суббота, 2 ноября 2013 г.

Promotion of uniform economic growth should be prohibited, as extremist



 

If you are interested in my theory, outlined in the MANIFESTO OF THE NEW ECONOMIC THEORY then I can write a book or an article for your order to be published in your journal.


"The role of public opinion in governing a state is increasing. But to use public opinion in managing economic processes now, would be equal to economic suicide. This is not surprising because all the media assess economic processes and actions of politicians in terms of a uniform increase in GDP, and justice is assessed in terms of equal distribution of income.


Then public opinion affects the action of politicians, and in the end it leads to economic crises. As methods of influence in the economy were not so sophisticated and effective, misconceptions about the economic processes could not cause any great harm, but now these erroneous views can be fatal. Therefore the economic ideology is a very important activity of the state .The basis of this ideology can be the following:


The uneven distribution of income - the force pushing forward the whole of  the society  People should love and appreciate their billionaires who are deprived of a normal life for the sake of prosperity of the whole society. 

Promotion of uniform economic growth should be prohibited, as extremist. False ideals of this growth, are pushing the government on monetary measures that prevent the normal development of the economy. And when the "monetary fog" dissipates, the crowds are demanding the resignation of governments, because they inspired with: the economic downturn is not natural, and there must be guilty. And  as it is known the guilty are to be punished.


Everything develops in cycles. Although, of course, the cycles may overlap .But the main idea of growth and development – freedom and comfort  should be sacrificed first, so that to get it at a higher level, and then ... again donate. The need to periodically sacrifice freedom and comfort,  must be understood and accepted. Just as the idea of uncertainty should be adopted. To move uniformly and predictably can lead only to slaughter, whereas the free development involves trial and error, ups and downs. 


Freedom is uncertainty in itself.


The desire to change something in the life of every citizen, in the activities of each organization should be cultivated.



There may not be economic development without deficit and sense of dissatisfaction.
Society should be able to continuously monitor key economic processes. Citizens should be freely informed about change in the following parameters: the amount of money supply, inflation, hidden inflation, the profitability of enterprises and industries. And you should forget about the GDP.


And to sum it up: you have to do away with the dominant consumer ideology of gradual and smooth consumption of more and more products, without risk, uncertainty, without ups and downs, without freedom."




What happens to the economy when the government is taking some monetary measures?



"What happens to the economy when the government is taking some monetary measures? These measures either lead to redistribution of entropy, or to inadequate assessment of the available entropy. But more often, to both. Suppose that the government has resorted to printing money. Most often this is done in order to overcome any crisis. First, as a rule the most money is received by structures which need it most of all. That is, the structures that either do not add entropy, or do it in a minimal volume. Taking into account the subsequent inflation, it is hidden redistribution of entropy from those who know how to receive it, to those who can not.


But if you need to get out from under the collapse, who do you trust  your pick and other tools? Those who know how to use them and walk quite well, or those who have never used them and could barely walk? Of course, the money issue should be directed to the most successful projects and companies. No matter how paradoxical it may sound: to help the most successful has proved that they can multiply the investment. 


But in fact the opposite is reality- the state takes away the tools of those who would use them efficiently and gives them to those who can not. Can  you predict the effectiveness of such emissions?"



Entropy is not only a universal measure of development, but also a measure of the competitiveness and survival



"Entropy is not only a universal measure of development, but also a measure of the competitiveness and survival. If there are some structures or communities struggling for the same resource, the winner is the one who is more powerful, has more entropy. Greater entropy can withstand more powerful enemies and natural elements. Therefore, people throughout history have learned to create different structures and the communities, because it is a way to concentrate and unite entropy.

 Since we are more interested in economic processes, we shall consider the production company .From the standpoint of personnel working in it, the principle of investment takes place here too. Employees give away their freedom to get a lot of freedom in the form of salaries and free time .The company concentrates entropy, and this allows it to achieve greater success than a single individual can achieve, or other organizations with lower entropy.


Thus, in many respects, the success of the company, and the level of  its entropy depends on how much entropy will be given by each employee .If an employee performs his work not well: not accurately and  not according to instructions ,not occupied, always thinking about things not related to work, he  will give a small  amount of entropy. If he follows the instructions exactly, and all his thoughts and efforts are directed to perform his tasks, he is investing the company the maximum amount of freedom and his entropy. If all employees do the same, the company receives the maximum amount of entropy, which increases its capabilities .As a result, employees also receive a large volume of entropy.


 A modern man invests his freedom not only into the company, in which  he works, but also into the state, and other structures, formal and informal, that we call institutions, and  as a result to get a greater freedom."





But the point of equilibrium - the worst point of the market, because buyers and producers receive a minimum satisfaction in it



If you are interested in my theory, outlined in the MANIFESTO OF THE NEW ECONOMIC THEORY then I can write a book or an article for your order to be published in your journal.



"In a competitive situation the market will move to a point of equilibrium, until it stops. But the point of equilibrium - the worst point of the market, because buyers and producers receive a minimum satisfaction in it. A slightly increased price -  and buyers will refuse to purchase. A slightly reduced price - and manufacturers  will refuse to manufacture the goods . At this point the market produces the  minimum volume of entropy.

The market produces the maximum volume of entropy when it moves to the point of equilibrium. Therefore, the more new markets are, the greater the entropy  is produced. But if to assume that due to improved competition a new market is instantaneously in the equilibrium position, it means that it produces a minimum volume of entropy.

On the one hand, the slower the market is moving to the point of equilibrium, the greater the entropy is produced per item. The more manufacturers are, the more products are sold and the greater entropy is, but the market comes into equilibrium faster. It is necessary to achieve the optimal balance between the speed of movement of the market to equilibrium and the volume of production."



Error of Keynes




If you are interested in my theory, outlined in the MANIFESTO OF THE NEW ECONOMIC THEORY then I can write a book or an article for your order to be published in your journal.
"The great mistake of modern economic theory is that consequence is taken for cause .This misconception is based on the theory of Keynes, and therefore leads to absurd conclusions.


Usually when they want to describe the principle underlying the Keynesian theory they describe a society in which all citizens produce quality and goods on demand, but everybody is in trouble, because due to the lack of money no one can buy this product .Now, if we give one of them $ 100 and he will buy  boots for it, then the GDP will increase by $ 100.Then a shoemaker will buy a tool from a blacksmith for the same money, and GDP will increase by$ 200 now. A blacksmith  will buy grain, etc..Thus, the $ 100  will not only bring happiness to all, but will also lead to an infinite growth of GDP .Absurd.


Of course, there is a confusion here .Actually a purely operational problem is described here  where you can not exchange the goods, otherwise than through cash, but nobody has the banknotes. However, this situation is a very theoretical one. If there is a highly demanded product, people will find a way to exchange it, especially in the current conditions of diversity of the payments and settlements.


To somehow mitigate the absurdity of the above situation, when $ 100 leads to an infinite increase in GDP, the followers of Keynes, suggest that this case – the ultimate case. And that in fact the GDP will not grow indefinitely because (and only because) a shoemaker and a blacksmith will not buy anything  for all the money,  and some of that money will be obligatory deposited. For these followers, "not-eating" all resources is a negative phenomenon. It is hard to imagine a more devastating statement for the economy. So it is no surprising  that the world brought up on Keynesian theory is vulnerable to economic crises.


"Eating away" money being poured into the economy leads to a temporary increase in GDP, but the entropy itself is not growing, but  it is only redistributed. And so when the economy makes sure that it is "empty" money, everything will return to even worse state, because the crisis did not stop. To prevent it, it is necessary to increase the entropy, and for this one needs  money, which society can invest, the money that the shoemaker and the blacksmith deposited . It is this money  that will bring freedom of choice and opportunity. Hence such an accumulation of funds is a positive factor . But a modern economic theory, which absorbed incorrect postulates of  Keynes, continues to lead the national economy to the wrong direction, focusing on GDP as the main criterion and flooding the economy with "empty" money.


Economic growth is accompanied by an increase in GDP, but the cause is the change in entropy, change in GDP - a consequence. An attempt to replace cause and consequence leads to a primitive fetishism. As a savage imitates thunder to cause rain, and the government stimulates the demand, hoping to trigger economic growth.
I think it would be more useful to repeat the words of Keynes's notion that in a crisis a state should behave as "the last big spender."  Not the investor, not the creator, not an entrepreneur - a spender. Maybe this phrase very clearly expressing the Keynesian approach would worry politicians and society, and would give rise to doubts about the strength of this theory."