Economics of the Global Society

In a modern industrial economy, some goods must be produced outside of the local community. Individual communities must import those goods from outside. Other communities must therefore produce some of their goods for export to the wider world. Or there must exist large scale workplaces, with workers drawn from several surrounding communities, which produce for the wider world.

That is essential if modern technology is to continue and to expand. Much human activity can and should be purely local, but a crucially important part must needs be organised on a large scale of production.

Co-ordinating such activity is no trivial task. Local economic activity can be organised by the community itself through direct democracy in face to face meetings. Everybody knows everybody else, and can judge the abilities and needs of their fellow citizens without any elaborate structures or bureaucracies. But global economic activity is outwith our ability to control and organise directly without mediation.

Kibbutz

The Israeli Kibbutzim represent perhaps the greatest example of success in small scale community economies. There are of course important problems in their treatment of Palestinians and to a much lesser extent their Thai and Mizrahi waged labourers. But they have shown to the world the way that free and fair local economies could work. While remaining socialist and libertarian, they created such economic growth as to within just 40 years go from penniless desert farmers into being accused by Menachem Begin in 1977 of becoming 'millionaires with swimming pools'.

Most often, at least originally, money was not used internally within each Kibbutz. But at all times the Kibbutzim relied on money denominated transactions for trade between their Kibbutz and the outside world, including trade with other Kibbutzim. Some Kibbutzniks would sleep in their Kibbutz at night but travel to work in another workplace in the big city. Their wages would be remitted into the communal Kibbutz fund. Some Kibbutzim ran manufacturing industries of their own, which exported goods to the outside, in return for money to the communal Kibbutz fund. When many Kibbutzim fell into financial difficulties in the 1980's, bail outs were organised from the wealthier Kibbutzim to the poorer. That demonstrated the spirit of solidarity and co-operation within the Kibbutz movement, but all the transactions - trades, loans, bail-outs – were denominated in money terms.

Spain

So it was in Spain during the revolution there in the 1930's. Communes, much like the Kibbtzim, were formed and proved economically successful. Within each commune the economic setup varied, many used money internally, but many did not. Some used a combination: money for luxuries, and distribution according to need of essentials.

But all used money for denominating transactions between individual agricultural communes. And for exchange of their produce for manufactured goods from the urban syndicalist workplaces. This meant that, while everyone within each individual commune and workplace was equal, that some communes were richer than others. To share this wealth, an equalisation fund was set up, whereby richer communes contributed financially, again denominated in money terms, to their poorer neighbours. At no point did the Spanish revolution control inter-communal transfers using anything other than money.

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