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

As the result, the society often loses the feeling of community, of common roots, as well as the reverence of the values earned through the sweat and blood of their predecessors. The harmonious vision of the world, the understanding of one’s place and purpose within it are gone. For instance, 26% of the Americans have no idea that the Earth orbits the Sun, and not vice versa. People have lost life’s purport and have become an easily mouldable material. They have accumulated suffering and spite, losing confidence and strength, belief and conscience, hope and kindness. And what is a man without them? The man does not live by bread only, not by gold or power. “No man can serve two masters’ (Gospels)9.

Against this background, wild propaganda is under way: human personality would be now freer than ever, human rights would be respected, and the omnipotent democracy would furnish everyone equal possibilities. But then, the human beings are deprived of their most basic right, the right for life. For their life is determined by the profit of the employers. The propaganda has been reinforced by coining of a series of clichés to worship, such as “freedom of personality’, “permissive behaviour’, “independent creation’, “tolerance’, or even “non-traditional sexual orientation’. They obscure the clear reference points, destroy the family, suppress the people’s inner aura, interfere with the link of generations, and let false values supplant the true ones.

Having thus crushed and crippled the person’s inner self, having diverted their energy towards pecuniary objectives exclusively, the present-day rulers have cut the supply from the true sources of well-being: kindness, respect and friendship. The lack of spiritual development is covered up by luxury, entertainment, and pleasures. Instead of love we get sex, instead of friendship – partnership, instead of respect – servility. Thus, spirituality, honour and dignity are being exterminated by all means available.

As the result, all contradictions accumulated in the past are aggravated, and the true values are substituted by the false ones. A considerable share of the fundamental concepts has come under the fire of ostracism; the previously undisputed truths have been questioned; the accrued experience has turned out to be unreliable, and the traditions – lost forever. That is why now it is hard to define what is erroneous and what is correct, where the truth and where the lies are, what the difference between business and crime is, what should be considered progress and what – regress. The society is revisiting the long-standing pillars of morality and culture, religion and science, physiology and psychology.

An unprecedented dissolution of manners has followed. Certain zealous and empowered persons and countries feel entitled to reshape the others’ destinies in accordance with their own petty ideologies and ambitions. The society has answered by the spread of social unrest, protests and revolutions, which claim lives and destroy cultural and material values. The result is the change among men of power, and the rotation of proprietors and social classes. However, as rules remain unaltered, these happenings have no significant consequences.

At the same time, it is widely proclaimed that the liberal economic model is the only possible one and that its key ideas are immutable. We seem to have returned to the Ptolemaic times, when they believed the Earth was born by whales, and no other version would have been accepted. In similar mode, the liberal economic theory is the very essence of the modern economics, while other systems are nothing but the fruits of ignorance. The numerous faults of this model are excused by the errors and the incompetence of the authorities, by the cupidity of certain individuals, and by the money grubbing of the proprietors and the government. Furthermore, there persists a naïve conviction that once these faults are eliminated, the existing economic system will provide for a decent living.

Such belief multiplies the ideas based on the liberal economic tools but used to change the situation and to get rid of some of its drawbacks. Nevertheless, in practice these tools are, as a rule, asymmetric and fail to bring any tangible advances on the existing issues. For example, if financing lacks, it is suggested that it be increased. If corruption ravages, new ways to fight it are found. These are just a few examples. In reality, it is impossible to eliminate the faults of the liberal economy through liberal methods, just as one cannot remove a spot with the substance that spotted the clothes. However, the theory of a different, non-liberal economics has not yet been worked out and, to tell the truth, it is not even visible yet.

The actual economics, as any other economics, is a rigid system held together by direct and reverse connections that make it integrated. All that conforms with the nature of the system flourishes within it, while everything hostile perishes. Indeed, every system has intrinsic qualities that cannot be eliminated as long as the model continues to apply. The fundamental concepts of the model will not survive any alteration, just as a cat will not grow to be a tiger whatever its food and living conditions are. A systemic crisis can only be cured by systemic measures.

In addition, the faults of the modern economics constitute its very essence. This means that we cannot get rid of corruption because it reflects a specific way of doing business. We cannot set up a comprehensive healthcare system as long as illnesses are a source of income for the pharmaceutical corporations and healthcare centres. And do not even consider having a child, as this is a risky investment.

These faults are inherent to this type of economics, wherever and whenever it is implemented. There may be certain deviations from the described system, but it is essentially the same. This economics cannot be different – a wolf cannot live on carrots, it has a different function. Nevertheless, all existing projects of mending the situation suggest precisely such type of measures.

In these conditions, the productiveness of the world economy steadily declines, despite the considerable scientific and technical progress. For instance, even though by 1998 North America, Western Europe and Japan were consuming up to 86% of the world’s natural, financial, human, and intellectual resources, their economies make no headway. Inflation aside, the salaries in the developed countries have not changed much in the past ten years. So, according to the official statistics, by the end of the past decade, almost 80 million EU citizens and over 43 million US citizens were not provided any means of existence.

To sum up, the well-being of the “developed’ countries is not attained thanks to specific qualities or organisation principles, to more efficient labour, superior culture or civilisation, but solely through large-scale redistribution of the world’s wealth. The developed countries succeed at the cost of ecosystems destruction and shameless exploitation of the natural resources and of the entire Earth’s population. For instance, the US consumes twice as many goods as it manufactures. This is the reason behind the high productivity of the American economy, which feeds the myth of the indisputable superiority of the American economic model over the others. At the same time, it is evident that the American path of development is unacceptable for other countries, as the Earth will not stand another such “golden billion’.

What can be said of the developing or underdeveloped countries then? Obviously, the rest of the world population have to content themselves with the leftovers. The World Bank estimated that 2.6 billion people, that is, over 40% of the total population live beyond the poverty line. In accordance with the UN-Habitat Report for 2003, the number of people living in the slums across the world reached 1 billion and continued to grow. This was the only true reason of the soaring massive crime rate, unprecedented surge of violence, crime and terrorism. And, as the situation does not improve, no methods within the liberal economic model are capable of turning this tide.

Summing up all said above, we may conclude that the liberal economic model has been exhausted, has become decrepit and obsolete. It is no more up to the challenges of the twenty-first century. This economic model is inefficient both in the emerging countries and the most developed nations. This means that the reasons of such a pitiable state are strategic and not tactical ones. It is not about the mistakes, the covert intention, or the low competence of certain persons, it is about the very model of economic development.

In addition, the situation is aggravated by the impressive progress of the modern science in the area of physics, chemistry, biology, informatics, and technology. If these innovations end up in the wrong hands, will be appropriated by any immoral person, the entire planet, and the humanity, may be destroyed. Under the present economic conditions, this is not only possible, but, in the end, imminent. Suffice it to remember George Soros, who inflicted terrible losses on many states and became the object of public outrage. Therefore, in order to save the life on our planet, a new organisation is needed, a new economic model, a new vision that will block the access to power and management to immoral individuals. Otherwise, the humanity will be doomed.

This is an essential point to be taken into account, for the current economic model, with its objectives and priorities conditions the way states and peoples live.

The economy of a state can be portrayed as a beautiful lake where a huge exhaust pipe dumps all kinds of waste and rubbish. The law enforcement, legislative, and administrative bodies are forced to fish the waste out to prevent the lake from becoming boggy. Obviously, this is a continuous process; it is inefficient, and little promising, too. Would not it just be easier to tap the pipe?

Let us consider the theoretical prerequisites for economics free from the above-mentioned faults. Without any doubt, economics should function for the benefit of all people and satisfy their needs in equal measures. Besides, it should act as the progress consolidation factor that would educate and harmonize human beings, thus contributing to renewal of natural resources used rather than solely to their consumption.

In this light, liberal economics will be inevitably replaced by a different economic system where such faults will not be imaginable. All economic activity will be aimed at improving the overall quality of life, and income will be reduced to an accessory instrument for achieving this goal. We are in for economics that would combine the interests of all people and economic actors. Moreover, it will be considerably simpler and more efficient than the current economics. This new economics will see not only the market, but the intelligent administrative tools work within it.

It is the harmonious economics aimed at providing everybody with means of existence, cured of the ills of the current economic system, that this book looks into. Such economics is designed to follow the natural flow of things, not to contradict it. It is universal, that is to say, it can be implemented not only in developed countries but across the entire world. Besides, the system proposed here may be used for analysing the state and determining the possibilities both of the current economics and of other existing types.

Harmonious economics is rational. It is inspired by the thoughts of many eminent philosophers and economists. However, they are all united by one logic and purpose. This new economics will not allow young energetic people to be unemployed, that is, out of demand in the economy, just for somebody’s benefit. It will further impede the proprietors, officials and imposed dogmas to condition the well-being of entire social classes.

This book proposes a harmonious economic system, and describes an alternative world order. It is based on an understanding of the globality of problems that economy is called to resolve, and not on the momentary success. Economics is recognized as a fundamental science, an essential part of the global knowledge. It is not limited to a narrow-applied study, but is the foundation of the human culture. Thus, economics should comply with the fundamental laws of nature both in theory and in practice.

Harmonious economics is alien to complexity, fantasy or utopia. The theory it obeys is significantly simpler and more reliable than the current one. The reason is that the modern economics is not complicated by its nature, but by the various contrivances aimed at increasing the profitability of money, power and property, something the new economics is liberated from.

Such economics will not provoke rejection of any group of citizens whose labour is useful, whatever type it is. The implementation of the harmonious economics will not entail social upheaval, property redistribution, changes in the established organisational structures, repressions, etc. Besides, the existing advance in applied economics will remain functional, but in different macro-conditions will become less complicated and more efficient.

Moreover, the laws formulated for harmonisation of the production relations are already active in the current economy. Whether they are known or not, applied consciously or not. Just as Newton’s laws worked even before they were discovered. Indeed, the more the current laws comply with the principles of harmony, the more efficient the economy is.

In addition, it should be taken into account that the harmonious economics theory is not a fruit of inspiration, a clever idea, or a political commission. On the contrary, it results from the systematization of knowledge, and this new system is logically precise, historically justified, and conformant to natural laws. This system could be compared to physics. It is such knowledge that is presented in this book. Certain principles of the harmonious economic theory are related in this book. Some have already been described by the author in a booklet [9] and a book [10]. A more detailed account of the basic economics is presented in the monographs [11] – [14].

In writing this book, its author was largely assisted and supported by many enthusiastic Russian people who love their country. Among them were Professor A. N. Malafeev, PhD in Economy, Professor B. M. Bolotin, PhD in Economy, Director of the Economic and Mathematical Institute of the Russian Academy of Sciences, General A. V. Ponidelko, Professor V. I. Kornyakov, Yu. N. Zabolotsky, E. V. Gilbo, L. P. Akaeva and many others who assisted the author in this work and helped this book become a reality. And last, but not least, my wife and my son, without whom this book would not have been born. I would like to express my heartfelt gratitude to all those mentioned here.

I. GENERAL THEORY OF HARMONIOUS ECONOMY

No experiment has any meaning at all unless it is interpreted by the theory10.

Max Born

CHAPTER 1. ECONOMICS AS A SCIENCE

§1.1. CULTURE AND ECONOMICS

Governance is inefficient unless it takes into account the traditions of the people, its culture, specific perception of the non-economic values, unless governance is “submerged’ in culture.

The Book of Lord Shang, an ancient Chinese treatise

1.1.1. Place of economics in the world knowledge system

Wisdom is a flower for the bee to make honey of, while the spider is a poison; thus, every one follows his nature.

Unknown author.

To define the nature of a phenomenon and determine its role in the global world order, one should start with comprehending the entire space where this phenomenon exists. That is why the highest level of abstraction is required to overview the economic system. So, let us start with studying the world on the macro scale.

It has been demonstrated that only three basic, global sciences exist in Nature, and they are the foundation of the entire bulk of knowledge in the world. One of them is the study of the quantitative laws of the world. The name of this science is philosophy, and it embraces ontology and gnosiology, logic and culture, art and cosmology, medicine, occultism and theology, history, ethic, and aesthetic. These and numerous other disciplines study the origins of people and their environment, the expressions of the World unity in particular elements, the rules of the World, the respective roles of God and Man, their purpose and place in the Universe.

The foundation of modern philosophy was laid by the ancient knowledge once condensed in the sacred teachings of rishis’ Vedas, Orphism, alchemy, Cathars’ beliefs, and other philosophic movements. This knowledge was the essence of the Brahmanical, Eleusinian, Bacchic, Orphic, Pagan, Biblical, Christian, Muslim, Buddhist, and other mysteries aimed at liberating the human nature of the burden of earthly ignorance. These philosophic doctrines became the bearers of the philosophic light based on intellectual, moral and ethical principles that ennobled the soul and gave a sense to the human existence.

Through dramatized shows and ritual games these mysteries educated the broad public in one way or the other, encouraged the from earthly interests to loftiness of the spirit. Thus, these activities laid the foundations of traditions, culture, arts, morality, and enlightenment. However, they completed this noble mission in a more delicate and efficient way than it is done today.

The ancient mysteries were at the source of all peoples of the world; they magnified the human spiritual essence and eliminated its mean, earthly nature while admitting their interdependence and similarity. Indeed, as Francis Bacon said, “A little philosophy inclineth man’s mind to atheism, but depth in philosophy bringeth men’s minds about to religion’11.

This is why philosophy shapes the deep human thinking, balances the sense and the sensibility, and prevents people from following unreasonable life principles. Philosophy studies the macro-world and micro-world structures, the general laws of Nature, society and individuals. Besides, it determines the similarity and the difference between the objective and the subjective, the being and the consciousness, the matter and the spirit.

Through philosophy we discover the expression of the particular in the general and vice versa, the difference between harmony and pathology, the Good and the Evil. Thus, we are able to distinguish power and justice, beauty and ugliness, form and contents, male and female, materialism and spirituality. To sum up, philosophy is present in every aspect of human existence. It is not by chance that up to recently physics was referred to as “natural philosophy’. Philosophy is universal notwithstanding the time and area of its application and is the expression of the spiritual component of the Universe.

The second basic science is mathematics, that is, the theory of quantitative patterns and spatial forms of the World. Mathematics lets us penetrates the mystery of the Universal order, understand the multiplicity, the grandeur, and the proportions of the bodies and objects. It is mathematics that studies the passage of quantity into quality, the correlation between the infinitesimal and the infinitely large, the particular and the general. This science establishes the possible and impossible types of quantitative correlations and spatial forms, and imposes natural limits within which philosophy functions. Mathematics tells us about the angles harmony and rhythm, and about the rules of universal organisation and order. It studies the numerical proportions of various bodies to demonstrate the difference between them, as well as the number of factors determining this difference. Mathematics serves as the foundation of the material component of the World. At the same time, the abstraction of mathematic methods renders them universal.

Back in the antiquity, philosophers noticed the common sources of philosophy and mathematics and understood the peculiarities of the quantitative and qualitative transformations of the matter and the spirit between their respective forms. The knowledge of mathematics, geometry and metrology was applied to symbols and shapes that were considered nothing but the images modifying various natural and spiritual phenomena: “The world was summoned from the Chaos by the Sound and the Harmony and built in accordance with the musical proportions’ (from the Pythagoreans’ theory). That is why door to the Platonic Academy read: “Let no one ignorant of geometry enter’.

The influence of antique knowledge on all aspects of the modern human life cannot be underestimated. Undoubtedly, this knowledge has been the foundation of the human culture, it has shaped the profound ethic, moral and aesthetic canons of the human behaviour, and it is, either consciously or unconsciously, referred to by people in search of explanation for all kinds of phenomena.

Finally, the title of the third basic science can be duly attributed to the economics, the study of the peculiarities of the human existence following the specific quantitative and qualitative laws of the World. In the end, it is economics that establishes the type and the principles of cooperation of people with each other, the God and the Universe. Besides, economics determines the evolvement of human communities and organisations, as well as shapes human behaviour and psychology.

In this light, economics as a science has, in essence, the objective of assuring the man’s harmonious integration into the Natural structure, into the Universe. This is quite logical, as the human being is not an isolated creature that lives without any aim or principle, entirely for its own pleasure or benefit. On the contrary, we are integrated with the World, the Nature, the Cosmos as a phenomenon executing its specific functions. We are not just individuals, but minds that have achieved the required balance between the matter and the spirit. It is through these minds that the Unconscious develops the Universe hoping to “achieve clear self-consciousness’’ (Genselo).

It is thus obvious that if the human behaviour fails to become part of the surrounding reality, then the humans will end up aliens in this World. If within the Universal Harmony Space, the humans remain egoistic, disharmonious, parasitic, alienated in their very essence, the World will estrange them. Without any doubt, neither benefit by all means, nor accumulation of currency, nor the adoration of fetishes, ideals or idols may be accepted as the purpose of human existence. Neither Nature, nor God need such a man.

Regarding this, economics, just as the Universe in general, has strict rules and restrictions. Though many of them have not been discovered yet this does not mean that they do not function. The economy must work in full accordance with the supreme laws of philosophy and mathematics and fulfil its functions. It acts as an essential component of the Basic World Knowledge and assists in the harmonisation of life. Indeed, as ancient Hindus believed that “lack of understanding of harmony makes life ugly’, and they were not alone.

Overview of economics from the global structure perspective allows defining more fully its role and place within the whole system of the World; identify its basic purpose and use it as guidance for assessing the efficiency and usefulness of any economic activities.

Needless to say, current economic theory is far from the above-described image. This alienates it from the entire Natural structure and entails numerous deviations from the reality.

On the other hand, every solid theory should have a firm foundation. As long as the aim of economy is profit, it will be based on human avidity that all peoples equally share. That is why modern economy has turned out functionally universal. However, if economy is supposed to work for the people’s wellbeing, then it is impossible to ignore their opportunities and capabilities, tastes and preferences, beliefs and morals. This, in turn, renders economy subjective, makes it dependent on people, their cultural demands, civilisation principles, and motivations.