economic principle

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. (66-2)

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. (66-3)

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. (66-4)

But, this does not mean that money itself is something vulgar.
What is vulgar is the people who have become dirtied by money. (66-5)

The root of the matter is how people live.
Economics is a discipline that considers how people live.(66-6)

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. (66-7)

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. (66-8)

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. (66-9)

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.(67-1)

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. (67-2)

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. (67-3)

The problem of numbers is a matter of perception, and it is a problem of the potential of understanding.
This is the basic premise. (67-4)

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. (67-5)

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. (67-6)

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. (66-10)

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. (66-11)

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.(66-12)

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. (66-13)

The three elements of recognition are related to position and movement.(66-1)

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. (67-10)

The driving force behind these three workings is the flow of funds, which appears in the form of income and expenditure. (67-11)

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.(67-9)

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. (66-14)

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. (66-15)

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.(66-16)

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. (66-17)

Needs are the criteria for measuring production and consumption, income and expenditure, and remuneration and living.
Needs are caused by surpluses and shortages. (66-18)

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.(66-19)

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. (66-20)

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. (66-21)

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. (66-22)

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. (66-23)

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. (66-24)

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. (66-25)

Discrimination is the largest cause for why working people can not make a living. Therefore, the problem lies in how to eliminate this discrimination. (66-26)

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. (66-27)

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. (66-28)

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. (66-29)

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.(66-30)

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. (66-31)

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. (66-32)
Structures mean a certain whole or entirety, and individual entities mean a certain part. (67-13)

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.(67-14)

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.(67-16)

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. (67-17)

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. (67-18)

Therefore, practitioners do not trust the study of economics.
In order to understand the movement of the economy, it is necessary to know not only the phenomena that appear on the surface layer, but also the mechanisms behind them.
When thinking about the economy, one should keep the following points in mind.(59-5)
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.(67-19)

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.(67-20)

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.(67-21)

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.(67-22)

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. (67-23)

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.(67-24)

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.(67-25)

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. (67-26)

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. (67-27)

The economy is an activity in which people live. The economy started with self-sufficiency. This means procuring or producing the things necessary for life. At such a time only sharing is involved, which means distribution. Money is not yet needed.
What is needed is the use value.(37-2)

The problem lies in the root of monetary value -- the grounds for monetary value. In order to understand this, it is necessary to clarify the history of money.(37-1)

Money comes into existence when the act of exchange is established. And exchange is established when it becomes necessary to exchange surplus products and deficient products when conditions of surplus or deficiency require. This starts the bartering of goods. At that time, in addition to the use value, property has taken on an exchange value. When the bartering of goods develops further, only the exchange value is specialized and money comes into existence. Even at this time, money has a value as a substance itself and it also has a use value.
In the bartering of goods in the initial stage, things themselves have a use value.(37-3)

The money economy has quantified the value of money and enabled the circulation of money by giving the value of money to a substance called currency. (61-1)

With this, the money economy created a money flow that flows in the direction opposite to the commodity flow. The money flow has established a function that stimulates the commodity flow. This is the basic dynamism of a money economy. (61-1)

Once a money economy has been established, the economy is expressed and measured with money. A money economy resembles a gamble. A game starts when a banker distributes chips to players and the game is over when there are no more chips. Basically, the players borrow chips and exchange them for commodities as needed. (61-3)

At the beginning, the players borrow chips from the banker. So to speak, the central bank is like the banker in gambling. The essence of money is based on borrowing. This symbolizes the essence of the money economy. (61-4)

Money works as a medium for exchange. This function of money -- a means of exchange -- is the basis that forms the five characteristics of money. The first characteristic is that each party recognizes the value of money as a medium for exchange and consents to its use in such a way. The second is that money can be divided up in units. The third is that money can be measured. The fourth is that the value of money can be stored. The fifth is that money is portable and can be carried or moved.(37-4)

Of the three preconditions for the establishment of the nonconvertible bills of today, first is that money has penetrated the market and a certain quantity of money required for circulation has been issued.
The second is that the function or value of money is approved in society. The third is that there is a mechanism to control the amount of money in circulation.(37-5)

First of all, in order to meet the first requirement, it is necessary that money should have been somehow supplied to the market in advance. This is the role fulfilled by coined money such as gold, silver or copper coins, that is, currency by weight. Coined money or currency by weight is based on the premise that the value of money as a substance or the value of the money’s material is equivalent to the same value as the monetary value. Then, money is unilaterally released to the market by an authority as a means of settlement without the prospect of collection.
However, such money has limits depending on the capability to produce money. When the procurement of materials for money becomes difficult, financial conditions become tight.
In order to make up for such financial conditions, good faith money is distributed.
If the money supply continues to be lopsided, the amount of money in circulation becomes uncontrollable.(37-6)

Because of such a situation, money comes to have excessive liquidity, which could lead to an escalation of inflation. To control this, a central bank is established outside of administrative bodies and the right to issue bills is separated from administration. With the premise that borrowing will occur, the administration builds a system to circulate money to the market using the functions of money collection and supply.
At this time, money has basically formed a part of debt.
Finally, money is changed from convertible bills to nonconvertible bills and the monetary value is used as information. The premise for this is that a nation borrows money and secures that debt and that the central bank issues bills.(37-7)

When the money system was first introduced, it was generally necessary that money had to be based on the value of money itself. As such, profit is generated upon the issuance of bills because the bills themselves have value. Until the market is saturated, seigniorage profit is generated. But, the effects of seigniorage end when bills have penetrated the market. When the market becomes excessively saturated, money takes on excessive liquidity resulting in inflation.
In the seigniorage establishment stage, it is possible for the administrative cost to rely on seigniorage. Once money has reached the point of saturation, the subsequent administrative cost has to be covered by collecting and distributing money.
At this stage, money has a negative function in administration. When this negative function plays the role of a base structure, the positive function, i.e., the object economy, comes to function.(37-8)

The negative economy forms a half of the present economy. Therefore, the establishment of a negative economy is important and indispensable.
Society based on a positive economy has a nature that is completely different from that of a society based on a negative economy. When currency flows in a constant direction, credits and debts in the same amount as the amount of currency in distribution are produced. If currency flows in the opposite direction, credits and debts cease to exist.
When currency flows from the negative (liabilities, capital and earnings) direction to the positive (asset and expenses) direction, credits and debts are produced. When it flows from the positive direction to the negative direction, credits and debts are cleared off.(37-9)

The roots of the economy lie in distribution. The essential scale of the economy is determined by the distribution of producer goods and the population. It is not about money. And therefore, poverty is a relative phenomenon, and the economy will not be balanced as long as there is no power of activity in both directions at work.
The problem with the economy at present is that economic policies have deviated from market realities, so they can not easily produce effects. The reason for this is because, although economic policies are established based upon current economics, current economics is not directly connected to actual practices.(59-4)

A game does not begin unless chips are provided to players in advance. Similarly, the money economy does not come into effect unless money is provided to consumers in advance. The fundamental function of a money economy is how to distribute money to consumers.
Defaulting or insolvency means that the economy ultimately fails and the balance is lost. (61-5)

An economy does not work effectively unless production and means of production are related to each other. For example, an economic system in which labor and distribution are not related is uncontrollable. The substance and positive function of an economy lie in commodities and people. Money is the shadow of an economy and a negative function. The foundation for a commodity economy is production and consumption. The foundation for a people’s economy is a means of production and distribution. Labor is a kind of means of production. (61-6)

Overall equilibrium is not always united with partial equilibrium. In a free economy, partial disequilibrium is a premise of overall equilibrium. The important point of a free economy is how to harmonize partial disequilibrium as a whole. (61-7)

A money economy can be deemed to be an aggregation of the value of money. In order to make a money economy work effectively, it is necessary to know the functions of the value of money.
This is because the functions of money depend on the attributes of money. (61-8)

In order to learn the function of the value of money, it is necessary to clarify the attributes of money. Money is, at first, numerical information representing value. Second, the value of money is expressed as natural numbers and discrete numbers. Third, money fixes the monetary value of an object. Fourth, it substantializes the unit of value of money. Fifth, it can materialize an object. Sixth, it is exchangeable. Seventh, it can be owned. Eighth, it can be moved or conveyed. Ninth, it can be stocked, or put in dead stock. Tenth, the value of money can be centralized and disparate things can be calculated if the standard is unified. Eleventh, money can be made and issued by an arbitrary institution. Twelfth, an independent money system can be constructed using an arbitrary unit. Thirteenth, money is a means or tool for transactions. Fourteenth, money has a function to stimulate circulation of commodities and services. Fifteenth, money is a means for buying, selling, lending and borrowing. Sixteenth, money is a means for evaluating labor. Seventeenth, money is a right or evidence on which the credit system is based. Eighteenth, money is an artificial thing. (61-9)

The value of money is a relative value and fixed through transactions. An aggregation means the scores and points collected based on some kinds of premises or conditions. At the base of such scores or points, there are some materials. In other words, scores or points that constitute an aggregation symbolize some object. (61-10)

Scores or points that constitute an aggregation have some biases or characteristics. A seemingly flat aggregation of figures has irregularity. Furthermore, such irregularity has biases or characteristics. Scores and points that constitute an aggregation, i.e. elements, reflect events in the real world. (61-11)

For the elements that constitute an aggregation, the functions and the direction of the functions are important. (61-14)

First, the market economy of today is a debt economy.
And second of all, in the final analysis, what moves economic entities is cash.
It is the flow of cash that produces the vibrations that move the market and economic entities.(59-6)

Nations, corporations, family budgets and even central banks function based on their borrowing as a premise.
When a nation borrows money and makes investments, corporations can gain earnings, and furthermore, distribute income as personnel expenses. In this way, corporations borrow money and circulate funds. As for family budgets, people can build homes and buy cars by borrowing money.
In terms of an economic system like this, the economy would not work if borrowing were considered to be evil. Borrowing is not evil. When the amount of money in circulation cannot be controlled, problems occur.(37-10)

A nation borrows money from family budgets and corporations. Family budgets and corporations borrow money from financial organizations. Financial organizations borrow money from the central bank. Money is distributed in the community when financial organizations borrow money from the central bank.
Well, then, from whom does the central bank borrow money? It borrows money from faith in the market -- from the people. The last part of this sentence is very important. From whom and under what name does the central bank borrow money? To answer this question is to clarify the principle of the monetary economy.(37-11)

A device that controls the present economy is hidden in the gimmick or mechanism of money creation by the central bank. The bank’s accounting mechanism -- the structure of double-entry bookkeeping -- is a device to control the monetary economy. Also, the key to operating finance is hidden.(37-12)

Money has a negative value. The monetary value comes into existence when the property value is mapped on the monetary value. That is to say, the monetary value is a shadow. Bills symbolizing the monetary value are a negative existence. Without understanding this premise, it is impossible to understand finance.(37-13)

The present problem of our economy is not a problem of goods or people. It is a problem of money. Money is why the economy is important.(19)

It is impossible to understand the economy unless we can gauge the flow of money. Our present core money comprises inconvertible notes.(19)

Money consists of real money, convertible notes and inconvertible notes. Each has its own characteristics, but people tend to mix them up, and such confusion upsets the economy.(19)

The money economy was established when the value of money, or the numerical value, was substantiated by a physical substance called money.(19)

The quantity of real money and convertible notes is limited, and money itself forms the commodity price. Basically, inconvertible notes are not restricted by the physical quantity of money. Exchange rates exist but they are not influenced by the commodity price.(19)

Notes are supplied to the market though lending and public investment, and in both cases, the resource is borrowed money. Notes do not exist in the beginning.(19)

A huge quantity of notes is supplied to the market through public investment. The supplied notes are collected a long time after the initial investment. The means of collection is not taxation but repayment. The resource for repayment is basically covered by the profit of the transaction. Namely, notes are supplied to the market through investment and collected within the range of profit. Notes are supplied to the market upon such investment and collected upon repayment. To put this another way, notes flow to the market side through investment and flow to the collection side through repayment. The economy functions everyday with such notes circulating throughout the market. Thus, economic conditions are stabilized by the quantity of notes circulating in the market, the direction of their flow, and the number of rotations that they make.(19)

In the economy, the role and characteristic of time depends on its length. In economic events, the role of time is characterized by its length. Therefore, accounting measurements use the length of time as a reference.(19)

Investment forms the flow of long-term funds and consumption forms the flow of short-term funds. The ratio of investment to consumption determines the function of funds.(19)

The function of long-term funds is to keep the funds circulating in the market in a constant quantity. Short-term funds make the market exert its distribution function. To make the distribution function effective, it is necessary to balance income and consumption. This balance is realized by the relationship between profit and expense. And this is the structure of a market economy.(19)

Long-term funds are collected from profit. Profit should be established with the premise that long-term funds will be collected. But, in light of periodical profit and loss, the collection and repayment of long-term funds do not come out into the open. That is why the flow of long-term funds gets disrupted when profit worsens or market competition gets stiffer. In the end, financial institutions try to withdraw long-term funds, which leads to a depletion of funds in the market.(19)

The function of taxation is to circulate currency and redistribute income. The role of income redistribution is to circulate currency efficiently.(19)

Why is there any need for taxes?
In order to understand this, we need to understand the difference between working for money and working for payment in kind.
The generation of taxes is derived from the need to bear the finances of those in power. In olden times, payment was in kind.
Payment in kind did not need to be based on a system of credit. They simply conscripted the necessary supplies and usufruct that they needed for their own consumption.(60-4)

There is a time lag between the time when notes are supplied to the market through public investment and when those notes are collected. The quantity of long-term funds, i.e., notes circulating in the market, is adjusted through use of this time lag.(19)

Money is nothing but a tool for economic activity. There is no purpose in accumulating money itself.(19)

Notes circulating in the market are always under the pressure of collection. And that pressure serves to circulate the notes in the market. If collection of notes is the only activity, the amount of money circulating in the market will keep declining. That is why there is a need for continuing a certain level of investment. However, the quantity of notes would overflow if public investment was carried out aimlessly. So, the quantity of notes to be supplied is restricted by the scales of the economy and the market.(19)

In 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.(58-6)

The lending and borrowing that occurs between economic entities become zeroes.(58-7)

The 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.(58-8)
In both things and money, there is a difference between the positive and the negative.
Originally, the concept of the negative is derived from indebtedness. This negative space is what invented credit money. More than anything else, the evidence of this is that IOU slips are said to be the forerunners of today’s paper money. (65-9)

The 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 structural problem.(58-9)

Amongst these, there are target characteristics that are an aggregate of arbitrary characteristics. On the contrary, there are characteristics with functions to equalize the targets depending on those arbitrary characteristics. In addition, there are a some workings that extract specific properties and elements and typify the targets depending on their characteristics. And money, too, inherits its characteristics based on a number of such characteristics.
When considering money, this effect has an important function.
In other words, the essence of money is that it is a natural number. A natural number is typified by its characteristic of being a discrete number without a negative. In terms of monetary value, the functioning of this natural number makes it possible to calculate the monetary value of an extraneous object.
This is the most important element in the workings of money. (65-11)

An equals sign establishes a zero-sum relationship.
The events that establish a zero-sum relationship complete one event.
A zero-sum relationship holds a positive and negative relationship.
In other words, the relationship becomes zero as a result of addition.
This addition and the zero relationship determines the relationship between symmetry and asymmetry. (65-12)

What 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.(58-10)

For 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.(58-11)

It 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. (58-12)

There are two basic forms of exercise: a rotational movement and a linear movement.
The basis of circulatory movement, and the basis of cyclical movement, as well as the basis of wave movement is a rotational movement. (65-13)

The problem is what characteristics and functions deficits and surpluses have.(58-13)

What nature do changes in deficits and surpluses have in terms of time?(58-14)

Are deficits and surpluses chronic?(58-15)

What makes up for deficits and surpluses?(58-16)

What are the interactions between deficits and surpluses?(58-17)

Therefore, the problem with an economic event is whether the positive and negative relationship is an ongoing event or a transient event.
That is, whether it is determined that the event is based on a rotational movement or on a linear movement. (65-14)

The important point is the roles that economic entities in the red and economic entities in the black have.(58-18)

The problem is what impact an economic entity suffering deficits and one enjoying surpluses has on other economic entities suffering deficits or enjoying surpluses.(58-19)

In other words, the key is the mechanism that produces surpluses or deficits.(58-20)
The economy moves through the relationships among proceeds, expenditure and income.(58-52)

Income is an entrance and also an exit.(58-53)

Income is the total of value added.(58-54)

Value 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.(58-55)

Income is the expenditure in the previous term.(58-56)

Proceeds are composed of income, debts and repayments of loans.(58-57)

Expenditure is composed of consumption, savings and repayments of debts.(58-58)

Consumption produces economic flows, while savings and debts form stock.(58-59)

Income turns into the expenditure and savings in the present term.(58-60)

Expenditure exceeding the income of the present term is made possible by using loans and withdrawing past savings.(58-61)

Expenditure is turned into income.(58-62)

If 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.(58-63)

Proceeds are the product of the amount of currencies and the number of turnovers. The number of turnovers means the amount of trade.(58-64)

As 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. (58-65)

If 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. (58-66)

When 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.(58-67)

The 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.(58-68)

What 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 unstable.(58-69)

And, in addition, whether or not the regularity becomes a problem.
Rules form the basis of periodicity. (65-15)

If there is no longer a balance between the positive value and the negative value, the nominal value and the substantial value will diverge. And if the flow and stock become unbalanced, it will cause sudden fluctuations in prices.(65-17)

If you want to turn a motion into a rotary motion, you need to make a setting so that an action in a reverse direction is activated when another action is activated. This two-action set has an action-reaction relationship.
In a money economy, the money flow and commodity flow have such an action-reaction relationship.
While the money flow forms the nominal value, the commodity flow forms the substantive value.(61-15)

It is the zero-sum relationship that brings this action-reaction function into play for money. (61-16)

The function of money comes into effect by means of transactions. Transactions are basically a zero-sum relationship. (61-17)

If there is no longer a balance between the positive value and the negative value, the nominal value and the substantial value will diverge. And if the flow and stock become unbalanced, it will cause sudden fluctuations in prices.(65-17)

Money flows in the opposite direction of the commodity flow. This point is important. The problem is seen in the equilibrium between the value of money and the value of commodities.
A current balance in the red means a capital balance in the black. If money is insufficient to import commodities, you must borrow money to cover the shortage. Before you see a shortage of money as a problem, you must see creditworthiness for money-raising as a problem. (61-18)

The world is one. What unites the world as one is a zero-sum relationship. In other words, “one” leads to “zero.”(63-1)
In labor, there is positive labor and negative labor.
Positive labor is productive labor, while negative labor is unproductive labor.
In the category of unproductive labor, there is monetary labor and consumption labor. (65-18)

The foundations of a free economy are balance and symmetry.(58-1)

In 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.(58-2)

Double-entry 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.(58-3)

Once 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.(58-4)

In 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.(58-5)

If zero sum is the basis of the economy, then the central limit theorem has an important meaning.(60-1)

If zero sum is the basis of the economy, then the central limit theorem has an important meaning.
A zero sum means that the average value is zero, and the fact that the distribution focuses on zero has an important meaning.
Try extracting the elements in a zero-sum relationship and assembling it on the basis of common coordinate axes. We need to see what exists on the opposite side. Take the current account balance, for example. At the other end of the spectrum is the capital account balance.
We should not be deciding simply that being in the red with a deficit is bad, and being in the black and having a surplus is good.
Where there is a zero-sum relationship, it means that if there is a surplus, then a deficit also exists.
A zero-sum relationship in the EU region means a balance in the accounts of the government sector, the private sector and the foreign sector.
The sum total of the current account balance will be zero sum. The sum total of the trade balance will be zero sum. The sum total of the income balance will be zero sum. The current account balance and capital account balance will be zero sum.
In a zero-sum-based market economy, there is a vertical equilibrium and a horizontal equilibrium. The horizontal equilibrium has become hierarchical.
The current account balance and capital account balance have a vertical equilibrium relationship.
In contrast, the sum total of the current account balance, the sum total of the capital account balance, and the sum total of the trade balance all have a horizontal equilibrium relationship. The sum total of transactions between economic entities also has a horizontal equilibrium relationship.
And, the sum total of the balance on goods and services, the sum total of the income balance and the sum total of the current transfers balance form the hierarchy of the current account balance.(60-2)

In labor, there is positive labor and negative labor.
Positive labor is productive labor, while negative labor is unproductive labor.
In the category of unproductive labor, there is monetary labor and consumption labor. (65-18)

Considering the current account, the measures to be taken differ depending on whether it is seen as a movement of the surplus and deficit swinging over a period of time, or as a movement that balances in the short term, or as a movement that accumulates linearly. And, without identifying this point, discussing whether the surplus is right or wrong is foolish.(65-20)

The economy is fueled by the energy generated when things waver between a balance and an imbalance.
People today tend to be fascinated by a short-term and partial balance only and they overlook a long-term and overall balance. But economic policies should try to adjust a short-term imbalance by means of a long-term balance, and if the economy sticks just to a short-term, partial balance, it will be unable to ensure any long-term, overall balance and lose its normal functions.(63-2)
The current account (in the private sector, public sector and overseas sector), capital and financial account (in the private sector, public sector and overseas sector) and payment reserves (in the private sector, public sector and overseas sector) have a vertical balance among them. On the other hand, each of the sum totals of the current account, of the capital and financial account, and of the balance on goods have a horizontal balance. The sum total of the economic entities has a horizontal balance, too. The current account, capital and financial account and payment reserves have a zero-sum relationship both as a whole and within the economic entities. The current account, capital and financial account and payment reserves have a zero-sum relationship horizontally, too. Therefore, they have a zero-sum relationship as a whole, too.(63-3)
If currency phenomena have a zero-sum relationship in a short term, they will also have a zero-sum relationship in a long term.(63-5)
A vertical zero sum relationship means that the entire economy has a zero sum relationship within the economic entities. A horizontal zero sum relationship means that the sum total of the economic entities is zero.
The economic entities include the public sector, private sector and overseas sector. The private sector is further divided into households and businesses. The public sector includes the government finance account and loans and borrowings among public agencies. The issuance of currencies means the borrowings of public agencies. (63-4)What determines the currency-based scale of the market are the amount and turnover of the currency supplied.(63-5)
Public finance consists of investment and the government’s income and expenditure, and its loans and borrowings. The income and expenditure in each fiscal year are accumulated in the loans and borrowings of public finance. If public finance is in the black, national debts will decrease. If national debts decrease, debts in the private sector or the overseas sector will increase. An increase in debts in the private sector will affect consumption and investment in this sector.
If debts in households in the private sector remain unchanged, debts of private businesses will increase. Debts of private businesses will be reflected on the financial market and the capital market.
Fiscal revenue and expenditure are directly related to an increase or decrease in currencies. If public investment decreases, the debts of the government will decrease but the flow of currencies will decrease. The problem is the lowest limit to the supply and withdrawal of currencies.
Debts in the overseas sector will affect financial markets abroad.
Loans and borrowings will occur among countries.
Lenders can exist only when borrowers exist, and borrowers can exist only when lenders exist. The problem is the limit to and extent of loans and borrowings; these two factors determine the amount of currencies.(63-6)
The outflow of funds to overseas countries is basically the same as running into debt abroad.
Creditor nations can exist only when debtor nations exist. Debtor countries support creditor countries.(63-7)
A money economy is supported by negative accounts. In other words, debt exists there at the root of the money economy.
In a money economy, if debt is not regarded positively, the functions of the economy may not work well and may become uncontrollable.
A money economy will not hold with simplistic thinking that debt and deficits are bad and should be done away with.
If the functioning of debt is not regarded positively, we will not be able to make effective use of negative accounts and the economy will no longer be stable. Periodic profit and loss has been designed for this reason. (65-6)
Why does a situation develop into a war? It is because the negative accounts have not been regarded positively. Because we are not regarding the negative accounts positively, the inefficiencies of the negative accounts have been accumulating without being eliminated. As a result, the accounts of the negative expand, and we will not be able to control these negative accounts. And as a further result, defaulting will become very frequent.
And the economy will not function properly if the negative accounts are not cleaned out. To that end, the economy will seek creative destruction. One of the means to eliminate such a stiff negative portion is war.
With fully operating manufacturing facilities, war produces a large amount of debt. And on the other hand, war is accompanied by large expenditures. Staff must also be mobilized. And although inflation also occurs, employment is also created by it. In other words, excessive consumption occurs, which in turn creates excessive demand. And as a result, there is plenty of money available.
On the other hand, liabilities and debt of the past are liquidated. Also, if you win the war, you acquire new markets. That part is also somewhat of an illusion, but even so, it is also a fact that you will be able to monopolize specific resources. However, war is war. It should not be forgotten that, on the other hand, war is accompanied by enormous destruction.(65-7)

The international balance is a problem of international investment and loans and borrowings among countries and the total amount of currencies. The state of the world’s economy will also change according to which key currency or which currency of settlement is adopted.(63-8)
Funds in the private sector will be supplied in the form of income. Income is paid as compensation to those who are the means of production.
Expenditure in the private sector includes consumption and investment. If funds are in excess in the private sector, the surplus funds will be saved, and if people are short of funds in the private sector, they will borrow money. Savings and debts have a zero-sum relationship both from a short-term viewpoint and from a long-term viewpoint. Savings and debts as well as investment will be accumulated.(63-9)
Seeing the situation with a focus on things, the relationships among production, consumption and stock are zero-sum relationships. Therefore, overproduction produces greater consumption and stock. The problem is density; quantity should be adjusted by quality. Both in production and consumption, quantity should be adjusted by quality.(63-10)
Goods and money differ from each other. While surplus money will be accumulated, all surplus goods will not be accumulated.(63-11)
Market transactions are conducted for the purpose of distributing resources (people, goods and money) from areas with surplus resources to areas where they are in short supply.
The role of the economy is to supply necessary quantities of the necessary resources to the areas where the resources are required.(63-12)
In today’s economy, what is considered important is results only. But what is really important to the economy are the motives and the needs. If you consume something just because you have made it, you will be unable to prevent indiscriminate production and waste of resources. Environmental issues and problems of resources have become graver now, and a system for consuming necessary resources in necessary quantities is required.(63-13)
The harmony of the entire economy can be achieved by a physical economy. The problem is how to harmonize production, employment, consumption and the means of production. Currency is just a kind of means of production and is not everything.(63-14)
What we should do is to relax or strengthen market controls and cause the economic entities to compete or cooperate with one another depending on the trends of goods. In addition, we should properly encourage international investment, public investment and private sector investment. Economic controls can be achieved through market mechanisms.(63-15)
International investment is never a war. This is because the world is one.(63-16)

The basics for an economy are income and spending. Economic conditions are determined by the movement of people, commodities and money to or from an economic entity. The scale, manner, departure point and destination of the movement are the decisive factors. (61-19)

The actions to circulate money are lending, borrowing, buying and selling. The interest on money is the function that stimulates the circulation of money.
While lending and borrowing generate rights, buying and selling generate physical distribution.
Lending and borrowing as well as buying and selling come into effect respectively as pairs. If the viewpoint or standpoint is shifted, borrowing becomes lending and selling becomes buying.
Lending and borrowing as well as buying and selling are two sides of the same coin. Basically, they mean income and spending. Namely, the money flow consists of the stages of remainder, income, spending and remainder. (61-20)

Considering the current account, the measures to be taken differ depending on whether it is seen as a movement of the surplus and deficit swinging over a period of time, or as a movement that balances in the short term, or as a movement that accumulates linearly. And, without identifying this point, discussing whether the surplus is right or wrong is foolish.(65-20)

Money flowing into an economic entity is the total of income and borrowed money. Spending is the price paid in exchange for consumption, investment and surplus. Investment can be deemed as means of production and surplus can be deemed as savings. Borrowed money, a means of production and savings form stock. (61-21)

If seen from another viewpoint, savings are credits to financial institutions. Savings are debt for financial institutions. In this way, lending and borrowing are two sides of the same coin. Savings and debt can be considered to do the same actions. (61-22)

In a money economy, which is built on an action-reaction relationship brought about by a zero-sum relationship, average and dispersion have a special meaning. The fact that average and dispersion have meaning suggests that the central limit theorem and normal distribution are important.
In addition, the effectiveness of Bayesian probability is also indicated.
When anticipating economic phenomena, how to set an a priori probability or an a posteriori probability is an important key. Therefore, Bayesian probability and Bayesian statistics are important.(61-23)

The fiscal balance is the result of the supply and recovery of currency. And the fiscal balance occurs if all the currency that was supplied can be collected.
However, recovery of all the currency supplied by taxes is not possible, and the monetary system itself would collapse if such a thing were possible.
Currency is circulated by transactions. Transactions involve buying and selling, and borrowing and lending. The range that can be captured by taxes is a portion of buying and selling.
Because it is an unrealized portion, the portion of borrowing and lending is not suitable for taxation, and in addition, currency does not recirculate only through buying and selling transactions. This is because credit money, through its characteristics of borrowing and lending, is supplied to the market and recovered.
Currency will not recirculate in the market through buying and selling transactions alone. This is because distribution produces a flow of funds only in a certain direction. Borrowing and lending transactions are what supplies and recovers the currency and causes the recirculation of funds in the market.
Currency no longer recirculates after all the currency supplied to the market is recovered. This is a borrowing and lending transaction. If the distribution of currency in the market is continued, it will not be possible to collect tax revenues on all of the currency. If such a situation occurs even temporarily, it will cause the currency to disappear from the market. In order to continue to flow currency constantly into the market, it is necessary to supply and recover funds that are linked directly to the market.
To do this, we must not rely only on tax revenues, but we should establish the means for recovering the funds directly from the market, that is, the government should incorporate some profit-oriented business.
When using a constant cycle for the supply and recovery of currency, the mechanism for controlling the flow rate of the passage will become important. That is, should we introduce a mechanism to repeat the supply and recovery of currency at a constant cycle.
In order to introduce a mechanism to repeat the supply and recovery at a constant cycle, it should not be premised on the balance of a single year, but rather it should be premised on a long-term balance.
Monopolies and exclusionary activities interfere with the circulation of currency and cause an uneven distribution of wealth. Uneven distribution of wealth causes hording of currencies.
Business without quid pro quo does not enable the functions of the supply and recovery of currency to be fulfilled. This is because borrowing and lending transactions and buying and selling transactions are unrelated. (65-21)

What we should note is that cash flow is a non-zero sum relationship.
Cash is a natural number, i.e., a plus number. Accordingly, the balance is important for cash flow.
Double-entry bookkeeping is an operation that converts a cash flow, which is a non-zero sum relationship, into a zero-sum relationship. When converting a non-zero sum relationship into a zero-sum relationship, the value of time holds the key.
When anticipating economic events, it is necessary to definitely distinguish flow and stock. Economic phenomena emerge in the process of production and consumption. Flow is formed by the cash flow and stock is formed by the means of production and rights. (61-24)

Consumption is the action of spending values. Investment is the action of spending funds for the means of production, that is, it is the action of paying for the means of production. In terms of the functions of money, basically investment is also the action of spending values similar to the action of consumption. What distinguishes between investment and consumption is the issue of a time period, namely, a time axis. The functions are basically the same. (61-25)

Means of production include depreciable assets and non-depreciable assets. Depreciable assets are things whose value will be lost within a certain period of time according to a predetermined standard. In contrast, non-depreciable assets are assets whose value is determined on the market. However, this operation is only on the books and it does not refer to the substantive value. The substantive value is determined through market transactions. (61-26)
The positive and negative energy of the economy is converted into rotational movement through the up-and-down movement of economic value, causing distribution, and resources are distributed through exchanges in the market. This is a market economy.
What becomes a problem is when linear movement can not be converted into rotational movement or circulating movement or cyclical movement.
If linear movement can not be converted to rotational movement, a negative chain begins.(65-22)

Linear movement will be converted to a rotational movement by an up-and-down movement.
For example, the upper limit movement of foreign exchange rates will adjust the current account, and the up-and-down movement of the current account balance will affect the exchange rates.(65-23)

Linear movement will be converted to a rotational movement by an up-and-down movement.
For example, the upper limit movement of foreign exchange rates will adjust the current account, and the up-and-down movement of the current account balance will affect the exchange rates.(65-23)

The accounting value is a virtual value.
Monetary transactions form nominal values. Though the commodity value is not always consistent with the value on the books, the nominal value agrees with the value on the books in principle.(61-27)

In corporate accounting, the relationships among the principal repayment of a long-term loan, depreciation, profit, tax and cash flow are important. This is a problem that involves the fundamentals of the economy.
The market system is a purposeful and artificial system.
The systems of a market or an economy are not naturally developed systems.
Competition is a sort of means to achieve the objective of the economy or market. It is not a rule like a principle. The means to achieve economic objectives include the means to hold down competition such as tie-ups, collaborations and agreements.
The principle is to have people compete while maintaining earning capacity. If people are exclusively forced to compete, earning capacity would not be maintained resulting in an oligopoly or monopoly.(61-28)

It is the power of politics that decides the objective or means of an economy or market. That’s why statesmen must take economically neutral positions. (61-29)

It is not advisable to make use of an economy politically. This is because an economic collapse may involve the risk of inviting unexpected results such as a war or starvation. (61-30)

War is effective in the market expansion stage. But, in a mature or shrinking market stage, war may involve the risk of devastating the market. (61-31)

Rather, market activity is induced by incentives. Industries have the function of developing in a direction to gain profits.
A good example is energy policies. To solve environmental issues, thorough saving of energy is required. However, promoting the saving of energy does not always lead to profits for the energy industry. It is necessary to take measures so that the saving of energy can produce some profits.(61-32)

For corporations, continuation is a major premise.
This is because the social mission or original purpose of corporations is to provide employment while supplying useful goods to society. Therefore, corporations are not the possession of a particular individual or family but are institutions that exist for the public.
The deficit or surplus in the periodical profit and loss is just a rough indication. The success or failure of a corporation is determined by the income and expenditure of funds.
Corporations stand on the equilibrium of lending and borrowing as well as on the equilibrium of stock and flow. The criterion for the sustainability of a corporation is the equilibrium of profit and loss. It is a silly stunt to encourage competition until corporate management collapses.(61-33)

For activities that are derived from the flow of cash, in particular, the functioning of the negative is important. This functioning of the negative means that there is a minus, a back side that is at work in the shadows.
In periodic profit and loss accounting, the workings of debts and deficits are responsible for half of the activities.
We should not forget that it is cash that is moving the market economy. The periodic profit and loss principle is a mechanism for facilitating this flow of cash. If you forget this, you will lose sight of the essence of the economy.(59-7)

Funds are the making use of cash as resources. The flowing of funds, the in-flow and out-flow, is the energy that moves the economy and economic entities.
However, while the cash flow that is referred to for accounting purposes does represent the flow of funds, cash flow does not represent the functioning of funds. And as such, it therefore becomes necessary to measure the profit and loss of the period.(59-8)

The time axis is the key to periodic profit and loss accounting.
In addition, averaging is the most important factor in the periodical profit and loss accounting. And averaging is premised on having a fixed income.
A fixed income is the basis for finalizing long-term debts. In other words, it comprises the introduced portion.(59-9)

The ratio is an important factor in periodic profit and loss accounting. However, in cash basis accounting, the difference is important. The reason for this is because, while periodical profit and loss accounting is based on integers and negative numbers are allowed, cash basis accounting is based on natural numbers and negative numbers are not allowed.
In periodic profit and loss accounting, the workings of debts and deficits are responsible for half of the activities.(59-10)

The first problem is that in the market economy systems of today, the principles of cash basis accounting and periodic profit and loss accounting are mixed.
The second problem is that systems based on cash basis accounting and systems based on periodic profit and loss accounting are not clearly separated, and they have not been made systematically consistent. Above all, the most problematic issue is consistency with the tax system.(59-11)

The structure of profit and loss and the structure of income and expenditure are asymmetrical.
And the tax system is a compromise between cash basis accounting and the periodic profit and loss accounting. And this puts pressure on the flow of funds and distorts it.
For this reason, cash based income and expenditure and profits have an asymmetrical relationship.(59-12)

This also distorts the relationships between capital and assets and liabilities.
In order to maintain the consistency of profit and loss accounting with cash basis accounting, as well as with the tax system, we must clarify whether we base the tax system on profit and loss accounting or cash basis accounting, and in addition, what do we use to harmonize the systems.
This is an issue of what is taxable, as well as an issue of using paid taxes as funds.(59-13)

The problem is the lack of consistency between the depreciation and the repayment of the principal of the debt.
Depreciation and repayments of the principal of debt are asymmetrical, so if profits were made taxable and taxes were imposed it could possibly cause serious trouble for the management of funds. In such a state, there is a possibility that serious problems could be caused not only for one economic entity, but to the entire economy.(59-14)

In order to be able to avoid such disorder, it is necessary to understand the workings of deficits (losses).
The workings of deficits also have a role to play. In other words, deficits should not be condemned as just something bad.
The important thing is the workings of deficits in their individual aspects.(59-15)

If we assume that deficits are bad, then surpluses must also be bad. The problem lies in the workings of a deficit at a given point in time, in its characteristics, direction and temporal transition. But the deficit itself is not bad. It makes no sense to be discussing the pros and cons of deficits if you do not have an understanding of the pros and cons and the respective workings of surpluses at the opposite side.(59-16)

By substituting these relationships in the following formulas,
Revenue - (Depreciation + Interest expense + Other expenses) = Profit
Revenue - (Interest expense + Principal repayment + Other expenses) = Cash balance
Cash balance - Profit ´ Tax rate = Net cash proceeds.(59-17)

The net cash proceeds can not be allowed to be negative. This would mean an economic collapse. In order to avoid that, it would become necessary to increase borrowings.
If the tax payment exceeds the cash balance, it could turn into a case of so-called “black-ink bankruptcy” due to taxes.(59-19)

The structure of the economy should have a balance between lending, borrowing, profits and expenses. But the problem lies in the fact that depreciation and repayments of long-term debt are asymmetrical, and this has an impact on lending and borrowing and on profit and loss that is visible on the surface.(59-20)

The part that appears on the surface has to do with buying and selling, and this part is related to goods. In contrast, in the background are lending and borrowing, and money, that is, the financial part. For profit and loss, and for revenue and expenditure, even though the taxable amount is based on the difference, the base factors and the factors to be subtracted differ respectively, and the amount of tax to be paid is calculated by that ratio. This prevents the smooth flow of currency.(59-21)

For the concept of added value, as well, a difference occurs in both profit and loss accounting and in cash basis accounting.
In cash basis accounting, added value is returned in the end as land and building rents, interest rates and labor costs.
In profit and loss accounting, depreciation expenses are also exerting an effect.
The basis of a free economy lies in differentiation and segmentation, and these also lead to equality in the end.
The factor that forms the center of the market economy is price, and prices are determined by segmentation and differentiation.(59-22)

Prices can be decomposed into volume and monetary value.
In the value of goods, people and money, there are qualitative factors and quantitative factors, and density will become an issue.
Therefore, in prices, too, there are qualitative factors and quantitative factors, and the price structure in which density is not an issue involves the value of goods, the value of money, as well as the need for people. The value of goods is determined by the relationship between supply and demand. The value of money depends on the rate of the passing flow. The need for people is determined by such factors as the amount of people, that is, the amount of income of each person and the population.(59-23)

In other words, price is a function of people, goods and money.
This means that price is also an index representing the density of the monetary value of goods.
Price is structured by the quality and quantity of goods, as well as by monetary density.
And, price is formed by being bound in a complex manner to a combination of the exchange value and goods and the needs of consumers.(59-24)

Prices are assumed to be able to fluctuate.(59-25)

This is because, first of all, the relationship between production and consumption is asymmetrical. Second, while there are physical constraints on production and consumption, there are no physical constraints on the quantity of money. And, for the third point, while external factors determine production, consumption is determined by needs which are influenced by internal factors. These three factors together are what determines the trends of prices.

And, the entities that determine the allocation of resources for production and the entities that determine the allocation of resources for consumption are independent of each other.
Consumption and income are in the end results related to individuals. Therefore, your awareness of resources will depend on how you define the personal attributes, work and character of individuals.(59-26)

Today, price is no longer seen as the result of a one-to-one relationship between goods and the monetary value of the goods. Rather, it has come to be recognized as having one-to-many, many-to-one, and many-to-many relationships.(59-27)
When considering price, you might tend to fall into a one-sided trend of one-dimensional thinking. If you are not able to think two-dimensionally and three-dimensionally you will not reach a resolution.(59-28)

Price is established by joining together the product groups, the fee structure group and the consumer group.(59-29)
This relationship is formed through the working of the price. The working of the price means that products and consumers are linked through the exchange value which encourages the distribution of goods.(59-30)

And, the product group, fee structure group and consumer group should be diverse, and not derived from even uniformity. (59-31)
The way the economy ought to be, should be determined by the total amount and standards of income and by fluctuations in distribution.
Income means the right of distribution and the right to exchange goods in the market.(59-32)

We tend to think of differences between the rich and the poor as differences in income, but whether one is rich or poor is only a part of the problem, an aspect of it. However, if you want to determine the trend of the economy, you will need to capture the overall problem, as well.(59-33)
In addition, whether one is rich or poor is fundamentally a matter of results, and the problem lies with the cause of the results or the mechanism from which the results are derived.(59-34)

Mass production and mass consumption have a function to unify and standardize commodities. Namely, mass production and mass consumption average commodities. Mass production and mass consumption have a function to offset the individuality of each product by means of averaging. This is a demerit of mass production and mass consumption. (61-12)

The concept of an economy depends on whether individuals’ desires should be handled with uniformity or with diversity. Both the mass production-oriented approach and communism have a common directionality. Both the mass production-oriented approach and communism head toward the unification of life.
Human desires are not uniform. This is a major premise. The unification of life is inconsistent with humanity. Therefore, it is inconsistent with the autonomy of an economy. Affluence lies in diversity. A wide variety of commodities is required to realize a mature market. (61-13)

You 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.(58-30)

Profits 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 destroyed.(58-40)

Price competition makes the quality of commodities become homogeneous.(58-41)

Mass 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.(58-42)

Your 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.(58-45)

The affluence of a free economy lies in its diversity. This is because unification and standardization of value reduce alternatives and make them weaker.(58-46)

Unification 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.(58-47)

The outcome is that disorderly price competition will reduce profits to zero.(58-48)

If 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.(58-49)

But, you should adopt the same premises and conditions of competition, otherwise you will be unable to achieve fair competition.(58-50)

What 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.(58-51)

What should be corrected is not the past but the present.
The past is corrected to make the present better. Sticking to the past will not correct the present, and it is like putting the cart before the horse.(62-1-1)
A war occurs when an economic problem develops into a political problem. Hidden economic problems lie at the root of a war.
When economic or political systems fail to work properly, people attempt to solve problems by taking violent means. This is what a war is. (62-1-2)
Why do controlled economy, planned economy and totalitarian countries collapse? And why don’t liberal countries collapse? Why does a state-controlled economy collapse? And why doesn’t a market economy collapse?
Behind this mystery is a rule that has a decisive influence on the economy. It is not just thinking but it contains pragmatic meaning.
Both political and economic systems can maintain their balance because of bidirectional actions. Bidirectional actions bring “money” and circulatory movement of people to the system. It is liberal system that sustains the political and economic systems by the circulatory movement. (62-3)

In both political and economic fields, a balance of power cannot be maintained only by unidirectional actions. The system cannot maintain its balance only with unidirectional actions and it would split off. Transactions create economic symmetry. Transactions have the function of setting the economic value at a zero-sum relationship though the exchange of commodities and money and of objectifying economic value. Transactions are completed in two steps, that is, “money”/“resources” and “resources”/”money.” Such steps are present even in a single transaction. The duality of transactions, i.e., the exchange of commodities and money and the exchange of money and commodities, produces zero-sum and action-reaction relationships. The duality of transactions forms the relationships of claims and obligations. This is a source for the equilibrium of a money economy. The zero-sum and action-reaction relationships generated in market transactions produce the circulation of “money.”(62-4)

In contrast, in a controlled economy, planned economy and totalitarianism, the foundation is distribution by direct means rather than indirect means such as money or markets. That’s why the bidirectional actions of commodities and money are not produced under a controlled economy, planned economy and totalitarianism. Only unidirectional actions work there. Accordingly, the economic motions are not cyclic, circulative or rotary motions. (62-5)

A liberal system comes into effect by circulating “money” to prevent the breakup of the distribution structure as well as the emergence of a hierarchy.
In a controlled economy and planned economy, there is no bidirectional action. Only unidirectional flow can be produced. A controlled economy and totalitarian system cannot stably control the circulatory motion of commodities and money through their own power.
Therefore, current controlled economy, planned economy and totalitarian systems entail the risk of breakup because they cannot sustain the system through their own power and would lose their centripetal force unless they depended on a medium that maintained the circulatory motion. There is a risk that the circulation of goods and funds will not be sustained, and goods and funds move in a unidirectional flow that brings strains and biases to an economy. If such strains and biases were left as they are, the society would split and a hierarchy would emerge. (62-6)

A totalitarian system, controlled economy system and socialist system tend to be hierarchized in an economic sense.
Stocked funds mean poor efficiency of fund operations. In common speech, such funds are said to be sleeping.
When the society is economically hierarchized, the gap between rich and poor widens.
The rich begin to stock funds. In a hierarchized society, fund operations are biased and fund efficiency drops. (62-7)

If resources are distributed by direct means rather than indirect means such as through currency or markets, overall circulation of the funds is not brought about.
If resources of the labor force are distributed by direct means rather than indirect means such as through currency or markets, it will be difficult for the circulation of individuals and money to be brought about.
Classes tend to be generated. By necessity, social change will happen through violent means.
Production and consumption are dissymmetric, which makes a planned economy and controlled economy difficult.
Stocked funds mean poor efficiency of fund operations. In common speech, such funds are said to be sleeping.
Hierarchization biases fund operations and fund efficiency drops.
When the society is economically hierarchized, the gap between rich and poor widens.
The rich begin to stock funds and the efficiency of fund operations declines remarkably. (62-9)

A totalitarian system and controlled economy are not measures backed by national consensus, that is, economic control is difficult because institutional support is not given.
Under a totalitarian system and state-controlled system, economic problems can be eventually solved only through violent measures.
It is difficult to ensure consistency between a liberal system and totalitarian, controlled economy and socialist systems.
If the economic system is different, it is difficult to solve economic disputes drastically.
If a dispute cannot be settled diplomatically, violent means may be employed in the end.(62-10)

In the economy, there are many cases in which the correlation is more important than the cause-and-effect relationship. The relationship between the currencies exchange and the current account should not be seen in the light of which is the cause and which is the result, but rather that they are linked. (65-24)
One of the mechanisms that causes the circulation of money is a zero-sum relationship. The positive and negative relationship produced by the zero-sum relationship is the force that drives the rotational movement. (65-25)

Cash flow is a linear movement, but through periodic profit and loss, the movement is replaced with a constant cycle movement, and it is the accounting system that converts it into a rotational movement. Hence, the accounting system is based upon double-entry bookkeeping.
The accounting system is the mechanism that changes linear movement into rotational movement. (65-26)

Although in a modern economy linear movement can not be converted into rotational movement, the largest problem of all is that a chain of negatives is being caused. (65-27)
Energy is stored unilaterally, and this distorts the market and encourages the uneven distribution of wealth. This causes distribution to no longer be fair and inhibits distribution. Furthermore, it is impossible to link production and consumption. And it would break the ties between the means of production and productivity. (65-28)

The ability to raise funds is reduced by a decline in asset values, and when funds are insufficient, debt increases, capital flows out, and internal funds are reduced. When internal funds are depleted, the funds for re-investment are lost.(65-29)

The economy is something that distributes creations in order for people to live.
It is the will of God. That is to say, the economy is an act of God.
For this reason, the nature of the economy lies in distribution. This is the point that we should think about first of all.(68-2)

The premise here is that the income that people need to survive must be distributed to them.
And this also assumes that the necessary resources must be procured from the market in order for people to survive. (68-3)

At the root of the economy is work, and the resources that people need in order to live and the means to acquire them.
And it means guaranteeing the income that people need in order to acquire the resources that they need to live.
For this purpose, an effective means to supply money to the market is through public investments.
However, when the market is not activated after stimulating demand through public works projects, public finance will collapse. (68-4)

Private companies need to make a profit in order to activate the market.(68-5)

In other words, guaranteeing an equitable distribution is what it takes to increase profits.
Profits must be an indicator of achieving equitable distribution. And profits are a fitting indicator.
Profits should be set arbitrarily for the proper purposes.
If profits are set based on proper purposes but appropriate profits are not being made, then the economy is not fulfilling its purpose. And profits are the means for doing so. (68-6)

Profits are an indicator - a relative indicator. Profits need to change depending on the environment, circumstances and conditions. This is because the way to achieve equitable distribution also changes depending on the environment, circumstances and conditions.(68-7)

In order to improve economic conditions, it is necessary to increase earnings. Why won’t economic conditions get better if earnings do not increase? The reason for this is that expenses are based upon the existence of earnings. Expenses hold the key to the health of the economy. Without reducing expenses unnecessarily, unless profits are increased, economic conditions will not recover.
For example, even if profits are doing well, if expenses are biased only in favor of some people, this will not lead to a full-scale recovery of economic conditions. This is because money exhibits its utility when it is being put to use. (68-8)

Distribution is rooted in expenses. Equitable distribution can not be realized unless proper expenses are maintained.
Expenses are the essence of the economy.

Once a market matures, it becomes saturated. Once the amount of resources needed to live has been secured, a shift from quantity to quality is needed. Shifting from quantity to quality involves a change from size to diversity, from centralized to distributed, and from general to individual.
Economic efficiency is measured by quantity, unit price, profit margin, turnaround speed, and by income. As the market matures and production volumes reach a plateau, the turnaround speed drops. In order to ensure a proper level of income, it is necessary to increase profit margins. The market changes from an emphasis on production efficiency to one of distribution efficiency.
The emphasis in the market changes from daily goods, necessities and consumables to a focus on high value-added goods such as custom-made items, luxury goods and durable goods. (68-9)

Labor and quality then change accordingly. These changes serve to improve income.
And that becomes a source of profits. Labor changes from simple technology to specialized technology, as well as to labor that respects humanity.
This results in the nature of labor changing from an activity simply done in order to survive, to becoming a means for self-realization.
The relative importance should shift from industrial products to crafts.
In remodeling, energy saving, recycling and brands, transitioning to luxury goods, high-quality products and high-performance products will serve to maintain harmony between income and productivity.
Inexpensive things will be cheap, and expensive goods will be pricey. This is a sign that the market is maturing.
As long as we do not take the leap into an energy-saving era, the problems of high energy prices and global warming can not be solved. And also from the viewpoint of resource conservation, so to speak, a mass-production, mass-consumption type of economy can no longer be valid.
The very worst thing of all is competition without principle. What unprincipled competition brings is a modern-day economic problem: the devastation of a market. (68-10)

Competition is not something bad. The problem lies in leaving the workings of competition hidden and demanding that competition should be able to solve all economic problems.
Competition should not be viewed as something absolute, but rather the processes and conditions, and the environment and prerequisites should be checked.
Why is competition necessary? In the first place, it is necessary because economic value is a relative value. Second of all, because competition encourages change. And third, because competition exerts mutual checks and balances.
Appropriate competition - some level of moderate competition - is essential for an economy. But, unregulated competition is not competition at all - it is war.(68-11)

Handicaps are given in golf in order to maintain fair play. If conditions change, the competitive advantage also changes. If we are hoping for equality in competition, then we should compete on a level playing field under the same conditions.
Of course, punitive regulations are unfair. But, if they are imposed in order to maintain fair competition, then regulations can not be condemned as something bad.
Competing under the same conditions with people forced to work for low wages in countries with poor working environments and conditions can not be permitted, and certainly not from a humane aspect as well.
First of all, the condition must be getting back fairness. (68-12)

Today’s economy is brutal.
Economic problems are problems of the heart. They are not money problems or physical problems.
Economic problems are, in the end, prayers. Prayers for peace.(68-13)

People do not live to eat bread. They eat bread to live.
In order to make money, it’s not a matter of making money. Making money might be a means to some end, but can not be the purpose of making money. The purpose of making money is to make people happy. For the sake of making money, sacrificing the happiness of one’s family is like putting the cart before the horse, and it is just foolish. (65-30)

If left in this state, the global economy is sure to collapse without a doubt. This is just the very thing I fear.
And as a result, humanity would experience the most dire of circumstances, suffering wars, hunger, extremes of weather - if not extinction itself.
If I died, all of my ideas would be lost with me. I do not think that all of my theories are correct.
But as long as I’m alive, I’ll act on the basis of my beliefs. (68-15)

In history, just because something is put forth as a fact, does not make it true.
A fact is a matter of recognition, but the truth is a matter of existence.
If something is said to be a fact, then it is, and if it is said not to be a fact, then it is not.
The truth is that people are helping each other, or if they are not helping each other, then serious problems that can not be solved are piling up.
It is the will of God. It is the will of God that is hidden in the truth.
To be trapped in historical fact and to look away from the truth is foolish.
Even if people were to vanish, god would not be the reason. The folly of people would be the reason.
God will not be the salvation for a person who is not seeking salvation. This is because there is no salvation for a person who is not seeking salvation.(65-31)

People can not become like gods. (68-16)

The pursuit of wealth, and for sure the pursuit of happiness, is the economic path to be taken.(68-17)

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