job they like to do and be satisfied with the income earned.

 

Labour competition will not allow anyone to sleep on their laurels. Over time, one can expect tiredness and satiation from over-intensive action on a broad social level so that ambitions will subside. Such an orientation will form a balance between man’s natural needs and possibilities. Freedom in socialism will enable workers to follow work processes with interest, develop a critical attitude and act on their strengths. This path will allow workers to examine the validity of the premises that guided them to form their needs. This will contribute to the formation of objective values ​​in production.

 

In this way, people will get closer to their nature and find values ​​that stem from their nature. Socialism will contribute to removing the subjective vision of reality imposed by the authorities throughout humanity’s history, which is the basis of alienation and problems in society. It is a process of disalienation. This will bring values ​​that allow people to find their balance and satisfaction.

 

In socialism, people will accept their helplessness where they cannot overcome it and find fields where they can objectively exercise their power and thus satisfy their needs. People who manage to meet their needs constantly are not destructive. Such people would have no depression, neurosis, or psychosis and are not alcoholics, drug addicts, masochists, sadists, or aggressive. The process of disalienation will make people live responsible life. Socialism will enable the productive and constructive orientation of people, and then they will believe in prosperity based on productivity, solidarity, and reciprocity. Then one can believe in peace, love, and the joy of living.

 

Then, society will form a constructive attitude towards young people. This relationship will no longer be authoritative because no person in the community will be subordinated to authoritarian forces. It can be assumed that such a society will form a natural way of life with natural needs. The population will give up alienated ambitions to create healthy relationships in society. Relationships will be formed in which adults will respect young people and where mutual contradictions will be resolved by agreement. Relationships will be formed to enable a person to develop appropriately from an early age. And only then can society find its long-term constructive orientation.

Labour Price

3.1.2.2.1       Price of Work  

Work has indirect and direct value. Indirect value of work is expressed through the value of work products, while direct work value is defined by the values occurring in the duration of the work.

 

In capitalism, the work value is shown almost exclusively in indirect form through the work products’ value because the work is, per se, generally not favourable. Accordingly, it almost does not have a direct value. Besides that, a scale that might measure such a value does not exist. Private companies in the commune will continue to set the price of labour as they do today. The value of work products is formed on the market by the demand and supply of commodities and is determined by the price of the commodities. The work confirms its indirect value through the sale of commodities. Then the price of commodities represents the work price as well.

 

Under socialism, Marx’s labour theory of value is accepted, which did not sufficiently consider the productivity and workload of workers’ participation in producing goods. In embracing the ideology of equality among people, Karl Marx neglected research that would develop the objective values of labour. This finally led to the collapse of the socialist economy.

 

Past labour is the basis of everything that society has created, while current labour is the basis of everything the economy produces; therefore, both must be objectively respected. Such respect can create the conditions for a just distribution of work results in production, which will have a stimulating effect on the individual’s work and contributions to the prosperity of society.

 

In connection with the above, let us accept that the indirect work value (in further text: the work price) in the unit of time is equal to the product of the multiplication of past labour income-based value and current labour price.

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

Past Labour Value

 

The new socialist system envisages competition of workers through higher productivity for every publicly owned job. Labour competition will achieve higher productivity than capitalism in the open labour market. Socialism needs socially owned enterprises to accomplish this goal. In this regard, socialism needs to find an acceptable method of transforming private capital into social. Owners of private capital will voluntarily surrender their private property to society if society values and redeems their wealth fairly. Such capital will create a new value in socialism, which will generate higher incomes for those who sell their property to society. Thus, the owners of capital may be encouraged to sell their worth to the community.

 

Socialism has accepted a labour theory of value which bounds the value of commodities to the labour time needed to produce them. However, each product contains a considerable number of hours of work spent on discovering and developing the production process that every product uses, from the discovery of fire and wheels to the present day. Therefore, it is impossible to summarize the total amount of past work of all generations that created the material and cognitive values that society possesses today.

 

Therefore, socialist systems valued the past work of workers formally through years of service. A longer length of service would generate a slightly higher income. However, such a measure of the value of labour did not objectively represent individual contributions to productivity and was therefore not productively stimulating. A significant shortcoming also lies in the fact that socialism did not consider the value of the past work of ancestors who contributed to the creation of all that society possesses.

 

The capitalist system determines the values of past labour more efficiently because it displays it using the value of produced capital. Marxists complain that a part of the value of owned capital arose from the exploitation of workers, which is true. Still, there is no method to determine which part of their property was created by exploitation. Private property is accepted globally, so socialism should accept it as well because there is no other suitable solution. Socialism needs to reform the distribution system in production to increase justice and improve society.

 

It should be accepted that a more valuable capital reflects the greater value of past labour. A higher value of past work should generate higher income, motivating private capital owners to cede their capital to society. Let us call the unit value of past labour the point of past labour. The value of past labour points can replace the private property in real estate, securities, and money in the commune. All values expressed in money can also be shown in points of past work. Private owners of material goods will receive as many points of past labour as their property has value. A person with more valuable past work will get more past work points and earn a higher income.

 

People who do not have private property will realize the value of past work to the extent that, together with their ancestors, they contributed to the creation of value in the joint ownership of the commune’s inhabitants. Each commune possesses material values owned by the society, such as enterprises, land, facilities, infrastructure, natural resources, and other resources. Therefore, it will be necessary to estimate the total value of the common property of the commune inhabitants and determine its equivalent in points of past labour.

 

The total value of common material wealth expressed in points of past work should be determined by arbitration and then distributed to members of the community according to jointly agreed and accepted criteria that will valorize all contributions to building today’s society. Such a criterion should be formed by an expert commission and approved by the commune assembly. In the end, the people will accept such regulation in a referendum by a large majority. Such regulation of past work values will not be easy to establish, but people could succeed after optimally acceptable corrections. The solution that will be obtained, no matter how relatively inconvenient it may seem to an individual or a group, will be a big step forward for each individual and society.

 

Let a certain amount of points of past work be achieved at birth. The work that individual does by creating themselves brings the greatest perfection that people can make and brings the most significant value that people can create for themselves and other people. In addition, socialism can regulate the birth rate of society through past labour points. For example, in a fall in the birth rate, parents with more children may be awarded more past labour points, stimulating an increase in the birth rate and vice versa.

 

Furthermore, the values of past work can increase linearly with years of service, education and all the criteria that permanently improve individuals, society and nature. The distribution of past work points will be formed so that it stimulates the realization of social needs. This measure primarily refers to production where productivity-enhancing work would be rewarded.

 

The total amount of past labour points of all commune residents can be adjusted to the numerical value of the commune’s revenue. The increase in production increases the commune’s revenue. As the revenue increases, the number of past labour points earmarked for distribution among the commune’s population increases. Workers who improve productivity would be automatically awarded a certain number of points of past work, depending on the rise in productivity and their responsibilities. This will promote the productivity of the companies, which will bring social prosperity.

 

On the other hand, socially owned production has not found a satisfactory solution to the issue of workers’ responsibility in the production process, which significantly reduces their efficiency. Besides this, work can also permanently damage the productivity of companies. Accountability in the social form of production can be taken through past labour points. The difference between offered and achieved productivity has its value. This value can be determined and then deducted from the value of the past work of responsible workers by a mutually agreed procedure. The application of such a mode of accountability can solve the fundamental problems in socialist production and non-profit organizations. Taking responsibility by the points of past work will be highly effective because people will be responsible with their past work and their current and future income. The principles of responsibility in production are presented in more detail in the chapter “Development of the Economy.”

 

A certain amount of past work points can be distributed to independent creators as a sign of recognition for scientific, cultural, sports, or other achievements that would stimulate non-economic activities that contribute to society’s development. Such a distribution would be made by juries and arbitration commissions based on the valorization of accomplishments and the benefits that society derives from them.

 

Every society has a judicial system that protects people from the criminal activities of free individuals. Today’s system solves the problem of crime mainly by taking people’s freedom by imprisonment. It is cruel and inefficient. Socialism can achieve an acceptable and effective form of sanctions for offences committed by deducting the statutory amount of past labour points. It should not be a problem for the courts to convert prison sentences into points of past work. Taking responsibility through past labour points is more acceptable than inhumane imprisonment because people retain their freedom and productive power in society. If people commit significant crimes, they may lose all points of past work and even fall into negative value. The proposed system can make the negative value of past work points psychologically, sociologically and economically more painful than prison. People who fall into the negative amount of past work points will be able to earn only a minimal income no matter what job they do until they escape from the negative value of past work. For the few that commit particularly disgraceful crimes and are considered a threat to society, they will be rehabilitated in mental health institutions.

 

Furthermore, people who fall into the negative value of past work points may be forced to wear unique clothing that will tell everyone that they are bad people. As a result, people will shy away from crime and misdemeanours more than they do today. Suppose people enter the negative value of past work. In that case, they will try hard to get out of it, and this will be possible only with the help of highly productive work and exemplary behaviour over a long period.

 

In the same way, the judiciary can take over the function of rewarding people who bring significant benefits to society, stimulating the development of productive orientation in the community. However, courts have significant shortcomings because their forming of justice in society is authoritative, which means that it is alienated from society. As humanity strives for the growth of democracy, each member should be given equal power to sanction and reward other people for creating benefits and troubles in society. With such a right, every person will receive direct and equal executive power in the community, which would anarchically stimulate favourable social actions at all levels of complex social relations. Such power of judging people is called democratic anarchy.

 

The negative evaluation people receive should take a small part of the points of past work. By introducing such a measure, each person will try not to create disadvantages for another person or create them as little as possible at all levels of complex social relations. In other words, every person should know what does not suit well to another person and will avoid doing it. Moreover, suppose people do not know that they create difficulties for other community members. In that case, the negative evaluations they receive and the penalties that come with it will make them contemplate and realize what is wrong with them.

 

Over a longer period, such an assessment method can replace judicial bodies, laws, and regulations, rendering them unnecessary. People will form unwritten codes of justice based on natural knowledge about realizing benefits in society. On the other hand, every community member should be entitled in the same way to reward people who have contributed to creating benefits for themselves and society. Democratic anarchy can form the most significant benefits in society

 

The number of past work points will be a form of humanistic shares because it will provide income based on the value of past work. More past work points will indicate more valuable past work and generate higher salaries. It will present the productive power of people and become a great value in society. The commune should also be able to exchange past labour points for money to increase confidence in this form of value. This value will continue to be alienated from human nature but will effectively build a good society.

 

Points of past work will be the inviolable property of people that will be inherited through generations. It will thus become a measure of the values of the work through generations. Therefore, the points of past work will require responsible behaviour, bringing social stability through generations. Such a system would be acceptably repressive because it would not deprive people of their freedom but would prevent members of society from using their freedom to create problems in society.

 

 

Current Labour Price

 

The price of current labour depends on the direct value of labour itself. The direct value of labour shows the relation between conveniences and inconveniences arising from work itself, independently of the value of the produced results of work.

 

The conveniences connected with the work as such stem from the meeting of the individual’s immediate work needs, from the necessary exchange of energy with nature, the realization of both physical and spiritual needs, the need for developing the individual’s essential powers, from the status value of the working position, from the presentation of the productive potency in the society, from helping others, as well as in work contributions to the development of society. The conveniences arising from work as such bring pleasure.

 

On the other hand, the work also brings inconveniences, which cannot be accepted as a value. The inconveniences in work occur due to forced work where the individual is a means to realize needs alienated to them, or from forced labour necessary to ensure existential needs. Such work is not free and, therefore, cannot realize the individual’s productive forces, so it cannot bring direct conveniences to the individual.

 

A greater value will present the job that suits the individual’s nature more, their individual characteristics, which realizes more conveniences in its duration. Let it be accepted that average work has a magnitude equal to 1 (one) as direct current value labour. If the interval between the extreme inconvenience and the extreme convenience of work were from 0.1 to 10, then the convenient work would, in mathematical terms, be a hundred times more valuable than the inconvenient.

 

Each worker can most efficiently establish the direct value of current labour because they know best how convenient or inconvenient the work they perform is. Therefore, each individual needs to assess the relationship of the magnitudes of everyday work burden and relaxation with all their psychophysical factors and compare them with other work obligations. The result of such assessment will be a magnitude between 0.1 and 10 that will indicate the relationship between work conveniences and inconveniences on a specific work post against average work.

 

A lower value of current labour represents greater inconveniences during the duration of work and therefore needs to realize a larger share in income distribution to compensate for the work-related inconveniences. Conversely, a higher value of current labour advocates greater conveniences in the work duration in relation to average work and needs from that point of view to realize a smaller share in income distribution and will thus realize smaller conveniences in the work results.

 

The price of current labour determines the share in the distribution of work results. The current labour price is inversely proportionate to the direct current labour value. The current labour price will also have a value scale from 0.1 to 10. A more favourable work will realize an immediate current labour value higher than 1 (one) so that the price of present labour will be smaller than 1 (one), and the income thus realized will be smaller than the average. For example, very unfavourable work getting a direct current labour value equal to 0.2 will be five times less favourable than average work and will realize the current labour price equal to 5, thus an income five times higher than the one on average work.    

 

In a system of protected work posts, each worker could, by their subjective consciousness, evaluate their work as markedly inconvenient and would require a substantially larger share in the distribution of the performance of collective work than the one they would objectively deserve. Socialism will ensure an objective valuation of work with the help of work competition in the work market. This means that in the circumstances of equal productivity, the right to work will be exercised by the worker to whom current labour brings greater direct exchange value or the worker who will demand a lower current labour price and a lower income.

 

In that way, a new trend in society may be achieved in which the direct exchange value of the work would rise to the point where it would become more important than the operating result. Such a trend may form a turning point in the development of society. This is possible to achieve by automation of the production, by the redistribution of inappropriate forms of labour and by the increased possibility of selecting the types of work where the individual may find the sources of realization of their productive, essential forces. The work as a form of realization of the power of being may cause the individual to find non-exhaustive inspiration and necessity, convenience and value. Such work has its usable value. The prosperity of the society lies in the approach where the work in its duration becomes a value. It can bring conveniences greater or equal to those realized beyond the work.

 

The result of such an approach to the valuation of current labour is the number that shows the price of current labour of each worker employed in enterprises, where workers directly realize income by their work. However, each socially beneficial activity would need to be proclaimed as valuable, irrespective of whether it participates directly in the production. An unemployed individual contributes in some form to society daily. The individual is a value to the individual, and society must accept this standpoint for such a value to develop.   

 

This measure refers to all unemployed people: pre-school children, pupils, persons of advanced age who are no longer able to work, invalids and those not wishing to work. Accepting the values of everyone’s current labour means to ensure to each individual an income-based compensation to the level of the recognized price of present labour. The current labour price of the unemployed population needs to be determined by the commune’s leadership based on the commune’s needs and possibilities and adopted by the commune’s assembly. Such values may be changeable according to the economic opportunities and needs of the social community. For example, if workers were not sufficiently interested in work, the price of current labour would, with the unemployed portion of the population, fall depending on the category of the unemployed, which would reduce their income and increase, in terms of revenue, the interest in work.

 

On the other hand, if workers were more interested in work than necessary or, more precisely said, if direct work becomes a value, the current labour price of the unemployed portion of the population will rise and increase their share in the distribution of the result of work, which would reduce the income-based share of the interest in work. Therefore, such income regulation between employed and unemployed portions of the population will contribute to the balance in the work demand and supply, contributing to the balance within complex social relations.

 

Such an approach to work valuation will ensure economic and existential independence and freedom for everyone, which is an essential prerequisite for social freedom, stability, and prosperity. It is necessary to provide basic needs for everyone because an individual’s endangered survival leads to the endangered survival of society. This measure is nothing else but a universal substitution for social, pension and disability insurance, solidarity-based payments to the unemployed, child allowances, or tax facilities in the case of multi-member families. Instead, it means a simpler, more just and more efficient redistribution that is at the same time more natural and wiser when social determinations are concerned.

 

 

Each work contains elements of current and past labour. Past labour without the current one that maintains it has no value, while present labour cannot exist without the past one. As current and past labour are mutually linked, and as the production develops by geometric progression, the price of each work may be shown by the product of past labour value expressed in points of past labour and the price of current labour. 

Work price = (Points of past labour) x (Current labour price)

Such price of current labour needs to be the basis of the work’s indirect value – income. It arises from the formula that the price of each work is proportionate to the number of past labour points and the current labour price. The more past labour points a worker gathers, the higher the price of their work and the higher the supposed income. On the other hand, the more productive, challenging, dangerous, complex, inconvenient, and unhealthy work a highly responsible worker performs, the smaller the value of current labour and, therefore, the work price will be justifiably greater, as will the income.

 

The association of enterprises in the commune realizes the right of workers to work in any work post. At the same time, the method of substituting indirect forms of past labour values allows them to realize income proportionate to the number of past labour points. The worker who possesses a larger quantity of past labour points will realize a larger income than the worker who has a smaller amount of points even though both workers realize the same work performance. Past labour points will become a sort of humanistic shares that will bring income substitution for all kinds of profits, interests, rents, and dividends of the capitalist form of production. However, workers’ large individual incomes will not significantly burden their companies because the incomes will be calculated at the commune level. It will be better explained in the chapter “Commodity Price.”

 

The current labour price will be maximally objective because it will be directly established by work competition. The small value of the current labour price concerning past labour points should not be misleading because an increase of the current labour price of only 0.1, according to the formula, increases the work price by a significant 10%.

 

The price of work develops the labour theory of value and will become a basis for forming workers’ incomes in socialism. As the price of work is objectively established, society will accept such a system of income distribution as just. In this way, society will overcome the big problems of today’s income distribution. Moreover, such an income distribution system may pave the way for a continuously productive orientation. But naturally, the work price will find its confirmation or negation in the realized income that will depend on the realized labour productivity and many other factors.