3.2.2 Association of the Economy
A larger social community offers stronger possibilities of development to the economy and, accordingly, a greater prosperity of society. At the same time, it requires a more concerted effort for the accomplishment of a coordination of collective acting. Presently, the money in circulation mainly regulates relations in the production. The money in circulation forms the micro- and macro-economic policy of the society.
The micro-economic policy regulates the supply and demand of goods and labour on the market. Such a policy is the product of free purchase and sale of goods by individuals or enterprises. The free market is hard to predict, which creates great difficulties in establishing a stable economy. Only a highly developed form of planned economy can accomplish a fully stable micro-economic policy. Such an option requires a production by order of individual consumers. As the society does not have for the time being, such an option, it has to accept the market economy with all its advantages and disadvantages.
The macro-economic policy regulates the economy in the state. The state leadership conducts such policy in order to satisfy the state needs. The state macro-economic policy regulates the monetary, fiscal, credit, income, customs and other policies. The task of the macro-economic policy is to ensure the growth of productivity in the economy, to bring the balance of payments of the state into equilibrium, to form social security of the population, and a balance between the supply and demand of commodities and labour on the market. The task of the state's regulation of economic relations is to produce a stable and efficient economic policy that will bring prosperity to the population.
States with the capitalistic system support the free market economy and for this reason have little operative possibility in influencing the economic stability and prosperity of the economy. In such states, the macroeconomic policy tries to make up for the deficiencies of uncontrolled money circulation by way of setting monetary policies. Then it can consciously manage monetary flows and, thereby, the state economy.
The state is a heavy possessor and consumer for the needs of administration, national defence, all forms of insurance, investment, commodity reserves, various subsidies, etc. By earmarking the money it also earmarks the economy. In addition, the state employs an enormous number of people. It can also increase this number by organizing a planned production for its needs. Such an economy offers the most stable form of business operation and states frequently practice it as an escape out from economic crises. However, big businesses fiercely oppose state enterprises because they take profits away from them, and such an economy gets largely privatized everywhere in the world under the influence of the rich and powerful. They are successful in this regard because large-scale state-owned systems have a markedly developed bureaucratic structure that reduces productivity. It is really fair to say that present-day state services are often inefficient as was the centralized socialist system of doing business. On the other hand, the efficiency of work organization in large systems is not an insurmountable problem. The stronger proof is the permanent strengthening and merging of large private corporations, which have more and more workers, operate very well and can even more so improve.
Furthermore, each state leadership could, for example, fully abolish unemployment by enacting the laws that would shorten the length of work hours proportionately to the rate of unemployment. Naturally, the problem is that full employment makes work more expensive and thus reduces the profit of enterprise owners. Big businesses give great support to the political parties winning elections, and such parties will not support the interests of those deprived of their rights. They will not realize full employment of workers and a balanced distribution of conveniences and inconveniences in the society.
However, the leadership of each state tries to ensure its economic prosperity but they have not found general socially acceptable methods, and lack operative possibilities that can achieve economic prosperity and stability of the society. Present-day state leaderships are not sufficiently successful as there is no mechanism able to monitor and conduct a satisfactory economic policy of the enormous independent turnover of goods and labour.
The newly proposed system introduces new elements able to tailor a satisfactory economic policy. The proposed system is based on the agreement of the most productive manufacturers, which allows maximal productivity of the economy and a relative stability of the system. The stability of the new economic system will be based on a steady production, stable prices of products, stable incomes and the known needs of the population. In this way a stable production and consumption will be formed, as a precondition for the stability of a state.
The association of communes into a state allows a higher degree of labour distribution with full employment of workers as demonstrated in the commune. Leadership will direct the work in the manner so as to maximally use of regional and manufacturing possibilities of certain communes. In the centralized system of production organization, state leadership will follow the interests of the people and aspire to enterprise association. This will help to diminish, and later completely abolish the competition of enterprises, with equal production programs. Vertical hierarchical subordination will ensure a rational production and a more stable business activity.
The new system will garner large productivity by lowering enterprise competition to the level of work posts. Within the state, a unique principle of exercising the right to work by the work competition will be in place. Any inhabitant may apply for any work post in the state. The workers who would like to work in other communes might previously be required to announce their intentions to authorized managers in order prepare work posts for such workers. However, their freedom of working choices cannot be questioned. The work competition will, on one side, give an objective value of each work and, on the other, improve the productivity of each work post. The population will in this way achieve more conveniences than in capitalism.
Free work choice in the state also opens up the problem of excessive migrations of the population from economically less developed to economically more developed regions. Such migrations would also make the planning of production more difficult, and reduce stability in doing business.
State leaders will be required to take into account the interests of all inhabitants of all communes when organizing regional economic productions. Their program will be accepted by the consensus of the political parties of state parliament. However, if the state managers are not successful in practice that would cause large migrations to regions with privileged status. Also, that would certainly increase work competition for the limited number of work posts in privileged communes and without doubt that would dissatisfy many people. State leaders, who would not offer an equal chance to all communes to develop, would receive negative evaluations from dissatisfied people. Negative evaluations would decrease the incomes and quantity of past labour points of the bad leaders. Unsuccessful leaders will for the first time be really responsible to the people and therefore would have to leave their positions. Only the most skilful and brave people would dare to work in leadership. This is a good guarantee for the state prosperity.
When the just distribution of work is established among communes, the system itself will completely solve the problem of working migrations from non-developed to developed communes with the past labour points of workers. Workers in non-developed communes have a less valuable past labour because their contribution to the building of the economic system is smaller. They also accomplished a lower productivity and, therefore, realize smaller profit and income. Smaller incomes lead to a smaller quantity of past labour points as a permanent form presenting their overall power. By migrating from one commune to another, the worker takes with past labour points that form their income. Workers from non-developed regions have a smaller quantity of past labour points and by moving to work in developed regions they will realize a relatively equal income for the same work as in the non-developed communes. By applying such a system, income will not be the factor that will stimulate workers to migrate from non-developed to developed communes.
Hence, migrations of workers will be possible, but from the point of view of income and past labour points they will be non-stimulating. Workers will be more stimulated to remain in non-developed regions, as such regions can on the basis of grants intended for economic development achieve a faster increase of profit and, consequently, a larger increase of incomes and of quantity of the past labour points.
The system envisages in its entirety, an exact establishment of responsibility of the workers, enterprises and communes for the realization of the envisaged productivity, as a guarantee for the survival of itself as demonstrated in the commune. The responsibility is borne by income and past labour points of workers. The system also envisages the establishment of responsibility by way of mutual assessments of inhabitants, consumers, associations, arbitrations and evaluation committees at the level of the state. This will be a guarantee for the establishment of responsible relations in the state's economy and for the prosperity of such a state.
The proposed system can ensure a considerably higher degree of stability in the society by the pooling of money. In this way, disruptions in market trends can be more evenly distributed. The new system forms a single mass of money that will be elastically distributed onto all forms of consumption according to market and democratically established principles.
Thus far, it has been state leadership that has regulated the macro-economic policy of the state, i.e. the fundamentals of social relations. This means that autocrats have always ruled the society. As autocrats often have specific interests in relation to the population, the population may easily stay dissatisfied with the decisions made by autocrats. Moreover, the decisions made by authorities are alienated from the population and, therefore, the population cannot accept them as their own.
One may say that the present-day macro-economic policy has reached its maximum efficiency and that further development of economic relations can be allowed by further development of economic relations in the economy. In a developed democratic system each inhabitant will participate in creating the macro-economic policy of the state by direct participation in the distribution of collective money.
Thus, by the distribution of collective money the people will directly form a new economic policy of the state that will replace the monetary, fiscal, credit and income policies of the present systems. Moreover, it will create a new production and development policy of the economy and, consequently, of the society. Direct distribution of collective money will drastically reduce alienation in the process of production and distribution, while the economy will get the macro-economic orientation guidelines of its own activity and thereby the elements for a higher degree of a stable business activity.
The state issues money. The total supply of money in circulation needs to be formed, approximately, between the value of the total commodities produced and the total realized profit on the market, as described in the commune. The system allows a relatively easy control of the money in circulation and, thereby, strong control over inflationary and deflationary processes, which ensures stability in the business activity of the economy.
The entire mass of money envisaged for the turnover of commodities in the state is distributed to cash assets intended for the communes, and cash assets intended for the state. The ratio of the money intended for the communes and for the state is determined directly, by democratic statements made by all inhabitants of the state in the function of individual voting powers within possible value ranges set by the state leadership.
Cash assets intended for the communes are distributed proportionately to their productive power of communes, in the first place proportionately to realized profits on the market. Also the distribution of funds among the communes will be made in proportion to other factors that determine income, such as environmental pollution, crime, etc. which have already been defined in the chapter: “Income Distribution”. This means that each commune will have at its disposal the quantity of money it deserves based on its entire production productivity.
By pooling the money earned in all communes, it is possible to make small deviations from the communes' realized profit as a way to ensure a stable income of all communes. Namely, if in the case of a natural catastrophe or bad operating results, a commune registers a significant loss of money, the income of such a commune can be covered from the collective fund and gradually reduced until the economy in the commune becomes consolidated, and would then again rise. In this way, the system ensures economic stability of all communes.
The population of productive communes may assess the spill over of income between and among the communes as unfavourable. However, it may be assumed that inhabitants of all communes will accept such pooling, as the spill over would not be significant nor frequent, and would ensure the stable income of the communes. The money realized for the needs of the commune will be distributed in a fully sovereign manner by direct agreement of the population as already described.
Monetary assets intended for the union of communes serve for the collective consumption and development needs of the whole state. Such assets are formed and distributed by direct voting by all inhabitants of the state. It is worth mentioning in this connection that more assets intended for the state diminish proportionately the quantity of assets intended for the communes. In the portion of money earmarked for the state needs, communes lose their economic sovereignty.
Money assets intended for the collective commodity consumption of the state are distributed per groups, as are the assets intended for collective consumption in the commune. The only difference is that the assets satisfy the needs of the state. Such assets are used for the maintenance and construction of the state administration facilities, for state defence needs, for the needs of construction and maintenance of facilities of great importance, for health care, education, science, culture and sports, main transport routes, infrastructure and other facilities necessary for all inhabitants of the state, that represents a too heavy investment burden for an individual community. In this way, a more rational and more effective use of the collective money is ensured.
Assets are used according to the possibilities, and are directly distributed by the population of the state in the manner identical to the one described in the commune. Direct expression of inhabitants' views by votes is, perhaps, the most important measure of the system. The population having ruling power will try to get to know the needs of its state. Such a system will contribute to the disalienation of the population from the state, which will therefore accept it as its own to a greater extent.
Assets intended for the economic development of the state serve for the developmental needs of the associated economy that is located across several communes, for large investments of some communes, as well as for all enterprises unable to realize the assets that would be earmarked for economic development in their communes. Assets are distributed to enterprises according to the magnitude of the development coefficient in the same way as in the commune. Enterprises envisaging a larger profit on the basis of a smaller quantity of necessary cash assets over a shorter turnover period will ensure the necessary amount of money intended for economic development. Cash assets are allocated in the form of grants, as they are renewed from the revenue of the state in each accounting period. The whole state will then be actually associated in a single big company, and companies do not have to repay to themselves invested money. Enterprises are bound to realize the envisaged monetary gains within a determined period of time. In this way, cash assets intended for economic development would achieve their objective, and the whole system would find its sufficient justification.
It may be assumed that the economically developed communes will be less interested in expanding their development, as their living standard will be so high that it may approach the level of saturation. A rise in productivity of a developed economy may entail a greater risk in terms of profit realization due to the saturation on the market and insufficient purchasing power of non-developed communes. This fact offers a better chance to non-developed communes for ensuring more money assets needed for development, than they could themselves provide for this purpose. By increasing productivity, non-developed communes will increase their purchasing power and thus expand the state market. The system will in this way contribute to a more balanced development of the entire state.
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November 13, 2013