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.
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.
