A monetary system is a gigantic device to distribute wealth. We should not get tricked by figures. The important thing is its function. A key question is: What sort of function should we expect from a monetary system? On the other hand, figures represent results. We should change the system so that the figures represent the function.
The market is driven by differentiation. People can position themselves by means of differentiation.
However, people nowadays tend to connect differentiation with discrimination quickly. If differentiation were to be connected with discrimination and denied blindly, we wouldn’t be able to make reasonable distinctions. Consequently, an invisible type of discrimination would spread.
The criteria for reasonable distinction should be focused on work. Grouping should be based on an assessment of work and this should be connected to an assessment of workers.
The grounds and criteria for reasonable distinction are competence, performance and achievement.
The problem lies in unearned income.
I wouldn’t say that social security itself is wrong. But, if it suppressed the will to work, that would be another matter altogether.
If welfare payments or unemployment insurance were to exceed the minimum wage of general workers, that, too, would be another matter.
If that were the case, people would feel foolish about working hard.
If that
were the case, social security would deviate from its original objective. When
finance ceases to work because of social security expenses, it would be like
putting the cart before the horse. A society that prov
When the
gold standard system was replaced by the flexible exchange rate system, the
gold standard system was virtually replaced by the land standard system. This
is because nothing other than land could secure funds. Unlike the gold standard
system, however, people are unaware of the land standard system.
Under the land standard system, the foundation of the market is formed by debt that is secured with land. The source of bank notes, the main currency, is the debt of the nation. This fact generates the balance of credits and debts, i.e., a zero-sum relationship. Debt backed by credit supplies money, and the distribution of wealth is achieved by the supplied money. This is the basic mechanism of the land standard system.
However, under the land standard system, land cannot be used for settlement between currency blocs. Therefore, foreign currency reserves play an important role for settlement between currency blocs.
When the subprime problem came to light, the land standard system was exposed unexpectedly.
Under the land standard system, the direction of fund flow depends on the market price of land.
A rise in land prices enhances the internal fund-raising capability of management agencies. On the other hand, a decline in land prices invites reduced fund-raising capability. When the fund-raising capability increases, funds are directed to investments. When the fund-raising capability decreases, funds are collected. This is a factor that increases or decreases the money supply. The money supply has a function that affects business conditions in the market.
If you don’t understand the mechanism of land prices and economic conditions, you can’t clearly understand the present market economy.
Under the land standard system, soaring land prices invite overheated business conditions and reduced land prices lead to depressed business conditions.
Since land prices fluctuate in a long cycle, a rise in land prices becomes a source for sustainable economic growth. On the other hand, a decline in land prices leads to a long-term economic recession. The economy should be steered with due regard for this point of difference. It is the stability of land prices that builds the backbone of economic policies under the land standard system.
The market price of land underpins the economy.
Under the land standard system, a key factor is the utilization of state-owned land and national bonds.
Under the land standard system, the significance of land-related social capital such as roads is important. The added value generated from land is important. When a road is constructed effectively, it invites a rise in the price of land. When a road is constructed randomly, the environment is destroyed and a hotbed for vested interests is created.
Accounting is a sort of algebra.
Accounting is a group that consists of a set of natural numbers, addition and information.
Accounting is based on addition and multiplication. Subtraction and division take effect based on addition and multiplication.
Accordingly, accounting can’t help but focus on the balance in essence. Since accounting is based on natural numbers, the balance of an individual account is not allowed to go negative. An individual account should always result in zero or a natural number. If not, accounting is not effective. Eventually, accounting converges on the present balance.
Accounting is a function based on the premise that the balance is a natural number including zero.
Accounting is a also a fiction created by currency flow. This is an important point.
Why was a fiction like accounting created? Moreover, why was a fiction like accounting needed? In other words, what functions do people expect from accounting? In order to understand accounting phenomena, it is essential to clarify this point.
A market economy based on an accounting system generates nominal values and real values between fictitious accounting and the real economy.
An accounting system is a mechanism to distribute money and goods to people through currency circulation.
Economic phenomena, such as inflation or deflation based on the value of money, are caused by an excessive or insufficient money supply.
When the market is based on an accounting system, an improperly functioning accounting system might be a cause of inflation or deflation.
The important key points for understanding such a money economy are the accumulation and fluctuation of the value of money.
The value of money is a product of illusion. The value of money exists because people think that money itself has value. If people didn’t accept the value of money, money would have no value. The value of money is meaningless.
Money
has value when it is tied to something. When money
and the value of money are tied, money has the value of money. A banknote is
merely a piece of paper unless it is tied to the value of money.
A group is a set of elements that have some sort of mutual relationships. A structure is a set having some mechanism.
What is important in a structure is the relationships among elements, or the association of elements.
In terms of a financial system, this association is not established. And this is the biggest cause of financial collapse.
To sum
up, when cons
In terms of accounting, how the relationships and functions are established among accounts, which underlies figures, determines the function of accounting.
The basics of accounting are how to build relationships between earnings and expenses, earnings and assets, earnings and debt, earnings and capital, expenses and assets, expenses and debt, expenses and capital, assets and debt, asset and capital, and debt and capital. The index for building relationships is profit. If you don’t understand these relationships, you can’t understand the market structure and its phenomena.
Based on these relationships as a premise, the direction of fund flow and the function of funds should be clarified.
It is the role of government to construct the market mechanism and control the amount, direction and interest (time value) of funds that are supplied to the market.
A group is an aggregation of control.
A group is a structural aggregation.
A group is an aggregation of functions.
Enter a transaction in a book. Issue a slip. Keep a journal. Post the count to the general ledger. Close the book. Tally up the count on a trial balance. Prepare the work sheet. Prepare the financial statement. Prepare the tax returns. Submit the tax returns to the tax office. This series of account processing tasks has order, position and function. An aggregation of these tasks is a group.
A transaction is a product of multiplication of {Credit| Fictitious Transaction, Reduction of Assets, Increase of Debt, Reduction of Capital, Generation of Earnings} and
{Credit| Empty set, Increase of Assets, Decrease of Debt, Decrease of Capital, Generation of Expenses}. Therefore, a transaction is a group.
When
dealing with transactions, a reverse transaction should be regarded as zero or
a fictitious transaction. In other words, it is an
A transaction is a cyclic group.
The whole consists of parts, and the parts are controlled by the whole. This is a structure.
The same interaction is seen in the structure of an organization.
What is important for the structure of a group is the shape and style. The basics of mathematics lie in finding out the isomorphism hidden in the group.
The isomorphism hidden in accounting is the structure of the market economy.
The fundamentals of accounting lie in the isomorphism.
A transaction that constitutes accounting forms the automorphism group.
Depending
on the transaction, an account turns on an axis formed by the boundary between
the transaction agent and the transaction partner. Consequently, the accounts
of the transaction agent and the transaction partner have a line-symmetrical
shape.