First of all, it is necessary to clear up just what the economy is.
First of all, it is necessary to clear up just what the economy is.
Many people today talk about the economy, but they really do not know what the economy means.
This is a basic mistake.
The three elements of recognition are related to position and movement.
The economy can not be said to simply involve monetary matters.
When speaking about the economy, it is primarily a problem of whether or not there are profits.
And the primary issue is a matter of life or death.
Next in line is the problem of how people can live their lives as human beings.
On top of that comes the problem of monetary events.
The question of money is simply not first and foremost.
People work to receive remuneration, and they spend that money that to buy the things that they need to live, and to feed their families - that is what people’s lives are all about. This is about people needing money to live. People do not live to make money.
But, this does not mean that money itself is something vulgar.
What is vulgar is the people who have become dirtied by money.
The root of the matter is how people live.
Economics is a discipline that considers how people live.
If something can not be resolved by economic means, we try to resolve it by political means. If it can not be resolved by political means, then we try to resolve it by violent means.
Use of violence is the ultimate means that can be taken.
The economy involves the activities that are needed to live.
The economy is not a monetary phenomenon.
As a means, money is in secondary importance to the activities that are needed to live.
In its original sense, money is not an unambiguous means of living.
The unambiguous means of the economy are production, storage, distribution, consumption, and labor.
The important point here is that the money economy is a numerical economy.
The money economy is a system that unifies the monetary value of goods by multiplying the unit prices of the goods in question.
As such, value is reduced to quantitative information. And value is assumed to be expressed as a numerical value.
The elements that make up the economy are the element of people, the element of goods, and the element of money.
People are quantified using numbers of people, goods are quantified using the quantities of goods, and money is quantified by prices.
Monetary value can be expressed as the product of people and prices, and as the product of quantities and prices.
Population is the basis for quantifying the number of people.
Economic fluctuations are a function of time, and they are caused by distribution. And consequently, what is important in the economy are differences and ratios.
The elements that make up the economy are people, goods and money. People and goods are the traditional elements. Compared to people and goods, the element of money can be said to be a product of history. In other words, over a long period of time, people have taken money be to an element of the economy, and as such money is an acquired, artificial element.
When thinking about the economy, what is important to consider are the elements that make up the economy and the flow of money in the economy.
The four elements of money that make up the money economy are income, savings, debt and spending.
The four elements of goods that make up the money economy are production, storage, distribution and consumption.
The four elements of people that make up the money economy are labor, income, property and living.
For people in a money economy, in general four activities can be cited: working, selling, buying and providing for themselves and their families.
Working turns into remuneration, into income. Living creates desires. The means of production constrains the supply capacity, and desire forms demand.
Revenue, production and labor are all tied to each other. Expenditure, consumption and living are also tied to each other.
Income and expenditure, production and consumption, labor and living have asymmetrical relationships. And they are also asymmetrical with regard to time.
The means of eliminating this asymmetry are savings, debt, storage, distribution, remuneration, desire and time.
In addition, this asymmetry is eliminated by the flow of money.
These elements are interconnected to each other in two-sided relationships.
There are two sides to goods as well. Production and consumption, supply and demand, labor and distribution, revenues and expenses, investment and return on investment, procurement and repayment. The two-sided aspects of these events are what runs the economy.
For example, production volume becomes supply capacity. Supply capacity becomes the basis for distribution. Desire is derived from consumption.
Desire arouses demand. Remuneration is paid on the basis of labor. Remuneration is revenue. Revenue is spent on the basis of desire. Subtracting expenditures from revenues leaves savings. Savings are lent, and the funds that are lent become debt. Invested funds are planned to be recovered. The basis of investment is the procurement and repayment of funds.
Income, production and revenues will be equal, and living, consumption and expenditures will be equal to each other.
The sum of income and debt will be equal to the sum of spending and savings.
The sum of production and imports and exports will be equal to the sum of inventory and consumption.
Needs are the criteria for measuring production and consumption, income and expenditure, and remuneration and living.
Needs are caused by surpluses and shortages.
The basis of the economy for people is their lives. Living is consumption.
The foundation of the economy for people is their means of living and their cost of living.
Dependents are included in the living expenses of people.
The population forms the basis of the economy for people.
The means of production for people is their labor. The productivity of people is therefore is determined by their labor.
However, the period in which people can work is limited.
The period in which people can work constrains their economy.
Production is the basis of the economy of goods. Therefore, the foundation of the economy of goods is the means of production and the products produced.
The means of production refers to such things as land and labor. For products, there are tangible goods and intangible goods.
Products are produced by combined means of production. Means of production include both physical things and human resources.
The physical elements underlying the economy are divided into the means of production and the products produced.
The human elements underlying the economy are ownership and labor. Ownership and labor form the basis of rights and obligations.
The means of production and products, and ownership and labor constitute unique elements of the economy.
The means of production and the means of living are formed by investments and constitute stock.
Products and the cost of living form a flow that is tied to consumption.
Living is comprised of the consumption of products.
Funds are raised by revenue and debt, and they are released by spending and savings (lending).
Funds flow in a direction from their procurement to their release.
Labor is the foundation of today’s modern economy. On this point, socialism and communism are the same.
The basic principle is that those who do not work do not get to eat.
And money is paid to compensate for labor. This is a cardinal rule.
The problem lies in the fact that there are people who can live extravagantly without working, as well as people who can not live no matter how much they work.
And, unearned income is generated through the ownership of the means of production.
How this notion is grasped is the fundamental difference between capitalism and socialism, and communism.
However, capitalism, socialism and communism, too, are all consistent with respect to the necessity of providing some constraints on private ownership.
Discrimination is the largest cause for why working people can not make a living. Therefore, the problem lies in how to eliminate this discrimination.
Money is a means of measuring the value of goods and the value of labor. On top of that, money is a means for distributing products to people.
The basis of the flow of money is income and expenditure.
And this is premised on income and expenditure not being symmetrical.
A shortage of funds occurs when spending exceeds income, and a surplus of funds occurs when income exceeds spending.
Savings and debt are what compensate for these surpluses and shortages.
If you look at economic activities from the aspect of the monetary elements, there are basically only buying and selling, and lending and borrowing. Selling and buying, and lending and borrowing, are both two sides of similar activities. For this reason, trading in the market is a balancing activity.
Income and expenditure are made symmetrical through buying and selling and through lending and borrowing. The functioning of income and expenditure is achieved through the buying and selling of products and the means of production, or alternatively, through lending and borrowing. In the principle of periodic profit and loss, income and expenditure are decomposed into unit periods to calculate the revenues and expenses. Income is calculated against costs to measure cost-effectiveness. Cost-effectiveness is equivalent to the workings of the money flow.
It is difficult to measure the cost-effectiveness of such services as the national defense forces, police departments, and fire-fighting services
For this reason, they are configured as publicly funded services.
Such public services are financed by taxes.
This is the major premise.
The wrong perception of profits is making the current economy strange.
Depending on how and whether profits are defined and set, the market economy will exhibit a completely different aspect.
It is a mistake to admit or deny that seizing profits is selfish.
According to how they are set, making profits can vary from being selfish actions or individualistic actions.
And, if the economic objectives are made clear, then goals can be determined that aim at profits.
It is meaningless to aimlessly say that profits need to be increased.
The problem lies in how profits are set.
Making a profit is not a given.
Profit is certainly an idea to be spoken about.
The problem of the idea is in how profits are set. The outcome is not something that occurs by accident. Even capitalism can be changed for the worse by the way profits are set.
And, profits should be set as they were originally intended for purposes of public welfare.
Profits are a means and an index for the purpose of realizing freedom, equality and philanthropy.
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