Chapter 11.5.

👉The table of contents so far is here.

Chapter 11: Planned Economy and Corporate Forms

11.5. Corporate internal structure -part 3-

The corporate forms we have looked at in the previous article were all examples of production organizations for general production activities. This time, we will overview special corporate structures in other fields.

First, primary industries such as agriculture and fisheries, which operate under a planned economy and based on production plan Divison B, are managed by socially owned production enterprises (Agricultural Production Organization and Fishery Production Organization). However, their internal structure differs from that of ordinary production organizations.

Because primary industries are highly regional, it makes sense to adopt a decentralized, regionally-based structure. The level of this structure is a matter of policy discretion, but to achieve a higher degree of intensiveness, a fairly extensive regional subsidiary structure would likely be required. 

While each of these local branches of production organizations has its own production organization structure, the central headquarters also has a management committee and a workers' representative committee composed of members elected from each branch.

Meanwhile, Consumer Business Cooperatives are responsible for consumer activities based on local consumption plans. Unlike self-managed production cooperatives, these are a type of consumer cooperative organization in which all residents of each region are automatically enrolled.

As a result, their operations are based on a members' general meeting made up of member representatives, with joint decisions made by a board of directors responsible for management and a workers' representative committee made up of union employee representatives.

Another issue is the nature of public utility organizations involved in public services such as welfare, medical care, and education. Under capitalism, such public utility organizations are often given special legal personality as non-profit entities, but in a communist economy, since profit-making businesses disappear altogether, the distinction between profit and non-profit becomes unclear.

Therefore, it may be possible to consider that such public utility organizations could also be self-managed production cooperatives, but because they are different from simple production activities, they should be organized as special public utility associations/corporations, and in order to ensure the public interest in particular, in addition to a board of directors that is responsible for day-to-day operations, a permanent board of supervisors should be established as a supervisory and advisory body made up of external experts and citizens.

Chapter 11.4.

👉The table of contents so far is here.

Chapter 11: Planned Economy and Corporate Forms

11.4. Corporate internal structure -part 2-

In contrast to socially owned production enterprise, where management and labor are separated, self-managed production cooperative is structured so that workers themselves are involved in management. For this reason, in a production cooperative, the general meeting of members, made up of all members, is the highest management body.

One question is what size of company is possible for such self-management, and the maximum is thought to be less than 1,000 members. It could also be more limited to a level of 500, but this is left to a policy decision.

For a production cooperative with more than 500 members, if it is not realistic to regularly hold general meetings with full participation, it should be allowed to establish a member representative council similar to the worker representative committee of a production business organization. Even in cases with fewer than 500 members, proxy participation by power of delegate should be permitted.

In any case, in a production cooperative, members are directly involved in management through general meeting, but since it is larger than small business, it needs a board of directors as the body responsible for management. Directors are elected by and are subject to supervision by the general member assembly. Regarding the audit system, even in a production cooperative, a distinction is made between operational audits and environmental audits, with permanent operational auditors and environmental auditors appointed to correspond to each.

However, for large enterprises with more than 1,000 members, the production cooperative model is no longer sufficient to govern them effectively, and it is necessary to recognize a production business corporation model similar to a socially owned enterprise. Therefore, as the number of members increases, a production cooperative may be converted into a production business corporation.

In this large enterprise format, management and labor are separated, similar to a production business organization, and a permanent management committe and a workers' representative committee are established. The rest of the internal structure will also be similar to that of a production business organization.

On the other hand, for micro-enterprises with fewer than 20 members (the required number of members is determined by policy), the production cooperative model may not be flexible enough. In such cases, a system such as a cooperative labor group would be more appropriate to allow for more flexible cooperative relationships. In this case, apart from having at least one auditor (there is no need to distinguish between an operational auditor and an environmental auditor), the internal structure of the company is left to the discretion of the members, and management can be decided by consensus of all members or by consensus of several secretaries.

👉The papers published on this blog are meant to expand upon my On Communism.

Chapter 11.3.

👉The table of contents so far is here.

Chapter 11: Planned Economy and Corporate Forms

11.3. Corporate internal structure -part 1-

In the previous article, we looked at two main types of communist enterprises: a socially owned public enterprise (production business organization) and a self-managed private enterprise (production cooperative). From here, we'll delve deeper into the internal structure of these enterprises.

First, a socially owned enterprises, which also form the core of planned economy, is the largest in terms of corporate scale, comparable in size to the combined efforts of all the major companies in a single "industry" in a capitalist economy.

In running a such large-scale enterprise, it is practically impossible to integrate labor and management in a self-managed enterprise where the workers themselves are in charge of management. Therefore, as with joint-stock companies, management and labor must be separated.

As a result, a management committee, equivalent to the board of directors of a joint-stock company, is established as the body responsible for management. However, due to the large scale of the enterprise and to ensure democratic corporate governance, they do not have a single-person top executive such as a CEO; instead, they use a consensus-based system centered around a management chairperson.

When we talk about the separation of management and labor, we do not mean the capitalist command-and-control relationship between labor and management, but rather the establishment of a system of co-determination between management and labor. Such co-determination systems have long been introduced in progressive capitalist countries, even in joint-stock companies, but the reality is that such co-determination has effectively become a mere formality due to the hierarchical relationship between labor and management.

In contrast, in communist public enterprises, to make co-determination a substantive system, a permanent workers' representative committee made up of worker representatives is established, and in areas related to working conditions and benefits in particular, a joint resolution by the management committee and the workers' representative committee is required for a proposal to be valid. For other proposals, the management committee must also disclose them in advance to the workers' representative committee, guaranteeing the opportunity to request that they be co-determined insofar as they relate to working conditions.

Incidentally, communist enterprises generally do not have an owner's body equivalent to the general shareholders' meeting, which is the general supervisory body of a joint-stock company. However, in the case of socially owned production business organization, the ultimate owner is the people, so the people's representative body becomes the ultimate owner's body, but this is largely merely political and symbolic, and in practice the general staff assembly is the general supervisory body. Therefore, the members of the management committee and workers' representative committee are both elected by the general staff assembly, and the activities of both bodies are overseen by the general staff assembly.

However, because a production business organization is large, it is technically impossible to hold a general meeting with everyone's participation, so a representative system based on general assembly delegates will likely be used. The method of election of these delegates may be by lottery or voting, with each company being able to choose.

Finally, an operational audit committee will be established as an auditing body equivalent to the board of auditors of a joint-stock company, but this will primarily act from the perspective of compliance with laws and regulations.

In addition, under the sustainable planned economy, it is also necessary to establish an internal audit system for corporate activities from the perspective of environmental sustainability, so an environmental audit committee will be established as a permanent entity separate from the operational audit committee. The members of both audit committees are also elected at the general staff meeting.

👉The papers published on this blog are meant to expand upon my On Communism.

Chapter11.2.

👉The table of contents so far is here.

Chapter 11: Planned Economy and Corporate Forms

11.2. Self-Managed enterprise

Sectors other than environmentally-burdened industries subject to sustainable planned economies shall be left to the free market. However, even though it is called a free economy, it does not presuppose a monetary economy; thus, it is “free” in the sense that it is not a monetary exchange economy and is not subject to the discipline of economic planning.

Production activities in the free economy, which are not subject to the planned economy, are carried out by private enterprises. In this respect, it should be noted that this differs from the Soviet-style socialist system, which did not tolerate the existence of private enterprises in their pure form.

A private enterprise means that it can be freely established, its activities are not bound by economic plans, and are free as long as it complies with relevant laws and regulations. However, when we say private enterprises, they are of course not joint-stock corporations, but private enterprises unique to communist societies.

First, "unique to communist societies" means that they are non-profit enterprises, rather than for-profit enterprises that aim to distribute profits like joint-stock corporations. Second, they are self-managed enterprises where labor and management are integrated, unlike joint-stock corporations where management and labor are separated and managers direct workers to engage in production activities. Instead, the workers themselves, who engage in production activities, autonomously manage the enterprises.

This type of enterprise form is more like a cooperative than a company, and the legal name for such communist private enterprises is a "production cooperative." While the name overlaps with the production cooperative envisioned by Marx, they differ in that while Marx's production cooperative was positioned as the operating entities of a planned economy, production cooperative here is free private enterprise that operates outside of the planned economy.

Thus, the core of production activity under the communist mode of production is two-pronged: a production business organization that serves as public enterprise and the subject of the planned economy (establishment must be approved), and a production cooperative that serves as private enterprise in the free economy (establishment must be registered). In terms of size, the former is large enterprise, and the latter is small and medium-sized enterprise. 

However, there can be a intermediate private corporate form with internal structures similar to socially owned enterprise, because of its large scale which makes it difficult to literally implement self-management. Conversely, there can be a cooperative labor group specialized for micro-enterprise that are smaller than a production cooperative. The legal names and internal structures of these modified corporate forms will be discussed in detail later.

👉The papers published on this blog are meant to expand upon my On Communism.

Chapter 11.1.

👉The table of contents so far is here.

PART 3: PRODUCTION, LABOR, AND CONSUMPTION UNDER A SUSTAINABLE PLANNED ECONOMY

Chapter 11: Planned Economy and Corporate Forms

11.1. Socially owned enterprise

In modern times, major production activities are carried out systematically and continuously through enterprises that aggregate labor and material resources. This remains true in planned economies, but the corporate form is determined by the mode of production.

Under the capitalist mode of production, the typical corporate form is the joint-stock company, which can easily raise investment funds from the private sector. On the other hand, under the socialist mode of production based on the Soviet-style administratively planned economy, the typical corporate form is the state-owned enterprise, which is directly invested in and operated by the state.

In contrast, under the communist mode of production, which is based on a joint economic plan formulated autonomously by production enterprises, the typical corporate form is a public enterprise, neither a joint-stock company nor a state-owned enterprise.

In this regard, Marx defined a communist society as "a society consisting of cooperatives of free and equal producers acting consciously according to a rational joint plan."

According to this definition, production activities in the communist society envisioned by Marx would be carried out through a corporate form called production cooperatives. In fact, Marx's planned economy was envisioned as being based on the joint planning of such cooperative enterprises.

However, this definition and conception seem a little too idealistic. Large-scale, intensive production activities are required in today's core industrial sectors, and in order to implement a planned economy that incorporates environmental sustainability, it is considered essential to utilize corporate entities larger than cooperatives in sectors with high environmental burden to which a planned economy is applied.

If we were to design a production enterprise that corresponds to the production activities of core industrial sectors while utilizing Marx's concept, a form such as joint production cooperative could be envisioned, but such a joint enterprise would raise concerns about integrated governance and would remain merely a model.

As a more realistic corporate form, a communist public enterprise can be defined as a socially owned enterprise, in that it is owned neither by investor shareholders like in a joint-stock company nor by the state like in a state-owned enterprise, but rather belong to society as a social commons. Here, we will refer to their legal name as "production business organization."

The fields in which these production business organizations produce are limited to sectors with high environmental burden to which the planned economy applies. In other words, the operating bodies of the planned economy are production business organization, which are socially owned enterprise. 

👉The papers published on this blog are meant to expand upon my On Communism.

Chapter 10.6.

👉The table of contents so far is here.

Chapter 10: Details of Economic Planning

10.6. Special Structure and Details of the pharmaceutical plans

Although drugs are included in the broad definition of food, due to their specific uses, they are not included in the broader local consumption plans and are produced and distributed based on the separate pharmaceutical plans. Because drugs often have universal global demand, pharmaceutical plans start from the World Commonwealth plan.

A distinction is made between basic drugs for which there is universal demand, specialty drugs for a small number of patients with intractable diseases, and endemic drugs for endemic diseases specific to specific regions.

Basic and specialty drugs are manufactured by the World Pharmaceutical Organization under the World Commonwealth under the World Commonwealth Plan and supplied equitably throughout the world, provided that their efficacy and safety are confirmed by the World Commonwealth Drug Regulatory Agency.

On the other hand, endemic drugs, based on the supply plan of the Grand-Zone where they are in demand (e.g., the Pan-African-South Atlantic Zone), are listed in the World Commonwealth plan and manufactured and supplied.

Furthermore, whenever an epidemic such as a pandemic or endemic occurs, vaccines for infectious diseases are manufactured and supplied in accordance with the World Commonwealth's emergency vaccine plan appropriate to the type of epidemic.

In contrast to drugs certified by the World commonwealth, drugs independently certified by the drug regulatory bodies of each Zone are manufactured and supplied by the pharmaceutical industry organization of each Zone in accordance with that Zone's pharmaceutical plan.

To that extent, the pharmaceutical plan is divided into the World Commonwealth plan and the Zonal plans. However, there is always the possibility that the efficacy and safety of a drug manufactured and supplied under a Zonal plan will also be certified by the World Commonwealth and that it will be newly listed as an item on the World Commonwealth Pharmaceutical plan.  *Conversely, there may be cases where the efficacy and safety of a drug manufactured and supplied under a Zonal plan is denied or banned by the World Commonwealth, or, although rare, there may be cases where the efficacy and safety of a drug manufactured and supplied under the World Commonwealth plan is denied or banned in a specific Zone.

This Zonal pharmaceutical plan does not cover all drugs, but is limited to drugs prescribed by doctors, and even within that, it is particularly narrowed to core drugs (equivalent to the basic drugs in the above category). The remaining drugs will be freely produced and supplied by pharmaceutical companies based on official approval review.

👉The papers published on this blog are meant to expand upon my On Communism.

Chapter 10.5.

👉The table of contents so far is here.

Chapter 10: Details of Economic Planning

10.5.  Structure and details of the broader local economic plans

The broader local economic plans, while linked to the Zonal economic plans, are economic plans primarily concerned with consumption. In that sense, they are the most special economic plans within the overall system of economic plans, with the world economic plan at its apex, as they relate to end-user demand. The core of such consumption plans is the supply plan for everyday consumer goods.

In this regard, consumption plans under sustainable economic plans involve the planned supply of consumer goods in quantities and qualities that are consistent with environmental sustainability, in response to anticipated demand calculated backward from the predetermined quantity and quality of waste.

Since such waste quantity and quality control must be formulated in each Zone based on global standards, waste control standards are set forth in the world economic plan and the Zonal economic plans, and the broader local economic plans are formulated based on those standards. To that extent, the broader local economic plans constitute a tertiary part of the overall system of sustainable economic plans.

The details of the plan include a supply plan for each category of core consumer goods, such as basic daily food items, electrical appliances, furnishings, and sanitary products that are essential to modern life. Among food items, agricultural and marine products are linked to Division B in the Zonal economic plan, and are therefore restricted by the Zonal economic plan.

In addition, electrical appliances and furnishings that are large and likely to become bulky waste will be supplied on a loan basis for reuse. The ratio of loaned items to donated items will be calculated based on waste standards.

Furthermore, the broader local economic plans will also include a supply plan for stockpiled consumer goods based primarily on surplus production in anticipation of disaster emergencies. While quantitative waste regulations do not apply to the supply of stockpiled consumer goods (qualitative standards do apply), it goes without saying that their release in normal times is prohibited.

👉The papers published on this blog are meant to expand upon my On Communism.