👉The table of contents so far is here.
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 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.
