６７、Mathematics is a means to an end, and the discipline of mathematics
was originally something that was purposeful.
Mathematics is a means to an end, and the discipline of mathematics was originally something that was purposeful.
A number is an abstract concept, and depending on what object a number is representing, the characteristics of any given number may change.
The characteristics of such numbers as the population, the elderly and housing construction starts are determined by the objects that such numbers are representing.
The objects referred to here are the entirety, the whole, of certain objects. The number of elements that make up that whole are determined by how the whole is taken and perceived.
Numbers, while they are abstract things, are a means and a tool. As abstract means and tools, based on the object, purpose, and handling and processing method, numbers change their appearance, form and nature in a lot of ways.
Therefore, differences have arisen such as to describe natural numbers, integers and real numbers.
When dealing with numbers we should make sure to check their preconditions and purposes.
The problem of numbers is a matter of perception, and it is a problem of the potential of understanding.
This is the basic premise.
In the economy in particular, this means that numbers are not functioning on their own.
Numbers function when working in combination with whatever objects they happen to represent.
The essence of numbers is abstract; it is their workings; it is their information; it is their characteristics.
Hidden behind the act of counting numbers is the act of choosing objects with common elements and characteristics.
In other words, this means that numbers are composed assuming the existence of a set of phenomena with the same elements and characteristics.
The workings of numbers may be said to involve selecting, dividing, counting, collecting, measuring (comparing), recording and saving.
These workings have been passed down to the value of money.
And these workings of numbers form the basis of economic activities.
What money is, is something that gives substance to numbers.
Money is something that gives substance to numbers.By gaining substance, money not only has a numeric attribute but also has an additional attribute of substance.
By becoming something substantive, money not only acquires the attribute of substance, but at the same time it also acquires the constraints commensurate with being something of substance.
With its attributes as a thing of substance, money can be owned, possessed, carried, seen, touched, replaced, distributed, lent, rented, deposited, received on deposit, given, earned, stored, saved, submitted, received, handed over, discarded, disposed of, thrown away, hidden and changed.
With its attributes as a thing of substance, money can not have a negative value, can not be represented fractionally (in other words, it can not be handled as something that is indivisible), and can not be used as imaginary numbers or irrational numbers. It becomes a discrete number, without being based on a balance, and is a finite number of simple substance that does not function.
And the attributes of numbers and substance define the workings of money. In addition, they are the foundation of the value of money.
Money is comprised of links between the value of goods and the numbers of money used to represent them. Money quantifies the value of goods. And through this quantifying, it is possible to express the workings of value as formulas.
As a result of quantifying, the qualitative characteristics stand out. When a population is classified by age, the differences between each generation stand out. If you try to determine things only from monetary values that appear in a table, you will overlook the qualitative aspects of the economy.
The economy is made up of three workings: first, forces working in the market; second, structural workings such as organizations, institutions, laws and mechanisms; and third, the workings of individual entities, parts and units.
The driving force behind these three workings is the flow of funds, which appears in the form of income and expenditure.
The mechanism of a money economy is driven by the vibrations of income and expenditure. The balancing of accounts creates the flow of funds. The flow of funds controls the workings in the market, the movement of structures and the movement of individual entities.
Structures mean a certain whole or entirety, and individual entities mean a certain part.
For accounting purposes, the means of obtaining revenue include debt and capital, and earnings related expenditures are classified as asset expenditures, cost expenditures and financial expenditures. Asset expenditures are investments, and cost expenditures are also consumption. However, financial expenditures are not recorded in accounting procedures. Interest rates are cost expenditures.
Income and expenditure have a two-sided relationship as seen from the perspective of economic entities.
However, this in this relationship, expenditure is a revenue, but revenue is not necessarily an expenditure.
Revenue and earnings are different things.
Revenue is something that is basically covered by earnings. But, if earnings are inadequate, revenue must be supplemented by means of debt or by means of capital.
The source of the forces acting on the economy is, first of all, the interaction of nominal value and substantive value. Second, there is the interaction of flows and stocks. And these interactions create the interactions of assets, liabilities, revenues, and expenses with earnings and expenditures, that is, the workings of the flow of funds.
Forces in the market arise from the relationship between nominal value and substantive value. The interaction of nominal value and substantive value is determined by the characteristics of the market forces. In addition, stocks are the basis for the forces acting in the market.
The three elements that make up the economy are the element of people, the element of goods and the element of money. The substantive value reflects the element of goods, and the nominal value reflects the element of money.
In accounting, substantive values are classified into assets and expenses. Nominal values are classified into debt, capital and earnings. Profits are accumulated in the capital.
Regarding the difference between nominal and substantive values, nominal value refers to phenomena that only have value as money, and substantive value refers to phenomena that have value as something of substance.
The nominal value is when the value appearing on the surface matches the substantive value, whereas, for the substantive value, there are cases in which the value appearing on the surface does not match the substantive value. For example, for land prices, the price actually transacted and the value that is recorded in accounting procedures may not necessarily coincide. As with land prices, for differences between the substantive value and the value recorded in the account books, the value shall be taken to be a substantive value.
In addition, there are also liquidity problems with stocks and flows.
In accounting, assets, liabilities and capital belong to stock. Earnings and expenses belong to flows.
Flow and stock are part of the substantive value. The flow portion of the substantive value is basically consistent with the nominal value. The problem lies in the fact that the stock portion of the substantive value deviates from the substance.
And, the difference between the stock portion of the substantive value and the nominal value defines the direction of the flow of funds.
When there is an expanding trend in the market, substantive values exceed the nominal values, which serves to promote growth.
And this contributes to inflation.
Just as the sum of domestic production is the gross domestic product, take the sum of domestic earnings to be the gross domestic income, the sum of domestic expenses to be the gross domestic expenses, the sum of domestic total assets to be the gross domestic assets, the sum of domestic debt to be the gross domestic debt, the sum of total domestic capital to be the gross domestic capital, and the sum of net capital to be the gross domestic net assets.
When the procurement capabilities of funds are suppressed for some reason, the earning capacity is rapidly reduced, the total expense ratio rises relatively, gross domestic assets are compressed, and the domestic gross debt burden increases relatively.
As a result, it becomes difficult for funds to flow in the actual market.
The biggest problem is that the supply of money to the actual market gets shut off.
A balance sheet listing assets and liabilities may be said to be basically a sheet that shows a balance. It is a balance sheet, so you would be less likely to grab the cash balance from an income statement.
However, what is flowing and underlying both the balance sheet and the income statement is the cash balance.
When the economy worsens and the earning capacity of society as a whole is reduced, negative burdens inevitably increase.
When there is no longer any earning capacity of the society as a whole, the collateral margin of assets is lost, the pressure to repay and collect debts intensifies, and surplus funds that could be put to use for investments and expenses are eliminated. In addition, frequently with the recession that comes, businesses will resort to falling into excessive competition, which reduces the earning capacity all the more. And thus a negative spiral begins. And with the plunge into excessive competition during a recession, the market itself becomes saturated because there is no room to expand. This happens because so many companies are going around competing for such little room. And as this happens, the routes by which funds flow into the actual market become narrower and funds wind up staying in financial institutions. Such funds flow into the asset markets in search of outlets. And this is an economic bubble.
The problem is that funds are no longer flowing into the actual market, and the distribution functions are no longer working.
In this situation, competition should be suppressed in order to regain the earnings capacity of the market.
Even with a lot of public investment, if the market is not able to absorb the funds, public investments, too, will contrarily produce adverse effects.
It is not a matter of there being an insufficient amount of funds. It is difficult for the funds to flow, or the flow is backing up.
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