It is now high time for the revolutionary proletariat finally to acquire a
definite conception of the social order with which it intends to replace
capitalism. It no longer suffices to push this task to one side with such
facile remarks as that “the victorious working class will develop hitherto
undreamed of powers, once it has struck off the fetters which at present bind
it”. For one thing, this is an extremely uncertain vision of the future. More
to the point, it is in any case quite irrelevant. Indeed the opposite is true.
Each day brings fresh evidence to prove that the capitalist economy is moving
with giant strides along the path of concentration, and only those afflicted
with blindness could fail to recognise that sooner or later it will find its
highest and most complete form in the State. This then is the path of
development by which the power of capital reaches its ultimate degree of
concentration, and it functions simultaneously as the form of alliance binding
together all sections of the ruling class, including the leadership levels of
the old workers’ organisations, against the proletariat. It is in this
direction that the propaganda conducted on the broadest possible basis by
Social Democracy and the trade unions on behalf of “economic democracy” – a
propaganda which would be better described as the opening up of measures to
enable the leaderships of the old workers’ organisations to exercise a degree
of control over the economy through the agency of the State – is aimed. The old
workers’ movement is unfolding its economic programme, its proposed planned
economy, and its “socialism” thereby acquires form and structure; but what
becomes amply clear along with these revelations is that the proposals put
forward represent no more than a continuation of wage-labour under a new guise.
And now it is also possible to declare with certainty that so-called Russian
State communism is no more than a somewhat more radical means of implementing
this new form of wage-labour. We revolutionary proletarians therefore have no
choice. Before the eyes of the broad masses of the working class a way forward
for their actions and struggles is being presented which will allegedly lead
then to socialism or communism, to their liberation. And it is these selfsame
masses of workers whom we must win to our side, to whom we must show their own
autonomous goal, for without whom there can be no revolution and no communism.
And this in its turn we can only do when we ourselves have a clear conception
of the mode of production and structure of the communist society for which we
fight, and for which we are prepared to devote our lives.

There is however yet more to be said on this theme. Even bourgeois scientists
have recognised the approaching catastrophe, and they are even now preparing
the reconciliation of capital with the idea of a socialised economy. They
recognise that the days of private economic management are numbered and that
the time has come when thought should be devoted to the task of maintaining
exploitation by means of new forms of socialised management. Characteristic of
this tendency is a work by the bourgeois economist E. Horn: The Economic Limits
of the Socialised Economy, in which the view is expressed that the abolition of
private property in means of production does not necessarily entail the end of
capitalist production. It is for this reason that, in the final analysis, the
elimination of private property in means of production holds no fears for him
at least, because according to his view the whole capitalist mode of
production, together with its market mechanism and the process of surplus-value
formation, must be maintained at all costs. For him the problem is not whether
but how private property in means of production is to be made obsolete.

It is of course axiomatic for a bourgeois economist such as E. Horn to attempt
to prove the impossibility of communism. The fact that he seeks to achieve this
by reference to the theory of marginal utility developed by  Bohm-Bawerk
renders it unnecessary for us to examine this in any greater detail. In our
opinion, N. Bukharin has done everything that is necessary towards the
refutation of this theory in the book Die politische Oekonomie des Rentners
(The Political Economy of the Rentier Class). But the manner in which Horn
criticised the official theory of the communist economy is worthy of note. He
describes this as an economic order with negative characteristics, because, in
that official theory, communism is defined by what it is not, and never, in no
single case, according to the actual categories by means of which this economy
will be ordered. The characteristics of the communist economy are stated as
being that it has no market, no prices and no money. In other words, everything
is negatively defined.

The spontaneous activities of the workers in their role as
producer-distributors will fill out the spaces left by this negative
characterisation, replies Neurath; Hilferding for his part refers this task to
the State commissars with their statistical apparatus governing production and
consumption; as a final resort, refuge is sought in fulsome references to “the
creative energies of the victorious proletariat”, which will solve problems “at
the flick of a wrist…”. Here we have reached the fitting point at which to
recall the old adage: “When concepts fail to correspond with reality, at the
critical moment the imagination supplies the appropriate word”.

It may at first glance appear surprising that the so-called marxist economists
have paid so little attention to the categories of communist economy, in spite
of the fact that Marx himself has set down his views concerning this in a more
or less complete, even if extremely condensed, form in his Critique of the
Gotha Programme. Only, however, at first glance. The “disciples” of Marx did
not know what to make of his grandiose vision, because they believed that they
had made the discovery that the basic preconditions for the administration and
management of the communist economy would develop along lines so completely
different from those conceived by Marx. His “Association of Free and Equal
Producers” was transformed in their hands into “State nationalisation”, for did
not the very process of capital concentration organic to the capitalist economy
lead with absolute certainty to this end? However, the revolutionary years
1917-23 revealed for all to see the forms through which the proletariat seizes
control of the means of production, and the Russian Revolution proved that two
opposite perspectives lay at the heart of the revolutionary development there:
either the Workers’ Councils succeed in maintaining their power in society, or
that power falls into the hands of the centralised economic organs of the
State. Thus the broad lines of development of the communist society as set
forth by Marx have once again proved themselves to be correct.

Concerning the Critique of the Gotha Programme, the following information is
relevant : in the year 1875, measures were set in motion to bring about a
fusion of the General Workers’ Union of Germany, which as a general rule
followed the doctrines propagated by Ferdinand Lassalle, with the Social
Democratic Workers’ Party of Germany, for which purpose a draft of the
Programme to be presented for adoption at the Unity Congress, to be held at the
small Thuringian town of Gotha, was drawn up. Both Marx and Engels subjected
this draft to an annihilating criticism. Marx expressed his criticism in a
letter to Brake, and subsequently named this manuscript Marginal Notes on the
Coalition Programme. It was only after 1891 that this criticism became more
widely known, and this happened when Engels was instrumental in bringing about
its publication in Neue Zeit (New Times) , Vol 9, pp. 561-575. For many years,
nothing more was heard about the matter until in 1920, again in 1922 and then
in 1928, new editions of this text were published (all relevant dates have been
taken from Program-Kritiken (Critical Notes on the Programme), or, as it is
better known in English, the  Critique of the Gotha Programme. In fact, these
“Marginal Notes” only came to our notice after we had concluded our study. They
correspond so closely with the outline given here that our work to some extent
appeared as if it were no more than a contemporary elaboration of Marx’s
conception. We will content ourselves with showing but one example of this
close correspondence, namely at that point in Marx’s text where Marx
polemicises against the view, taken by the Unity Programme, that each worker
should receive the “undiminished proceeds of his labour”:

     “Let us take first of all the words ‘proceeds of labour’ in the sense
     of the product of labour; then the cooperative proceeds of labour are
     the total social product.
     From this must now be deducted:
     First, cover for replacement of the means of production used up.
     Secondly, additional portion for expansion of production.
     Thirdly, reserve or insurance funds to provide against accidents,
     dislocations caused by natural calamities, etc.
      These deductions from the ‘undiminished proceeds of labour’ are an
     economic necessity and their magnitude is to be determined according
     to available means and forces, and partly by computation of
     probabilities, but they are in no way calculable by equity.
     There remains the other part of the total product, intended to serve
     as means of consumption.
      Before this is divided among the individuals, there has to be
     deduction from it:
     First, the general costs of administration not belonging to
     production.
     This part will, from the outset, be very considerably restricted in
     comparison to present-day society, and it diminishes in proportion as
     the new society develops.
      Secondly, that which is intended for the common satisfaction of
     needs, such as schools, health services, etc.
     From the outset, this part will grow considerably in comparison with
     present-day society, and it grows in proportion as the new society
     develops.
     Thirdly, funds for those unable to work, etc., in short, for what is
     included under so-called official poor relief today.
      Only now do we come to the ‘distribution’ which the programme, under
     Lassallean influence, alone has in view in its narrow fashion,
     namely, to that part of the means of consumption which is divided
     among the individual producers of the cooperative society.
      The ‘undiminished proceeds of labour’ have already unnoticeable
     become converted into the ‘diminished’ proceeds, although what the
     producer is deprived of in his capacity as a private individual
     benefits him directly or indirectly as a member of society ” ( K.
     Marx: Critique of the Gotha Programme; Progress Publishers, Moscow;
     1978; p.15 )

That for which we search in vain amongst the writings of any of the official
marxist economists is what first hits the eye in Marx’s representation: as with
capitalism, he sees the economy of the communist society as a closed,
self-contained process, at the heart of which a law-governed circuit is taking
place. The economic necessity to reproduce and extend the means of production
consumed is the foundation on the basis of which the distribution of the total
product is conceived. Furthermore, the idea would never have occurred to Marx
that this necessary process of reproduction could be made the personal
responsibility of State commissars, that is to say, could be purely
subjectively decreed. On the contrary, it is an objective process, and it is a
self-evident necessity that its unit measure of regulation and control must
proceed out of production itself. Following upon that, when considering those
general social outgoings which can be satisfied only socially and which will
represent deductions from the “full proceeds of labour” – the maintenance of
those incapable of work, etc., – with Marx there is no sign whatsoever of any
conception which envisages that a mountain of statistics would be necessary for
this to be done! On the contrary, these outgoings are obtained by a simple
deduction from the individually consumed product. If one recalls the fact that
he proposes as the measure for this distribution the individually contributed
labour-time, the picture becomes complete. For all these reasons we believe
ourselves to be fully justified in saying that the work which we have carried
out is no more than the consistent application of Marx’s own theoretical methods.

From Money to Labour-Time Computation

In the course of the various discussions we have held concerning the
fundamental principles of communist production and distribution, there were two
arguments which, in the main, were brought to bear in criticism of our work.
The first related to the system of labour-time computation, and the second
argument was that the foundations of communist society outlined in this study
were “utopian”. We now intend to show how history itself has refuted both these
arguments.

The abolition of money and its replacement by average social labour-time – the
so-called “labour certificates”, is a revolutionary act and, providing that the
working class can apply the necessary degree of social persuasion, could be
brought into being within a few months of the establishment of proletarian
power. It is no more than a question of social power, the social power of a
class – power which only the entire proletariat can adequately bring to bear.

To achieve this, a party dictatorship is an absolutely inappropriate and
inadequate instrument. A party dictatorship can be a product only of a
development towards State communism.

In the first phase of its existence, the new proletarian society will almost
inevitably require vast quantities of money, which it will procure for itself
in all likelihood by the same means as those employed by the capitalist States
in central Europe in the immediate post-war period: that is to say, by means of
the printing press. The result, of course, will be a strong monetary inflation,
leading to soaring prices of all products. The question to be asked in this
connection is not as to whether or not such consciously motivated inflation is
desirable; if it were to be avoidable then the proletarian power would
certainly do everything to prevent it. The phenomenon of devaluation of the
currency is, however, an unavoidable consequence of each and every
revolutionary movement which succeeds in any degree in overthrowing existing
society. Just how the revolution then proceeds further – whether it leads to
State communism or to the Association of Free and Equal Producers, whether a
political party is successful in establishing its dictatorship or whether, on
the other hand, the proletarian class succeeds in establishing its power
through the Councils, – whichever of these occurs, inflation will be the
inevitable by-product of social upheaval. In due course, however, a certain
degree of regularisation of social relations sets in, and this in its turn
makes stabilisation of the currency possible. The old unit of currency is
discarded and a new one takes its place. Thus it was in Russia, where the
Chervonetz was introduced as a new unit of currency; also Austria, which
acquired its Schilling in this way, as did Belgium its Belgar and Germany its
Goldmark. France and Italy took the same step, but with the currency retaining
its old name.

Of all peoples, it has been the German people which have received the most
enlightening instruction concerning the significance of a change in currency.
Here, the simple decision was taken that, from a certain date, one billion
Marks of the old currency would correspond with one new Goldmark. Economic life
readily adapted itself to the new conditions and the new unit of currency was
adopted with barely a disturbance to be seen anywhere on the social horizon.

Only an ungracious malcontent would have pointed out that in the process
innumerable small property holders had been expropriated, because the
devaluation of their holdings had so thoroughly ruined them that their
creditors had been compelled to foreclose as the sole means of obtaining any
restitution of the sums owed them!

Essentially the same phenomenon occurs with the introduction of the Average
Social Hour of Labour as a unit of economic regulation and control. So soon as
production is proceeding more or less smoothly, a situation of “stabilisation”
is proclaimed, that is to say, from a certain date onwards all money will be
declared worthless and only labour certificates will give entitlement to social
product. It will be possible to exchange this “certificate money” only at the
cooperative shops and warehouses. The sudden abolition of money will bring
about a situation in which, equally suddenly, all products must have their
appropriate ASRT (Average Social Reproduction Time) stamped upon them. It is,
of course, simply not possible to do this on the spur of the moment and without
further ado, and for the time being it is arrived at by sheer rule of thumb.
This will inevitably mean that in one case it will be estimated too high, in
another too low. So soon, however, as the system of labour-time computation
will have been generally introduced, the real reproduction times will come to
light soon enough.

In the same way, since the producers themselves will now have management and
administration of production in their own hands, it will now also be their
responsibility to complete the conversion from money values into labour-time
units. The only tool they will require for this task will be a set of
conversion tables or key indexes, a form of easy reference made so familiar to
everybody during the war years.

A method of arriving at an approximate form of this conversion is to calculate
the ASRT applicable to those countries which either produce a mass product, or
else are so-called key industries – for instance, coal, iron and steel or
potash. It will be possible to obtain from the works cost accounting department
data revealing how many tonnes of product were produced in a given amount of
time, and from this to derive the former intrinsic cost price. Leaving such
purely capitalistic factors as interest on bank loans, etc., out of account, it
is then possible to calculate how many labour-hours were expended in producing
that quantity of product. From this same data it is then possible to calculate
the money-value represented by an hour of iron production (“iron-hour”) or for
an hour of potash production (“potash-hour”). This having been done, the
average of all these industries can then be adopted as a temporary general
average. In putting this forward we do not wish to suggest that this particular
method of arriving at a conversion cipher is the sole definitive one, the
exclusive use of which is axiomatic – on the contrary, there are many roads
leading to the same goal. As we have already remarked, history has already
proved the possibility of carrying through sudden changes in the unit of
economic exchange employed. In the developed industrial nations, it has proved
possible to complete “the largest and most difficult financial operation ever
attempted anywhere” (the New Statesman commenting on the introduction of the
Goldmark) without any serious difficulties.

Should our calculation, for instance, produce a result which shows that the
relevant ASRT equivalent amounts to Marks 0.8 = 1 labour-hour, it will then be
possible for each industrial establishment to calculate a temporary production
time for its product. In all such industrial establishments, inventories would
then be drawn up employing this standard scale, expressed in Marks. The
depreciation of tools and machines is then estimated – values which,
incidentally, are well-known in all industrial plants. This having been
completed, everything is converted according to the figures shown in the index.
In the case of a boot and shoe factory, for instance, the calculation could
look something like this:

Depreciated machinery etc., = Marks 1000 = 1250 Labour-Hours.

Leather etc., = Marks 49000 = 61250 Labour-Hours.

Labour-time = 62500

therefore total equates to : 125000 = 40000 per shoe

Average Production Time then is : 125000 divided by  40000

 equals 3.125 per pr.

Alleged Utopianism

The second argument deployed against us by our critics is that of an alleged
“utopianism”. However, this also is incorrect, since throughout the entire
examination no imaginary constructions whatsoever have been dreamed up for the
future. We have examined only the basic economic categories of communist
economic life. Our sole aim has been to show that the proletarian revolution
must summon forth the power to implement in society the system of Average
Social Reproduction Time (ASRT); should it fail in this, then the end outcome
of the revolution will inevitably be State communism. It is, however, unlikely
that any such form of State communism will be introduced directly or openly
announced, since this would tend to compromise it far too openly. A much more
likely turn of events would be that these tendencies would develop out of some
form of guild socialism, which the English writer G.D.H. Cole has described in
his book Self-Management in Industry, and which has been taken up by Leichter
in a more exact form. Everything here is disguised State communism. In
particular, this work represents a last-ditch attempt by the bourgeoisie to
forestall the establishment of that most fundamental but least understood of
all the “Fundamental Principles of Communist Production and Distribution”: the
establishment of an exact relationship of the producer to the social product.

It has, on the contrary, been our experience that every work purporting to
represent a principled view of communist production and distribution which has
hitherto come to our attention and which claims to be based upon the
historically valid realities is in fact based upon the purest utopia. Projects
are drawn up showing how the various industries are to be organised, how the
contradiction between producers and consumers is to be eliminated through the
agencies of various commissions and committees, through which organs the power
of the State is to be curbed, and so on. Wherever one or the other author of
such a fantastic scheme finds he has fantasised himself into a corner with his
intellectual somersaults, or wherever any difficulty arises in making his
concocted speculations work out, for instance in respect to the integration of
various industries .. the solution is soon to hand: a new commission or a
special committee is “brought into being”. This is especially the case with
Cole’s Guild Socialism, the historical predecessor of which was so-called
German trade-union socialism.

The organisational infrastructure of any system of production and distribution
is functionally associated with the economic laws determining its movement. Any
conception concerning such an infrastructure which does not reflect the
economic categories inherent to its system is therefore no more than utopian
speculation. Such utopianism merely serves to distract attention away from the
real fundamental problems.

In our observations we have not concerned ourselves with this speculative
field. Insofar as the organisational structure of economic life has been
touched upon at all, this has been only to refer here and there to the
organisation of industrial establishments and cooperatives. This has its
justification in the fact that history has to a large extent already indicated
what these forms are to be, thereby depriving them of any of the
characteristics of an over-heated imagination. We have treated the question of
the organisation of the peasants with the greatest reserve, precisely because
the West European movement possesses very little experience in this field. We
must await the verdict of history as to just how the peasants will organise
themselves. As far as the farming establishments are concerned, we have
contented ourselves by showing how capitalism itself has prepared the
conditions for calculating Average Social Reproduction Time (ASRT). All we have
done has been to examine some of the consequences arising from this.

Just how the industrial organisations will combine with one another, which
organs they will call into being in order to ensure the smooth operation of
production and distribution, just how these organs will be elected, how the
cooperatives will be grouped – all these are problems the solutions for which
will be determined by the special conditions prevailing in each sector of the
economy and the specific ways in which they reflect the fundamental
characteristics of production and distribution. It is precisely this, the
functional operation of the production apparatus, which Cole elaborates in the
greatest detail in his depiction of guild socialism, without anywhere touching
upon the real problems as they arise from the fundamental economic laws of
motion, and it is this which reduces his work to the status of worthless dross.
For this reason we reject decisively any and all accusations of “utopianism”.
The method we have adopted in our exposition is precisely that of concentrating
upon the fundamental questions, which are those concerned with the methods to
be adopted for implementing the average social hour of labour and the
reproduction time arising therefrom.

Should one equate trust in the strength of the proletariat to establish
communism with utopia, then this can be no more than a subjective utopianism
which the proletariat will need to eradicate through intensive propaganda.

The sole area in which the accusation of utopianism might seem to possess some
semblance of justification is that relating to the system of control over the
norms of economic life. But only a semblance. One might hold the opinion, for
instance, that Leichter has allowed more scope for developmental possibilities,
inasmuch as he has left open the question as to whether the system of
accounting between separate industrial establishments should be carried out
individually between the establishments themselves through the medium of labour
certificates, or whether this should be done through simple double-entry
book-keeping at the book-keeping centre, whilst we insist unconditionally upon
the method of centralised double-entry recording. The essential point, however,
is that we draw attention continually to the prime significance of the system
of social book-keeping in general as a weapon of the economic power of the
proletariat, whilst it simultaneously provides the solution to the problem of
regulation and social control of economic life. The organisational structure of
this system of book-keeping, its specific points of contact with society as a
whole – these questions have naturally been left out of our account.

It is of course possible that, in its revolution, the proletariat will fail to
generate the strength necessary to enable it to use this decisive weapon for
promoting its class power. In the end, however, this is what it must come to,
and indeed this is quite apart from the question of the social power of the
proletariat, for the simple reason that a communist economy demands an exact
computation of the quantity of unremunerated product which consumers are to
receive. In other words, the data necessary for the computation of the Factor
of Individual Consumption (FIC) must be ascertained; should this not be
received, or only inadequately, then it becomes impossible to implement the
category of Average Social Reproduction Time, whereupon the entire communist
economy collapses. Then there remains no other solution than that of a price
policy, and we will have turned full circle, to arrive once again at a system
of rule over the masses. We will have sailed straight into the jaws of State
communism. Thus it is not our imagination which considers the system of general
social book-keeping to be a necessity for communism; on the contrary, it is the
objective legality of the communist economic system which makes this
unconditional demand.

If we were to make a brief summary of our observations, we would arrive at the
following picture:

The foundations of this exposition are grounded in that which is empirically
given, namely: that with the assumption of power in society by the proletariat,
control over the means of production passes into the hands of the industrial
organisations of the workers. The strength of communist consciousness, which in
its turn is associated with a clear understanding as to the social uses to
which those means of production are to be put, will determine whether or not
the economic system in which that use is comprised will maintain itself. Should
the proletariat fail to make its power effective, then the only road remaining
open is that which leads to State communism, a system which can try out its
various hopeless attempts to establish a planned system of production only on
the backs of the workers. A second revolution, which finally succeeds in
actually placing control over the means production into the hands of the
producers themselves, then becomes necessary.

Should, however, the industrial organisations succeed in making their power
effective, then they can order the economy in no other way than on the basis of
Average Social Reproduction Time, with simultaneous abolition of money. It is,
of course, also possible that syndicalist tendencies may be present, with such
a degree of strength that the attempt of the workers to assume their own
administrative control over the industrial establishments is accompanied by
attempts to retain the role of money as the medium of exchange. Were this to
occur, the result could be nothing other than the establishment of a form of
guild socialism, which in its turn could only lead by another road to State
communism. The decisive nodal point of a proletarian revolution, however, lies
in the establishment of an exact relationship of the producers to the social
product, and this is possible only by means of the universal introduction of
the system of labour-time computation. It is the highest demand that the
proletariat can place before history.. Simultaneously, however, it is also the
most fundamental, and it is without doubt the decisive factor for the struggle
for power. It is an aspect of power which the proletariat alone can win,
through its struggle, and in that struggle it must never place its chief
reliance upon the assistance of socialist or communist intellectuals.

The maintenance of the power of the industrial organisations is therefore based
upon the assertion of independent administration and management, since this is
the sole foundation upon which the system of labour-time accounting may be
implemented. A veritable stream of literature from America, England and Germany
supplies proof that the computation of average social production time is
already being prepared within the bosom of capitalism. Under communism the
calculation of (P + C) + L serves just as readily as now, under capitalism, a
different unit of economic regulation does – in this respect also capitalist
society bears the new communist mode of production in its womb. The settlement
of accounts between the various industrial establishments, necessary to ensure
the conditions for reproduction in each one of them, takes place through
double-entry book-keeping maintained at the accounting centre … just as now.
This also represents yet another example of how capitalism is pregnant with the
new communist order. The amalgamation of establishments is also a process
which, already today, is being carried into effect. It must only be borne in
mind that the industrial regroupings of the communist future will as likely as
not be of a different kind, because they will persue different aims. Those
industrial establishments which we have designated as the GSU type, the
so-called “public” establishments, also exist today, but as instruments of the
capitalist State. These will be separated from the State and integrated into
society according to communist principles. Here also we are dealing with the
reconstruction and extension of that which already exists. But the State
thereby loses its present hypocritical character and initially exists only as
the apparatus of proletarian power pure and simple. Its task is to break the
resistance of the bourgeoisie. …But as far as the administration of the
economy is concerned, it has no role whatsoever to fulfil, whereby the
preconditions for the “withering away” of the State are simultaneously given.

The separation of the public establishments from the State, their integration
into the total organism of the economy, demands that the part of the total
social product which is still destined for distribution according to norms of
individual remuneration must be determined, for which purpose we have
elaborated the Factor of Individual Consumption (FIC).

As regards the sphere of distribution, here also the organs of the future
communist society are present in embryo within capitalism. To what extent
present-day consumer cooperatives will prove to be viable as organs of the new
communist economy is another question, since under communism distribution will
be organised along different lines. One thing, however, is certain: a great
deal of experience is even now being accumulated in the contemporary consumer
cooperatives.

If we compare all this with State communism, the first thing to be observed is
that, in its case, there is no possibility that money will pass out of use,
because only those productive establishments will be made State property which
have reached the required degree of “maturity”. Hence a large part of
production will still remain in the hands of private capital, thereby excluding
the possibility of any other form of economic control than that of money. The
commodity market remains, as does also labour-power as a commodity, one which
must then realise its price on the market. This would mean that, in spite of
all the fine words to the contrary, in reality the elimination of wage-labour
would be impossible. The ensuing programme of “nationalisation”, which is then
supposed to open up the road to communism, in fact inaugurates nothing but an
endless vista of hopeless prospects. The right to shape the developing
communist society is snatched out of the hands of the producers themselves and
vested in those of State bureaucracy, which would soon bring the economy to a
state of total stagnation. From the isolated vantage-point of their central
bureaux, it would be the administrators who would decide what is produced, how
long it would (more likely, ought to!) take to produce it, and with what level
of wages labour would be remunerated.

In such a system it will also be necessary for democracy to play its part. It
is solely by means of elected responsible bodies and councils that the
interests of the masses can be guaranteed. This democracy, however, will be
infringed and rendered null and void in sphere after sphere, because in essence
it is incompatible with the type of centralised administration which will
inevitably arise. The latter will unavoidably dissolve into the rule of many
separate dictators, and the course of social life will be determined by
autocratic forms of rule within the system of democracy. Thus here also we will
see yet a further example of how democracy becomes a cloak concealing the
actual imposition of the rule of a minority over millions of working people,
exactly as under capitalism. At the very best the workers will have to content
themselves with the highly valued “right of co-management”, which represents
yet another form of disguise concealing the real relations of power.

The rejection of all centralised forms of administration and management of
production does not however imply that we have taken our stand exclusively upon
a federalised structure. Wherever management and administration are in the
hands of the masses themselves and are implemented through their industrial
organisations and cooperatives, powerful syndicalist tendencies are without
doubt present; but when viewed from the aspect of the system of general social
book-keeping, economic life is seen to be an indivisible whole, from which
strategic vantage-point the economy is not so much administered and managed as
surveyed and planned as a unified whole. The fact that all the various changes
wrought upon society in the course of the economic process by the application
and simultaneous transformation of creative human energies come to be
registered in the one recording organism forms the highest summation of all
economic life. Whether one calls this federalist or centralist depends simply
upon the vantage point from which one views the same phenomenon. It is
simultaneously the one and the other, which means that, as far as the system of
production as a whole is concerned, these concepts have lost their meaning. The
mutual opposition of federalism and centralism has been subsumed within its
higher unity; the productive organism has become an organic whole.