Chapter 6.1.

Part II: THE PROCESS OF SUSTAINABLE ECONOMIC PLANNING

Chapter 6: Planning organization

6.1. Overview

Unlike a market economy, where there is no overall plan other than the management plans of each individual enterprise, a planned economy is operated over time according to an overall economic plan, and therefore requires a planning organization involved in the formulation and operation of the plan. Planning organization theory explores the nature of this planning organization.

No matter what type of planned economy it is, it cannot run on the principles of planning alone unless it is supported by a rational planning organization. On the other hand, if a rational planning organization becomes too complicated, it can cause problems in its operation. The planning organization in the former Soviet Union is a lesson in this regard.

The Soviet Union took on a unique form as a super-large federal state consisting of 15 non-sovereign republics, so the planning organization was divided into one for the entire federation and one for each republic, and the administrative agencies of the federation and republics were also involved in planning, and it was a complex of multiple layers in which state-owned enterprises in each sector were involved at the forefront of planning. Moreover, it was the ruling party, the Communist Party, that dictated the direction of the entire plan.

When formulating plans based on a basic five-year period, the policies of the Communist Party leadership were the ultimate command, but the numerous planning agencies each asserted their own interests and often found themselves in a competitive relationship, making the planning process unstable.

It is little short of miraculous that the Soviet Union managed to run a planned economy for over half a century and survive as a superpower rivaling the United States under such a complex and unstable planning organization; however, it is also true that this planning organization was already on the verge of collapse before the Soviet Union's eventual dissolution.

There are various factors behind this, but one is that the planning organization had become too complex, with so much time and effort being spent on formulating plans that it was believed to have hindered the smooth running of the economy. The lesson to be learned from this is that it is desirable for planning organizations to be as simple as possible. In principle, it would be good for a single planning agency to be responsible for consistent planning, but in reality it is not possible to simplify to that extent.

In this respect, a sustainable planned economy based on the World Commonwealth is a system in which the planning organizations of each of the Zones that make up the World Commonwealth work together to formulate and implement plans, with a world organization that formulates a common economic plan at the center. Moreover, since there are no political organizations such as governments or political parties, and the planning organizations are constituted as deliberative bodies of the business organizations that are the targets of the plans, the structure of the planning organization is much simpler than that of the Soviet Union.

👉The table of contents so far is here.

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

TABLE OF CONTENTS

Preface  page1

Part I: PRINCIPLES OF SUSTAINABLE PLANNED ECONOMY

Chapter 1: What is a planned economy?

 1.1. Planned economy and market economy  page2
 1.2. Planned economy and exchange economy  page3
 1.3. Marx's theory of planned economy  page4

Chapter 2: Criticism of the Soviet-style planned economy  

 2.1. Ambiguous beginning  page5

 2.2. National planned economy  page6

 2.3. Intrinsic deficiencies  page7

 2.4. Policy deficiencies  page8

Chapter 3: The Relationship between the Environment and the Economy

 3.1. Science and forecasting  page9
 3.2. Role of environmental ethics  page10
 3.3. Limitations of Classical Environmental Economics  page11
 3.4. Environment planned economy model  page12
 3.5. Dialectic between Environment and Economy  page13
 3.6. Economic Theory of Non-monetized Economy  page14

Chapter 4: Standard Principles of Planning

 4.1. Overview  page15
 4.2. Environmental Balance -part 1- : Mitigation vs. Control  page16
 4.3. Environmental Balance -part 2- : Mathematical Models   page17
 4.4. Material Balance -part1- :Supply-Demand Adjustment  page18
 4.5. Material Balance -part2- :Local production for local consumption  page19
 4.6. Material Balance -part2- :Mathematical Models  page20
 4.7. Disciplining principle of the free production domain  page21

Chapter 5: Globalization of Planned Economy

 5.1. Global Planned Economy  page22
 5.2. From trade to economic cooperation  page23
 5.3. The World Economic Planning Organization  page24
 5.4. The Council for Grand-Zonal Economic Cooperation  page25

Part II: THE PROCESS OF SUSTAINABLE ECONOMIC PLANNING

Chapter 6: Planning organization

6.1. Overview  page26

 

To be continued.

Chapter 5.4.

Chapter 5: Globalization of Planned Economy

5.4. The Council for Grand-Zonal Economic Cooperation

Since the World Commonwealth is not an integrated entity like a single nation state, world economic planning encompasses economic coordination among the five Grand-Zones, which are the regional groupings of the Zones that constitute the World Commonwealth. Such Grand-Zonal economic cooperation is extremely important in a sustainable planned economy as an alternative to capitalist commercial trade.

In essence, a sustainable planned economy is a global economic system based on a world economic plan, in which individual Zonal planned economies and cross-Zonal economic cooperation are organically interrelated.

In that sense, Grand-Zones are important units as economic cooperation spheres, and a working organization such as the Council for Grand-Zonal Economic Cooperation must be established, separate from the World Economic Planning Organization, to handle such inter-Zonal economic cooperation and maintain constant economic cooperation relationships.

To give a specific example, in the case of automobiles, the central Zone within each Grand-Zone produces them according to the guidelines set out in the world economic plan, and they are shared within the Grand-Zone. As a result, automobile manufacturers will no longer compete with each other for global market share, and production activities will be completed within each Grand-Zone.

However, this is not a rigid rule, and in places like Africa where there are no independent automobile manufacturers - although of course the possibility of developing independent manufacturers is greater than under a capitalist economy - the existence of cooperative relationships beyond Grand-Zonal boundaries, such as sourcing from neighboring Europe, is not denied.

Another important role of the Grand-Zones will be economic cooperation in the field of food and agriculture. Communist food production is based on each Zone being self-sufficient, without relying on trade, and in reality communism makes this possible, but the state of agricultural development and production volume are also affected by geographical conditions and weather, and imbalances cannot be completely avoided, so cooperative relationships in which  Grand-Zones that share a common food culture can share scarce products are essential.

A World Food and Agriculture Organization will be established as a specialized agency to coordinate such cooperative relationships globally. This will take over the work of the current UN agency, the Food and Agriculture Organization of the United Nations (FAO), but this agency will remain a coordinating body, and the actual practical aspects of cooperation will be carried out by Food and Agriculture Councils established in each Grand-Zone.

👉The table of contents so far is here.

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

Chapter 5.3.

Chapter 5: Globalization of Planned Economy

5.3. The World Economic Planning Organization

The practical organization for the global planned economy is the World Economic Planning Organization. This organization is equivalent to the headquarters of the Economic Planning Conferences, which are the planning organizations for each Zone of the World Commonwealth. When the global planned economy is finally established, it will be a systematic organization in which the economic plans of each Zone are formulated within the overall framework of the world economic plan formulated by this organization.

This World Economic Planning Organization is positioned as a specialized organization of the World Commonwealth, but it is not a bureaucratic administrative organization like the current UN organizations, but a deliberative organization that formulates joint plans for production enterprises themselves, just like the Economic Planning Conferences of each Zone. 

Its structure is also similar to the Economic Planning Conferences of each Zone. In other words, the executive body (The Senior Board of Directors) that is responsible for the decision-making of the World Economic Planning Organization is mainly composed of representatives of the production business associations, which is the global associations of production business organizations in the environmentally burdensome industrial sector that is the target of the planned economy.

There is no organization equivalent to a production business association in a capitalist economy, but if we were to cite existing analogues, we could imagine international industry associations such as the World Steel Association or the Organisation Internationale des Constructeurs d'Automobiles, etc.

Under a capitalist system, such international industry associations are merely organizations representing the international interests of each industry, and coordinating production activities themselves would be considered an international cartel and would be prohibited. However, in a global planned economy, production business associations are not simply industry associations, but is truly the leading organization of the global planned economy.

The world economic plan that the production business associations formulate after deliberation through the World Economic Planning Organization must then be deliberated at the General Assembly of the World Commonwealth (the World Commons' Convention), the representative and decision-making body of the people of the World Commonwealth. As a result, the adopted world economic plan binds each Zone with normativeness equivalent to a treaty and becomes the standard guideline for economic planning at the Zonal level.

👉The table of contents so far is here.

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

Chapter 5.2.

Chapter 5: Globalization of Planned Economy

5.2. From trade to economic cooperation

When a global sustainable planned economy is realized, the biggest change that will occur in the world economy will be the disappearance of the economic activity known as trade, whether it is "free trade" or "protectionist trade." This is in a parallel relationship with the disappearance of commerce at the "single country" level. This is a natural fact, given that trade means commercial activity that crosses the borders of sea and land.

However, even if trade disappears, it does not mean that there will be a shift to a completely self-sufficient system at the "single country" level. The overseas procurement of goods that are difficult to produce in one's own country, including food, will continue. However, this will no longer be done in the commercial form of trade, but in the form of free economic cooperation.

It is important to note that the economic cooperation referred to here is not a donating economic act implemented as "assistance" to "developing countries" as in the case of economic cooperation under capitalist economies, but rather is, in principle, an everyday reciprocal economic act.

An imperfect precedent for such an attempt was the economic cooperation system (COMECON) of the socialist economic bloc centered on the Soviet Union during the Cold War, but this adopted a uniform division of labor system, which led to bias in the industrial structure of the member countries. Economic cooperation in a sustainable planned economy is flexible inter-regional cooperation that does not rely on such a uniform division of labor.

In fact, the world economic plan mentioned in the previous section is itself a general guideline for economic cooperation, but concrete economic cooperation is carried out at the level of neighboring economic cooperation bloc, taking into account geographical proximity. As will be discussed again in the next chapter, the Great-Zone bloc that divides the world into five functions as an economic cooperation bloc. 

Among this economic cooperation, food is directly linked to human life and death and is heavily dependent on natural conditions, so it is necessary to draw up a plan for it separately from regular economic plans, but actual economic cooperation will still be carried out on the Great-Zonal level.

Furthermore, as part of economic cooperation, there is the issue of transnational management of natural resources that serve as energy sources. As discussed in my On Communism, natural resources will not be left to nationalism, but will be placed under transnational management as unowned property that belongs to no one, with a World Natural Resources Organization being set up as the management body, and sustainable joint mining will be carried out. The world economic plan will also encompass a plan for the distribution of these resources.

👉The table of contents so far is here.

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

Chapter 5.1.

Chapter 5: Globalization of Planned Economy

5.1. Global Planned Economy

In the previous chapters, we discussed the theoretical foundations of a new planned economy that places emphasis on environmental sustainability - a sustainable planned economy. For the time being, this discussionhas assumed a planned economy at the level of a "country" - as we will discuss again in the following chapter 6, a sustainable planned economy is incompatible with the political unit of a "country".

However, since environmental sustainability means, strictly speaking, the sustainability of the global environment - in other words, preserving the Earth so that it is not destroyed by human factors - a sustainable planned economy cannot be practiced in only one particular country.

In its ultimate form, a sustainable planned economy must be practiced on a global scale. In this respect, it aims for a more thorough globalization than the "environmental policy theory" that trivializes environmental sustainability to a national policy issue, nor the recent trend of trying to coordinate specific environmental issues such as climate change and biodiversity through individual international treaties, with ratification or withdrawal left to the discretion of each country.

To achieve this, a world economic plan that will serve as a global standard for a sustainable planned economy is needed. This will be the overall framework (cap) for economic planning at the "national" level, which has been the premise of the discussion up to the previous chapter. In other words, planning at the "national" level will be positioned as an individual allocation (quota) based on the global economic plan.

Any "realist" will question such a grandiose concept, asking whether such a large-scale economic plan can be formulated effectively without dispute on the current Earth, which now has a population of several billion.

It is certainly a grand economic experiment that humanity has never experienced before. However, I believe that this can be achieved by abolishing the current system of sovereign states and creating the World Commonwealth to replace the current United Nations, which is merely a federation of sovereign states. In that sense, the relationship between a sustainable planned economy and political systems is an important point of discussion, but this will be the subject of the next chapter. 

👉The table of contents so far is here.

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

Chapter 4.7.

Chapter 4: Standard Principles of Planning

4.7. Disciplining principle of the free production domain

In a sustainable planned economy, the planned economy is limited to the environmentally hazardous industrial sectors, while other sectors are left to unplanned free production. This may be interpreted as a kind of mixed economic system between a planned economy and a market economy, rather than strictly speaking a planned economy.

The difficulty common to such mixed economic systems is that mixing two types of economic systems based on different principles can cause malfunctions. To use a chemical analogy, it would be fine if they could be separated without mixing like oil and water, but the most worrisome situation would be if highly toxic substances were produced as a result of mixing them.

To prevent this, it is necessary to view the unplanned free production domain as a residual domain of the planned economy, rather than the "mixed" concept. In other words, the free production domain is considered to be a domain that is outside the scope of the planned economy, but to which the discipline of the planned economy is indirectly applied.

In this regard, it is inevitable that the planned economy will be applicable to free production domain in a spillover manner, since even free production domain will eventually receive supplies of goods and services from the planned domain covering the key industrial sectors related to the supply of capital goods and energy. 

Furthermore, the principle of environmental sustainability also applies to the free production domain, meaning that production activities in the free production domain are regulated by a common environmental legal regime, and "freedom" that undermines environmental sustainability is not tolerated.

By the way,  because a sustainable planned economy is an economic system that does not assume a monetized economy, even a free production domain is not naturally a monetized economy. As such, "freedom" here simply implies that it is not directly subject to economic planning, and a free production domain does not necessarily equal a market economy.

As an ideal type, we can imagine completely free production activities that are supplied free of charge, but the scale to which such activities will actually take place is a world unknown to humanity. As a prediction from economic anthropology, if humans are creatures that essentially desire exchange, then purely altruistic free production activities that do not involve any exchange will be very limited.

Therefore, if the old practice of barter is revived in place of a monetized economy, it is a type of exchange economy, and if the objects of barter are customarily formulated, it approaches a monetized economy. From there, if private currency that is only valid in specific trading circles emerges and becomes established, it will progress to the stage of a customary monetized economy.

In a sustainable planned economy system, customary private currency will not be recognized as official currency, but conversely, it will not be banned. Such economic practices are respected as an expression of private autonomy in the free productive domain. However, they are not laissez-faire and are subject to civil law discipline.

👉The table of contents so far is here.

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