3.1.2.7.                      Income Distribution  

Distribution of joint operating results represents a problem in all forms of relations in production, as each worker aspires for a larger share in the distribution of a collectively produced commodity. In authoritative systems of economic operation the manager regulates the distribution. The manager is an authority who in the broadest sense assesses the work burden of the work posts and determines, on the grounds of established productivity, the level of workers' incomes. The manager is privileged by his status and easily makes decisions to his own favour and to the detriment of the workers. Unjust differences in the distribution of operating results always create tensions in the process of production, which are harmful for the production and bring inconveniences to the society.

In the proposed system where the means of production are in the communal shareholding-social, or humanistic form of ownership, distribution of collective operating results is performed by distribution of income. The level of income of each worker is based on the price of work and realized productivity. The level of income can be determined by a coefficient with the following formula:  

C-Income = (Work price) x C-income_W x C-income_E x C-income_C 

Work price = (Value of past labour) x (Value of current labour) 

The work price is determined by the product of past labour or net quantity of past labour income-based points of a worker, and the price of current work. The quantity of income-based points that each worker holds is equal to the value of his past labour together with the value of past labour of his predecessors. The quantity of income-based labour points is the specific condition of the system where the worker with a higher value of past labour realizes a proportionately higher income, irrespective of the current work he is performing. Past labour income-based points present a humanistic form of shares that will bring profit based on the value of past work. Such a profit may be large but it will not be a burden to companies because it will be distributed on the level of commune as it was already explained in the chapter “Commodity price”. 

Each worker autonomously determines the price of current labour by comparing the work conveniences and inconveniences with other forms of work. He ensures the objectivity in valuing the current work price by the work competition where the right to work is exercised by the worker who in the circumstances of equal productivity asks for a lower current work price.  

In the new system, all inhabitants realize the safety of their survival by income and it is, therefore, necessary to also set the current work price of unemployed inhabitants. Since unemployed inhabitants of the commune do not directly perform any economic or non-economic activity, they cannot autonomously set the prices of their current work. Such price will be determined by the leadership of the commune with the consent of the assembly or council of commune, according to the commune's working needs and possibilities, or in the manner that will enable to balance the supply of and demand for the work in the commune. If the commune's inhabitants would not be sufficiently interested in work, the leadership would reduce the price of current work of the unemployed population. This would result in their lower income, which would on its part increase interest in work of the inhabitants. Conversely, if the interest in work by workers was excessive, the leadership may increase the current work price of the unemployed, and the workers' interest in work based on income would go down. The leadership may give a higher price of current work to pupils and students, which would stimulate education. The price of current work of invalids and of elderly people is regulated by the commune's social policy. The people in this commune will not need a pension plan as the retirement insurance any more because the new system provides the man with an income regardless he works or not. Beside, the man will be able to work as long as he wishes or can without limit of his age. 

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Finally, the level of income of each worker depends on the C-of income. The C-of income of each worker depends on the proportion of the realized and envisaged productivity of workers, enterprises and the whole commune in the function of workers' accountability for the realized productivity. C-of income of a worker can be presented by the following formula:  

C-income_W =   (f-of Accountability)   

C-income-W establishes the relation of the realized and envisaged productivity of workers in the function of workers' accountability.  

Productivity is expressed in any accepted work magnitudes that indicate the number and quality of products in economic enterprises, and of services in non-economic work organizations. Where productivity cannot be exactly established by the quantity and quality of products or services, it can be established by assessing the labour productivity. The system of assessment will be designed in a manner that will allow that the range of assessments indicate the work productivity in the same way as in the case of exact establishment of the quantity of produced commodities.  

Mutual assessment of inhabitants brings to each inhabitant an equal power of decision-making, which introduces a new form of anarchic-democratic behaviour in the society. Each individual, thanks to equal assessing power, may become both a prosecutor and an accused without the right to complaint. The impact of individual assessment on the income of the population cannot be great. Quite to the contrary, it will be little, because the accused will not have the right to defend; however, it will be sufficiently strong to form respect of the man for the man. Such respect will pave the way for major conveniences in the society. The system of assessment will force the man to diminish his own shortcomings and augment his virtues in his behaviour toward the society in the broadest sense.  

If the realized productivity gets equal with the necessary productivity, then C-income-W = 1. In that case, the realized income will correspond to the envisaged income. If the realized productivity is higher or lower than the one needed, then income of the worker will be higher or lower than the envisaged.  

Finally, the level of the C-income-W is determined by the C-of responsibility of a worker determined by the worker himself. It is easy to mathematically determine that for a little C-of responsibility worker gets the required income irrespective of the envisaged and realized productivity. With the rise of the C-of responsibility, income will increase more intensively in the case of the rise of productivity, and income will more intensively decline in the case of the fall in productivity. Naturally, a higher C-of responsibility gives a stronger competitive power to workers for performing any work.  

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Workers also bear responsibility for the productivity of an enterprise. The enterprise productivity may be shown in the same way as productivity of a worker. The formula may have the following form:     

C-income_E =   (f-of responsibility)  

C-income_E establishes the relation of the realized and envisaged enterprise productivity in the function of worker's responsibility.  

Productivity of economic enterprises is shown by the realized monetary profit on the market. Monetary profit represents the most efficient way for assessing the productivity, or more precisely, the values of the operating results in the present-day society. 

Workers realize the envisaged income in the case of realization of the envisaged productivity or, to say it differently, if they sell the entire current production on the market. Of course, that would require a high speed in assets turnover or practically, the production for known customers.  

As it is difficult to sell the produced commodities in whole during the accounting period, a certain portion of such commodities will be sold in another accounting period and will thus realize the profit in another accounting period. Such enterprises would in the current accounting period realize a profit smaller than necessary and, consequently, their income would need to be lower. However, it may be assumed that the commodities remaining from the past labour period are sold in the current accounting period and generate the profit in the current period.  

If the profit an enterprise realizes on the market is equal to the envisaged monetary profit on the market, then the C-income_E will be equal to 1 (one), and the enterprise's realized income identical to the envisaged income. If the formula establishes the C-of income_E larger or smaller than 1 (one), then the enterprise's income will be proportionately larger or smaller than the envisaged one. The C-of income of enterprises will be completely equal to the coefficient that presents the profit of company per worker. In case of a large fluctuation of workers among companies it will be sometimes possible and necessary measuring the productivity of companies by the profit per worker. 

The system of work competition insures the balanced distribution of all working conveniences and inconveniences of the working posts. Therefore, the management of commune will organize the production of companies in such manner to equalize the production as well as profits of all companies. That will be achieved among other ways by the transfer of work positions among companies. In this type of production the workers will certainly get the same incomes for the same work. This is extremely important fact for the stability and prosperity of society. Of course, such a measure will decrease the influence of profits of companies on incomes of workers and therefore by the time the evaluations of producers by customers will need to increase its influence on incomes of workers.  

It is further possible to regulate with the coefficient of productivity other forms of success of the production, which cannot be presented by cash profit on the market, and which would regulate: the protection of the environment against pollution, the satisfaction of the population with the purchased commodities, the deviation from all standards of the quality of goods, etc.  

Most of the states already have regulations that determine the standards for various kinds of products and production processes but now it will be necessary such regulations bring closer to larger possibilities of the new communal system. Special commissions will accept the standards of the state, analyze possible declines from such standards, and propose the intensity of influences of such declines to C-income_E. Specially will be important taking into account all criterion for protecting the man and his environment from pollution. At the end this regulation will need to be accepted by commune’s assembly or council. On the basis of such standards the consumers of commodities, consumer associations, professional institutions, specialized arbitration commissions at the level of the commune or of the federation of communes, or international arbitrations will give their own evaluations as regards the quality of work of economic enterprises.  

It is noteworthy that the system does not envisage a bureaucratic evaluation of all producers, because an enormous bureaucratic administrative apparatus would be formed in that way. The system envisages a customer’s free evaluation of those enterprises which products deviate either positively or negatively from the determined standards. The system also provides the evaluation on the basis of the analysis made by expert services of randomly selected or reported enterprises. The enterprises that do not get any assessment will be treated as they operate within the envisaged productivity and adopted economic operation standards.  

Analogously to the profit realized on the market, the enterprises with the production more socially acceptable products in more acceptable manner to society will get the productivity assessment higher than 1 and will realize a higher total income. And vice versa, the enterprises socially unacceptable will realize the assessment lower than 1 and, consequently, a smaller income. Calculation of the realized productivity may be presented in an indefinite number of factors that will by mutual product in the end give the final value of the coefficient K-Income_E.   

By using the coefficients the economic enterprises can efficiently bear the responsibility with their income for the pollution of the environment or a bad quality of the products. Enterprises polluting the environment or producing low-quality products will, dependently of the influence that such declines from the standards have, realize a lower income than they are supposed to receive according to the realized profit. Workers will also be additionally sanctioned by the loss of past labour income-based points. In order to remove the shortcomings in their economic activity, such enterprises will have to compete for assets intended for the development of the economy in the function of non-profitable increase of productivity expressed by the assessment. 

Even though the developed countries in the world have developed significant improvement in the environmental protection of the world it is still not enough. It is hard to make consensus for the enforcement of environmental protection on the international level because it costs a lot. Today, many regulations that determine protection of a man and his environment are still facultative what makes the pollution of nature still rising. The new system will certainly and efficiently ensure clean rivers, air, healthy food, etc. Due to the quality of life the system offers to the society it may be accepted by all of communes around the world. Needless to say, that this will enable a healthy planet Earth.  

Generally, non-economic enterprises do not have presently a standard of work productivity, responsibility or of the value of their operating results. The group of such enterprises includes education, health-care, administration and all other technical and service-rendering activities that do not realize income directly on the market, but are funded from the budget.

Non-economic enterprises need to be placed in business activity conditions equal to those prevailing for economic enterprises. The users of services, consumer associations and professional institutions give the assessment for their production. The assessment of the success of non-economic enterprises' performance may be shown by the coefficient equally successfully as presentation of the economic enterprises' performance. Using the coefficients enables to make precise comparisons of the success in the activity of economic and non-economic enterprises, and to make rewards on that basis according to the values of the realized work.  

As in the associated labour each work is non-separable from another work, each worker also bears responsibility for economic activity of his enterprise by stating his own C-of responsibility. A worker stating a higher coefficient of responsibility also assumes a greater responsibility for the enterprise's productivity, and will realize a higher income in the case of the enterprise's rise in productivity, and vice versa.   

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All inhabitants of the commune are responsible for the productive orientation of the commune. The coefficient of the commune's realized productivity can be expressed by the following formula:  

C-income-C =    (f-of Responsibility)   

C-income_C establishes the relation of the realized and envisaged productivity of the commune in the function of responsibility of each individual worker.  

This coefficient does not have a strong impact on the distribution of income within the commune. Differences occur only vis-à-vis the degree of responsibility that an individual worker assumes for his own and collective productivity. Establishment of the C-of realized productivity of the commune would be highly important in the association of the communes and in the distribution of income among the communes.  

At the level of the commune, the productivity is expressed by the total realized cash profit of the economy. It is possible to expand the measure of commune's productivity by a poly-functional system that evaluates the quality of life such as the pollution-non-pollution, literacy-illiteracy, legality-illegality in the acting of the population. By using C-income_C also is possible making subvention to less developed communes. That would increase interest of workers to work in such communes. In the same manner will be possible regulating even the birth rate of the population of commune. If commune has too low or too high birth rate it may be put to more acceptable level by decreasing C-income_C by the appropriate value.  

The definition of such categories and their regulation will be the task for the state parliament. Defined categories of the coefficients of values would allow a more efficient implementation of social, economic, ecological, cultural, and all other policies of associated communes.  

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Income of each worker in the associated labour or of the commune's inhabitants can be presented by the following formula:

C-income = (Work price) x C-income_W x C-income_E x C-income_C 

It clearly arises from the formula that C-of income of each worker depends on the envisaged work price and coefficient of the realized productivity at the level of the work post, enterprise and the commune, in the function of responsibility for the realized productivity. By applying the computer technology, the level of income of all workers can be quickly calculated, regardless of the number of factors determining the income. A worker who, for example, realizes a 10% rise in productivity at his work post in the enterprise that registers a 5% drop in productivity, will realize C-income by about 5% higher. It may be assumed that workers will be most responsible for their own work because oscillations in the enterprise productivity are smaller, while they are minimal at the level of the commune.  

The above socio-economic system represents a shareholding-social, or more precisely, a humanistic form of ownership of the means of production; however, it also allows the production of independent private entrepreneurship. Private entrepreneurship understands an independent production where the means of production are in private ownership. Work posts in private entrepreneurship are owned by private entrepreneurs, and are not subject to work competition. The owner of an enterprise employs workers according to the needs and possibilities.  

Upon realizing the cash profit on the market, private entrepreneurs keep working cash assets according to the needs. They also keep cash assets for the upgrading and amortization of the production. They are bound to pay the profit tax, and the tax for private use of the property as the case is today. These cash assets are intended for the employed workers in the non-economy, unemployed workers, the commune's collective consumption, and the federal consumption. The tax level for independent private entrepreneurs will be identical to the taxes of the associated labour. The population of commune will directly determine the level of appropriations. The owner of a private enterprise may decide to autonomously determine the income level of his workers and to pay them autonomously, or may get integrated into the collective distribution of incomes of the commune's inhabitants.  

If an independent private entrepreneurship uses in its work a production technology unknown to the public and realizes with such technology a cash profit on the market higher than the associated labour with the shareholding-social or humanistic ownership of the means of production, it will realize a higher income. Such private entrepreneurship can survive and attract the labour force in the new system as well.  

However, the newly proposed economy will invest money in its development as much as it is needed. The system of work competition will develop the economy to such an extent that it will become more productive than independent private entrepreneurship. At the time when independent private entrepreneurs realize income lower than enterprises in collective ownership, the number of workers interested in employment with private entrepreneurs will drop. In addition, if we take into account the right of workers to freely choose the work they want, to make all decisions about their work, to choose their salaries, and to share profits of the companies that the new system offers, the number of workers interested to work with private enterprises will be even lower. In short, the new system will push out the private companies from the free market and take over their workers. It may be expected with a high certainty that independent private entrepreneurs will surrender the ownership of the means of production to the society in exchange for an equivalent quantity of past labour income-based points. A larger number of past labour income-based points will ensure a higher income, a stronger competitive power in choosing the work, and therefore a stronger power in the society.  

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The money intended for incomes of all inhabitants is formed at the level of the commune's administrative centre from the revenue of commune. The quantity of money is determined by direct voting of the population and is appropriated from the total amount of money intended for the turnover of commodities in the commune. 

The obtained amount of money intended for incomes of the commune's population needs, in principle, to correspond with the envisaged quantity of money intended for the incomes of the population, because the system is based on the price of work corresponding to the income of workers. However, deviations are possible due to differently realized productivities. Therefore, there might be more or less money available for the overall income of all inhabitants in comparison with what the system originally anticipated. It is possible to adjust such deviations in the manner that the whole amount of money for incomes be distributed among workers proportionately to the defined C-income of workers. 

The technique of income distribution may take place from the commune's computer centre.  Actual income can be established according to the extended proportion formula:  

Income-1 : Income-2 : Income-2 : … : Income-n =

            C-income_1 : C-income_2 : C-income_3 : … : C-income_n   

From the overall quantity of money envisaged for incomes and the shown extended proportion that may have millions of members, by using the computer technology, income of each worker can be quickly and precisely calculated in the form of:    

Income-1 = Value-1

Income-2 = Value-2

Income-3 = Value-3

…

Income-n = Value-n    

The obtained income shows the operating result value of each commune's inhabitant in a certain monetary amount.  

Centralization of income distribution systems allows application of uniform distribution criteria according to the principle that equal incomes pertain to equal work. The profit that in classical economy brings conveniences to the owners of the means of production is now, in a socially acceptable manner, distributed to all inhabitants of the commune. Exploitation is no longer in place.     

No work is independent and, therefore, income arising from the collective operation result needs not to be independently distributed. Income distribution by means of prolonged proportion and coefficients allows that the entire quantity of money intended for incomes in the commune is elastically distributed among the commune's workers and inhabitants, proportionately with the price of the invested labour and the workers' responsibility for the realized production, without a surplus or deficit of money assets in the annual balance sheet.  

Possible abrupt changes in the realized income of workers due to a high increase or strong decrease in productivity may be amortized by a mathematical function that will not allow a sudden rise or sudden fall of income, which would contribute to a more steady economic stability of the society.  

A final say in income distribution has to be that of the commune's inhabitants by their direct stating of the minimum income level. The obtained mean value stated by all inhabitants in the function of their decision-making voting power would represent the guaranteed survival subsistence minimum that each worker or inhabitant of the commune gets in an accounting period regardless of the size of his share in the production, and the price of his work.  

A lower minimal income of inhabitants would with the established income-related amount of money intended for all incomes create a larger range among incomes, which would increase the work engagement and, accordingly, the productivity of the economy and social standard. The high standard and high productivity can result in saturated markets, which diminishes the working needs. The population then could by its own free will increase the minimal income of the population, thus reducing the range among incomes, and the workers due to decreased income-related stimulation in the process of production would reduce their own work engagement to the point where the supply and demand of work would come into balance.  

The corrections can be by applying the computer technology easily and rapidly calculated, where the smallest C-of income would ensure a democratically established minimal income. Application of the extended proportion will proportionately increase or decrease the differences in the level of income, according to the needs of the society.  

With this requirement finalizes the complex approach to the establishment of income distribution of the commune's inhabitants. The obtained value expresses the definite final income value and also the purchasing power of all inhabitants in the commune. Incomes of workers may be presented to public or kept in secret depending on the wish of the people and every individual. Each inhabitant uses his own income according to his free wish.

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