Future of Economics

Back Home Up Next

 

 

 

The Future of Economics



Today, the market economy is accepted as the most productive because it brings the biggest profits to manufacturers and the largest consumer benefits to society. However, the market economy has major disadvantages as well. The better producer makes profit and suppresses the losers from the market. For this reason, the market economy causes fear to manufacturers and creates greed, which brings the instability of the economy and society. Besides that, the market economy values profit above the nature existing around us, so that it causes severe damage to nature, which is a condition of our survival. 

On the market of work today, employers offer jobs and workers offer their abilities to work. The balance between supply and demand of labour is provided by the cost of labour. By definition of labour market, employers and workers collaborate together for mutual benefits that should optimally satisfy their needs. In practice it does not happen.

The market economy is based on profits and therefore it values profits above people. This is an alienation that develops inequality to the society and brings injustice in the process of production and division. In case of a good enterprise business, the employees generally cannot participate in the division of profits, but in case of a bad enterprises business, workers face lower incomes for sure or a loss of work and there is nothing they can do. Relations between employers and workers are also not moral because employers are the buyers of work and workers are salespeople of their own work. Thus, the workers become commodities and that is unacceptable. Given that in the market economy a man, himself, is not accepted as a value, manufacturers lead an unscrupulous exploitation of workers in order to achieve higher profits.  

How does it happen? Employers, by the help from the politics, maintain an average unemployment rate of around 5% and economists support it as a "normal" state. This "normal" state reduces labour costs and increases the exploitation of workers because workers are forced to accept any job in order to feed themselves and their families. When a work position opens on the market where a 5% unemployment rate exists, it remains there for a very short period of time because for each open position a large number of candidates apply. They often tear down labour costs to a level sufficient only for basic survival.

Today, the prevailing opinion exists that the market economy should be forced by reforms to appreciate people and nature but capitalism provides great resistance. The situation would be better if an equal number of jobs for an equal number of workers exists in the labour market, because the workers would then have a more equal position in the production process and might require fairer compensation for their work. But the policy that follows the needs of the privileged class of people avoids such a situation. Through a long struggle however, workers have managed to impose a regulation that protects their interests to the some extent, but I would not say that this has been achieved in a correct enough manner. Workers have also succeeded in achieving some rights by joining trade unions but practice confirms that the trade unions as mediators cannot defend the interests of workers successfully enough. No one can better represent the interests of workers than the workers themselves in an equal relationship with employers and other workers. However, such relations in the production processes never existed because a system that would support the equality of people was never established. This is the basis for all the problems of today's society.

However, nobody in today's world even thinks that most of the problems of today's market economy are primarily based on the underdevelopment of the market economy. I will try in this article to present that the main problem of today's market economy is not too much market, but rather, not enough market. The economy today has accepted a regulation of work rights that supports the privileges of employers and privileges of employees to some extent. That is in complete contradiction with the laws of the market. Some owners of the means of production are privileged to other owners but all of them are privileged in relation to workers. Some workers are privileged to other workers but all of them are privileged in relation to unemployed people. When jobs are not subject to the competition of workers, they do not exercise good enough production. That is why socialism has resulted in a poor quality of production work and goods.

Jobs in capitalism are also protected, and that means privileged, although to a lesser extent than in socialism. That is why capitalism could neither allocate the resources efficiently enough nor achieve productivity efficiently enough. It is wrong. One should protect the existence of workers, not jobs. Development of the market economy requires the development of the labour market! The development of the labour market will naturally improve the economy; bring justice to the manufacturing process, and stability to society. This article talks about it.


***

A better future of humankind necessarily requires that workers become subjects with equal rights in the process of production. This will be achieved when all the workers have equal opportunities to choose work. In a system where jobs are almost never on the market, it is impossible to freely choose work. Therefore it is necessary to open a permanent labour market. There is no fairer or better division of work than a competition of workers through their own labour productivity at any workplace at any time. Productivity would be measured by earned money, by the amount and quality of goods produced, or by rating the productivity of workers by consumers. An employee who offers higher profits, more manufactured goods, a better, cleaner and cheaper production will get the desired job.

It probably seems impossible to you, dear readers, because such a division of labour has never existed. The reason that such a division of work has never existed is just because nobody trusted that such a thing is possible and did not invest an effort to develop such an idea. I did. I have taken into account the possible problems that such a division of work might bring and formed a solution that would eliminate such problems. Once such a division of work is accepted, it will bring huge benefits to all.

Of course, this division of work will relate only to public companies, because if it is applied to private enterprises that would practically mean a seizure of private property. Private companies will continue their business as they do today. A new division of labour in public enterprises would be necessary to regulate and democratically accept by the law. It will not be easy to implement it because of the inertia of society to changes but I am positive one day a new division of work will be accepted by society because it is the best possible division of work. I will present in this article the advantages that such a division of labour would make and you, dear readers, may decide whether it is acceptable to you or not.

A worker who predicts and offers the highest productivity for any workplace at any time, immediately becomes a prime candidate for that position, regardless of whether the position is occupied or not. If at such a workplace there is already an employed worker who does not want to leave his job, he would have to accept the productivity offered by the competitor, and in that case he would continue to hold the position. If he would not be able to accept the new responsibilities or would not want that, he should immediately vacate the workplace and leave it to the competitor.

The existential security of workers is necessary, as a condition of stability for society, and therefore the society should guarantee it. In the system I have proposed, all employees will automatically be economically secured after leaving any job. Workers who lose their jobs will gradually receive less income until they reach a democratically agreed minimum income. Once they find a new job their incomes will gradually grow until they reach the level that they are asking for. Economically, losing a job will not be an income stress any more and each worker will have a great ability to quickly find a new job. This will remove the great fear that today is spread around the world. Capitalism finds the main motivation for work from the fear of economic survival of workers and that is the reason it cannot guarantee economic security to the people. The new system will build motivation for work from the free choice of choosing work and in the satisfaction that comes from it.

The advantages of such a division of work will be enormous. The best worker in every workplace ensures maximum productivity for companies, and yet because of it, such a division of work has its justification. Besides, the labour market will give people the freedom to choose jobs that they love more and therefore they will enjoy work far more than they do today. Work will become a direct value for itself. Furthermore, the open labour market will eliminate privileges. This will eliminate corruption, the source of immorality in today's society. Today, people might experience a loss of privileges as a big inconvenience. But by time, people will realize that the loss of such privileges would significantly increase the possibility of finding work that will allow bringing workers’ needs of being to life. Being needs of work develop creativity and bring great and stable conveniences that privileges could not achieve. That is the reason the labour market I have proposed will be accepted one day and will bring virtually unlimited benefits across society.

The labour market will regulate the price of labour. This will be achieved by giving the job with a limited productivity to the worker who demands the lowest price for current work and, consequently, a lower income. Price of current work will be one of the factors that determine the amount of income for workers. In this regard, suitable jobs will achieve relatively lower incomes and worse jobs will be compensated with relatively higher incomes. In such a way a developed market of work will form an objective price of work and balance the interest in all jobs. Given that the workers themselves will determine the amount of their income themselves, they will also be most satisfied with their earnings. Unions as mediators between the employers and the employees will no longer be required.

The work must be easily accessible to everyone. In order to establish a balance between supply and demand of work, it will be necessary to equalize the number of jobs with the number of workers.  Otherwise, it might lead to an unnecessary struggle for jobs. If the creation of new jobs will be not needed, full employment would be achieved by reducing working hours in proportion to the rate of unemployment. This is a political measure that must be equally treated in public and private companies. Such measures will make full employment possible. In addition, it will reduce and possibly abolish the exploitation of workers by employers and will enable the establishment of an acceptable distribution of incomes for all workers. Such a measure will finally establish a general stability in society.

The system would have no meaning without an effective regulation of workers' responsibilities. If the workers, on their way to succeed greater competitive powers, offer productivities that they would not be able to realize, the system would collapse. Today’s politicians do exactly that for example. The new economy will form a very effective system of accountability for the realization of productivities workers offer, so that they would not dare offer productivities they cannot accomplish. It will be realized in such a way that workers would guarantee the productivity they offered by a new value that I call a “productive value of man”.

A productive value of man is a numerical value, which presents the total contribution that each person has made in the creation of accepted values in society, together with the values that he inherited from his ancestors. It will be something similar to the stocks of corporations. These shares will bring them a regular income that will inter alia be proportional to the productive value that they possess. By using the productive value of man one could form an effective system of bearing the workers' responsibilities for achieving the offered productivity in the manufacturing process. If workers do not meet the proposed productivity they will bear the responsibility by losing productive value that they possess proportionally to the unrealized productivity, or in other words, proportionally to the damage they have produced. The possible loss of the value of the productive power of workers will prevent them from offering productivities they cannot achieve. I

In publicly owned companies, workers will share profits proportionally to the numerically determined responsibilities they themselves propose for their work. The higher responsibility will naturally realize a larger share in profit, in the case that the company’s profit increases. Such profit will now be expressed in a value that reflects the workers’ human productive power. And vice versa, in case of production losses, workers who propose higher responsibility for their work will realize larger losses in value representing their productive power.

Finally, one should ask the question whether formal education is necessary for work? Whether workers could compete for each work position regardless of the level of education that they possess. Or can the man who has the knowledge of a machinist compete for the job of a dentist? Of course he cannot, but one should not condition anyone's employment to be dependent on the possession of a diploma. Firstly, because a possession of diploma does not guarantee knowledge, and secondly conditioning the possession of a diploma unnecessarily, bureaucratically aggravates access to desired jobs. The limitation of employment with possession of a diploma has evolved to the level of absurdity, which restricts the freedom of labour to a vast extent. Besides, the greatest amount of knowledge that the education system imposes has no connection with the future profession of people, but serves to ensure the survival of an authoritarian system and represents an unnecessary burden that alienates students. In this regard, it is necessary to remove education as a bureaucratic requirement that gives the right to work. The new system will develop such a large responsibility of the workers for the jobs they perform that no one will dare to apply for a job if they do not have enough knowledge. This means that formal education in the future will be welcome, but not necessary, because the knowledge can be acquired independently or in the best way, through working practice.

***

No economy can be more productive than the one where the best available worker gets each job. Therefore, public companies will easily become significantly more productive and more profitable than the private ones. The owners of private companies, under the competitive pressures of public companies, will try to increase their productivity in a similar way as public companies, but they could not go far enough because they simply would not have the operational capabilities to oppose the public companies. Specifically, private entrepreneurs would not be able to accept the participation of workers in decision-making and profit sharing processes of the company, because in that case they would no longer be able to gain any advantage in their own companies in relation to the workers. What is private ownership for then? Given that workers in private companies would not have the freedom as offered with employment in public companies, and could not participate in sharing the profits, they will be less interested in working for private companies.

It should be taken into account the psychological factor as well. Workers who are prone to authorities would likely continue to work for private businesses, even if work in these companies is less convenient to them than work in public companies. But the system I have proposed will eventually demystify the authorities in the eyes of people so that the owners of the means of production will not long be able to count on this advantage. Workers who prefer equal relations in the production process will be less interested in working for private companies.

I hope that some region in the world would sooner rather than later accept the system of an open work market because there is not a better division of labour. I believe that already at the beginning of the implementation, many private companies in the region will voluntarily join the new system. They will do it under the pressure of the higher productivity of public companies. Owners of private companies will get the equivalent value that presents their productive power, in exchange for their properties. In addition, owners of private companies will find out that large companies will be more stable to conjuncture changes which will ensure a greater stability of the economy and the values they possess. If the owners of private companies today would have the chance to join such a company, they would most likely do so, because it would preserve more of their capital values in the frequent crises of capitalism.

It can be expected in the system I have proposed, that all companies in a region will by time merge together into one big company. The company will have a centralized leadership that will establish the most effective coordination of work. It will open job positions where they are most needed, and will close off ones that are not needed enough. In that way, the community will achieve the highest productivity of the economy. Such an organization of the economy will decrease market competition between companies, but it will ensure the efficiency of production by lowering the level of competition from the companies to the level of jobs.

The responsibility that the new system of work division requires from all workers will be so great that it will force manufacturers to avoid economic losses in an unpredictable market of goods by organizing their production to a large extent on a demand of consumers. People will democratically direct the collective consumption funds for education, health insurance, public safety, infrastructure, etc. Furthermore, individual consumers will be increasingly required to order their special needs in advance. Production based on the demands of the consumers is the most stable production possible. The best worker at every workplace will ensure the most efficient production of such an economy and the most efficient meeting of the people’s needs. Such an economy would no longer be based on profit but on the maximum satisfaction of human needs. Furthermore, great responsibility in the production process will force the workers to base their mutual relations more on cooperation than on competition, at all levels of production processes and thus, it will contribute to the productive development of society. The free development of a market economy will thus develop a democratically planned economy.

Once such an economy is accepted, privileged people would not exist any more so that the regulation that protects people and nature would be accepted more easily. Nobody will be afraid for his or her existence any more. People will be improving their societies and nature because they will enjoy doing it. Life will be beautiful.

This is just the basic idea about the future of economics. It cannot be understood well enough without reading and analysing my book “Humanism” available free of charge here: Table of Contens.

February
12, 2010 

 


Back to Top
   

www.sarovic.com        www.sarovic.net        www.sarovic.org

Copyright protected at Consumer and Corporate Affairs Canada           Last updated: January 15, 2011
For problems, questions, or comments regarding the website please contact
aleksandar@sarovic.com