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This is an essential point to be taken into account, for the current economic model, with its objectives and priorities conditions the way states and peoples live.
The economy of a state can be portrayed as a beautiful lake where a huge exhaust pipe dumps all kinds of waste and rubbish. The law enforcement, legislative, and administrative bodies are forced to fish the waste out to prevent the lake from becoming boggy. Obviously, this is a continuous process; it is inefficient, and little promising, too. Would not it just be easier to tap the pipe?
Let us consider the theoretical prerequisites for economics free from the above-mentioned faults. Without any doubt, economics should function for the benefit of all people and satisfy their needs in equal measures. Besides, it should act as the progress consolidation factor that would educate and harmonize human beings, thus contributing to renewal of natural resources used rather than solely to their consumption.
In this light, liberal economics will be inevitably replaced by a different economic system where such faults will not be imaginable. All economic activity will be aimed at improving the overall quality of life, and income will be reduced to an accessory instrument for achieving this goal. We are in for economics that would combine the interests of all people and economic actors. Moreover, it will be considerably simpler and more efficient than the current economics. This new economics will see not only the market, but the intelligent administrative tools work within it.
It is the harmonious economics aimed at providing everybody with means of existence, cured of the ills of the current economic system, that this book looks into. Such economics is designed to follow the natural flow of things, not to contradict it. It is universal, that is to say, it can be implemented not only in developed countries but across the entire world. Besides, the system proposed here may be used for analysing the state and determining the possibilities both of the current economics and of other existing types.
Harmonious economics is rational. It is inspired by the thoughts of many eminent philosophers and economists. However, they are all united by one logic and purpose. This new economics will not allow young energetic people to be unemployed, that is, out of demand in the economy, just for somebody’s benefit. It will further impede the proprietors, officials and imposed dogmas to condition the well-being of entire social classes.
This book proposes a harmonious economic system, and describes an alternative world order. It is based on an understanding of the globality of problems that economy is called to resolve, and not on the momentary success. Economics is recognized as a fundamental science, an essential part of the global knowledge. It is not limited to a narrow-applied study, but is the foundation of the human culture. Thus, economics should comply with the fundamental laws of nature both in theory and in practice.
Harmonious economics is alien to complexity, fantasy or utopia. The theory it obeys is significantly simpler and more reliable than the current one. The reason is that the modern economics is not complicated by its nature, but by the various contrivances aimed at increasing the profitability of money, power and property, something the new economics is liberated from.
Such economics will not provoke rejection of any group of citizens whose labour is useful, whatever type it is. The implementation of the harmonious economics will not entail social upheaval, property redistribution, changes in the established organisational structures, repressions, etc. Besides, the existing advance in applied economics will remain functional, but in different macro-conditions will become less complicated and more efficient.
Moreover, the laws formulated for harmonisation of the production relations are already active in the current economy. Whether they are known or not, applied consciously or not. Just as Newton’s laws worked even before they were discovered. Indeed, the more the current laws comply with the principles of harmony, the more efficient the economy is.
In addition, it should be taken into account that the harmonious economics theory is not a fruit of inspiration, a clever idea, or a political commission. On the contrary, it results from the systematization of knowledge, and this new system is logically precise, historically justified, and conformant to natural laws. This system could be compared to physics. It is such knowledge that is presented in this book. Certain principles of the harmonious economic theory are related in this book. Some have already been described by the author in a booklet [9] and a book [10]. A more detailed account of the basic economics is presented in the monographs [11] – [14].
In writing this book, its author was largely assisted and supported by many enthusiastic Russian people who love their country. Among them were Professor A. N. Malafeev, PhD in Economy, Professor B. M. Bolotin, PhD in Economy, Director of the Economic and Mathematical Institute of the Russian Academy of Sciences, General A. V. Ponidelko, Professor V. I. Kornyakov, Yu. N. Zabolotsky, E. V. Gilbo, L. P. Akaeva and many others who assisted the author in this work and helped this book become a reality. And last, but not least, my wife and my son, without whom this book would not have been born. I would like to express my heartfelt gratitude to all those mentioned here.
I. General theory of harmonious economy
No experiment has any meaning at all unless it is interpreted by the theory10.
Max Born
Chapter 1. Economics as a science
§1.1. Culture and Economics
Governance is inefficient unless it takes into account the traditions of the people, its culture, specific perception of the non-economic values, unless governance is “submerged’ in culture.
The Book of Lord Shang, an ancient Chinese treatise
1.1.1. Place of economics in the world knowledge system
Wisdom is a flower for the bee to make honey of, while the spider is a poison; thus, every one follows his nature.
Unknown author.
To define the nature of a phenomenon and determine its role in the global world order, one should start with comprehending the entire space where this phenomenon exists. That is why the highest level of abstraction is required to overview the economic system. So, let us start with studying the world on the macro scale.
It has been demonstrated that only three basic, global sciences exist in Nature, and they are the foundation of the entire bulk of knowledge in the world. One of them is the study of the quantitative laws of the world. The name of this science is philosophy, and it embraces ontology and gnosiology, logic and culture, art and cosmology, medicine, occultism and theology, history, ethic, and aesthetic. These and numerous other disciplines study the origins of people and their environment, the expressions of the World unity in particular elements, the rules of the World, the respective roles of God and Man, their purpose and place in the Universe.
The foundation of modern philosophy was laid by the ancient knowledge once condensed in the sacred teachings of rishis’ Vedas, Orphism, alchemy, Cathars’ beliefs, and other philosophic movements. This knowledge was the essence of the Brahmanical, Eleusinian, Bacchic, Orphic, Pagan, Biblical, Christian, Muslim, Buddhist, and other mysteries aimed at liberating the human nature of the burden of earthly ignorance. These philosophic doctrines became the bearers of the philosophic light based on intellectual, moral and ethical principles that ennobled the soul and gave a sense to the human existence.
Through dramatized shows and ritual games these mysteries educated the broad public in one way or the other, encouraged the from earthly interests to loftiness of the spirit. Thus, these activities laid the foundations of traditions, culture, arts, morality, and enlightenment. However, they completed this noble mission in a more delicate and efficient way than it is done today.
The ancient mysteries were at the source of all peoples of the world; they magnified the human spiritual essence and eliminated its mean, earthly nature while admitting their interdependence and similarity. Indeed, as Francis Bacon said, “A little philosophy inclineth man’s mind to atheism, but depth in philosophy bringeth men’s minds about to religion’11.
This is why philosophy shapes the deep human thinking, balances the sense and the sensibility, and prevents people from following unreasonable life principles. Philosophy studies the macro-world and micro-world structures, the general laws of Nature, society and individuals. Besides, it determines the similarity and the difference between the objective and the subjective, the being and the consciousness, the matter and the spirit.
Through philosophy we discover the expression of the particular in the general and vice versa, the difference between harmony and pathology, the Good and the Evil. Thus, we are able to distinguish power and justice, beauty and ugliness, form and contents, male and female, materialism and spirituality. To sum up, philosophy is present in every aspect of human existence. It is not by chance that up to recently physics was referred to as “natural philosophy’. Philosophy is universal notwithstanding the time and area of its application and is the expression of the spiritual component of the Universe.
The second basic science is mathematics, that is, the theory of quantitative patterns and spatial forms of the World. Mathematics lets us penetrates the mystery of the Universal order, understand the multiplicity, the grandeur, and the proportions of the bodies and objects. It is mathematics that studies the passage of quantity into quality, the correlation between the infinitesimal and the infinitely large, the particular and the general. This science establishes the possible and impossible types of quantitative correlations and spatial forms, and imposes natural limits within which philosophy functions. Mathematics tells us about the angles harmony and rhythm, and about the rules of universal organisation and order. It studies the numerical proportions of various bodies to demonstrate the difference between them, as well as the number of factors determining this difference. Mathematics serves as the foundation of the material component of the World. At the same time, the abstraction of mathematic methods renders them universal.
Back in the antiquity, philosophers noticed the common sources of philosophy and mathematics and understood the peculiarities of the quantitative and qualitative transformations of the matter and the spirit between their respective forms. The knowledge of mathematics, geometry and metrology was applied to symbols and shapes that were considered nothing but the images modifying various natural and spiritual phenomena: “The world was summoned from the Chaos by the Sound and the Harmony and built in accordance with the musical proportions’ (from the Pythagoreans’ theory). That is why door to the Platonic Academy read: “Let no one ignorant of geometry enter’.
The influence of antique knowledge on all aspects of the modern human life cannot be underestimated. Undoubtedly, this knowledge has been the foundation of the human culture, it has shaped the profound ethic, moral and aesthetic canons of the human behaviour, and it is, either consciously or unconsciously, referred to by people in search of explanation for all kinds of phenomena.
Finally, the title of the third basic science can be duly attributed to the economics, the study of the peculiarities of the human existence following the specific quantitative and qualitative laws of the World. In the end, it is economics that establishes the type and the principles of cooperation of people with each other, the God and the Universe. Besides, economics determines the evolvement of human communities and organisations, as well as shapes human behaviour and psychology.
In this light, economics as a science has, in essence, the objective of assuring the man’s harmonious integration into the Natural structure, into the Universe. This is quite logical, as the human being is not an isolated creature that lives without any aim or principle, entirely for its own pleasure or benefit. On the contrary, we are integrated with the World, the Nature, the Cosmos as a phenomenon executing its specific functions. We are not just individuals, but minds that have achieved the required balance between the matter and the spirit. It is through these minds that the Unconscious develops the Universe hoping to “achieve clear self-consciousness’’ (Genselo).
It is thus obvious that if the human behaviour fails to become part of the surrounding reality, then the humans will end up aliens in this World. If within the Universal Harmony Space, the humans remain egoistic, disharmonious, parasitic, alienated in their very essence, the World will estrange them. Without any doubt, neither benefit by all means, nor accumulation of currency, nor the adoration of fetishes, ideals or idols may be accepted as the purpose of human existence. Neither Nature, nor God need such a man.
Regarding this, economics, just as the Universe in general, has strict rules and restrictions. Though many of them have not been discovered yet this does not mean that they do not function. The economy must work in full accordance with the supreme laws of philosophy and mathematics and fulfil its functions. It acts as an essential component of the Basic World Knowledge and assists in the harmonisation of life. Indeed, as ancient Hindus believed that “lack of understanding of harmony makes life ugly’, and they were not alone.
Overview of economics from the global structure perspective allows defining more fully its role and place within the whole system of the World; identify its basic purpose and use it as guidance for assessing the efficiency and usefulness of any economic activities.
Needless to say, current economic theory is far from the above-described image. This alienates it from the entire Natural structure and entails numerous deviations from the reality.
On the other hand, every solid theory should have a firm foundation. As long as the aim of economy is profit, it will be based on human avidity that all peoples equally share. That is why modern economy has turned out functionally universal. However, if economy is supposed to work for the people’s wellbeing, then it is impossible to ignore their opportunities and capabilities, tastes and preferences, beliefs and morals. This, in turn, renders economy subjective, makes it dependent on people, their cultural demands, civilisation principles, and motivations.
In reality, the need for the unity of traditions, spiritual and economic life of every peoples is undoubted, as it is the condition for the increased material efficiency coupled with a developed and enhanced spiritual component. Indeed, no country in the world can afford satisfying its economic demands without recurring to all of its natural, human and organisational assets. Moreover, no country can afford ignoring its own weaknesses. For this reason, a universal efficient economic model is not feasible, just as a medicine to cure all known diseases.
Foreign experience is useful, provided that it is applied cautiously. In fact, efficient economy can only be national, as it should reflect the state of the country, the mentality of its people, as well as their historic traditions and legacy. Besides, it goes without saying that such economy should be integrated in the world economic system, without, for that matter, losing its identity or harming its people. It is comparable to a person who lives in a society while preserving their individuality. “Political economy should take the national idea as the starting point and teach how this particular nation… can preserve and improve its economic situation’ (S. Yu. Vitte, President of the Russian Council of Ministers in 1905—1906).
This rule is observed in the modern world, too. For instance, American capitalism is based on the key priorities of the American nations: engagement, individualism, worship of personal initiative, and uncompromising struggle for money and power. It is well known that the US has gathered all the planet’s individualists in one place. These people have voluntarily broken with their origins, becoming outcasts without any link to the land that bore them. They have demonstrated what a person free of national and class prejudices, free of traditions, centuries-old culture and affections is capable of.
Such people have built a powerful state and a unique civilisation. Moreover, as true pragmatists, they enabled an unprecedented flourishing of material culture. They have reduced social relations to an absurdity; this “capitalist’ type of relations has become the very symbol of such economy. All the thoughts of such people have been subordinated to money, rationalism, and consumption. Thus, they managed to formalize and, successively, to impoverish the human aspirations and relationships, and to substitute the priorities.
The Japanese are distinguished among other peoples by their strict obedience to discipline, hard work, industriousness, responsibility, conscientiousness, honesty, patriotism, and attachment to their company. Japanese statehood is built upon the culture of the family, corporate and social relations and hierarchies inherent to the Japanese people. It is based on an innate understanding of the benefits of reasonable administration, of the Oriental philosophy, of the century-old traditions, of the unique writing system, phonetics and linguistic system of the Japanese language, and, by consequence, of the thinking associated with it.
German capitalism is supported by honesty, exactness, discipline, labour culture of the Germans; by thorough planning and regulation of all elements organisational elements. Chinese economy employs ancient culture, diligence and conscientiousness of its people, etc. This is why, while many economic models share similar names, in essence they are strikingly different one from the other. And this precisely lets them complete with each other successfully. It is evident that if German economy were guided by American interests, and Japan or the US followed German traditions, none of them would have any positive results.
Similarly, Russian people equally have typical, distinguishing organisational and national features. There exist Russian attitudes to life, labour, and corporate relationship that do reflect the national character and traditions. These attitudes rely on the specific traits of the Russian people that are at the source of the Russian culture, history and moral principles. The Russians can, like no other nation, work in small groups, forming harmonious collaborations, where each member can fully realize their capabilities, allowing a maximum efficiency of the collective effort.
In the light of the foregoing, in the following sections we will study the civilisational differences of various cultures to determine their common and divergent points. Only after such analysis will it be possible to work out the preferable economic principles for people living across the globe to fully reflect their expectations and cultures, while conforming to the laws of the Universe.
1.1.2. Differences between western and eastern cultures and their influence on the economic structure
Oh, East is East, and West is West, and never the twain shall meet.12
R. Kipling
Let us proceed with the study of the profound differences that exist between civilisations. The theory of hierarchy of civilisations that presupposes the supremacy of some civilisations and the backwardness of the others is by far disputable. In reality, as Honoré de Balzac wrote, “Things that we admire in Europe are punishable in Asia, and a vice in Paris becomes a necessity when you have passed the Azores. There are no such things as hard-and-fast rules; there are only conventions adapted to the climate’13.
At the same time, significant differences in the lifestyle of peoples cannot fail to influence their economic organisation. Indeed, the overall purpose of economy is to provide people with the means of existence. This objective serves as an incentive as well as a source of well-being for nations. No nation or people could survive if they did not employ their entire life potential, including natural, intellectual, and cultural potential. Otherwise they would not be able to make the best of their advantages and curb their weaknesses, would not aspire for economic structure that conforms most with their mentality. And, consequently, people would fail to preserve their specific mentality. It is well known that a good gambler does not always win at chess. In this light, as Joseph E. Stiglitz believed “Each country should have its own economic policy based on the specific characteristics of this country; there can be no common, universal policy for all reforming countries’14 [16].
In order to prove this affirmation, we shall consider the fundamental differences of such distinct cultures as eastern and western cultures. Their most conspicuous representatives are the European and the Indian cultures, respectively. This does not mean that other civilisations, such as Chinese, Japanese, Jewish, Slavic, or else Arab civilisations are of less importance. However, it is the cultures of India and Europe that provide an example of a most striking contrast. What are their fundamental differences?
European culture is relatively young. It was shaped by the rationality of Rome reinforced by the Greek Romanticism. Indeed, “… take Rome out – and the entire European edifice will collapse’ (Valentin Ivanov). If we analyse the map of the Roman oikumene at the beginning of the first millennium AD, including the territories of the Germanic tribes that the Roman Empire fought against, it is evident that the oikumene reunites precisely the states that make part of the modern Western Europe. All the tribes inhabiting this territory were inevitably and profoundly influenced by the sophisticated culture, language, order, and the very image of the rigorous Roman mind. The successors of the Empire naturally inherited its organisation, its harmony, rationality, democracy and inherent homogeneity.
But at the same time, they inherited the egotism, cynicism, cruelty, arrogance and pragmatism of Rome of those days, which in the end brought the Empire to ruin. For it was in the depths of Rome that the pagan cults of violence, hedonism, thirst for luxury, and permissiveness flourished. It was there that double standards, the modern plague of the western society, appeared. Within that system, everything that benefited Rome was considered good, while evil was all that ran counter to its interests. Then, the notions of truth, conscience and justice were employed as needed, often, as an excuse.
The Indian civilisation is more ancient. It is based on occult learning, manuscripts and cultural monuments that the legend attributes to the ancient Aryan civilisation. That is why all notions of this culture have already been tested by the time, and they tend to be more profound and precise. For this reason, as Carl Gustav Jung [17], a recognized expert in the western and eastern cultures, said, not only the lifestyles, but also the types of mentality of the western and the eastern societies are remarkably different.
Indeed, in the West, thinking, intelligence and logic are deemed the best tools for discovering the truth. As the result, the western mentality has become rigid, it does not tolerate deviations and unjustified assumptions. Besides, the area of rational use of mind has been significantly restricted in the West. While people there trust exact observations and logic, they also shun the unconscious and its dubious fantasies. The East has different demands. While the European mind can only process what is visible and tangible, the eastern mind strives to discover the nature and the essence of things. Consequently, a European sees the World around as a system of hierarchies, and an Indian – as a whole. Knowing the way to control the supreme power inside a person is the highest good for an Indian; a European only values what his eye sees.
To illustrate this idea, it can be mentioned that the a maiore ad minus15 (Latin for “from the bigger to the smaller’) principle is seen in the East as the key tool for learning about the reality. All inferences are drawn from the general principles. In the West, the road towards the truth takes the opposite direction: from the simple to the more complex. Western thinkers believe that the process of learning about the world can only be consecutive, it advances as new data is collected and processed; eastern thinkers discover the world through studying and elaborating the way the general Laws of the Universe are manifested. That is why it is these laws that the western philosophers usually study.
The above explains why a western person takes a detached view of the World, striving to distance themselves from it, to acquire an absolute personal freedom, and an Indian, on the contrary, tries to merge with the World. Therefore, a western person draws conclusions regarding their inner world based on external sensations, while an Indian person is guided by their internal meditations.
Consequently, western mind has a wide knowledge of the Nature, and knows very little about it essence. Europeans always try to make use of things instead of understanding them. They see the reality as something that works, that is connected with the world of phenomena, while for an Indian only the soul, the spirit is real.
Science, with its tendency for systematisation, for logic and consistency, is undoubtedly an invention of the western world. Science conforms with its capacity for logical thinking and reality management. However, about 80% of the scientific knowledge considered evident is proved wrong every 100 years. Although the physical world view as presented by modern science is logically rigorous and justified, it allows no space for life. So, this theory will suffer no changes if the humans disappear from the Universe. Now what is the real value of science if the only being it was created for is excluded from its structure?
The East, on the contrary, glorifies the rational dominant of feeling, elevates the spiritual component of the World, and perceives the truth through intuition, feelings and emotions. That is why eastern knowledge is indifferent to time running, and what was valued a thousand years ago is still valued today. To give just one example, “The supreme good of the human-beast is health; the supreme good of a spiritual human being is truth’16 (from The Gems of the East [15]). Is there anything to oppose this statement? Indeed, what is eternal is immune to change, and what is constant is eternal.
All this eventually shaped the different views of the people who live at the opposite points of the planet, both their views of themselves, and of the World around them. One of the cultures under consideration underestimates the world of consciousness, the other rejects that of the Uniform Spirit. The West celebrates “objectiveness’ sacrificing to it the beauty and the integrity of life. The East substitutes objectiveness with wisdom, peace of estrangement and psychic immobility that help human beings return to the source and leave all troubles and joys outside. “Subjectivity is really an advanced or preparatory stage for objectivity’ (Satprem [18]).
Having completed their historic development, the Europeans have gone so far from their origins that their minds have finally split into faith and knowledge. This is not surprising, as any psychological exaggeration leads to a split into the inherent opposites. Thus, a European person, equipped with the bad habit of believing and, at the same time, with a developed scientific and philosophic criticism, is inevitably trapped either in blind adoration or in an equally uncompromising rejection of foreign opinions and lifestyles.
The East believes that “Everything requires for its existence its own opposite, or else it fades into nothingness’ (Carl Gustav Jung, [17]). The World is stable as long as its composing factors are balanced. It understands that “Where there is faith, there is doubt; where there is doubt, there is thirst for faith; where there is morality, there is temptation’ (Laozi). That is why “The West can galvanize and separate, but it can neither stabilize nor unite’ (A. J. Toynbee).
An Indian take care both of the body and the mind, and a European keeps forgetting to attend to either the one or to the other. Where there is a will, there is a way, claims the West, and a European person takes this as a life motto. Thanks to persistent energy and forgetfulness, the Europeans have conquered the entire planet. And, at the same time, they have lost their planet. “That is the sickness of western man, and he will not rest until he has infected the whole world with his own greedy restlessness’ (C. G. Jung [17]). This is why the western man has become a symbol of the material component of the World, this is why he has made impressive material achievements. However, he has failed in the spiritual ones, as an increase in one place will always be balanced by a decrease in another, according to the law of conservation of energy.
In fact, neither of these two highly contrasted viewpoints is universal. As the great medieval scientist, theologian and poet Jalāl ad-Dīn Muhammad Rūmī [19] said, there are two tools for discovering the world: logic and sense. And these two are inseparable and irreplaceable, just as the two sides of the coin. Rumi believed that the more one tries to push apart two opposites, the more power they have.
