Orion Digest №27 — Hybrid Planned Economy: Microeconomics

We have covered how a Hybrid Planned Economy (HPE) could function on a macroeconomic scale — National Market Bureaus (NMB’s) would create and oversee Regional Market Bureaus (RMB), which allow for registration of citizen-managed businesses that compete in an RMB-regulated market. The operation of the market will be reported back to the NMB, which will analyze trends and consumer demand for goods and services and will implement changes in funding and individual direction accordingly. However, how would these businesses be organized, and how would a civilian interact with the government system of HPE?

In our typical member nation within the eco-socialist federation, the average citizen is registered with their national and regional government, and until the time at which they are able to find employment on their own, they are put on track for employment with a government registered business, or are provided welfare and at least food and housing. If a citizen wants to create their own business, they will draft a business proposal to send to their RMB, which acts as an application for usage of public production resources and funding. Once their application is approved, they will be given capital to begin building their idea, which includes securement of machinery, housing, and hiring of staff.

One of the first regulations that our entrepreneur will be accountable to is the concept of the democratic workplace. They will not own the business, or have sole management — every member of their company will have partial ownership in the company they work for, and business decisions will be made by democratic assembly, which can have higher management through election. This is not a new concept — worker co-operatives already exist in capitalist economies, and are widely successful, though rather obscure among business practices. This democratic structure of management allows workers to have a say in what they produce and how they operate, while also creating a management staff to ensure that progress of the company moves forward.

In a democratic workplace, decisions that would disadvantage the workers will be naturally discouraged; to make such a decision would require the workers themselves to intentionally vote to disadvantage themselves, so as long as they act in their own self interest, the operation of the business will put people first. If the protection of staff is a priority, then fewer risky decisions in the interest of profit will be made, and thus, the tendency of businesses to enlarge themselves could be minimized, keeping us at lower levels of growth that would assist environmental de-escalation programs.

The exact specifics of profit distribution would have to be decided by the nation and their respective Market Bureaus, but the profits of a registered business would be used both to provide livable wages to the workers, but would also be partially sent back in the form of taxes to the government, to help provide for the funding and capital for start-ups and businesses of interest. The rest could be used for reasons of expansion, though to what level this excess profit allows for expansion would affect the annual capital provisions from the RMB. Taxation of the profit of government registered businesses would enable lower taxes upon citizens (the goal of such a society would be to prevent mass discrepancy in wealth, so while wealth would be proportionate to taxes, ideally the difference would be negligible as we move towards equal wealth).

A balance would need to be struck between prices set by businesses (another factor that NMB’s could control through their annual review) and the wages afforded to workers in order to ensure that the wages were livable, as if the government has to provide welfare and housing to those in poverty regardless, it would do them little good to send people into poverty with unaffordable prices. Taxation would also have to be taken into account, and so, much of the difficulty in creating an HPE system would revolve around the delicate balance of business taxation, salary taxation (one option available is to have no salary taxation, and simply have heavier taxes upon business profits), prices, and wages. The flipside of having the economy feed directly into the government is having the average quality of life become something the government must maintain, and at every level, this government will be democratic and accountable to the very same people who rely on it, so there is no choice but to find an equitable balance.

The complex job of managing so many businesses would require a vastly expanded bureaucracy, but this problem could open up a solution to others — a larger bureaucracy means additional job opportunities created for citizens displaced from dissolved companies, or simply unemployed citizens unable to find work elsewhere. The world federation could establish funding to national bureaucracies to support the hiring of workers to keep the market running, supplied by government (public) ownership of production resources, which would consist of pre-federation wealth and general capital owned by the government and given to citizens in exchange for a portion of the profit.

Any citizen within a eco-socialist federation would then be presented with multiple options for career work, and would have a degree of control and input over the world around them — they would be able to vote and run for government at any level, and either create or work in a democratic business or for the bureaucracy that supplies and manages the market. It’s also important to remember that as much effort as it would take to create a HPE structure, the output would only be need-based while we focus on de-escalating to ZPG, so when we speak of work, we do not mean 12 hour shifts and long, backbreaking work weeks. The goal of any moral system of economy is to have people do skilled work of their choice, and have as much time for personal development and recreation outside of that environment as possible. The purpose of life is not to work, but with an HPE, we can make an economy that works for the people.