The current economic crisis has a paradoxical nature. Production capacity at the global level is growing, rapidly evolving technologies, yet there are no problems of any significant rarity of vital resources, human resources are becoming more numerous. But, however, we find ourselves in economic crisis, and people across the globe are afraid for what could bring future not too distant. Something seems fundamentally wrong with this situation. Is it a failure of capitalism and the free market or the contrary?
The distinction between personal and collective-owned property is a tricky distinction. Reminding us of the Communist regime, in what way was the collective property? Certainly, the property was deemed to be collective; but, as we know, the effective control of an alleged collective entities can be achieved only by certain individuals. And the history of mankind can be easily understood as ways of history in which a leading low caste-controlled majority ownership.
What is striking in the Communist system is precisely the fact that leading a small elite control the de facto decision on the use of the highest parts of the supposed collective property.
When we speak of an order of private property, we support the first of a world in which every person can produce the goods and services to change them on a free market (liberty) and wealth distribution is obtained exclusively from voluntary transactions with the property rights of others (right). But due to the dispersion of private initiative and talent, it is unreasonable to imagine this world as deeply as the copyright bargain. The result of the distribution will not be one in which few individuals control a large part of the property.
What role have money in that order? Money, as a means of Exchange and standard measure of value, intrinsic value not transactional in an economy based on barter. In other words, the money never starve not related by themselves, but because they have the buying power in the wake of economic interactions. Money does not constitute goods as such, but the other faith justification (social claims) founded on trust in them to other participants in the market. And the value of money established to quantify the usefulness of social strata that an individual provides through the goods and services offered. Human interdependence is so powerful that the value of money is maintained and stabilized through every interaction that involves money market.
Taxation or taxation of citizens through actions which are contributing to the State budget, finantandu, thus spending. There are two main methods by which they can achieve. First, the direct consists of taxation of income, profit or transactions. This method involves taking a percentage of the money odds already existing on the market. In a society with a mass of 10 million currency units and a single tax on the income of 10%, the State would collect taxes from one million units of currency, and in the private area will remain new million units. Second, the indirect method, consists in the introduction of new currency table. Thus, in the same example, a roughly equivalent method to obtain the same resources the State would have to be done, such as buttoning a million extra. In this case, although the private I have all 10 million, while the State would dispose of a million new money coming from print, charging would occur all over the citizens, since the introduction of the new money leads to devaluation by 10%. In short, regardless of the method used, the effect is the same if the percentage by mass of the total foreign exchange earned by the State is the same. Of course, the usual practice of the State both methods, but considering only first as toll or tax.
Without bringing up justetea taxation or the existence of fees as such remains the indisputable fact that they exclusively of tin in the relationship between citizens and the State, as a collective entity that they represent their interests. In a free economy that operates in justly, money cannot be created from nothing. The money represents faith justification in goods and services (those social claims that I was talking about), and the total amount of money on the market represents the total amount owed to the company level faith justification. In other words, in such an economy, the main usefulness of the money is to allow indreptatirilor at the level of distribution of the members of the society. Private property and the order ensures that these faith justification may be obtained only as a result of the supply of goods and services on the free market. The basic condition that ensure the proper functioning of this monetary item is divisible by their character, which ensure the smooth flow of transactions on the market.
Of course, a monetary system with a fixed monetary involve complex issues. One of them would be blocking the economy because of the rarity of the object currency. According to this argument, the growth of the gross domestic product related to a fixed monetary mass would cause a phenomenon of deflation, at least as harmful as that of inflation. The value of currencies would increases continuously, thus stimulating savings. In a system with fixed monetary mass is enough to "keep your money to sock" because their value increase proportionately with the growth of GDP. Such a system would create a vicious circle, because people would be stimulated to save money given that the economy prospers, which would further lower the monetary expansion is used itself in market transactions, a growing and more pronounced in the value of money and incentives to save. Finally, this process would lead to the disappearance of liquidity on the market, equivalent to the blocking of the entire economy. Therefore, it seems that a functional economy involves the introduction of new liquidity in the market to prevent the blockage of transactions and investments.
Beyond the question of technique on the amount of new money you have to enter the market in order to ensure a smooth functioning of the economy, the fundamental problem remains one of political and moral-or, if you will, one of Justice: who needs to get into possession of new money entering the market? If money represents faith justification obtained from services provided on the free market, then the new money doesn't reflect the contribution of this kind of individual. Therefore, a monetary system that involves the introduction of new amounts of money in the market is purely financial reasons as to the extent to which marketing actions of the monetary mass does not alter in any way the distribution of the indreptatirilor structure. In other words, the introduction of new money in the market should not alter the relative distribution of purchasing power among existing distribution agents arising as a result of previous interactions on the free market.
In parallel with the two ways of charging two legitimate ways of introduction of new money in the market by the State. The first one involves the distribution of new money at the population level, the proportional share which it held mass in such a manner, leaving the currency distribution of power purchase agreements. The second method involves the allocation of new money directly from the State budget as part of the toll. Of the two methods, the first seems completely unnecessary to the extent that it will carry out the process of taxation. Using the second method, we both taxation and monetary growth through a single process of allocating new money directly from the State budget.
Unfortunately, in the current monetary system introduction of new money in the market is done in a different way and illegitimate. And the case most eloquently is even the central pillar of world monetary market, that of the United States. Suppose that the federal Government needs $ 10,000 to cover certain expenses. It emits Treasury Bills worth $ 10,000. Federal Bank buys Treasury, creditand Government account located the Bank the sum of $ 10,000, the newly created money which the Government can use and enjoy the buying power. These $ 10,000 deposited in the Bank will also become part of the reserve of the Bank. The principle of fractional reserve, the Bank has the right to borrow 90% of the new book. These $ 9,000, also created new money will be borrowed some willing, and the money will go to a store with other commercial banks in turn B, they will be able to borrow $ 8,100 a new costumer, continuing the process until it will be created about $ 100,000 us $ 10,000 initial use by the Government plus about $ 90,000 offer as potential credit willing. Of course, when using these new money creates a debt equivalent, datorati $ 10,000 from the Government and $ 90,000 datorati creditors.
Whom are datorati this money? Mostly banks. To understand the magnitude of the injustice, it is sufficient to look at the United States public debt, which has reached 13,000 billion dollars; the amount that is due in large part due to the amounts of new money created by the Government receive from Federal Bank. If you add on top of that, an amount nine times higher, due to individuals and companies as a result of receiving credits in new money created on the basis of the principle of fractional reserve, the situation becomes dramatic. In a world where money should only reflect the contribution of each individual on the free market, we assist to a continuous process of counterfeiting of money by the State institutions that let individuals take both separately and collectively owe, and economy in a State of crisis.
