Chapter 18

👉The table of contents so far is here.

Chapter 18: Economic Transition Plan III: Completion Phase

The final stage of the economic transition plan is the completion phase. While this signifies the stage at which the system of a sustainable planned economy is fully established, the question remains: what constitutes "completion"?

Theoretically, the completion phase is the stage where all the institutions previously outlined are in place and subsequent economic plans (from the second phase onwards) are formulated and implemented smoothly. However, the minimum necessary conditions for declaring the system established can be summarized as follows:

(a) Establishment of a global economic plan

Since "sustainability" in a sustainable planned economy precisely refers to the "ecological sustainability of the global environment," the completed form of such an economy is a global-scale economic planning system centered on a World Commonwealth Economic Planning Organization.

Therefore, a prerequisite for completion is the founding of a "World Commonwealth" (WoCom)—a new transnational governance body to replace the United Nations—and the establishment of the WoCom Economic Planning Organization as its specialized institution. The system reaches its completed form only when successive economic plans are formulated and operated for each constituent Zone based on the global economic plan devised by the WoCom Economic Planning Organization.

(b) Establishment of a purely voluntary labor system

The fundamental essence of a sustainable planned economy lies in production and labor that do not rely on a monetary economy; thus, a system of unpaid, purely voluntary labor must be established. While this process begins during the initial phase—when the monetary system is abolished—it will likely take an entire era for the system to become fully entrenched and established.

During this process, certain occupations that previously relied on the wage system under a market economy may face a form of attrition and disappear. To compensate for this, necessary measures will include introducing a system of occupational allocation based on aptitude, promoting automation through robots and AI, and—in cases where such automation is difficult—designating the affected occupations as mandatory labor for all citizens on a provisional basis. 

(c) Establishment of a system for the free provision of goods and services

Under a sustainable planned economy—characterized by the abolition of wage labor and the separation of labor from daily life—it is necessary to establish a system for the free provision of the goods and services that sustain daily existence. While this system will begin operating during the initial phase, certain flaws—such as shortages of goods or distribution disruptions—may arise at that stage. By the time the system reaches maturity, however, such flaws must be rectified, ensuring the establishment of a smoothly functioning free-provision system.

In the interim, the system may be supplemented by customary practices of free exchange via barter occurring outside the free-provision framework; the sustainable planned economy does not classify such practices as an illegal "black market," and their continued existence alongside the formal system—as a legitimate free-exchange economy—is permitted even after the system has fully matured.

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

Chapter 17.4.＆17.5.

👉The table of contents so far is here.

Chapter 17: Economic Transition Plan II: Initial Phase

17.4. Establishment of the Economic Planning Conference and Various Enterprise Entities

During the initial phase of the economic transition plan, the Economic Planning Conference—an institution essential for formulating and implementing the First Three-Year Plan (the first step)—will be created, and the enterprise entities that will serve as the agents of the economic plan ("planned enterprise entities") will be established.

This entails the formal launch of the various preparatory organizations that had been set up during the interim period. The planned enterprise entities will formally commence operations, comprising various production business organizations and consumer business cooperatives that serve as the agents of the economic plan.

Simultaneously, the initial phase will see a concentrated effort to establish new "free-production" enterprise entities—such as production business corporations, production cooperatives, and cooperative labor groups—responsible for free production outside the scope of the plan.

In this regard, while many private enterprises under a capitalist economic system take the form of joint-stock companies, such companies and stock markets have no place in a sustainable planned economic system—which presupposes the abolition of the monetary economy—because the practice of raising capital through shares ceases to exist. Consequently, joint-stock companies (as well as other forms of for-profit enterprises) will be simultaneously converted into one of the three aforementioned enterprise forms.

However, since the joint-stock company form remains in place during the interim period while the monetary economy persists, it is desirable to enact transitional legislation allowing enterprises to change their organizational form at their own discretion during this period.

17.5. Launch of the First Three-Year Plan

The final stage of the initial phase of the economic transition plan is the launch of the First Three-Year Plan. This represents the very first step toward a sustainable planned economy—a crucial initial move upon which the success or failure of the planned economy as a whole will hinge.

However, as previously mentioned, the initial phase assumes the continued existence of foreign trade conducted via currency; thus, the First Three-Year Plan will incorporate such trade plans. In this respect, it possesses characteristics distinct from the economic plans of the "completion phase"—the stage reached after the economic transition plan concludes. In this sense, the first three-year plan retains elements of a transitional phase; depending on international developments, it is possible that trade planning measures may persist into the second and subsequent three-year plans.

In any event, the first three-year plan represents the culmination of the initial phase, serves as a driving force toward the realization of a sustainable economic plan, and establishes a precedent for future economic planning; therefore, it must be formulated with care and precision.

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

Chapter 17.3

👉The table of contents so far is here.

Chapter 17: Economic Transition Plan II: Initial Phase

17.3.  Abolition of the monetary system -part 2-: Unified trade mechanism and foreign currency settlement outlets

As noted previously, while abolishing the monetary system simultaneously across the board—based on a treaty—would ensure thorough implementation and minimize confusion, such a simultaneous rollout is practically difficult; consequently, a time lag in the global spread of the abolition is inevitable.

In such a scenario, trade relations with foreign nations that have not yet abolished their monetary systems would face disruptions. This poses a significant problem, particularly for regions with high import dependency. However, in cases of such individual abolition, it is the domestic currency that is eliminated, not foreign currency.

Therefore, the central bank overseeing the abolition must maintain foreign currency reserves necessary for trade settlements and ensure these funds can be utilized for ongoing foreign trade. To this end, trading companies involved in imports and exports would be integrated—or more loosely combined—to establish a provisional, unified trade mechanism to facilitate continued foreign trade.

Furthermore, although it does not constitute "trade" in the strict sense, a system could also be devised wherein this unified trade mechanism mediates instances where individuals purchase goods from abroad using foreign currency.

Apart from this, a practical issue that could arise from the time lag in abolishing the monetary system is the potential for an influx of foreign tourists seeking to acquire goods for free from regions where the monetary system remains intact.

Such "frenetic buying tours" from abroad are observed even under market economies and serve to disrupt supply-and-demand dynamics; however, if the monetary system were abolished and goods supplied free of charge, it is highly predictable that tourists from abroad—having heard the news—would flock to the area in large numbers. 

To prevent the planned economy from being disrupted during this initial phase, the approach will likely involve—setting aside permanent residents and long-term residents staying for a specified period—prohibiting the provision of goods free of charge to temporary foreign residents in principle, while exercising control through special measures that limit their purchases to specific outlets accepting foreign currency payments.

Thus, even during this initial phase when the monetary economy has been abolished, the continuation of trade means that a commodity-based exchange system involving currency persists in external relations; consequently, this period does not yet represent the realization of a fully established, sustainable planned economy.

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

Chapter 16.7.

👉The table of contents so far is here.

Chapter 16: Economic Transition Plan I: Transition Period

16.7. Preparation for the integration of agriculture, forestry, and fisheries

In a sustainable planned economy, agriculture, forestry, and fisheries, which are involved in food production, are treated separately as production plan Division B, distinct from production plan Division A for the core industrial sectors. However, the planning and implementation of production plan Division B are carried out by the integrated enterprise itself, such as the Agriculture, Forestry and Livestock Business Organization or the Fisheries Business Organization, similar to production plan Division A.

During the transitional period, the preparatory process for establishing the integrated enterprise that will be the planning body for Production Plan Division B will be carried out. In particular, the agriculture, forestry, and livestock sectors are closely related to the land system, and therefore overlap with the process of abolishing the land ownership system, as seen previously.

That is, it is assumed that farmland, forests, and pastures, which are factors of production in agriculture, forestry, and livestock, will all be liberated from the concept of ownership and placed under public management as ownerless property. In this respect, it is necessary to note that this is a completely different process from the land confiscation and distribution often carried out as socialist "land reform" policies.

Furthermore, the nature of the preparatory process will differ depending on the management form adopted by agriculture, forestry, and livestock at the start of the transitional period. In cases where self-employed family businesses are the dominant form of operation, establishing a consolidated enterprise will require a cautious process involving notification to each family and trial runs.

If cooperative organizations are well-established within the framework of self-employed family businesses, forming a consolidated enterprise by merging these cooperative organizations is relatively easy. In this case, the central cooperative organization will form the core.

In either case, traditional farmers, foresters, and livestock farmers will be incorporated as local managers or work instructors for agricultural, forestry, and livestock workers within the future Agricultural, Forestry, and Livestock Business Organization, requiring training to accompany this change in status.

On the other hand, if a semi-feudal system of large-scale land ownership still exists at the start of the transition period, former landowners who lost land ownership but were not absentee landlords and were actively engaged in agricultural, forestry, and livestock operations themselves may be rehired as local managers within the Agricultural, Forestry, and Livestock Business Organization. The basic process described above is largely applicable to the fisheries sector, but since the water bodies equivalent to land in the fisheries sector are not inherently subject to individual ownership, preparations related to the abolition of ownership rights, as seen in the agriculture, forestry, and livestock sectors, are not necessary.

However, if semi-feudal fisheries management systems, such as the net owner system by fishing vessel owners, still exist at the start of the transitional period, the process of dismantling such old systems will precede the establishment of integrated corporations.

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

Chapter 16.6.

👉The table of contents so far is here.

Chapter 16: Economic Transition Plan I: Transition Period

16.6. Preparations for the abolition of the land ownership system

Alongside the preparation for abolishing the monetary system, another major hurdle during the transition is the preparation for abolishing the land ownership system. This means transitioning to a system where land is managed as ownerless property, belonging to no one.

It is important to note here that this process is entirely different from the nationalization of land, which has often been implemented in various countries as a socialist land policy. Nationalization of land merely transfers ownership from private individuals to the state, while still retaining the concept of land ownership.

However, the abolition of the land ownership system, as referred to here, means liberating land from the very concept of "ownership," making it a natural object without ownership, similar to wild plants and animals. In essence, it means conceptually returning the Earth itself to its original natural state.

Therefore, this will be a legal measure without compensation, not a legal measure like the individual seizure of land with compensation. However, it also differs from socialist policies where the state or other public entities forcibly seize private land without compensation; it simply extinguishes land ownership in a legal concept.

However, this does not mean leaving the land in a primitive, unmanaged state; therefore, a system for publicly managing land must be established in each Zone. Preparations for establishing such a system will begin during the transition period.

The first stage is the enactment of the Land Ownership Extinction Law. This law will serve as the legal basis for abolishing the land ownership system. However, to avoid confusion, the extinction of land ownership will not be retroactive or immediate, but rather a future effect with a specified date.

The second stage is the establishment of an organization that will serve as the predecessor to the future Land Management Agency. While the Land Management Agency will be a public institution responsible for all matters concerning the public and private use and disposal of land that has become ownerless, it is simplest to establish its predecessor organization by integrating the current land registration agencies.

The land registry office is an institution responsible for the registration of the current status of privately owned land, based on the land ownership system. While it currently only handles the formal aspects of registration, it is a public institution that comprehensively grasps information related to the complexities of land ownership. Therefore, it is considered reasonable to reorganize it into the Land Management Agency.

Furthermore, the future  Land Management Agency will have police functions to crack down on land encroachment and seizure. Therefore, its predecessor organization should also establish a law enforcement department to prepare a system for cracking down on real estate crimes.

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

Chapter 16.5.

👉The table of contents so far is here.

Chapter 16: Economic Transition Plan I: Transition Period

16.5. Preparation for the abolition of the monetary economy

During the transition period, capitalism based on chain-reaction monetary exchange is not completely abolished; a considerable portion of it remains (residual capitalism). However, conducting trials to adapt to the new economic system, which is unknown to most people, is essential for achieving a smooth transition.

This preparation for the abolition of the monetary economy is both the most important point and the most difficult hurdle in the transition process. Failure to do so could lead to economic chaos, shortages of goods, and even famine, so it must be carried out with the utmost care and deliberation.

The ultimate goal of abolishing the monetary economy is nothing less than the complete abolition of the monetary system, but this is a task to be achieved in the initial period after the transitional period. In the transitional period before that, the monetary system remains, and without shock measures such as denomination, trial preparatory measures are taken.

As a preparatory measure during the transitional period, the preparatory organization for the Economic Planning Conference also conducts rehearsals for formulating economic plans that do not rely on monetary exchange throughout the transitional period, but this is, of course, a tabletop exercise in core production activities that are included in the scope of the planned economy. 

In contrast, a rehearsal for the free, non-monetary supply of consumer goods directly related to citizens' daily lives will be conducted through the local preparatory organizations for Consumer Business Cooperatives. This will not be a theoretical exercise, but rather an actual trial of the free supply of daily necessities, primarily food, and some miscellaneous useful goods, with quantity restrictions.

The specific items to be included in the trial will be a policy issue. While this partial free supply of goods resembles wartime/disaster rationing, it is not a temporary measure like rationing, but rather a preparatory measure for the upcoming abolition of the monetary economy. Therefore, the range of items will gradually expand as the transition period progresses.

Furthermore, while the supply of basic utility services such as electricity and gas is included in the responsibilities of the preparatory organization for the Economic Planning Conference as part of the energy industry sector, these services are essential even in the future planned economy. Therefore, it would be beneficial to begin trials of the free supply of basic utility services from the transition period stage, in conjunction with the free supply of consumer goods.

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

Chapter 16.3.

👉The table of contents so far is here.

Chapter 16: Economic Transition Plan I: Transition Period

16.3. Establishment of a preparatory organization for the Economic Planning Conference

After creating merged corporations that integrate the key industries included in the scope of the planned economy, the next step is to establish a preparatory organization for the Economic Planning Conference (hereinafter simply referred to as the preparatory organization), which will serve as the predecessor of the Economic Planning Conference, the body that will formulate and implement the future planned economy.

In a sustainable planned economy, the economic planning body is not an administrative central command body, but rather a collegial body jointly operated by the production business organizations themselves that are the subject of the planned economy. Therefore, the preparatory organization, which will be its predecessor, will also have a similar structure and will be composed as a collegial organization of the merged corporations that will be the predecessors of the production business organizations.

For this reason, the preparatory organization at its inception will likely take on the appearance of a kind of business association, but since the purpose of this preparatory organization is precisely to prepare for future economic planning activities, its main task will be to strive to develop the material and human resources necessary for the formulation and implementation of the economic plan.

As for the material resources necessary for the formulation and implementation of the economic plan, a large-scale computer system to be used in the plan is a typical example. As will be discussed again in a later appendix, economic planning is based on a sophisticated foundation of computational science.

On the other hand, the human resources base will primarily consist of training and deploying "environmental economic researchers (ecolonomists)," essential professionals who conduct economic analysis and forecasting from an environmental perspective in the practical application of economic planning, and "environmental economic analysts," who collect and analyze environmental economic data.

The Economic Planning Conference, which will be completed in the future, will function as a kind of economic decision-making body alongside the Common's Convention, which deliberates and decides on political issues. It will form a bicameral system with the Common's Convention, and therefore the preparatory organization will not be merely an incorporated association, but will have the legal status of a special public body.

For this reason, the preparatory organization will be organized as a conference with the executives in charge of each merged corporation as delegates, and during the transition period of the economic transition, conducting tabletop exercises of economic planning toward the formulation of the future formal first three-year economic plan will be an important task.

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

Chapter 16.1.

👉The table of contents so far is here.

Chapter 16: Economic Transition Plan I: Transition Period

16.1. Overview of the transition period

The transition period is the starting point of the economic transition plan, which aims to build a sustainable planned economic system that will ultimately lead to the abolition of the monetary economy worldwide. This period is the most important and delicate process, corresponding to the first step in moving away from the capitalist market economy.

In historical examples of overall economic system transitions, significant disruption often occurs in this initial step, corresponding to the transition period. This is because politically driven, hasty transitions are often forced through as a shock therapy-like, all-or-nothing approach.

To avoid such disruption, it is necessary to establish a planned and gradual transition preparation process using an uncompromising, gradual approach. Here, the term "gradual approach" is often synonymous with "compromising," resulting in incomplete transitions. However, gradualism and compromise are not synonymous. Here, gradualism means steady progress that avoids haste.

Specifically, the primary objective during this transitional period is to steadily prepare for the establishment of a planned economy system, which will form the cornerstone of a sustainable planned economy, and for the abolition of the monetary system.

In this process, it is rational to prioritize the establishment of a planned economy system before the abolition of the monetary system, which is the ultimate and most difficult hurdle. The starting point is the integration of key industries toward the establishment of production organizations that will be the mainstays of the planned economy.

While the details will be discussed later, in short, this involves consolidating the key industries, which currently mostly exist in the form of joint-stock companies, into a single comprehensive company, and establishing a preparatory organization that will serve as the precursor to an autonomous economic planning institution by future production organizations.

In contrast, the abolition of the monetary system is a process that must be handled with the utmost caution, but during the transitional period, it will begin with trials of the free supply of consumer goods without monetary exchange.

This system involves the free provision of goods, primarily everyday necessities such as food, and some miscellaneous useful items. At this stage, it resembles a rationing system coexisting with a market economy, but it covers a wider range of items than a rationing system, and the range of items covered is gradually expanded over the course of time.

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

Chapter 15.5.

👉The table of contents so far is here.

Chapter 15: Economic Transition Planning

15.5. Notification and trial implementation

A fundamental shift in an economic system significantly impacts the entire cycle of production, distribution, and consumption, making it prone to economic disruption. This is especially true with shock therapy-style transitions, but disruption can also occur with gradual methods.

While there are no technical measures to completely prevent such transitional disruption, minimizing it as much as possible requires implementing notification and trial implementation procedures at each stage of the transition.

Notification and trial implementation involve explaining the overall process and specific measures in the transition, ensuring full information disclosure, and then proceeding with the transition process while experimentally implementing each measure.

Among these, notification, which involves information disclosure, is a crucial key to minimizing disruption during the transition. This is because economic actors, including individuals, can anticipate and prepare for what is to come through notification. In this sense, being notified can be considered a right for all economic actors. 

There are two main types of notifications: those for specific industries and those for individual households. However, simply publishing a single notice in a public bulletin or on an official website is insufficient; both require written documentation and individual distribution. This is why they are called "notifications."

Notifications for industries aim to encourage businesses to proactively prepare for the transition through a circular document detailing the mechanisms and transition process of a sustainable planned economy.

Notifications for individual households aim to alleviate anxieties by distributing booklets that clearly explain the mechanisms of production, labor, and overall life under a sustainable planned economy to all households.

Based on these notifications, individual measures in the transition process will be implemented systematically. These transition measures may remain theoretical exercises or be actually implemented; the latter may be implemented partially or fully.

In that sense, the measures during the transition period are experimental, but within the three stages of the transition process—transition period → initial phase → completion phase—the transitional period is the most experimental, followed by the initial phase and completion phase, which are envisioned as moving towards full implementation.

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

Chapter 15.4.

👉The table of contents so far is here.

Chapter 15: Economic Transition Planning

15.4. Liberation from the "concept of money"

In the transition to a sustainable planned economy that abolishes the monetary economy, while technical policies to ensure a smooth transition are important, it is also essential to promote a kind of conscious revolution that consciously liberates people from the concept of money that they almost unconsciously take for granted.

In the modern world, the monetary exchange system, in which all goods and services are acquired in exchange for money, is firmly established. People unconsciously take money for granted to the same extent as breathing air, making it extremely difficult to envision an economic system that operates without monetary exchange, but rather through free exchange or bartering.

In this regard, how humans acquire the concept of monetary exchange after birth is not fully understood, and remains a mystery, much like the process of acquiring one's native language after birth. Since there is no evidence of systematic monetary education being implemented at home or school, the majority of people's developmental process involves an unconscious acquisition process at the same level as acquiring one's native language, and by a certain age, they naturally become able to make simple purchases. 

Freeing people from the monetary concepts they have naturally acquired is not easy. While the acquisition of monetary concepts may occur unconsciously, liberation from them requires conscious and rigorous training. Examining the process and methods of liberation remains a largely unexplored challenge in behavioral economics.

Here too, if we were to adopt a shock therapy approach and immediately abolish the monetary economy, some people might react by hoarding goods in an attempt to monopolize them, which could lead to severe shortages. While desire for material desire is regulated unequally by the amount of money one holds under a monetary economy, it must be regulated by a different, fairer method under a non-monetary economy.

Whether material desires are acquired later in life or innate needs inherent to human beings as biological beings, controlling such desires is a crucial issue directly related to the success or failure of a sustainable planned economy, and, alongside liberation from the concept of money, is an inseparable challenge in behavioral economics.

While acknowledging these challenges, it is also necessary to incorporate liberation from the concept of money into the economic transition plan. In general, the smoothest transition would be to proceed through stages starting with information provision and education, followed by limited trials of a non-monetary economy, and finally to the full implementation of a non-monetary economy (For details, see Chapter 16 and below).

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

Chapter 15.3.

👉The table of contents so far is here.

Chapter 15: Economic Transition Planning

15.3. Transitional approach or Special Economic Zone approach?

During economic transitions, special economic zones are often established, granting specific regions special legal status and implementing different economic systems from other regions. This is often seen in the process of transitioning from a controlled economic system to a free-market economic system. China has utilized this most extensively.

This approach mitigates the economic chaos that often ensues when transitioning economic systems abruptly, and also has the significance of adapting the socio-economic system to the new economic system by first conducting trials in limited areas within the special economic zone.

Theoretically, such special economic zone systems can also be applied when transitioning from a free-market economy to a sustainable planned economy. For example, one could designate certain areas in urban and rural areas as "planned economic special zones" and conduct pilot trials of a sustainable planned economy in these limited areas.

However, regardless of the direction of the special economic zone system, granting special economic privileges to residents and registered corporations in designated areas violates the principle of equality before the law.

In particular, since a sustainable planned economy aims to abolish the monetary system, the unfairness of abolishing the monetary system only within special zones, and the resulting economic disruption, are not considered appropriate.

When transitioning to a sustainable planned economy, a uniform system transition across the entire region should be envisioned, rather than a special zone system. This approach can be called a "transitional approach" in contrast to a "special zone approach." A transitional approach is a method of systematically transitioning the economic system through stages, as we saw previously.

Incidentally, another method contrasted with the "transitional approach" is the "shock approach." This involves an immediate transition to the new economic system without stages, a kind of shock therapy. While there are examples of this being applied to Russia after the dissolution of the Soviet Union, when transitioning to a capitalist market economy, it resulted in significant economic disruption at the expense of citizens' lives.

In this respect, the disruption that would be expected from immediately abolishing the monetary economy would be far greater than that of a rapid shift to a market economy, making such an approach out of the question. Ultimately, a transitional system accompanied by a meticulous economic transition plan is considered to be the most effective way to ensure a smooth transition to a sustainable planned economy.

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

Chapter 15.2.

👉The table of contents so far is here.

Chapter 15: Economic Transition Planning

15.2.  Duration of economic transition plans

Generally, a comprehensive transition of an economic system requires a certain amount of time. Therefore, unlike economic plans that are based on a few years, economic transition plans must be gradual and based on a fairly long-term perspective.

Furthermore, it will undoubtedly take an "era" to transition from a capitalist market economy, the ultimate goal of a monetary economy, to a sustainable planned economy, the ultimate goal of which is the complete abolition of the monetary economy, a historic transformation for humankind.

While it is difficult to quantify how long this period will actually take, generally speaking, the longer an economic transition plan will take in proportion to the level of progress made in the capitalist market economy.

Therefore, the more delayed a country's capitalist economic development is and the more likely it is to be classified as a "developing" country by current standards, the shorter the economic transition period. Conversely, the more "developed" a country (i.e., a developed capitalist country), the longer it will take to transition to a sustainable planned economy, becoming a "(reverse) developing" country. Although the length of each stage may vary, the economic transition planning process can be broadly divided into three stages: transitional, initial, and completion, with the stage at which a sustainable planned economy is fully established as the final goal. A "maturity stage" beyond completion is also conceivable, but given the nature of the transition process, it is out of the question here.

The initial transitional period is the very center of the economic transition planning process, as rushing through this phase could lead to economic collapse, so caution is required. It is particularly taboo to hastily abolish the monetary system, which modern "civilized people" have almost unconsciously ingrained in their bodies.

As we will discuss later, one issue at this stage is whether to introduce a regional pilot system such as a special economic zone system. In any event, this transitional period is the most critical stage, holding the key to the success of the economic transition.

The subsequent initial period is the period after the transitional period when the first three-year economic plan is implemented and the sustainable planned economy gets underway. During this period, the transition to a sustainable planned economy is probably still limited worldwide, with some countries still maintaining capitalist market economies, so the transition has not yet been complete.

On the other hand, although this period is the initial stage, insofar as a sustainable planned economy has already been launched, it could also be said that the period of the economic transition plan has passed. However, due to the circumstances mentioned above, the economic transition plan has not yet ended, and it could also be said to be an extension of the plan.

Once this initial stage has passed and a sustainable planned economy has been established worldwide, the completion period will begin. At this stage, the monetary economy will finally be almost entirely abolished worldwide, and the economic transition plan will come to an end.

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

Chapter 15.1.

👉The table of contents so far is here.

PART IV: 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.

Chapter 13.2.

👉The table of contents so far is here.

Chapter 13: Planned Economy and Working Life

13.2. Labor standards

Labor standards in a capitalist market economy are governed by the correlation between wages, which are the compensation for working (i.e., the price of labor as a commodity), and working hours. In other words, the basic principle is to guarantee wages commensurate with the hours worked and to regulate working hours commensurate with wages. However, in reality, this includes a large amount of unpaid work time, which is the source of "surplus value" in the Marxian sense.

Labor standards under a communist planned economy based on unpaid labor lack a compensation system known as wages, so labor standards are governed solely by working hours. While the determination of legal working hours is a policy decision, if a planned labor allocation system is established, so-called work-life balance can be implemented uniformly as part of a labor plan, rather than simply a matter of slogan or corporate effort.

For example, it would not be impossible to make a four-hour workday (half-day work), half the current number, the norm, in combination with planned work sharing. When it comes to unpaid work, discretionary work systems become easier to introduce and expand, and one might wonder whether regulations on statutory working hours will become meaningless. However, when it comes to unpaid work, time is the only absolute regulatory framework.

Furthermore, unlike labor standards in a market economy, which tend to focus on wage issues, a planned economy will likely cover a wide range of labor issues that cannot be resolved through wage issues, such as work environment issues, measures to prevent workplace harassment, and employment discrimination based on gender or other attributes.

Because capitalist labor standards are a type of economic regulation that is  late-coming and external to capital's activities, profit-seeking businesses have a hidden intention to circumvent these regulations as much as possible. This necessitates a labor standards inspection system backed by penalties, but even this often does not function effectively.

Communist labor standards are fundamental and inherent value standards, and businesses that do not need to consider profits have no incentive to circumvent them. Therefore, although it is not true that a labor standards inspection system will no longer be necessary, a system such as labor standards inspectors with police powers will no longer be necessary, and labor standards will likely be guaranteed through something like an internal arbitration system within companies (as will be discussed later in Section 4 of this chapter.).

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