Harmonious Economics or The New World Order. 2nd edition by supplemented

Harmonious Economics or The New World Order. 2nd edition by supplemented
Vladimir Chabanov

The modern economy, whose driving force is income, and not benefits to people, is inevitably monetary, rental, and exploitative. She does not cope with modern problems. In order for the economy to become a factory of useful things, it must abandon liberal principles, change the management philosophy, priorities and tools. The theory and features of building such an economy are presented in this book. It is original and has no world analogues.

Harmonious Economics or The New World Order

2nd edition by supplemented

Vladimir Chabanov

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Scientific editor: PhD in Economics, Honoured Worker of Higher Education of the RF, Head of the Department of Economic Theory of the S-P State University Victor Timofeevich Ryazanov

Interpreter and translator Ekaterina Nikolaevna Bereznikova

© Vladimir Chabanov, 2020

ISBN 978-5-4496-2405-5

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The book offers a profound analysis of economy aimed at providing better living conditions to the population rather than allowing individuals to get more profit. The research studies the existing political and economic structures, discovering their advantages and drawbacks. It shows that a harmonious economy that reconciles the interests of all people and states, of Nature and Humanity, and valorises order and justice, is the most efficient. The methods of building financial, tax, and administrative systems, as well as production relations, within such structures are described, too. The deep analysis, the concise and logical style, and the opportunities offered make this original book unparalleled. The implementation of this theory will resolve many issues of modern economy, as well as improve the quality of life of people.

©Chabanov, 2018
© Ekaterina Nikolaevna Bereznikova, transtation, 2018

Created with Ridero smart publishing system

Выполнен фундаментальный анализ экономики, предназначенной для наилучшего жизнеобеспечения граждан, а не для получения дохода частными лицами. В рамках исследования рассмотрены существующие политические и экономические формации, описаны их достоинства и недостатки. Показано, что наиболее совершенной является гармоничная форма организации, в которой органически сочетаются интересы всех людей и государств, Природы и Человечества на основе порядка и справедливости. Установлены особенности построения в них финансовой, налоговой и административной систем, производственных отношений. По глубине анализа, по строгости и логичности, открываемым возможностям книга является оригинальной и не имеет мировых аналогов. Ее внедрение позволит решить многие проблемы современной экономики и существенно повысить жизненный уровень населения.

La recherche constitue une analyse profonde de l’économie qui vise le bien-être de la population et non pas l’enrichissement de certains individus. L’auteur de la recherche examine les structures politiques et économiques existantes et décrit leurs avantages et défauts. Il démontre que la structure économique harmonieuse, qui associe les intérêts des tous les individus et États, de la Nature et de l’Humanité, sur un socle de valeurs telles que l’ordre et la justice, est la plus efficace. L’analyse des systèmes financier, fiscal et administratif, ainsi que des rapports de production au sein de ces structures est proposé. Cet ouvrage est profond, laconique et logique; il ouvre des opportunités sans précédent, et dans son originalité il n’a pas d’équivalents dans le monde. L’application des découvertes qu’il propose permettra de résoudre des nombreux problèmes de l’économie moderne et d’améliorer considérablement la qualité de l’homme.

El libro produjo un análisis fundamental de la economía, diseñado para mejorar las condiciones de vida de los ciudadanos, y no solo para generar ingresos para algunas personas. El estudio examinó las formaciones políticas y económicas existentes, describió sus ventajas y desventajas. Esto demuestra que lo más perfecto es la forma armoniosa de organización en la que los intereses de todas las personas y estados, la naturaleza y la humanidad se combinan orgánicamente sobre la base del orden y la justicia. Se describen las características de la construcción de esta economía en los sistemas financieros, fiscales y administrativos, la armonización de las relaciones de producción. En términos de profundidad de análisis, rigor y consistencia de las posibilidades ofrecidas, el libro es original y no tiene análogos en el mundo. Su implementación permitirá resolver muchos problemas de la economía moderna y mejorar significativamente el nivel de vida de la población.

Introduction[1 - [Translator’s note: This English-language translation of the monograph is based on the Russian-language manuscript provided by the author; it may, therefore, contain a number of slight differences from the published Russian version of the book.]]

    The theory without practice is dead, and practice without theory is blind
    Paphnutiy Chebyshev

Theory that has reached deadlock opens up brilliant perspectives[2 - [Translator’s Note: Unless stated otherwise, all quotations from English-language original sources and English translations of foreign-language sources referenced in the bibliography are cited from the respective originals/ translations. All other quotations, unless stated otherwise, have been translated into English for the present edition. All biblical quotations are cited from the Authorized King James Version of the Bible.]].

    Ibn Sabey

Estimated readers!

The book you are holding in your hands is about economics. However, its subject is not the economics that we witness today, but economics the way it should be. This book is about economics that would create a stable and violence-free world where all people would have an opportunity to provide a dignified living for themselves and their families. About economics that would conform with the common sense and respect and promote the ideas of kindness and justice. About economics that would benefit all, whether they are strong or weak, bright or not-so-intelligent, elderly or young. Economics that would encourage a healthy lifestyle and not vice versa, and contribute to the development of culture, education and morality, instead of suppressing them.

This is not a utopia or a naïve dream, but a tenable theory based on the laws of the Universe, world experience, and knowledge. This is precisely what economics should be! Such economics has an internal logic, and, peeled off all that is superfluous, artificial or immoral, this is what the modern shapeless and faulty economic doctrines boil down to. Their intricacies do not arise from the complexity of economics as such, but from the unbounded desire of some to make profit regardless of the costs to Nature and the society.

As the result, the majority of the world’s population has trouble upkeeping their dignity, not only in the earthly matters, but in the international relations, too. In the current economic conditions, common people cannot work normally, live decently, eat healthy, or raise their children any more. Today, human beings have turned from clients into yet another resource, another source of income. Unless they are profitable, there is no need to provide them with means of existence.

Consequently, social protests increase, the feeling of discontent deepens, and terrorism gains ground. On the other hand, the number of millionaires grows. And it would be a violation of truth to believe that the more people get rich, the less poor there are. So why does this happen?

The existing economic theory is based on liberal principles that consider the free – that is, uncontrolled – actions of a certain group of persons as the paramount value of the social being. This freedom brings about the inviolability of private property, the freedom of business, and the precedence of the rights of a person over the rights of the society (a person is more important than the state). Besides, these principles exempt people of their obligations before others, and limit, as much as possible, the state and social interference in everyday and economic life of the country. This economics conforms to Thomas Carlyle’s formula “anarchy plus a street-constable’[3 - Cit. ex T. Carlyle, The Present Time (Cambridge University Press, 2013), 24.], which the wellbeing of the state and the society do not fit.

Such economic philosophy in all its forms turned out to be most advanced and thoroughly tested, and has served as the ideological foundation of the modern economic science. That is why all tools, criteria and incentives of the existing structure have been adapted to serve the profitable economics and not the useful economics. For instance, its global indicators, such as GDP, national income, and GNP, are based on the monetary income and not the tangible social improvements. All of the above-mentioned factors have given rise to a global confrontation between the social nature of production and the private consumption of its results. Nevertheless, economics disregards this and continues along the selected path, just as a driver who would navigate by the stars failing to look at the road. It is obvious that in such conditions collapses are inevitable.

Due to these reasons, current economics is incomplete, self-contradictory, and unstable. Its notions cannot withstand reasonable criticism, they have lost touch with reality, and lack unifying logic and clear objective. These notions are obsolete. However, there is no solid structure, and for that matter no science, without a foundation.

Indeed, the chasm separating modern economic studies from economic practice is dispiriting. The way it is interpreted and taught, this subject has little in common with the real situation. As Ronald Coase, Nobel prize winner in economics in 1991, wrote: “The tools used by economists to analyse business firms are too abstract and speculative… Since economics offers little in the way of practical insight, managers and entrepreneurs depend on their own business acumen, personal judgment, and rules of thumb in making decisions… Economics thus becomes a convenient instrument the state uses to manage the economy, rather than a tool the public turns to for understanding how the economy operates’[4 - [Translator’s note: Translated by me.]].

The tone of the modern economics is set by theoretical philosophizing on price formation principles, returns and expenses, interest rates and inflation, demand and offer, rent and preferences, which has supplanted discussion of the ways to increase labour productivity and improve labour organisation. Instead of striving to create conditions for dignified human existence and cultural development, this science is impregnated with acquisitiveness.

Thus, economics turns out to be a fruit of centuries-old delusions, passions and egotism, politics and momentary actions, and not a product of systemized knowledge. It is used to justify and to serve the existing political regime, not to improve it. That is why the crisis we observe today is easy to understand and explain. Besides, a large number of economists are familiar with it (ref., inter alia,

). For this reason, the method of analogies, i.e. the trial and error method, is used in decision-making, which with time renders it ever less reliable and ever more expensive. Another possibility is to recreate blindly the experience of others.

In order to avoid it, a solid fundamental theory is required that would be capable both of forecasting and guiding. It should serve as a compass to indicate the correct and the erroneous direction of development for every specific action. Unfortunately, in modern economics, such a tool does not exist and is not even foreseeable.

That is why the variety of economic doctrines is so wide – they seek to bring some order into this kingdom of chaos. Here anything can be found: from monetarism to Keynesianism and mercantilism, from planned economy to utter anarchy, from conservatism to naïve romanticism. And while mercantilism encourages to save money, physiocracy urges to actively spend it. While metallism considers money an indicator of the nation’s wealth, nominalism regards it as conventional sign. The list of comparisons can be continued.

Thus, the current economic theories do not make up a whole, but are just fragments of science. They are not united by one principle, logic, or managing tools. That is, they resemble the branches of a business entity tree not connected to any single trunk or root. Consequently, the advice based on such studies is not universal. Economy is a complex structure that cannot be simply assembled out of separate fragments, like a puzzle.

It is obvious that economics can turn into a real science only provided that it abides by objective, universal laws and serves every human being instead of just the few. Then the entire arsenal of the limited doctrines will become superfluous, and the only true doctrine based on the laws of the World will survive. Indeed, the man is not a special supranatural creature guided by its personal cravings, but a natural phenomenon carrying out the functions it has been charged with. As the result, if the man tries acting as he wishes, in disregard of the laws of the World he lives in, then the World turns its back on him, and all the powers of Nature take up arms against him. We witness this confrontation on a regular basis. It increases the number of natural catastrophes, earthquakes and tsunamis, anthropogenic accidents, and emergencies. However, there should be no surprise here, as everything in the world is interconnected.

On the other hand, the current economic doctrines, highly controversial as they might be, all have one thing in common: money, as their only tool of analysis and management. This is no coincidence. In full accordance with the liberal doctrine, current economics takes monetary income, and not the actual benefit, as its basic tool. That is why current economics has turned money into its global objective, has made it the main means and source of human wellbeing, their dream and guiding star. The fact that money is more profitable to produce than goods contributes to this situation.

Thus, the existing economy is conditioned by money, and nothing goes by without it. Money generates money, it serves as the yardstick, as a fundamental incentive, and the criterion of perfection for any company or economic transaction. Money subordinates people, nature, and power. It is profit, investment, shares quotations, and interest rates that control production, instead of such factors as production efficiency, possible success, and usefulness. As the result, the objectives of capital owners dominate those of useful items producers. Obviously, this does not contribute to increasing the productivity of economy.

Consequently, the “long money’ has disappeared, and financing is granted only to those projects that bring the fastest profit, and not the biggest benefit. Economics is now guided by short-term activity, thus losing its global objective and ultimate goal. Once money has acquired its unnatural overwhelming importance, it started actively submitting the world to its power. It is the money that causes and directs modern destructive tendencies.

Indeed, money serves as the universal key to open both minds and hearts. That is why, as M. G. Delyagin said, “there is no problem in the world that can be solved without money, just as there is no problem in the world that money alone can solve’ 

.

The vortex created by such “economics’ keeps devouring more countries, peoples and continents only to grind, wring out, and diffuse them. Money ruins the lives of people, nations and states, exacerbating poverty, crime rate, and terrorism. Money as it exists today is an oppressor of the authentic values: honour and conscience; truth and justice; beauty and decency; Nature, freedom, love, and the very life. “What power has law where only money rules!” (Gaius Petronius Arbiter, first century AD)[5 - Cit. ex J. Pine and P. Donahue, Money and Wealth: A Book of Quotations (Courier Corporation, 2013), 15.]. All the human troubles, all wars, and all revolutions are, eventually, down to money. Moreover, the process gradually seems to become even more global and less controllable.

The clearer the direction of such development, the darker the situation. Meanwhile, money is the most visible instrument of public relations, produced by social culture and lifestyle. It is a factor formed, for the most part, by the society itself. This makes the situation unpredictable on the global scale, for it is true that by choosing a certain form of money, nations define their own future.

The absence of real value in money entails a currencies struggle, where only the currencies enjoying a strong state support can win and exert an influence. As the result, a parasitic virtual economics evolves; it allows money to bring profit without any benefits for the people, that is, circumventing the real production and goods exchange, through pure speculation, by transfer from one pocket to another.

Furthermore, the income of the virtual economy exceeds the income of the real one. That is why modern money amasses within financial entities, and not manufacturing ones. Consequently, the daily global foreign exchange operations cost reached $5.3 trillion by 2013 and currently continues rising. At the same time, the currency turnover related to goods and services transactions amounted to $55 billion only, that is less than 1% of the total amount of foreign currency transactions 

. This brought about an unprecedented dominance of the financial market over the goods and services markets. While around $64 trillion circulate in the form of cash, bank accounts and deposits, the direct investment into production does not exceed $1.8 trillion.

On the other hand, economy based on money is inevitably usurious due to the artificial money deficit and the reign of money (obviously, the two processes are interdependent). This is no new phenomenon; it appeared a long time ago. Back then money lenders laid their hands on the major part of the lender’s profit through interest rate. Without creating new production factors, usury degraded production, helped paralyze production forces and promoted parasitic processes. It is no wonder then that economy built on usurious principles fails to be ethical or efficient. Its activity is bound to disregard the rules of common sense.

However, few are disturbed by this fact, and nowadays usury has flourished violently. It has become the basic principle of operation for modern banks, corporations, and other commercial entities. Moreover, it dominates the social and the state sectors. Usury has filled in all the pores of the current economy and has become the rudder of management and planning. The cupidity of individuals has been elevated to the level of state priorities.