Chapter 6: Distribution department
(1) The distribution in the first phase of communist society
In "Critique of the Gotha Program", Karl Marx presented his argument about distribution in communist society by separating it in two phases:
① the distribution in the first phase of communist society, and
② the distribution in a higher phase of communist society.
I want to advance theory according to it here.
First, the distribution in the first phase of communist society is described as follows.
In the first phase of communist society just as it emerges from capitalist society, "the right of the producers is proportional to the labor they supply; the equality consists in the fact that measurement is made with an equal standard, labor. But one man is superior to another physically, or mentally, and supplies more labor in the same time, or can labor for a longer time; and labor, to serve as a measure, must be defined by its duration or intensity, otherwise it ceases to be a standard of measurement. This equal right is an unequal right for unequal labor."
"But these defects are inevitable in the first phase of communist society as it is when it has just emerged after prolonged birth pangs from capitalist society. Right can never be higher than the economic structure of society and its cultural development conditioned thereby." (Marginal Notes to the Program of the German Workers' Party by Karl Marx: ONLINE VERSION)
And, in such first phase of communist society, the following must be deducted from total social product before distributing it.
"First, cover for replacement of the means of production used up.………①
Second, additional portion for expansion of production.………②
Third, reserve or insurance funds to provide against accidents, dislocations caused by natural calamities, etc.………③
These deductions from the "undiminished" proceeds of labor are an economic necessity, and their magnitude is to be determined according to available means and forces, and partly by computation of probabilities, but they are in no way calculable by equity. There remains the other part of the total product, intended to serve as means of consumption. Before this is divided among the individuals, there has to be deduction again, from it:
First, the general costs of administration do not belonging to production.………④
This part will, from the outset, be very considerably restricted in comparison with present-day society, and it diminishes in proportion as the new society develops.
Second, that which is intended for the common satisfaction of needs, such as schools, health services, etc.………⑤
From the outset, this part grows considerably in comparison with present-day society, and it grows in proportion as the new society develops.
Third, funds for those unable to work, etc., in short, for what is included under so-called official poor relief today."………⑥ (ditto)
Next, I will try to compare above-mentioned six items with financial statements. As we had watched in First Section, the theoretical surplus-value incarnates as profit in reality. Accordingly disposal (distribution) of surplus-value appears in reality as disposal (distribution) of profit. According to Karl Marx, "the capitalist exploits all the surplus values", but how is it indeed. The next schedule is an example of statement of retained earnings.
The range of "capitalist" changes greatly by how the capitalist is defined. But if we glance at this statement of retained earnings, we can understand that it is not right that "the capitalist exploits all of the profit (surplus value)." Moreover, if six items of "Critique of the Gotha Programme" are compared with profit and loss statement which links to this statement of retained earnings, the comparison of distribution style of the capitalist society and that of the first grade communist society is almost possible. The next table shows this.
Naturally each item of Critique of the Gotha Program cannot be compared with each item of financial statements in the strict sense of the word. Definition of the items is rough, but I want to point out similarities of the both. From this table it is understood that the part deducted before distribution in communist society is also deducted in capitalist society.
Accordingly the other parts left are distributed, and they are, in financial statements, (A) personnel expenses (salaries / bonuses) on profit and loss statement, and, (B) director's bonuses and dividend to stockholders on retained earnings statement. If (C) labor cost on factory cost report is added to them, all the parts equivalent to distribution in communist society will be contained.
Among them, only "dividend to stockholders" will be examined in the next section because it is special in the sense that it is not appearing in the communist society. But, concerning the other deductions and the distributions, it may be said that distribution in the first phase of communist society extremely resembles distribution in the present-age capitalist society (deduction is regarded as part of distribution).
(2) One consideration about dividend to stockholders
In the comparison table of financial statements and Critique of the Gotha Program, we can understand that there is only one distribution of "dividend to stockholders" missing in communist society. If it is expressed in other words, putting aside "dividend to stockholders," items of distribution in the first phase of communist society is almost the same as the present-age capitalist society. So I will try to investigate on "dividend to stockholders" here. The point in this case is "who is the stockholder that receives dividend to stockholders."
① In case of Japan
According to Nihon Kokusei Zue (Collection of Pictures of State of Japan; 1977-97 year version; published by Kokuseisha co.), a change of each owner ratio of shareholding is just shown as in the chart below.
(table24)
Change of shareholding ratio of each holder
All listed companies 1970-95 （％）
| shareholder | 1970 | 1975 | 1980 | 1985 | 1990 | 1995 |
| Financial institution | 33 | 36 | 39 | 42 | 45 | 41 |
| Industrial corporation | 25 | 30 | 27 | 25 | 26 | 26 |
| Individual | 42 | 34 | 29 | 26 | 24 | 24 |
| Foreigner | 0 | 0 | 5 | 7 | 5 | 9 |
cf. Nihon Kokusei Zue (Collection of Pictures of State of Japan); Pubulished by Kokuseisha Co.
The ratio of individual shareholding falls from 60 % ～70 % in 1950s to 23.6 % in 1995.
Accordingly financial institutions and industrial corporations own about three quarters, and individuals own the other quarter. Besides, the individual shareholding ratio has been decreasing year by year. As the majority of stockholders are juridical persons, many stocks are in interdependent (mutual possession of stocks) situation among juridical persons.
What is the percentage of dividend to individual owner of all the shares? For example, let's suppose that shares for labor cost, salary, bonus to directors and dividend to stockholders are as follows.
Labor cost: 390
Salary: 100
Bonus to directors: 10
Dividend to stockholders: 40
Share total: 540
From 40×1／4÷540≒1.9％ (1/4 represents the individual shareholding ratio to all stocks), the distribution ratio to individual owner in this case is only about 1.9 %. Moreover, if deduction is regarded as part of distribution, the ratio will become smaller and smaller because share total becomes larger.
Karl Marx says, "these defects (existence of inequality) are inevitable in the first phase of communist society" in Critique of the Gotha Program. Is the ratio of this dividend to stockholders too large compared with the inevitable inequality? It is all the same about "bonus to directors."
"Dividend to corporate shareholder" becomes the origin of profit of a corporation again, and flow back to a juridical person. So it is not referred to when fair or unfairness of distribution for an individual is discussed.
② In case of U.S.A
I noe have a shocking report by Peter F. Drucker. He assumes in the book that U.S.A is a true socialist country, and the grounds are described as follows.
1.The Revolution No One Noticed
The Attainment of Pension Fund Socialism
If "socialism" is defined as "ownership of the means of production by the workers"－and this is both the orthodox and the only rigorous definition－then the United States is the first truly "Socialist" country.
Through their pension funds, employees of American business today own at least 25 percent of its equity capital, which is more than enough for control. The pension funds of the self-employed, of the public employees, and of school and college teachers own at least another 10 percent, giving the workers of America ownership of more than one-third of the equity capital of American business. Within another ten years the pension funds will inevitably increase their holdings, and by 1985 (probably sooner), they will own at least 50－if not 60－percent of equity capital. Ten years later, or well before the turn of the century, their holding should exceed around two-thirds of the equity capital (that is, the common shares) plus a major portion－perhaps 40 percent－of the debt capital (bonds, debentures, and notes) of the American economy. Inflation can only speed up this process. "The Unseen Revolution: How Pension Fund Socialism Came to America" by Peter F. Drucker. (Harper & Row, Publishers Inc, pp. 1 to 2)
That is, in U.S.A. it says that employee (laborer) becomes one of biggest shareholders. If considered in this way, "a stockholder" in the current capitalist society largely differs from "the capitalist" whom Karl Marx witnessed 100 years ago.
From the above-mentioned we do not need to think that the modern capitalist society is different conclusively from the first phase of communist society by presence of "dividend to stockholders." Rather we should pay attention to great many similarities between the both as we had seen in the previous paragraphs.
(3) The distribution in a higher phase of communist society
Successively Karl Marx describes distribution in a higher phase of communist society in Critique of the Gotha Program as follows.
"In a higher phase of communist society, after the enslaving subordination of the individual to the division of labor, and therewith also the antithesis between mental and physical labor, has vanished; after labor has become not only a means of life but life's prime want; after the productive forces have also increased with the all-around development of the individual, and all the springs of co-operative wealth flow more abundantly -- only then then can the narrow horizon of bourgeois right be crossed in its entirety and society inscribe on its banners: From each according to his ability, to each according to his needs!"(Marginal Notes to the Program of the German Workers' Party by Karl Marx: ONLINE VERSION)
A condition to reach a higher phase of communist society is described, but the sentences are examined and analyzed.
① after the enslaving subordination of the individual to the division of labor,
② the antithesis between mental and physical labor, has vanished;
③ after labor has become not only a means of life but life's prime want;
④ the all-around development of the individual,
⑤ after the productive forces have also increased
⑥ all the springs of co-operative wealth flow more abundantly
When the sentence, that is resolved as above, is rearranged, we can
understand ①,⑤ and ⑥ are on the premise of the increase of productive
force and abundant resources, and ②,③ and ④ are on the premise of a
completed human society where there is no idleness or egoism. That
is:
(Ⅰ) Increase of productive force and abundant resources.
(Ⅱ) Society of humans who are complete as Christ or Buddha.
When above-mentioned two major conditions are completed, a higher phase of communist society or the next society comes true.
(Ⅰ) From each according to his ability,
(Ⅱ) to each according to his needs!
Then, is there a possibility of realization of these two major conditions? The Marxists thought that it would come true by all means so long as communist society would come, but I think it is too optimistic. The reasons are as follows.
(Condition Ⅰ)
… …about "increase of productive force and abundant resources":
In recent years, as a global problem, there is a problem of exhaustion of resources. At the times of Karl Marx, the people were forced to poverty because the productive force was low. But Karl Marx thought "people become rich endlessly, so long as productive force increases because natural fortune is infinity." This thought was alive till some 30 years ago. Nobody thought that resources would be exhausted. But, in reality, natural fortune does not seem to be infinite.
Perhaps productive force showed the increase that is beyond imagination of Karl Marx by constant innovations. But the hurdle of limitation of resources stood high on the way before realizing a higher phase of communist society. The present age entered into the epoch when recycling of resources is attempted from the epoch when material wealth was pursued. When this change is ignored, there will not be a future for mankind.
(Condition Ⅱ)
… …about "society of humans who are complete as Christ or Buddha":
This cannot be merely read from the condition sentence. The same thing may be said from the sentence "From each according to his ability, to each according to his needs!" as the result. That is to say, "From each according to his ability," means one person will work more than needs in his life, and one person will work less than needs in his life. But it is distributed between the both persons at their needs.
In this case I think the person of the latter is not dissatisfied, but is there not dissatisfaction for the person of the former? A feeling to give a share of oneself to someone else cannot be easily born. From the first, laborer wants to get the share that the laborer worked, and communist, that is to say, aims at communist society because they do not want to be exploited by a capitalist. If each person has the spirit of sacrifice and service, laborer will not become angry if a little is exploited by a capitalist.
I can not think about purifying automatically the life polluted by desire, egoism and laziness which exist in the depths of human life even if capitalist society changes into communist society. Rather if human life is filled with spirit of altruism or a merciful clean heart of Buddha, there may be no problem about distribution of wealth in communist society or capitalist society. If adversely human life is not purified, a higher phase of communist society will not come true forever. A key of the realization lies in the matter of human life.
After all, possibility of the realization of "a higher phase of communist society" is extremely low, because on one hand from an external factor of exhaustion of resources and on the other hand from an internal factor of human life. Rather there will be no possibility of the realization. That Marxism that has been called scientific socialism is proof that it is utopian socialism. How should we, mankind, live, then? We must search for the road. I want to recommend "Small is Beautiful" (A Study of Economics as if People Mattered) by E. F. Schumacher, as the first grade clue.
Next page (Epilogue)