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Up to this point we have considered only such industrial establishments which supply, through their productive activity, a tangible or measurable product. However, we have already made reference to the fact that in certain establishments no material or physical product is created, whilst at the same time they remain indispensable for social life. We mentioned in this connection the economic and political councils, the education system, the health service, etc. - in general, institutions concerned with cultural and social needs. They produce no tangible product. The result of their activities is that their services are absorbed directly into society, and in their case, therefore, production and distribution are carried out simultaneously. A further characteristic feature of these establishment is that, in a communist society, they supply their services "free of charge". They stand freely at the disposal of all to the extent that they are needed. With this type of establishment the principle "supply according to need" is realised; distribution takes place without economic measure. This type we will name ESTABLISHMENTS FOR GENERAL SOCIAL USE (GSU ESTABLISHMENTS) or simply PUBLIC ESTABLISHMENTS. This is in contradistinction to those establishments which do not produce without compensation and which are here named PRODUCTIVE ESTABLISHMENTS.
It should be clear that this difference in economic function introduces complications into the communist system of economic regulation and control. Were all establishments to produce a tangible product, one would need to say relatively little about communist production. It would only be necessary to organise a correct distribution to the productive establishments in respect of P, C and L, and production would be able to move smoothly forward, whilst each individual worker could receive "the full proceeds of the individual's labour-power", paid in labour certificates at the factory. Labour-time then becomes a direct measure for that part of the social product which is destined for individual consumption.
This, however, does not reflect the realities of the system. Although the GSU (public) establishments consume means of production, raw materials and also consumption goods for the workers who work in them, they contribute no new product to the total mass of products at the disposal of society. All those use-values which the GSU (public) establishments consume must therefore be deducted from the mass of products produced by the productive establishments; that is to say, the workers do not receive the "full proceeds of their labour" paid out at the productive establishments, and that labour-time is not the direct measure determining the part of the social product which is destined for individual consumption, inasmuch as the workers must surrender a part of their product for, amongst other categories, the public (GSU) establishments. This makes it appear as if, in this case, the exact relationship of the producers to the social product had been disturbed, and it is indeed here that the source of the difficulty may be found which has caused the economists so many headaches.
It is now our task to find a final solution to this problem. For all economists concerned with the economic system of communism, this question is a sensitive point. It was, furthermore, from the attempt to solve this anomaly that, amongst other things, Neurath's project for a central authority for producers and distributors first arose, in that it is this central authority which decides what and how much out of the total social product each individual shall enjoy according to "the way of life to which he is accustomed". Others are not quite consistent in their treatment of the problem and attempt to solve it by means of indirect taxes (Russia). But in all these cases the answer to the questions to exactly what and how much should be allocated to the individual worker-producer for individual consumption represents just so much fumbling around in the dark. On one question, however, there is unanimity: in order to solve the problem a central management and administration of the economy is necessary, which then means that there can be no question of establishing an exact relationship of the producer to the product. The fact that "libertarian communism" a la Sebastian Faure is also compelled to grasp at the straw offered to him by an economy administered "from above" means that in this system also the basic motivation may be imputed to the same cause.
Since it can be demonstrated from this that the most significant roots of State communism lie embedded in attempts to solve this problem, it is imperative that we devote especial attention to it. It was indeed only after the onset of the revolutionary period 1917-23 that a solution first became possible, when the marxist principle - as, indeed, the Bakuninist also - that "not the state but the union of free associations of the communist society" represents the positive principle in the construction of communism, crystallised into its first concrete form in the system of Workers' Councils.
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