This question was addressed by James Guillaume in 1876. He envisaged that each farm or factory would be taken over by a commune comprising the people living in a particular area. Each commune would then collectively own the means of production (land, machinery etc) and organise their work in a democratic way. Each commune would set up a "Bank of Exchange" to provide economic government for the commune, paying the workers to produce goods with its own "voucher" currency, and backing these vouchers with the products of the labour of the commune.

The Bank of Exchange will not only receive products belonging to the workers of the commune; it will correspond with other communes and arrange to procure goods which the commune is obliged to get from outside sources, such as certain foodstuffs, fuels, manufactured products, etc. These outside products will be featured side by side with local goods. The consumers will pay for the commodities in the various markets with vouchers of different denominations, and all goods will be uniformly priced.

 

It is evident from our description that the operations of the Bank of Exchange do not differ essentially from the usual commercial procedures. These operations are in effect nothing but buying and selling; the bank buys from the producers and sells to the consumers. But we think that after a certain length of time the functions of the Banks of Exchange will be reduced without inconvenience and that a new system will gradually replace the old system: exchange in the traditional sense will give way to distribution, pure and simple. What do we mean by this?

 

As long as a product is in short supply it will to a certain extent have to be rationed. And the easiest way to do this would be to sell these scarce products at a price so high that only people who really need them would be willing to buy them. But when the prodigious growth of production, which will not fail to take place when work is rationally organized, produces an oversupply of this or that product, it will not be necessary to ration consumption. The practice of selling, which was adopted as a sort of deterrent to immoderate consumption, will be abolished; the communal banks will no longer sell commodities, they will distribute them in accordance with the needs of the consumers.

If I understand this correctly, Guillaume believed that the increased efficiency of the communes would create such a massive increase in production that the use of money to restrict consumption would no longer be necessary; anyone who wanted anything would simply ask their local commune for it. Or to put it another way, this was going to be a post-scarcity economy, so none of the hard questions faced by capitalist economies would be relevant.

(Note to commenters inclined to argue with Guillaume's analysis: this is an answer to the question, not a claim that the analysis is correct)

This question was addressed by James Guillaume in 1876. He envisaged that each farm or factory would be taken over by a commune comprising the people living in a particular area. Each commune would then collectively own the means of production (land, machinery etc) and organise their work in a democratic way. Each commune would set up a "Bank of Exchange" to provide economic government for the commune, paying the workers to produce goods with its own "voucher" currency, and backing these vouchers with the products of the labour of the commune.

The Bank of Exchange will not only receive products belonging to the workers of the commune; it will correspond with other communes and arrange to procure goods which the commune is obliged to get from outside sources, such as certain foodstuffs, fuels, manufactured products, etc. These outside products will be featured side by side with local goods. The consumers will pay for the commodities in the various markets with vouchers of different denominations, and all goods will be uniformly priced.

It is evident from our description that the operations of the Bank of Exchange do not differ essentially from the usual commercial procedures. These operations are in effect nothing but buying and selling; the bank buys from the producers and sells to the consumers. But we think that after a certain length of time the functions of the Banks of Exchange will be reduced without inconvenience and that a new system will gradually replace the old system: exchange in the traditional sense will give way to distribution, pure and simple. What do we mean by this?

As long as a product is in short supply it will to a certain extent have to be rationed. And the easiest way to do this would be to sell these scarce products at a price so high that only people who really need them would be willing to buy them. But when the prodigious growth of production, which will not fail to take place when work is rationally organized, produces an oversupply of this or that product, it will not be necessary to ration consumption. The practice of selling, which was adopted as a sort of deterrent to immoderate consumption, will be abolished; the communal banks will no longer sell commodities, they will distribute them in accordance with the needs of the consumers.

If I understand this correctly, Guillaume believed that the increased efficiency of the communes would create such a massive increase in production that the use of money to restrict consumption would no longer be necessary; anyone who wanted anything would simply ask their local commune for it. Or to put it another way, this was going to be a post-scarcity economy, so none of the hard questions faced by capitalist economies would be relevant.

(Note to commenters inclined to argue with Guillaume's analysis: this is an answer to the question, not a claim that the analysis is correct)