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It was, however, quite unnecessary, even in a situation in which such a solution by means of an antagonistic mode of distribution of the product is posed, to take this road of indirect taxes and a price policy. In the main, the problem was correctly formulated in the first place. The general social costs can only be borne by the directly expended labour-power. This becomes immediately apparent if we take, so to speak, an aerial view of the entire economic process in all its simplicity. Reduced to its most simple terms, this may be formulated as follows:
Society in its productive activity turns out products in thousandfold form. These products have stamped upon them how many hours of average social labour-time have been used up in their production. Out of this mass of products it is the productive installations which first of all renew their used up means of production and raw materials. Next it is the GSU (public) installations which carry through the same process. Finally, the remaining products are consumed by all workers. With this, the entire social product has been consumed by society.
At the first stage, therefore, the productive establishments take out of the product mass what they have used up in p and c. This means nothing more than, that all installations, each one taken separately, which have calculated the quantities of p and c they have used up and which have adopted these into the cost computations of their products, now also renew all those products in exactly those quantities determined by the relevant cost computation. If we set down once again the production schematic for the total of all productive installations, taken together, we have:
In this case all these installations taken together would have consumed a total of 700 million labour-hours (for P and C). These are accordingly withdrawn from the total social product, so that a mass of product remains which embodies 600 million labour-hours.
From this remaining mass of products the GSU (public) establishments now take out what is required for the renewal of their means of production and raw materials. What then remains is available for individual consumption.
In order to formulate this mode of distribution concretely, it is necessary that the total consumption of the GSU (public) establishments be a known quantity. If we term the means of production required for these installations Pu, the raw materials Cu and the labour Lu (the index u stands for "universal", ie. public) then we can formulate the total budget for all GSU establishments as follows:
By this means we have made a further advance. From the 600 million labour-hours of product accountable to the productive establishments, 58 million are at first withdrawn to cover the (Pu-Cu) of the GSU establishments, so that 542 million remain for the individual consumption of all workers in total. The question then becomes: what is the quantity accruing to each individual worker? In order to provide an answer to this question, we must first determine what proportion of the total yield of labour-power has been consumed by the GSU (public) establishments. Having achieved that, the problem is solved.
In the case of the productive establishments, 600 million labour-hours were expended by the workers working in them, and in the GSU establishments 50 million. For all workers taken together this amounts to 650 million labour-hours. For individual consumption, however, only 542 million out of the total yield of labour-power is available, that is to say a ratio of 542:650 = 0.83. At the place of work itself, therefore, it is not the full yield of labour-power which can be paid out, but only 0.83 of it, or 83%.
The figure thus obtained, which indicates the proportion of total labour-power which is available to be paid out at the separate industrial establishments as labour certificates, we name the Remuneration Factor, or Factor of Individual Consumption = FIC. In our example it amounts to 0.83, from which we can calculate that a worker who has worked for 40 hours will receive from that the equivalent of only 0.83 x 40 = 33.2 labour-hours in labour certificates, indicating the worker's share in total social product available according to choice.
In order to express this in more universal form, we will now compile a formula for FIC. First of all we take the value for L. From this we subtract (Pu + Cu), so that there remains L - (Pu + Cu). The remainder is divided by the number of labour-hours represented by L + Lu, from which we see that each worker obtains for his or her individual consumption:
This calculation has been made possible because all industrial establishments have maintained an exact record of their consumption of p, c and L. The system of general social book-keeping, which registers the stream of products by means of a simple system of exchange accounting control, disposes directly over all data necessary for determining the Remuneration Factor. These are expressed through the symbols L, Pu, Cu and Lu, and can be obtained by means of a simple summation in the exchange account.
With this system of production and distribution the proportion of total social product placed at the disposal of any individual is not "allocated" subjectively by any agency. What we have here is not a system of distribution decided arbitrarily by officials; on the contrary, distribution takes place on the basis of the objective exigencies of the system of production itself. The relationship of the producers to the social product is objectively embodied in that system, and precisely for this reason no subjectively motivated authority holds the responsibility for "allocating" anything. This then also explains the "mystery" of how it comes about that the role of the State apparatus in the economy becomes redundant. The whole economy, both production and distribution, stands on objective foundations, because precisely through this relationship the producers and consumers are given the power to administer and manage the whole process themselves.
In various meetings and discussions which were held on the above theme, anxiety was sometimes expressed in various quarters that the system of general social book-keeping could under certain circumstances develop into a new organ of exploitation, because it is empowered with the task of determining the value of FIC. It could for instance calculate this factor at too low a value.
It should, however, be borne in mind that there now no longer exists any basis whatsoever for exploitation. The entire communist economy is made up of only factory or works organisations, and they alone "govern" it. Whatever function these may fulfil, they do so only within the limits of their budgets. The organ of general social book-keeping is itself just such an industrial organisation (GSU-type) and it also can only operate within the defined framework. It cannot exercise any power over the economic apparatus, because the material basis of the economy has placed control over the economic system fully in the hands of the workers, who now constitute the whole of society. On the other hand, however, any economic system which is not founded on an exactly defined relationship of the producer to the product, and in which this relationship is determined subjectively by officials constituted in official bodies, must inevitably develop into an apparatus of oppression, even if private ownership of means of production has been eliminated.
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