Chapter 15.1.

👉The table of contents so far is here.

PART 4: THE TRANSITION PROCESS TO A SUSTAINABLE PLANNED ECONOMY

Chapter 15: Economic Transition Planning

15.1. Overview

So far, we have looked at the details of sustainable planned economies that do not rely on monetary economies. However, in reality, the greatest challenge lies not in the operation of such planned economies themselves, but in the process of abolishing monetary economies and transitioning to sustainable planned economic systems.

Because monetary economic systems have traditionally been taken for granted, regardless of whether they are capitalist or socialist, humanity has never experienced the abolition of a monetary economy. Therefore, how to smoothly abolish a monetary economy is a truly uncharted territory.

That said, within the framework of a monetary economy, the process of transforming one economic system into another—whether the transition to a socialist planned economy following a socialist revolution, or conversely, the shift to a market economy after a de-socialist revolution—is one that many countries experienced in the 20th century.

Although both of these system transitions were solely within the framework of a monetary economy, they are remembered for bringing about considerable socioeconomic turmoil and economic hardship for the masses. Moreover, it is not surprising that there are concerns about the level of chaos that would result from abolishing the monetary economy, which has been taken for granted.

Counting back to the founding of the monetary system in ancient times, this would involve transforming an economic system that has likely continued for thousands of years, and it would certainly be a major transformation in the history of mankind.

For this reason, even if one supports the abolition of the monetary economy in principle, one may be forced to oppose it given the difficulties of the transition process. In fact, even in Russia after the socialist revolution, the most radical theorists envisioned the abolition of the monetary economy, but this did not become part of the economic policy of the revolutionary government, and the monetary economy was retained even after the planned economic system was completed.

Therefore, as an actual economic policy rather than merely an idea, in order to transition to a sustainable planned economy while minimizing the chaos that would accompany the abolition of the monetary economy, it is necessary to plan the transition process itself. This is called an "economic transition plan." It is, in other words, a roadmap for economic transition. This economic transition plan is not an economic plan per se, but a kind of normative program that aims to minimize the socio-economic disruptions that are common during the transition process by explicitly outlining the yearly process of economic transition. 

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

Chapter 14.4.

👉The table of contents so far is here.

Chapter 14: Planned Economy and Consumer Life

14.4. Planned distribution and unplanned distribution

Marx stated that “distribution itself is merely a certain moment of exchange, or exchange considered in its totality,” thereby placing relatively low importance on distribution. Not necessarily because of this, but planned economies in countries professing Marxism tended to suffer from distribution deficiencies, particularly difficulties in obtaining daily necessities due to flaws and corruption within the distribution system. 

However, distribution inherently possesses a unique significance that cannot be reduced to exchange in general; its system structure must be specifically designed. For a planned economy to succeed, the issue of distribution is an unavoidable challenge.

Consumer business cooperatives, which are the main actors in consumption planning in a sustainable planned economy, not only formulate consumption plans but also directly operate supply centers. Depending on their size, supply centers can be divided into convenience store-like lightweight supply centers and supermarket-like comprehensive supply centers.

Lightweight supply centers are planned and located at high density to avoid overcrowding like commercial convenience stores, fulfilling the same end-user supply function as convenience stores. In contrast, comprehensive supply stations would be similarly planned and located at a lower density. These supply stations would also offer home delivery services for consumers who have difficulty visiting supply stations, such as the elderly and disabled.

Meanwhile, consumer business cooperatives would need to deploy their own transportation departments to ensure the reliable delivery of products received from production companies to each supply station. A planned economy does not completely reject the division of labor, but it does relativize it to a certain extent, so services like transportation are internalized.

In addition to these supply stations for everyday goods, consumer business cooperatives would also manage stockpiles for emergencies such as disasters, and in the event of a disaster, they would work with disaster relief organizations to ensure the smooth supply of emergency supplies.

Planned distribution based on the above consumption plan is actually only a part of distribution; entertainment and luxury goods other than everyday necessities are produced and distributed freely. In this way, distribution in a sustainable planned economy will consist of a mixed system of planned distribution of basic necessities and unplanned distribution of all other items.

However, even though we are talking about unplanned distribution, the monetary economy has been abolished, so there will be no distribution based on monetary exchange, but a distribution system based on free or barter exchange will develop. Therefore, in these fields, private supply stores or exchanges based on individual shops will be widely accepted, including online.

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

Chapter 14.3.

👉The table of contents so far is here.

Chapter 14: Planned Economy and Consumer Life

14.3. Consumer business cooperatives

The main actors in consumer planning are the consumer business cooperatives (CBC) established in each broader local area. While we briefly looked at their internal structure in Chapter 11, let's take a closer look at their organizational structure and activities here.

A CBC is similar to consumer cooperatives (co-ops) under the current system. However, unlike co-ops, it also operates more fixed supply points, making it more functionally similar to distribution capital like supermarkets.

A CBC under a sustainable planned economy is operated non-profit, but it differs from co-op in that residents of the relevant area are automatically registered as members. For example, residents of the A province are automatically registered as members of the A provincial CBC, giving them the right to use its services.

Here, membership means not just being a beneficiary who uses services, but also being the operator of the cooperative. Therefore, a CBC is run with the Members' General Meeting as its highest authority, but because it is logistically difficult for local residents to hold general meetings, the Members' General Meeting is composed of representatives selected by lottery.

The consumption plan, which refers to the three-year economic plan for production and is formulated by the Board of Directors, the responsible operating body of a CBC, is discussed and adopted by the Members' General Meeting. It then officially comes into effect after being approved by the Provincial Commons' Convention, the local people's representative body.

In accordance with this consumption plan, a CBC outsources production to consumer goods production companies that partner with the cooperative. 

An important role of the Board of Directors is to publicly solicit and select partner companies, and environmental sustainability and human safety are the main criteria for selection.

The Board of Directors shall conduct regular inspections to determine whether these standards are being met. As basic information for these inspections, delegates to the Members' General Meeting and monitors selected by lottery on a city, town, or village basis report on the quality of the goods supplied to the cooperative on a monthly basis, and whenever necessary.

If the inspection reveals any problems, the Board of Directors can take necessary measures such as recommending improvements or suspending or terminating the partnership with the production company in question, and to that extent, it can be said that the CBC has supervisory authority over its affiliated production companies.

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

Chapter 14.2.

👉The table of contents so far is here.

Chapter 14: Planned Economy and Consumer Life

14.2. Consumption planning

In the Soviet-style planned economy, there were production plans but no consumption plans. This was because the Soviet-style planned economy was biased toward production, particularly heavy and large-scale industries such as military and military production. As a result, there were noticeable defects in the production and distribution of consumer goods, which contributed to the poor quality of consumer life.

However, the new, sustainable planned economy pays attention to consumption. Consumption is not simply the result of production, but, as Marx pointed out, "it is itself the catalyst for productive activity." A planned economy extends not only to production but also to consumption.

As mentioned earlier, this consumption plan is formulated at the local level, separate from the domestic—and ultimately global—production plan. This is because consumption patterns have local characteristics, and planned local production and consumption that takes these characteristics into account is environmentally sustainable.

The main actors in consumption planning are the Consumer Business Cooperatives, which serve as cooperative consumer organizations established in each local area (such as the Provincial Area or the Zonelet in federal Zone). We will discuss the actual organization in the next section, but here we will provide an overview of the contents of the consumption plan.

This consumption plan sets demand forecasts for standard daily necessities needed for basic food, clothing, and shelter in the form of a three-year plan, taking into account the characteristics of each local area. Criteria for doing so include consideration of the environmental sustainability of products and their safety for the human body.

Such consumption plans come into effect after approval by the local representative body, the Commons' Convention, and serve as guidelines for the production and consumption of consumer goods for the next three years. In accordance with these, orders are placed with production companies that have business partnerships with each Consumer Business Cooperative, and products are supplied.

In a capitalist market economy where commercial mass production takes place, there is a general tendency for overproduction. While there are almost no shortages in normal times, there are large amounts of unsold goods and waste. However, in a communist planned economy, production is carried out in appropriate quantities based on consumption plans based on strict demand forecasts.

 In sustainable consumption plans, emergency supplies are always kept on hand in case of disasters, and the actual demand outlook is overestimated as a policy measure, taking into account the possibility of a sudden major disaster, resulting in a relative overproduction system - a surplus production system.

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

Chapter 14.1.

👉The table of contents so far is here.

Chapter 14: Planned Economy and Consumer Life

14.1. Mode of production and mode of consumption

In the introduction to the Grundrisse der Kritik der Politischen Ökonomie, Marx states that "consumption creates the desire for new production and is thus the prerequisite for production," and points out that "the manner of consumption is produced not only objectively but also subjectively by production." In other words, the mode of consumption also depends on the mode of production.

In this passage, Marx cites an interesting example contrasting hunger satisfied by eating cooked meat with a fork and knife with hunger satisfied by devouring with one's hands, nails, and teeth. However, this example is somewhat inaccurate. This is because the former presupposes that meat and tableware are products, regardless of their form, while the latter suggests the consumption behavior of hunter-gatherers who do not engage in productive activities.

Even in the former example, there is a significant difference in the mode of consumption between when meat and tableware are self-sufficient and when they are mass-produced as commodities. The former corresponds to the consumption pattern of pre-capitalist agricultural societies, while the latter corresponds to the consumption pattern of commodity production societies.

In today's capitalist mode of production, as is well known, the mass production-mass consumption mode, in which mass-produced goods and services are acquired and consumed in exchange for money, has taken root, and people normally purchase mass-produced meat and tableware.

In contrast, in the communist mode of production, where commodity production is abolished, meat and tableware are not produced as commodities, but are supplied free of charge as non-commodities.

Turning to the method of acquisition of products, in a capitalist market economy, products are, in principle, acquired in exchange for money on the market, and ordinary consumers usually provide the monetary compensation earned through wage labor as a means of exchange.

In contrast, in a communist society, wage labor, which commodifies labor power, is abolished, and so labor and consumption are separated. In slogans, it is "from each according to his ability (work), to each according to his needs (distribute)."

Therefore, regardless of the type of work, everyone can acquire the goods and services they need free of charge. In the previous example, each person would be able to obtain as much meat and tableware as they needed.

However, with this type of consumption pattern, there is no restraint like the amount of money on hand, which in a capitalist market economy is also used to limit consumption, and so there is a risk of falling into a "shortage economy" where shortages of goods become chronic, with people monopolizing everything or high-demand items running out. Therefore, in order to avoid such problems, it is essential to take measures to limit the amount of acquisition at the supply end.

This type of consumption pattern is similar to a rationing system, but unlike a rationing system, which limits the types of goods supplied, there is no limit to the types of goods and services supplied, and everyday necessities and services are generally supplied free of charge. However, for unusual luxury or rare items, barter practices will likely be used.

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

Chapter 13.4.

👉The table of contents so far is here.

Chapter 13: Chapter 13: Planned Economy and Working Life

13.4. Labor disputes

Since labor-management conflicts are sublated in communist enterprises, serious collective labor disputes are generally not expected. However, individual disputes over working conditions and other issues may arise between workers and their respective enterprises. To address such disputes, communist enterprises, which are based on worker participation, must also incorporate a dispute resolution function (in-corporate judicial system).

The third-party organization responsible for such in-corporate judicial system is the "Labor Arbitration Committee." This is an arbitration body composed of external lawyers with no vested interest in the company. It accepts consultations from troubled workers and mediates disputes.

Workers dissatisfied with the arbitration proposal submitted by the committee can file a complaint with the Labor Tribune, a judicial body specializing in the protection of basic labor rights (see my article for more on the Labor Tribune in general).

All enterprises, except for small-scale cooperative labor groups, are required to have a permanent labor arbitration committee. Labor disputes cannot be filed with the Labor Arbitration Commission unless they have first been arbitrated by the company's internal labor arbitration committee (the principle of prior arbitration).

As mentioned above, collective labor disputes that go beyond individual labor disputes are difficult to imagine in communist enterprises, where worker participation in management is fundamental. Wage disputes, which account for almost all labor disputes in capitalist societies, are particularly unthinkable in a communist society where wage labor has been abolished.

Therefore, while collective labor disputes can be considered unimaginable in the first place, if they do arise, the basic approach is to resolve them through consultations with the responsible management body via a workers' participation organization. As mentioned last time, there is no formal labor union system in a communist society.

In extreme conflict situations that cannot be resolved even through workers' participation organizations, it is not necessarily prohibited for willing workers to form a union and take industrial action such as a strike. That said, the "right to strike" is not openly recognized as in a capitalist society, and dismissal for industrial action is possible, although the appropriateness of such disciplinary action will be left to the discretion of the Labor Tribune on a case-by-case basis.

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

Chapter 13.3.

👉The table of contents so far is here.

Chapter 13: Planned Economy and Working Life

13.3. Management participation

In capitalist enterprises, management and labor are generally strictly separated. Even if labor unions have the right to negotiate, they cannot intervene in management itself. This is because capitalist enterprises are based on strict class distinctions and superiority-subordinate relationships between labor and management.

In contrast, in communist enterprises, worker participation in management is a common element, although the degree and method vary depending on the type of enterprise. This issue has already been discussed in Chapter 11, but I would like to summarize it again here from a labor perspective.

In communist enterprises, worker participation in management is roughly divided into indirect participation through worker representative committee in large enterprises where management and labor are inevitably separated, and direct participation through general staff assembly in small and medium-sized enterprises where management and labor are integrated. However, in either case, these worker participation bodies retain the right to co-decision-making with the management body regarding issues related to working conditions and benefits. 

Co-determination means that matters relating to working conditions and employee benefits must be decided based on agreement between the management body and the worker participation body. It also means that worker participation bodies have the right to make proposals to the management body regarding these issues, and can request that specific management issues that affect working conditions and employee benefits be taken up as matters for co-determination with the management body.

Applying this analogy to a capitalist enterprise, issues relating to working conditions and employee benefits are essentially matters for co-determination between the management body and the in-house labor union. However, since labor unions in capitalist enterprises are ultimately organizations outside the company, true co-determination between labor and management is not possible.

In a communist enterprise, there is no need for external labor union organizations. This is because in-house worker participation bodies are, so to speak, labor unions that have been internalized within the company.

However, this does not mean that the formation of labor unions is prohibited. However, since workers generally act through internal company participation organizations and labor unions are merely external, informal organizations, companies are not obligated to consider labor unions as official negotiating partners.

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