foundations of a free economy are balance and symmetry.
this sense, the fact that the structure of double-entry bookkeeping is based on
positioning debt on one side and credit on the other, that is, lending and
borrowing, has a deep meaning.
bookkeeping, which is the grammar of the market economy, is based on a zero sum
relationship. In other words, in double-entry bookkeeping, the sum is always
zero. This is the source of the pressure of zero. With zero, whether it is a
zero point, zero line or zero surface, the power to maintain a balance is at
work. Zero has the function of producing symmetry, too.
a zero point or zero line is set, it moves to shrink to zero or moves to
amplify with zero as a center area can often be seen. These effects are the
pressure of zero.
a zero-sum state, the power to converge on zero, i.e., the power to balance, is
at work. This is the pressure of zero. In addition, the meaning of zero is
important because of these foregoing facts.
a market where double-entry bookkeeping is the grammar, profit will converge on
zero if no action is taken. This is because double-entry bookkeeping, the
foundation of accounting, is based on a zero sum relationship.
lending and borrowing that occurs between economic entities become zeroes.
sums of the current balance and the capital and financial balance become zero,
too. The sums of the current balance, capital and financial balance and balance
on goods of the entire market are also zero. Therefore, the problem is not
whether the figures are in the red or in the black.
principle of a free economy where the above-mentioned relationships exist is
that if you have surpluses, you have the same amount of deficits. Thus, it
would be wrong to say definitively that surpluses are normal and deficits are
abnormal. What is important is the mechanism producing surpluses and deficits
and the function of that mechanism. This means that surpluses and deficits are
not flexible and that the portion of surpluses and the portion of deficits are
both continuously in the black and in the red. In addition, this is a
are deficits and what are surpluses? Are deficits and surpluses balanced in
terms of time? It would also become a problem if the width of the amplitude of
deficits and surpluses was appropriately arranged.
example, the fact that when the current balance is in the red, the capital and
financial balance must be in the black, and that the sums of the current
balance, financial balance, family budget balance and private sector balance
are zero means that economic entities exist both in the red and in the black.
is impossible for all economic entities to enjoy surpluses. That is not to say
that surpluses are right and deficits are wrong. Rather, the problem lies in
the role and trend of economic entities enjoying surpluses and economic
entities suffering deficits.
problem is what characteristics and functions deficits and surpluses have.
nature do changes in deficits and surpluses have in terms of time?
deficits and surpluses chronic?
makes up for deficits and surpluses?
are the interactions between deficits and surpluses?
important point is the roles that economic entities in the red and economic
entities in the black have.
problem is what impact an economic entity suffering deficits and one enjoying
surpluses has on other economic entities suffering deficits or enjoying
other words, the key is the mechanism that produces surpluses or deficits.
should keep in mind that, as for the phenomenon of balance and symmetry, power
in the opposite direction works behind any phenomenon that has taken place.
Because deficits work on surpluses, you cannot understand the true role of
surpluses unless you observe the function of deficits, i.e., the movements in
the opposite direction, instead of only looking at the workings of surpluses.
accrue depending on the existence of both economic entities suffering deficits
and those enjoying surpluses. Thus, the pressure for balance creates the
function of trying to reduce profits to zero as much as possible. Therefore, to
keep the market sound, it is important how balance and symmetry should be
competition makes the quality of commodities become homogeneous.
production and mass consumption have the functions of unifying and
standardizing commodities, which occur because mass production and mass
consumption make production and consumption become average.
perspective on the economy and on the principle of the mechanism of the economy
will differ depending on how you regard your personal desires, and whether you
desire a unified and uniform economy or a diverse one. In the process of
maturing, a free market must naturally be premised upon diversified personal
desires. Arguing that personal desires should be unified and made uniform is
tantamount to totalitarianism and managerialism.
affluence of a free economy lies in its diversity. This is because unification
and standardization of value reduce alternatives and make them weaker.
and standardization of value will eliminate differences and gaps in economic
value. As a result, economic value tends toward balance and approaches zero
endlessly. This is the phenomenon that deprives the economy of its vitality.
outcome is that disorderly price competition will reduce profits to zero.
you are to continue earning profits, you need to employ a mechanism for taking
steps other than price competition. Competition is not for prices only.
you should adopt the same premises and conditions of competition, otherwise you
will be unable to achieve fair competition.
generates profits is the mechanism and structure of the market. The structure
of the market is established by regulations. Regulations determine how the
market should work. Therefore, deregulation should not be considered the be-all
and end-all. Proper regulations are necessary.
economy moves through the relationships among proceeds, expenditure and income.
is an entrance and also an exit.
is the total of value added.
added means the economic value produced by economic activities in a given
period of time, which is expressed by monetary value. In other words, income is
the value produced.
is the expenditure in the previous term.
are composed of income, debts and repayments of loans.
is composed of consumption, savings and repayments of debts.
produces economic flows, while savings and debts form stock.
turns into the expenditure and savings in the present term.
exceeding the income of the present term is made possible by using loans and
withdrawing past savings.
is turned into income.
expenditure is greater than income, the market will grow and debts will
increase. If expenditure is smaller than income, the market will shrink and
debts will decrease.
are the product of the amount of currencies and the number of turnovers. The
number of turnovers means the amount of trade.
stated above, consumption, savings and loans are created by the relationships
among proceeds, income and expenditure. Savings and loans are the potential
power of investment.
expenditure is greater than income, the shortage is made up for by taking out
loans or withdrawing savings. Loans are saved as stock, and if savings are
withdrawn, stock turns into flow.
expenditure exceeds income, this situation shows that the market is expanding.
If expenditure is smaller than income, the surplus will be used for savings or
for the repayment of loans. This situation means that the market is shrinking.
real economy is supported by the production and consumption of goods and the
amount of currencies circulated. Commodity prices are real economic values. Production
and consumption are achieved on the basis of income. This is because production
is supported by labor from which income is derived. In addition, consumption
occurs within the scope of proceeds. This is because income is the only
productive factor among the factors that compose proceeds, i.e., income, loans
and the withdrawal of savings. If consumption exceeds production, you will have
no alternative but to import goods from other countries. By contrast, if
production becomes excessive, you will have to store or export the surpluses.
Exports and imports are the sources of the current balance.
connects the economy of goods with the economy of money is the relationships
among proceeds, expenditure and income. Goods exist at the exit and represent
consumption and expenditure. Money exists at the entrance and represents
production and proceeds. What connects goods to money is people. While the
current balance depends on substantial production industries, the income
balance is dependent on consumption industries (service industries including
finance). This suggests the relationships between goods and money, substantial
and nominal factors, and productive and consumption aspects. Economic phenomena
occur through the economy of goods, the economy of money and the economy of
people. If people, goods and money are in harmony with one another, the economy
will be stabilized, but if they lose their balance, the economy will become