👉The table of contents so far is here.
Chapter 12: Planned Economy and Corporate Management
12.4. Two types of corporate accounting
In a little-known passage in Volume II of Capital, Marx argued that the more socialized the production process, the greater the need for bookkeeping. He pointed out that "communal production" requires more bookkeeping than capitalist production, but that bookkeeping costs are reduced.
The capitalist market economy developed corporate accounting techniques and systems as a tool for recording corporate revenue activities and further increasing profits. Corporate accounting in a capitalist economy serves as a public record of revenue and expenditures related to revenue-generating activities and as reference data for formulating profit-generating business plans. In other words, whether financial accounting or management accounting, the greatest emphasis is on the calculation of revenue-generating activities, which is accounting in monetary units.
From another perspective, because corporate accounting under capitalism is an indirect calculation record that evaluates production activities in monetary terms, it is extremely complex and systematized. This not only requires costly bookkeeping but also makes it prone to fraud, such as window dressing, that often deviates from reality.
In contrast, because a sustainable planned economy is based on the premise of the abolition of a monetary exchange economy, corporate accounting eliminates the element of monetary calculation and becomes a direct record of production activities themselves, which are not evaluated in monetary terms.
For this reason, corporate accounting under a sustainable planned economy basically relies on asset tables, which record the state of inventory, and material receipts, which simply record the input and output of materials in physical units, thereby reducing the effort required for bookkeeping.
However, there are differences between the accounting of public enterprises that are subject to planned economy and the accounting of private enterprises that are not. In the case of public enterprises, the emphasis is on their significance as publicly certified records of production activities within the scope of economic plans, which form the broad framework for production activities, whereas private enterprises engage to a certain extent in barter, and to that extent they also engage in profit-making activities and a calculative element is recognized.
However, the most distinctive feature of corporate accounting under a sustainable planned economy is the highly developed technology and systems of environmental accounting. Environmental accounting has also been introduced in market economies that take environmental sustainability into consideration, but as long as the emphasis remains on profit-making activities, it is given a lower priority than calculation accounting and only plays a complementary role.
In contrast, environmental accounting in a sustainable planned economy is a form of accounting that takes precedence over production accounting, providing an environmental framework, and the two together form a record of environmentally sustainable production activities.
👉The papers published on this blog are meant to expand upon my On Communism
