Chain
The events of this world are all interconnected and occur in a chain.
The center of the economy is people. People are living beings. As living beings, people are subject to physical and bodily constraints. People are limited by the span of their lives. Human economy is subject to the constraints of birth, illness, aging, and death. Human economy is formed based on the human life cycle.
People have lives. Human economy refers to the activities necessary for people to live. Human economy refers to the activities that keep people alive. Life has cycles. The economy is based on the cycles of life.
In a market economy, people must purchase the resources necessary for survival from the market by paying money. Money can only be obtained by working and earning. Money disappears when spent. Therefore, money must be constantly replenished. This means that people need to keep working.
Not everyone can work. Only certain people can earn money through their work. People need organizations.
Compensation is paid according to the work performed.
People are autonomous. People aim for self-actualization. People know themselves through their work.
Action and reaction of recognition. Therefore, through productive activities, people position themselves within human relationships.
People cannot live alone. Human economy is based on the chain reactions of human work.
At the root of human economy are human relationships. People form families. People are social beings.
The motivation that drives the economy. The fundamental cause that drives the economy is people. Money is the energy that drives the economic mechanism.
First, insight into people. Without this, it is impossible to understand why the economy moves by just observing the flow of money. What is the fundamental cause that drives the economy?
What drives people is desire. And it is human desire that drives the economy. Desire is not a bad thing. What is bad is being unable to control desire. There are various types of desires: physiological desire, material desire, desire for fame, desire for conquest.
The history of humanity is a struggle with desire. Asceticism and pleasure. Desire is often accompanied by violence and crime.
Desire has an important function. Why is it necessary? Desire becomes a motivation, a driving force. Desire becomes a demand. What is sought. Survival, descendants, self-actualization.
What is the essence of desire? Desire is the same as demand. In other words, what one desires, what one seeks, that motivation is the essence of desire.
What one desires, what one seeks, is one’s existence, survival. In other words, desire emanates from one’s existence. Therefore, desire is the fundamental cause. It is the meaning of existence. That is why desire is indispensable.
Moreover, desire also emanates from the preservation of the species. Desire exists because it is necessary to leave descendants.
When one becomes aware of the differences between oneself and others, self-consciousness arises. When self-consciousness arises, the desire for self-actualization arises. Moreover, the desire for self-preservation arises.
Desire is not exclusive to humans. Desire exists in all living beings, including viruses. Because desire is a driving force necessary for survival.
It is dangerous to consider desire as evil or to release it without principles. It is important to correctly evaluate the importance of desire and learn how to control it. Law and education exist for this purpose.
If one understands the essence of desire, one can clarify the purpose of one’s actions.
At the root of desire are self-survival, preservation of the species, and self-actualization. It is the meaning of existence. It is the fundamental cause of all living things. The purpose is formed from the fundamental cause.
Therefore, desire brings purpose to life. If one understands the essence of desire, the purpose of life becomes clear. When the purpose of life becomes clear, self-discipline arises.
If one can set or discover one’s purpose by oneself, one can become independent of others. Because one can protect oneself by oneself.
Desire is influenced by forces of attraction and seduction. This is what is called temptation. Temptation is a force of attraction and seduction that awakens desire, but if one does not understand its meaning, one cannot control oneself. Temptation is attractive, but it is also dangerous.
To awaken desire, rewards and gratifications are given.
Instead of a one-to-one logic, a one-to-many, many-to-many, many-to-one logic is required. Because multiple elements must be processed simultaneously.
The position and function of each element, as well as their relationships, are important. If this is clarified, highly accurate predictions become possible. That is why correlation analysis is popular, but most correlation analyses are necessarily one-to-one analyses. It is necessary to clarify the true correlation. One-to-many, many-to-one, many-to-many analyses are required. This exceeds human capabilities.
How to perform structural analysis?
Establish an overall view and see what impact a change in a particular element would have on other parts.
The events of the world are complex and interconnected. Correlation analysis is an important method to clarify these relationships, but traditional one-to-one analysis has its limits.
To perform many-to-many analysis, it is effective to establish an overall view and conduct simulations. Specifically, the following steps can be considered:
Establish an overall view: First, identify the elements or variables to be analyzed and graphically represent their relationships. This makes it easier to understand the whole picture. Conduct simulations: Simulate the effects of changing a particular element on other elements. This clarifies causal relationships. Collect and analyze data: Based on the simulation results, collect actual data and analyze it using statistical methods. This allows for hypothesis testing. By adopting this approach, more accurate predictions and analyses become possible.
Action and reaction. God can be considered as a force.
The world is structurally controlled. God does not say “Do this”. He simply shows.
This world has a whole and parts. There is a force that always tends to balance the whole.
The fundamental movement of this world is linear motion and rotational motion.
The economy alternates between expansion and contraction.
Everything in this world is linked and chained. No one can escape this relationship.
People cannot live alone. No dictator can do anything alone.
Human affairs can only be resolved by humans. Everyone’s actions come back to oneself. Everyone’s bad actions bring misfortune to oneself. Everyone’s good actions bring happiness to oneself.
Sometimes one may wonder why, but people must live with what is given by God. That is fate.
Cursing or resenting it will not bring happiness. Because one can only be oneself.
God sees everything.
All people are economically connected.
Economic value does not stand alone. It is always the result of the combination of multiple elements. Monetary value is the product of nominal value (money) and real value (quantity).
Quantity is a physical measure and is subject to physical constraints. Time is subject to the constraints of a day, a month, a year. Money is not subject to these constraints. It is open-ended.
Therefore, the monetary standard is maintained by the balance of power between people and goods.
Elements other than money, such as people, goods, and time, form economic relationships. Money only reflects these relationships as they are formed.
Money is not a consumable good. In other words, it is not consumed but accumulated. Money exerts its effect by circulating. Therefore, the function of money is determined by the amount in circulation, speed, direction, number of rotations, and amount of savings. Money is paid in exchange for something. Money stimulates productive activities.
Economic value is determined by the constraints of people, goods, and time, as well as their interactions.
Real economic quantity is tangible and is determined by the relationship between people and goods. For example, the phenomenon where the economy fluctuates greatly without a change in production is a monetary phenomenon.
Therefore, monetary phenomena should be treated as monetary phenomena. It is important not to lose sight of the economic reality.
The real factor influencing the economy is the population, but the composition of the population. The ratio of the working-age population to the total population is decisive. Moreover, it is not just the decline in the ratio that matters. When the number of elderly people increases, a part of the working-age population must be devoted to their care.
Those who need to procure the resources necessary for life from the market must have money. In other words, all those who need to procure the goods necessary for life from the market must receive money in advance. Money disappears when spent. When spent, money becomes insufficient. What is lacking must always be replenished.
Inflation is due to a shortage of goods. The shortage of goods results from the relationship between people and goods.
Quantity is a physical measure and forms the basis of real value. Therefore, real value is subject to physical constraints. Money and time are nominal quantities and are not subject to physical constraints. Instead, they are constrained by the relationships between people and goods.
For example, supply is limited by production and inventory. Production is limited by production means, production resources, labor, and time. Production means are limited by equipment, labor is limited by the number of people. Thus, economic value is always linked to certain factors, and economic value is measured by monetary value.
The economic mechanism consists of producing and distributing the goods necessary for people’s lives, in order to maintain the lives of all. Therefore, the exchange in the distribution mechanism is based on equivalence, and the sum of market transactions is balanced at zero.
Deregulation is not a panacea, competition is not a principle. Cartels are not absolutely bad. Economic policies are relative actions determined by the economic situation, preconditions, intentions, and objectives of policymakers. Economic policies cannot be measured in terms of good or bad. The question is what situation is optimal.
When the industry matures, it becomes oversaturated and tends towards a contraction equilibrium. The market alternates between expansion and contraction.
The market changes according to the stages of development.
Growth and expansion are not the only components of the economy. Growth should not be the premise of economic policies.
At the growth stage, there is an expansion equilibrium. At the maturity stage, there is a contraction equilibrium.
Profits do not appear as profits in national economic accounts. This is the key point. It is an operating surplus. It is symbolic.
Based on this, national economic statistics are organized and analyzed. This is my basic stance. In other words, I derive laws from the forces acting in the economic field, the positions and relationships between elements.
However, what lies behind monetary phenomena is the circulation of money. Basically, this is due to an excess or shortage of money, but that alone is not enough to motivate. That is why time value is utilized. Time value is added by interest and profit.
In short, the factors that hinder the circulation of funds, stagnation, imbalance, distortion, accumulation, dams, walls, faults, etc. When money starts to flow in one direction, it stops circulating. When money flows unilaterally from the poor to the rich, or from companies to finance, it eventually collapses.
In monetary phenomena, the amount of money in circulation is important, but the real problem is the shortage of goods.
Therefore, monetary phenomena should be treated as monetary phenomena. It is important not to lose sight of the economic reality. Real economic quantity is tangible and is determined by the relationship between people and goods. For example, the phenomenon where the economy fluctuates greatly without a change in production is a monetary phenomenon.
Prices are based on the balance of multiple factors. The factors that dominate vary depending on the situation.
The relationships between economic elements can be expressed by functions. Because economic elements are numbers and quantities.
Economic transactions mean equivalent exchanges, so the sum is always balanced at zero. This is derived from the action and reaction of recognition. Therefore, transactions are based on relationships of action and reaction.
Monetary value is the product of the monetary unit and quantity. Real value is based on tangible things such as people, goods, and time. Quantity is a physical measure. Money is a nominal quantity.
Economic phenomena are influenced by multiple forces simultaneously, so a linear approach connecting one-to-one points cannot provide a solution. Economic phenomena require a spatial approach, one-to-many, many-to-many, many-to-one. For this, it is necessary to first construct a space. Space is constructed by simultaneous equations or determinants.
This becomes a nonlinear model.
The basis is transformer technology.
Consider the nodes. How to define the nodes. The equations of economic factors are also products and sums.
An equilibrium model should be considered. Thinking about action and reaction, zero-sum.
National economic accounts are based on the balance of flows and stocks, nominal and real values, differences, vertical and horizontal, the whole world.
The basis is consumption and human problems. Without this perspective, the economy becomes inorganic.
The economy is determined by how one defines people. Especially how one views human life. The economy is not centered on money, nor on goods, but on people.
People are emotional animals. The definition is subtle.
However, this is useful for analyzing economic, social, and political phenomena. This is where the issue of understandability arises (laughs).
In the end, all philosophy and religion come down to this. What is a person? What sustains me? Human life. This is the basis of the economy. That is why Buddha defined the four sufferings: birth, illness, aging, and death. All things are impermanent. Birth. Childhood, adolescence, youth, adulthood, old age, there is an economy at each stage.
People cannot live without the help of others at birth and old age. This means that there are guardians and dependents. This is the beginning of the economy.
Here, there is a bifurcation between production and consumption. The place of production (workplace) and the place of consumption (living place) are separated. This is how the household is formed. The workplace is divided into corporate entities, finance, and fiscal policy. In other words, at the root, at the exit, there is the household.
Thus, what connects the place of production and the place of consumption is the place of distribution, and the medium is money.
However, when money starts to function outside its original purpose, it becomes the cause of economic confusion.
The mechanism of controlling money is therefore important.
When analyzing or learning from history, it is important to note that what was correct can become incorrect. The factors of success can become the causes of failure. Too much success can become a cause of failure. This is a trap that one often falls into. Mistaking a successful coincidence for one’s own ability. A once excellent leader can become a tyrant. If one makes a mistake in this evaluation.
That is why it is dangerous to advocate deregulation at all costs or to consider competition as a principle. It is essential to check the preconditions and initial settings.
To avoid such errors, it is necessary to adopt a structural approach. However, when people succeed, they tend to take credit for themselves and stop listening to others. One must always anticipate the worst and prepare for it. In other words, one focuses on success until the results are obtained, but at the same time, prepares for failure. In normal times, one operates in normal mode, but in emergencies, one must be ready to switch to emergency mode quickly.
For example, if one lands safely in bad weather. Do not conclude that one can land in bad weather based on that experience. Check the preconditions and objectives. And compare them with the conditions at that time to decide in advance how to deal with similar situations. First, although one landed successfully this time, what was the probability of not being able to land? To determine that probability, check the conditions, weather, wind speed, and the condition of the aircraft. Depending on the conditions, decide whether to cancel the next flight. In this way, set standards in advance based on data, not subjective judgment. I call this approach structural.
The ultimate goal of the economy is to make people happy, so productivity is increased and profits are raised as a means to that end. Sacrificing people’s happiness for productivity or profit is putting the cart before the horse. The question is, what is happiness? At the very least, everyone should aim to create an environment where people can live with dignity.
The economy is determined by how one defines people. Especially how one views human life. The economy is not centered on money, nor on goods, but on people. People are living beings. People are subject to physical constraints. It is obvious. Anyone can understand this. That is what a definition is. It does not need to be literary or beautiful.
The ultimate goal of the economy is to make people happy, so productivity is increased and profits are raised as a means to that end. Sacrificing people’s happiness for productivity or profit is putting the cart before the horse. The question is, what is happiness? At the very least, everyone should aim to create an environment where people can live with dignity.
Establishing a consumer economy. Modern economy is too biased towards production. That is why economic balance cannot be maintained. The basis is consumption, and the production system should be designed to support that consumption. Culture also exists in consumption. The problem of poverty also lies in the poverty of consumption. Production and consumption are the two wheels of the economy.
First, distinguish between resources necessary for life and those that are not. Then prioritize securing the resources necessary for life. Today, jobs that produce the resources necessary for life are undervalued. This inevitably leads to food shortages and energy shortages. People become ferocious when they are hungry. It becomes a seed of war. Next, prioritize jobs for self-actualization. In this way, consider both the quality and quantity of consumption.
Therefore, maintaining fair prices is necessary. Commodity industries are prone to price wars and discount battles. Deregulation at all costs, competition is not a principle. A vision is necessary. It is the will of people.
During the Lehman crisis and the bubble, on one side, the number of vacant luxury homes increased, and on the other side, the number of homeless people increased. This is also deviating from the true meaning of the economy. As a result, the bubble burst, the Lehman shock, and rampant development. Does Japan need more golf courses? While luxury apartments and tower mansions are springing up, the number of vacant houses is increasing. There is no urban planning. The next generation will pay the price.
Maintaining an environment where people can live is also one of the purposes of the economy. Making money is a means.
People are kept alive. When people lose their reverence for the existence and space that keep them alive, they will destroy themselves. The best example is nuclear weapons. Even if people gain the power of God, if they lose their fear of God, they will destroy themselves with the power they have gained. People cannot become God, nor can they surpass God.