When called into question by God at the end of your life, what will your
When called into question by God at the end of your life, what will your answer be?
Will you be able to give an honest accounting of your deeds?
Thus, we have no choice but to live a life without doing anything to be ashamed of in the face of God.
There is not only a single market. Rather, the whole market scheme is comprised of a combination of multiple independent markets.
The separate markets that make up the whole are not equally uniform, and each has its own unique mechanisms. These markets also consist of several layers, each comprising procurement, manufacturing, logistics, sales, etc., at each level in the hierarchy. And the aspect of these markets changes at each stage of development. In addition, these markets are also influenced by other markets, such as those overseas.
The individual markets are built upon a lower structure that comprises such factors as, history, regional characteristics, geographical conditions, culture, religion, environment (currency exchange, price trends of raw materials, technological innovations, employment conditions, manners and customs, etc.), trade environment, economic institutions, and political systems.
The mechanism of the parts that constitute these markets must respectively change according to the position and circumstances at each stage of development. Regulations are the principle behind the mechanism that is responsible for this.
It is therefore necessary to change the regulations according to such factors as the characteristics of products, the development stage of the market, and the external environment. Although deregulations are implemented at the request of such markets, they must be premised on need.
While there are markets with relaxed regulations, there are also markets that should have their regulations strengthened.
Some parts should have their regulations strengthened, and there are also some parts that should have their regulations relaxed.
However, it is also a fact that the time when income begins to stagnate is the time when regulations single-mindedly begin to be relaxed.
And that is the time to take this fact seriously.
It is absurd to give priority to reasoning and logic and neglect this fact.
Why is deregulation implemented, and why does its purpose have a two-sided relationship with the purpose of instituting regulations. This is because the purpose of regulations is the same as the purpose of deregulation.
For both deregulation and regulation, the purpose is to achieve fair pricing.
This is not a matter of granting benefits to any party in particular, or achieving low prices, or fueling competition.
Fair pricing means that, after having to bear appropriate expenses, being able to make a profit that corresponds to changes in the environment, and moreover achieving prices that minimize the burden on consumers.
Deregulation brought about dramatic innovation in the communications and information industry. But the opposite happened in the petroleum industry which saw the market devastated. Deregulation is not a panacea.
The high-value-added and innovative communications and information industry and the device industry must not be lumped together with the petroleum industry and its difficulties in differentiating consumption.
Up till now an attempt at complete fairness, such as in competition, has not been achieved in the market. If all the conditions are roughly the same, competition will not take place. This is because it is impossible for market participants to compete given the same preconditions.
It is impossible to unify all sports with the same single rule.
Trying to unify soccer, baseball, tennis, golf and all sports with one rule would be outrageous. In the same way, all markets can not be unified with a single rule, at least for now. Trying to unify, generalize or universalize anything and everything is one of the vices of scientism.
The purpose of the market is to achieve fair pricing, and the market is a place with the purpose of achieving equitable distribution; the market is not a place with the purpose of achieving low pricing and competition. And, accounting is a mechanism that provides a reference for monitoring the workings of the market.
Basing on accounting standards is like making a car matched to a speedometer.
A speedometer provides a means for safe and comfortable driving, and is not for the purpose of making a car.
The market reacts honestly. Rather than quibbling over individual events, we should address the problem of whether or not proper regulations were in place with respect to the occurrence of events. Events such as the Lehman Brothers bankruptcy should been prevented if appropriate regulations had been in place.
Why will a price war occur when regulations are not implemented? The cause of this lies in the profit structure.
The profit structure consists essentially of profits and expenses.
The biggest problem is the incorrect perception that expenses are unnecessary and that they should be eliminated. This has created distorted thinking about prices and regulations.
A market economy can not stand once expenses have been denied. This is because expenses are what is responsible for distribution.
Expenses are what comprises the added value.
Revenue and expenses are set concepts for the purpose of leveling the cash balance.
Profit is a means of measuring the balance of revenue and expenses, and it is relative.
In order to correctly reflect the conditions of a business, the business is changed depending on the state it is in.
Thus, profit is based on the premise that the business is operating in accordance with the state it is in. Profitable operation is not allowed only in the event that the state of the business is not correctly reflected. This is because the nature of expenses is not constant, and it changes depending on the environment and scale. This is also because, depending on the way that expenses are recognized, there is a risk that the business may no longer operate correctly.
But, it should be noted that the original purpose of periodic profit and loss was for leveling the cash balance.
The problem is the nature of expenses. Expenses comprise variable expenses, such as costs, and fixed expenses, such as administrative expenses.
Fixed expenses consist mainly of personnel expenses, depreciation and amortization, and payment interest rates.
But, there is nothing of substance in outlaying expenses for depreciation and amortization.
While not without substance strictly speaking, the accounting itself is not tied directly to expenditures for depreciation and amortization.
Depreciation and amortization expenses have a nature of post-processing past investments. Originally depreciation and amortization involved capital investment, that is, their basis was expenditures on fixed assets.
However, there is no expenditure for depreciation and amortization expenses corresponding to the concerned depreciation and amortization expenses recorded in the accounts.
Expenses of a fixed type such as costs and personnel expenses were based on fixed assets and were grouped together to form fixed expenses. Expenses are comprised of fixed and variable expenses. Depreciation and amortization expenses are what comprises the nucleus of the expenses that make up fixed expenses. These are one of the factors that effect the flow of unit prices.
Another important point is that, in the current profit and loss calculation, anything greater than the fixed portion is recorded as profit. This means that unless a certain level of sales is reached, profits will not rise. This is tied to a sales-oriented form of business. Because sales revenues are the product of quantity and unit price, the only approach to obtaining more sales revenues is to increase the sales quantity or increase the unit price.
In other words, the operating capacity and sales volume determine the profits.
The fact is that the greater the sales volume, the earlier the business can get beyond the break-even point and make a profit. For that reason, it means that the momentum arises for getting caught up in a low-price war while attempting to pursue overall profits or even partially at the expense of profits. But, it is possible to adjust the balance within a single fiscal year even when caught up in a low-price war.
Therefore, if you get caught up in a price war one time, the situation is out of control.
Another point is that people in the market do not act rationally, and they are not capable of doing so.
The market is a place of conflict, not a rational field of competition such as that thought by scholars and critics. The market is a battlefield. Once the fighting starts the battle is fought until the opponent is vanquished. This is because it is an unregulated dispute, a lawless act, and the situation is not settled until one of the sides is defeated.
Scholars, critics, and accountants do not understand such things. And that is why they can not be business operators.
Once a low-price war is triggered, suppression no longer functions, the situation turns into a quagmire, the market is devastated, and eventually an oligopolistic monopoly comes about.
Making a profit is thought to be something bad.
In accounting, because the goal is to make appropriate profits, achieving accounting with integrity and at low-cost is something of secondary importance. Scholars, accountants, and critics can not run a business.
In addition, along with being a place to distribute producer goods, the market is also a place to distribute money.
Money is conveyed along the paths that goods flow on and is also distributed.
If we focus superficially on prices alone, we overlook the paths of the flow of money.
However, if we say that it is all right to cut out the intermediate paths, we have completely overlooked the paths of money.
The market is not made up only of consumers, nor is it made up only of producers. A bias arises only with regard to which of those profits are represented.
Producers are also consumers, and consumers are also producers.
Achieving low prices simply to make consumers happy denies the position of producers. And making surplus profits only through production efficiency or at the convenience of producers also can not be allowed. That is why they are in balance.
A big fuss is being made about big data and AI, but why aren't they being put to use to deal with economic issues?
The basis of the economy is simple and calculations are not difficult, but there is just a huge amount of data.
In other words, the use of big data is supposed to be the best method for the economy.
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