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

The essence of the theoretical foundations of this doctrine is the following: the liberals admit and even insist on the relations between personal freedom, private property, and the society’s economic prosperity. Besides, the individualism of this approach, which became one of the founding principles of the European civilisation, was not considered egotism and narcissism of people, but respect for the individual, and an absolute priority of every person’s right for self-realisation in this world.

The implementation of liberal ideas in everyday economic processes is due to Adam Smith (1723—1790). In his work [31] Smith presented the concept of economic person driven by egotism and thirst for wealth. The author claimed that when a person acts solely in accordance with their own selfish interests, they do not only increase their capital, but also multiply their wealth. Based on this assumption, Adam Smith introduced the famous idea of the “invisible hand of the market’ that manages on its own all economic processes. He considered money as a source of wealth and as a technical tool that simplifies exchange of commodities.

At the same time, none of the above-mentioned scientists have defined the limits of liberal doctrine application, that is why economics did not prevent the liberation of ones through restricting the freedom of others. On the contrary, it enabled certain individuals to make profit without bearing any responsibility. It did not oppose to living at the expense of others, whatever harm this way of life inflicted upon Nature and the society. Moreover, this doctrine infused western mentality economic system with the Darwinian struggle for existence, which justified any methods that assure personal success. Thus, the economic functions of production and distribution were separated from one another. As the result, the ideological basis of capitalism emerged.

It is this vision that is still applied today to the entire global capitalist system. It is part of the foundation of all present-day economic theories. What is more, this particular vision is studied and implemented by the modern economic science and economy, it is thoroughly supported by the legal framework and legislation, as well as justified through the history of human development. As the result, liberal economy gets a moral excuse not to serve the society in general but to satisfy the interests of specific individuals. The economists have been led to believe that this type of organisation is the only one possible and they fight against the multiple drawbacks of liberal economy by liberal methods: they are enslaved by the rudimentary profit-generating economy just because they are unfamiliar with other possibilities.

The logical consequence of this situation has been the desire to govern this amorphous human mass with the help of such universal tool as money. For this reason, all the current and previous reputed economic theories have to a certain extent been focused on financial instruments and the methods of making various types of profit. This is why “economics is mostly interested in the study of methods of setting monetary price for commodities and services sold at the market’38 (Ludwig von Mises [30]). As the result, economics has moved to serve business rather than the society in general, to care for income and profits, rather than general well-being. Furthermore, little attention is given to developing efficient labour factors.

This narrow-mindedness of economics has made this science groundless and largely remote from the reality. The objectives of various social strata have drifted apart, which in itself is a sign of regression. For instance, the acquisition of foreign goods often produces additional income, however, it leads to repression of local manufacturers. Moreover, the very citizens of a country become out of demand within such economy. Hence additional profit is made by certain individuals at the expense of others. This is an objective controversy that needs to be resolved.

Such economy actively employs the principle of differentiation of labour, and rarely – its cooperation. Competition has become dominant, and initiatives that unite people fail to be integrated in this system. Social responsibility of all enterprises has been forgotten. But on the other hand, all profit-generating activities, including criminal ones, have been justified. This is the main reason of the soaring crime rate, devouring corruption and ruinous permissiveness that all modern states are living through.

Such situation can be easily explained. Indeed, the focus of any economy can lie either with its productive functions, that is, with human labour, or with the distributive functions, represented by money. It is evident that where efficient labour is encouraged, the well-being and the quality of life of the population grows. On the contrary, if the income of money owners is stimulated, if rent and profit are to increase, then the number of wealthy people grows, while the rest of the population goes poor and dies out.

For a country to be successful, it should support production instead of consumption; it should create suitable conditions for those who generate real values instead of virtual ones. Economics should encourage fair work and condemn harmful activities as counterproductive. Then the moral and ethical environment will change dramatically, and order and benefit will replace chaos and evil at the rudder of the society. Economics should teach people to improve the productive and moral mechanisms that exist in a society; it should not act as a bad doctor who makes the best of his patients’ conditions. Economic science should make dishonest people fair, and not vice versa. “Among the ancients, we never come across an investigation into which form of landed property, etc., is the most productive, creates the greatest wealth… The enquiry is always about which form of property creates the best citizens’ (K. Marx)39.

In the light of the foregoing, the capitalist model of economy only pushes the humanity further towards a dead end. It is suited for energetic, selfish and cruel people. Therefore, it primarily creates appropriate conditions for such individuals, while the rest of the society is seen as a nutrient medium for them.

At the same time, if nature created humans different it was not for some of them parasitizing the others. In reality, different human qualities are required to reinforce the general human ability to survive, to adapt to any developmental scenario and to explore the world compared with the same abilities of a separate individual. For this reason, an economy focused on one type of people only is inevitably weaker, less vigorous and more defective.

Karl Marx described economics as a science that studies “historically determined forms of production and exchange, as well as corresponding social relations’. Therefore, the USSR, where this understanding of economics was put into practice, defined this science as a branch of knowledge related to the study of the objective social development laws and to the formulation of practical recommendations in the area of production and distribution of material goods. Such economics served the society more than specific individuals. It put more emphasis on the peculiarities of class war rather than class cooperation, and encouraged collaboration over competition.

The governance within such system turned out to be overcentralized, as the result, the ruling elites acquired all-embracing power. The worker became just a cog in the production machine, well cared for (the Soviet social security system is still unrivalled), but deprived of all rights. And this lack of harmony eventually conditioned the collapse of the socialist system.

Resuming what has been said above, it is possible to conclude that neither the capitalist, nor the socialist economic models is perfect. Neither of the two has reconciled labour differentiation and cooperation, the private and the common, the functioning of the active and the passive social forces. Therefore, the economic success of both capitalist and socialist countries was less impressive than it could have been provided the current scientific, technological and human intellectual development.

In order to elaborate the harmonious approach to this phenomenon, we shall consider that economics is a science that studies the mechanisms of increasing human labour productivity and assuring better life quality for the population. Importantly, the life quality of the current generation, as well as of all the subsequent generations. Economics should encourage human integration in the Natural ecosystem; it should abide by the laws of this ecosystem and increase the moral and cultural level of the human society. This science is supposed to reinforce the moral principles of society, instead of annihilating them. It should stimulate a coordinated evolvement of the entire human society and consider a human being as part of the Universe executing its specific functions, and not as an ordinary consumer, who pursues his selfish goal or become a victim of the desire of others.

This monograph is dedicated to the description of the main rules and forms of such organisation.

Without any doubt, this will be a completely different economics. Therefore, neither the capitalist, nor the socialist theories is fully suitable for it. The main objective here is not prioritizing the interest of any of the parties, as we can witness in the current economic relations, but enlarging the scope of economic activities so that everybody could have their fair share.

The harmonisation of economic relations will render the society more human, it will become stronger, kinder, and more spiritually developed. Besides, an enormous amount of human energy will be liberated and directed towards production rather than struggle for existence. The ultimate goal will be prosperity for all instead of well-being of the privileged few; normal life instead of bare survival. That is why the economic model corresponding to these principles will be called harmonious economics. This means self-consistent, orderly, where parts will be coordinated with the whole to make one organism that will oppose the chaos.

Harmonious economics will resort to both differentiation and cooperation of labour, and complete both individual and social functions of production to integrate both the strong and the weak into society. Money will become obedient servant of humans, instead of capricious master that it is now. Taxes will no more function as a mechanism for income alienation, but as a tool for income increase.

Such economics will benefit entrepreneurs as much as wage workers. The rules of conduct will encourage the exchange of labour products, as well as fairness and harmony of human relationships, and will not destroy them any more. All types of property will exist and prove useful through fair competition. This means that none of the useful factors will be abandoned but all of them will be combined harmoniously. Such organisation will be very natural, as in Nature all things rationally coexist.

If the purpose of economics is well-being of the few at any expense, then capitalism is the best model to apply. If it is needed to reinforce the state at any expense, then the socialist model is the best choice. But if the country seeks prosperity of the entire nation and of every single individual in it, then neither of the model is sufficient. Such a purpose requires a fundamentally different type of economic ideology. And it is obvious that different economic doctrine cannot be created following the same standards or share common rules or ideology.

1.2.2. Fundamental purpose of harmonious economics

From now on we shall hold that the mission of economics is encouraging harmonious integration of humans in the Natural ecosystem, abiding by its laws, increasing the productivity of human labour and assuring smooth development of society. In this event, the model to emulate is not the economic organisation of the US, of Japan or any other state, as we have been trying to do, but the natural order of things. Obviously, none of the countries mentioned is ideal. It is better to use nature as the perfect standard rather than resort to any surrogate models. This does not mean that the experience of others should not be taken into account; however, it should be applied selectively, as part of the coordinated system of natural patterns.

How can the purpose of economics be formulated so as to reflect this principle?

When studying the harmonious laws of economic organisation, we shall from now on consider that the purpose of economy as any other productive activity is satisfying the needs of individuals and of the entire human community. Indeed, “Consumption is the sole end and purpose of all production…” (Adam Smith [31]). John Keynes echoes this idea: “Consumption – to repeat the obvious – is the sole end and object of all economic activity’ [33].

So, it is not the generation of profit, income or money at any expense, as it might be concluded from the present-day economic theories, but working out the ways to assure best life of the individuals. Without any doubt, this assumption does not exclude the existence of income, however, it is not dominant, and is not achieved at the cost of others. The source of income is in increasing the productivity of common labour, not in the redistribution of its results.

Here, besides the everyday needs, prospective future needs also should be taken into account, not for one current generation, but for the subsequent generations, as well. Achieving this is the main mission of economics. All other purposes should be subordinated to this one, as otherwise they are pointless. Economics is meant to serve all people, not only some of them.

Thus, economics does not function for the sake of production process, for generation of structures, values, profit, or money, for serving ideology or idols, but for satisfying the needs of people. This includes all people: rich and poor; white, yellow and black; young and old; clever and stupid; strong and weak; healthy and ill. If God has created them all, it is because they are all needed, and it is not human business to rectify God’s plans. Economics should work for people, and people should not serve economics. Therefore, it is doubtless that the sole criterion of economics perfection is the completion of its function.

Despite this idea being evident, history has known many variations in the way economic policies of countries have been interpreted. For instance, socialist system presented the purpose of economics as reinforcement of the state and construction of the material and technical basis of communism: “Our goal is communism!” was the most popular motto in the USSR. Nevertheless, a significant part of communist construction projects did not return the expenses; excessive emphasis on social needs led to underestimation of private needs of individuals, and excessive centralisation caused communism to degrade. All these factors eventually conditioned the insufficient productivity of socialist economics.

The main purpose of capitalist economics is generation of profit and increase of income, whatever the consequences for Nature and the society. At the same time “workers themselves appear as that which they are in capitalist production – mere means of production, not an end in themselves and not the aim of production’40 (K. Marx [34]). As the result, human labour and human beings themselves, despite being the real drivers of economics, have stopped being the main object economics serves.

Indeed, economics is being used mostly for making money, and not for providing people with means of existence. Today economics is dominated by business – a legal way of generating personal profit – and not by entrepreneurship, which allows achieving personal well-being by means of useful activities, not at the expense of others.

If focus is made on profit and income at any expense, notwithstanding the actual economic structure, money and money alone gets to the rudder of economics. This gives privilege to materialized labour over human labour. Consequently, the prestige and the cost of wage labour drops, and the population is exploited by the ruling elite. As the result, social inequality emerges, the crime rate soars, and the society suffers respective losses. This is why states with such structure inevitably turn out to be unproductive.

In authoritarian communities, the purpose of functioning of the government institutes is glorifying the leaders’ personalities. Suffice it to remember the famous saying of the French King Louis XIV, “I am the state’. Countries that live by nationalist ideology prioritize the prosperity of certain peoples at the expense of the other. States with a huge social gap see the poorest social strata die out, only to have them substituted with those recently deemed relatively well-off. At the same time, the said deviations from the above-mentioned ideas do not benefit anybody, but contribute to the overall degradation.

Summing up, it may be declared that none of the evident purposes of modern economic systems conforms with the principles of harmony either in ideology or in practice. Besides, substitution of the true purpose with preliminary results is indeed dangerously misleading.

Economic ideology is supposed to encourage fair labour over dishonesty. Only then will the moral and ethical environment undergo significant changes to let order and usefulness govern the society, replacing chaos and money-grabbing at its rudder. Economics should stimulate people to improve the productive and moral principles of the society, instead of taking advantage of social ills for selfish purposes.

1.2.3. Human needs, commodities and production means

I have fed you with milk, and not with meat: for hitherto

ye were not able to bear it, neither yet now are ye able.

Corinthians 3:2

The definition of the main purpose of economic activities provided above is, in fact, incomplete, for it does not specify what human needs are, nor gives a list of them, nor explains the conditions of their existence and satisfaction.

Needs shall be understood from here on as an inner state of psychological or functional feeling of insufficiency of certain factors becoming evident depending on the situation. These are typical both of individuals, and communities, social groups or even the society in general. Needs act as inner incentives for human activity.

Indeed, needs are the main driving force for a human being. Depending on their nature, needs can be divided into vital, spiritual and, social needs. The first category is related to the body’s need for food, dress, dwelling place, motion, rest, health, etc.

The spiritual human needs include the aspiration for personal freedom, for knowledge, for satisfaction of intellectual requirements, aesthetic tastes and harmony, for beauty, culture, morality, and for kindness and empathy. Among spiritual needs we find love and hatred, passion, and level of satisfaction. An important role in every man’s life is played by procreation, communication with other people, friendship and competitiveness. Moreover, factors of psychological comfort are classified among spiritual needs of human beings: self-confidence, prestige, self-realisation, self-respect, authority, etc.

Among social human needs there are security, equality, personal safety and the safety of one’s children, and confidence regarding one’s future. We all want to live surrounded by healthy, happy, kind-hearted, beautiful, and confident people. Besides, we demand from others a high level of mass culture and morality. There also exist specific social needs, such as need for labour, for mental and physical activity, for creativity and creation of new values.

These series are, undoubtedly, conditional and do not cover the entire range of human needs, nor delineate exact borders between different needs.

The needs depend on individual features of people, their living conditions, their gender and age, culture and education, their health, experience, traditions, religion, and national preferences. Besides, the needs are not immutable. With time, they develop, change, and evolve. They are influenced by the social environment of a person, by weather and nature, by the season and the place of residence, by the level of production development, and by the level of personal satisfaction. Moreover, the more one has, the more one needs.

Every individual, as a member of the human species, has certain needs similar to those of other people, human communities, or the society in general. For instance, all reasonable people wish to live in a clean and orderly place, in a country with a low crime rate, with a fair and experienced government, with a strong state structure, with a sound legislation and public order. At the same time, it would be hard to find two people with identical needs.

In fact, the individual perception of each need by different people varies; what some consider the sense of life, other discard as insignificant. Take music away from a melomaniac, there is nothing you could substitute it with. “The stifling of the individual may well be the stifling of the god in man’ (Sri Aurobindo, [16]). This is why there should be respectful attitude to the entire range of human needs. It is evident that satisfying just the needs of an average person, as conceived by planned economy and practiced by the current market economy, would not make anybody happy enough.

On the other hand, human needs cannot be studied just as a random set of factors. In fact, they constitute a harmonious complex that reflects the person. Besides, some needs only exist together with other. For instance, the desire for luxury cannot emerge unless the hunger is satisfied. A trendy hat demands a fashionable dress to be worn with. Nevertheless, the level of correlation and interchangeability of various needs is different and does not impact their importance. The failure to satisfy some needs for a long time might disrupt the inner harmony of a person, and even disfigure them.

However, not all needs may be easily welcomed. For example, thirst for power and selfish ambitions of certain individuals often mean loss of freedom and poverty of others. From the social point of view, only the needs that can be satisfied without violating moral and ethical norms, trampling the rights of other people, of the society, or descendants, are worthy of respect. And it is such needs that we are going to address in this monograph. Other needs should be managed with the help of educational or psychiatric institutions, or law enforcement agencies. Furthermore, the impossibility of their satisfaction should be enshrined in the basic principles of economics and state organisation.

It should be mentioned that when the interests of an individual, a community, and the society match each other and combine harmoniously, this condition is observed without failure. And the fuller the implementation of this principle, the higher the level of society civilisation, and the more grounds to class it as a human society.

On the other hand, human needs are not abstract, they are made evident through certain conditions, things, and services that a human being requires. Therefore, everything that satisfies human needs, everything required for a decent living, that supports and restores human health, increases life tonus, encourages and assures procreation, etc. is classified in the group of commodities. Among these we find food and water; clothes and housing; medical assistance and sport facilities; spiritual wealth and clean nature. Besides, this group includes the goods and services that are provided to people by service sector actors, as well as by spheres that satisfy social needs (such as governance, science, education, healthcare, and defence).

Human labour is also classified among commodities, because, on the one hand, it satisfies human needs related to self-realisation; on the other hand, it is the driving force of production. Though, in fact, all other commodities can be described in this way, too. That is why the more they satisfy human needs, the more productive human labour is. Many things can be obtained by humans directly from nature without additional effort, the rest are produced by the people themselves. In the remaining part of this monograph this latter category will mostly be considered.