Digression 2 : The Axioms of Modern Economics
Ford and Stalin. How to Live in Humaneness · перевод (English) · раздел 11 из 42
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Digression 2 : The Axioms of Modern Economics
In order to make clear what conception [52] of controlling the productive forces of mankind H. Ford adhered to we must clearly define several theses regarding the modern system of production and distribution of products and services in the society.
Most of them are obvious because they constitute some of the objective qualities of the social and economic life of our age. Yet regardless of that the economic theories dominating in modern science are founded upon the assumption that different opinions hold true for the issues discussed and that the views stated below are supposedly false.
We shall not recall the times of Adam Smith and earlier. We shall leave alone Robinson Crusoe and Friday living on an imaginary island. We shall turn to normal everyday life of any modern society that has developed a technosphere and that has become dependant on it. One can make the following statements about its life and economy.
FIRST. With minor exceptions there are no products or services we consume that can be produced by someone on his or her own. Production of any object or service starting with the conception of its design and up to delivering it to the customer requires collective labor both directly aimed at producing the object or service and indirectly connected with its production (manufacture and maintenance of technical equipment, ensuring necessary conditions that accompany production, for example heating on the premises etc.)
In other words, collective labor of many people, sometimes passed on from generation to generation, is the basis of the welfare of society on the whole. And it’s the basis of the welfare of social groups and individuals within it. And any kind of personal labor that forms a part of such collective work is a combination of directly productive labor and management labor. The last is aimed at coordinating activity of members of a single collective, as well coordinating activity of many collectives.
SECOND. If we proceed along the line of manufacturing a product in the opposite direction (start with the finished product, going then back to the stage of manufacturing semi-finished goods, components, technical equipment and, finally, to obtaining raw materials and energy) we shall see that the manufacturing process appears to be something like a branching tree. In this tree every «branch» is managed by administratively independent directorates of different enterprises.
These directorates even if their staff consists of a single member control activities by means of directives addressed to their specific area of «jurisdiction». These activities are:
· Controlling certain stages of the manufacturing process (telling people what should be done and who must do it);
· Controlling products exchange within the manufacturing process (telling how work must be passed on from one man to another).
The reason people started trading in all times and in all countries was their inability for different reasons to control the exchange of products efficiently using the addressed directive method. [53]
THIRD. Therefore the market of intermediate and «investment» products [54] , which services the sphere of production and has a more or less open pricing, is a kind of «glue». It «glues» together different fractions of the manufacturing process, which are under addressed directive control of different directorates (because they are owned by different physical or juridical persons), into an integral manufacturing process. When the market can no longer act as this kind of «glue» the complicated manufacturing processes, which employ a great many directorates and staffs subordinate to them, break up into fragments for which there is no demand. As they are not self-sufficient systems in terms of production and consumption they begin to degrade until they disappear completely in the course of time.
FOURTH. It is not only the market that plays the role of such «glue», which integrates many private enterprises (microeconomy) into a macroeconomy. This role is also performed by culture on the whole: most of all by language culture [55], and by the system of standards [56] maintained in the society in particular.
FIVE. Sales of products and services to ultimate consumers (individuals, households, non-production social organizations, state institutions and so on) are ensured not only by a demand for the products, which are necessary to satisfy the needs of customers. It is also ensured by the paying capacity of potential consumers. As well as by the trends and their paying capacity one anticipates.
SIX. Financial circulation is a phenomenon that merely accompanies the exchange of intermediate products within the manufacturing process and consumption of products by ultimate consumers. It is a process, which controls production and consumption. The effect that financial circulation has on production and consumption, i.e. on whether the market is able to act as the «glue» or not, depends on the policy defined by the individuals who control the society’s finances. Namely: the government (issue of money, policy on taxes and subsidies), the bank sector (issue of money, setting loan interest rates and the volume of loans), insurance companies (volume of insurance and price on risks), etc.
SEVEN. Production and consumption form an integral system of the society. This system develops itself in the course of history. Its skeleton is formed by manufacturing processes. And it then acquires the flesh of a system of human relations determined by morals (ideological relations and those resulting from ideology - informal legal tradition, the legally codified one, financial ones, etc.)
EIGHT. The welfare of society and its future is secured SUBJECTIVELY by means of this system as a whole. This system, based on technology, exists and changes OBJECTIVELY. In order to apply this system efficiently one must do the following:
· Define targets that are to be completed by means of this system;
· Organize and adjust the system and its elements to the end of:
O completing objectives defined,
O suppressing processes that lead to completing objectives that are rejected,
O adapting it to new problems and objectives that emerge (including pre-emptive measures);
· Tailor the work of every colleague (and not an individual worker) so that it conforms to the objectives defined and to the scheme according to which this integral multiindustrial system of production and consumption was adjusted.
NINE. It follows that: There are economic theories that refuse to consider economic issues in terms of the systemic integrity of multiindustrial production and consumption in a modern society. Instead of focusing on the problem of controlling self-regulation of this multiindustrial production and consumption system they keep studying its components separately. Such theories avoid facing the question ofthe systemic integrity formed by its components which is superior to any one of them taken separately and of establishing controlover self-regulation of this systemic integrity. In the modern world these theories are nothing but humbug and swindle.
This humbug and swindle in the culture of our age is performed by mafia corporations of professionals. Very often it is not the matter of mistakes actually made by economists and sociologists [57] - members of the Academy, its corresponding members, doctors, professors, candidates of science, assistant professors as well as scientists and lecturers of a lower rank. It is the matter of their parasitic self-seeking avarice and malicious venality (readiness to provide «scientific» and «theoretic» grounds for any propaganda if it is paid for, readiness to teach students and schoolchildren anything ordered by their «customers» passing it off for reliable knowledge).
TEN. The globalization of the biblical, enslaving, usurious kind involves the downfall of modern civilization and the people’s falling into savagery alike the screenplays of American «futuristic» nightmare films. A globalization alternative to it is not possible without solving the problem of establishing a mechanism to control self-regulation of the global production and consumption system to the end of ensuring that all people share in human dignity.
These are the «ten commandments» which one must bear in mind when making an assessment of the entire economic science and press. They are at the same time the axioms of modern economics, of the economics that has a right to exist and develop in our age.
Keeping them in mind let us go back to what Ford thought about organizing production and distributing products and services within the society.