👉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, permanent workers' committees made up of worker representatives are established, and in areas related to working conditions and benefits in particular, a joint resolution by the management committee and the workers' committee is required for a proposal to be valid. For other proposals, the management committee must also disclose them in advance to the workers' 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.
