ESTABLISHING REAL VALUE ECONOMICS:
China is at a stage in its development where it is best situated to be
the leading example of real value economics. In fact it is in the
greatest need for implementing a real value economy. Everything has to
begin somewhere, and it is far more difficult for western capitalist
nations to understand and implement, even in baby steps rather than
giant steps, large economic changes. This is particularly true when it
comes to beliefs and prevailing practices. Western conservatism stands
in the way, lacking other forms of experience, to facilitate real
positive, progressive, changes. So we turn to China as the greatest
hope of the modern world for economic salvation.
There remains some hope for the Russian Federation and other areas of
the world that have too quickly and too enthusiastically jumped onto
the American band wagon of cost accounting and profit margin based
American style capitalism, with all its proven problems and its proven
inability to resolve real social, economic, and science of needs based
problems. Its inability and its stalwart unwillingness.
At first it seems very difficult to understand an economics of real
value. It is so very different from what we are so very accustomed
to.
First we have to understand the real value of anything in terms of a
real human need for whatever is assigned that real value. The need has
to be identified and adequately understood. This requires some careful
thoughtfulness, and some compassion for humanity, which are virtues
that are less common nowadays than they need to be. The tendency to
reduce needs to their most basic, and those who fight against needs
based economics by claiming that a real value economy will beat the
people down to an animal level of brute existence. Not true. Believing
in that argument can make it into the truth, but reality need not, and
does not, support that particular belief. Modern science, rather than
ideology, can provide us with a good understanding of the many needs
of a human life, and of a human being who is adequately or well
provided for. Unscientific use of ideology will only get us into
deeper trouble as it has in the past. Communism, as it existed in the
past, and various religions, tend to promote a very unscientific and
radical reduction of needs, but often that is due to those system
themselves becoming the tools of the enemies of real value.economics.
Nevertheless it is best to abandon former ideologies and to turn to a
purified, fact based, freed from ideological assumptions, science for
understanding human needs.
Let us return to the simple example of flour, used for making bread.
The real value of the total number of units of flour that are to be
consumed by the people is the actual need for that many units of
flour. Real value is real need. In some instances this is the most
difficult principle in today’s world to really understand and accept.
Nevertheless it is the most important in any real economy that has any
real future. It breaks through the fog of economic illusions that have
caused so very much suffering in the world.
Now we can determine that X (whatever the number is) units of flour
are needed. In a real value economy we know that flour is very
important. More important than many other things. Now we can assign
the land, and other material resources, and the manpower labor that is
necessary to make X units of flour. In a real value economy there is
no need to consider the cost per unit. It is irrelevant. Only the
actual need matters. Some land is very good for growing grain, and
that land requires less other materials and less labor. It is used
first, if there is no greater need for its use than the growing of
grain. That land is not enough to grow enough grain to make X units of
flour. Now we need to use land that is less able, and needs more
materials and work to grow grain. That is perfectly good. We can now
go ahead and do that. Still not enough grain. Alright, now we can
reclaim very bad land, even arid desert, for growing grain. It takes
more materials and labor, but that does not stop us. We can grow
grain.
We will leave foreign trade for some of that flour, or grain to make
it, out of the picture for now. We can return to that problem later.
Now what happened to the cost of grain and flour ? No problem. The
cost for flour is fixed in terms of a fixed token price in the market.
Every person can buy flour for the same reasonable price, unaffected
by cost and profit issues. Those latter issues are paper issues and
unreal. We are not concerned with those. They do not really exist.
Every person is given enough tokens, enough income, to meet their
needs based on the token prices that are assigned. You see how this
works so very nicely compared to price and wage battles and
fluctuations ? The price of flour will never change. The wages, equal
to everyone, will never change. What changes, instead, is the
assignment of materials and labor to various needs, to produce what is
of real value, so that there is always enough flour available at that
token fixed price. Nothing could be simpler, but that simplicity will
work perfectly, unlike the cost accounting and profit margin, rising
and falling commodity pricing, of the capitalist system where it
actually becomes impossible to produce enough grain or flour to meet
the real need for it, because of paper accounting.
When you apply this same simple principle to other needs, and even
more importantly to large projects of importance to the people and
their future, you find that what needs to be done, in terms of real
need and therefore real value, can always be done. There is never any
obstacle to doing what needs to be done.
Grain and flour are very simple, but water purification, sewage
treatment, restoring the quality of rivers and lakes, equipment to
stop air pollution, is more complex. Yes, but in fact simple. You see
the need. It is obvious. A government that sees the need simply needs
to assign the materials and labor to meet that need. That includes
scientific, technical, and production labor. All of these receive
provision for their needs in the same manner as the grain and flour
making workers. There is no difference, despite differences of talents
being employed to the task. The most important thing to consider is
that all of that equipment that needs to be made and work that needs
to be done, for the sake of people’s real needs, can be done. Cost is
irrelevant. We are assigning the material and labor resources to do
it, and to do it right away, as soon as it can be accomplished. We
have no need to wait for little bits of “profit” to accumulate as
piles of paper value, in hopes that someday some of that might be
chosen to be used to provide for those neglected needs. The factory
making pipe for irrigation does not worry about the cost of the pipe,
but does its best to make the best possible pipe, as productively as
is reasonably possible, to meet needs, without excessive pressure that
damages quality and worker’s health. There is no need to push that
hard. Costs and profits are largely irrelevant. What is important is
the best quality pipe and a reasonable pace of work which also must
conform to human needs. Pipe is now available to where it is needed,
according to a hierarchy of managed and planned needs. The irrigation
project to reclaim desert, for growing grain, might be the top
priority, because grain and thus flour are known to be in short
supply. The reclaiming of desert is also a high priority, for future
quality of life and the usefulness of that land. The cost and profit
of reclaiming that desert no longer stands in the way of it being
done. It can be done without that consideration.
For the factory producing pipe, freed from excessive concerns with the
cost of production, the acquiring of the very best equipment to stop
water and air pollution is no longer a concern. They can get it as
soon as it can be built and installed. In fact they must get it, and
as quickly as possible. Similarly better sources of cleaner energy.
The cost of the energy no longer matters. We know that pipe is
necessary. We know, from the science, that some means of energy
production are cleaner, better for the environment, and better for
people, but they might be expensive in a capitalist system when it
comes to calculating the cost of pipe. No matter. Forget that. The
pipe factory can now have the best system for producing energy. The
cost does not matter. Only human needs being met, now and in the long
term, and the need for making pipe, as real value to meet the need for
it, matters. Now we begin to understand the effects of a real value
economy.
We can do what is necessary to make the lives of people better,
faster, and to avoid problems that might not be solvable in the
future, if we do not solve them today. Only a real value economy can
accomplish that. A paper value economy, tied up tight in accounting of
costs and profits cannot ever do that. We must have a real value
economy.
Now, if we consider fishing as an interesting example. Over fishing of
the sea is becoming a problem. Some species are endangered, and fish
stocks in the sea are being greatly reduced. It is the lowest cost
method of getting fish. In a capitalist system a net in the sea is
preferred because of cost and profit, as long as something can be
caught. Forget that. While some fishing of the sea continues we can
help to solve the problem in a real value economy, in a way capitalism
has been unable to do. We can farm many different species. We only
need the materials and labor to build and run the farms. The cost is
irrelevant. We need fish. So we can build farms to help assure a good
supply of fish for the future. Science will help to find the best ways
and the best species to farm in that way. Again, the token price of
fish will not change. When someone goes to market fish will be
available to them, at the same price, without concern as to the cost.
Cost does not matter anymore.
Now, as to foreign trade. Ah, what a huge problem. Not really. We no
longer care about the paper values of things that we trade to the
world. Howeve,r, we must be very careful to produce what is of real
value to trade, even if we are pressured to do differently. That is
because everything we make has an effect on people, and takes material
and human resources to make. If we make the wrong things, we waste the
materials and resources. Even if the “devil” asks for it, and wants to
give us large piles of paper for it, that does not mean that we should
make that deal with the “devil” and make and supply those things. We
must consider what else is really needed and thus of real value,
first, within the priority of needs. We must never be seduced to
making what is not of real value, while what is of real value fails to
be made. This failure is exactly what is happening in the chase for
paper value. Making what is not really needed, of no real value,
within a legitimate science of needs only places excessive stress on
environment, society and quality of life. It also places undue stress
on other material and labor resources, when we have to solve the added
problems that that essentially worthless production causes. We need to
solve the environmental and human problems of production and work that
is of real value first, not dissipate our resources, and lack
resources, for what is of little or no real value. This approach will
always better the quality of life, reduce rates of illness and related
costs, and alleviate human suffering. The opposite attitude of making
anything that brings paper value, regardless of real value in terms of
needs, will always prove essentially destructive and damaging to the
present quality of life and even more to the future quality of life of
the people.
A real value economics also cares for the human need for leisure,
cultural activity, the arts, adequate intellectual stimulation, sports
for those who desire them, and no longer seeks to consume people
completely as if they are merely costly production machines that must
be driven harder and harder to reduce costs and improve production and
thus profits. That one dimensional way of life comes to an end in real
value economics. No one has to be a slave of profit, but everyone
needs to contribute to what is of real value for the collective needs
of all the people.
This includes having to work too hard, too long, without real leisure,
robbed of the enjoyments of human life, and thus needs not being met,
because of the false necessity, imposed by the paper value economy, to
reduce costs and to improve profits. In a real value economy we do not
have to push for constantly reduced costs, ever increasing production,
and constantly worrying about profit margins. While we need to utilize
production capacity for real value production, with reasonable
efficiency, we do not have to work under the extremes of pressure that
a cost, and profit mentality so brutally imposes. Where pressures to
produce are in fact valid can be in terms of producing real value, but
then that has that reward to the well being of the people and can be
better justified but even then planning should strive to reduce that
pressure by improving capacity for meeting real value needs so that
people do not become pushed beyond reasonable limits, in terms of the
science of needs.
That does not stop us from farming fish and trading them to Germany in
exchange for machines made in Germany that we have a real need for. If
Germany still persists in its failure to adopt a real value economy we
can use the prevailing “price” of fish in Germany to close our deal
with Germany, in trade for the going “price” of the machines.
Similarly as to any other commodity that Germany believes it needs in
exchange for what can be obtained there that will meet our needs.
Eventually Germany will join in, into a globalized real value economy.
It is inevitable, even if it might take a long time, and some
difficulties, to get there. In the meantime we have to make some
compromises, but those compromises do not necessarily have to have bad
effects on our own real value economics where real value is
implemented. In fact we have a trading advantage because we can trade
at Germany’s price for fish, without considering the cost of the
production of those fish. That cost does not matter to us. We simply
produce fish in the best way, of the best quality, and we can plan to
produce more fish than the local need, to trade with Germany for
something that they have invented, and have, that we do not have the
material and human means to manufacture. We have no problem in that.
Remember too that in a real value economy there is never any worry or
reality of unemployment, lack of means to what is needed by people.
That is because cost is no longer a factor. Profit is no longer a
factory. Anything that is deemed to meet needs can be done. There is
no end of something to do that needs to be done. It can all be done is
the most fundamental difference.
Robert Ezergailis