On the role of the state in the economy

2024 Author: Seth Attwood | [email protected]. Last modified: 2023-12-16 15:55

To understand this complex topic, I will give a simple everyday example.

Imagine that some rich party-goers have gathered in nature. They want a drink. They want to ostogram themselves. But no vodka. How to be?

Here you appear with a box of vodka. And they also want to! And there is no one else to buy at this picnic, except for you, to run far to others.

And the party-goers take vodka from you at two prices. With the words "we live once again" and other sayings.

Why do they do it? But because they have money. Did you give them money? Can not be! They found them themselves from somewhere. And you came with a box, offered it - and everything went well. You have a profit, but they boomed as they dreamed. You received twice as much money as you paid for the box at the wholesale depot.

What's the catch? The fact that those with whom you broke up initially had money from somewhere. What if it weren't? Let's say you would let them borrow money - what if they could not pay off later?

It's not that they wanted to drink - it won't enrich you. The fact is that before you came, they already had money “from somewhere” to satisfy their desire.

And when they tell tales that the market serves the needs of people - do not believe it. They can want until the carrots of the spell! The market serves a solvent request.

To put it really roughly, it parasitizes on the population's previously formed paying capacity. If this solvency is not formed, the market will not satisfy any needs, even the most burning ones …

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A very important difference: the buyer for the manufacturer and the seller is an external, non-systemic figure. But the worker for the manufacturer is an internal, systemic figure.

The buyer goes to the manufacturer and the seller ready-made, from the outside. And the worker is formed from within, due to the internal capabilities of the enterprise. Do you understand this key difference?

Without realizing it, you are doomed forever to be a victim of the huge lie of free market theory. You will wait for the entrepreneur to create a rich and generous consumer, and he by itselfwill never create.

And this is not his task at all - to create a consumer. He serves ready-made consumers, but does not create them. A builder can sell an apartment to someone who is ready to buy it. But he can't print money for someone who wants to get an apartment, and does not have money for this!

The builder satisfies the demand for housing not as the need arises, but as the solvency forms.

And who will an entrepreneur create very quickly? A beggar worker. He will create it very quickly and on his own in the free market, because he is looking for ways to reduce his costs, wages are costs, and the state in the free market does not prevent them from reducing them.

That is, the process will go in the opposite direction than the romantics of "libertarianism" dream of.

The entrepreneur satisfies only the demand that has developed outside of him and before him. And he pays not as much as he can, but how much he gets to pay at a minimum.

Let's say he can pay a plasterer 100 rubles, but why - if a plasterer in a difficult life situation agrees to be hired for 50? If there is an opportunity to bring down the price of labor, it will certainly be brought down. And just as much as possible.

The welfare state proceeds from guarantees provided to all citizens. And "wild capitalism" - proceeds from the maximum reduction of costs and expenses. He does not study the needs of the working people, but the possibilities of their reduction.

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When you talk about a free market, you are inviting sellers to make their own buyers. And this is absurdity.

The buyer for the seller is an external figure

An internal figure for a manufacturer and a seller is a worker who helps an entrepreneur create and / or sell a product. But a worker is an expense. Wages are a significant cost item for an entrepreneur. Not arrived, do you understand?

An entrepreneur sells a product to someone who has money. But he doesn't create money from someone who has money!

How do you imagine that? What will the entrepreneur give the buyer money first, and then accept it back as payment for the goods? If he is so kind - what won't he give right away? Why such strange manipulations?

It is quite obvious that an entrepreneur needs a ready-made person with ready-made money. An entrepreneur makes a profit by serving solvent needs, but he does not create this very ability to pay!

But the entrepreneur creates the income of the workers - and these are his personal costs. An increase in the wage bill reduces the entrepreneur's profit.

Of course, it increases the profit of another entrepreneur, to whom the workers will come already as buyers. But why thisan entrepreneur to increase profits another, tell?

If we take an entrepreneur as a system, as an autonomous figure, then income comes to him from outside, and he creates losses himself, within the system. This is a very important difference. The business does not create a client, but the business itself creates its own costs.

If a business keeps 20 people where 10 is enough, or pays 20 rubles for the work that they are ready to do for 10, then it will increase with its own hands their costs. In doing so, it will increase someone else's profit - but what does he care about someone else's profit ?!

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The oil manufacturer can produce more oil - if you buy more oil. But he can't (understand this !!!) produce more butter buyers.

Either they exist - and then he serves them. Or they do not exist - then it goes bankrupt, goes bankrupt, whatever - but just does not increase the production of oil. Even if he has the technical ability to make more oils - why would he ?

In the absence of buyers, an increase in oil production is only an increase in costs, costs within the enterprise, and nothing more !

How does the system work? Initially, there are buyers of oil, completely and initially solvent. Then they go to the oil manufacturer. And he, now, is embarrassed, there is no oil …

They tell him: do it, we will pay. And he starts to do. And only at the end of this chain appears a product called "butter" …

Liberals turn this whole chain, which, it seems, is understandable to a schoolboy, too. First, they say, it is necessary to increase labor productivity. That is, to produce more unclaimed goods.

Since more goods are made, then the payment to the pieceworkers who make it is more. And since they pay more, pieceworkers, entering the market, buy more.

So, in the sick fantasy of a liberal, oil creates an oil buyer. But the opposite is true: it is the buyer of oil, using the manufacturer as a tool, and produces oil. The manufacturer itself does not need oil (at least in industrial quantities).

He himself will not eat so much oil. Just as a hammer has no interest in hammering nails, so an oil manufacturer has no interest in producing oil. He is a tool in the hands of the decision maker.

And the final consumer of the oil decides on the need for oil production. His money (if he has it) is an application submitted to the manufacturer in the form of an order “do it!”.

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This is where the irreplaceable role of the state and law in economic relations is included. Freedom of exchange is canceled and exchange rules are introduced. For example, a mandatory and constantly growing minimum wage, below which it is PROHIBITED to pay.

What does this mean? The fact that the salary will be forced to raise ALL entrepreneurs and AT THE SAME TIME. And that won't ruin them. They will spend more on workers - but get more in payments for goods from workers othersenterprises.

Thus, the system "by a swift jack" rises to a new consumer level and a new level of everyday culture.

Can entrepreneurs do it WITHOUT the state? No. You can't do that out of order.

Suppose one humanist (the manufacturer Owen, or the manufacturer Engels, or the theorist Schumpeter who opened his own company) raised his workers' wages. And others, crooks, are happy: Owen-Engels' costs are growing, their factory is going bankrupt, those who have retained the "orgy of humanism" win and triumph in the competition!

By the way, what our deeply respected V. Putin does not understand (alas): it is impossible (unscientific) to raise wages in a particular place or sector, regardless of other places and sectors. This creates not well-being in the economy, but distortion and imbalances. Instead of reducing social antagonisms - builds them up … What is good for some doctors to raise, and forget about others?

Of course, if we talk about inflationary wages, then it can be raised by an hour or an hour later. But if we talk about real (commodity-secured) wages, then it can be raised either at the same time to everyone, or to no one.

An entrepreneur cannot by himself raise the wages of his workers. More often than not, he doesn't want to. But even when he suddenly wanted to - he himself cannot do it.

Market is a tool declinecosts. Make ramp upcosts can only be off-market and anti-market instruments.

The entrepreneur pays either the physiological minimum for survival, or the social minimum prescribed by the state. In addition, it is obvious that the entrepreneur, in determining earnings, is guided by the salaries of state employees and state-owned enterprises. Most often, the salary in the company is slightly lower than the state salary. But it happens that it is a little higher (when the entrepreneur wants to entice staff).

Anyone who knows even a little about economic theory understands why life works this way.

An entrepreneur, on the one hand, is forced to hire people, on the other, he strives to hire them at the lowest cost (the motive for reducing production costs of a private firm).

If the person being hired has no choice (a monotown, for example, there is nowhere to go to work), then the hiring will be carried out at the lowest rates. That is, blackmail by death by starvation will be unlimited. And a person becomes a complete hostage of the employer and his whims, like children in Beslan.

If a person has a choice - to go to a firm or to a state employee, or to a state-owned enterprise, then the person will not go to the lowest rates. To attract an employee, an entrepreneur is forced to keep ABOUT state salaries.

You give much less - they won't come to you.

Much more - you rob yourself. I could have hired cheaper.

This is not a whim of the employer, but the law of economics.

Therefore, the increase in wages among public sector employees "magically" (magically for those who do not know economics) leads to an increase in wages in the private sector.

On the contrary, the poverty of public sector employees and at state-owned enterprises leads to the fact that the private employer begins to work for a decrease. As in advertising: “and if there is no difference - why pay more ?!”.

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If the state is removed from the economy, gives the market freedom, and invites entrepreneurs to find the balance of wages themselves, this leads (see history) to extreme, transcendental poverty in the labor market.

Once again, for those who are in the "liberal tank":

The consumer entrepreneur does not produce!

The consumer owner is "plucking".

And the entrepreneur produces (on his own) - the worker, the employed. Who shares with the entrepreneur in one proportion or another the down and feathers plucked after the hunt for the consumer.

Businessman does not want “Too generous” to share with the worker if there are many consumers and they are fat.

And the entrepreneur can notshare with the worker (even if he suddenly wanted to) - if there are few consumers, they are skinny, their solvency is low, etc.

Not because he is so angry (although he is evil, of course, otherwise you will not get out in the competition), but simply because in the second situation he nothingshare something!

And in the first situation, if the state does not force to share more generously, the advertising question arises: "Why pay more?"

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Hence the conclusion: the state and law since ancient times have been regulators of the free market of exchanges, and without such regulators, the free market of exchanges will first come to social, and then literal cannibalism.

Cannibalism ends where libertarianism ends, where the state interferes in exchange processes, mutual terror and blackmail buyer and seller (both goods and labor).

The ancient state, as a regulator, was crappy … He lacked the brains, technology, and communications to regulate human relationships well.

But people stopped eating each other - because even though crappy, but a relationship regulator appeared. People were moving from direct, literal cannibalism to its milder, social forms, with the prospect of getting rid of it altogether.

With the development of civilization, the state has more and more instruments for regulating the relations of "ex-cannibals", its citizens. There is a general intellectual development, more advanced technologies, a more developed road network and communication systems of the capital with places.

It's one thing if the USSR State Planning Committee counts on accounts and adding machines, and stores information in dusty paper folders.

It is quite another to imagine the State Planning Committee with modern means of communication, instant information transfer and facilitated information retrieval. Gosplan with the Internet is completely different than Gosplan with invoices and paper correspondence!

And if we retrospectively step back one more step, we will see that the tsar-father also tried to plan the economy (at least the best of the tsars). Only he did it very badly - because without telephones, telegraph, communication lines, etc. was the tsar-father trust without checking.

The king found a confidant and sent him to the provinces, hoping that the confidant would do good there. And face from its unlimited power quickly shit, turned into a tyrant and tyrant …

Hence the conclusion: civilization always plans the economy, if it is a civilization (and not complete savagery). The ban on cannibalism is the first step in building a planned, regulated, administrative-command economy

But when a civilization is at a low level of technology, it is very difficult for it to plan. As to the tsar with his feudal lords-serf-owners! He appointed them commandants of fortresses, that is, defenders of the population, and they degenerated into despots, that is, into oppressors of those whom the tsar had entrusted to protect!

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It is a completely natural process: with the general scientific and technological development, the level of regulation of the economy, its administrative-command component, also increases.

That, what I wanted but could not to reach the king in the era of goose feathers and parchment "tugaments" - easily achieved in the era of telephony and the Internet. Legality develops from the most general, vague, vague regulation (frame-indicator) to more and more precise and detailed regulation.

Otherwise, the rule of law cannot develop: in the opposite direction, it only degrades to the delight of criminals (as in the 90s infernal years).

Tightening of legislative regulation (development of law) "brings to naught" private property. It is, as it were, liquidated in parts: first they prohibit one thing, then another, they prescribe this, then something else …

A private entrepreneur finds himself in the ring of state regulation of activities. And this ring shrinks around him, reducing and reducing for him the possibilities of personal arbitrariness

And this process - the elimination of arbitrariness (freedom) by legality (statism) - lies at the foundation of civilization.

It assumes one or another rate of growth of government regulation.

If state regulation of exchange processes decreases, then civilization as a whole is degrading, approaching the stage of savagery. Also at one speed or another (very fast in Ukraine, much slower in France, but …).

For me, it’s better not to walk in the direction of savagery at all, neither running, nor walking, nor crawling.