Chapter 17.4.＆17.5.

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Chapter 17: Economic Transition Plan II: Initial Phase

17.4. Establishment of the Economic Planning Conference and Various Enterprise Entities

During the initial phase of the economic transition plan, the Economic Planning Conference—an institution essential for formulating and implementing the First Three-Year Plan (the first step)—will be created, and the enterprise entities that will serve as the agents of the economic plan ("planned enterprise entities") will be established.

This entails the formal launch of the various preparatory organizations that had been set up during the interim period. The planned enterprise entities will formally commence operations, comprising various production business organizations and consumer business cooperatives that serve as the agents of the economic plan.

Simultaneously, the initial phase will see a concentrated effort to establish new "free-production" enterprise entities—such as production business corporations, production cooperatives, and cooperative labor groups—responsible for free production outside the scope of the plan.

In this regard, while many private enterprises under a capitalist economic system take the form of joint-stock companies, such companies and stock markets have no place in a sustainable planned economic system—which presupposes the abolition of the monetary economy—because the practice of raising capital through shares ceases to exist. Consequently, joint-stock companies (as well as other forms of for-profit enterprises) will be simultaneously converted into one of the three aforementioned enterprise forms.

However, since the joint-stock company form remains in place during the interim period while the monetary economy persists, it is desirable to enact transitional legislation allowing enterprises to change their organizational form at their own discretion during this period.

17.5. Launch of the First Three-Year Plan

The final stage of the initial phase of the economic transition plan is the launch of the First Three-Year Plan. This represents the very first step toward a sustainable planned economy—a crucial initial move upon which the success or failure of the planned economy as a whole will hinge.

However, as previously mentioned, the initial phase assumes the continued existence of foreign trade conducted via currency; thus, the First Three-Year Plan will incorporate such trade plans. In this respect, it possesses characteristics distinct from the economic plans of the "completion phase"—the stage reached after the economic transition plan concludes. In this sense, the first three-year plan retains elements of a transitional phase; depending on international developments, it is possible that trade planning measures may persist into the second and subsequent three-year plans.

In any event, the first three-year plan represents the culmination of the initial phase, serves as a driving force toward the realization of a sustainable economic plan, and establishes a precedent for future economic planning; therefore, it must be formulated with care and precision.

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

Chapter 17.3

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Chapter 17: Economic Transition Plan II: Initial Phase

17.3.  Abolition of the monetary system -part 2-: Unified trade mechanism and foreign currency settlement outlets

As noted previously, while abolishing the monetary system simultaneously across the board—based on a treaty—would ensure thorough implementation and minimize confusion, such a simultaneous rollout is practically difficult; consequently, a time lag in the global spread of the abolition is inevitable.

In such a scenario, trade relations with foreign nations that have not yet abolished their monetary systems would face disruptions. This poses a significant problem, particularly for regions with high import dependency. However, in cases of such individual abolition, it is the domestic currency that is eliminated, not foreign currency.

Therefore, the central bank overseeing the abolition must maintain foreign currency reserves necessary for trade settlements and ensure these funds can be utilized for ongoing foreign trade. To this end, trading companies involved in imports and exports would be integrated—or more loosely combined—to establish a provisional, unified trade mechanism to facilitate continued foreign trade.

Furthermore, although it does not constitute "trade" in the strict sense, a system could also be devised wherein this unified trade mechanism mediates instances where individuals purchase goods from abroad using foreign currency.

Apart from this, a practical issue that could arise from the time lag in abolishing the monetary system is the potential for an influx of foreign tourists seeking to acquire goods for free from regions where the monetary system remains intact.

Such "frenetic buying tours" from abroad are observed even under market economies and serve to disrupt supply-and-demand dynamics; however, if the monetary system were abolished and goods supplied free of charge, it is highly predictable that tourists from abroad—having heard the news—would flock to the area in large numbers. 

To prevent the planned economy from being disrupted during this initial phase, the approach will likely involve—setting aside permanent residents and long-term residents staying for a specified period—prohibiting the provision of goods free of charge to temporary foreign residents in principle, while exercising control through special measures that limit their purchases to specific outlets accepting foreign currency payments.

Thus, even during this initial phase when the monetary economy has been abolished, the continuation of trade means that a commodity-based exchange system involving currency persists in external relations; consequently, this period does not yet represent the realization of a fully established, sustainable planned economy.

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

Chapter 17.1.

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Chapter 17: Economic Transition Plan II: Initial Phase

17.1. Overview of the Initial Phase

After the transition period in the implementation process of the economic transition plan, as discussed in the previous chapter, the initial phase begins. This initial phase is precisely the start of a sustainable planned economy. The central event here is the launch of the first three-year economic plan.

As a prerequisite, the abolition of the monetary system, which is also the core of the sustainable economic plan, is a major event. Ultimately, the abolition of the monetary system and the launch of the first three-year plan are the two major events in the initial phase.

The initial phase unfolds based on various preparatory actions during the carefully planned transition period. Compared to the transition period, which requires a considerable amount of complex transition work, it is simpler, condensed into the two major events mentioned above, and the disruption associated with the initial phase is minimized.

17.2.  Abolition of the monetary system -part 1-: Financial Liquidation Corporations and Financial Liquidation Directorate

Among the events in the initial phase, the most significant is the abolition of the monetary system. Here, "money" refers to currency issued by the state. Therefore, more precisely, it is the abolition of the monetary system. As will be mentioned again later, private currencies issued by private entities are not included in the abolition targets here.

The abolition of the monetary system and the exchange economy based on currency represents almost a civilizational shift, and therefore, while it is retained during the transition period to avoid economic disruption, its complete abolition is aimed for in the initial period.

In this respect, the most desirable and simplest way to completely abolish the global monetary system without disruption is to implement it simultaneously worldwide based on a treaty, yet this is the most difficult to achieve, which is frustrating.

It is likely that once a sustainable planned economy model has spread almost worldwide, a currency abolition treaty or an international agreement equivalent to a treaty will be concluded, but here we will consider a more complex case in which the monetary system is abolished based on the laws of individual individual Zones (countries).

The laws abolishing the monetary system in each territory will come into effect immediately upon promulgation, and based on this, existing currencies will expire prospectively (not retroactively). However, foreign currency is an exception; it remains valid until the issuing Zone abolishes its own currency system.

Abolishing a monetary system involves the complete liquidation of the existing financial system, and therefore, the central bank is the most suitable entity to lead such a process. In a modern monetary economy, the central bank is the guardian of the monetary system and, therefore, can also act as its liquidator.

Specifically, based on legislation, clearing corporations for commercial banks and all other types of financial institutions are established, and these are comprehensively seized by the Financial Liquidation Corporations and Financial Liquidation Directorate established within the central bank, where all financial accounts are settled.

All deposits in these liquidation accounts are sealed and invalidated under the central bank's control. However, as mentioned above, when a region abolishes its monetary system, procedures for withdrawal and return of depositors' money are necessary for accounts held in the names of foreigners (including corporations) in countries that still maintain their monetary systems.

The central bank will oversee the entire process of abolishing the monetary system and will ultimately be liquidated and abolished itself. However, the Financial Liquidation Directorate will be separated and become an independent institution, remaining in place for a while as a body to handle the remaining affairs after the abolition of the monetary system.

Furthermore, personal money, such as cash kept at home and not deposited in financial institutions, will also become invalid under the abolition of the currency law. Therefore, there is no need to request its return or confiscate it; it will become an antique, like old coins today, and revert to the private property of its owner.

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

Chapter 16.8.

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Chapter 16: Economic Transition Plan I: Transition Period

16.8. Preparation for the establishment of pharmaceutical business organization, etc.

While pharmaceuticals can be classified as food in the broadest sense, their purpose and nature differ significantly from general food. Therefore, they are produced based on a pharmaceutical-specific production plan Division C, distinct from both the consumption plan for ordinary consumer goods and the production plan Division A for core industrial sectors and Division B for agriculture, forestry, and fisheries.

In this respect, since pharmaceuticals, in principle, should be supplied universally to maintain the life and health of all individuals worldwide, the principle is that key pharmaceuticals should be manufactured and supplied under a global common plan (see my article).

Furthermore, production plans for each zonal area will be independently formulated and implemented by a pharmaceutical business organization formed by integrating pharmaceutical companies. During the transitional period, the integration of individual pharmaceutical companies will be aimed at preparing for the establishment of the pharmaceutical business organization.

However, it is not necessary to integrate all existing pharmaceutical companies; the integration of companies responsible for manufacturing basic drugs such as representative disease treatments and vaccines that become prescription drugs for physicians, as well as a small number of specialized drugs for treating intractable diseases, will suffice.

Furthermore, the integration does not necessarily have to be company-wide; it would be acceptable to integrate after spinning off some departments into separate companies. The remaining departments not integrated, and pharmaceutical companies not involved in the manufacture of prescription drugs, will continue to exist as free production companies.

Incidentally, since the pharmaceutical business is inseparable from the existence of an independent and neutral drug regulatory and supervision system that conducts pre- and post-release reviews of drug efficacy and safety, preparations for the establishment of a regulatory and supervision agency completely separate from the pharmaceutical business organization will also be carried out in parallel.

This agency will not be a corporate entity but will basically have the characteristics of an administrative agency, and should have separate functions for pre-release efficacy and safety reviews and post-release safety reviews.

Of these, the latter, the post-release safety review agency, will have a quasi-judicial function for public protection, hearing specific drug-induced harm complaints from patients and providing relief to victims and taking action against those involved. Therefore, it will include not only medical and pharmaceutical experts but also lawyers well-versed in pharmaceutical laws.

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

Chapter 16.7.

👉The table of contents so far is here.

Chapter 16: Economic Transition Plan I: Transition Period

16.7. Preparation for the integration of agriculture, forestry, and fisheries

In a sustainable planned economy, agriculture, forestry, and fisheries, which are involved in food production, are treated separately as production plan Division B, distinct from production plan Division A for the core industrial sectors. However, the planning and implementation of production plan Division B are carried out by the integrated enterprise itself, such as the Agriculture, Forestry and Livestock Business Organization or the Fisheries Business Organization, similar to production plan Division A.

During the transitional period, the preparatory process for establishing the integrated enterprise that will be the planning body for Production Plan Division B will be carried out. In particular, the agriculture, forestry, and livestock sectors are closely related to the land system, and therefore overlap with the process of abolishing the land ownership system, as seen previously.

That is, it is assumed that farmland, forests, and pastures, which are factors of production in agriculture, forestry, and livestock, will all be liberated from the concept of ownership and placed under public management as ownerless property. In this respect, it is necessary to note that this is a completely different process from the land confiscation and distribution often carried out as socialist "land reform" policies.

Furthermore, the nature of the preparatory process will differ depending on the management form adopted by agriculture, forestry, and livestock at the start of the transitional period. In cases where self-employed family businesses are the dominant form of operation, establishing a consolidated enterprise will require a cautious process involving notification to each family and trial runs.

If cooperative organizations are well-established within the framework of self-employed family businesses, forming a consolidated enterprise by merging these cooperative organizations is relatively easy. In this case, the central cooperative organization will form the core.

In either case, traditional farmers, foresters, and livestock farmers will be incorporated as local managers or work instructors for agricultural, forestry, and livestock workers within the future Agricultural, Forestry, and Livestock Business Organization, requiring training to accompany this change in status.

On the other hand, if a semi-feudal system of large-scale land ownership still exists at the start of the transition period, former landowners who lost land ownership but were not absentee landlords and were actively engaged in agricultural, forestry, and livestock operations themselves may be rehired as local managers within the Agricultural, Forestry, and Livestock Business Organization. The basic process described above is largely applicable to the fisheries sector, but since the water bodies equivalent to land in the fisheries sector are not inherently subject to individual ownership, preparations related to the abolition of ownership rights, as seen in the agriculture, forestry, and livestock sectors, are not necessary.

However, if semi-feudal fisheries management systems, such as the net owner system by fishing vessel owners, still exist at the start of the transitional period, the process of dismantling such old systems will precede the establishment of integrated corporations.

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

Chapter 16.6.

👉The table of contents so far is here.

Chapter 16: Economic Transition Plan I: Transition Period

16.6. Preparations for the abolition of the land ownership system

Alongside the preparation for abolishing the monetary system, another major hurdle during the transition is the preparation for abolishing the land ownership system. This means transitioning to a system where land is managed as ownerless property, belonging to no one.

It is important to note here that this process is entirely different from the nationalization of land, which has often been implemented in various countries as a socialist land policy. Nationalization of land merely transfers ownership from private individuals to the state, while still retaining the concept of land ownership.

However, the abolition of the land ownership system, as referred to here, means liberating land from the very concept of "ownership," making it a natural object without ownership, similar to wild plants and animals. In essence, it means conceptually returning the Earth itself to its original natural state.

Therefore, this will be a legal measure without compensation, not a legal measure like the individual seizure of land with compensation. However, it also differs from socialist policies where the state or other public entities forcibly seize private land without compensation; it simply extinguishes land ownership in a legal concept.

However, this does not mean leaving the land in a primitive, unmanaged state; therefore, a system for publicly managing land must be established in each Zone. Preparations for establishing such a system will begin during the transition period.

The first stage is the enactment of the Land Ownership Extinction Law. This law will serve as the legal basis for abolishing the land ownership system. However, to avoid confusion, the extinction of land ownership will not be retroactive or immediate, but rather a future effect with a specified date.

The second stage is the establishment of an organization that will serve as the predecessor to the future Land Management Agency. While the Land Management Agency will be a public institution responsible for all matters concerning the public and private use and disposal of land that has become ownerless, it is simplest to establish its predecessor organization by integrating the current land registration agencies.

The land registry office is an institution responsible for the registration of the current status of privately owned land, based on the land ownership system. While it currently only handles the formal aspects of registration, it is a public institution that comprehensively grasps information related to the complexities of land ownership. Therefore, it is considered reasonable to reorganize it into the Land Management Agency.

Furthermore, the future  Land Management Agency will have police functions to crack down on land encroachment and seizure. Therefore, its predecessor organization should also establish a law enforcement department to prepare a system for cracking down on real estate crimes.

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

Chapter 16.5.

👉The table of contents so far is here.

Chapter 16: Economic Transition Plan I: Transition Period

16.5. Preparation for the abolition of the monetary economy

During the transition period, capitalism based on chain-reaction monetary exchange is not completely abolished; a considerable portion of it remains (residual capitalism). However, conducting trials to adapt to the new economic system, which is unknown to most people, is essential for achieving a smooth transition.

This preparation for the abolition of the monetary economy is both the most important point and the most difficult hurdle in the transition process. Failure to do so could lead to economic chaos, shortages of goods, and even famine, so it must be carried out with the utmost care and deliberation.

The ultimate goal of abolishing the monetary economy is nothing less than the complete abolition of the monetary system, but this is a task to be achieved in the initial period after the transitional period. In the transitional period before that, the monetary system remains, and without shock measures such as denomination, trial preparatory measures are taken.

As a preparatory measure during the transitional period, the preparatory organization for the Economic Planning Conference also conducts rehearsals for formulating economic plans that do not rely on monetary exchange throughout the transitional period, but this is, of course, a tabletop exercise in core production activities that are included in the scope of the planned economy. 

In contrast, a rehearsal for the free, non-monetary supply of consumer goods directly related to citizens' daily lives will be conducted through the local preparatory organizations for Consumer Business Cooperatives. This will not be a theoretical exercise, but rather an actual trial of the free supply of daily necessities, primarily food, and some miscellaneous useful goods, with quantity restrictions.

The specific items to be included in the trial will be a policy issue. While this partial free supply of goods resembles wartime/disaster rationing, it is not a temporary measure like rationing, but rather a preparatory measure for the upcoming abolition of the monetary economy. Therefore, the range of items will gradually expand as the transition period progresses.

Furthermore, while the supply of basic utility services such as electricity and gas is included in the responsibilities of the preparatory organization for the Economic Planning Conference as part of the energy industry sector, these services are essential even in the future planned economy. Therefore, it would be beneficial to begin trials of the free supply of basic utility services from the transition period stage, in conjunction with the free supply of consumer goods.

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