ECONOMIC THEORY

The market is, first of all, the exchange of the results of labor: goods and services. The deep essence of the functioning of the market economy lies in the free flow of investment capital = labor resources in production to the average rate of profit, respectively, optimal pricing, and ultimately - an equivalent (socially fair) exchange of labor results. We are talking about a sufficiently perfect market mechanism of self-regulation of the economy both in the interests of consumers in terms of satisfying their material needs, and in the interests of commodity producers in terms of equal value remuneration for equal labor. This is the essence of the law of value of a free-market economy, which, under "laisser-faire" conditions, flawlessly performs the function of supporting market equilibrium and stable development. The state must, observing a number of regulatory requirements (deficit-free state budget, moderate money emission, fixing the discount rate, the norm of bank reserves, the tax rate and a number of other parameters at the optimal level), leave the economy alone, giving business, with the exception of criminal business, complete freedom of creative self-realization. – The optimal strategic course of the state economic policy. The theoretical justification of such a policy, however, requires a revision of the conceptual foundations of classical political economy in order to eliminate its shortcomings and transform it from a theoretical abstraction into a full-fledged applied economic science suitable for developing the correct strategy for macroeconomic development. Political economy will become an applied science under the condition that it “gives birth” to a monetary unit on the labor-cost basis of the material wealth actually created by society. This monograph sets this task for itself.

The modern global economy requires a reformatting of the world monetary system in order to finally bring the money supply of international settlements into line with the total real mass of value in the world. What is needed now is an alternative to the current SDR (Special Drawing Rights) system. Unlike the gold exchange standard - GES and the modern SDR, the new supranational currency should be based solely on a labor-costs basis. That is, for the first time in history, a monetary unit should be tied to labor (living = materialized), rely on the actually produced mass of material wealth. The implementation of this project requires a synthesis of political economy and monetarism.

Currently, the most acute economic problem of Western countries is their deindustrialization. The reason for this lies in the redirection of investment flows from the real sector of the economy to the financial sector due to the higher profitability of the latter. As a result, financial bubbles inflate in the stock markets, and the real economy declines. What are the ways to overcome the problem? First of all, it is necessary to abandon the taxation of the entrepreneurial profit of a large business and move to the taxation of its stock market value - market capitalization. Then financial bubbles will burst and speculative pyramids will collapse, and investment flows will rush into the real sector of the economy, reviving industrial production.

Attention! There is a translation problem. In the understanding of the author:

PRICE (цена) is the monetary expression of the value of a commodity.

VALUE (стоимость) is the market valuation of the labor embodied in a commodity.

COST-PRICE (себестоимость) is the monetary costs of producing commodity.

COSTS-LABOR (трудозатраты) is the costs of labor for the production of good.

Under this condition, the value of the goods is presented:

In theory: VALUE > = < COSTS-LABOR → to the average rate of return.

In practice: VALUE (in price) = COST-PRICE + PROFIT (average).

PROFIT average is an indicator of the optimal VALUE (in price).