Communism requires both individuals and money to shape according to the dictate of the State rather than humans and money shaping the dictate of the State. That this be called "socialism" is a corruption of both the words social and society, that are essential elements of human relationship, that exist by nature of human relationships that are neither forced or dictated. Social value is as much a part of human basic requirement out of life as is money.
Money, the tool of the capitalist, is inherently a synthetic social value: it simply reduced reality to commona1ity. Individuality is re-shaped by money into relationships of value. When money is isolated from reality and becomes the singular aim or consideration it becomes anti-social, it loses its relationship, relating only to itself it is manufactured and self-arguing. In order to avoid this it is necessary to analyse the market force democracy, and this is to prove that it is inherently a social animal, and that for capitalism to work successfully requires social considerations at its heart; in order to do the job that money was designed to do, mainly to create a medium that would ease the interchange of reality, reality being interchanged to fulfil social needs and functions. Money was not invented to simply acquire; e.g. a millionaire who has money has nothing real until some of the money is exchanged for reality; it is only when reality (or service) is acquired that money gains it rightful value. Consequently it could be argued that the real value in money is only realised when it has gone, or been exchanged for reality; alone it has no value,
To get back to the underlying social framework within which the market operates. Consider the case of the farmer with a coal fire, the miner who eats. In order to buy coal to fuel his fire the farmer sells food at a profit. The profit is his income. On the other hand, the miner producing coal at a profit does so in order to earn wages that the miner needs to buy the food that the farmer produces. There is relationship and as a consequence of that relationship value is created which confirms the relationship and reinforces need for both continuation of relationship and consequence. Underlying the market is social necessity. Consequently the market is essentially a meeting for common value and only exists to fulfil the social framework. What this means is that society needs the creation and management of market as a primary consideration. Over-all consideration is the social fabric and satisfactory on-going balance of the population, easing the passage of life. So it is discovered that individual need is fulfilled when something is given or sold. Therefore it is in practise to ensure sensible levels of price including profit that not only fulfils the social need of exchanged reality and-service, but ensures the continuation of the provision of reality and service.
Separatism which denies social issues its true value puts the secondary relationship of market and profit first, sometimes even arguing that there is not such a thing as society. It puts the cart before the horse; it is scientific rather than realistic, isolating consequence from relationship and putting them in the wrong order of value. It is only satisfying the needs and aspiration of society that is the primary aim of any responsible uniting force, whilst labour, profit, market, enterprise are only the means to achieve; they are the how? and not the why? if market is successful at satisfying democratic society.
What becomes clear is that in order to satisfy society, market has to appeal to it, using money as a means of aspiration. The market itself is essentially a social animal, passing both goods and services and money around in a way that- satisfies continuing and fulfilled market. Business is just one huge interdependent family whose only differences are in the realities and services that are produced to satisfy the individualism in society. A pays workers and earns profit in order to buy from B and in turn B embarks upon the same course of action to buy from A and so on. Separatism that denies socialism loses the thread of the reason as to why economy exists; as a result employment, training, levels of public interest supporting important social values are diminished, in favour of concentrating solely on the value of money (which is only a tool) rather than treating social value as a primary and not a secondary notion. As communism and anti-social government is waning the only alternative seems market-led economy, dictated by separatism under right-wing banners in the name of democracy, as if the two hand in hand are the only solutions to government - the only direction to go in. Hence the prospect of 20 years of right-wing separatism.
The success of the market hinges upon establishing the right price for goods and services. The price includes cost of production, labour costs, and taxes, a measured level of profit, and selling costs. The trend over recent years has been to expand selling costs (pushing the goods) battening the hatches on labour costs, minimising production costs to improve cash flow and to sell, sell, sell. It is all very well to sell, sell, sell, but that implies that it is also necessary for someone somewhere to buy, buy, buy. What has to be right is the interface between buying and selling; get that wrong and there are resultant problems like inflation, where the need to pace between buying and selling pushes up buying costs out of proportion to other costs, where a lack of relationship between money available and goods for sale is noticeable; unsupported money puts pressure on reality, therefore labour and production costs imbalance both production and demand.
Inflation, boom, recession are not separate problems, they are related. Another kind of problem is that the creation of market in a sell-minded environment produces reality and service ahead of true market; consequently if labour cost is battened down, the availability for sale goes out of kilter with that which is available to buy, causing a thinning of the market, over-production, a recession which rapidly bites into over-production causing a re-think in the market place, resulting in cut-backs in production, price reductions, reduced profit or increased loss - an even worsening effect on labour costs making buy, buy, buy even more difficult. The result is a reduction in inflation as prices stabilise or reduce, less disposable income because of the restraint on labour. Yet until the market and labour costs are on an even keel the likelihood of recession spiralling is great. The question is matching market to available income; the relationship is essential to avoid further inflation, recessions and short-term booms; they are all symptoms of the same disease, the lack of relationship between sell and buy ability in the market place. As an example of this, look at the car market. In the early 60s when we were told "you have never had it so good" there were four major mass car producers in the UK in competition for a home market. In the 1990s as well as four major UK producers there has developed more than twice as many Far Eastern manufacturers selling mass produced cars into the UK at average prices; consequently the width of the sell market for mass produced cars in the UK in thirty years could be said to have trebled.
Imported cars carry no wages and tax costs of production that find their way in the UK buy market. The level of generated income is disproportionately less than the rate of the width of available market. This means that for a big ticket item like a car there needs to be strong buy ability to make the right kind of adjustments to the overall market. There has to be a strong relationship to lessen problems generated in the market place. The car problem is resolved only by expanding buy ability in the market to match sell ability as much as possible.
The probable only realistic cure is to increase export, whereby finished goods do not find their way into the UK sell market so easily, but income/buy finds its way into the market, reinforcing buy ability; this is the way out of recession. Narrow trade gaps, overturn them; that is the way forward. The problem with British, German and American markets is that they fail to export themselves out of trouble and their markets for home consumption are supported by imports too large for their created buy ability in their home market.
The Japanese who successfully expanded their economy resists problems by heavily exporting, creating buy ability in their home market at the same time keeping a tight rein on imports so that it is only great export output that builds incomes and living standards. There is narrower width of home sell ability, i.e. essentially the market is inflated on the buy side, deflated on the sell side; there is artificial management of the buy/sell relationship which leads to lower inflation as there are less pressures from the buy side of the market, already high. So how does Japan run into trouble? Because exports are high it requires the buy ability of importers to be high. If there is recession in the sell market of importing nations, there are problems for the strength of Far Eastern trade; this in turn makes problems for the market of Japan.
The problem of market-led democracy as opposed to realistic democracy is that it is fundamentally flawed and the flaws are simple to recognise. The late 80s saw a credit motivated boom in the UK. This was instrumental in leading to a boom followed by a crash. Credit served to inflate the buy side of the market, consequently the sell side of the market inflated. The problem was that there was disturbance between real cost, real buy, real sell, and real profit. The fact that there was a sudden upsurge in both buy/sell ability was offset by the fact that the normal relationships between labour and product were disturbed. What happened was that there was a distortion caused by credit effectively mortgaging production costs, declaring profit on the whole before the production existed to pay for labour that paid the true cost; in consequence it can be said that credit distorts the relationship between profit and production; its effect is to contract long-term buy ability. Consequently it can be said that the outcome of a credit-led boom is that it is followed by an apparent recession in the economy as the buy side of the market has to offset short term credit by medium term payment, causing long term retraction from the buy side of the market, affecting the operation of the sell side of the market. There is a period of adjustment. Credit also adds to inflation of prices by hiding increased costs of goods and services behind service charges. But it is not just that that is problematic; there is something far more fundamental and worrying. As stated before, price (the sell side) consists of costs of production, labour costs, taxes, profit and costs of selling. Therefore price is made up of component elements that make up the total that is price; price is largely achieved by the seller rather than the buyer: which means that manufacturers and retailers set the price, not the consumer.
Price is achieved by adding components that relate to and make up the reality, yet labour and taxes and to some extent profit are the only components finding their way into the buy side of the mass market. Capacity to buy created is always less than achievable price components. Therefore the sell value of products finding their way into the market place is always greater than the level of produced buy ability associated with creating the market; buy ability is always playing catch-up. There is in-built distortion of the relationship of buy/sell abilities. The sell side either has to give in to lesser buy ability or the buy side has to be reinforced by credit. There is a need for monitoring the buy capability in such a way that it makes the best of the sell side. The position can be helped by export creating buy ability in the home market or importing buy ability in the form of tourism and investment, and inflating wages to the point whereby they are the greatest acceptable, so that buy ability relates at its highest to sell requirement. The emphasis for business is put fairly and squarely in creating and managing market activity, relationship between buying and selling being the most serious factor to generate long term success. If business simply ignores the problem and does not pay heed and does not pay the best it can afford, it does not aim to alleviate home trade gaps. The result is that business will not recoup costs of production and it is this that causes deficits.
The more countries that take the road to market and profit orientated economies and separatist democracy, will find an increasing need to export which implies an increasing need for import on the buy side of the market, but countries that import need to equivalently export to pay their way; consequently marketing becomes doubly reinforced to export to supplement costs of production in the home market.
Widening of free market economies could create problems of the need for massive oversell in the world - countries awash with production looking for markets where there can be consumption of much stimulated production. The effect could be a world-wide recession as buy ability never matches sell ability and threatens achievable profit, thereby depressing wage costs and real markets, i.e. a vicious circle only broken by a fall in production, further worsening living standards internationally. The social structure of economy would break down. Perhaps the way out of it is to not expand market and profit internationally but to support countries to eliminate the likelihood of deficits within narrower market economy creating the room to support living standards in poorer countries, creating relationship on a reduced scale in such a way that there is inbuilt cost on the part of primary countries leading to the support for Third World countries which finds its way as aid as support for the less well off.
Market economy mass proliferation is dangerously based. Common mass market would lead to a situation whereby underlying costs of production were never truly fully met out of the wage/tax/profit that constitutes buy ability in the market place, according to the success or failure of the realities in the market place causing disrelated profit, but more than likely creating underlying deficit in total. If the world were total market economy, the books would never balance.
Since in this book deficit is a non-reality as it is impossible to rationalise as nothing is the bottom line of reality, if the world went into total and continuing deficit what would be created would be something that was impossible to get out of and economically suicidal; economies would collapse.
All that is necessary to make economy work is to create as much as possible synonimity between the buy and sell so that there is maximum creation of buy power.
The way market works at the moment is that it has to be supported by money generation, the inference is upon the saving and development of money generation out of financial dealing. The encouragement of market where costs of production and selling are minimised is what is required - a structure that pushes for the maximum consumer buy power.
The result is a marriage between individualism and socialism creating product and service and buy power and service: socialism which is a natural value overriding economic value, marrying sell and buy abilities as much as possible with the accent on the standard of living for the mass. hence it is possible to overlay socialism upon individualism in a continually progressive way.
Whatever the view of the market for goods and services, whilst this chapter concentrates upon finance it is not to be forgotten that setting up and running market puts increased pressure upon reality to give up of itself.
Footnote:
Realistic statistics - the route to economic strangulation. The following chart illustrates the pressure to create sufficient sales out of disposable income with a staff costing of 20% of sales.
| Disposable Income at 20% of Sales | Sales required to keep income running at 20% | |
| £20 | £100 | 1 |
| £100 | £500 | 2 |
| £500 | £2,500 | 3 |
| £2,500 | £12,500 | 4 |
| £12,500 | £60,000 | 5 |
| £60,000 | £300,000 | 6 |
| £300,000 | £1,500,000 | 7 |
| £1,500,000 | £7,500,000 | 8 |
| £7,500,000 | £37,500,000 | 9 |
The chart demonstrates how much and how quickly disposable income creation to achieve sales is manifest. In order to achieve any sales there has to be at the least sufficient disposable income to make. What the chart shows is just how much a monetary gap is created very quickly by pressure upon disposable income. Neither sales nor disposable income can be achieved without major economic activity.
