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A new look at economic theory

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We are given the ability to communicate to facilitate the exchange of information and improve our lives.

Words are the connecting links of this process. Each word has its specific meaning and is a carrier of information. Only the correct combination of these communication links ensures the reliability of the information.

Combinations of words that we call phrases and even rearrangement can change the meaning of information.

This is how lies are born.

And each subsequent incorrect permutation or substitution, like a snowball, is covered with other incorrect combinations.

Little lies, even for good, breed big lies.

This leads to the multiplication of errors and the distortion of our world view, gradually changing the algorithm of our life.

And now we have reached the point where at first glance we are doing everything right, but for some reason the poor get poorer faster, the rich get richer faster, the state does not work for the people, but the people for the state.

Public service is not an honorable duty, but a nourisher and a way to increase personal well-being.

The overproduction of goods and the growth of wealth in some countries led others to poverty and transformation into appendages of raw materials.

The number of children dying of hunger in these countries grows in proportion to the number of weapons produced in others.

This enumeration can go on for a long time, but the purpose of this article is not to launch strong accusations, but to identify errors and suggest ways out of this situation.

The sooner we diagnose and take action, the sooner recovery will come.

Fundamental errors and misunderstandings of economic theory have led us to the situation in which we find ourselves.

One of these errors I want to pay attention to first.

Economic theory tries very hard to balance supply and demand, but everything

Single sided type.

Let’s take a closer look at these concepts.

What unites the concepts of supply and demand? Both have a connection with the question, how much? But if something unites, then there is something that separates.

The difference is that the demand with the question “how much?” join the function – “sell”, and the sentence with the question “how much?” bind function – “produce”.

But the functions of “selling” and “producing” are inherent in a single element – this is PRODUCTION.

Logically, someone has to balance it, and it’s–it’s a CONSUMER.

This object is also interested in the “how much?” question, only in the opposite functions of the producer functions.

These are the “buy” and “consume” functions.

And then the circuit diagram will have a different meaning.

A new look at economic theory.

Isn’t it the unilateral understanding of the principle of balance that has brought us to the real reality?

We, the people, must manage production, not us.

We, the people, the consumers must determine how much we can consume.

We humans should decide to produce or not, not our greed.

Perhaps we will finally understand that we are producers and consumers in one person, that when we work, we become producers, when we buy, we become consumers.

Perhaps we finally think that the quality of our work is not needed by some consumer, but by our father, mother, brother, friend, me, you and everyone.

Perhaps we will finally understand that work is not something for those marginalized by fortune, but a way to achieve good things.

(Isn’t the struggle of these contradictions within us the beginning of a split personality and subsequent mental illness?)

Changing this algorithm will only start to generate positive results with subsequent changes.

All downstream processes and relationships can also be determined from this diagram.

The only question is whether we want these changes.

The next step is to develop clear terminology.

Economics is intimately related to mathematics, and since mathematics does not accept vague meanings, inaccuracies.

The more blurriness, inaccuracies, the less reliable information.

The lower the reliability, the more erroneous the forecast.

For example, if we say “budget”, then this means the totality of planned income and expenses for a certain period of time, in this case, the totality is not a sum.

Totality determines the belonging of two or more concepts to one or another community, and the word sum denotes the result of an action – sum.

To determine the ownership of the budget, we must add: states, companies, families.

The introduction of new concepts in circulation must be agreed with all the subjects and the arbitrary appearance of concepts such as “tax budget”, “expenditure budget” must be excluded.

I explain. The concept of “tax” is one of the components of the concept of “budget”. According to the rules of language, when we translate the expression “state budget” into the expression “state budget”, we perform an equivalent action, because both the word “budget” and the word “the state” are expressions at all.

And since the concept of “tax” is a component of the concept of “budget”, the expression “fiscal budget” distorts and reduces the meaning of the concept of “budget” and leads to the loss of a causal relationship.

By the way, this is the mechanism of the so-called globalization process. It consists in the fact that we break down the whole into small components and then globalize them separately. At the same time, we lose the causal relationship, an integral vision and control over what is happening.

(Have not transnational corporations appeared, whose budget is many times greater than the budget of the states and who dictate conditions to these states, thus undermining the authority of the authorities in the eyes of the population?)

But back to the mistakes.

I have reviewed the following textbooks:

1. “Economy” VP Bardovsky, OV Rudanova, EM Samorodova, 2011.

2. “Economic theory” NI Bazyleva, SP Gurko,

3. “Macroeconomía” T.A.Agapova, S.F.Seryogina, 2004.

4. “Foundations of economic theory” SI Ivanov, 2004

They all have an identical error – this is the equation of the consumption function, but Professor Ivanov’s explanations allowed me to detect it.

He started by presenting income as Q=C+S, where: Q is income, C is consumption, S is saving.

It then proceeds to the income increase formula ΔQ=ΔC+ΔS, where: ΔQ — income increase, ΔC – consumption increase, ΔS – savings increase.

The marginal propensity to consume “c” is derived from the formula c =  A new look at economic theory. . But as far as I know, this is the operation of obtaining a coefficient.

THE COEFFICIENT INDICATES THE PROPORTIONALITY OF THE GROWTH OF TWO VALUES AND THERE IS A CONSTANT VALUE .

FOR TWO VALUES THAT DO NOT CHANGE PROPORTIONALLY, IT IS IMPOSSIBLE TO FIND THE COEFFICIENT.

THAT IS SOMETHING SOME INTELLIGENT MAN IN THE CALCULATIONS HOW MUCH I HAVE TO SPEND AND NOT HOW MUCH I WANT TO MAKE HIS PRODUCTION PROSPER.

As a result, we obtained the CONSUMPTION FUNCTION EQUATION.

C = Ca + с × Q,

Where C is consumption, Ca is autonomous consumption, c is the coefficient of marginal consumption, Q is income.

This formula creates a conflict of interest within ourselves, because  not all consumers can become entrepreneurs.

( All the studies that only 1% of humanity have entrepreneurial skills are nonsense, you put people in the same conditions and you put  the same rules, then you will see who of this percentage will stay and how many new ones will appear, and then draw conclusions ).

IT IS NOT WE, THE CONSUMERS, WHO DISPOSE OF OUR INCOME AT OUR OPTION, BUT THE MANUFACTURER OF WHOSE HOSTAGE WE ARE.

Where is the equation of the saving function?

How do we achieve balance?

TO ACHIEVE A BALANCE WITH THE SAME REASON, REVENUES MUST GROW.

(Isn’t that the reason for the widening gap between rich and poor?)

THE ELEMENTARY RULE OF MATHEMATICS IS:

THAT EQUALITY DOES NOT GO TO INEQUALITY, THE OPERATIONS CARRIED OUT WITH ONE MEMBER SHOULD BE CARRIED OUT WITH ALL THE OTHERS.

IT IS NOT THEREFORE THAT INCOME IS GROWING, BUT ONLY FOR OWNER-PRODUCERS IN THE FORM OF PROFITS, BUT NOT FOR THOSE WHO ARE PAID WAGES.

I think that this alone is enough to consider all subsequent dubious and erroneous conclusions and conclusions.

Isn’t this error a consequence of the process, the mechanism of which I called globalization a little earlier?

Because of this mistake, we have programmed the consumption and its growth without our consent.

THE FORMULA USED IN THE CALCULATIONS SHOULD BE UNIVERSAL AND REFLECT THE INTERRELATIONS OF THE SUBJECTS OF ECONOMIC ACTIVITY, NOT THEIR DESIRES.

ACCORDING TO THE SCHEME AT THE BEGINNING OF THE ARTICLE, THIS OPERATION MAY BE AN OPERATION TO STIMULATE PRODUCTION AND PROGRESS THAT SHOWS HOW CONSUMPTION AND INVESTMENT CAN GROW WITH GROWING INCOME.

THIS IS AN ELEMENT OF FORECAST, NOT OF ECONOMIC MANAGEMENT.

In my opinion, the formula C = Ca + c × Q is  the GREED formula , and it is IMPOSSIBLE to achieve balance based on this formula alone!

THE EQUILIBRIUM FORMULA IS Q=C+S (1)

Is it not from this formula that all subsequent inferences and conclusions must come?

ALL OTHER PROCESSES CAN BE CONTROLLED ON THE BASIS OF THIS FORMULA BY CORRECTLY DETERMINING THE INTERRELATION OF THE PROCESSES AND OBSERVING THE MATHEMATICAL RULES.

To know how these concepts interact with each other and achieve balance, you just need to correctly transform this expression.

If we assume that Q \u003d 1, then the equation Q \u003d C + S takes the form Q × 1 \u003d (C + S) × 1, while equality remains.

As a result of this transformation, we obtain the formula

1=(C+S)÷Q (2)

which indicates inverse proportionality, and since Q = 1 – the dependence of consumption and saving on income, that is, the higher the income, the greater the possibility and desire for consumption and investment.

(Isn’t this a mechanism to stimulate work and increase its productivity?).

It is only necessary to add that all the values ​​obtained will be expressed as a percentage of the total.

Next, we need to find out how consumption and saving interact with each other. To do this, only consumption and savings must remain in the formula. From formula (1) we know that Q = C + S and Q = 1 and we obtain the formula

C+S= C+S÷ C+S,

Furthermore, through transformations, we obtain two formulas S = 1 ÷ C (3) and C = 1 ÷ S (4), which indicate that with a constant income, these amounts can affect each other in an inverse relationship, that is, if more consumption, then less savings and vice versa.

Furthermore, substituting alternately the formulas (3) and (4) in the formula (1), we obtain the formulas:

Q=1÷ C+ C (5) y Q=1÷ S+ S (6),

Which, respectively, will indicate how changes in one or another value will affect each other.

And so on.

WILL THESE FORMULAS REDUCE FORECAST ERRORS?

Mathematical formulas are an algorithm that represents and records our actions in life, and their reading depends on the correct establishment of the relationship.

By the way, the “greed formula” transformed the equation

PRODUCTION+SERVICES=CASH EQUIVALENT

in inequality

PRODUCTION ≤ SERVICES ≤ CASH EQUIVALENT

It led to unprecedented growth of the financial sector of the economy, the rise of financial pyramids, the collapse of economies and crises, the concentration of capital in the hands of a smaller part of humanity.

The super profits received in the financial sector have turned it into a casino.

(Is this not the reason for the reluctance of private investors to invest in unprofitable industries, which in turn imposed another burden on the shoulders of state budgets and authorities in the form of employment problems).

This imbalance, in turn, leads to runaway inflation.

Another error characteristic of all textbooks is the violation of the rules and principles of graphics, which also leads to distortion of processes and misinterpretation of the foundations of economic theory.

The next change should be the designation of property types and the limits of their interaction.

In my opinion, there can be two types of property: public and private.

The status should include the property of central authorities and the property of local authorities.

Private should include the property of individuals and groups of individuals.

A mixture of state and private property is UNACCEPTABLE due to the difference in the motives for the emergence of these properties.

Let me explain this part in more detail.

The state is a form of social system and is created to protect the interests of society within certain limits of space.

The reason for the creation of the State implies the rejection of a part of the personal benefit in favor of the State, for which the predominance of personal benefit in the service of the State contradicts the very meaning of the State and undermines the authority of power.

(Is it not because social tensions in society are growing every day, is it because we are seeing an increase in crime among the “offended by fortune” and representatives of the lowest levels of power?).

The fewer points of convergence and confusion, the less chance of corruption and theft.

By the way, the most effective way to combat corruption is the prohibition of holding any position (including janitor) paid from the budget by people who have tainted themselves with corruption and theft.

The interaction of this type of goods must be carried out by payments, but not by mixing.

In turn, private property is inherent and permissible to the predominance of personal gain, which encourages business activity.

I would like to say about entrepreneurship. Entrepreneurship does not determine the goal – to make a profit, but the motive. This motive, in turn, determines the path to achieve the goal, which can be at least two.

The first way is to use the existing regulatory and labor framework.

The second way is to devise schemes and look for loopholes in the existing regulatory framework.

The path we choose will determine the degree of respect in society and in society as a whole.

This choice will determine our essence: we are people, a collective, a nation, or people, a gang, a herd and, consequently, the conditions of our existence.

Why, the businessmen who stole from people during the privatization period and are now trying to pay them back with charity actions, but can’t?

To those who object, I will reply.

Do not confuse respect with servility, servility, if it were the other way around, then the number of violent deaths between them would be lower.

And about one more step in the way out of the crisis.

The state budgets of the countries are drawn up with a deficit.

The deficit is the result of the execution of the State budget and there is a NEGATIVE difference between income and expenses.

I understand that when planning it is impossible to foresee each and every one of the risks of fiscal deficit (which depends directly on the efficiency of the fiscal service and the balance of the fiscal legislation), and it is even more difficult to foresee the risks of expenditure ( for example, those associated with natural disasters).

But putting an initially negative result into the calculations and striving for it in the hope that it will bring a positive one is at least stupid.

There are three reasons for the budget deficit:

1. Long-term investments.

2. Management errors, information distortion.

3. Theft, corruption.

I will not open them, so as not to deviate from the topic.

If we balance the negative results, we will not obtain positive results, which explains the increase in the debt of the states, even those that show growth.

2007 2008 2009 2010 2011 2012;
-3% -four% -6% -2% -four% -a% = -20% -public debt.

This is a mechanism to increase debt.

But if we move to surplus budgets, this will allow us to stop the slide and start to climb out of the debt hole.

2013 2014 2015 2016 2017
+2% +3% +4% +5% +6% =20%

The data is not related to a particular state, but simply shows the mechanism to overcome the crisis.

It is easier to identify and correct a system error than a system error.

If the movement of humanity is explained as a spiral movement, then I would describe the current situation as a corkscrew in aviation. The problem is that it has a critical point and getting out of it once past it is impossible.

Even just by acknowledging and realizing our mistakes, we will change the general algorithm of our life, and from our action or inaction, this algorithm will change for better or worse.

The choice is ours!

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