2. Introduction |
What is a self-governed Market Economy?
Is Self-Government Market Economy a new philosophy?
Is it a new ideology?
Is it a new vision or an utopic fictional hope?
Is it the compendium of old ideas wrapped in new words?
Is it an economy without hierarchy or rather an economy without
money?
Is there a government of anarchists or of amateurs who are
workers in their real profession?
It is nothing of this.
But if we want get the know how of a fair economy, we need first
knowledge about the characteristics of the present economy. The
present economy is called the new economy. It is the old
capitalistic economy with less regulation. The fundamental theory
of capitalism was described from Adam Smith 1723-1790. He said
that all production needs three elements. The factors for
production are 1. work, 2. ground and 3. capital. In the future
his theory was criticized from many economists. The most famous
critician was Karl Marx 1818-1883. He postulated, that only the work
should be the a factor of production and not any kind of
property. The theory of Karl Marx was later realized by Wladimir
Iljitsch Lenin since 1917 in Russia and then in Soviet Union
until 1990. The history showed us, that in communistic ecomomies
the people realized less productivity and more problems with
distribution than in capitalism. Hence the new economy seems to
be successful with less and less regulation and more and more
rights for the capital owners.
You know, the three factors of production are 1. work, 2. capital and
3.
ground or nature. These factors are still the main sources of
income in our present economy. The workers can earn wage and
salary. The owner of nature receive rent and lease for natural
and artificial things. And the owners of capital demand interest
and dividend for their debts and stocks.
Now it is possible to postulate, that there are only two factors
of production: performance and property or more precisely: human
power and natural property.
In this case we can classify work as a part of human performance
and ground or other natural things are a part of somebodies
property. But it is not so easy to classify capital in one of the
two categories human performance or material property. Why? You
know, all natural things possess a value. If any natural thing
will change the owner the buyer must pay a price and the seller
will receive a price. If the seller and the counterpart who is
demanding the product can make their own price without any
regulation the price is the market price. Such a business needs
the agreement of both counterparts.
But what is now the specific characteristic of capital? You know
all natural things does have a place where they stay and
especially a quality. What is the quality of capital? If a
company sells many stocks, do they have any different quality? If a
governmaent sells bonds, do they have different qualities? Is it
possible to consume capital? Not? Why not? If natural products
become older they loose usually quality and the value on the
market is less. Does capital loose quality because of his age?
You know that all capital has a value because of the laws in the
country and not because of human beings who need capitalistic
things for their consumption. Yes, the value of capital dues from the
laws of the government and their jurisdiction. If capital changes
the owner, the buyer pays instead of a price a rate. The value of
stocks and bonds are calculated like foreign currencies with an
exchange rate. Therefore you can change capital and save it like
money. If rich people want expensive things they must first sell
capital. They can calculate the risk immediately because
agreements for capital transactions are not necessary.
Hence capital is a part of the volume of money. Traditionally our
money is in the purse in form as coins and banknotes. For our
security we carry only a small part of our money in the purse.
The bigger part of our money seems to be with guarantee at our
bank. In modern times it is more comfortable and more secure to
pay with a plastic card. In every case we do not know without dobt, if
"our" money on the bank is deposited for noncash
transactions or if it is lend to the bank for investments of others. In
case the
bank has enough liquidity, the amount on our account number tells
us the value of our money on the bank. If the bank has no more
enough solvency we remember that we didn' t deposited money but only
capital on our bank.The banks and the bourse are big
manufacturers and destroyers of capital. If the production and
destructrion of capital keeps the balance, it seems to be, that the
bourses and the banks are only facilities for distributing
capital. It is of course the aim of all money policy and
financial policy to keep steadiness in producing and destroying
capital. On the other hand the politicians and economists know
because of their experience, that a growing volume of capital has
positive effects to the labour market.
We can learn more and more about the features of capital.
However, it' s necessary to recognize some essentials of capital. The
origin of capital income is property but not material property.
It is a property by law. Capital is a legal form of security for
the creditor. All legal credits need guarantees for the creditor.
Some kinds of guarantees are material objects. For example
mortgages, ground or accomodations. In this case the debtor can
be richer than the creditor. If the debtor has not enough
securities, he can give his income as security. The most
mysterious forms of debts are the stocks. In this case the stockowner
has the legal right to receive dividends without time
limit.
The question is: Are the creditors shareholders on other objects
or on other subjects? Are they the shareholders on material
things or are they shareholders on economic income? Economic
income is the result of distributing money. Only human beings are
able to earn money. Hence if the creditors are shareholder on
material things like mortgages they have income because of
natural things. In case the debtor has not enough material
security, he can give his income instead of material things as
security. In this case the creditor has like a stockowner
property on a part of other economc income. He has property on
the human power of his debtor.
You know, if a houseowner gives his house as guarantee, the
debtor can be richer than the creditor. This credit is not the
result of an emergency case. But if somebody gives his income as
guarantee, the business is an act of two unequal partners. In
order to avoid financial emergencies we should consider the
differential effects of a social dividend from the government in
comparison with consumer credits from credit business.
But now another question. What are the conditions for creditors
to lend money to poor people without material securities? The
economic income can change like the performance of the debtors.
Therefore it is necessary to adapt the conditions adequate to the
performance of the debtor. This is possible with the notice of
withdrawal. A notice of withdrawal is a termination of the
contract without an agreement. One partner of the credit contract
don' t want a termination of the conditions. They want only
change the conditions to their own advantage. But you know, if
the debtor must give his income as guarantee for the credit he is
the weaker part of the contract. Therefore the creditor of a
capitalistic credits has two advantages. He can change the
conditions all the time to his own advantage, because he can
change the interest rate without an agreement and second the
credit has no more a price but a rate, in case he divides the loan in
many identical parts. So he can also sell the
credit without an agreement. The speculative credit has a legal
exchange value like a currency and therefore he is a part of the
money volume. If an economist want make a prognosis of the
inflation rate he must calculate also with a big part of volume
of speculative credits.
It seems to be a secret that credit contracts are also possible
without a notice of withdrawal. In this case it is nonsense to
calculate an interest rate for the credit, because the conditions
of the contract are not changeable without an agreement. Even if
the debtor want no more pay the redemption a notice of withdrawal
is not necessary. In this case a termination of the contract is
also possible, because the creditor is shareholder on an object
and not on a subject. They can sell the guarantee object all the
time with a market price and not with a rate. Such a credit is
not a speculative credit and it is not dangerous for the whole
economy and relevant for the whole money volume, because the risk
of the credit depends only from the behaviour of a subject and
not from the development on the stock exchange.
This is now an utopic credit system, because the capitalistic
economy needs money to reduce unemployment. For this purpose it
seems to be not important if the money comes from central bank or
private banks or the government or other companies who are
trading on the stock exchange.
On the other hand it is really significant. Because if the
capital volume becomes bigger and bigger in relation to the money
volume created from the central bank, the part of the national
gross product distributed through wage and salary becomes less
than the part distributed through interest and dividends.
Such a situation makes the struggle for allocation of money not
easier. Hence we must consider more about the macroeconomic
problems in chapter
3. The problems.