In Production for Profit, the goal of taxation policy is to acquire a source of Kapital as tax revenue for the Parliament. Since this Mode of Production places greater emphasis on privatized commercial firms, it is inevitable for taxes to become a contentious issue in Liberal Capitalist Parliamentary Democracy. A Parliament’s budget exists separately from the budget of one privatized commercial firm. To gain access to the privatized commercial firm’s Kapital and thus cover its own expenses, Parliament levies taxes on the privatized commercial firm. Here, the phrase “taxation is theft” touted by some Classical Liberals (Read: Libertarians) achieves its relevance within any conception of economic life.
Together with adjustments to government spending and its Central Bank’s monetary policies, the taxes levied by Parliament are justified to fulfill its Social Contract with the Civil Society. When the Parliament obtains its revenue from taxes, the Civil Society expects something back in return for those consecutive payments in Kapital. Such expectations vary across various different ideological tendencies of Neoliberalism. The Classical Liberals are counting on Parliament to spend Kapital on endeavors that would create more Kapital. Conversely, Social Liberals (Read: Progressives) prefer Parliament spending the Kapital on initiatives conducive to the “social safety net” of Welfare Capitalism.
This same mentality continues unchanged when the Mode of Production shifts from Production for Profit to Production for Utility. In the context of the latter, a privatized commercial firm may become nationalized by the Parliament. By nationalizing the privatized commercial firm, Parliament gains Kapital from its ownership of the firm with the tradeoff being that Parliament must also be willing to afford the production and upkeep costs. Where Parliament cannot afford those costs, that is when a new Incentive emerges to compel Parliament to privatize the nationalized firm, shifting the firm’s Mode of Production back to Production for Profit.
Nationalized firms in Production for Utility do not necessarily need to be taxed as much as privatized commercial firms in Production for Profit. As Social-Democracies have demonstrated in their applications of Production for Utility, nationalized firms still generate Kapital no differently than privatized ones. The real difference becomes a matter of who or what earns the Kapital from that nationalized firm’s economic activities. Going back to the example of the manufactory established earlier this week, the Liberal Capitalists would prefer minimizing the Parliament’s presence within the affairs of that manufactory. They are fine with Parliament levying taxes, offering subsidies, and imposing regulations as they deem necessary. The line starts to become clear once the question of socialization and nationalization emerges.
Are there precise distinctions between socialization and nationalization of the means of production within Production for Utility? It would seem that Production for Profit tends to conflate the two terms, implying the same undertaking, even though both terms are in actuality distinguishable from each other. Between Social-Democracy and its Corporatist equivalent, Tripartism, I have consistently maintained that their conceptions of socialization and nationalization are distinguishable from the ones that I used in The Work-Standard and The Third Place. And I am convinced that taxation policy happens to be one of the most obvious examples where the nationalization-socialization model of Production for Utility deviates from the one that Production for Dasein employs in conjunction with the Work-Standard. To understand my argument, allow me to point out the definitions of “nationalization” and “socialization” and how those two terms relate to the Work-Standard’s perspective on taxation policy.
In The Work-Standard and The Third Place, economic organizations within the VCS Planned/Command Economy are split between Enterprises controlled by the Council State and those controlled by the Totality. The “National-Socialized Enterprise (NSE)” functions as an intermediate where its economic activities involve the Totality and their Council State. An NSE is too large to be entirely owned and operated by the Totality and too small to be completely owned and operated by the Council State. The term “National-Socialized” fits the description well from the outset insofar as it exists somewhere between nationalization and socialization.
Those who have read The Work-Standard will recall that I had advocated for taxation policies designed to complement the contributions of Arbeit and Geld to the Life-Energy Reserve. And those who read The Third Place will also recall the colorful illustrations of diagrams depicting how the Life-Energization Reciprocity (LER) Process functions within everyday economic activities. I stated that most Enterprises create wealth under the Work-Standard through three primary methods:
- “Creating the Finished Product”
- “Successfully Selling it to the Tournament”
- “The Transactional Sales themselves”
The diagram I am referring to depicts the first and second categories as sources of Arbeit, the third category a source of Geld. The production process and the subsequent sale of the finished product create Actual Arbeit that can then be converted into Actual Geld at the Life-Energy Reserve. The third category, meanwhile, is whatever Actual Geld the Enterprise happens to receive from customers buying their product. It is the third category in particular where most conceptions of taxation policy often target. After all, most conceptions of taxation policy in Production for Profit and Production for Utility focus on the Kapital that one earns, the Kapital that one buys with, and the Kapital that one already has. I know it is something that I discussed previously in The Work-Standard, but I could help but ponder over the implications in the context of The Third Place.
Going by the very logic of LER Process, the Council State is more than capable of sustaining itself by carrying out its official functions. With its own sources of revenue outside of taxation, the Council State’s approaches to taxation policy reflect the circumstances of Production for Dasein. Together with the Life-Energy Reserve, it is no longer necessary to have Taxation Rates as high and as prolific as those commonly found in most Liberal Capitalist regimes. It then becomes inevitable to consider the prospect of lower costs of living because Taxation Rates are either lower or minimal compared to those implemented by the Liberal Capitalists.
The implication of that realization should be obvious to anyone who has read The Work-Standard and The Third Place. In essence, the Council State will never be able to tax any particular aspect of the LER Process. One cannot truly ‘tax’ Arbeit insofar as there are sources of Arbeit which exist outside the Domains of the Work-World, a concept that was made apparent in the discussions of Heimarbeit (Homework or ‘Work-from-Home) and the Informal Economy. Thus, what the Council State will only be able to levy taxes on the Actual Geld of the Totality and the Self.
Due to the fact that taxation policies target the Kapital or Geld possessed by the Totality and the Self, it is no wonder why there continues to be so much contention about the role of taxation in the State of Total Mobilization. What the Work-Standard has demonstrated vis-à-vis the LER Process is that there is a whole different way for the Council State to obtain its own sources of State Revenue beyond the conventional taxation policy. Moreover, our perceptions of taxes are dependent on which Mode of Production the national economy is operating under. In Production for Profit, taxes are constraint on the Kapital Accumulation. In Production for Utility, taxes are intended to enhance Civil Society’s Utility. And in Production for Dasein, taxes are an auxiliary source of State Revenue whose implementation is limited to encouraging or discouraging certain actions under the Intents of Command and Obedience.
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