The question what the state economy should be like is very much complicated. Back in 15-16 centuries, people were not aware of exchange rate fluctuations and easily exchanged gold coins of different coinages by weight. Along with the capitalism formation there came a new, in a certain sense more ‘aggressive’ economy, with money separated from gold, there started circulating shares, exchanges, permanent trading of ‘demand-supply’ deals. Later we have got a classical monetary economy, which ‘works’ till now. This economy was supported by a theory, served by special institutes and taught to high-school students. The USSR applied a classical ‘planned’ type of economy, which differed dramatically from the capitalist one. First, the socialists have invented their specific economy, later they have developed a theoretical basis, set up the institutions, etc.
Basically, it is possible to think out and implement any economic system. It is possible even to invent such an economy, where there will be no taxes at all, for example: each worker will receive from the state an unlimited number of ‘credits’ that cannot be transferred or bequeathed to somebody. Neither can these credits be traded, sold, purchased or exchanged, etc. Every person will have his personal credits, i.e. everyone will have so many credits, as he has earned, everyone will have the right to spend so many credits, as he has received. Such economy would hardly appear feasible, still it also has the right to exist, because there may be in use even more freakish forms of economic relations between people. As an example, it would be enough to take India, where till now some communities refuse from money, people practice a primitive barter based on a subsistence economy, and in case of need one may address to the community for help to receive some extra bonuses beyond the barter.
So, the matter of construction of a new economic theory, completely satisfying the major objectives of the New philosophy is not so much of economics, as of the philosophy and politics. At first, we need to understand, what principles should serve as a basis for the life, where distribution of benefits between people would be fair at maximum. Thereafter, leaning against earlier known economic systems, we have to describe and build up a new economy. And only then, as always, it will be possible to develop a theoretical basis for the new economy and to begin teaching students.
The economy, which is based on the New philosophy model of decent civil society construction shall meet to the following main objectives:
- Orientation to overall development of the mankind.
- Careful attitude to the planet resources.
- Fair distribution of resources between all members of society: dependence between the possibility of goods, services and public benefits receipt and the degree of the personal usefulness for the society and the scope of work performed by the person.
- The economy should not have a distributive character, i.e. each person within the limits of benefit he had brought to the society should have a chance to choose independently for itself a concrete set of goods, services and public benefits.
- High degree of social orientation.
Proceeding from the above-stated the New philosophy formulates a basis of economy construction:
Principle 1: The whole economy of state should be divided into 2 sectors: a consumer economy and an industrial economy.
Principle 1.1. The consumer economy is a sector of economic activity, which considers the complex of all goods and services provided for the population. The volume of total money supply should correspond to this complex of all goods and services. The money supply should be distributed between the population in the form of salary and come back to the state in the form of merchandise payment and services.
Principle 1.2. The industrial economy is a sector of economic activity, which is responsible for production process. This sector of economic activity should have its own indicators, which evaluate the quality of finished goods and consider the quantity of resources involved in production: material, human, intellectual, time, etc.
Principle 1.3. When produced, some goods should be transferred from the industrial economy to the consumer one, for example, foodstuff, goods of light industry, etc.
Two examples will help us to explain the essence of above-stated:
1) if food products or their components, for example, wheat are used is production process, the quality of cultivated wheat would be essentially more important than the quantity of resources spend for wheat production (petrol, motor vehicles, time, people). In our understanding, people should not even have in mind, whether the farm field should be dragged one more time or not. If it is required by technology, it has to be done, surely. Any goods and products should be the best quality: people should eat healthy and wholesome food, wear a high-quality durable garments and footwear, and should live in strong and warm houses.
2) if the mankind has decided to flight to the Moon, then it does not matter, how much it would cost and what materials should be used, and which ones it would be better to replace, because they are too much expensive. Once the decision is made, a needed volume of design and development works should be done, the required quantity of gold and platinum and everything, what is needed, should be invested. There of certain significance would be the availability of such materials, their rarity in the nature, the complexity of extraction and processing, but not in any way the price. The question should not be formulated as, whether we have enough money for launching the spaceship to the Moon, but the question should be formulated as: how much time and what resources we need to launch the spaceship to the Moon.
Please pay attention, solely the introduction of the first principle allows to solve a number of corner questions straight away:
1. So far as the main issue of resources redistribution is resolved at the national level only, no private structure will be further capable of independent solving the matters of large-scale investment of resources they have. Therefore every possibility of any wars, even financial ones, for resources, seller's markets, etc. will be excluded a priori.
2. Everything referring to the natural resources extraction and utilization of will come under the state control.
3. The finances cease to control the World completely. All remaining from them will become an auxiliary instrument of resources redistribution and nothing more.
4. The economy will cease to be a consumer one, and, similar to the politics, will be rerouted to the achievement of basic values of the mankind: overall development including the cultural one, improvement of health of people, ecology, etc.
5. A whole set of financial mechanisms, unnecessary from the mankind development point of view, will disappear: shares, exchanges, futures, etc. As a result, any chance of earning money on money and, as a consequence, any financial pyramids will be practically eliminated.
Any making money on money one way or another would lead to financial pyramids, because always there will be the smartest one, who would wish to earn on their greed more, than the others. History shows no financial pyramid is stable - all of them fall sooner or later, and the greater is the number of people and finance involved, the more severe will be the consequence. World crises are the best illustration for that. Disappearance of such economic instrument will allow the people to stop trying to snatch immediate money and will let them to proceed to a systematic work as required by the society.
6. Together with elimination of principal kinds of gamble on money stocks, the whole cohort of pseudo-elite - financiers – will disappear.
This would be reasonable from the point of view of decent development of the mankind. So-called financial education in no way defines the knowledge of the person in science and technics, in geography or biology, i.e. in any science, and in no way defines his general educational and the more so cultural background. From the point of view of erudition the financial education – the narrowest - does not go beyond the ability to sum up and deduct money in the own purse. In general, at a closer look, bankers, as a matter of fact are only cashiers and security guards, i.e. the representatives of not the most prestigious trades. Actually they are engaged in accepting other people's money on deposit and give it back as required. The amount of their own assets in large bank structures in comparison with the borrowed funds - are miserly low. However, using a possibility to redistribute the resources at their own discretion, first, the financiers have raised themselves to the rank of elite, and, secondly, which is reflected absolute negatively in the mankind development, for some reason they consider possible to indicate to the mankind the way of development.
7. So far as consumption and production matters are separated, every chance of large-scale frauds will disappear. It will not be possible to take, for example, a credit on behalf of an enterprise, and then using a ‘moon lighting’ scheme to put money in the pocket. Same way, no one will be have a chance to sell an enterprise, say, in order to purchase yachts or palaces. It will not be possible to give an enterprise as a present to the son or any other successor, to purchase, give as a pledge, to change, etc.
8. The issue of enterprise ‘profitability’ will disappear. This issue will be considered, as follows: if the society needs an enterprise, this enterprise will go on operating, if not, the manufacture will be closed.
Principle 2. The economy should support a business competition, as the business struggle stimulates the development and eliminates the recession, however the business struggle should be totally under the state control.
There is no sense in availability of 100 types of washing machines and 1000 kinds of electric teapots, five-seven items would be quite enough. With sharp increase of business competition the share of design and development work in the goods decreases, the price increases and the quality decreases. However, in a situation without business struggle, there occurs exactly the same thing: there is no sense in inventing something new, it is possible to raise the price, and quality pales into insignificance, as there’s no alternative at all. The state should regulate such processes, for example, 2 aircraft factories would be quite enough for the whole planet, the region does not need to have more than 5 bus depots, and 20 restaurants and cafes would be sufficient for each 100.000 urban population. The basis of the process: decrease or increase in business struggle to the level of maximum usefulness and to the best quality of the offered goods and services.
Principle 2.1. Only professionals and citizens should operate medium and big size enterprises.
No one would deny that the enterprise can be successfully operated and manufacture competitive products, not after it is purchased by an investor, but when it is administered by a competent manager keen in production process. Therefore, only business professionals and citizens should run the medium and big size enterprises. A procedure similar to the scheme applied in the state government should be applied to employment of top executive positions: no top position can be held until the subordinate posts have been passed.
Principle 2.2. Small enterprises with the permission of state should have the right to be formed independently, citizenship should not be taken into consideration.
It is of no point for the state in spending its resources for definition of who is going to operate a flower shop or a footwear repair booth – the size is too small. Here important would be to assess the necessity of such enterprise and to consider the matters of expediency from the point of view of business competition: would this enterprise be excessive for the area or not. At the same time another major issue is solved here. Many men of enterprise demonstrate their ability to improve their vital conditions. They should have a chance to show themselves. Such an approach will provide the source of manpower in the state scale. For example, someone will have an idea of construction of a small tourist home perfectly fitting to this very coast line. If this project falls within the scheme of the region development, it is quite possible to give him permission and to support his project. After and if the project appears successful and effective - it will be quite possible to offer this person the management of larger project, say, a boarding house.
Let's take one more example: some projects of the national scale had a very modest startup. It would be interesting to mention GIRD (Group for the Study of Reactive Motion) of academician Sergey Korolev. In 1931 it was a small circle of several person, their work based almost on a pure enthusiasm. Later the project became one of the largest in scale in the country, practically all national key industry branches and their factories have been involved in the project. Any large organization created from above is always rigidly structured, and ‘upstarts’ are rarely supported. Creative people should have an option to make their way in life, sometimes going their own way they achieve greater results for themselves and for the country.
The special chapter - personal income.
It is obvious that to some extent personal income reflects human usefulness for the society: never in his life a janitor will receive a salary more than an operating surgeon. Now let’s have a look at the existing model of economy: what is the salary of a professor at the Moscow State University? Suppose, his income makes app. $2000 per month, i.e. around $50.000 per year. According to the press publications, Dima Bilan for the one New Year's eve only ‘has earned’ app. $1.000.000. It comes out that Dima Bilan by usefulness will cost as the whole high-school department of 20-30 wisest professors of the national leading University. One more example: David Beckham ‘earns’ app. $20.000.000 per year. Let’s accept an average wage of employees, including both the management and security guards with janitors in the leading medical scientific research institute of Russia – app. $750, which makes around $10.000 a year per capita. Thus in the present society the value of a moron-sportsman or a boor-rapper today can be quite equal to the whole national cardiological center in aggregate numbering 2000 employees, yearly saving lives of more than one thousand persons.
Certainly, it is right, when a well-known popular singer or a sportsman earns more than a head of studies of research laboratory thanks to his popularity. Still the difference in their incomes should be reasonable.
Principle 3.1: The people most useful for society should earn the greatest number of benefits, which greater part is money by now. The usefulness of people should be defined both in material, and in cultural and spiritual aspects.
The conductor of a symphonic orchestra should earn more than a banker, and the salary of an ordinary teacher should exceed the salary of an ordinary builder. The highest incomes should have those, who move the mankind forward, i.e. the scientists.
Principle 3.2: According to basis of the New philosophy model of society structure, incomes should not depend on citizenship, i.e. at equal posts under equal conditions a citizen and a common resident should receive equal wages.
From the point of view of economy, one of the main objectives of a working person - is earning benefits for satisfaction of his own needs. Has anyone ever pondered, what is the most expensive on the earth one can purchase and spend? For example, one can to purchase some millions square kilometers of the earth, but they cannot be spent, same way one cannot buy one million cars, to spend them, because the whole life will not be enough for at least one time driving each of them. The most expensive house in the world will cost hardly more than several million dollars. The most expensive on the Earth is a flight to the Moon. Total investment into this program development made 3 billion dollars, one may spend this money within 3-4 years to fly as a tourist to the Earth sole satellite. There is nothing more expensive!
Here we do not take into consideration the cases of multiplication of money invested in business, because this matter does not refer to satisfaction of needs of a person, it refers solely to multiplication of capital in the economic model. Here one may ask a fair question: what for is the economy needed, where one can ‘earn’ so big money, he cannot spend?
This does not mean at all that all people should be equal. The society shall necessarily have rich people, because the desire to join their number will serve an ever stimulus for a person to self-improve and to become of maximal use for the society.
Principle 3.3: The Economy should not allow a person to earn for all his life more than a certain amount of benefits, money terms included.
Principle 3.4: Every trade should apply a principle: the amount and the quality of work shall correspond to the amount of received benefits. This principle shall refer to every trade, state employees included.
No one has asked himself, why do the government bodies demonstrate such an awful corruption? At that the bribery is not a problem of Russia only, the principle ‘steal more while in power’ works well practically in every country. The reason of such situation is clear: the person being in power has a chance to control big cash flows. Noteworthy is that his salary does not depend on the quality of his work at all. Such state of affairs should become a thing of the past!
The salary of a state employee, especially the one holding the elective office should depend on:
- the rate ex officio depending on the quantity of people under his management
- the quality of his work.
For example: the salary rate of mayor of town M with population of 100.000 persons will be 100.000 roubles, and the salary of mayor of town N with population of 150.000 persons - 150.000 roubles.
Both mayors have worked for 1 year. Basically, the region has received an increase in major economic indicators by 3 %, compared to the previous year. At that town M has shown an increase in these indicators by 8 %, while town N - reduction by 2 %. Accordingly, the management of town M should be awarded a bonus by a part of additionally earned money, the management of town N – should be severely fined, or can be even dismissed.
Principle 3.5: Incomes of employees and administration should be in direct dependence.
The character of such dependence: arithmetic, geometrical, percentage or other – is a separate matter. Probably, it should be a certain scale of salary rates. The main thing is the following: incomes of the management and subordinates should be rigidly connected. The system, where at an unprofitable enterprise in conditions of decrease in irregularly paid salary of employees the regularly paid income of the management may increase, should become a thing of the past.