3.1.2.3.                       Price of Commodities 

Commodities have their sales value expressed by the price. In a market system, the law of supply and demand determines the price of commodities. The price of commodities is adjusted in accordance with the manufacturing possibilities, the purchasing power and the needs of the society.  

The proposed system of business activity envisages a form of social shareholding or humanistic ownership of the means of production on the territory of a commune, but also allows free production to independent private entrepreneurship. All enterprises set freely the prices for their products on the free market of commodities.  

Commodities have their manufacturing value. The manufacturing value is compared with the market value so that profitability of the production could be established.  

In associated economy of the commune, a great many factors influence the manufacturing value. The manufacturing value of commodities incorporates: (1) cash assets intended for the work price of all workers who produce the commodities; (2) the pertaining ratio of the work of workers in non-economy: (3) unemployed workers on the territory of the commune; (4) cash assets intended for collective commodity consumption of the commune's inhabitants: (5) assets intended for the consumption at federal level; (6) cash assets intended for the development of the commune's economy; (7) depreciation of the production; and, finally, (8) the working cash assets.  

The system is very similar to the present-day mode of accounting burdened with all types of production costs and taxes, but is significantly more precise and more democratic. All requirements may be presented by the following formula:  

C = å (A x (1+m+n) x (1+o+p+r+s)) + B 

The formula indicates that the manufacturing value of commodities is equal to the sum of all gross work prices of the workers participating in the manufacture of the work products and of invested working capital. The gross price of the work includes the net price of the workers who directly produce the commodities, appropriations for the workers in non-economy, as well as the appropriations for the collective consumption of commodities, and for the development of the economy.  

A detailed explanation of the formula follows:  

C – The manufacturing value of commodities. 

A – The total net work price of each worker who participate in manufacturing of the commodity.  The price is defined by length of the work in a unit of time, then by net quantity of past labor income-based points and by the current labor price per unit of time.   

Net quantity of past labor income-based points is determined by the holdings by workers, while workers determine the current labor price by stating it in a freely competitive way. The product of these two value coefficients gives the net work price of the worker in a unit of time. That price in product with the time the worker spends in producing each commodity gives his net price of work for producing such commodity. 

m – The coefficient of workers employed in non-economy; it is expressed by the proportion of the work price of all workers employed in non-economy and in economy on the territory of the commune.  

The proportion of the number of workers employed in economy and non-economy is regulated by the commune's management in accordance with the needs and possibilities. The work price of workers in non-economy is established in the manner identical to that when workers in economy are concerned. The workers in economy produce the commodities whose sale generates the profit on the commodities market. The workers employed in non-economy, such as teachers and police staff, do not directly realize cash earning from customers for their work for the reason that this activity is free of charge for the workers in economy and for the commune's inhabitants. This means that the total quantity of produced commodities and services is a fruit of the collective work in both the economy and non-economy sectors. As all workers in economy use services of non-economic activities, thus, according to the principle of mutuality, the workers in non-economic activities also have to use the products of the work performed by the workers in economy. By applying this coefficient, the contribution of the workers in non-economy is built into the price of the product. Also, the share of such workers in the distribution of all commodities is actually precisely established.  

n -  The coefficient of unemployed inhabitants. It is expressed by the proportion of the number of unemployed and employed workers in economy on the commune's territory in the function of the price of current labor and the quantity of past labor income-based points.  

The coefficient represents the entire population that does not work directly: the young, pupils, retired people, housewives, invalids and, generally, the whole population not employed in the commune's enterprises. Unemployed population needs to receive income in the name of past or future labor, as well as for reasons of economic safety of such population, and such income needs to be incorporated in the price of produced commodities.  

The quantity of past labor income-based points of unemployed workers is determined by the holdings of past labor income-based points. The current labor price of unemployed workers is determined by the commune's management. Lower price of current labor of the unemployed will generate a smaller income, which would increase the interest in work. And vice-versa, a higher price of current labor of the unemployed will generate a higher income, which will decrease the income based work interest. In this way the commune’s management will direct the social work in accordance with social needs. Increase in the price of current labor of students would stimulate education, etc.  

The quoted coefficients represent in the cost price of commodities the income-based appropriations for all inhabitants in the commune. The sale of goods on the market allows that all commune inhabitants realize their precisely determined gross share in the realized profit.  

o – The coefficient of collective consumption shows the ratio of the money assets intended for collective and individual consumption of the population on the territory of the commune. Collective cash assets are used for satisfying the total collective consumption of commodities or, to be more precise, for anything that the society as a community necessitates for the needs of its own standard. This refers to the maintenance and building of the social standard structure, and embraces all needs, from collective feeding to the building of all facilities, such as roads, apartments, sports and cultural facilities.  

The amount of money intended for collective mercantile consumption at the level of the commune is determined by the voting decisions of population within the possible ratio determined by the commune's management. Each commune member will have the voting right identical to the quantity of past labor voting points he holds. Each commune member will according to his own wish separate certain percentage of his past labor voting points for the collective consumption. The sum of the voting values proposed by all inhabitants of commune will determine the amount of money intended for collective mercantile consumption of commune. When the quantity of money intended for collective and individual consumption in commune are known, known is as well the collective consumption coefficient that burdens proportionately the price of all products. That will be in fact a new democratic tax policy of society.  

The system envisages a single tax rate because it is simpler in accounting terms and, therefore, enables the population to set the taxes by making direct decisions about them. The regulation of the social policy will be realized directly through income, and no longer through tax policy. The forms of consumption that is harmful for health, such as alcohol and tobacco, cannot be efficiently reduced by the tax policy but by disalienation of the society.    

The sale of products on the market will generate a quantity of money intended for the collective consumption proportionately to the collective consumption coefficient. The specific purposes of assets for collective mercantile consumption will be determined by the population practicing direct democracy.  

p – The coefficient of federal consumption shows the proportion of the funds intended for federal and individual consumption of the population on the territory of the commune. Federal cash money serves for the consumption needs of associated communes, of the republic or the state. The quantum of cash funds for federal consumption is set by the federal assembly or parliament through delegates of all communes. The representatives of the communes represent the interests of their respective constituencies and create the necessary amount of money by agreement.  

Once the quantity of money for the federal consumption needs is known, it is distributed among the communes proportionately to the income of the communes. Once the quantity of money intended for federal consumption and the quantity of money intended for individual consumption in the community will be known, the federal consumption coefficient that burdens the commune's economy will also be determined. In this way, the federal consumption gets built into the price of each product. The sale of products on the market will generate the amount of money for the federal consumption.  

r – The coefficient of the development of the economy points to the proportion of cash assets intended for the development of the economy and for total individual consumption of the population. Such assets serve for improvements in the economy, for acquisition of the new means of production, as well as for the working capital until the time when the economy will become self-supporting.  

The population determines the amount of cash assets intended for economic development by a direct vote within the possible values determined by the commune's management. Each community member will have the voting right proportionate to the voting past labor points. Each commune member will according to his own wish separate certain percentage of his past labor voting points for the economic development of commune. The sum of voting values of all inhabitants of commune will determine the quantity of money intended for the commune's economic development. Once the amount of money intended for economic development and that for the needs of the commune's individual consumption become known, the coefficient of the commune's economic development will also be determined. The coefficient of the economic development is incorporated proportionately into the price of all commune's products, and once the profit is realized there will be created the amount of money intended for the development of the commune's economic development.

Distribution of the money earmarked for economic development will be carried out among the enterprises under the principle of market competition of the users of cash assets.  

s – The depreciation coefficient of the economy shows the proportion of money assets intended for depreciation of the means of production, and of the money assets intended for the overall individual consumption of the population. The money assets intended for depreciation of the means of production serve for the renewal of worn-out means of production.  

The population determines the amount of money intended for depreciation of the means of production by a direct vote, according to the needs within possible magnitudes set by the commune's management. The money assets intended for depreciation of the means of production are generated identically as money assets intended for economic development, and exert influence on the price of the products of work, and exercise a proportional share in the profit.  

The commune’s management according to the needs on the economy carries out the distribution of money assets intended for depreciation of the means of production.  

B – The quantity of cash working assets spent to produce the commodities. Working assets understand the value of a part of products manufactured by other producers, and refer to intermediates, semi-finished products and raw materials.  

Working money assets are set aside from the commune's reserve fund formed by redeeming the cash assets in exchange for past labor income-based points, or otherwise. Working assets are taken according to the needs of the economy, however, with an obligation of their repayment during the accounting period. Working assets are the only cash funds that are repaid by producers, while other money assets are permanently and automatically renewable through the sale of commodities.  

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The system envisages a fully linear burdening of prices of all products. In other words, it does not envisage any tax facility for certain forms of consumption. Such principle abolishes the manipulations of the privileged centers of power in favor of a democratic establishment of the economic policy.  

The product price incorporates all factors forming the distribution of products. Factors A, m and n are determined by the known values of past labor of workers while the price of work is determined by direct workers' bidding. Factors o, r and s are determined by collective voting of the population of commune, while factor p by voting of the federal parliament delegates. Factor B is the product of the conditions prevailing in the production.  

In the accounting period, factors m, n, o, r, s and p are unique and may be easily calculated by applying the computer technology, irrespective of the quantity of entry data, and be shown by the coefficient k. In this way, the manufacturing price of commodities can be expressed by the formula:  

C = å (A x k) + B  

The sum of all net prices of the work performed by the workers participating in the manufacturing of each product, burdened by contributions, gives a total gross price of the work necessary to manufacture a certain product. If we add the working capital that was spent, we get the manufacturing value of goods.

Total manufacturing value of all goods produced in commune is approximately identical to the income of the commune's population or more precisely to the purchasing power of the society. That allows accomplishment of the best possible balance in the system of the production and distribution of the market–based form of business activity.  

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Due to the different material equipping of work the productivity of enterprises is different, and by selling their commodities on the free market they realize different income. In the system of free choice of work on the basis of work competition, work posts realizing a higher income under identical work burdens would stir up a great interest of workers. On the other hand, the work posts realizing a lower income under identical work burdens would arouse a considerably less interest. That would certainly produce instabilities in the market of work and in society. 

The commune's management needs to solve the issue of balancing of the demand for all work posts in the commune's enterprises by analyzing the advantages and disadvantages of different forms of production. The balance may be increased by employing a larger number of workers in enterprises realizing bigger profit, and by decreasing the number of workers in companies that realizing smaller profits. If such an option is not economically justified the balance may be established and also bigger profits earned by investing in companies that already produce profits and by closing down the loss-making enterprises. If such an option is not possible the balance lies in investing in enterprises operating with smaller income, which would achieve a higher productivity and, accordingly, an increase in the profit.  

However, the difference in the level of productivity and in the realized income among enterprises in the commune will exist as long as the difference in the material equipping of the work is in place. The sizeable automation of the production process will always significantly reduce the necessary number of workers. In this way, the productivity and income of such a company will rise in relation to the producers in the commune having a lower level of automation in their production. Hence, if work competition were the only coordinator between the supply and demand of work, it would always create some kind of instability and inconveniences in the commune.  

The proposed accounting system of payment transactions envisages that the total income surplus accomplished by an enterprise better materially equipped for work in the commune will be equal to the deficiency of income realized by enterprises in the commune whose material work equipping is poorer.  

The balance between the supply and demand for work in the commune can be achieved in the way that enterprises realizing a surplus income renounce a part of the cash profit, equal to the difference between the manufacturing and market value of the complete production, in favor of enterprises realizing income less than needed. Such measure is necessary because in its absence the workers in the system of free choice of work on the basis of work competition would run for work in the more productive enterprises. The task of such measure would exclusively be to balance the income-based interest of workers in all necessary work posts.  

Such spillover of income will allow selling all of the commodities of all enterprises in the commune at the market value. That is still the best possible distribution of commodities to consumers. At the same time, the new system will allow all workers to realize the income proportionately to their share in the production process, irrespective of the level of the material work equipment of enterprises. The workers who possess a larger number of income-based points will realize bigger incomes even in companies that realize smaller profits and by introducing such a measure they will not be an income burden to such companies. Such spillover of income will not, in terms of income, affect the workers in productive enterprises, because they will realize the income proportional to the work price. They will be deprived of the surplus income realized thanks to the better material work equipment, which is a collective ownership, in favor of the workers having a lower level of the work material equipment.  

From the standpoint of the capitalistic private entrepreneurship, the system is fully non-stimulating because it does not allow making of the extra profit by speculations beyond direct work. The new system will form a new work stimulation that will arise directly from the work competition, and from the need of seeking and certifying the individual productive power that represents one of the most important driving forces of the man. Such a system can achieve a considerably higher productivity than the existing models can, and thus generate greater conveniences to individuals and to the society in general.  

In the new system, speculations are possible only through different statement of the coefficient of responsibility that is directly linked with work productivity of workers and the business performance of the work collective. Individual and collective profits will continue to be realized thanks to the rise of productivity, however, these profits will be smaller as they will not include the privileges resulting from the better status in society, or from the better material work equipment in the production, or from random work conveniences, but exclusively from the equal struggle of workers for accomplishing greater conveniences to the society.  

In other words, if each worker can increase equally the productivity of the work collective by using the new means of production, one cannot speak in such cases of his important contribution to the production, and he needs not to be specially rewarded. However, if an individual worker increases the productivity more than other workers in his position could do, then this will be his own contribution and the same will have to be accepted and rewarded.  

The product of all prices of commodities and of the quantity of goods gives a total value of currently produced goods. Realization of such production requires an equivalent quantity of money in circulation as a means of payment for the goods.  

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