What Guarantees the Ruin of Economy? 11 страница
If the system of macroeconomic regulation is absent or underdeveloped[124] businessmen react to prices being formed on the markets by expanding and starting production of some products and removing production of other products. Accordingly if one considers the processes of production and distribution of products in the society during sufficiently long time periods the so-called «law of value» does regulate the inter-industry proportions and the absolute activities of production in each of the industries.
The market mechanism is capable of regulating many things if not everything in a society’s life. Yet the real freedom of private heterogeneous entrepreneurship under the fundamental economic law of capitalism — «get more profit right now!» — makes all of us face the question about the nature and quality of this regulation.
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During the epoch when macroeconomic regulation did not exist the «law of value» worked the following way. Bad harvest was a calamity: food is short, prices on food rise, curtailing the solvent demand in other industries and causing an outflow of workforce and ruin of producers. A rich harvest was equally a calamity: food is in affluence, prices fall to a level when producers of agricultural goods go broke. This leads to reduction of their share of solvent demand on other markets, a slump in production in other industries whose effort was on satisfying their needs. In historic reality it came to burning grain in furnaces simply to stop the price on it from falling. People utterly forgot about the past bad harvests and about the bad harvest that could yet come in future. A rush demand caused by real needs or by the whims of vogue leads to a rush raising of production capacity in the corresponding industries. Production capacities buildup requires time, and the rush demand could disappear while that time passes. Or the rush rising of production capacity could lead to the supply of the product on the market becoming superfluous in regard to the current needs of society or the solvent demand. This causes prices to fall below the level of production’s self-repayment and to the ruin of entrepreneurs who have invested wrongly.
This kind of mess is «natural» for the historically real capitalism with a free market that has formed on the basis of free private enterprise and free price formation in the sphere of production. Yet this capitalism comes with a special annex of free usury and stock-exchange speculations which the supranational bank corporation is engaged in. This corporation is capable of arranging a financial crisis on purpose and with a pre-planned timing in any country it controls using it as on of the means to achieve goals of a non-financial nature. This was exactly how financial and economic crises in pre-revolutionary Russia were provoked, this was how the «great depression» of 1929 was arranged in the USA spreading throughout the whole capitalist world of the time.
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This was what capitalism was like until the mid 20th century. Its market mechanism — the free market — was viewed as a system of self-regulation of production and distribution (including self-regulation of inter-industry proportions) and taken at long historic time intervals. It can be characterized by the following features:
· suppressing the potential of guaranteed satisfaction of the demographically grounded needs of all laborers due to its adjustment to satisfaction of degraded parasitic needs as priority, and first and foremost — to satisfaction of degraded parasitic needs of the ruling “elite” due to the way current incomes and savings were distributed within the society;
· disrupting productive capacities due to the regulating process’s instability in regard to factors that are beyond the bounds of manufacturing processes and of real needs of people (influence of natural elements, financial and stock-exchange speculations and hysteria, fashion etc.);
· disrupting productive capacities due to «overregulating» — redundantly strong reaction to quick changes in the solvent demand distribution among specialized markets of products and services caused by whatever reasons;
· being almost completely incapable of reacting to avert an unwanted event in advance and predominantly reacting to events that have already taken place. Even if this does not lead to disrupting productive capacities it results in low efficiency of the production and distribution system measured against the criteria of speed of operation and volume of output and delivery.
The above-mentioned features are inherent to the free market as a system of self-regulation of production and distribution of products in the society and of self-regulation of productive capacities’ levels and inter-industry proportions.[125]
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Besides, after a certain production achieves a level of capacity allowing satisfying the demographically grounded needs assuredly and in a short time period, the demand will drop to a minimal level determined by how quickly previously satisfied needs come back. The market mechanism will block the structural reorganization of the multiindustrial production and consumption system yet it encourages artificial stimulation of demand by means of lowering the ergonomic and resource characteristics of production.
On the scale of the society in general this is a macroeconomy directed towards getting lots of people involved into a fuss (vanity) that is detrimental for everyone and not towards satisfying people’s vital needs.
The people are forced to bog down in this vanity by the macroeconomic organization. Thus they waste their vigor and time on it without a chance to develop their personality. Such direction towards creating an artificial vane business has the following reasons:
· the market mechanism does not «know» how to dispose of labor resources that are released in the course of technological and organizational progress;
· professional politicians, people of culture see no other way of social development but to offer the people released from labor to ruin themselves and waste their spare time indulging in satisfying their passions and sensualities, mostly within the same range of degraded parasitic needs (booze, gambling and shows, «safe» and «non-conventional» sex etc.)
Therefore, the more freedom market gets in the society the further people are from fulfilling their human potential: at work a man is an appendage to his workplace and outside work he has either no strength left or he wastes his time for drowning himself in a sea of pleasures.
In the feudal era and in the earlier times of blunt slavery social life was placed within a pattern of classes and castes preventing money from acquiring that almost absolute power within society it has assumed in the capitalist era, especially in the «wild» capitalism of free market. In the pre-capitalist era this circumstance concealed and partially curbed the flawed nature the system of free market regulation of production and distribution of products had in the society where inhuman psychology, ethics and morals are dominant.
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But in the capitalist era it became evident to many that this system of production and distribution was flawed. That is why starting from the middle of the 19th century various measures were taken in different societies toward curbing its antihuman nature. These measures had and continue to have a broad range.
Among these measures are efforts to introduce the following:
· progressive income tax;
· progressive prices and charges — more like penalties — on consumption exceeding the limits set in legislature;
· tax benefits for businessmen who spend their profits on funding charity foundations and programs of public consequence;
· quotas determined by the State and agreements of producers concerning production volumes and delivery times of their products to the markets which have been divided between these producers;
· governmental subsidies for the producers and consumers of certain products.
These measures and some other including those of a non-financial or economic nature to some extent suppress solvent demand and funding of production within the degraded parasitic range and allow to maintain the socially necessary volume of production in the demographically grounded range of needs in industries where with such production volume prices fall to a level when non-subsidized production becomes unprofitable or when consumption without subsidies is not possible on the prices allowing for the production’s self-repayment.
Measures of this kind can also to some extent level out the consequences of «overregulation» ensuring a more stable operation of industries and product distribution system. This kind of stability makes the life of many average people happier and predictable for themselves which partially mitigates personal and class antagonism in the society and adds some peace and order to social life.
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These measures are not founded upon a conscious differentiation between the demographically grounded and the degraded parasitic range of needs. Because of that they bring no change into the nature of the inhuman civilization (judged by the psychic types that are dominant in it). They preserve flawed morals directing vices onto a course that poses no danger for the social system’s present stability thereby increasing chances of its potential future downfall.
There are many ways the society reacts to the flawed nature of the free-market regulation of production and consumption. The range of such reactions is crowned by the effort to introduce a system of production and consumption on a planned basis which conforms to really vital needs of all laborers and denies civil rights to unrepentant (persisting) parasites and those who oppose to organizing public life upon declaring the principle of conscientious labor to the benefit of all other laborers. In the course of history such social and economic order has been termed «socialism».[126]
Yet in order to grasp what the very possibility of making a practically consistent plan is objectively caused by we must turn again to the structure of vital needs generated by the society. Because planning deals with satisfying current and future needs then if it is impossible to determine and predict the dynamics of needs in future it is impossible to make plans and run the economy on a planned basis. Therefore the issue of stable predictability of needs is the key issue when running the economy on a planned basis is concerned.
Vital needs are the demographically grounded needs. They can be predicted decades in advance; and their being predictable decades in advance makes it possible to control them centuries in advance. Their predictability springs from the fact that by analyzing what the needs depend on they can be distributed between the three following groups:
· needs where the volume of production required to satisfy them is proportionate to the number of population in groups formed on the basis of sex and age characteristics (these are — food, clothes, kindergartens, school, universities, jobs, etc.);
· needs where the volume of production required to satisfy them is proportionate to the number of families corresponding to how the general number of families is distributed between types of families (single, childless couples, couples having many children; families where more than two generations live together under one roof; those living in town apartments; those living in private houses with allotments etc. — these group of needs includes mainly housing and most home appliances);
· needs in infrastructure which are determined by the population’s way of life in the region and the aims of state institution’s activity (these are transport infrastructure, energy supply, information exchange, education and health service, army bases and combat training facilities etc.)
Because the demographically grounded needs of each group are predictable the economy can be adjusted and prepared in advance to the end of their full and assured stable satisfaction from generation to generation.
In this case society’s technological and organizational progress, and most of all its ethic progress contribute to stability of the multiindustrial system of production and consumption operating on a planned basis given that the state (viewed as a system of professional control of social life) executes a policy beneficial to the whole of society.
Yet an irreversible implementation of this scheme of operation in the economy and state control system will require quite a long time period. At best it will take up one generation’s active lifetime if this is a thinking generation, living in good conscience and developing their morality and ethics according to a world understanding that follows their conscience.
A plan in general , a plan as such, consists of the following:
· a set of defined objectives and indices that are subject to objective control and that define each of the objectives and can reveal deviations in the process of implementation if such occur;[127]
· a complex of actions (a scenario, perhaps a multi-choice one) which consist in utilizing various resources (discovered and defined) and means to complete the objectives chosen (there may be a certain order of succession due to different levels of priority of the objectives and the limited nature of available resources and means).
This definition is also applicable to plans of social and economic development. This is a very useful definition that explains what the plan is in essence. This definition makes clear that:
· a plan of economic and social development is a set of objectives for production and product distribution and a scenario according to which the multiindustrial production and consumption system is controlled (control always has objectives because it is impossible without distinctly defined objectives);
· and the market mechanism is one of the possible means by which the multiindustrial production and consumption system can be self-regulated. This means can be adjusted (if one knows how to do it) to completing certain objectives of production and distribution that have been recognized and set.
In other words when speaking generally some plans (scenarios) of the social and economic nature can include applying market mechanism for completing the chosen objectives, and other plans (scenarios) of the social and economic nature can exclude or ban self-regulation of multiindustrial production and consumption either completely or partially in some of its aspects.[128]
For Russia at the beginning of the 21st century (first of all) and other states of the former USSR this means that the cult opposition (since 1985 and until now[129]) of the so-called «planned economy» and «market economy» which have been considered to be two mutually excluding alternatives results from the superficial attitude, ignorance and folly of «economists» and parrot-like «analytic» journalists» who have made such statements before and continue making them now.
All this time intelligent people who are aware of the problem’s essence have held a different opinion.[130] For example A. Epstein in his article “More dangerous than an enemy”[131] published in the “Economicheskaya gazeta” (№ 41 (210), October 1998) quotes an interview with Saburo Okita, one of the «founding fathers» of the Japanese «economical miracle», given shortly before his death to professor A. Dinkevich:
«One often hears that the transition to market mechanism proclaimed there (in the former USSR and Eastern Europe — A.E.) is convincing proof for the market-oriented economy being superior to the centrally planned one. I think it is a mistake... The problem lies in CONNECTING, CO-ORDINATING, COMBINING THE PRINCIPLE OF THE TWO SYSTEMS IN A SINGLE MECHANISM.[132] (put in capitals by A.A.), finding a way of combining market mechanisms and government planning and regulation».
In order to apply the last sentence of the quotation to the global economy of mankind one needs to change it the following way:
To connect, co-ordinate, combine the principles of these two systems in a common algorithms of social self-government, to find a effective method of combining market mechanisms, national and global planning and regulation to the end of providing every person with a chance of living a life a human being is worthy of (deserves).[133]
Planning of economic development is performed after interindustry proportions and links are discovered, this has been mentioned before. Because it requires to develop productive capacities in compliance with pre-set figures of final product output in each of the industries (in other words it requires having pre-defined objectives and is impossible without the process of setting targets) theoretic and practical planning and control on a planned basis at the very start face the problem of determining needs and the consequences of their satisfaction. In the course of time as one gets a richer experience one inevitable comes to an understanding that all of the needs society has must be divided into demographically grounded ones and degraded parasitic ones.
The needs, which have been discovered and included in the plan, must be divided between the two classes every time a new project plan is being drawn for the upcoming period. The way this issue is dealt with determines where the plan’s control indices come from and what they are.
Earlier we pointed out that the many-sided issue of defining targets in its most aspects lies outside the mechanism of market self-regulation. Yet for same reasons it lies outside the methodology of mathematic modeling and plan optimization, as well as outside the methodology of implementing plans of economic and social development.
One and the same methods (algorithms) of making and optimizing plans, as well as identical control structures and procedures in certain cases can be used for achieving mutually exclusive objectives included in different plans. This is what those prejudiced against planned economy should be aware of.
Yet the problem formulated by S. Okito can be solved if the issue of dividing demographically grounded and degraded parasitic needs is solved. Let us remind you how this problem has been worded: to find and effective way of combining market mechanisms and state planning and regulation in a common algorithms of social self-control. This is so because if the contrary plan is pursued the system of plan-based control will face sabotage at best and at worst — deliberate counter-action.
The point is that generally controlling the multiindustrial production and consumption system on the basis of a plan involves the following: defining targets; distributing investments between industries and regions in compliance with the targets, as well as timing their provision and volume; addressed directive control of state-owned enterprises; working out and granting government contracts to private enterprises, defining policy on taxes, credits, insurance and subsidies connected with government contracts, implementing this policy while fulfilling the plan, etc.
If these heterogeneous means turn out to be in the hands of people, who advocate different conceptions of social order and economy and act at will, according to their moral principles the problem posed by S. Okito would become insoluble.
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