1. Those problems involving inter-relations between the various producing groups, such as the factory workers, transport workers, agricultural workers and the like, that must exchange their products and receive from one another the materials upon which existence depends.
2. Those problems which are common to all producing groups simply because they are common to men and women who are trying to live and to function together. The water-supply, roads, education, are questions of this type.
Problems of the second sort, and the issues raised by them, cannot be entered upon at this point. The same federal authority that is charged with the control over inter-industrial problems will likewise charge itself, in each instance, with these common questions not immediately related to industry.
This is not an attempt to under-estimate the importance of non-industrial problems, but to confine attention, for the moment, to matters directly related to production, with the conviction that when a mechanism is developed capable of handling the industrial problems there will be less difficulty in taking care of those not so closely related to industry.
The issues arising between industrial groups, and those problems common to all groups, will best be handled by federations having a jurisdictional scope parallel to that of the separate groups of which the federations are composed. If these component groups are local economic units, the federation will be local in character. If they are district economic units, the federation will have a district as its sphere, and so on. By this means, there will be created a series of federations or joint organizations, beginning with the federation of local economic units, and ending with a federation of world industries. Throughout this enlarging series of federations the principle of local autonomy will be maintained in all of its rigor, and no matter will be referred to a federation that can be handled by a local group. At the same time, the principle of federal authority will be asserted, and those matters that concern the welfare of more than one group of parallel jurisdiction, will be referred automatically to the federal authority under whose control the group in question falls.
The most elemental of the federations would be the local producers' federation, which would correspond, quite accurately, to the town or the city of the present day, save that its size and character would of necessity be much better regulated than the character and size of the present-day town or city. The modern city has been built as a profiteer's paradise. From the construction of houses to the erection of office buildings, the one foremost question: "What per cent will it yield?" has been the guiding principle behind city construction. The local industrial federation will have, as its chief task, the provision of a living and working place for people, hence the character of the industrial community will be determined with a view to the well-being of the inhabitants rather than to the profit of landlords.
The local federation would be under the control of a local council, the members of which would be elected by the producing units or groups composing the local federation, very much as the modern city is managed by a council elected by wards or aldermanic districts. Except for the choice of representatives on the council by occupational groups, rather than by geographic divisions, the local federation would closely resemble the municipal government of the present day. In addition to its present functions, however, it would assume the task of dealing with issues arising between two or more of the local producing groups. That is, it would have economic as well as political functions, although it would not necessarily carry on any more productive enterprises (gas, water, house-construction, abbatoirs) than do municipalities at the present time.
The local producers' federation would be responsible for two chief lines of activity. On the one hand, it would seek to maintain working relations between the various local economic groups by adjudicating those local questions that affected two or more of the groups. On the other hand, it would take charge of, and administer, those matters of common concern, such as the water supply, the local educational institutions, and so on. This second group of functions would be similar to those now performed by the city council, the board of health, the board of education.
There would be a local producers' federation wherever a number of local industrial units agreed to function together. Counties, cities, boroughs, and school districts are, at the present time, organized very much in that way.
The local producers' federation would therefore differ little from the existing local groups, such as towns and cities, save that its constituent elements would be occupational groups rather than geographic divisions, and that it would be functioning in the economic as well as in the political field.
The second series of federations might be called the producers' district federations. They would include all district industrial groups within a given economic field. Such a district federation would correspond, roughly, to the present state as it exists in Mexico or Australia, or to the provinces in Canada.
The district federation would function in three ways. First, there would be the issues arising between the industrial organizations that composed the district federation; second, there would be the issues arising between local federations within the district, and third, there would be those common matters, like health, education, highways and so on.
The third series of federations would be the divisional producers federations, which would correspond, roughly, to such aggregations of states as the Commonwealth of Australia or the United States of America. The boundaries of such a federation would follow the boundaries of the principal land areas and the chief population centers. North America, South America, South Africa, the Mediterranean Basin, Northern Europe, Northern Asia, Eastern Asia, Southern Asia and Australia would furnish a working basis for separating the world into such geographical divisions. Each of these divisional federations would function along the same general lines as the local and district groups.
The fourth, in the series of federations, would be the world producers' federation, which would be an organization composed of all of the major industrial groups. These groups, each of which would be organized on a world-wide basis, would unite in the world producers' federation in order to further those interests that were of consequence to two or more of them, as well as those common interests that were of concern to all alike. The world producers' federation would be built on the same principle as the local producers' federation, but unlike this latter federation, the world federation has no prototype existing at the present time.
The world producers' federation would be a world authority, linking up those interests of world consequence that are now waving about like cobwebs in the wind.
Throughout its entire course this outline has been designed in such a way as to separate sharply the producing units and the administrative groups (federations). The local, district, divisional and world industrial units are the back-bone of the public machinery in a producers' society. For the purposes of facilitating the work of administration, these producers' groups are brought together, at various points, in local, district, divisional and in a world producers' federation, all of which federations derive their power directly from the industrial producers' groups. The world producers' federation therefore has no direct relations with the local producers' federation, any more than the government of a county, in a modern state, has with the central federal authority. The authority of the world producers' federation, like that of the local, district and divisional producers' federations, is derived from its constituent industrial member groups, and is confined to the questions that are of immediate concern to a number of them, or that are the common concern of all.
This arrangement will make difficult the production of a state of present type which has drifted far away from some of the most pressing necessities of the common life, and into the hands of politicians,—a situation that permits tyranny on the one hand, and that makes any adequate check on the activities of these political rings difficult or impossible. This danger would be considerably reduced by delegating administrative power to the federations, holding each within its prescribed range, and keeping the real power in the hands of the local, district, divisional and world industrial groups.
The decision of the world producers' federation would therefore be binding on the industrial groups, and not upon the local, district and divisional producers' federations, except in so far as the industrial groups compelled these federations to follow the policy of the world producers' federation.
It is probable that an exception would have to be made in the case of issues arising between two divisional producers' federations. The burden of settling such an issue should rest, however, on the industrial groups rather than on the world producers' federation.
This withholding of authority from the federations in general, and from the world producers' federation in particular may be open to criticism, but it has several strong points in its favor. Through its control of resources, transport and the like, the world producers' federation will wield an immense power. Its constituent members, having aided in its decisions of policy, may follow a similar course of action in the divisional and the district producers' federations. Again, the alternative to the organization of a series of disconnected federations is a centralized bureaucracy of such magnitude, and holding such vast power, that it would be both unwieldy and dangerous, beside violating that very essential rule of local authority in local affairs.
The separation of the federations would compel each of them to specialize on particular problems of administrative routine. Questions that were to be carried to wider authorities would be carried by and through the various constituent industrial groups.
The structural organization of the world producers' federation would be similar to that of the United States of America or that of the Russian Federated Soviet Republic. The constituent groups would be economic and occupational rather than political or geographic, but the principle of federated autonomous groups would be the same. Each of the major industrial groups that belonged to the world producers' federation would have sovereign power over those matters which affected that group alone. The federation, on the other hand, would have jurisdiction over matters affecting two or more of the world industrial groups, as well as over those matters which were of common concern to all of the member groups.
The general lines of organization for the world producers' federation would be somewhat as follows:
1. The workers in each of the major industrial groups would vote in June of each year for the members of a world parliament which would be the central authority in the world producers' federation.
2. The world parliament would consist of from 800 to 1000 delegates, elected in each of the major industrial groups by the producers in that group.
a. Each industrial group would be entitled to at least 50 members in the world parliament, and to one additional member for each 50,000 workers over two and one half millions. But no group would be entitled to more than 150 members in the world parliament.
b. The members of the world parliament would be elected by popular vote in each of the major industrial groups, the franchise being extended to all producers, including those who had been producers and were rendered incapable of activity through age or infirmity.
c. Each industrial division would be entitled to at least five members of the parliamentary delegation from that particular industrial group, but the details of representation from each of the major industrial groups would be left in the hands of the group.
3. The world parliament would be elected in June and would meet in July of each year. Since the world congresses of each of the major industrial groups would meet in the preceding January, they would have six months to thresh out their individual problems, before they were called upon to consider the general problems confronting all of the groups.
4. The world parliament would select, from its own membership, an executive committee equal in size to ten per cent of the total membership of the parliament.
a. On this executive committee each of the world industrial groups would be entitled to at least five members.
b. The executive committee would be the steering committee of the world parliament, and when the world parliament was not in session, the executive committee would be the responsible body.
c. The executive committee would meet once in four months, or oftener at its discretion.
5. The executive committee would select, from its membership, a number of administrative boards, at the same time naming the chairman of each board. Each of these administrative boards would be charged with the responsibility of handling a unit problem, such as the control of resources, the control of transport, and the like.
6. The chairmen of the various administrative boards would constitute the executive heads of the world producers' federation. They might be called the world producers' federation board of managers. This board of managers would be responsible to the world parliament executive committee.
a. If, at any time, the board of managers failed to secure a vote of confidence from the world parliament executive committee, on any matter involving a question of general policy, the board of managers would be automatically dissolved, and the executive committee would proceed at once to select a new board that would replace the old one.
b. If the executive committee failed to select a board of managers that could secure a vote of confidence, the world parliament would be automatically summoned to meet one month from the day on which this failure to elect occurred.
c. As soon as it convened, the world parliament would proceed, as a first order of business, to the election of an executive committee which would function.
d. If the parliament failed to elect an executive committee capable of functioning, the parliament would be automatically dissolved, a special election would be held within ten days, a new parliament would be selected, and would assemble thirty days from the date of this special election.
e. By these means, the whole machinery of the world producers' federation would be rendered immediately responsive at all times to the sentiment of its constituency, and the board of managers would be compelled to function in line with the policy of the executive committee and of the world parliament, or turn the work over to another group.
PLAN FOR WORLD ECONOMIC ORGANIZATION
7. The world parliament would exercise, directly, or by delegated authority, all legislative, executive and judicial functions that pertained to its activities. It would therefore create the departments or subdivisions necessary to the carrying out of these various functions. The members of the world parliament would be elected for one year, subject to recall at any time by the constituency that elected them. The parliament would decide on the qualifications of its own members.
This proposed plan for the organization of a world producers' federation will be made clearer by a diagram. (p. 116.)
8. All Power to the Producers!
The plan for a world producers' federation is designed with the object of placing all power in the hands of the producers. The society of the present day vests power—particularly economic power—in the hands of the owners of economic resources and machinery. Their public institution is the capitalist state, and their rule is perpetuated by the manipulation of its machinery.
Under this order of society, the chief emphasis is placed on owning rather than on working. The largest material rewards and the greatest amount of social prestige go to the owners. The present society sanctifies ownership, and raises the owner to a position of moral superiority.
The same system which dignifies ownership can scarcely recognize work as of supreme social consequence. The worker is therefore placed in a position inferior to that of the owner. His economic rewards are less, his place on the social ladder is lower, and his children are taught in the schools the necessity of getting out of his class into the society of those who are able to live without working.
It is hardly necessary to remark that in a community dependent for its existence upon labor, the teaching of such a philosophy points the way to class conflict and ultimately to social disintegration. If the community is dependent upon production for its existence, there must be sufficient incentive to continue production, otherwise the community dies.
The disastrous consequences that must of necessity follow on the economic order as it is constituted at the present time are already in evidence,—strikingly so in the case of the European breakdown. The owning class society is coming to an end—falling of its own weight. The time has come when the producers must take the control of the world into their own hands or suffer disaster.
Man's sense of justice tells him that the product should belong to him who is responsible for creating it, and his experience teaches him that human beings take a greater interest in that which is theirs than they take in the property of another. The results of production should go to the producers; the machinery of production and the materials entering into production should belong to those responsible for the carrying on of the productive process. How shall these things be? Only when the producers themselves decide to make them come true.
All power to the producers!
This sentence carries with it the key to the society of the future.
VI. WORLD ADMINISTRATION
1. The Basis for World Administration
When the producers of the world are organized along the lines of their economic activities, and are federated in local, district and divisional federations, and in a world producers' federation, the structural side of the producers society will be complete. Such a structure is built for use, not for appearance, and its effectiveness depends upon the way in which it works. The handling or administration of the producers society is therefore the determining factor in its success. A world producers' society may fail as miserably as any other form of social organization unless it is deliberately utilized to attain the ends for which it was created.
The establishment of a world parliament consisting of representatives from the major industrial groups would create an authority more powerful than that of any existing state because, in the first place, it would be more extensive than any existing state. But even supposing that one of the great nations—Britain or the United States—was to conquer the world and attempt to administer it, the world producers' federation would be far more effective than such a victor, because its rule would be founded on the will and on the consent of the governed and not on the imperial foundation of organized might. The world producers' federation could therefore look for a support from its constituency that no empire could hope to demand from its conquered subjects.
The centralization involved in maintaining the authority of an imperial ruling class in a large and complex state is so great that it invariably results in friction and disaffection. The self-governing state, less efficiently co-ordinated and centralized, still has a far better chance for survival. Its energy-generating centres are so much more numerous and more localized than those of the class governed empire that they necessarily reach a larger share of the population. The roots of the self-governing social group may go no deeper than the roots of the group under a bureaucratic government, but there are more of them, and they go to more places. The foundations are sounder because they are broader.
In addition to these functional advantages of self-government, it possesses an immense asset in the sense of proprietorship that leads the citizens of a self-governing community to stand by the community organization because they feel that they have built it and that it is their own. A self-governing community therefore carries within itself the means of its own perpetuation in the enthusiasm and devotion of its population to an institution in which they feel a sense of workmanship and of the pride of possession.
A world parliament, organized on the basis of self-governing industrial groups, would be unique in two respects. First, in that it was of world extent, and second in that it was built upon the industrial affiliations of its citizenship. If such an organization were handled in a way to hold the allegiance of its constituent members, its decisions on matters of world importance would carry an immense authority.
2. The Field of World Administration
There, in fact, would be the test of world government efficacy—in its ability to leave the handling of local problems to local groups, and to concentrate its energies on the administration of those problems which have assumed a distinctively world scope. Such capacity to understand the difference between the business of local groups and the business of the world organization would be the touchstone of world statesmanship, the criterion by which the master political minds of the age could be tested. The short-sighted, narrow-visioned leader of world affairs would seek to gain and to hold power for himself and for his immediate local interests. The presence of many such men in positions of power would soon split the world government into a series of factions, each one seeking to destroy the others and to take away their authority. Such a competitive stage would represent little advance over the present nationalism.
A world government has no virtue in itself, and may as easily degenerate into a scramble for office as may any other phase of group relationship. Its success would only be possible where its power was strictly limited to the control of those matters that had reached a plane of world importance. Even then success would be impossible unless those responsible for making essential decisions saw the world problems as wholes rather than as localized and separable problems.
Grave issues hang on the method in which the world problems are approached and handled. Success is not assured by any means. Still, the dangers and disadvantages of a plan do not condemn it unless they outweigh the apparent advantages.
The people of the western world face a number of serious problems that cannot be solved by the existing nations. Some step must be taken to cope with the new situation that has followed on the heels of the industrial revolution, and in so far as the actual practices of life have evolved to a world plane, and in so far as they concern the workers in more than one industry, it must be apparent that nothing less than some world authority will suffice to cope with the issues that they present.
A number of economic questions, such as the control of resources and of transport, have already passed beyond the boundary of the individual nation, and have reached a stage of world importance where they can be handled only on a world basis. In the normal course of social evolution, other questions will, in like manner, emerge into a place of world consequence. As rapidly as such developments occur, the administration of the world issues must be delegated to the world parliament and to its appointees and subordinate bodies.
There are a number of problems that have passed beyond the control of any single nation, and that should therefore be made the subject of world administration. Among them are: (1) the control of resources and raw materials, (2) transport (3) exchange, credit and investment, (4) the world economic budget, and (5) adjudication of world disputes. Under a world producers' federation, the administration of these five problems would be in the hands of five administrative boards selected by the executive committee of the world parliament.
Each administrative board would select and organize a staff of experts and specialists in its own field, and would present the outline of its proposed activities to the world parliament very much as the department of a modern government presents its budget to the parliament of its state. This presentation would take place through the executive committee of the world parliament, and it would be necessary to secure the endorsement of that committee before the plan could go before the parliament.
When the plan was approved, the administrative board would begin to function as a part of the machinery of the world producers' federation. Thereafter it would serve as a part of the world administrative mechanism, the working organization of which would remain intact, even should there be a change of policy, in exactly the same way that the department of state or of agriculture, in any modern government, remains intact through the various changes of party in power.
The specialists and experts who made up the staffs of the administrative boards would secure their appointments as the result of civil service examinations, and would continue in their positions until some question arose as to their efficiency. Each administrative board would be organized into a series of departments corresponding with the unit problems coming before the boards, with one specialist or department head charged with the direction of each of these departments. In the raw materials and resources board, for example, there might be one department for each of the more important resources such as coal, iron, copper, cotton, wool, timber, and the like. In the same way, the work of the transport board might be divided into departments covering shipping on the high seas, inland water transport between divisions, inter-divisional land transport, aerial navigation not wholly within one division, and so forth. In each instance, the task of providing an adequate supply of the commodity or an efficient service, would fall to the department or departments involved, while the administrative board itself would sit as a court of last resort, and as a board of strategy for the field in which it was functioning.
The administrative board would thus be a group primarily of experts, charged with the specific task of handling some problem of world moment, and responsible to the board of managers of the world producers' federation for the success of its activities.
4. Work of the Administrative Boards
A separate administrative board would be established to handle each of the important administrative problems confronting the world producers' federation. At the outset there would be such problems as resources, transport, credit and exchange, budget, and the adjudication of disputes affecting more than one division or more than one of the major industrial groups.
It is neither possible nor desirable to draw up a working program for any one of these boards. Such details must be met and solved when the task of administrative work begins. At this point it is only necessary to suggest some of the more important fields in which the boards would operate, and to bring forward typical instances of their functioning.
5. The Resources and Raw Materials Board
The survival of a modern industrial centre like the Manchester District of England or the Lille-Roubaix district of France depends upon the supplies of raw material which it is able to secure from and through other industrial groups. These supplies are in turn dependent upon the available deposits of raw materials, the power, and the fertility of the soil. Raw materials and resources are thus the foundation upon which all productive enterprise is based, and it would be one of the first duties of a producers' society to handle this issue successfully.
Some idea of the extent to which a modern industrial community is dependent for its survival upon imported raw materials may be gained from an examination of the trade figures for Great Britain. In 1920 the total value of British imports was 1,936 millions of pounds sterling. Of this amount, 767 millions (more than a third) were for food, drink and tobacco, while another third (711 millions) were for raw materials. Under these two general headings were included such items as grain and flour 232 millions, meat 142 millions, cotton and cotton waste 257 millions and wool and wool rags 94 millions of pounds sterling. The two main items of food and raw materials, covered more than three quarters of all British imports. (Statesman's Year Book.)
But Britain is a relatively small and very much isolated community, lacking some of the essential resources. It is therefore quite natural that her trade figures should show such a result. The same thing is of course true of Japan, Germany, Holland, Belgium, Italy, France, and in fact most of the important industrial countries. This is taken as a matter of course. Oddly enough, however, it is likewise true of the United States, which is as near to industrial self-sufficiency as any of the leading industrial nations.
Among the 5,278 millions of dollars worth of commodities imported by the United States in 1920, there were 40 million pounds of aluminum, 143 million pounds of rice, 345 million pounds of cocoa and cacao, 1,297 million pounds of coffee, 510 million pounds of hides, 152 million pounds of fresh meat, 603 million pounds of India rubber, 260 million pounds of wool, 510 million pounds of paper stock, 1,460 million pounds of paper, 8,074 million pounds of sugar, 4,459 million gallons of crude oil, 130 million skins, and so on. Here are extensive imports of hides, oil, paper, sugar, coffee, wool and rubber—seven of the most important items of modern commerce. Well supplied as it is with varieties of climate and resources, the United States is nevertheless compelled to import large amounts of some of the most essential raw materials. Like the nations of Europe, it is forced to depend, for these and other industrial essentials, upon portions of the economic world that lie outside the national boundaries.
An examination of these and similar figures tells the story of the industrial future—a story of limited, localized resources upon which the expanding industries will be compelled to make ever increasing demands. Since all of these demands cannot be met there must ensue a ferocious struggle among the nations to secure and hold the resource key to economic advantage. The beginnings of that struggle have already been witnessed in the contest between France and Germany for the coal and iron deposits of Western Europe. Its next stage will include a struggle between Great Britain and the United States for the possession of the world's reserves of oil. Such a struggle, with its appalling toll of suffering and chaos can be obviated in only one way, by an apportionment, among the users, of the chief raw materials, through an agency in whose direction all of those concerned have a share. This result could be accomplished by the resources and raw materials board of the world producers' federation.
The activities of the resources and raw materials board will include:
1. A survey of all available resources and raw materials.
2. A survey of the present consumption of these raw materials.
3. A survey of the present production and of the possible production of these materials.
4. A production budget, assigning to each of the producing areas the amounts of materials that they are responsible for producing.
5. A consumption budget, assigning to the various using areas their quotas of the materials produced.
6. Provision for the increase in production necessary to meet the demands of the consumers of raw materials.
7. Final decisions as to which resources should be used, and for what purposes.
This board would have under its immediate control the destiny of the whole producing world. It would not own the resources any more than the postal department of a government owns the post offices and the mail trucks, but in one case, as in the other, the power to decide on the service to be rendered would rest with the administrative officers.
The need for some central control over the world's resources, and of some clearing house for raw materials seems quite obvious. The world producers' federation faces no more important or pressing issue. In this field alone, through its elimination of sources of conflict and its regularizing of raw material supplies, the world producers' federation could undoubtedly justify its existence.
6. The Transport and Communication Board
The transport and communication board would have jurisdiction over all of those activities involving the transfer of goods, of people and of messages, not wholly within one division. Such a plan has been worked out in part in the United States of America, where commerce between the states (interstate commerce) is under the control of the Federal Government, while commerce wholly within one state is under the control of that state. The same principle, applied to a producers' society, would leave local transport in local hands, while all matters concerning world transport would be under the control of the world producers' federation.
The present economic system depends on the shipment of goods from one point to another. Raw materials are sent from the place of their origin to the fabricating establishment that consumes them. In some cases, these distances are small, but when Cuba sends iron ore to the United States, or when Brazil ships coffee to Europe, or when England sends coal to Italy, the distances are considerable and the means of efficient transport are correspondingly important. The same thing holds true of the marketing of finished products. Many of the goods turned out by the present-day industry—particularly machinery—are very bulky and heavy. Each of the manufacturing nations sells its goods, not only within its own borders, but at the ends of the earth. The transport of goods thus becomes supremely important.
The transport of goods and of people is only one aspect of the work coming under the direction of the transport and communication board. In addition, there would be:
1. The postal system, which is already on a world basis.
2. The express system, which is really only a branch of the postal system, and which is also on a world basis at the present time.
3. Telephone, telegraph and wireless machinery, which are in their very nature wider than the boundaries of one nation, and which are to-day among the chief means of holding the people of the world close together.
The mechanism of transport constitutes a vast net-work of inter-relations that have been carried farther toward a world basis than any other phase of the world's economic life. The nature of ocean transport, of the postal service, of the express service and of the telephone and telegraph made this inevitable. The inventions and discoveries of the past century have worldized transport without the necessity of any intervention from a producer's society.
While the work of the transport and communication board would be of vital consequence, it would be relatively simple, in that it would involve little innovation, but rather the unification and co-ordination of existing agencies.
7. The Exchange, Credit and Investment Board
Many economic writers have characterized the processes of exchange as "non-productive" activities, nevertheless, under the present economic order they lie closer to the seat of power than any other single group of activities. The rise of the banker to his present commanding position is due, primarily, to his control over money, and to his power to issue or to withhold credit. A producers' society may lay far less emphasis on money and its derivatives than does the present system, yet the money function will remain and the money forces will doubtless play some part for a very long period in the new economic order.
Money will owe its position of importance, under a producers' society, to the need for a medium of exchange, and until men discover a means more effective than money for the facilitating of exchange, money will continue to play an economic rôle.
The inhabitant of a modern industrial community buys many things each day. For the newspaper he spends a penny or two; for the street-car ride, five or ten cents; for fruit, groceries, and other food products, a number of small sums. These transactions, in a country of fifty millions of people, aggregate tens of millions for each day.
There are three possible ways in which such transactions may be carried on: (1) each party may give the other some commodity or service—a bunch of carrots for a street-car ride, a sack of flour for a hat, (2) Money may be employed. (3) A system of book-keeping may be devised, and each purchaser may use a credit card, or some similar device. Barter is impossible. Money is the usual means of facilitating exchange. Bookkeeping, on a scale requisite for all petty transactions would be an immensely intricate mechanism.
The chances are that at the outset, a producers' society will be compelled to follow the practices of present-day economic life, and to distinguish between the two chief uses of money: money as a means of making change and money as a basis for credit.
This distinction has been pretty well established in all parts of the world. The business man buys his morning paper and his lunch with the change that he carries in his pocket. He buys his automobile or his factory building with a check (credit). Money as a means of making change will continue under a producers' society until some more satisfactory means of handling minor transactions is discovered. Money as a basis for credit will be superseded by a system of social book-keeping.
The money used at the present time is based on an amount of some commodity, such as gold. A producers' society will undoubtedly substitute for this commodity base some unit of productive effort—an hour's labor or a day's labor in a given industry. Such an idealized labor production period could be used as a basis for all value computations.
There are a number of requirements for such a value measure:—(1) It must be reasonably stable; (2) it must be generally recognized and accepted; (3) it must be the medium in which all values in all parts of the economic world are calculated.
With a standardized labor unit of value once determined, there would be several methods of procedure. One would be to issue a certificate for each unit of labor performed. The pay-check would then serve as money. Another method would be for the world parliament to issue metal and paper money, using the labor unit instead of gold as the basis of value. In the former case, there would be a labor check, or piece of money in the community for each unit of labor performed. In the latter case, only so much money would be issued as was required for the ordinary purposes of making change. The latter method is the one now in use. The former would represent a distinct step in advance, in that there would be a certificate of purchasing power in the community for each unit of goods and services that was produced. There would be still a third method of handling the problem, by having the world producers' federation issue paper currency stamped with the statement "this is a mark" or "this is a franc," and making it receivable for all legal and public obligations. If the amount of this "fiat" money were carefully regulated, it would probably serve all of the purposes for which money is needed. Whatever its character, it is essential that all money and credit should be publicly issued and under public control.
The first problem confronting the exchange and credit board would be to establish some such generally acceptable standard of value. The chaos now existing in exchange rates is but a foretaste of the difficulties that confront a world which is attempting to carry on economic transactions with scores of different moneys and of differing financial systems.
The exchange and credit board would have three other important fields of activity:
1. The computation of the values produced by the various industrial groups.
This result would be accomplished by establishing a clearing house for reports on production in all industries and in all parts of the world.
2. The financing or exchange of materials between the various producing groups.
This activity is now carried on by the commercial banker, who handles trade acceptances, bills of exchange, and the like. It need be no more than a system of book-keeping, with the balances entered as loans from the industries that produce a surplus to those that are using more than they produce. Such a situation would of necessity be temporary, since the aim of the central authority would be to balance values in such a way that there would be an equilibrium all around, with no surpluses and no deficits. Such an ideal condition would never be reached, but it could be approximated.
3. Transfers of capital, or loans negotiated between various industrial groups, and covering more than one division.
These loans would take the form of adverse balances in the general clearing between producing groups, and would cover the advances for improvements and betterments, that one producing group would make to another, or that the world producers' federation would make to one of the producing groups.
The exchange and credit board would, in reality, be the book-keeping department for the world producers' federation, whose exchange transactions would be planned and handled through this department.
Two principal functions would be performed by the budget board. On the one hand it would be charged with budgeting or planning the transactions involved in the world organization of economic life. This function would include the estimates of the requirements of the major economic groups during a given year, and the estimate of the sources from which these requirements were to be met. On the other hand, it would be responsible for preparing the budget of the world producers' federation, and of deciding upon the course that must be adopted in order to meet these necessary outlays. Thus the board would correspond, in a sense, to the finance committee of a modern parliament or to the department of finance in a modern cabinet.
9. The Adjudication of Disputes Board
The organization of the world producers' federation places before it certain judicial functions. The federation would be called upon to adjudicate: