3.2.2 Association of the Economy
A larger social community offers more potent possibilities for developing the economy and, accordingly, greater prosperity of society. At the same time, it requires a more concerted effort to accomplish coordination of collective actions. Every society strives to achieve economic prosperity but cannot because people have not defined methods to achieve more significant and more stable economic progress than capitalism offers.
The socialism presented in this book defines new elements that can significantly improve the economic policy of society. Socialism will be based on the agreement of the most productive manufacturers, which allows for maximal productivity of the economy and relative stability of the system. The stability of the new economic system will be based on a steady production, stable prices of products, regular incomes and the known needs of the population. Sound production and distribution are preconditions for the stability of a state.
The association of communes into a state allows a higher degree of labour distribution with the total employment of workers, as demonstrated in the commune. Leadership will direct the work to use the regional and manufacturing possibilities of certain communes maximally. Socialism will lead to the merging of enterprises, diminishing competition between enterprises with similar production programs until it eliminates it. Vertical hierarchical subordination will ensure a rational production and a stable business activity.
Socialism will garner significant productivity by lowering enterprise competition to the level of work posts. The right to work within the state will be exercised through the competition of work among workers. Any inhabitant will be able to compete for any work post in the whole state. The work competition will, on one side, give an objective value to each work and, on the other, improve the productivity of each work post. A socialist state will, in this way, achieve a more productive and stable economy than capitalism can.
Free work choice in the state also opens up the problem of excessive migrations of the population from economically less developed to economically more developed regions. Such migrations would make production planning more difficult and reduce the stability of businesses.
State leaders will be required to consider the interests of all inhabitants of all communes when organizing regional economic productions. If the state managers are unsuccessful, that will cause migrations to regions with privileged status. Also, that would undoubtedly increase work competition for the limited number of work posts in privileged communes, and without a doubt, that would dissatisfy many people. State leaders, who would not offer an equal chance to all communes to develop, would receive negative evaluations from dissatisfied people. Negative evaluations would decrease the bad leaders’ incomes and quantity of past labour points. Unsuccessful leaders will be responsible to the people for the first time and therefore would have to leave their positions. Only the most skilful and brave people would dare to lead countries. This is a good enough warranty of the state’s prosperity.
Socialism will completely solve the problem of working migrations from non-developed to developed communes with the past labour points of workers. Workers in non-developed communes have less valuable past labour because their contribution to building their economy is smaller. They also accomplish lower productivity and, therefore, realize smaller profits and income. Smaller incomes lead to a smaller amount of past labour points as a permanent form presenting their overall power. By migrating from one commune to another, the workers bring the past labour points that form their income. By moving to work in more developed areas, they will realize a relatively equal income for the same work as in the non-developed communes. In socialism, income will not be the factor that will stimulate workers to migrate from non-developed to developed communes.
Hence, migrations of workers will be possible, but from the point of view of income and past labour points, they will be non-stimulating. On the contrary, workers will be more motivated to remain in non-developed regions, as such areas can, based on grants intended for economic development, achieve a faster increase in profit and, consequently, a more significant increase in incomes and quantity of the past labour points.
The system envisages an establishment of responsibility for the workers, enterprises, and communes to realize a productive life, as demonstrated in the commune. The accountability will be performed through workers’ income and past labour points. The system also envisages the establishment of responsibility through mutual assessments of inhabitants, consumers, associations, arbitrations, and evaluation committees at the state level. This will guarantee the establishment of responsible relations in the state’s economy and the prosperity of such a state.
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Socialism can ensure a considerably higher degree of stability in society and coordination of its activities than capitalism. This will be achieved by pooling money and by its democratic control. The new system forms a single mass of funds that society will distribute onto all forms of spending according to market and democratically established principles.
Thus far, the state leadership performed the state’s macro-economic policy regulation, i.e. the fundamentals of social relations. This means that autocrats have always ruled society. As authorities often pursue interests that do not sufficiently represent the social interests, the population often remains dissatisfied with the authorities’ decisions. Moreover, the decisions made by leaders are alienated from the people, and therefore, the people cannot accept them as their own.
One may say that the present-day macro-economic policy has reached its maximum efficiency. Further development of economic relations can be allowed only by utilizing democracy in the economy. In socialism, each inhabitant will create the macro-economic policy of the state by direct participation in the distribution of collective money. Thus, by distributing joint money, the people will directly form an economic policy of socialism.
The sum of all residents’ statements in the function of their economic voting power will
replace the monetary, credit, development, income, and fiscal policies of capitalism. Direct distribution of collective money will drastically reduce alienation in production and distribution. At the same time, the economy will get the macro-economic orientation guidelines of its activity and thereby the elements for a higher degree of stability in business activities.
The state issues money. The total money supply in circulation needs to be formed approximately between the value of the entire commodities produced and the overall realized profit on the market, as described in the commune. The system allows relatively easy control of the money in circulation and, thereby, robust control over inflationary and deflationary processes, ensuring stability in the economy’s business activity.
The entire mass of money envisaged for the turnover of commodities in the state is distributed to cash assets intended for the communes and cash assets designed for the use of the state. The ratio of the money intended for the communes and the state is determined directly by democratic statements made by all state inhabitants in the function of individual economic voting powers within possible value ranges set by the state leadership.
Cash assets intended for the communes are distributed proportionately to the realized profits on the market. But also, the assets of the commune will depend on the protection and improvement of society and its environment. More significant improvement of society and its environment will achieve a more substantial share in distributing the funds among the communes. This has already been discussed in the chapter “Income Distribution.” This means that each commune will receive at its disposal as much money as it deserves with its overall productive orientation.
By pooling the money earned in all communes, it is possible to make some deviations from the revenues of communes to ensure a stable income for all communes. Namely, suppose in the case of a natural catastrophe or terrible work results, a commune registers a significant loss of money. In that case, the income of such a commune can be covered by the collective fund and gradually reduced until the economy in the commune becomes consolidated and then start growing again. In this way, the system ensures the economic stability of all communes.
The population of productive communes may experience the spillover of income between and among the communes as unfavourable. However, considering that the spillover would not be significant nor frequent and would ensure the communes’ stable income, it can be assumed that the inhabitants of all communes in socialism will accept such an insurance policy. The asset realized for the commune’s expenses will be fully sovereignly distributed by the principles people accepted.
Monetary assets intended for the union of communes serve the whole state’s collective spending and development needs. Such funds are formed and distributed by direct voting by all state inhabitants. It is worth mentioning that more assets intended for the state diminish proportionately the resources envisioned for the communes. In the portion of money earmarked for the state needs, communes lose their economic sovereignty.
Money assets intended for the collective spending of the state are distributed per group, as are the assets earmarked for collaborative expenditure on the commune. The only difference is that the assets satisfy the needs of the state. The funds are used to maintain and build the requirements of state administration and defence, infrastructure, health, education, science, culture and sports, and other purposes that are needed by all residents of the state and represent an excessive investment burden for each commune.
Collective money assets are used according to the possibilities and are directly distributed by the state’s population identically to the one described in the commune. Direct expression of inhabitants’ views by votes is one of the most critical measures of socialism. Besides other benefits, the population having ruling power will try to get to know the needs of its state. Socialism will contribute to the disalienation of the people from the state so that they will accept it as its own to a greater extent.
Assets intended for the economic development of the state service the developmental needs of the associated economy, for significant investments of some communes, and for all enterprises unable to realize the assets necessary for economic development in their communes. Assets are distributed to enterprises according to the size of the development coefficient in the same way as in the commune. Enterprises envisaging a more significant profit based on a smaller amount of necessary cash assets over a shorter turnover period will ensure the amount of money intended for economic development.
Cash assets are allocated as grants, as they are renewed from the state’s revenue in each accounting period. The whole state will then be associated with a single corporation, and companies do not have to repay themselves invested money. Enterprises are bound to realize the envisaged monetary gains within a determined period. In this way, cash assets intended for economic development would achieve their objective, and the whole financial system would find its sufficient justification.
It may be assumed that the economically developed communes will be less interested in expanding their development, as their living standard will be so high that they may approach the level of saturation. A rise in productivity of a developed commune may entail a risk in terms of profit realization due to the saturation of the market and insufficient purchasing power of non-developed communes. Underdeveloped communes will require more money for economic development, and democracy will require developed communes to set aside more funds for development than they need. This fact offers a better chance to non-developed communes to ensure more money assets for development than they could themselves provide for this purpose. By increasing productivity, non-developed communes will increase their purchasing power and thus expand the state market. The system will, in this way, contribute to a more balanced development of the entire state.
